How the Newspaper and Music Industry Has Changed Because of E-commerce

The Internet has become more and more present in everyday life. The expansion of social networks such as Twitter or Facebook has revolutionized the way people interact with their family and their friends. The Internet made communicating and exchanging easier: you can now send an e-mail to the other side of the world in less than a second. The number of users is rapidly growing: the International Telecommunication Union estimates that more than 2.7 billion people have access to the Internet in 2013. These changes did not only affect private life. The “Net” is now more and more important in the business environment: it is now used as a professional tool in nearly all existing companies. Some companies are even completely based on the Internet: they are commonly called “dot-com companies”. A new industry was also created: the Electronic Commerce (or e-commerce) industry: the buying and selling of products (or services) are entirely conducted over the Internet. McKinsey & Company, one of the most prestigious consulting firm in the world, estimates that almost $8 trillion were exchanged in 2011 thanks to e-commerce.

However, the Internet did not only create new industries. For McKnight et al. (2001), the Internet also led to a process of creative destruction (defined by Schumpeter in the 20th century as the destruction of existing technologies and methods of productions by innovation): “clearly defined industry boundaries, entry barriers, and market positions within the telecommunications industry have been replaced, perhaps permanently, by blurred and fluid industry borders, rapidly shifting interfirm alliances, and the unrelenting introduction of cost-reducing product and process innovations.” Indeed, the Internet led to drastic cha...

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...fers. In the last section, we have studied the effects of the Internet on the supply and demand economic model, thanks to a comparison with an e-Commerce environment, and concluded that the costs of both consumers and producers are reduced thanks to the Internet, while information asymmetry is less and less likely to happen, thanks to the easily available amount of information on the “Net”.

To conclude, I would say that the Internet has had a great impact on traditional industries, mostly positive for consumers and producers. Even if some negative effects can be pointed out (such as piracy or job destruction in printing houses, for example), we can assume that the current situation is the most convenient for everyone. However, the Internet is changing rapidly and we are still at the beginning of this process: we can expect even more changes in the near future.