Value Chain Envy: Explaining New Entry and Vertical Integration in Popular Music*

Joeri M. Mol, Nachoem M. Wijnberg and Charles Carroll

Journal of Management Studies, 2005, vol. 42, issue 2, 251-276

Abstract: abstract The concepts of value creation, value capture, and value protection are employed to explain new entry and vertical integration. It is posited that if, at one stage of the value system, the share of value captured is disproportionally higher than the share of value created, value chain envy will ensue. This value chain envy will result in new entry and vertical integration towards that desirable stage provided that the means of value protection available to the incumbents can be overcome. Within the popular music industries, the value created at the stage of music publishing has diminished steadily over the course of the 20th century, but the value captured has remained high. This has triggered value chain envy both inside and outside of the value system. The data presented in this paper show high levels of vertical integration into that stage originating primarily from the stages upstream in the value system, while the level of new entry has been comparatively low. At the same time, the data indicate that the recent introduction of new information communication technologies (ICT) have not significantly affected the levels of new entry and vertical integration into music publishing.

Date: 2005
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