new technology and industrial change professor bob o’keefe dean, faculty of management & law...

New Technology and Industrial Change

Professor Bob O’Keefe Dean, Faculty of Management & Law

Hong Kong University SpaceMarch 20th 2010

The Gramophone

Basic technology using cylinders invented by Edison in the 1870’s.

Disc records invented by Berliner in the 1890’s.

In 1928, RCA merged with Victor: the then largest merger in US history.

RCA Victor were the Microsoft or Goggle of their time.

His Master’s Voice: Trademark 1900

The Music Supply Chain (circa 1951)

Recording

Warehouse

Retailer

Artist

Pressing

The Music Supply Chain (circa 1965)

Consumer

Recording

Warehouse

Retailer

Artist

Pressing

The Music Value Chain (circa 1965)

Recording

Warehouse

Retailer

Artist

Pressing

Responding to consumer “demands”

Portable, Recordable

Searchable

Portable,Reliable,

Searchable

Portable, Recordable, Digital

The Music Supply Chain (circa 1990)

Consumer

Recording

Warehouse

Retailer

Artist

Pressing

The Digital Possibility ……

Recording

Warehouse

Retailer

Artist

Pressing

Digital Music Required Three Technology Advances

• Cheap, reliable memory– Hard drives: from megabytes to giga and terra bytes– Flash (NAND) memory

• Standard compression algorithms– Moving Picture Experts Group-1 Audio Layer 3 (MP3)– Advanced Audio Coding (AAC)

• Near zero marginal cost consumer networking, i.e., the Internet

Winamp

A simple, free MP3 player that drove diffusion of MP3 (over 60 million users by 2006)

The Music Supply Chain (circa 2010)

Peer to Peer Distribution: Napster

Spotify: Back to the Juke Box

Convergence