ARTIST & REPERTOIRE 2.0 A STUDY ON THE INFLUENCE OF DIGITALISATION ON THE ROLE OF A&R MASTER THESIS COPENHAGEN BUSINESS SCHOOL 2016 MSCSOCSC IN MANAGEMENT OF CREATIVE BUSINESS PROCESSES AUTHOR: Katharina Leichter SUPERVISOR: Lise Oxenbøll Huggler SUBMISSION DATE: 9th September 2016 CHARACTERS: 180.699 PAGES: 79 Abstract The artist and repertoire (A&R) department of record labels is responsible for the selection of artists as well as the development of economically exploitable music content. The A&R department, thus, represents a core competence of the record label that mainly influences its market performance. Throughout the last two decades, disruptive technological developments tremendously changed the production, distribution and consumption of music. The digitalisation, thereby, profoundly influenced the way A&R departments are working today. Following four expert interviews with A&R mangers, this study discusses the effects of digitalisation on A&R practices. The analysis of strategic resources of A&R in a post-digitalisation era, thereby, allowed for the identification of current A&R challenges. The findings suggest that as artists nowadays make use of digital tools to produce music themselves, the A&R manager’s role in the artist’s creative process got reduced. Artists do not look for labels anymore primarily for the production of music, but rather sign with them in order to profit from the record label’s network and expertise. Hence, an A&R manager’s network is argued to pose a strategic factor to the record label that strengthens its bargaining power. Furthermore, the results propose that the digitalisation increased the strategic importance to build competitive talent acquisition competencies. A&R managers’ networking abilities, thereby, are argued to support talent selection processes. In addition, A&R managers are increasingly engaging in “Data Driven A&R”, that enables them to discover talent through the analysis of digital information on the Internet. However, as this information is available to anyone, data driven artist sourcing leads to an increased competition that is challenging A&R departments. Therefore, the findings emphasise the importance of tools that facilitate quick and effective decision-making. The findings further suggest that “Big Data Scouting” is challenging the long-term profitability of record labels as it promotes the short-term success of hit singles, rather than the building of artists’ long-term careers. Therefore, A&R managers seem to increasingly concentrate on the acquisition of local talent in an early point of their career in order to balance this short-term trend with the securement of long-term exploitation rights. 2 1. INTRODUCTION ......................................................................................................................................... 5 1.1. RESEARCH QUESTION .............................................................................................................................................. 6 2. LITERATURE REVIEW ............................................................................................................................. 8 2.1. THE DIGITALISATION OF THE MUSIC INDUSTRY – A BRIEF HISTORY ........................................................... 8 2.2. ARTIST AND REPERTOIRE .................................................................................................................................... 10 2.2.1. A&R as a Gatekeeping and Boundary Spanning Function .......................................................... 12 2.2.2. A&R Policy ......................................................................................................................................................... 13 2.2.3. Networking ....................................................................................................................................................... 15 2.2.4. Changing A&R Landscape .......................................................................................................................... 17 2.3. TALENT SELECTION ............................................................................................................................................... 19 2.3.1. Decision-Making in A&R ............................................................................................................................. 21 2.3.2. The Role of Intuition in Decision-Making ........................................................................................... 23 3. THEORETICAL FRAMEWORK ............................................................................................................. 24 3.1. RESOURCE BASED VIEW OF THE FIRM ................................................................................................................ 24 3.1.1. From RBV to Resource Management .................................................................................................... 25 3.2. RESOURCE MANAGEMENT .................................................................................................................................... 26 3.2.1. Structuring, Bundling and Leveraging Resources .......................................................................... 26 3.2.2. Managing Resources in a Dynamic Environment ........................................................................... 28 3.3. STRATEGIC RESOURCES ........................................................................................................................................ 29 3.3.1. Technological Capital .................................................................................................................................. 30 3.3.2. Financial Capital ............................................................................................................................................ 30 3.3.3. Human Capital ................................................................................................................................................ 31 3.3.4. Social Capital ................................................................................................................................................... 32 3.3.5. The Artist in a Resource-Based Context ............................................................................................... 33 4. METHODOLOGY ..................................................................................................................................... 34 4.1. EPISTEMOLOGICAL APPROACH ............................................................................................................................ 35 4.2. RESEARCH DESIGN ................................................................................................................................................. 36 4.3. DATA COLLECTION ................................................................................................................................................ 40 4.3.1. Primary Data Collection ............................................................................................................................. 40 4.3.2. Secondary Data Collection ........................................................................................................................ 41 4.4. DATA ANALYSIS STRATEGY .................................................................................................................................. 42 5. FINDINGS .................................................................................................................................................. 43 5.1. THE ROLE OF A&R IN THE MUSIC INDUSTRY ................................................................................................... 43 5.1.1. Importance of A&R ........................................................................................................................................ 43 5.1.2. Opportunity Seeking Behaviour .............................................................................................................. 45 5.1.3. Development of A&R ..................................................................................................................................... 46 5.2. THE IMPORTANCE OF NETWORKING .................................................................................................................. 49 5.3. ARTIST SOURCING .................................................................................................................................................. 51 3 5.3.1. Networking as Talent Selection Support ............................................................................................ 55 5.4. DECISION-MAKING ................................................................................................................................................ 57 5.4.1. Importance of Information Filtering .................................................................................................... 57 5.4.2. Intuition ............................................................................................................................................................. 57 5.5. ARTIST DEVELOPMENT ......................................................................................................................................... 59 6. ANALYSIS .................................................................................................................................................