To collaborate or not that is the music industry’s question

Janina Natali Igelsø Najmark-Hvidt & Stephanie Nina Espersen

Student thesis: Master thesis


Music is not considered a speculative market, since it has always existed and will continue to do so. The music industry has been changed by digitalization and we can speak of a paradigm shift having occurred due to the influence of technology being vast. It has led to immense alterations forcing the music industry to adapt in order to survive. Extraordinary value creation is, now, more than ever, a precondition for the music industry to prevail over the critical downfall exposure. A widespread mentality change within consumers’ minds is one of many consequences and we can speak of a ‘Principle of Free’ being adopted. With digitalization, illegal consumption of music has become conventional and diminishing is not likely. With the improved technologies of today, now more than ever, music is at ones immediate disposal, creating natural expectations for immediate demand fulfillment. The music industry has been especially vulnerable due to its entailed exclusivity being somewhat lost in the digitalization craze. Great loss of revenue has led to vital cost cutting restructuring inherently affecting quality and overall execution of business practices. The objective for this research is, therefore, to investigate to what extent can record labels generate new revenue sources through collaborations with companies from different industries. Through secondary and qualitative data, we identified a range of intangible benefits retrieved from collaborative processes. It is deduced that clear rewards arise from these engagements and depending on the individual circumstance of how they are executed. A clear competitive advantage could be gained for a company if it was able to draw upon the uniqueness of a music artist, especially those artists whom have been able to obtain the skills, following the dynamics and development of the ever-changing market. Much consideration has to be given in this process and is stressed by the implications the effects of such collaborations have. Each collaboration is unique and it is not possible to apply a general blueprint as to how collaborations should be composed, nor a correct manner for dividing the revenue amongst collaborative parties. It was found that for a collaboration to become a competitive advantage long-term considerations are necessary. We have recapitulated eight preconditions for a successful collaboration to emerge, these include; a clear synergy, mutual trust and respect as well as the importance of authenticity. The consequences and effects following an ended collaboration must also be considered. Concluding, collaborations with companies display great potential and experiences immense support within the music industry. If collaborations are planned and executed optimally huge overall rewards can be acquired. This boosts both the music industry and corporate sector, thus generating new revenue sources.

EducationsMSocSc in Management of Creative Business Processes , (Graduate Programme) Final Thesis
Publication date2011
Number of pages142