Access over 20 million homework & study documents

Playing to a new beat: marketing in the music industry

Content type
User Generated
Type
Study Guide
Rating
Showing Page:
1/31
The Indian Institute of Business Management & Studies
SUBJECT: Marketing Management Marks:100
1
CASE: I Playing to a new beat: marketing in the music industry
Good old fashioned rock ‘n’ roll could be dead. If a mobile phone ringtone in the shape of the vocalizations
of the animated Crazy Frog dominates the billboard charts for months on end, then it could well signal the
death knell for the industry, and how it operates. If this ubiquitous amphibian’s aurally annoying song,
converted from a mobile phone ringtone, outsold even mainstay acts such as Oasis and Coldplay, why should
music companies invest millions in cultivating fresh musical talent, hoping for them to be the next big thing,
when their efforts can be beaten by basic synthesizer music? The industry is facing a number of challenges
that it has to address, such as strong competition, piracy, changing delivery formats, increasing cost
pressures, demanding pri-madonnas and changing customer needs. Gone are the days when music moguls
were reliant on sales from albums alone, now the industry trawls for revenue from a variety of sources, such
as ringtones, merchandising, concerts, and music DVDs, leveraging extensive back catalogues, and music
rights from advertising, movies and TV programming.
The music industry is in a state of flux at the moment. The cornerstone of the industrythe singles chart
has been facing terminal decline since the mid-1990s. Some retailers are now not even stocking singles due
to this marked freefall. Some industry commentators blame the Internet as the sole cause, while others point
to value differences between the price of an album and the price of a single as too much. Likewise, some
commentators criticize the heavy pre-release promotion of new songs, the targeting of ever-younger markets
by pop acts, and the explosion of digital television music channels as root causes of the single’s demise. The
day when the typical record buyer browses through rows of shelves for a much sought-after band or song on
a Saturday afternoon may be thing of the past.
Long-term success stories for the music industry are increasingly difficult to develop. The old tradition of
A&R (which stands for ‘Artists & Repertoire’) was to sign, nurture and develop musical talent over a period
of years. The industry relied on continually feeding the system with fresh talent that could prove to be the
next big thing and capture the public imagination. Now corporate short-term thinking has enveloped business
strategies. If an act fails to be an immediate hit, the record label drops them. The industry is now
characterized by an endless succession of one-hit wonders and videogenic artist churning out classic cover
songs, before vanishing off the celebrity radar. Four large music labels now dominate the industry (see Table
1), and have emerged through years of consolidation.
Table 1 The ‘big four’ music labels
Universal Music
Sony BMG
The largest music label, with 26 per cent of
global music market share; artists on its
roster include U2, Limp Bizkit, Mariah
Carey and No Doubt
Merger consolidated its position; artists on
its roster include Michael Jackson, Lauryn
Hill, Westlife, Dido, Outkast and Christina
Aguilera
Warner Music
EMI
Third biggest music group; artists on its
roster include Madonna, Red Hot Chili
Peppers and REM
Artists on its roster include the Rolling
Stones, Coldplay, Norah Jones, Radiohead,
and Robbie Williams
The ‘big four’ labels have the marketing clout and resources to invest heavily in their acts, providing them
with expensive videos, publicity tours and PR coverage. This clout allows their acts to get vital airplay and

Sign up to view the full document!

lock_open Sign Up
Showing Page:
2/31
The Indian Institute of Business Management & Studies
SUBJECT: Marketing Management Marks:100
2
video rotation on dedicated TV music channels. Major record labels have been accused of offering cash
inducements of gifts to radio stations and DJs in an effort to get their songs on playlists. This activity is
known in the industry as ‘radio payola’.
Consumer have flocked to the Internet, to download, to stream, to ‘rip and burn’ copyrighted music material.
The digital music revolution has changed the way people listen, use and obtain their favourite music. The
very business model that has worked for decades, buying a single or album from a high-street store, may not
survive. Music executives are left questioning whether the Internet will kill the music business model has
been fundamentally altered. According to the British Phonographic Industry (BPI), it estimated that 8 million
people in the UK are downloading music from the Internet92 per cent of them doing so illegally. In 2005
alone, sales of CD singles fell by a colossal 23 per cent. To put the change into context, the sales of digital
singles increased by 746.6 per cent in 2005. Consumers are buying their music through different channels
and also listening to their favourate songs through digital media rather than through standard CD, cassette or
vinyl. The emergence of MP3 players, particularly the immensely popular Apple iPod, has transformed the
music landscape even further. Consumers are now downloading songs electronically from the Internet, and
storing them on these digital devices or burning them onto rewritable CDs.
Glossary of online music jargon
Streaming: Allows the user to listen to or watch a file as it is being simultaneously downloaded. Radio
channels utilize this technology to transmit their programming on the Internet.
Rip n burn’: Means downloading a song or audio file from the Internet and then burning them onto
rewritable CDs or DVD.
MP3 format: MP3 is a popular digital music file format. The sound quality is similar to that of a CD. The
format reduces the size of a song to one-tenth of its original size allowing for it to be transmitted quickly
over computer networks.
Apple iPod: The ‘digital jukebox’ that has transformed the fortunes of the pioneer PC maker. By the end of
2004 Apple is expected to have sold 5 million units of this ultra-hip gadget. It was the ‘must-have item’ for
2003. The standard 20 GB iPod player can hold around 5000 songs. Other hardware companies, such as Dell
& Creative Labs, have launched competing devices. These competing brands can retail for less than £75.
Peer-to-peer networks (P2P): These networks allow users to share their music libraries with other net
users. There is no central server, rather individual computers on the Internet communicating with one
another. A P2P program allows users to search for material, such as music files, on other computers. The
program lets users find their desired music files through the use of a central computer server. The system
works lime this; a user sends in a request for a song; the system checks where on the Internet that song is
located; that song is downloaded directly onto the computer of the user who made the request. The P2P
server never actually holds the physical music filesit just facilitates the process.
The Internet offers a number of benefits to music shoppers, such as instant delivery, access to huge music
catalogues and provision of other rich multi-media material like concerts or videos, access to samples of
tracks, cheaper pricing (buying songs for 99p rather than an expensive single) and, above all, convenience.
On the positive side, labels now have access to a wider global audience, possibilities of new revenue streams
and leveraging their vast back catalogues. It has diminished the bargaining power of large retailers, it is a

Sign up to view the full document!

lock_open Sign Up
Showing Page:
3/31

Sign up to view the full document!

lock_open Sign Up
End of Preview - Want to read all 31 pages?
Access Now
Unformatted Attachment Preview
The Indian Institute of Business Management & Studies SUBJECT: Marketing Management CASE: I Marks:100 Playing to a new beat: marketing in the music industry Good old fashioned rock ‘n’ roll could be dead. If a mobile phone ringtone in the shape of the vocalizations of the animated Crazy Frog dominates the billboard charts for months on end, then it could well signal the death knell for the industry, and how it operates. If this ubiquitous amphibian’s aurally annoying song, converted from a mobile phone ringtone, outsold even mainstay acts such as Oasis and Coldplay, why should music companies invest millions in cultivating fresh musical talent, hoping for them to be the next big thing, when their efforts can be beaten by basic synthesizer music? The industry is facing a number of challenges that it has to address, such as strong competition, piracy, changing delivery formats, increasing cost pressures, demanding pri-madonnas and changing customer needs. Gone are the days when music moguls were reliant on sales from albums alone, now the industry trawls for revenue from a variety of sources, such as ringtones, merchandising, concerts, and music DVDs, leveraging extensive back catalogues, and music rights from advertising, movies and TV programming. The music industry is in a state of flux at the moment. The cornerstone of the industry—the singles chart— has been facing terminal decline since the mid-1990s. Some retailers are now not even stocking singles due to t ...
Purchase document to see full attachment
User generated content is uploaded by users for the purposes of learning and should be used following Studypool's honor code & terms of service.

Anonymous
I was stuck on this subject and a friend recommended Studypool. I'm so glad I checked it out!

Studypool
4.7
Trustpilot
4.5
Sitejabber
4.4

Similar Documents