The “ Big Four” have now been reduced to just three with the sale of EMI to Universal. At various times, each of these companies has also been affiliated to substantial film, electronics and publishing interests – further proof of the vertical and horizontal integration. The 1970s began a rapid process of horizontal integration, as the major record labels merged with one another at such a rate that by the late 1990s there were really only four global companies – Sony, Warner, Universal and EMI.
The major record labels owned the content, the means of production (recording and manufacture), the publishing and licensing activities, the distribution channels – and in some cases, they even manufactured the hardware, owned the retail stores and promoted live concerts. Most debate about the demise of the music industry is predicated on the impact of technology that facilitates music piracy, whereas in reality the business model has been broken as a consequence of digital disintermediation.įor most of its history, the recording industry was a model of vertical integration. Yet, rather like Mark Twain, the death of the record industry appears to be greatly exaggerated. Or, more specifically, has disintermediation broken the business model?Įver since the invention of compact cassettes in the 1960s and the arrival of the Walkman in the 1970s, pundits have been predicting the end of the music business (remember those “Home Taping Is Killing Music” campaign logos of the 1980s?) – a theory that look set to come true in the 1990s with the launch of mp3 players and peer-to-peer file sharing.
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