The Disruptive Nature of Digitization: The Case of the Recorded Music Industry

International audienceThis article draws on the theory of disruption to analyze the impact of digital technology on the recorded music industry and to explain the delay of dominant firms in reacting to this technological discontinuity. The author shows that digitization matches the characteristics of disruptive innovation as described in the literature. He explains why established firms initially paid little heed to an innovation leading to a product (digital music files) that is cheaper and poorer in quality than their existing product (CDs) and ill-suited to mainstream consumers. The reaction of these firms has been typical of the behaviour of companies facing disruptive innovation. Confronted with an innovation that they see as more of a threat than an opportunity, incumbent firms have found it extremely difficult to accept the need for a radical rethinking of their business model