Resumen

With entering the twenty-first century a new era had begun, the digital era. The dynamic forces of digitization on the Sound Recording Industry were remarkable. With the introduction of digital music, along with a new, virtual reality and the facilitated communication and access to an enormous amount of information that the Internet provides, static conditions were overrun and economics that have dominated in the industry for nearly a century were altered by new product and service innovations. Record Companies struggled with the effects of digitization, especially with the economic losses of revenues due to the dropped physical album sales in the recent years, and were in the need to undergo a fundamental transformation. While Major Record Companies are in great power in the physical music market due to their ownership of main manufacturing facilities and distribution networks, they have lost their power in the digital music market, due to the easiness to duplicate and distribute the digital music file through the Internet. For Independent Labels on the other hand, digital music meant a liberalization of the dependency on the Major Record Companies, mainly their distribution systems, an important shift towards the equalization of power. The immense costs reduction created great opportunities to increase their ability to create, promote, introduce and monetize music. Consumers who before highly depended on the Music Label´s presentation of music and domination of the traditional promotion channels in order to gather information and discover new music, have been empowered with new bargaining power and music consumption freedom, due to a great availability of free online music channels and flow of information on the Internet. At the same time new threats challenge the Sound Recording Industry. Especially the increasing number of competitors, the problematic situation of monetizing the musical content in the digital age and the low consumer´s willingness to pay for music, provide difficult market conditions to generate a secure flow of income. Altogether, these events form a highly volatile music market, influenced by new technology and consumption opportunities. Deductively Major and Independent Labels in the Sound Recording Industry must be constantly aware of new upcoming trends and tendencies, possibilities to capitalize on and new threats to defend, in order to be successful in the new digitized music market environment.

Palabras clave: Record Label.

Esta tesis sólo puede ser consultada por miembros de la Comunidad Universitaria. (ir al índice de contenido)

Dresel, C. Y. 2014. The Economic Impact of Digitization on the Sound Recording Industry: Business Opportunities for Small Companies. Proyecto Integrador Licenciatura. International Business Administration. Departamento de Administración de Negocios Internacionales, Escuela de Negocios y Economía, Universidad de las Américas Puebla. Abril. Derechos Reservados © 2014.