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Recorded music supply network reconfiguration: the dual effect of digital technology

Current literature on the impact of technology innovation has mainly focused on manufacturing firms and networks and has considered technology impact as having an immediate effect on the supply network. This paper analyses how digital technology has impacted the recorded music supply network, a fast moving supply chain, arguing that it had a twofold effect. It was initially applied to the production process, displaying a competency enhancing effect but not changing substantially the industry structure and governance pattern. It was only when applied to the distribution process, the governance-granting process, that its impacts were fully deployed, allowing the entry of new types of players adopting new business models and challenging the former governance pattern: the hierarchical governance was replaced by a pattern in which agents organise themselves in project-based, adhoc configurations, and market access is not controlled by large companies.