The length of historical path and the digitalization speed of record labels: A path dependence perspective

Abstract

Drawing on the theory of organizational path dependence, we investigate how the length of historical paths affects the digitalization of record labels—music organizations that release sound recordings and music videos. We propose a negative relationship between the length of a label’s historical path and the speed of its first digital recordings, arguing that this relationship is intensified by the diversification of international markets and music formats, as well as the degree of digitalization of the label type and the home market. While diversification promotes path learning by accumulating knowledge and experience from historically established practices, the degree of digitalization shapes path synergy by determining the extent to which a record label can match its resources with its digital operating environment. Our arguments gain empirical support from analyses of 5,129 record labels in 68 countries between 2000 and 2018.