And the Band Played On

Understanding how changes in an industry lead to changes firm profitability, and hence strategy, is often difficult to detect. Even when drastic changes occur within a decade, as in the music industry, it takes a careful eye to uncover these effects. In Joel Waldfogel's recent paper, "And the Bands Played On: Digital Disintermediation and the Quality of New Recorded Music," he brings together a number of different analyses that document the evolution of this industry. Some findings are:

• While the number of major-label album releases fell, the total number is up.
• This has been accompanied by less concentration of sales in the top albums. 
• Internet radio and online criticism have altered how consumers get product information. 
• Albums are finding commercial success without traditional radio airplay. 
• Albums from independent labels account for a growing share of successes.

These changes are likely to have undermined the profitability of major labels and top radio stations, much to the benefit of musicians.