...Digital Distribution and the Music Industry in 2001: a Case Study of Napster By Julius Danjuma IS650: Telecommunications Management Summer 2012 Overview: Shawn Fanning created Napster in his dorm room at Northeastern. It was the fastest-growing application in the history of the Internet which changed the world but failed to achieve business success. Napster started out as a free download tool but the goal was to make it into a real business in partnership with the record labels. The goal at Napster was to be the online distribution channel for the record labels, much like iTunes for example. There were several offers made to the labels that would have given them the vast majority of all of the revenue. The numbers were staggering. There were over 50 million users, many of whom were willing to pay $5 per month or $1 per download for digital music. That translates to about $250M a month or $3B per year. Even if Napster kept just 10% of the revenue that would be $300M per year against expenses of less than $10M. At the stock market multiples of the day that would have been a $15B IPO. The economics of the record industry are puzzling and their accounting methods are very creative. At the time CD’s were sold for about $17 at retail. The retailer and distributor took more than half of the price as their mark-up. The manufacturing costs took another couple bucks. The promotional costs of advertising, music video, payola to radio stations, and other PR typically...
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...Nowadays, online music is more popular than before. The Peer-to-Peer online music that was used by Napster became a huge legal barrier to this company up to closing down their business. New Napster's owner, Roxio, has been trying different strategies to cover increase their revenue and customers again. There are different strategies for Napster to increase its market share in this market. This report will provide few strategies that would be efficient for Napster to compete with their competitors specially Apple and Rhapsody. Reputation! In today's market is has becoming increasingly important for organizations to posses a strong brand name and reputation. People everywhere recognize Napster. Why? Because it was the first company to offer digital music downloading. This provides Napster with a huge advantage over its competitors. Unfortunately because it was the innovator of this new technology Napster had to deal with copyright infringement charges brought about by the RIAA (Recording Industry Association of America). Despite the fact that Napster emerged from this battle they sti... ... middle of paper ... ...e major worldwide record labels such as Sony, EMI, BMG, Warner Music, and others to distribute digital copies of their music would be a smart business decision to take business away from iTunes and other major competitors. Another option is to collaborate technologies. For example, they might think about partnering with telephone companies that would implement...
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...curve. In all honesty before this assignment I had only ever heard of the term monopoly, so this was definitely a learning experience for me. After reading up on oligopolies a few examples came to mind. For example, the music industry is currently being dominated by Universal Music Group, Sony, BMG, Warner and EMI Group. If we look closely at the travel industry is also another example of oligopoly with airlines like American Airlines, Delta Airlines and United Airlines double or even in some areas tripling the number of destinations travelled to over their smaller counterparts. Whenever we turn on the television we never stop to think that over 90% of the national media and new outlets that we view everyday are owned by six corporations - Walt Disney, Time Warner, CBS Corporation, Viacom, NBC Universal and Rupert Murdoch’s News Corporation. Another great example of an oligopoly that exist today is the operating systems that we use on our smartphones. In a survey conducted by the NPD Group in 2014, they found after interview 5000 Americans that 68 percent were Samsung and Apple devices. It is evident that the biggest disadvantage of oligopolistic market to a consumer is that it leaves the consumer without a choice. From the example of the travel industry in the US I personally feel that whenever I decide to travel I don’t really have much of choice because usually the first airlines that you are presented with when you conduct a search...
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...Cd/EMI industry and My future predictions By: Stephen Brown Table of Contents Chapters Page Chapter-1 Introduction pgs 1-2 Chapter-2 History and changes of EMI pgs 2-4 Chapter-3 History of Music Industry pgs 4-6 Chapter-4 Negative effects on Music Industry (past and present) pgs 6-8 Chapter-5 Conclusion pg 8 References pg 9 1 In recent years and in the past there have been constant changes in the selling of music cds by corporations within the industry. Over the years many different situations have caused music corporations abroad to be faced with negative results and now just as before new problems exist which must be analyzed and corrected or the industry will suffer. In the nineties events such as mega retailers undercutting prices of the industry contributed to what was considered as the major music selling problems them. Within the last several...
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...an attempt to reap the potential profits of the emerging online music industry, Sonic Records has established esonic, a subsidiary exclusively designed to serve as an online music store. In the wake of mounting anti-piracy campaigns concerning music downloads, increased demand for digital technologies that offer greater access and mobility, and an overall increase in consumer demand for access to digital media, esonic has a more than favorable forecast of success in entering the digital music market. Despite fierce competition from established online music providers such as Apple’s iTunes and Napster, esonic will find more than enough room for growth. Through strategic alliances with software and hardware technology firms, esonic can further magnify its reach and appeal to become a digital music industry giant. A unique opportunity presents itself to esonic: it can learn from and avoid the mistakes of digital music industry pioneers, whilst simultaneously mimicking elements of successful strategies at the rapid pace that an online music store with relatively little operating costs can provide. Designing a competitive business strategy remains imperative, however, and the success of esonic will be dependent on its ability to adequately recognize opportunities for growth. Growth in global spending and a naturally expanding digital distribution market invites esonic to capitalize on the digital music industries in foreign markets. Studies have shown the most significant growth...
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...1.0 INTRODUCTION EMI Group plc In early spring 2007, Martin Stewart as chief financial officer (CFO) for global music giant EMI, he’s knew most of the news that would break at the company’s April 18 earnings announcement. Annual underlying revenue for the company was down 16% to GBP 1.8 billion (British pounds). Earnings per share (EPS) have also dropped from 10.9 pence (p) in 2006 to -36.3p in FY2007. The performance reflected the global decline in music industry revenues, as well as the extraordinary cost of the restructuring program EMI was pursuing to realign its investment priorities and focus its resources to achieve the best returns in the future. On an annual basis, EMI has consistently paid an 8p-per-share dividend to ordinary shareholders since 2002. EMI’s recent performance, Stewart questioned whether EMI should continue to maintain what would represent a combined GBP 63 million annual dividend payment. Stewart recognized that EMI faced considerable threat of takeover. It seemed that boosting EMI’s share price was imperative, if Emi wanted to maintain its independence. The Dividend Decision The board already declared an interim dividend of 2p per share in November 2006, whether to maintain the past payout level by recommending an additional 6p final EMI dividend be paid. Provided a forecast of the cash flows effects of maintaining the dividend based on market-based forecast of performance. Dividends are payments made by an organization to its shareholders...
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...E-Business Technologies The affects of the iPod on music industry Table of Contents Section 1: Introduction Page 4 Section 2: Technology Adoption Page 4 Section 3: Value Chain Page 5 Section 4: Relationships Page 6 Section 5: Conclusion Page 7 Section 6: References Page 7 Introduction The purpose of this report is to discuss the functions and features of Apple’s innovative MP3 player. I will be relating to the Schumpeterian model, as to how the iPod led to rapid mainstream adoption, whilst similar products failed. I will also consider the opportunities which promoted this device and the challenges that the Apple iPod currently face, highlighting the effects on the traditional music industry value chain, compared to the current value chain. In addition, I will discuss how the iPod developed working relationships which has assisted in Apple’s e-business success. I will then finish by concluding my findings. Technology Adoption The Schumpeterian model looks at the relationship between technological innovation and business activity. According to Perez (2002) there are five typical stages of each wave, which I will briefly describe. Irruption The Apple iPod was launched in 2001, a sleek and stylish MP3 player with an easy user interface, compressing digital audio files the iPod holds up to 1,000 songs...
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...1 PROBLEM STATEMENT After failing at their first attempt to enter the music industry, Polyphonic HMI (hereinafter referred to as the “Company”), is releasing Hit Song Science (HSS), software used to predict future hit songs with 80% accuracy. An integrated marketing strategy, needs to be developed to launch an innovative product, in an industry typically known for “gut instinct” and therefore likely to meet strong customer resistance. Thus there are two key challenges to address: what is the target market and desired positioning of HSS and what is the plan for marketing this product to achieve that positioning, given a tight “shoestring” budget. 2 SITUATION ANALYSIS Polyphonic HMI wants to launch, what they consider, a sophisticated, new, revolutionary software product in the music industry, with stringent budget and time constraints and therefore must swiftly define a target market and marketing plan. This begins by utilizing a framework for performing a situation analysis of the internal, the micro and macro environmental situation, composed of the typical five Cs: customers, Company, collaborators, competition, context. There are three potential target customer segments that have several unique aspects. Firstly, the record labels, that employ artist-and-repertoire (A&R) people, that amongst other activities, decides whether to market a new album and if needed select one or more songs from it to be released as singles. This is by far the smallest segment with just over...
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...CASE STUDY I.2 Manchester United: still trying to establish a global brand Manchester United (abbreviated as ManUtd, www.manutd.com) has developed into one of the most famous and financially successful football clubs in the world, being recognized in virtually every country, even those with little interest in the sport. Real Madrid has displaced ManUtd from the pole position in Deloitte’s football money league. The list, which has been running for the last 9 years, identifies the top 20 clubs in terms of revenue. The top five in 2008 were: Real Madrid with 3365.8 million, Manchester United (3324.8 million), FC Barcelona (3308.8 million), Bayern Munich (3295.3 million) and Chelsea (3268.9 million) (Deloitte, 2009). Having won the Premier League and Champions League in 2007/08, United would have overtaken Real Madrid at the top of the Deloitte Football Money League had it not been for the depreciation of the pound. The top 20 clubs now generate more than three times the combined revenue of the clubs in the first Money League publication in 1996/97. The most valuable US sport teams, the National Football League’s Washington Redskins and baseball’s New York Yankees, are both worth somewhat more but more than any US sports team, ManUtd has built a global brand. Since the mass commercialization of football in 1992, Manchester United has unquestionably been the team to beat. In the past 16 seasons, it has collected 10 Premier League titles, four FA Cups and two Champion League trophies...
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...STUDY: EMI Group, PLC CD Pricing in the recorded music industry Company Overview Electric & Musical Industries (EMI) was established in 1931. EMI Group, PLC is the world 3rd largest music company which based in London. It is the world largest independent music company, not being a unit, subsidiary or division of a larger conglomerate corporation. EMI’s business is comprised of two main group; EMI Recorded Music and EMI Music Publishing. EMI Recorded Music accounted for 81.6% of EMI Group, PLC sales and 59.3% of the company’s operating profit in fiscal 2003. EMI Recorded Music has over 100 recording labels featuring some of the greatest rock and pop artists in recorded music history. Its major recording label includes: Capital Record and Capital Record Nashville, Chrysalis, EMI Classics, Java Records, Mosaic Records and many more. Its artist with major albums in 2002 and 2003 included: David Bowie, The Beatles, Blue, Cold play, Norah Jones, Queen and many more. EMI Music Publishing owns the rights to more than one million musical compositions, which its market, licenses and sell. Royalties derived from EMI-owned compositions for the sale of music in the CD format comprised 53% of EMI Music Publishing revenue in fiscal 2003. Performance income derived from the public performance of song in EMI catalog, accounted for 25% of EMI Music Publishing revenue. Among the major music compositions and catalogues is “getting better” (The Beatles), James...
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...Courtney Mustoe Does Rap music Misrepresent African Americans? There are many genera’s in today’s music world. Depending on who a person is, and what their emotions may be, there will always be a song or genera that one can relate to. Some music helps us relax, while others help us to get pumped up. Other music helps us study while some get us ready to party. Music can create closeness with a significant other while sometimes it can relate to our sorrows of a breakup. It can make us happy when we are sad, while in curtain circumstances make us sad when we are happy. Music can take over our thoughts and emotions that create a story we can relate to or a story we are unfamiliar with. It can take us down a street we have never been before. In some aspects this could be a problem. Some listeners might think all country singers are hicks from the south or mid west. Many might assume every punk rocker is a rebellious Goth. So if these presumptions can be made, what is there to stop people from letting a genera of music represent a certain race in our society today? In the past, music was limited by certain branches of music that could air on the radio and one genera in particular, rap, had to fight its way through the music industry to be heard. Its roots came from the hip-hop culture which includes rapping, graffiti, break dancing, DJing (audio mixing or scratching) ect. After rap was recognized, over the years, changes within the music industry and what the media focuses...
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...EMI Group, PLC: CD Pricing in the Recorded Music Industry Case Study Matthew Curtis John Humphreys MKT 515 - Winter 2010 3/17/10 I. SITUATION ANALYSIS Nature of Demand EMI is the largest independent music company and is 3rd among the top 5 music companies globally, with 12.6% of the global market share. The firm engages in the recording, producing, and distribution of music, mainly through CDs. EMI is a British based company, but North America is the largest market for the music industry. CD buyers have low brand awareness and loyalty. They typically don’t even know the music company that is producing the product. Brand awareness for the artist is very high and will drive the purchase decision almost exclusively. Buyers will seek out a store to purchase the music they desire. However, brand loyalty is low, with many “one hit wonders” that are #1 sellers one year, then gone the next. CDs are durable goods. They last a long time, but people’s tastes for music may change and, thus, categorizes them as a non-durable good. In this case, it is more about music than the actual CD. The location of the purchase decision has changed dramatically with a significant number of people using the Internet to illegally share music files. EMI and its recording artists do not receive any compensation from music file sharing. Those music consumers who remain have shifted from music stores to mass marketers. The market for CDs in the United States is splintered into different...
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...Seminar Innovation and Marketing Polyphonic HMI: Mixing Music and Math Marco de Graaf 350111 We Fong Ma 375268 Oliver Müller 373496 Instructor: Dr. G. Liberali Master Business and Economics, Specialization Marketing Erasmus School of Economics Rotterdam, January 22, 2013 Diagnosis The management team of Polyphonic is entering a market, which is currently facing permanent changes and a lot of pressure. Rapid technological changes, like the development from CD to DVD and movements towards digital downloading, forces recording companies to adapt their business models consequently. In addition, the music industry is facing negative annual unit sales growth in their most important markets: North America, which accounts for 41% of global music sales, showed a decline in demand of enormous 10.4 % in 2002. The European market, which is the second most important market, also showed a negative trend in most regions. This situation puts a lot of pressure on the recording industry: Funds have to be allocated wisely and it cannot be afforded to waste and risk any money. In an industry, where the average success rate is approximately 10% and where a lack of tools to measure the potential of a song/artist efficiently is immanent, the task of not wasting money is a difficult one. The industry has to rely on the feelings, ears, guts and experience of its producers. The most popular scientific alternative currently available is the so-called “call-out research”. Depending on...
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...Module Code and Group Number. FAILURE to do so| |may result in your assignment being delayed. If you are unsure of any of the above please check at the Business School Student Centre | |Reception. | |Student Number (s): | | | |1028400 | |Programme:(e.g. Business Management) |MUSIC INDUSTRY MANAGEMENT | |Module Title: (e.g. Studying for Business) |MUSIC INDUSTRY ENVIROMENT |Seminar Group |1 | |Module Code: |HR1009 |Word Count |2,457 | I confirm that no part of this assignment. except where clearly quoted and referenced. has been copied from material belonging to any other person e.g. from a book. handout, another student. I am aware that it is a breach of UEL regulations to copy the work of another without clear acknowledgement and that attempting to do so renders me liable to disciplinary proceedings. SECTION B: (to be completed by the tutor marking assignment) ...
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...Sony Music Entertainment and the Evolution of the Music Industry Table of Contents Table of Contents…………………………………………………………………………………............................2 Recommendations…………………………………………………………………………………………………………..3 Appendix 1………………………………………………………………………………………….…………………………. 5 Appendix 2………………………………………………………………………………………….…………………………. 11 Appendix 3…………………………………………………………………………………………………………………….. 13 Appendix 4………………………………………………………………………………………….…………………………. 15 Appendix 5………………………………………………………………………………………….…………………………. 16 Appendix 6………………………………………………………………………………………….…………………………. 17 Appendix 7………………………………………………………………………………………….…………………………. 17 Appendix 8………………………………………………………………………………………….…………………………. 18 Appendix 9………………………………………………………………………………………….…………………………. 20 Appendix 10……………………………………………………………………………………….…………………………..21 Appendix 11……………………………………………………………………………………….…………………………..21 2 Recommendations 1. I recommend Sony continues to fight for market share in the digital media segment by investing in improvements to address the low, 3 star rating of its streaming service to allow it to compete with the large competitors, Spotify and Pandora. In 2014, The three main methods of digital music distribution included digital download, Internet radio, and interactive streaming. (Appendix 1) Sony’s operating income increased for the first time in 4 years due mainly to lowering costs and growth in digital revenue. As revenue from digital increases, Sony should...
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