Concentration and product diversity in culture-based industries: A case study of the music recording industry

• Main Author: Alexander, Peter James
• Language: ENG
• Published: ScholarWorks@UMass Amherst 1990
• Subjects: Economic theory|Music|Labor relations
• Online Access: https://scholarworks.umass.edu/dissertations/AAI9110098

This dissertation explores the relationship between technical innovation, product innovation, and industry structure in culture-based industries, taking the music recording industry as a case study. It investigates how technical change may stimulate the entry of new firms and examines the role of new firms as product innovators. Evidence is provided which suggests that the two periods of significant competition in the recording industry have occurred as a consequence of technical innovations that facilitated the entry of new innovative firms. These technical innovations reduced the level of fixed costs and the scale of efficient operation in production and manufacture. Horizontal mergers and increased vertical integration are major factors in subsequent periods of renewed industry concentration. It is suggested that a consequence of a high level of industry concentration is a lower level of product diversity and variety.