A formal definition of cultural industries is developed following four distinct features of cultural goods: (a) oversupply, (b) quality uncertainty, (c) network effects and (d) demand reversal. Drawing on economic and socio‐psychological notions of ‘network’, increasing returns and social contagion effects are distinguished. Increasing returns may govern the adoption of standards when choices are binary, social contagion explains the diffusion of cultural goods when choices are multiple. Together, the four structural features delineating cultural industries account for curious competitive dynamics prevalent in cultural markets, such as the notorious 10 : 90 proportionality (under which 10% of cultural goods account for 90% of the market), causal ambiguity about the reasons for success, and the formation of fashions. Six managerial recommendations are advanced, focusing on a criticial circulation point triggering self‐sustaining diffusion patterns. Finally ‘project‐based enterprises’ and ‘network forms of governance’ are identified as the organizational forms most suited to the dynamics of the cultural markets.
Music plays an important, and sometimes overlooked part in the transformation of communication and distribution channels. With a global market volume exceeding US$40 billion, music is not only one of the primary entertainment goods in its own right. Since music is easily personalized and transmitted, it also permeates many other services across cultural borders, anticipating social and economic trends. This article presents one of the first detailed empirical studies on the impact of internet technologies on a specific industry. Drawing on more than 100 interviews conducted between 1996 and 2000 with multinational and independent music companies in 10 markets, strategies of the major players, current business models, future scenarios and regulatory responses to the online distribution of music files are identified and evaluated. The data suggest that changes in the music industry will indeed be far-reaching, but disintermediation is not the likely outcome.
This article reports the results of a major study, conducted between 1996 and 1999, examining the impact of de-regulation and digital technologies on the global music industry. We analyse four negotiations in the process of bringing music to the world market: commodification, globalisation, delivery, and royalty management. We show that the location of intellectual property rights in this process depends on the mutual bargaining power of the parties involved, within a statutory frame vesting music copyright initially in the author. We describe the forces which have led to the appropriation of rights accounting for 80% of global publishing and recording revenues by only five companies: EMI (UK), Bertelsmann (Germany), Warner (US), Sony (Japan) and Universal (Canada). We predict that this regime will not last and consider the likely future location of intellectual property rights in music.globalization, information society, intellectual property, music copyright, royalty, vertical integration,
Individual intellectual property right holders in music cannot easily enforce their statutory claims to exclusive usage and remuneration. Since the middle of the 19th century, composers and publishers have responded by creating collective bodies, so-called collecting societies which monitor musical activity in a given territory, and collect and distribute fees accordingly. These societies, first established in Western Europe, operate on two principles: the principle of reciprocity, linking monopolistic national societies and the principle of solidarity, making a collecting service available to all right holders at roughly the same rate. The rise of the global media corporation combined with new digital production and distribution technologies has seriously undermined these principles. The article reports recent trends drawing on over 30 interviews with executives of the five largest multinational music firms and the major copyright institutions in Germany, Japan, Sweden and the UK, including the European Commission, the World Intellectual Property Organization and national and international trade bodies. We conclude that the present structure of music copyright is likely to collapse, skewing the distribution of revenues in favour of big corporate players and global musical products if there is no institutional intervention. Policy implications are discussed.
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