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Music Industry 2006: Stuck?. David Stiebel MAS.111 May 5, 2006. Overview. The Problem Market Need Available Tools My work. Music Industry in Trouble.

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music industry 2006 stuck

Music Industry 2006: Stuck?

David Stiebel


May 5, 2006

  • The Problem
  • Market Need
  • Available Tools
  • My work
music industry in trouble
Music Industry in Trouble

“The fact is that all traditional media companies are facing the same core problem: viewers and advertisers are steadily migrating toward new media. 

Allof the media companies are now ‘on the defensive,’ trying to prove that there's still growth opportunity in their businesses, and desperately trying to find ways to get some positive momentum going in their stock price.”

Lex Suvanto, SVP at Abernathy MacGregor

the problem
The Problem
  • The music industry does not know which songs will be successful and which will fail
market need
Market Need
  • Today, Artist and Repertoire (A&R) at major record labels has a success rate of 10%
      • [source: Recording Industry Association of America (RIAA)]
  • The record industry improves their bottom line by taking 90% of all CD releases, and throwing them in the trash
market research
Market Research
  • RIAA says that major labels spend $13.5 billion annually on marketing and distribution [M&D]
  • HBS study suggests that A&R applies same M&D budget for successes and failures
  • The industry wastes over $12 billion on M&D for unprofitable CDs (i.e. 90% of 13.5B)
available tools
Available Tools
  • There are several tools available that major labels can use to get a leg up
subjective data
Subjective Data
  • Focus groups/radio call-outs
    • Pro: Asking directly, gathers demographics
    • Con: Measures music taste in captivity
  • Disk Jockey Review
    • Pro: Experienced opinion
    • Con: Easily swayed opinion
objective data
Objective Data
  • Peer-to-Peer searches/file offerings
    • Pro: Tracks what people are looking for
    • Con: Not necessarily what people will buy
  • Music Purchase Records
    • Pro: Reports what’s hot and what’s not
    • Con: Reports after budget is spent
what am i doing
What am I doing?
    • A new approach for the music industry
  • Market Research Executive
    • Gather information about the current market and our competitors
  • Patent Searches
latest news
Latest News
  • MIT$50$100K Semi-Finalists
  • Winners announced Thursday, May 18
    • 7:00 - 9:00 PM
    • Kresge