Major Record Labels’ Strategic Positioning in the Digital Popular Music Market

The Internet has revolutionized the tradition market structure of the music industry, moving from a total vertical integration of activities under major record labels’ control to a rise of independent labels and a segmentation of supply chain’s activities. It has thus led to debates about the importance of major labels in guaranteeing artists success in the digital era. This research aims to understand whether the use of the Internet has lessen majors’ market power to the extent that DIY practices taken over by independent labels can compete with majors’ production, promotion and distribution strategies. It focuses on the French popular music market after the Internet revolution and and it is based on tracks’ performances in Spotify’s Top-200 charts between the beginning of 2017 until the end of 2018. Short-term success is measured by the discounted amount of streams of each tracks present in the database, and long-term success is indicated by their survival probability on charts. An OLS regression has enabled to underline majors’ outperformance for album tracks on the short run while an AFT model has revealed longer survival time of signed tracks in top-charts. Thanks to a distinction between several organizational deals allocating supply chain’s activities to different types of labels, this research shows that major record labels hold a competitive advantage in the promotion field while independent labels are fierce rivals in production and distribution operationalization. Thus, majors are expected to attract aspiring artists with new acts guaranteeing outstanding marketing plans which will ensure them higher instant fame and better career management over the long run. In the digital era, online strategies are crucial to compete with new players on the market, however their use is not sufficient to build a sustainable artistic career in the French popular music industry. Major record labels can thus still assert their market domination if a re-positioning towards unmatched promotion strategies is appropriately undertaken for promising artists.