Facing the Music: Value-Driven Electronic Markets, Networks and Value Webs in Economic Integration of Digital Products

Abstract

The underlying premise for this chapter is that a solution for DRM protection and related issues must be found on the business side, i.e. the solution must present itself within a business model, as technical solutions will always be temporary ad infinitum, resulting in endless revisions, upgrades, catch-up efforts, and improvements. There is no question that evolving and future distribution systems for images, music and movies will be digital and the distribution itself will be electronic via networks and e-channels. This contribution explores this setting in terms of economic and organizational underpinnings of electronic markets, networks and channels. We can presently observe the evolution of value networks, value-adding channels, as well as entire value webs in the distribution (and value) chain. A value web is a customer-driven network of independent firms who use information technology to coordinate their value chains to collectively produce a product or service for a market. Finally, we address some of these observations, descriptions and discussions in the context of DRM, specifically the music and movie industry. We will offer some insights, address current developments, but also some speculations how these industries may (and quite possibly must) progress.