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Innovation Dynamics and Evolutionary Economic Paths in the Music Industry

By Massimiliano Mazzanti and Caterina Cardinali

Abstract

This work aims at analysing the evolution of music industry, since the beginning of music marketed as a product for the masses until the new frontiers of digital music. Our goal is to identify which factors played a key role in the evolution of the demand in the last years and in the largely discussed crisis of the international music market. In order to reach our goal, it is necessary to contextualise the analysis, starting from the definition of the so-called pop music, or popular music, that must not be confused with the expression “musica popolare†that in Italian defines folk traditional music. We analysed diverse sets of data, ranging from economic ones to sociology-related studies, which helped us to understand, through the contribution of several schools of thought, which factors influence music consumption and to what extent demand and supply influence each other. Our work focuses on the conception of the music market as an eclectic sector of cultural industry, halfway between entertainment, leisure and culture. Music can be used in several ways, and during the years the use has been modified by the implementation of new technological means (particularly referring to the phonograph) by the attempt to satisfy needs that change constantly, such as self-accomplishment, social aggregation or escape from the routine. On the basis of these needs the industry periodically tried to control demand through push strategies, trying to impose new musical trends and pull strategies, adapting to the consumption trends registered. It is important to determine to what extent acting on the market influenced the current situation and whether in this context music is the only element to take into account or not. Our idea is that music does not always play a key role in demand dynamics, that is to say music influences consumption to the extent it is able to meet specific requests by the public, that sometimes are not strictly related to the product itself. Because of the uncertainty of the record industry, technology, market situation and demand become extremely interdependent factors.Schumpeterian dynamics; Music industry; Appropriability; Radical innovations

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