Question

1. What industry conditions lead to the revolution in audio distribution? Which stakeholders stand to benefit most (or least) from this revolution?

2. Why did the music stores created by the record labels fail to attract many subscribers? What, if anything, should the record labels have done differently?

3. What factors led iTunes to be successful?

4. What new models of music distribution have emerged, and what do you think will influence whether they endure?

Answer 1

1. Innovation of technology in audio space has revolutionized audio distribution. Through invention of MP3 format larger digital audio compressed and shared over hard drive and internet. This technology revolutionizes distribution of music. Consumer win from this revolution because of easy distribution and transmission.
2. Main reason for failure was proprietary file formats used by the labels which limited digital rights management (DRM) schemes. They could have collaborated in developing an open dominant design candidate with complementary goods.
3. Less restrictive DRM, a greater number of songs, two file formats led to the success of iTunes.
4. Online streaming of music with out any right of digital storage is the emerging model of music distribution. Here consumer pays to stream the song.