Ultimately, the three major record companies marketed using a similar strategy of targeting all genres of music, diversifying their investments and securing valuable shelf-space, making it extremely difficult to find a point of entry into the marketplace.
• Mergers and acquisitions.
Strategic mergers and acquisitions made it possible for the "majors" to maintain dominance within the recording industry. By 1999, 85% of global market for recorded music was owned by the "majors" (BMG, EMI, Sony, Warner, Universal). These mergers and acquisitions added to the size of the major record companies, pushed smaller competitors out of the industry, and allowed them to withstand business cycle trends more effectively than small record companies due to their diversified position.
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b).
How does the advent of the Internet change the structure and economics of music industry? Will major record companies continue to dominate the business?.
From a structural standpoint, the changes that will be brought out include lower barrier to entry, reorganization of the supply chain, and subjecting the public to a different point of service. The first idea stipulates that entrepenurs will no longer have to invest as much money as before into such things as vertical integration and developing a retail distributor center. As for supply chain reorganization, digital music will be available, eliminating the need to manufacture and distribute records. Inventory levels can also be minimized due to the possibility of storing music data (data storage vs. inventory storage). The third idea stipulates that people will no longer need to go to retail stores to buy music, as websites are available as a convenient substitute.
From an economic standpoint, there is an increasing market share for online music businesses and a decreasing market share for the brick-and-mortar retailers, as people will be "buying bytes" instead of buying tangible music media.