Winds Of Change : Marketing effects of the Internet at Universal Music

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The internet has fundamentally changed our society during the past decade with considerable ramifications for business practices in all types of industries. The music industry is arguably one where the effects have been most evident with a drastic decline in record sales as a result of piracy and increased competition for customers’ attention. Thus, record companies must find new ways of satisfying music consumers’ needs by restructuring their promotion and distribution processes. Therefore, this paper investigates how the internet has affected the promotion and distribution of music at major Swedish record companies by performing a case study at Universal Music AB. To analyse the effects of the internet, a resource based view of the firm is adopted with special focus on market based assets. The analysis indicates that the most significant changes brought about by the internet regarding the distribution of music are the transition from brick and mortar retailers to online equivalents and the creation of alternative means of distribution, such as digital sales. The internet also contributes with new channels for music promotion, which not only increase competition for customers’ attention but also encourage the search for new marketing partners, particularly evident in the demise of MTV and the emergence of online channels such as Yo...