Challenges of electronic channels in the music industry

This paper explores a key artefact of any culture around the world: music, and discusses the impact of information and communication technology (ICT) on the music industry. According to Vogel (1998, p. 132) "[R]ecorded music readily pervades virtually every culture and every level of society. As such, it may be considered as the most fundamental of the entertainment businesses." Besides cultural effects, this industry has important economic effects. In this particular era technological developments and a liberal, free market ideology work together in creating a global economic sphere. In this paper we will concentrate on the effects of developments in information and communication technology on the global and increasingly virtual music industry. Studies in technology dynamics indicate that social actors can and often do steer technological developments, or mediate its effects (Rip and Kemp 1998). As virtual value chains (Rayport and Sviokla 1994, 1995) pose significant challenges as well as opportunities for many countries and players who traditionally have not taken central positions in certain industries by lowering entry barriers, this industry is an excellent example of a global industry where electronic channels will have a dramatic impact. More particularly, we analyse the changing role of intermediary organisations in the music industry.