The music industry is an information business where the costs of physical distribution are high. In this type of industry, existing value chains are vulnerable to fragmentation, as current and new players will attack the traditional business model, using technology to facilitate the distribution of music to the end consumer. In fact, because music is information, the value chain of this industry is particularly susceptible to rapid changes. Technology improvement will facilitate digital storage and reproduction of the music created by the artists, dramatically reducing the need for distributors and retailers and quickly diminishing the influence of the labels. The marginal cost of producing and distributing the music will become zero, allowing cost savings can be passed to the customer in the form of lower prices, while increasing the margins earned by the artists and labels.
Information also plays an important role in the popularity of the artist and the product.
The label traditionally plays a tremendous role in media publicity, which greatly influences consumer tastes and awareness. Radio stations and traditional media will hold less power over the artist as more sources of music information and reviews develop. Consumers will be able to find different types of music reducing their dependence on the information forced through the tradition promotions. Technology has made it possible for anyone with a PC to gain access to a wide variety of music, whether in CD or digital form. The revolution in the music industry has already begun.