The development of a framework for managing disruptive innovation in the UK recorded music industry

Abstract

The impact on the UK recorded music industry of digital music files distributed via the Internet has been studied using Clayton M. Christensen's Disruptive Innovation Theory. The study has identified that the recent innovation of Internet retail and distribution of digital music files was indeed disruptive (rather than sustaining) in nature in its impact on the established UK record manufacturers and retailers. Furthermore, Christensen's theories have been used to investigate the factors (assets, culture and capabilities) that impeded the established UK recorded music manufacturers from adopting and promoting the new technology to create a digital consumer proposition. The reluctance of the established record manufacturers to embrace and therefore control the new technology of digital music files distributed via the Internet allowed new retailers like Apple's iTunes to become the dominant providers to the new digital consumers. The study therefore considers and identifies the organisational assets, culture and capabilities that created the most successful Internet retailing operation for digital music and in so doing reveals how to incorporate and harness disruptive technology for commercial gain within the established recorded music industry. Finally, the study proposes a strategic framework for UK recorded music companies so that they can respond successfully to disruptive technologies that will in future alter their market sector, including consumer attitudes and music usage. This framework will give the record companies the opportunity to manage the impact of disruptive technologies, enabling them to adapt their business strategies and tactics to provide a service that meets consumer needs the next time an innovative technology impacts the established manufacturing and retailing paradigm.