The Impact of a Radical Innovation on Business Models: Incremental Adjustments or Big Bang?

Marc Bourreau, Michel Gensollen () and François Moreau
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Michel Gensollen: ECOGE - Economie Gestion - I3 SES - Institut interdisciplinaire de l’innovation de Telecom Paris - Télécom Paris - IMT - Institut Mines-Télécom [Paris] - IP Paris - Institut Polytechnique de Paris - I3 - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique, ECO-Télécom Paris - Equipe Eco Economie - I3 SES - Institut interdisciplinaire de l’innovation de Telecom Paris - Télécom Paris - IMT - Institut Mines-Télécom [Paris] - IP Paris - Institut Polytechnique de Paris - I3 - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique, SES - Département Sciences Economiques et Sociales - Télécom Paris - IMT - Institut Mines-Télécom [Paris] - IP Paris - Institut Polytechnique de Paris

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Abstract: In this paper we study the impact of a radical technological innovation on business models. Do firms react by adjusting their business models incrementally, through iterative steps? Or do such innovations lead, instead, to a big bang of new innovative business models that are all adopted and experimented with by the industry? To answer these questions, we analyze the impact of digitization—a radical innovation—on business models in the recorded music industry. Using an economic analysis of the effects of digitization, we begin by building five potential digital business models for the music industry. Then, using data from a survey on a sample of French record companies, we map these record labels on our digital business models. Our analysis suggests that digitization has led to a big bang of business models in the music industry, rather than to incremental adjustments of the existing business model.

Keywords: Business models; Innovation; Digitization; Recorded music industry; L2 L86 Z1 business models innovation digitization recorded music industry; L2; L86; Z1 business models (search for similar items in EconPapers)
Date: 2012
Note: View the original document on HAL open archive server: https://hal.science/hal-01345406v1
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Citations: View citations in EconPapers (1)

Published in Industry and Innovation, 2012, 19 (5), pp.415-435. ⟨10.1080/13662716.2012.711026⟩

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Journal Article: The Impact of a Radical Innovation on Business Models: Incremental Adjustments or Big Bang? (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01345406

DOI: 10.1080/13662716.2012.711026

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