Business Innovation and Disruption in the Music Industry

Business Innovation and Disruption in the Music Industry

Edited by Patrik Wikström and Robert DeFillippi

Over the past fifteen years the music industry has experienced a disruptive process of digital transformation that has reshaped most aspects of the industry; in 2015 the contours of a “new music economy” have begun to emerge. The structure and mechanics of these evolutionary processes vary considerably between continents, and this book examines these processes within Europe, America and Asia. The contributors offer a range of theoretical perspectives, as well as empirical findings from the social sciences and business, as well as the media industries. They offer a holistic understanding of the forces shaping the new music economy, and shed some light on the impact of these forces on the ways in which music is created, aggregated and distributed, and on the economic and social consequences for industry producers and consumers.

Chapter 5: Digital disruption and recording studio diversification: changing business models for the digital age

Allan Watson

Subjects: business and management, knowledge management, organisational innovation, innovation and technology, knowledge management, organisational innovation


This chapter is concerned with three key elements of a ‘digital disruption’ effecting the contemporary recording studio sector: (1) falling recording budgets from a wider economic crisis in the musical economy; (2) home recording technologies; and (3) audio quality. These developments have challenged the future viability of recording studios as formal, professional spaces of recording. The chapter examines diversification as a strategy being adopted by recording studios to remain economically viable businesses in the face of these challenges. Set in the context of the rise of ‘dual-market’ audio facilities, the chapter provides a case study of the service diversification of the world-renowned Abbey Road Studios in London. Then, considering the potential for diversification across the sector more widely, the chapter identifies medium-sized professional studios as the potential losers in an industry in which large ‘audio service centres’ gain the lion’s share of heavily reduced corporate recording budgets, and small home and project studios offer audio services at rates that larger studios simply cannot afford.

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