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Thesis Bjerkoe Sorbo

Thesis Bjerkoe Sorbo

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i 
Richard Bjerkøe
 
 Anders Sørbo
BI Norwegian School of Management 
Thesis
The Norwegian Music Industryin the Age of Digitalization
Date of submission:
 01.09.2010
Supervisor:
Espen Andersen
Exam code and name:
GRA19002
Master Thesis
Programme:
Master of Science in Business and Economics
 
 
 
i 
 Acknowledgements
This thesis could not have been done without the support and contributionsfrom several people. We would like to thank the following for their valuableinfluence and help:
 Jan Paulsen
(Majorstudio) for helping us with numbers, access to interviews andcritical review of the material presented to him.
Hans Ole Rian
(Mfo) for valuableinsights into the music industry, and access to artists for the survey.
Elin Aamodt 
 (GramArt) for help with sending out a survey to the artists and for providing uswith helpful information about the industry.
Christopher E. Andersen
 (QuestBack) for professional help with the questionnaire sent out.
 Anders. W.Hagen
(Dagens Næringsliv) for giving us access to a previous music survey.
Daniel Johansson
and
Markus Larsson
for providing the framework to calculatethe total music industry revenues and total artist income; this thesis would not included those numbers if it were not for their research.The authors would also like to thank the following organizations for helping usin getting access to industry numbers and annual reports and answering ourmany questions:
Fond for Lyd og Bilde, Fond for Utøvende Kunstnere, FONO,GramArt, Gramo, IFPI, Musikernes Fellesorganisasjon, Nordic Copyright Bureau,Norsk Kulturråd, Norwaco, Rikskonsertene og TONO
.We also would like to express our gratitude to Liv-Kristin Bjerkøe and TrineSkalmerud for their support throughout the work on the thesis.Finally a special thanks to our supervisor, Associate Professor
Espen Andersen
 for sharing his insights, and providing guidance and clever suggestionsthroughout the process. Your encouragement was of great value!
Oslo. September 1
st 
2010Richard Bjerkøe Anders Sørbo
 
GRA 19002 - Master Thesis The Norwegian Music Industry in the Age of Digitalization
ii
Executive Summary
This thesis sets out to investigate impacts the digitalization of music has had forthe music industry in Norway. The authors decided to explore the followingresearch problem:
How has digitalization and the consequent downloading of music changed the economic situation for the Norwegian music industry and for theNorwegian record artists the last 10 years? 
The following two sub-problems were also explored:
1.
What are the primary income sources for Norwegian record artists today? 
  2.
Has the total music related income for record artists today decreased compared to 10 years ago? 
 
The thesis then goes on to review and discuss relevant theory on the subject;focusing on disruptive innovation and network economies.The thesis was originally intended to consist of three main parts: interviews,questionnaire, and annual reports. But, due to a lack of respondents in thequestionnaire, this section was reduced to a brief discussion of findings.The authors conducted 14 in-depth interviews with different members of themusic industry in Norway. A 10-question discussion guide was created andfollowed in all of the interviews.The annual report section followed a framework developed by Johansson andLarsson (2010) to estimate the revenue of the Norwegian music industry as wellas calculating the income for Norwegian music artists. In order to find theseamounts many annual reports had to be collected, and the numbers in thesereports were used to: find total record sales, calculate total remunerationscollected, estimate total live market and to find the total amount of statesubsidizations and grants. This study was done for the period from 1999 to2009.The authors found that the total music industry revenue in Norway was almost NOK 1,9 billion in 2009, increasing from NOK 1,4 billion in 1999. Adjusted forinflation the industry has only seen 4% growth in this period of time. Total artist income adjusted for inflation was NOK 545 million in 2009, up from NOK 255

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