From Major to Minor: How Digitalization and Business Models Support the Democratization of the Music Industry

Abstract: With a long history of oligopolistic practices within the music industry, the major labels have upheld their traditional business model and benefitted from the high barriers of entry of working as an artist. Digital technologies have disrupted the supply chain of music by lowering entry barriers, which has allowed for the new forms of business models to gain a footing within the industry. The purpose of this study is to explore how the digitalization of the music industry has democratized its supply chain, and analyze the role played by business models in this process. This is an exploratory qualitative study inspired by Hesmondhalgh's (2019) democratization conceptualization, power-dependence relations as well as a practice approach towards business models. Semi-structured in-depth interviews were held with industry executives and relevant informants. Qualitative content analysis was thereafter used to fulfill the purpose of the study and develop a revised model of the recorded music industry's democratization. The findings suggest that digital technologies significantly contributed to the recorded music industry's democratization by increasing artists' access to the supply chain. Beyond the functional availability, digital technologies have also vastly reduced their cost barriers, thereby increasing access further and presenting artists with alternatives to the traditional record label structure. Both of these developments mitigate the artists' dependency on major labels, which have created a more equalized power-dependence relationship. The democratization has enabled new firms' business models to exist by providing them with infrastructure and process technologies on which their market offerings are built. In turn, business models have the capacity to support the industry's democratization, highlighting their performative role as they both reflect and shape the democratization process.