Apply the Value Chain and Competitive Forces Models to the Music Recording Industry

1. Apply the value chain and competitive forces models to the music recording industry.

The music industry is experiencing probably the most radical change since 1877 when Thomas Edison invented the phonograph. The first decade of 21st century was the transient state of mediums. We went from the physical mediums to digital music. To flash or hard drive music storage and if we look in tomorrow we have to consider the "cloud" storage. Undoubtedly this affected the way music is created and merchandised. The Value Chain had to be adjusted in order to stay successful and profitable. An industry that is worth over 130 billion dollars in 2010 is a gigantic "place" that had a lift off in the past few years if you consider that the worth back in 2005 was 38 billion dollars. But for the Value chain the things are very simple. Internet has demolished the small distributors but gave monstrous earnings to the pioneers and the "chameleons" of the industry. Today, companies like Apple and Amazon host the biggest music stores in the world. You can buy and instantly download a song or a whole album with one click. That perspective left the distributors and music merchandisers out of the business. Now the companies don't need to search, find, distribute from town to town the music. It's just uploaded on a server and you re done. In addition this gave the opportunity to new comers in music scene to make a career or publish their songs