CAN THE MUSIC INDUSTRY

CHANGE ITS TUNE ?

PRESENTED BY :
RAJAT TYAGI
KRISHNA KR SAKUNIA
ABINASH SAHOO
SOURAV CHOUDHARY
PRATIK MAJUMDAR
RITWIK MAHAPATRA
SOMYA 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 Singer
Recording Studios
Manufacturing
Marketing
Distribution
- Direct distribution through traditional channels
- Indirect distribution through nontraditional channels
Retailing
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 player
Late 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.