Welcome to our site. We invite you to take a closer look at the
music recording industry and production of CDs through a supply
chain analysis. We chose the recorded music industry because
it integrates the topic of industry structure and changes with
an important media form well-known to everyone. This site deals
with the global competitiveness
of the industry by comparing the major
players in the industry and their differing strategies throughout
The breadth of the music industry is astounding. Out of 3,300
hours that you, the consumer, spend consuming some form of media,
you spend an average 257 hours or 7.8% of your time listening
to recorded music. And this does not include radio consumption!
This is a fairly astounding figure considering that music is one
of the top areas of consumer demand in such a broad area as media.
We have also found that consumer spending and consumption of
this music media has changed dramatically through time. There
was a 122.6% increase in consumer spending per average person
on recorded music in America from 1984 to 1994. This is a greater
change than any other types of media including cable, movies and
theaters, magazines, home videos, and newspapers.
The reasons for this change are linked to the technology
structure so prevalent in the music industry. When Thomas
Edisonís "talking machine" was invented in 1877, he probably had
no idea that this recording machine would mutate music from LPís
to cassettes to CDís to mini discs and finally to MP3ís. More
and more, people became hungrier for "portable" music instead
of having to leave the comfort of their locales to enjoy a music
concert. And the technology and advancements in music that evolved
provided people with the luxury of instant
It was with the explosion of rock and roll into the industry
in the mid 1950s that the music industry saw greater breadth and
expansion. Artists, recordings, and labels appeared every day
and retail expanded for the customerís convenience. FM radio stations
grew and needed more recordings and the compact disc arrived to
solve this problem, boosting the industry with a much better quality
in sound. CDís dramatically replaced cassettes when 333.1 million
units sold in 1991 in America became 727.6 million units in 1995.
Meanwhile, sales of cassettes fell from 360.1 million units in
1991 to 272.6 million units in 1995.
With all of these changes, the music recording industry had to
adapt and change its structure as well. Large entertainment conglomerates
took over in an international scale by acquiring different branches
of the entire entertainment industry such as film, television,
electronics, recordings, music publishing, record labels, and
even retail chains. Because music infused itself into every major
entertainment sector, from film to radio to TV, these entertainment
conglomerates were particularly interested in owning the major
components of the music supply chain- publishing, manufacturing,
and distribution. Owning a copyright of Michael Jacksonís "Thriller",
for example, would make the company profits through royalties
each time a song was played in a film, a TV show, the radio, or
sold in a store while the company just sat back and enjoyed. And
with the prevalence of technology, these companies could encourage
more and more artists to record, reaching a wider breadth of music
tastes, and therefore more consumers. Faster and better technology
increased the companyís chance of striking another hit like "Thriller."
These entertainment conglomerates sprang up all over the world--EMI
from the UK, Time Warner from
the U.S., Sony Music from Japan,
Polygram from the Netherlands,
MCA from Canada, and BMG
from Germany. And while the focus of the industry began in the
United States where entertainment was a global leader, the industries
began to spread around the world, finding untouched areas to infiltrate
their knowledge, power, network structure and expertise. By finding
these hidden untouched niches, the conglomerate companies, formerly
known as the Big Six, were able to
compete against each other by tapping into untouched resources.
New recording technology became another resource, especially in
recent years, that companies have been manipulating to compete
against each other.
Perhaps the newest problem that the music industry faces is that
this new technology has reached too many consumers in too many
places too easily. With the rise of the internet,
the music medium was infused into yet another realm. Yet, before
the global music industry along with different governments could
work together to think of a method to handle this transition,
the piracy problem swept the globe. Music
pirates could spread music at no cost or little cost to the
consumer with just a click of the mouse. The music industry has
lost and is still losing millions of dollars for these copyright
infringements. The question now remains of how
the music industry will handle the internet as a new form of music
media. Will technology save them again this time by providing
a method of limiting illegal music sales through the internet?
Who will succeed and who will fail in harnessing the power of
this new market?
We encourage you to join us in exploring the unraveling of the
music industry, particularly focusing on the period of compact
discs, through time and to discover how new technologies are helping
and hurting the global industry.
Start your journey here. We hope
you enjoy the beats through time.