Music Industry Case Studies By April McCullin QuickTimeª and a QuickTimeª and a QuickTimeª and aTIFF (Uncompressed) decompressor TIFF (Uncompressed) decompressorQuickTimeª and a TIFF (Uncompressed) decompre TIFF (Uncompressed) decompressor are needed to see this picture. are needed to see this picture. needed to see this picture. needed to see this picture are are
SONY SMEList of Sony Music Entertainment labels: • RCA Records • Sony Music Nashville • Provident Label Group • Verity Gospel Music Group • Sony Music Latin • Sony Masterworks • Legacy Recordings • Columbia Records UK • RCA label Group UK • Syco Music • RED Distribution • JG3 Records • Columbia Records • Epic Records
Artist’s signed with SME:• Calvin Harris • Avril Lavigne• Evanescence • Beyonce• The Fray • Olly Murs• The Foo Fighters • One Direction• Fat Boy Slim • Rebecca Ferguson• Guy Sebastian • Michael Jackson• Glee • Britney Spears• Human Nature • Boys Like Girls• Hey Mondays • Celine Dion• Imogen Heap • Bob Dylan• Jessica Mauboy • Backstreet Boys• Jennifer Lopez • Chris Brown• Jimmy Hendrix • Christina Aguilera• John Mayer • Ciara• Johnny Cash • MGMT• Justin Timberlake • Misha Omar• Mariah Carrey • OutKast• The Shins • Oasis• Paul Simons • Adam Lambert• Karmin• Outlandish (Only to name a few…)
PRODUCTION:• Sony Music Entertainment; a major conglomerate company(a large corporation formed by the merging of separate and diverse firms)/subsidiary of Sony Corporation of America. The second largest global recorded music company of the ‘big four’ record companies.• Company headquarters, New York, United States. Producers of ‘music and entertainment’.• About half of Sonys products are manufactured in Japan. Their other manufacturing bases are in China, Europe, and America.• Sony also produces movies and games in addition to music. Therefore, Sony makes a profit from convergence as they are then able to include their music on soundtracks; successfully widening the target audience and making them more aware.• Sony also produces mp3 players and other electrical devices, allowing people to listen to music.
CONSUMPTION:• Sony too own the rights to any of the music that they produce. This meaning that if another company producing a film/game using their particular track, the company would need to pay Sony for this privilege, resulting in a huge profit due to media convergence.• Sony is a major and the many different subsidiaries they own are all at different stages of music consumption, distribution and production.• Sony sells their music to the audience through legal music downloading and CD’s. COMPANY SUCCESS:• Sony work with high standard of quality within their products and has very good customer, third party, satisfaction.• Using Sybase technology, Sony BMG developed a flexible, powerful system, enhancing its service in an extremely competitive market.• Their products are of unbelievably good reliability and are always working on revolutionary products that realistically will be successful and they consider the customer with high expectations before selling their products.
PROFIT:• In 2008, Sony cut its predicted annual profit by a massive 57%. As ‘tough price competition’ was to blame. Though Sony SME’s second quarter revenue fell from $851 million, in 2007 to $762 in 2008, this was still a fall of 11%.• The cause of this was “the continued decline in the worldwide physical music market not being offset by growth in digital product sales.”• Sony Revenue 2010: $5,672 million• Operation Income 2010: $450 million
EMI Music (brief overview)• EMI Music, founded by the inventor of the gramophone, Emile Berliner, is known to be one of the world’s leading music companies. Home to many of the most successful and internationally recognized recording artists. From Lily Allen, The Beatles, to David Guetta and Katy Perry. And through their companies and network of licensees, they are able to serve their artists, consumers and partners all over the world. “EMI Music brings artists and fans together by driving action and creating value wherever music is experienced.”• Their record labels include: Angel, Astralwerks, Blue Note, Capitol, Capitol Latin, Capitol Records Nashville, EMI Classics, EMI CMG, EMI Records, EMI Records Nashville, Manhattan, Parlophone, Virgin Classics and Virgin Records.• EMI Music provides independent labels and artists with a ‘global menu’ of commercial services and seamless access to an expanding range of revenue streams and business models, including digital and physical distribution, sales, press and promotion, marketing, licensing, synch, brand partnerships, live recordings and merchandising.• “EMI has always been at the forefront of technology and change.”
Universal (brief overview)• Universal Music Group (UMG) is the world’s number one largest music company with market leading positions in recorded music, music publishing, and merchandising.The business discovers and develops recording artists and then markets and promotes their music across a wide variety of formats and platforms.• UMGs music publishing company, Universal Music Publishing Group, discovers and develops songwriters, and owns and administers copyrights to musical compositions for use in recordings, public performances, and related uses, such as films and advertisements.• Bravado, UMG’s merchandising company, sells artist and music-branded products through multiple sale points such as fashion retail, live performances, and the internet.• Their record labels include: A&M/Octone, Barclay, Decca, Deutsche Grammophon, Disa, ECM, Emarcy, Fonovisa, Interscope Geffen A&M Records, Island Def Jam Music Group, Machete Music, Mercury Records, Polydor Records, Show Dog ﾐ Universal Music, Universal Motown Republic Group, Universal Music Latino, Universal Music Group Nashville (which includes Lost Highway, MCA Nashville and Mercury Nashville), and Verve Music Group.• In some markets outside the U.S, UMG companies handle their own distribution and sales. In other markets UMG companies have sub-contracted services to third parties or entered into distribution joint ventures with other record companies.
Spotify (brief overview)• Spotify is a music streaming service with desktop applications and is available for download on Mac OS X, Linux and Microsoft Windows. Spotify founder and CEO, Daniel Ek, says: ‘I remember however that we sat around my media htpc machine quite a lot and thought that it was a cumbersome to get content, despite the technology having been around (Napster) since at least 2000. I think thats why we got stuck on the idea of Spotify.’ What makes Spotify so important within the Uk music industry is simply the way that it is designed/made. Its elegant and simple and in a consumer-friendly proposition. It too entered the market at the perfect timing, as broadband was introduced and a rapidly growing amount of people in the UK were getting smartphones and data plans. Additionally, markets with Spotify saw an average digital growth rate of 43% compared to 9.3% for Spotify-less markets.
Napster (brief overview)• Napster is an application that allows people to share their music over the internet without having to purchase their CD. The users could access music recordings in the MP3 format from other users who are online at the same time. Allowing the user also to, build a vast library with over 15 million tracks and new music added every day. ﾊ Napster music follows ﾊ through the use of computers, mobiles, hi-fi, therefore, a huge majority of people would be able to reach their music.Let the music come to you with interactive playlists, radio stations and much more. Founded by 19 year old, Shawn Fanning in 1999, Napster first became popular on college campuses. However, in 2001, the web based service was shut down by a court order. As it was subject to violating the rules of copyright. It was too seen to compete with the classical offline distribution channels as it allowed users to conveniently share music over the internet.