The aim of this research is to assess the role of digital music distribution services in the downturn and restructuring of the music industry. The research was bound by the systems of innovation conceptual framework and explores the dynamics between the technical, social, legal and economic dimensions with the purpose of understanding how the traditional supply chain has changed. The cases of MP3.com, Napster and Kazaa are studied for their historical significance and the sheer breadth of issues they bring to the fore. Data was collected using documentation review and interviews. The findings of the research show that the creation of digital music distribution services initially resulted in disintermediation. However, it was not long before record companies reintermediated into the supply chain with pay-per-download (PPD) and subscription payment schemes. Today, the law seems to be catching up with entities that illegally distribute music but it has not ceased the development of newer online establishments that are technically not in breach of legislation
