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New Technology and Industrial Change
Professor Bob O’Keefe Dean, Faculty of Management & Law
Hong Kong University SpaceMarch 20th 2010
The Gramophone
Basic technology using cylinders invented by Edison in the 1870’s.
Disc records invented by Berliner in the 1890’s.
In 1928, RCA merged with Victor: the then largest merger in US history.
RCA Victor were the Microsoft or Goggle of their time.
His Master’s Voice: Trademark 1900
The Music Supply Chain (circa 1951)
Recording
Warehouse
Retailer
Artist
Pressing
The Music Supply Chain (circa 1965)
Consumer
Recording
Warehouse
Retailer
Artist
Pressing
The Music Value Chain (circa 1965)
Recording
Warehouse
Retailer
Artist
Pressing
Responding to consumer “demands”
Portable, Recordable
Searchable
Portable,Reliable,
Searchable
Portable, Recordable, Digital
The Music Supply Chain (circa 1990)
Consumer
Recording
Warehouse
Retailer
Artist
Pressing
The Digital Possibility ……
Recording
Warehouse
Retailer
Artist
Pressing
Digital Music Required Three Technology Advances
• Cheap, reliable memory– Hard drives: from megabytes to giga and terra bytes– Flash (NAND) memory
• Standard compression algorithms– Moving Picture Experts Group-1 Audio Layer 3 (MP3)– Advanced Audio Coding (AAC)
• Near zero marginal cost consumer networking, i.e., the Internet
Winamp
A simple, free MP3 player that drove diffusion of MP3 (over 60 million users by 2006)
The Music Supply Chain (circa 2010)
Peer to Peer Distribution: Napster
Spotify: Back to the Juke Box
Convergence