The impact of exogenous shocks on business models and business relationships: An empirical analysis of the Italian music industry

Abstract

Purpose Scholars have been increasingly interested in understanding business models. However, little attention has been paid to how business models change in reaction to exogenous circumstances and how business relationships alter as a result of business model changes. This paper investigates how the business model paradigm of the Italian music industry altered in response to two major exogenous influences that impacted the sector: the digital revolution and the COVID-19 pandemic.

Design/methodology/approach As the purpose of this study is to investigate phenomena in a real-world setting, qualitative research methodology has been selected as the most appropriate one. We decided to conduct sixteen semi-structured interviews with professionals active in the Italian music business that have been selected by a combination of snowball and convenience sampling

Findings Our empirical findings indicate that the digital revolution and COVID-19 pushed Italian music companies to revise their business models by either reducing the number of linkages to the existing ones or adding new linkages to the existing ones. This was done in order for the companies to remain competitive in an environment that is constantly changing and to outcompete competitors.

Originality/value Few studies have evaluated how business relationships alter in response to the many business models emerging in the music industry due to external causes. Our research is one of the first to examine music companies' reactions to exogenous events such as crises or disruptive advances that affect the competitive landscape.