Rough Middle/Research Clusters



Conceptual Lens


  1. How have other industries combatted this initial loss of profit with digitization?
    1. Amazon
      1. Reinvestment of profit into technology
        1. Initial loss of profit
        2. Creation of a more convenient and personalized user experience through reinvestment of profits
          1. Jeff Bezos
            1. Investing everywhere you can, knowing that some  investments will create better
            2. “experiment patiently, accept failures, plant seeds, protect saplings, and double down when you see customer delight.”
          2. Frey, Christina, and John Cook. “How Amazon.Com survived, thrived and turned a profit.” Ammatos, Seattle PI, 28 Jan. 2004,
            1. “The revolution in thinking was everybody saying you have a great opportunity to grow quickly here, money is available, so let’s take advantage of it and use that money to grow quickly even if we lose money,”
          3. Yarow, Jay. “Former Amazon Employee Explains How The Company’s Business Model Really Works.” Business Insider, Business Insider, 28 Oct. 2013,
            1. “Amazon is profitable in its retail operations, but it’s losing money overall because it’s investing in big opportunities to expand globally and crank up sales.
        3. Better products available increases supply
          1. A greater supply will lower the value of these service and products, even if their technology and corresponding available utility is greater.
            1. Bergen, Mark, et al. “How to Fight a Pricewar.” Harvard Business Review, 200ADAD. Harvard Business Review,$FILE/ATTATFPA/How%20to%20fight%20a%20%20Price%20War.doc.
              1. “Price wars can create economically devastating and psychologically debilitating situations that take an extraordinary toll on an individual, a company, and industry profitability.  No matter who wins, the combatants all seem to end up worse off than before they joined the battle.  And yet, price wars are becoming increasingly common and uncommonly fierce. Price wars can create economically devastating and psychologically debilitating situations that take an extraordinary toll on an individual, a company, and industry profitability.  No matter who wins, the combatants all seem to end up worse off than before they joined the battle.  And yet, price wars are becoming increasingly common and uncommonly fierce.”
            2. Amazon attempts to avoid these price wars by creating a sort of monopoly in terms of market share
              1. Frey, Christina, and John Cook. “How Amazon.Com survived, thrived and turned a profit.” Ammatos, Seattle PI, 28 Jan. 2004,
                1. “It wasn’t that there weren’t lots of opportunities to make money. It was just that we had consciously fore- gone those opportunities to reach scale and make it impossible to duplicate what we had done.”
    2. Movies
      1. Idea of bettering user experience
        1. Creation of online Streaming
          1. Better user experience
            1. Convenience
              1. More convenient platforms will lower the demand for inconvenient watching prices, and the increase in total supply of movie watching platforms lowers the general price.
              2. Ferri, Mickey. “Rent, Buy, or Pirate: Consumer Preferences in the Movie Industry.” The University of Chicago, 2013,
                1. “Threatened by low-priced rentals and increasing digital options, DVD and Blu-ray sales have been falling every year since 2007. Industry experts have argued over how much of the fall in DVD and Blu-ray sales should be attributed to Netflix and Redbox cannibalization and how much should be attributed to other factors like illegal downloading and increasing legal digital options.”
            2. Recommendation System
              1. Amatriain, Xavier, and Justin Basilico. “Recommender Systems in Industry: A Netflix Case Study.” Recommender Systems Handbook, 2015, pp. 385–419., doi:10.1007/978-1-4899-7637-6_11.
                1. “Given an existing application, an improvement in the recommendation system can have a value of millions of dollars and can be the factor that determines the success or failure of a business. “
          2. Much larger supply of movies
          3. Overall decrease
  2. Are we paying for the content or the experience?
    1. Movie industry
      1. People pay more for certain viewing forms than others.
        1. Bach, Barak Y. Antitrust and pricing in the motion picture industry. University of Michigan, 2004
          1. “many individuals would rather watch a movie at a theater than stay at home,”
          2. Therefore the price for going out is much higher
          3. We are paying for the experience of watching the movie, not actually owning the movie.
            1. McNamara, Mary. “Going to the Movies Isn’t Just about the Movies; It’s How We Grow Up.” Los Angeles Times, Los Angeles Times, 3 June 2017,
            2. For example, going to the movie theater posses a high amount of utility in our American society.
              1. “Going to the movies was and remains a centerpiece of our emerging social and independent lives.”
              2. Theater sales have hardly been affected simply because their experience has been sought after. However, low utility services such as DVDs are now being phased out. (According to this article)
        2. Although Bootleg movies are used, their utility is low so they are not as sought after
          1. Netflix and other streaming services are legal alternatives to illegal online movie watching and possess better user experience.
            1. Connects to the idea that users for the most part don’t want to pirate, but want the convenience.
        3. Overall bettering of experiences due to improved technology (Parallels directly with music industry phenomen)
          1. Bigger supply of movie watching available
          2. Lowered price per unit
          3. Increased users due to lowered cost


Bigger Significance: The trends of supply increase and pricing decreasing for previous highly sought after goods is not just present in music. It seems to be present in the movie industry, as well as the retailer industry. It is evident that the issues I am exploring concerning digitization are not solely a music industry problem, but are a larger societal problem that all aspects of our culture have faced, are facing, or will face.



Conceptual: If music labels are not outdated in terms of their music production capabilities, why have they not been phased out? Is music produced for the music itself, or the branding of the musician?




    1. New technologies eliminate the need for record labels
      1. Potts, Liza. “Amanda Palmer and the #LOFNOTC: How Online Fan Participation Is Rewriting Music Labels.” Participations, Participations, Nov. 2012,
        1. “ labels have used the strategy of aggressively trying to control content, individual artists have found success in leveraging technology to remove these barriers between artists and their audiences.”
        2. Case Study: Amanda Palmer working around her labels.
          1. Works with idea that
        3. Branding is able to done through social media, without the usage of music labels
          1. “The Record Labels Of The Future Are Already Here”
            1. “ native branding on social media sites, perhaps at the expense of immediate incremental revenue.”


  • Amanda Palmer “In addition to her own blog, website, and forum, Palmer has a presence across numerous social sites such as Twitter, YouTube, Vimeo, Facebook, Instagram, and MySpace. An earlier adopter, she has quickly learned how to move across these spaces, communicating with her fans, distributing her materials to them, and sharing their work with a wider audience.


        1. However, there is still need for capital for this investment

Iv. Peters, Luke. “How Evolving Tech Has Changed Music Production.” TechCo, TechCo, 25 Jan. 2016,

1.“Current technology makes it easier for a musician to produce their own music, but used correctly is can also help a musician promote themselves and earn money. There are even some benefits, like that a musician no longer has to compete with other artists for shelf space in a store, nor do they worry about distributors or producers. Physical record sales are becoming less viable as the years go on, but a musician can earn money by streaming music, earning royalties and signing licenses, or even by teaching music through online tutorial.

  1. Phasing out these labels could be the solution to the lowered profit in music industry.
    1. Large costs of recording an working through a label
    2. Masonic, Mike. “RIAA Accounting: Why Even Major Label Musicians Rarely Make Money From Album Sales.” Techdirt, Tech Dirt, 13 July 2010,
      1. the label is still straight up cashing 63% of every sale, which does not go towards making up the advance.
  2. Yet these labels still exist
    1. Labels are providing the branding of artists, which sells, not the actual music
      1. Counter example: Amanda Palmer
        1. Branding herself with social media, without the usage of music labels
        2. Supports the idea that the brand of music is being sold, rather than the content.
        3. Extension -Luke peters
          1. “By eliminating the necessity of a third party (the record label) musicians are now able to deal directly with their audience. This brings with it benefits and conflicts, as creative control is returned to musicians they also find themselves responsible for the business side of the music industry. Self-promotion has never been more important, but it’s also never been easier or cheaper. Social media and online advertisement are powerful sources to those in the entertainment space.”
      2. Labels are necessary in artist development and exposure
        1. Hu, Cherie. “The Record Labels Of The Future Are Already Here.” Forbes, Forbes Magazine, 18 Oct. 2016,
        2. “Labels spend as much as 15.6% of their revenue on artist development”
        3. RIAA ACCOUNTING –
          1. “It starts off with a band getting a massive $1 million advance, and then you follow the money:

What happens to that million dollars?

They spend half a million to record their album. That leaves the band with $500,000. They pay $100,000 to their manager for 20 percent commission. They pay $25,000 each to their lawyer and business manager.

That leaves $350,000 for the four band members to split. After $170,000 in taxes, there’s $180,000 left. That comes out to $45,000 per person.

That’s $45,000 to live on for a year until the record gets released.”

    1. Has music’s deeper meaning disappeared?
      1. Increase in number of singles relative to albums
      2. Bands are more pressured to be monetarily motivated
    2. Has music always been about selling an experience rather than the content? (CONNECT TO EXPERIENCE WITH DIFFERENT PLATFORMS)
      1. “The Record Labels Of The Future Are Already Here.”
        1. “Historically, artists often carried stronger brands than the labels supporting them (e.g. more listeners recognize “Grimes” versus “4AD,” or “Arcade Fire” versus “Merge Records”). In the future, labels could market their own brands more aggressively, instead of relying on a handful of artists from their roster.”


LOOK AT “UNDERSTANDING THE MUSIC INDUSTRY BOOK” does not fit this particular lens, but very useful for large scope of essay.


Significance: I am still slightly unsure what topic my thesis is going to tackle, but as I do more research I am leaning towards exploring what the music industry is selling music, or the experience of music, with all of its corresponding self imaging. This research cluster really starts to tackle these questions



Conceptual: Technological developments have increased to such a degree where the increased demand resulting from these advances is so high that these companies are becoming monopolistic overpowered unions.


This is a societal wide trend; it is not consolidated into any industry in particular.


Premise for argument: Increased technologies create more sought after, more enjoyable experiences for the user. Users pay for the experience, not the content. As technology increases, development of content should be more accessible, but a small group of people are holding onto these advancements as their own, preventing a fair market available.

Horizontal Lense: How these trends are universal across many aspects of society

Proposed Outline of argument with evidence:

I will research the specific technologies and other specific information in my final cluster. This cluster is simply focusing on macro trends across industries.


    1. Case Study 1: The Tech Industry
      1. Online Retailing
        1. Their technology
          1. Rao, Leena. “Amazon Prime Revenue Up Nearly 50% In The Past Year.” Fortune, Fortune, 27 Apr. 2017,
          2. “For $99 annually, Amazon Prime members can stream digital movies, TV shows, podcasts, and Amazon’s original productions in addition to getting free two-day shipping and one-hour delivery on certain orders. Prime is used by the company to encourage loyalty with shoppers who want to access faster shipping on items like toilet paper or coffee or toys.”
          3. Shipping Methods
            1. McFarland, Mac. “Amazon Only Needs a Minute of Human Labor to Ship Your next Package.” CNNMoney, Cable News Network, 6 Oct. 2016,
              1. “On a typical Amazon (AMZN, Tech30) order, employees will spend about a minute total — taking an item off the shelf, then boxing and shipping it.”
          4. Access to multiple
            1. Cluster 1
            2. Examples: (whole foods acquisition, prime shipping, amazon music, amazon video, etc..) (not everyone is successful however, but in the long run it pays off, all about market ownership, not short term profit)
        2. The Cell Phone Industry
        3. Their technology
          1. hardware/software superiority
            1. Touch Screen, siri, battery life, platform idea of imessage/icloud etc… (modern monopolies)
            2. It is not their superior technology itself, its is their connection  of various softwares, which led to their increased popularity, and eventually ability to purchase superior hardwares.
            3. Apple/ Google
              1. “Modern Monopolies” – Moazed, Alex
                1. “Through iOS, iTunes, and the App Store, it  offers platforms that connect buyers and sellers of every kind of digital good you can imagine.”


  • Constantly reinvest to experiment in new  markets, to increase power.


              1. These markets have high enough barriers where only companies the size of google are able to enter.
                1. “Google is singularly adept at using its core search platform to establish new platforms in other, seemingly unrelated markets… it has already released platforms for wearable devices and health data…. Internet connected thermostat….UBer competitor….”
        1. Superior coverage
      1. How they own the entire market
        1. “Patent as a sword”
          1. Patents
        2. “Some experts worry that Apple’s broad patents may give the company control of technologies that, over the last seven years, have been independently developed at dozens of companies and have become central to many devices.
      2. “Amazon Prime Revenue…. -Rao”
        1. Loyalty programs, offering better deals if customers commit to more. This is a form of creating a market barrier, only these large companies can afford to offer these programs, which pay for themselves in the long run, but temporarily cut the profit per person drastically. Cause smaller competitors to drop out of market
  1. Case Study 2: The Music Industry
    1. Music Label Superior Branding Refer to Cluster 1
      1. Their technology
      2. How they own the entire market
      3. Their consequent power
    2. Music Streaming
      1. Their technology
      2. How they own the entire market
      3. Their consequent power
  2. Case Study 4: The electric company industry
    1. COUNTER EXAMPLE: is this sort of oligopoly/monopoly acceptable in certain aspects?
      1. Tehnology
        1. Many cities/counties have a sole energy provider, which is privately owned. (SDGE)
      2. Uses/ Practility
        1. Easier for such a NEEDED industry to have a single provider without free market varying prices
          1. Booher, Martin, et al. “Practical Law.” Practical Law US (New Platform) Signon, Tomas Reuters, 1 June 2016,
            1. “ Federal regulation is focused on interstate transmission and wholesale power sales. Interstate transmission of electricity is a form of interstate commerce, which provides a constitutional basis for federal regulation. At the state level, state regulators typically focus on the intrastate generation, transmission and sale of electricity, while local regulators focus on issues such as facility siting and zoning.”
      3. Difference is
        1. More of a necessity, highly regulated (not capitalistic)
  3. Case Study 3: The Movie Industry
    1. Movie Production Refer to cluster 1, but expand more specifically, was somewhat vague
      1. Their technology
      2. How they own the entire market
      3. Their consequent power
    2. Movie Showing
      1. Their technology
      2. How they own the entire market
      3. Their consequent power


General Research (Horizontal):

Although the technology itself may vary itself from industry to industry, the methods of how they maintain market control and their corresponding power is generally a horizontal trend(and above is my specific research into the technologies themselves):


    1. Technology
      1. Platform Business Model
        1. The platform models connects consumers in multiple ways and through multiple industries, which leads to their commitment to these companies n an unprecedented level.
        2. Integrating software programs together for a more unified, enjoyable experience for the user.
        3. Not possible before
        4. Causing new technologies to be developed on these platforms (according to modern monopolies). Forcing technologies to be on platforms like etsy, ebay, amazon or facebook allows for these platforms to acquire successful startups, and m (ALSO POWER HERE) “orchestrater of this business activity”
        5. Moazed, Alex, and Nicholas L. Johnson. Modern Monopolies What It Takes to Dominate the 21st-Century Economy. St. Martin’s Press, 2016.
          1. “Platforms allow consumers and producers to connect with each other and exchange goods, services, and information.”
          2. These business are created new markets, that were never before possible, but now are larger than any previous markets.
          3. “The open Internet is a myth. The INternet as we know it today is almost entirely dominated by platforms”
    2. How they own the entire market
      1. Patent protection expanded on apple case study above
        1. “The Patent Used as A Sword” (Lohr)
          1. “the marketplace for new ideas has been corrupted by software patents used as destructive weapons.”
          2. “‘I have patents that can prevent you from practicing in this market,’ Nuance’s chief executive, Paul Ricci, told Mr. Phillips”
          3. “$20 billion was spent on patent litigation and patent purchases in the last two years”
          4. “Some patents are so broad that they allow patent holders to claim sweeping ownership of seemingly unrelated products built by others. Often, companies are sued for violating patents they never knew existed or never dreamed might apply to their creations, at a cost shouldered by consumers in the form of higher prices and fewer choices.”
          5. “United States patent office has increased by more than 50 percent over the last decade”
      2. ‘Platform Style Business Model’


  • Reinvestment of Profit to expand Markets


          1. Refer to Cluster 1 (Case Study on Amazon)
      1. Legal Power
        1. “The Patent Used as a Sword”
          1. Ability to create very loose patents, where they can claim new technologies as their own, and win these suits with large legal teams, sparing no expense.
          2. “When Mr. Phillips refused to sell [his voice recognition company], Mr. Ricci’s company filed the first of six lawsuits…Mr. Phillips won…But it was too late. The suit had cost $3 million dollars, and the financial damage was done. Mr. Phillips agreed to sell his company to Mr. Ricci.”
        2. One/two more sources here
      2. Market barriers (Pure cost of entry)
        1. Amazon’s ability to buy in bulk, lose money on shipping, to temproairly lose money in order to get rid of the competition.







BIG IDEA: Rapid increases in technology causes an increase in supply of XXX, which allows for and causes the consolidation of these markets. This is evident thorugh history.


In “Can Washington Stop Big Companies?”:

Mr. Reback, who is now working against Google, argued that the government’s antitrust prosecution of Microsoft had altered the company’s culture — which in turn created room in the market for entrants like Google and Facebook.”

(it is not one company in particular, or even one industry in particular, but is a HISTORICAL TREND)


Historical Lense


    1. Rapid Increase of Technology in the late 1800s- Parrels increase in technology during the tech boom


  • Engelman, Ryan, et al. “The Second Industrial Revolution, 1870-1914.” US History Scene, US History Scene,


      1. “After the invention of steam power and the cotton gin by Eli Whitney in 1793, cotton could be shipped from the American South by New England ships to the vast textile factories of Great Britain, producing a reverse triangle trade around a single global commodity.”
      2. Almost platform busines smodel (integrating
        1. “ During the Second Industrial Revolution, innovations in transportation, such as roads, steamboats, the Eerie Canal, and most notably railroads, linked distant, previously isolated communities together.”
      3. “Inventions during the Second Industrial Revolution were interconnected. The railroad spurred the growth of the telegraph machine. Telegraph lines and railroad lines inextricably bound together as telegraph polls dotted the distance of railroad lines. The telegraph, and later the telephone, ushered in the era of instant communication and brought about, in the words of cultural historian Stephen Kern, “the annihilation of distance.” This was a profound change for Americans. The “local” shot outward to the “national” and even “international” as a new sense of world unity was established through these new technologies. These technologies also increased the pace of life and the manner in which people worked and lived.
      4. Major technological advances of the Second Industrial Revolution:
        1. • 1870s – Automatic signals, air brakes, and knuckle couplers on the railroads; the Bessemer and then the open-hearth process in the steel mills; the telephone, electric light, and typewriter.
        2. • 1880s – The elevator and structural steel for buildings, leading to the first “skyscrapers.”
        3. • 1890s – The phonograph and motion pictures; the electric generator, contributing to modern household items such as refrigerators and washing machines and gradually replaced water and steam powered engines; and the internal combustion engine, which made possible the first automobiles and the first airplane flight by the Wright brothers in 1903.”
  1. Consolidation of markets due to increased supply-Creation of Monopolies
  1. “Rockefeller annihilated rival oil firms through committed competition, secret deals with railroad companies, and fixed prices and production quotas. He bought out competing oil refineries and managed all aspects of the operation, including drilling, refining, storage, and distribution. Before long, Rockefeller’s Standard Oil Company controlled a majority of the nation’s oil industry
  2. “By the 1890s, Carnegie dominated the steel industry and had accumulated a fortune worth millions. His steel factories were the most technologically advanced in the world, although this honor came at a price for his workers. Carnegie ran his companies with a dictatorial hand; his factories operated around the clock and workers were burdened with long hours.”
  1. Recognition of these monopolies and legislation to bring them down



    1. “Responding to a large public outcry to check the price fixing abuses of these monopolies, the Sherman Antitrust Act was passed in 1890. This act banned trusts and monopolistic combinations that lessened or otherwise hampered interstate and international trade. The act acted like a hammer for the government, giving it the power to shatter big companies into smaller pieces to suit its own needs.”
  1. “The Antitrust Laws.” Federal Trade Commission, Etc, 11 June 2013,
    1. Congress passed the first antitrust law, the Sherman Act, in 1890 as a ‘comprehensive charter of economic liberty aimed at preserving free and unfettered competition as the rule of trade.’ In 1914, Congress passed two additional antitrust laws: the Federal Trade Commission Act, which created the FTC, and the Clayton Act.”
    2. “The Sherman Act outlaws “every contract, combination, or conspiracy in restraint of trade,” and any “monopolization, attempted monopolization, or conspiracy or combination to monopolize.” Long ago, the Supreme Court decided that the Sherman Act does not prohibit every restraint of trade, only those that are unreasonable.”
    3. “The Federal Trade Commission Act bans “unfair methods of competition” and “unfair or deceptive acts or practices.” The Supreme Court has said that all violations of the Sherman Act also violate the FTC Act. “
    4. “The Clayton Act addresses specific practices that the Sherman Act does not clearly prohibit, such as mergers and interlocking directorates (that is, the same person making business decisions for competing companies). Section 7 of the Clayton Act prohibits mergers and acquisitions where the effect “may be substantially to lessen competition, or to tend to create a monopoly.”


Greater Significance: Nearly identical trends occurred in the1890’s to 1910’s compared to trends occurring today with the tech boom. These monopolies were effectively shut down using legislative power. However, this power was only called for because these companies were unfairly fixing prices and taking advantage of their positions. FOR THE MOMENT, most tech companies continue to lower prices to secure market dominance and are becoming monopolies. Are these monopolies okay if they don’t fix prices? Will these companies fix prices once they secure market dominance, and how can we fith these companies once they do, if they do?

Overall Reflection:

Still majority just evidence, need to create more structured around my central research question. Will edit this next week.


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