How Relevant is Transaction Cost Economics to Inter-Firm Relationships in the Music Industry? (original) (raw)

A paradox of alliance management: resource contamination in the recorded music industry

Journal of Organizational Behavior, 2007

This paper deals with the problem of resource contamination in alliances, where incompatible resources may be transferred into or accessed by partner firms, thereby devaluing their own resources. Theory explains how collaborations between organizations can allow mutually beneficial resource combinations through the transfer of, or access to, the assets and/or capabilities of each partner. Research has focused on how to facilitate intended resource transfer while limiting unplanned appropriation of other resources. Here, we address how organizations can protect themselves from contamination by their partners. Resource inimicality arises from idiosyncratic path-dependent processes that create organizations with very different skills, assets and institutions. Thus, a paradox emerges where resources that are complementary may nonetheless be hostile if brought together in one firm: the exposure of one partner to another may erode the distinctive properties that make the partnership valuable. This paper explores this resource contamination perspective using interview data from managers of one Major music company and several smaller Independent partners. In this industry it is common for collaborations to occur between organizations whose resources are focused on the identification and creation of new artistic products, and partners whose resources exploit such products. These resources are complementary but also potentially hostile. We discuss the role of institutional structures and boundary spanners, individuals who mediate resource transfer across the organizations' boundaries, in resolving this paradox and inhibiting contamination. Copyright © 2007 John Wiley & Sons, Ltd.

Making the Mainstream Market: Organizational and Musical Change in the U.S. Recording Industry.

Doctoral Dissertation , 1996

The present study examines the dramatic changes that have occurred in the mainstream recording market -- the largest market for sound recordings in the U.S. Whereas a number of scholars explain market change by touting the emergence of new technologies or new competitors, this study develops an alternative explanation. Drawing on neo-institutional theory, it is argued that the impact of competition or technology is conditioned by the "commodity conception" held by market producers. This term refers to the widely-shared assessment of producers regarding the type of goods that are appropriate for their market. These conceptions entail more than consensus among market producers; they also provide the interpretive lens through which producers view their market. As a result, these conceptions shape the strategies that firms pursue. The first portion of this study documents the commodity conceptions that reigned in the mainstream from 1878 to 1896. Early market producers, for example, agreed that the phonograph should be leased for business dictation. As these early conceptions are analyzed, it comes clear that they shaped the manner in which competition occurred and the fashion in which new technologies were adopted. The second portion demonstrates how later commodity conceptions led dominant firms to shift from predatory strategies (i.e., seeking to eliminate competitors) to cooptive strategies (i.e., seeking to benefit from competition). This strategy shift had major implications for the operation of the mainstream market. Poisson and negative binomial analyses of new firms between 1940 and 1990 show that when dominant firms pursued predatory strategies, then increasing market concentration damped the number of new mainstream firms. When dominant firms pursued cooptive strategies, however, then increasing market concentration stimulated the number of new firms. Likewise, quantitative content analyses reveal that as dominant firms increasingly relied on cooptive strategies, the mainstream recordings became more musically diverse. Therefore, both sets of analyses demonstrate the theoretical point stressed at the outset: the impact of competition and technology is conditioned by the commodity conceptions -- and attendant strategies -- held by market producers.

Disintermediation Effects on Independent Approaches to Music Business

International Journal of Music Business Research (IJMBR) – issn 2227-5789, 2014

In the aftermath of the digital revolution, business models are changing and disintermediation is impacting the music economy. In these circumstances, we observe the widespread claim that music artists are able to successfully reach the market on their own, leveraging access to networked global communications and the use of digital network media as a means of production. This paper argues such arguments feed on the ideals of independence in the context of an experimental and transitional stage that the music industry is currently undergoing, and that may be part of a recurrent cycle leading to the establishment of a new generation of intermediaries.