Chart Success and Innovation in the Music Industry: Does Organizational Form Matter?

Abstract

In recent years, media industries are increasingly regarded as key settings for traditional organizations to draw lessons upon (Markides, 2006) as far as innovation strategies are concerned, due to the structural changes they are witnessing, and to the high pace of introduction of new products. Our research addresses different innovation strategies by investigating the competitive dynamics in the launch of new artists in the US music market, between 1991 and 2005. Our results show that, in a creative setting affected by growing environmental turbulence, established firms (majors) tend to adopt an emerging organizational form, by establishing partnerships with independent organizations (indies), in order to systematically introduce new products. Our results also show that the partnership is a winning form only when it is specifically aimed at exploration, that is to say, when it refers to the launch of new albums by previously unpublished artist.

Key Words:

• alliances
• innovation
• growth
• recording industry