Supply chain music industry and changing business models in Italy

The music industry is the first media market overcome by the recent technological evolution. This study presents an empirical analysis on the Italian music industry supply chain. The music industry is a complex system in which many different actors interact. In this system there are suppliers of musical instruments, music schools, authors, singers, recording companies, music publishers, live events organizers and also the suppliers of those electronic devices needed to listen to the music. In this study we calculate the size of each segment in 2009 and the changes over the previous year, identifying and analyzing the key nodes in this system. The final outcome is the estimation of the total value of this media market in Italy. Italian data show that the music industry makes more money from discotheques, live exhibitions and physical sales. The music market is not only a recording industry but a more complex system, even if historically the recording industry was its most important section,. Thus, a broader analysis of the supply chain sheds light on more general dynamics allowing deeper explanations of trends. The last years “CD crisis” makes clear that recording companies now do not only sell CDs or digital music (niche market), but also give a wide range of services to artists: merchandising, organization of live events, licencing, product placement, management, co-branding, etc. Definitely, above all, the big recording companies (Majors) are changing business models to survive. For small recording companies it is harder and many of them are going out of the business. Because of its complexity and, above all, the absence of data for too many countries, it is not possible to make the same analysis at a world or European level but we can presume a similar trend is in developed countries.