We describe the emerging competition and the role of online distribution in the music and news industries. We examine what resources have previously enabled record companies to create dependency and lock in their star acts. We examine which resources have been eroded in the newspaper industry and the remaining value that the newspaper company does still create, other than bundling stories, adding advertising, and printing and selling the papers. We consider what part of the business is vulnerable, if any, and where threats may arise. We combine the resource-based view of competitive advantage to examine which industry may have become newly easy to enter, and the theory of newly vulnerable markets to assess which industry may actually have become vulnerable as a result. Our analyses are then used to create a computer simulation model to make the implications more explicit under a range of assumptions.