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Information Technology and Management

, Volume 4, Issue 2–3, pp 259–287 | Cite as

The Decoupling of Value Creation from Revenue: A Strategic Analysis of the Markets for Pure Information Goods

  • Eric K. Clemons
  • Karl R. Lang
Article

Abstract

Information and telecommunications technologies have profoundly altered the distribution channels available for a wide range of goods and services. In this paper we analyze a particular class of products, information goods and develop a first framework for predicting which information goods are most likely to see their production, distribution, and consumption patterns altered by the net, which are likely to see shifts in power and profitability, and which are likely to remain unchanged for the foreseeable future. We focus on music and news as a selected couple of very different information goods industries that follow two very different trajectories. Our results suggest that the power structure in news distribution is unlikely to be transformed rapidly. In contrast, the power structure in music is transforming rapidly. Star acts no longer need their record labels to certify their music to their fans, and digital production and distribution have reduced or eliminated the value of other assets owned by the record companies. The framework we use to analyze these two industries can readily be applied to a range of others ... from the production of television soap opera series to the publication of academic journals in polymer chemistry.

business transformation digital media strategic analysis competitive advantage theory of newly vulnerable markets 

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Copyright information

© Kluwer Academic Publishers 2003

Authors and Affiliations

  • Eric K. Clemons
    • 1
  • Karl R. Lang
    • 2
  1. 1.Strategy, Systems, and Economics Group, Operations and Information ManagementThe Wharton School of the University of PennsylvaniaPhiladelphiaUSA
  2. 2.Department of Computer Information Systems, Baruch CollegeCity University of New York (CUNY), One Bernard Baruch WayNew YorkUSA

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