Utilizing contract theory to reduce double marginalization for pre-recorded music products within the retail supply chain – A case study

Abstract

The purpose of this case study is to analyze the effectiveness of three types of supply chain contracts within the pre-recorded music products supply chain. This article will analyze buyback contracts, revenue-sharing contracts and quantity flexibility contracts. The article will explain why managers in the pre-recorded music industry should adopt these supply chain contract approaches to increase revenues. The models described in the case study could be seamlessly utilized by music distributors and major consumer electronic retailers to maximize their revenues and profits within this highly competitive industry.