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Value Chain Envy: Explaining New Entry and Vertical Integration in Popular Music

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  • Joeri M. Mol
  • Nachoem M. Wijnberg
  • Charles Carroll

Abstract

abstract The concepts of value creation, value capture, and value protection are employed to explain new entry and vertical integration. It is posited that if, at one stage of the value system, the share of value captured is disproportionally higher than the share of value created, value chain envy will ensue. This value chain envy will result in new entry and vertical integration towards that desirable stage provided that the means of value protection available to the incumbents can be overcome. Within the popular music industries, the value created at the stage of music publishing has diminished steadily over the course of the 20th century, but the value captured has remained high. This has triggered value chain envy both inside and outside of the value system. The data presented in this paper show high levels of vertical integration into that stage originating primarily from the stages upstream in the value system, while the level of new entry has been comparatively low. At the same time, the data indicate that the recent introduction of new information communication technologies (ICT) have not significantly affected the levels of new entry and vertical integration into music publishing.

Suggested Citation

  • Joeri M. Mol & Nachoem M. Wijnberg & Charles Carroll, 2005. "Value Chain Envy: Explaining New Entry and Vertical Integration in Popular Music," Journal of Management Studies, Wiley Blackwell, vol. 42(2), pages 251-276, March.
    • Handle: RePEc:bla:jomstd:v:42:y:2005:i:2:p:251-276
    DOI: 10.1111/j.1467-6486.2005.00496.x
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    References listed on IDEAS

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    1. Wesley M. Cohen & Richard R. Nelson & John P. Walsh, 2000. "Protecting Their Intellectual Assets: Appropriability Conditions and Why U.S. Manufacturing Firms Patent (or Not)," NBER Working Papers 7552, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Pagani, Margherita & Fine, Charles H., 2008. "Value network dynamics in 3G-4G wireless communications: A systems thinking approach to strategic value assessment," Journal of Business Research, Elsevier, vol. 61(11), pages 1102-1112, November.
    2. Alexander Gleiss & Marco Kohlhagen & Key Pousttchi, 2021. "An apple a day – how the platform economy impacts value creation in the healthcare market," Electronic Markets, Springer;IIM University of St. Gallen, vol. 31(4), pages 849-876, December.
    3. Bakker, Gerben, 2012. "Adopting the rights-based model: music multinationals and local music industries since 1945," Economic History Working Papers 47507, London School of Economics and Political Science, Department of Economic History.
    4. Wijnberg, Nachoem M., 2011. "Classification systems and selection systems: The risks of radical innovation and category spanning," Scandinavian Journal of Management, Elsevier, vol. 27(3), pages 297-306, September.
    5. Andrew E Burke, 2011. "The Music Industry," Chapters, in: Ruth Towse (ed.), A Handbook of Cultural Economics, Second Edition, chapter 41, Edward Elgar Publishing.
    6. G. J. (Joost) Rietveld, 2011. "Profiting from Digitally Distributed Cultural Products: The Case of Content Producers in the Video Games Industry," Chapters, in: Killian J. McCarthy & Maya Fiolet & Wilfred Dolfsma (ed.), The Nature of the New Firm, chapter 5, Edward Elgar Publishing.
    7. Ebbers, Joris J. & Wijnberg, Nachoem M., 2012. "Nascent ventures competing for start-up capital: Matching reputations and investors," Journal of Business Venturing, Elsevier, vol. 27(3), pages 372-384.
    8. Aspara, Jaakko & Tikkanen, Henrikki, 2013. "Creating novel consumer value vs. capturing value: Strategic emphases and financial performance implications," Journal of Business Research, Elsevier, vol. 66(5), pages 593-602.
    9. Joseph Kim & Seung-Ho Kwon, 2022. "K-Pop’s Global Success and Its Innovative Production System," Sustainability, MDPI, vol. 14(17), pages 1-17, September.
    10. Broekhuizen, Thijs L.J. & Lampel, Joseph & Rietveld, Joost, 2013. "New horizons or a strategic mirage? Artist-led-distribution versus alliance strategy in the video game industry," Research Policy, Elsevier, vol. 42(4), pages 954-964.
    11. Leminen, Seppo & Rajahonka, Mervi & Wendelin, Robert & Westerlund, Mika & Nyström, Anna-Greta, 2022. "Autonomous vehicle solutions and their digital servitization business models," Technological Forecasting and Social Change, Elsevier, vol. 185(C).
    12. Gornostaeva, Galina, 2023. "The development of digital commerce in the fashion industry: The typology of emerging designers in London," Technological Forecasting and Social Change, Elsevier, vol. 186(PA).
    13. Muhammed Gul, 2020. "Digital business strategies and competitive superiority," International Journal of Business Ecosystem & Strategy (2687-2293), Bussecon International Academy, vol. 2(1), pages 17-31, January.

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