7.
7. Conclusion
The music industry has changed significantly. With digitalization, the illegal consumption of music has become conventional and is likely not going to diminish. Music has never before been consumed in such amounts and consumers understand how to utilize the various digital platforms. This is a very positive outcome and recent studies further illustrate the significance music actually has for the individual. Despite the positive impact of digitalization with the
‘Principle of Free’, being present it has become necessary for the music industry to look beyond its borders and explore alternative ways to regain strength.
The mentioned alteration of the music industry has motivated us to investigate how it can capitalize on collaborative engagements between artists and companies. We aimed at examining what elements are necessary to increase gains, thereby lifting the music industry.
Furthermore, it was vital to explore what resources were necessary for collaborations to become successful; therefore, the objective of this research was to investigate
“How can record labels generate new revenue sources through collaborations with companies from different industries?”
Two sub-questions were posed in order to obtain greater knowledge concerning elements forming the basis for answering our main research question. Our concluding observations are primarily drawn upon information obtained from our respondents.
1. What are the resources necessary for collaboration establishment and value generation?
No blueprint exists outlining what resources are necessary for establishing a successful collaboration, because each is unique. However, prior to initiating collaborations vital elements have to be present such as financial resources to secure funds for a campaign to be realized and an explicit synergy must exist between the collaborating parties. Organizational expertise is an imperative due to processes and goals having to be well orchestrated in order for synergy to be retained as well as ensuring a carefully planned campaign. If expertise is not a prevailing element, disastrous outcomes can occur and ultimately damage both artist and company. Contrarily, if all crucial elements are kept in mind and the campaign is executed
successfully the collaborating parties will experience greater value generation - hereby a win-win situation occurs. A general stance among our respondents is in fact that a need for mediators specializing in these types of collaborative processes exists.
Emphasis has to be put on the extent to which both the music industry and corporate sector need to draw upon the strengths both have to offer, thereby utilizing the best of both ‘worlds’.
In order to create the strongest collaboration possible both parties are required to provide VRIN/O resources to enforce this. Due to the market continuously changing and developing, great necessity lies is the ability to adapt correspondingly. This implies constant internal development that expands current resources into dynamic capabilities, thus creating sustained competitive advantage.
2. How will the involved parties share the value of the collaboration?
There is no one way to estimate and share value in a reasonable precise manner. A number of diverse aspects contribute to the complexity of determining the right allocation of value between parties. This could include the scope and purpose of collaboration and the size and image of a particular artist or company. Fundamentally, artists and music are in themselves identity creating and carrying and retain the ability to influence consumers at a much deeper level than any other instance prevails upon. We found, that during the preparation phase many resources and effort has to be put into determining what each party can contribute with and what they expect to gain from the collaboration. Mutual respect is of utmost importance and lays the foundation of trust. If this is already established and affirmed each party is less likely to display opportunistic behavior.
Affecting the image of the collaborating party cannot be avoided, which underlines the imperative of ensuring alignment. What was further observed was that from a company’s perspective it is decisive that the image and value set is preserved and reputation not damaged by collaborations. Whom it chooses to collaborate with has to reflect what the company represents and is a decisive factor in terms of strengthening the identity additionally – this further regards artists. As the exact outcome of collaborations is often uncertain, a proper division of value is affected by this unpredictability. For this reason, a contract must therefore be adopted as a tool to ensure both parties are treated and compensated fairly. However, if no
common value set is possible to attain then a collaboration should not even be considered, as no positive outcome will result from this.
Through answering our two sub-questions, we have discovered a number of intangible benefits retrieved from collaborative processes. What has to be kept in mind is the fact that no one single manner of measuring success of collaborations exists. Clear benefits arise from these engagements, however, they depend on individual circumstance and execution. If a company is able to acquire the skills following the dynamics and development of the ever-changing market as well as take advantage of the uniqueness of an artist representing music and all it entails, a clear competitive advantage will be gained. Furthermore, considering the implications the effect of such collaboration gives rise to, only stresses how much consideration must take place. Moreover, as each case is unique it is not possible to apply a general blueprint on what the intangible benefits might be and how these are divided. In order for a collaboration to become a competitive advantage, the engaging parties must think long-term. Furthermore, they are required to consider the long-term consequences and effects after their collaboration is ended.
Collaborations with companies display great potential and experiences immense support within the music industry. To emphasize, if collaborations are planned and executed to their then enormous overall rewards can be acquired. Consequently, this boosts both the music industry and corporate sector, thus generating new revenue sources.