Free Essay

Music Industry Research

In: Business and Management

Submitted By rikibobbyy
Words 2134
Pages 9
Research Memo

Date: October 16, 2013
To: Prof. Hastings
From: Riki Kotaka
Subject: How do music companies address the issue the music sales has been declining?


Music is essential for our lives, however it is difficult for those who get involved with music industry to make a profit. Music industry has been shrinking since 1999 when Napster, pioneering music file share service, was founded [1 McCormick]. In 1990’s when the music sales were at the peak, the total global music revenue was around $30 billion, but the one in 2012 was only $16.5 billion [2 Pfanner]. I did summer internship at Sony Music Entertainment in Tokyo for a month. I’ve participated in some meetings to consider marketing plans for musicians. One main reason of the sales declination is an illegal downloading. Although laws prohibit illegal downloading, there are still massive illegal downloading websites on the Internet. However, global music sales in 2012 increased for the first time since 1999, and the number of songs downloaded illegally was declined to 210 million in comparison to 1.2 billion in 2008. [3 Sherwin] It seems that music companies finally found some efficient ideas to overcome illegal downloaders.
Do music companies actually increase their profits? And how did music companies start adjusting the situation? The purpose of the research paper is to figure out the main reasons why music sales finally increased, any differences to market music products and if the situation of music companies and musicians has improved or not.


* Development of Music Stream Services Rather than regarding Internet as a “main virus” of sales declination, music companies use digital media to expand their business. Launch and growth of music streaming services, mainly Spotify, has caused significant loss on illegal downloading service. Before launching Spotify, iTunes service by Apple dominated on the legal online music market. Since it costs around $ 2.50 per a song, people prefer to download songs for free somehow.
People feel it less to demand illegal downloading after Spotify was launched. Although you are not a paid subscriber, you can still listen to music. Also, it is easy to find songs you want, and the sound quality is quite close to iTunes. Spotify’s revenue in 2012 became twice as the one in 2011. The main revenues of Spotify are from paid subscribers, advertisements put between songs for non-paid members. For musicians and copyright owners, they pay certain money by each play.
However, Spotify also has some significant negative parts. The main part is some musicians’ frustration towards their royalty system. Thom Yorke, an English musician and a vocal of Radiohead, claimed “I wouldn't necessarily say that streaming is detrimental to new artists, but I question why the majors are so supportive of a business model that is so clearly unsustainable in the long term.”[4 Colletti] and boycotted to send his songs to Spotify. Although Spotify weakened illegal downloading, it is not efficient business for musicians as well. For each play, artists can get paid only half-cent [4]. Some musicians regard it as an “unsustainable” business [4].

* YouTube Music Branding
YouTube is one of the biggest advertisement platforms for musicians nowadays. YouTube used to be considered as an obstruction of making music sales. Some random people uploaded music videos or MP3 files without any permission, and people downloaded the files by using some illegal software. Music companies just try to delete videos posted on YouTube without permission. However, lots of music companies or musicians themselves have launched their official channels and post high-quality music videos. Since then, the number of unofficial music videos posted has decreased because people obviously more prefer to watch high-quality official videos. Currently, half of top 100 most-viewed YouTube channel by categories are a musician [5 Eordogh]. Also, they can advertise songs by paid promotions that come up to right-hand upper corner on the page or play before videos you actually choose to watch. The most successful marketing advertisement by using YouTube would be a case of Gangnam Style by PSY. The official music video has become the most viewed YouTube video, passing Baby by Justin Bieber. So, why did a song of the Korean pop star suddenly become a trend all over the world? PSY’s label, YG Entertainment, targeted world widely on him. What they did was that they increase the number of view counts of the video systemically by preparing a lot of computer keeping playing the video, and people could see the video under the list of popular videos. Since the music video was catchy and funny, it successfully attracted people all over the world. [6]

* Jay-Z - Samsung Partnership
Music companies address the issue by some unique marketing plan. Jay-Z, one of the most popular rapper over the world, released a new album this July. He teamed up with Samsung, and the new album had been distributed for free for the first million android users who downloaded an app. The app started a service three days before its official release date. This is a part of the $5 million marketing deal between Samsung and Jay-Z. Basically, the business was that Samsung pays $5 per an album so that Jay-Z made $5 million profit before none of listeners bought the album. As a result, he sold 527,000 of copies in the first week and topped on the Billboard album chart [7 Sisario]. Although a lot of people purchased the app, the business was criticized from some points. First, the app had a security issue. Fake app makers targeted the app, and many consumers got troubled with them. It was also criticized in terms of privacy issue. The app required purchasers for sending their personal information such as their ages, their phone records, or even their SNS information, which are not related at all to get the album.

* Japanese “Idol Group” CD Marketing Plan If you take a look at foreign countries’ marketing plan other than Gangnam Style case, you can still find some interesting marketing plans to increase music sales. Although a population of Japan is less than half of one in United States, Japan has one of the largest music market sizes by countries, sharing a quarter of total global music sales [8 Swarts]. In Japan, physical formats such as CDs are still the main factor of music sales even though CD sales keep decreasing in rest of countries. All of top 5 songs in CD single chart in 2012 are AKB48 (*1)’s songs. AKB48 is a girls “idol” group, consisting of more than 80 girls all of who are between 13 and 24 years old. Idol groups are Japanese specific type of group of teens and twenty’s attractive and cute members and are considered to be a part of Japanese culture. AKB48 has so many core fans of either group itself or specific member, mostly man.
Their innovative marketing plan to increase music sales is to put a ticket for their handshake events in CD package. When you shake hands with them, you can also talk to them for around ten seconds. A tricky part of the system is that you can shake hands only once with one member with one ticket but also can shake hands as many as the number of CDs you purchase. For example, if you buy two CDs and get two tickets, you can either shake hands with two members or twice with one member. This system matches a feature that each of their fans is core. Some of their core fans spend $10,000 (equal to 1,000 CDs) on buying CDs not to listen to music but to actually “reach” them. This unique marketing increased the number of fans, and none of musicians can sell CDs more than AKB48 currently, and a lot of idol groups start selling CDs in their way. Also, real musicians also start combine some bonus such as DVDs or photo books with CDs, that is, they sell CDs with some advantages at the fixed price. Actually, a price of CDs has not changed since 15 years ago.
Some music fans though feel uncomfortable for the system. Basically, idols are more likely to attract people by appearance or characteristics than songs themselves or skills as singers, so they think it is unfair that they dominate the CD ranking over “real” musicians last a few years. They are on the top in the ranking not because their songs appeal people but because of the tickets. Also, it is not uncertain if the marketing method could be applied to other countries since Japanese pop culture is quite unique and different from others.

Key Points

* Music streaming services such as Spotify rifted up the music sales last year, which was the first time since 1999. Also, they have been decreasing people’s intentions to do illegal downloading. However, some famous musicians complain about the royalty systems to distribute profits to them. * YouTube is currently a significant advertisement place for music companies.
Not only videos but also paid promotions on the right corner of the pages are used as well. * Music companies applied some unique and new marketing plans to increase their sales. Jay-Z formed a partnership with Samsung and made a marketing plan which is to distribute apps to listen to his new album to their users for free. Also, Japanese idol group, AKB48, distributes a ticket for the hand-shaking event with CDs and made dramatic sales increase on their CD sales. Conclusion, Recommendation Global music sales increased last year, and people don't do illegal downloading as much as they used to. Yet, you have to still consider saying music companies and musicians earn as much money as they should do. Music companies still keep trying to make people to spend more money on music product and improve the situation. We need to be more respectful for all the people involved with music and protect one of the most entertaining contents by ourselves.


*1 AKS. (2011, May 27). AKB48 Member. Retrieved from

[1] Neil, McCormick. (2013, February 28). Digital music sales will not save the industry; The music industry might be excited about a tiny upturn in global sales figures thanks to singers like Adele, but it's time to get real, says Neil McCormick. The Telegraph. Retrieved from

[2] Eric, Pfanner. (2013, February 27). Music sales bring hope for industry's recovery;
A business sideswiped by digital revolution sees first growth since 1999. The International Herald Tribune. Retrieved from
[3] Adam, Sherwin. (2013, July 17). Music and film industries winning war on piracy, says report. The Independent. Retrieved from

[4] Justin, Colletti. (2013, July 31). Spotify Payouts Revisited – How Much Does it Pay Now and How Much Should Artists Demand? Sonyscoop. Retrieved from

[5] Fruszina, Eordogh. (2012, December 24). What Gangnam Style’s 1 Billion Views Say About Modern Society. ReadWrite. Retrieved from [6] PSY no GENTLEMAN no YouTube maketing ga mono sugoi. [ How good a YouTube marketing for Gentleman by PSY is] . Japan. Retrieved from

[7] Ben, Sisario. (2013, July 18). Jay’Z’s ‘ Magna Carta’ Soars to No.1. The New York Times. Retrieved from

[8] Alan, Swarts. (2013, July 3). Why Japan’s Music Industy is Booming … For Now. Billboard. Retrieved from * Strengths
I would say that the strongest point of the paper is the material I have found for the research. There are some points to achieve the purpose of the research paper which is to find out the current situation of music companies. Although the topic is not academic, I could have included four points on the findings.

* Weakness
The weakness point would be a conclusion and recommendation part. Since there is not a clear solution to improve the situation, I cannot include any recommendation with the strong provident on the paper.

* Grade and why
Hopefully I could get a grade between A and B. I followed the format it should be and could include a lot of finding to identify the current music industry. The thesis is also clear enough.

Similar Documents

Premium Essay

Music Industry

...Challenges Facing Music Industry and How to Develop It Music is one of the most beloved human experiences. Everyone enjoys a different type of music and that is evident in different events from graduation ceremonies to weddings and presidential inaugurations. Also, we use music in our films, plays because we can always deliver the message using music. It is the power of music that everyone gets influenced by and nothing could stop this power because it facilitates communication which goes beyond words and enables meanings to be shared. Nowadays, we have several types of music such as blues, jazz, hip-hop, new age metal, house, country and rock & roll. Also there are other types of music that produced due to modifications of several genres which makes the list unlimited. All these types are produced throughout the music industry. It consists of composers, singers and the companies and professional who produce and promote the music like music stores, music venues, road crew, producers, and business managers, studios, engineering performance and rights organizations. Nowadays, this industry is facing a lot of challenges that should be faced to develop the music industry. The music industry as a whole is facing a massive challenge. The industry is changing quickly and the market also is changing quickly. These challenges are related to the new technology that has been introduced into the music industry. The main problem that is facing the music industry is the......

Words: 1055 - Pages: 5

Premium Essay

Popular Music and Contemporary U.S. Culture

...Music in Different Cultures Popular Music and Contemporary U.S. Culture Popular Music in its Many Facets In its broadest sense, popular music is an umbrella term referring to a vast range of commercially mass-marketed musical genres contrasting with classical or art music and intended for mass consumption (e.g., rock, rock and roll, hip-hop, grunge, heavy metal, rhythm and blues, punk, soul, techno, funk, rap, house). This wide-ranging term encompasses a plethora of musical styles involving various rhythms, vocal styles, instruments, and technologies. Characteristically, popular music is a global cultural phenomenon and an accessible form of commercial music aimed at a worldwide audience. Traditionally, British and American forms of popular music have tended to dominate the industry. Corresponding to social, economic, and technological change, popular music is intimately linked to the identity of musicians, performers, or artists, as well as audiences and fans. Popular music is ubiquitous; from shopping malls and advertising to gymnasiums/fitness classes and political campaigns, popular music is a common feature of people's everyday lives and a significant aspect of consumer culture. For fans and enthusiasts, popular music can be a leisure-time pursuit occurring on evenings or weekends; alternatively, it can constitute a lifestyle, or way of life (e.g., Deadheads—a group of fans of the American band Grateful Dead who saw the band at...

Words: 3041 - Pages: 13

Premium Essay

Polyphonic Hmi: Mixing Music and Math

...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......

Words: 2335 - Pages: 10

Premium Essay


...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 the method, this form of research can cost......

Words: 2665 - Pages: 11

Free Essay

Internet Business Model Case Study

...Introduction to Management | Internet Business Models – A Case Study. | Nicole Fearon | user 5/3/2012 | Contents Question 3 Approach 3 The Case (Taken from Article) 4 Case Analysis 5 Business, Industry and Government Reviews 7 SWOT Analysis 7 Analysis Summary 8 Porters Five Forces Model 9 Porter’s Diamond Model 11 Demand Conditions 12 Related and Supporting Industries (collaborative industries) 12 Firm Strategy, Structure and Rivalry 12 Role of Government 13 Interconnectedness, Complexity and Business Models 15 Challenges and Strategies 15 External 16 Internal Strategies 17 Summary 19 Reference 20 Question Select one of the themes listed at the end of this table and undertake further research to prepare a paper outlining the key developments in the area. Your paper should contain references from a minimum of 15 sources, which should be clearly identified in a table of references or bibliography. You should also indicate the implications of your study for organizations in the Caribbean and provide recommendations for the adoption of strategies to address the challenges. Themes • Evolution of Management in the Caribbean • Managing in an Interconnected World • Managing the 21st Century Workforce • Use of ICT in Small and Medium Sized Business • Ethical Issues for Managerial Decision Making Approach Information and Communications Technology is a wide topic that can follow many paths. The focus for......

Words: 5486 - Pages: 22

Premium Essay

Consumer Perception of Spotify in the Irish Market

...To examine the effectiveness of the ‘Freemium’ business model. Student Name | Kyle Brown | Student Number | N00128284 | Student email address | | Date | 31/10/2014 | Submitted to | Eva Perez | 1 Introduction 3 1.1 Research Questions & Objectives 4 2 Literature Review 5 2.1 The 5% Rule 5 2.2 Music Streaming Services & Spotify 6 2.3 Freemium & Piracy 7 2.4 Consumer Perceptions 8 3 Research Methodology 9 3.1 Research Design 9 3.2 Data Collection 10 3.3 Sampling 11 4 Ethics 11 Harm to Participants 12 Invasion of Privacy 12 References 13 1. Introduction The term Freemium was originated by Jarid Lukin of the Flatiron portfolio company Alacra. Moreover, based on this term, Wilson, a venture capitalist, built up a business model in 2006 (Wilson, 2006). ‘Freemium’ is a business model which has emerged in recent years and has become increasingly popular within the digital service industry, particularly for ever growing music streaming services such as Spotify, as this model has almost saved the music industry from being washed out through ever growing piracy issues. The company has posted growth at a staggering rate of nearly 8,000 subscriptions per day and is currently valued at $3 billion dollars (Hampp, 2013). This substantial growth provides an interesting platform for the researcher and to find out how effective the model is for businesses......

Words: 3410 - Pages: 14

Premium Essay

Does Rap Music Misrepresent African Americans

...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......

Words: 2681 - Pages: 11

Premium Essay


... 12 9. Appendix 13 Executive Summary This company is named iMusic, which provides a source for legal and MP3 downloads. It is possible to download MP3 from thousands of artists. The pricing policy provides unlimited downloads for all members. This platform also enables artists to distribute and promote their music. The company expects that the music industry is changing with the change of distribution. The main significant changes are from CD-ROM, the Internet and wireless network access to digital format and physical format. This change is taking place as the result of universal and personal computers and portable digital music players such as Apple's iPod and iTunes, and the proliferation of consumer acceptance and recognition of the legitimate digital music sales. However, the digital music...

Words: 3072 - Pages: 13

Premium Essay


...Sony Mobile were Facebook and YouTube. Our research also showed sound quality and looks as the attributes most appealing to the target group. As a result, they had the capabilities  to seamlessly execute campaigns in tandem with new product launches on multiple social platforms. Their intelligence tools measured up  Sony’s competitors and planted the roots for a 360 degree Social Customer Relationship Management and a capability for  social commerce. By early 2012 the music industry in India had witnessed remarkable changes. With the rapid growth in Internet penetration and usage, innovative technology was driving music production, access and consumption. Sales from digital platforms had surpassed sales from traditional physical formats, such as CDs and tapes. With the distribution of digital music in India largely skewed towards the telecom business, music was increasingly being accessed via mobile devices, including smartphones and tablets. Overall, the role of the recording company seemed to be diminishing. While some of the leading companies in the music industry were testing the waters in the digital space, new players, including technology companies, were quickly entering the market with various new platforms and services.  Sony Music has unveiled its ‘India Segmentation Study’, the country’s first and largest research undertaken to analyse psychographic and demographic profiling of Indian audiences based on their music consumption patterns. It offers a never......

Words: 843 - Pages: 4

Premium Essay

1997 Saw the Us$19 Billion Merger of Guinness and Grand Met to Form Diageo, the World’s Largest Drinks Company. Guinness Was the Group’s Top- Selling Beverage After Smirnoff Vodka, and the Group’s Third Most Profitable

...KAZIAN GLOBAL SCHOOL OF BUSINESS MANAGEMENT MARKS: 80 COURSE: GDM Sem-III SUBJECT: Marketing Management N.B: 1} Attempt all questions Name: Chellappan Pillai Radhakrishnan Mangalappallil Reference Number: KM-00312-30891 ____________________________________________________________________________________ Case 1 Marks-16 1997 saw the US$19 billion merger of Guinness and Grand Met to form Diageo, the world’s largest drinks company. Guinness was the group’s top- selling beverage after Smirnoff vodka, and the group’s third most profitable brand, with an estimated global value of US$ 1.2 billion. More than 10 million glasses of the world’s most popular stout were sold every day, predominantly in Guinness’ top markets: respectively, the UK, Ireland, Nigeria, the USA and Cameroon. However, the famous dark stout with the white, creamy head was causing some strategic concerns for Diageo. In 1999, for the first time in the 241-year history of Guinness, sales fell. In early 2002 Diageo CEO Paul Walsh announced to the group’s concerned shareholders that global volume growth of Guinness was down 4 per cent in the last six month of 2001 and, more alarmingly, sales were also down 4 per cent in its home markets, Ireland. How should Diageo address falling sales in the centuries- old brand shrouded in Irish mystique and tradition? The changing face of the Irish beer market The Irish were very fond of beer and even fonder of Guinness. With close to 200 liters per capita drunk each year-......

Words: 4997 - Pages: 20

Premium Essay

Bus 499 Capstone Paper

...Campus April, 2014 Abstract The purpose of the paper is to research and understand how the changes of globalization and technology have impacted the music industry. This paper will also apply the industrial organization model and the resource-based model to determine how the music industries earn above-average returns. This paper will explain how the music industry’s success is through its mission and vision statements with Universal Music Group as an example. Finally, this paper will evaluate how the importance each category of the stakeholder impacts is to the overall success of the music industry. Assess how globalization and technology changes have impacted the corporation you researched. The company researched was Universal Music Group because the music industry is ever growing and wanted to know more about the company. As we all know, technology has been a major part of the music industry both good and bad. Technology has helped plenty of artists and hurt others. Since the introduction of the mp3 and the popularity of the IPOD device, compact disc sales have declined and more music is being released without the record company’s permission. Some may view this as a major problem to the other major record labels that distribute music globally. But some are using the mp3 to their advantage. A while ago an artist could not walk out of a studio and release a record in ten minutes. Now artists can get the music to their fans in record time and the fans can then......

Words: 1489 - Pages: 6

Premium Essay

Sample 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......

Words: 5891 - Pages: 24

Premium Essay

Mr Dajid

...Project How can HMV optimize social media for music promotion Content Abstract 3 1. Introduction 4 2. Industry Context 5 3. Management Issue 9 4. Literature Review 15 4.1 Digital Music Market and Retailer 15 4.2 Social media 18 4.3 Social Media Tool and Music Retailer 21 5. Research Gap and Significance 25 6. Research Aims 25 7. Research Methodology 27 7.1 Research Source: Secondary data 27 7.2 Research Method: Case study 28 7.3 Research Steps 29 8. Research Analysis and Findings 31 8.1 Research Analysis 31 8.1.1 Audience Insight 32 8.1.2 Direct, Simple and Convenient Design 37 8.1.3 Insider Strengthening 39 8.2 Research Findings 41 8.3 Research Recommendation 42 9. Research Limitation 43 10. Conclusion 44 References 46 Abstract HMV is a British entertainment retailer, which is selling music including physical music and digital music. However, HMV does not runs good social media. In this dissertation, I will explain music industry context and HMV’s social media issue, followed by reviewing literatures about digital market, social media and music retailers. Furthermore, I design a research with secondary data research and case study method, and investigate how to deal with HMV’s social media issue through exploring what and how do other successful cases do for this challenge especially on social media. Key words: Digital market, Music, Retailer, Social......

Words: 9773 - Pages: 40

Premium Essay

Macroinvironmental Evaluation of Emi

...|Issue domain |Event or trend |Active stakeholder(s) |Potential significance | |Social |Music is very popular, especially |Consumers |A huge market of music tends to make a product that is not payed | | |among young people but they don’t |Record companied |for. Record companied loose money beacuse of piracy. Beginning | | |feel obliged to pay for digital | |artists may suffer because companies prefer to work with famous | | |music (which could be downloaded | |artists who are profitable despite piracy. (1) | | |from i-net) | | | |Alison Wenham, chair of WIN, says: "Most artists who want to make a career from their music still seek a recording deal. They want to be introduced to the | |best producers, sound engineers and session musicians in the business. They need financial support and professional help to develop marketing and promotional | |campaigns." Research conducted with the Unsigned Guide in the UK found 70 per cent of unsigned acts wanted a recording contract. The top drivers for | |wanting a recording contract are marketing and......

Words: 1879 - Pages: 8

Premium Essay

Emi Group Plc Case Study

...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......

Words: 4282 - Pages: 18