CAN THE MUSIC INDUSTRY CHANGE ITS

TUNE ?

PRESENTED BY :RAJAT TYAGIKRISHNA KR SAKUNIAABINASH SAHOOSOURAV CHOUDHARYPRATIK MAJUMDARRITWIK MAHAPATRASOMYA SINGH

THE CASE

• Online File Sharing through Napster.• Copyright laws & RIAA.• Legal obligations due to Central Title Index• Peer-to-Peer downloading & sharing. Eg.

Kazaa, Morpheus, Grokster.• Legal obligation shifted to users.

continues….

• Legal battles in Los Angeles & San Fransisco.• Prosecutions that followed. “Cease & Desist”• Free Music vs. Paid Music• Explanations in favor of Free Downloading.• Change in the approach of the Music Industry.

Success of iTune

• Wide range of songs• No subscription fee• Low cost per song (99 cents)• 30- second preview for each song• Restriction on file sharing & copying.

QUESTIONS 1

Apply the value chain and competitive forces models to the music recording industry.

Artists or SingerRecording Studios ManufacturingMarketingDistribution- Direct distribution through traditional channels- Indirect distribution through nontraditional channelsRetailing

QUESTIONS 2

What role did internet play in changing value propositions and the

competitive environment ? To what extent has it been responsible

for declining CD sales ? Explain your answer.

The internet plays positive and negative roles in the music industry. CD sales : In 2000 - $ 35.5 billion In 2001 - $ 33.7 billion In 2002 - $ 31.0 billion In 2003, worldwide sales of CDs fell 10% as compared to 2002.

QUESTION 3

Analyze the response of the music recording industry to these changes. What management, organizational, and technology issues affected this response ?

Increasing Internet speed.Online music playerLate release of songs

QUESTION 4

What is the current business strategy of the music industry ? Do you think it is viable ? Explain your answer.

1.Majority of the expense are on artist acquisition and marketing of the music albums.

2.Alternative pricing strategies: Selling of Individual songs( less than $1) or Full albums (approx.$10).

3. Commoditizing the digital music market.4.To sell music related products like Music players and Website subscription.