Music Entertainment Experience Daniel Chang Shaun Ching Entertainment Marketing IMC

Project Goal …. Marketing communications guideline to promote music as multiple form of entertainment experiences in the US music industry

Marketing communications guideline to promote music as multiple form of entertainment experiences in the US music industry

Presentation Outline Situation analysis Music as entertainment experience Music creation process Marcomm guideline / strategy to promote music

Situation analysis

Music as entertainment experience

Music creation process

Marcomm guideline / strategy to promote music

Trend at a Glance in 2006 15-19 yrs old the single largest audience group consuming music 25-44 yrs old comprises 33.5% of the largest block of audience Music industry annual global sales at $38 billion (2004) The global piracy industry is estimated to be worth about $4.8 billion (2004). Record store still registered 35.4% of the music purchase Digital downloads increase to 6.8% from 1997 to 2006 The long-tail of the music forms an aggregate of 21.8% (religious to children music)

15-19 yrs old the single largest audience group consuming music

25-44 yrs old comprises 33.5% of the largest block of audience

Music industry annual global sales at $38 billion (2004)

The global piracy industry is estimated to be worth about $4.8 billion (2004).

Record store still registered 35.4% of the music purchase

Digital downloads increase to 6.8% from 1997 to 2006

The long-tail of the music forms an aggregate of 21.8% (religious to children music)

SWOT Threat Expansion of internet and fragmentation of audience threaten old model of promotion Piracy and P2P software make music cost nothing and easy to get Opportunity Internet expansion provides new marketing outlets and breaks the barriers to entry New technology eases identification of valuable rights and allows broad extension of sponsorship and music placement Increased consumer interest in “long tail” music Weakness Lack of flexibility in existing marketing models Regulations restrict royalty rates and intermediate rights collections Licensees dissatisfied with high royalty rates Strength Music is the most common entertainment resource Large catalogs allow licensing bundles and cross-promotion

Threat

Expansion of internet and fragmentation of audience threaten old model of promotion

Piracy and P2P software make music cost nothing and easy to get

Opportunity

Internet expansion provides new marketing outlets and breaks the barriers to entry

New technology eases identification of valuable rights and allows broad extension of sponsorship and music placement

Increased consumer interest in “long tail” music

Weakness

Lack of flexibility in existing marketing models

Regulations restrict royalty rates and intermediate rights collections

Licensees dissatisfied with high royalty rates

Strength

Music is the most common entertainment resource

Large catalogs allow licensing bundles and cross-promotion

Music Value Chain

Physical distribution is increasingly moving away from music specialty stores towards big box retailers , such as Best Buy and Wal-Mart, and Internet retail stores such as Amazon. Supply chain radically transformed, intermediaries disappearing, power of the major record labels diminishing . Digital delivery methods democratized the power structure towards the artists, and strategic partner distribution become more relevant Consumers choose to share music, instead of purchasing . Channels of Distributing Music

Physical distribution is increasingly moving away from music specialty stores towards big box retailers , such as Best Buy and Wal-Mart, and Internet retail stores such as Amazon.

Supply chain radically transformed, intermediaries disappearing, power of the major record labels diminishing .

Digital delivery methods democratized the power structure towards the artists, and strategic partner distribution become more relevant

Consumers choose to share music, instead of purchasing .

Music Value Chain

Music as entertainment experience Listening Live Social Collection

Music Creation Process John Legend Recording Publishing Distribution Marketing & Promotion Art & Repertoire +

Marcomm guideline / strategy to promote music General / Elvis U2 Madonna Listening Live Social Collection Social Collection Listening Live Social Collection Live Listening Social Live Listening Collection Radiohead

Radiohead 40% 30% Recording Publishing Distribution Marketing & Promotion Art & Repertoire

Radiohead 40% 30% Recording Publishing Distribution Marketing & Promotion Art & Repertoire

Madonna Recording Publishing Distribution Marketing & Promotion Art & Repertoire 40% 30%

Marcomm Guidelines Understand the product (the music artist/style) Diagnose customer motivation and need Determine brand positioning of the music artist Develop targeted marcom strategy to serve customer’s music consumption need

Understand the product (the music artist/style)

Diagnose customer motivation and need

Determine brand positioning of the music artist

Develop targeted marcom strategy to serve customer’s music consumption need

Q & A Thank you!