264

“The distinction between direction of change values and level of magnitude values is necessary to describe dynamic processes.”

269

“Despite the scrutiny of available talent, most signed artists generate losses, while a limited number of extremely popular acts account for the largest portion of the record companies’ revenues and virtually all of their profits.”

273

“with strong differences in profitability among customers, and prices that do not reflect this difference, service providers are vulnerable to opportunistic pickoff, that is, the most famous creative acts could negotiate for better contracts or simply bypass the existing distribution system.”

“according to our theory of newly vulnerable markets three conditions are sufficient to show that a market that has been operating in a steady-state is now open for new competition and for a significant transformation. [...]

• newly easy to enter – new service providers can begin to compete with existing industry players, due to technological change, regulatory change, or changes in consumer preferences;
• attractive to attack – as a result of significant differences in profitability among customers, new entrants can target the most profitable accounts, allowing new entrants to be very profitable without necessarily relying on large market share;
• difficult to defend – organizational constraints may prohibit incumbents responding effectively to new threats.”

 
285

“an economic phenomenon that is becoming increasingly prevalent in the information goods markets, and explains vulnerability of business models: [...] decoupling of value creation and revenue.”

“The decoupling of expensive value creation from revenue creates attractive opportunities to new entrants for picking off the best customers by providing high value at lower cost while exploring novel business models that rely on different revenue streams.”