1. What was the unique value proposition of Rhapsody? Is it appealing? This question is about what is the promised value that Rhapsody will delivered and be experienced by the customer that is serviced by the online music company. Furthermore, is the value that is to be delivered to the customer/user attractive enough to purchase over the competition, beyond simply looking at the idea of subscription music as “appealing”. Unlike retailers that sold individual and multiple song albums, and the multiple services like Apples iTunes who did equivalently the same thing as the retail stores, but added an online download dimension with a mobile music player to store them, Rhapsody went in a different direction. The model of the business focused on subscriptions, at under $10 a month, which allowed unlimited, anywhere from a PC or online capable device, to a vast library of music, albums and artists. Rhapsody also went further by making purchased music able to burned to a CD at a lower price than the competition (Apple) at a rate of 79 cents (compared to nearly $1), which after being burned, the owner of the music could do whatever they wished, including downloading onto a portable music device like the iPod. Overall though, Rhapsody provided, before the onset of competition, a dynamic shift in the way people purchased and played music. 2. Why were customers reluctant to adopt streaming music services? This question is about the struggle and unwillingness of online music customers to fully immerse themselves into the music streaming industry. Generally speaking, the way in which people understood purchasing music and playing it involved CD’s, players, and purchasing via various retailers that provided the products. Much like tapes... ... middle of paper ... ...ne. The company is continuing to grow in popularity, thus the potential advertising campaign may not attract the subscribers needed for the company to stay afloat with struggling revenue and profit margins. Likely, Real could collaborate with a multitude of partners for distribution. Broadband providers (Ex. Comcast and Verizon) cover an extremely large population, provide ads through TV, and deals can be likely cost effective in the long run compared to an uncertain $30M advertising campaign. Another option is retailers (electric) like Bestbuy, which provide a physical outlet, with on-hand assistance, and likely provide subscription service options. This also can go further by being offered by actual hardware vendors, which would distribute items compatible with Real; Phones, Tablets, PC’s, TV’s, MP3 Players, and other devices which need subscriptions to access.
We have all watched over the last year and a half as the controversy over the digital music provider Napster has clogged our television screens and lined our floors in the forms of newspaper articles. We are also well aware of the implications and revenue losses that the service either directly or indirectly causes. What I am going to investigate more in-depth in this article is, more specifically, the effect that Napster has on the operations of record stores worldwide. I am going to try to describe the most profound effects that Napster has on this industry.
Perhaps the optimal solution for Napster’s dilemma is the possibility of a cable TV type payment. Users pay a certain monthly fee for all the downloaded music they wanted. They could chat with their favorite artists, get first claim on concert tickets, and browse possible downloads by genre. The new system would pay the artists their royalties and sell millions of older titles that at present are sitting in vaults because no stores will give them shelf space. This option has the advantages of cooperation between the music industry and Napster. Napster users will have the same type of service as they do now, with extras so they won’t have to turn to no-fee options (Gnutella and Freenet). Music companies will be able to use the Internet for sales of all their merchandise. If music companies can package a better experience people will pay for it. In a recent survey of college students more than two thirds of the respondents would be willing to pay for a $20 dollar monthly fee of a similar service. The only foreseeable disadvantage of this solution is the plausibility of the record companies cooperating in such an effort.
...refore the subscription they sell is still based on the niche market they started with. Unlike Pandora or Spotify, free users can stream music without interruptive advertisements, and they can also upload a limited amount of music.
Satellite radio is a technology that provides a radically new way to listen to radio. XM’s service makes use of advanced satellite capabilities and elaborates terrestrial receiver architecture to deliver a wide array of high quality radio programming nationwide. In early 1998, Robert Acker, director of strategic planning at XM, needs to develop a marketing strategy for this new radio service. There are several decisions that need to be made by the company in order to finalize the business plan. At fist XM needs to decide which of two business models to pursue, whether emphasis should be placed on charging customers a monthly subscription fee, or whether to rely more on earning revenue through advertising. In addressing this problem, management must consider the value that XM radio could propose for different consumer segments as compared with existing modes of radio (AM, FM) and in relation to its sole competitor in satellite radio – SIRIUS. Besides choosing a business model there is also a need to explore how best to approach and leverage manufacturer and channel partners, considering high unknown and high-risk technology. The purpose of this report is to analyze possibilities and outline possible recommendation on strategies for XM Radio. The following areas will be examined:
An “analyst” was quoted in the case (in 2002) as saying that “people will pay for music on the Internet, eventually.” This person was skeptical of the willingness of consumers to pay for
With the popularization of the MP3 format a few years back came a renewed interest into listening to music. One of the great advantages of the Internet was that it allowed for almost immediate access to information instantaneously. If a song had been recorded, then there was a good chance it could be found on the Internet. The MP3 format allowed listeners to check out new artists and allowed for people to sent songs to each other of artists they thought should be heard. This was a good way for unknown artists to be heard or forgotten artist to be re-discovered. Radio station play lists or MTV’s idea of the next big thing did not fuel this rekindled interest in music. Rather a desire to simply listen to music was all that drove this phenomenon of people downloading music.
First of all it’s successfully fighting against piracy, and turns former pirates into music consumers. Because there’s no reason why one would steal music when it can be easily “taken” for free in an absolutely legal way that benefits not only music consumers but artists too. And even though you can use Spotify for free more and more people are getting premium membership and paying the $9.99 monthly fee in return to get add free music streaming and the availability to listen to music offline. But some major labels are pushing Spotify towards limiting freemium membership, to convince more people to pay monthly fee, Ek refuses to do it, for obvious reasons – people will always find ways to get music for free, so if they won’t get it on Spotify they will find other places to do it and most likely in an illegal way. But still quite a few well known artist like Radiohead’s Thom Yorke, Taylor Swift, Johnny Marr and many others who are against Spotify, stating that it’s paying pennys for artist and that they are giving up their music for free, and staying with iTunes rather than Spotify. iTunes, in my opinion, is good for short term income, as when people buy a song they can listen to it as many times as they want and artist don’t get any more income from that song after someone have bought it, where as if an artist have their songs on Spotify even after 20 years
Abstract: Relatively little attention has been given to the effect of digital music on amateur musicians and music distribution. Here, I examine the revolution on the horizon-sites such as MP3.com herald the eventual bridging of the gap between artist and listener while shrinking the record companies. In this paper I examine two such sites that host independent and labeled artists alike: the larger, better-known MP3.com and the smaller, independent, non-profit Songfight. I examine how they each handle the challenges of digital music and their attraction for artists while concluding that a change in the recording industry as we know it is forthcoming.
These and numerous other sites now offer people the ability to listen to music without paying. These sites are causing a trend in the lack of music ownership, which is hurting an artist’s income. “The rise of the digital age has meant that recorded music is packaged differently, which has no doubt altered the consumer’s views on the value of recorded music” (Jackman). Spotify has 20 million users in 17 countries, with only five million of them actually paying the $5 to $10 a month to eliminate the ads that freeloaders see (Sisario). More and more people are choosing to stream music online rather than download it because why wouldn’t you want to summon any song, at any time, for free? 30 percent of consumers are streamers and only a fifth of these streamers actually pay to stream. The consumer’s transition from downloading music to streaming music is fundamentally a transition of spending. “Just as the download was a transition from the CD, streaming subscriptions are a transition from the download. This is because the majority of subscribers were already digital music buyers before becoming subscribers and the majority of those were iTunes customers” (How Streaming Will Impact Music Sales). People are now switching from downloading music to streaming music online because it is simply easier and
I’m going to be honest for a second; I am completely guilty of taking part in music piracy, having illegally downloaded music once or twice (cough) in my life, don’t judge me I’m sure you have been illegal once in your life wether its jay walking or whatever. But for those of you who have done this, it is so easy to slip into other peoples habits, like when your friends tell you about this awesome mp3 free downloader app, hey you’ve just got to try it out too right? The worst part about it is that people slave to write and produce these songs that we can receive within the click of a button; it’s kind of like getting a builder to build your house and then not paying him at the end. The New Media allows us so many options to slip through the
There have been many effects that music has in our daily lives. The growth of the internet’s bandwidth has impacted the music industry. Different companies have tried many strategies to spread out the general music interest. One of the ways has been the streaming strategy. This has caused the bandwidth of their servers to cost more money than could be made. This is why many companies have fallen in the industry. They simply could not make a profit out of having music being streamed compared to it being sold individually. A long-term profit has not been sustainable for most music-streaming companies. Music streaming has been around for over a decade. Companies such as Rhapsody, Napster, MOG, and We7 have tested different business models. They had a way where you could pay a monthly subscription to download all of the music you would like. This is easily comparable to an all-you-can-eat buffet. Some types of subscriptions made a limit on the number of songs you can download. There are different
The best part for the consumer is that similar to Netflix, you can engage in a free 2 month trial before you commit to a monthly subscription. This helps consumers continue to evaluate in order to make sure this is the best service to satisfy their need. Also, subscriptions are monthly and can be cancelled at any
This ultimately altered the conventions of music consumption and contributed to new listening culture based on peer-to-peer exchanges rather than corporate structures (Freedman, 2003, p. 173). Consequently, this forced all record labels “to adopt internet technologies, to create a richer and more fully featured web sites, and to experiment with electronic forms of distribution that are either proprietary or in other ways non-threatening” to alleviate potential damage from media technology (Easley, 2005, p. 165). Universal Music Group successfully addressed the changes brought by media convergence by modifying their traditional business model to adopt the paradigm shift and facilitate the digital media culture (Universal Music Group,
The music industry survives mainly on the sales of CD’s. Napster enables one person to purchase the CD, and through the use of their computer, they give the music to millions of different users.
The Internet has been hailed as one of the most prolific inventions in modern times. Although many believed it to be a passing phase at its inception, it has proven to be a driving force especially in the business world. Most industries have seen a boom in business due to the access of the global market the Internet draws. However, many have had to deal with the increase in competition. The music industry is no stranger to some of these challenges. Much has been said about how music piracy has decreased the revenue for some in the business. The Internet has revolutionized not only how music is made. It has affected economically the record companies the artists and those who listen to their music.