This was because of following entry barriers in different decades.

· Patents to the oligopoly. Therefore no access to technological know-how.

· Industry in its embryonic stage. This implied slow growth because of

o Buyer’s unfamiliarity with the industry product. Unless records were available machines were useless.

o High prices due to lack of scale economies

· Depression hit industry. Therefore it was consolidation time though otherwise it would have been growth stage for the industry.

· By now established firms had stronghold on production (scale economies), marketing and distribution.

· industry reached shake-out stage. There was more supply than demand. “payola” was widespread to beat the supply.

· This was maturity stage. established players had set up mature distribution network and promotional channels.

· Reconsolidation started happening.

Thus the patents in embryonic stage and a depression in the otherwise growth stage of the industry gave the initial players enough time to reach scale economies and edge in marketing & distribution which

o lack of technological-knowhow in the industry

b. Economics: there is no cost of manufacturing, distiribution and sales, but there is website setup cost (fixed cost), operating cost, and digital distribution cost. These costs depend on total sales. In the long run with hardware and software costs falling website operating costs will come down. Also on reaching scale economies in terms of sales, music can be provided to end customers at degree of magnitude cheaper rates.

o customer “perceives” the cost of supplying from a website low as it is not a brick-and-mortar setup. Therefore customer wants to buy physical product at wholesale price.

Some topics in this essay:
, Approach Internet, Conroy Zelnick, Zelnick Conroy, Universal BMG, CD Similarly, Britney Spears, music industry, scale economies, embryonic stage, record company, wholesale price, industry embryonic, popular artists, distribution division, downloaded music, industry dynamics, industry embryonic stage, growth stage industry, division supplies stock, otherwise growth stage, industry decline stage,