situation analysis

1. 1
Situation Analysis
Nova Granite
Full Sail University

2. 2
Market Analysis
Market Summary
The music business journey I’ve decided to take on is Independent Record Label. The
North American Industry Classification System, also known as the “NAICS” code, is 711410.
According to the Census.gov website, “This industry comprises establishments of agents and
managers primarily engaged in representing and/or managing creative and performing artists,
sports figures, entertainers, and other public figures. The representation and management include
activities, such as representing clients in contract negotiations; managing or organizing clients'
financial affairs; and generally promoting the careers of their clients.” (NAICS, 2017)
Record labels help mold their clients’ careers both short and long-term sense for as long
as the agreed contract. For a musical artist, signing with a label is one of the most vital decisions
you can make. Labels can honestly make you or break you, so artists will think long and hard
before they team up with a Label. This is considered high-involvement decision making because
of how impactful a record label can be to the artist’s career. The artist may want to look up the
Labels portfolio to see how they work with others and see what accomplishments they’ve made
because the artist wants to make sure they’re making the right decision before signing their
career away.
For the most part, selecting the right label relies on both cognitive and emotion decision
making. However, high-involvement situations suggest that the cognitive stage usually appears
first. (Rolston et al., 2015). As I mentioned with research comes with checking their credibility

3. 3
and artists should always make sure that the label is qualified to do the job first. “That’s why it’s
so important not to jump into the first deal with the first label who approaches you or whom you
find. Instead of resorting to “something is better than nothing,” take the time to find a label who
fits you and your goals and who is willing and genuinely excited to have you as a client.” (Awal,
2017) Once that is established, there comes the emotional aspect of it. Not only will this person
be a part of your career, but also your personal life. You need to make sure that they have a
personality that you can work with because you will have to be a solid team to achieve a high
level of success. We use emotional decision making to evaluate our personal values such as trust,
honesty, and integrity. This is very useful to artist consumers in the marketplace.
In our eBook reading, Record Label Marking, 3rd Edition, the Maslow’s Hierarchy of
Needs mentions that music can fulfill your need to belong. This can apply to a record label
because it’s not just a company, it’s a community, a family. When you find the right person to
work with, the relationships form into a sense of family feeling (or at least that’s the goal when
the right emotions are met). Another aspect to look at is the esteem needs, which “drives people
to seek validation and status” (Rolston et al., 2015). This description fits well in this marketplace
because that is the whole concept of being considered a successful artist, thus elevating their
status. An artist’s needs are to be validated by fans that their music is worth listening to. Labels
are extremely aware of this need and provide services that will allow them to achieve those
things.
Market Trends
There are many both positive and negative trends occurring in the Record Label industry
and one of them is the DIY artist trend. “The rise of DIY artists, and the vast consumption of
their music, have obviously exploded thanks to Spotify, YouTube, Pandora, Apple Music, et.”

4. 4
(Ingham, 2019) in 2020, streaming revenues peeked at $14.2 billion, up 19.6%. “For the first
time in history, the major labels under-performed in the streaming market – but not all majors
were affected in the same way. Sony Music Entertainment (SME) was entirely in line with
streaming market growth, Universal Music Group (UMG) slightly below and Warner Music
Group (WMG) markedly below. Independent labels and artists direct both strongly
overperformed in the market, collectively growing at 27% and thus increasing their combined
streaming market share to 31.5%.” (Mulligan, 2021)
The music industry is constantly growing and evolving. Covid-19 has truly impacted the
way we consume music. “The global music industry is worth over $50 billion, with two major
income streams. The first, live music, makes up over 50% of total revenues and is derived
mainly from sales of tickets to live performances” (Hall, 2020). Labels are being forced to
change the way they shape their artist’s now that a main source of revenue is gone. This has been
a time of reinventing and reevaluating.
Target Market
The target market that I’m searching for are men and women between the ages of 18-30
years. They will most likely live in the city areas such as New York, LA, Pittsburgh, and
California areas and are looking to start their careers off. These individuals are young, so I will
assume their income will be relatively low, ranging from $20,000 to $40,000 a year. These
people could possibly still be in college and/or working class. Due to this, they may live a
humble life, but still have the latest technology. Socializing and networking on social media are a
big part of their lives. These potential clients are visually appealing, personable, and up to date
with trends.

5. 5
Persona
Asher is a naturally gifted Rock/metal singer and songwriter. This 22-year-old is a recent
graduate from Dickinson College in Carlisle, PA. He spends a lot of his time on social media
engaging with his 10k+ followers on TikTok and Instagram. He likes to post clips of jamming
sessions with his band, as well as singing covers of hit songs on his social media platforms.
When he’s not writing a song or singing for his virtual audience, he’s working, writing new
music, or hanging out with friends. Asher and his bandmates are considering signing with an
independent record label to help further their career, they want to sign to a label that understands

6. 6
their lifestyle and genuinely believes in their talent. They want to work with a Label that will
guide them, but also give them the freedom to show their creativity.
Competitor Analysis
Competition
A direct competition would be Manic Kat Records. They are a well-known independent
label specifically for rock, metal, punk genre artists. They assist their artists by shaping their
careers by publishing their music. The indirect competition for me would be Red Light
Management, they represent very important people in many genres, developing sustainable
careers and long-lasting legacies for their roster.
Strengths
Manic Kat Records prides themselves as “being committed to aims to put the artists first.”
(MKR, 2020) They were founded in 2014, so they have years of experience. Their strength is
their credibility that has allowed them to grow across North America. With the funds, they can
execute well in various projects across many platforms.
Red Light Management is also another well-establish company whose time in the business
has allowed them to earn credibility. They have artists such as Luke Bryan, Lionel Richie, and
Enrique Iglesias. Having such successful artists demonstrates to their audience that they are very
well-equipped to help artists the same way that record label companies do. It always comes down
to exposure and marketing.

7. 7
Weaknesses
A weakness in MKR is the double-edged sword, the internet. This is a weakness for them,
because as I mentioned earlier, streaming, and social media has allowed artists and their
managers to gain exposure for themselves. A lot of artists are finding that they can keep more of
their profits by not signing to a label especially major label.
Red Light Management also has a similar weakness in the sense that most of the time you
“have to know a guy.” Also, the fact that they are so large. They indeed have well credibility, but
they often overlook new talented artists. So, to join, it’s usually based of who you know.
Whether that be someone who works in the company or building up your own audience.
Positioning
To young, up-and-coming artists on the East Coast that need to obtain their audience’s
attention and bring exposure to their music, Vital Records is an Independent Record Company,
that provides top grade marketing strategies and guide your career to the direction you want to
go, while never losing sight of the artist’s need.

8. 8
Resources
About • red light management. Red Light Management. (2021, July 23). Retrieved December 6,
2021, from https://www.redlightmanagement.com/about/.
Ingham, T. (2019, July 2). DIY artists will earn more than $1 billion this year. no wonder the
major labels want their business. Rolling Stone. Retrieved December 6, 2021, from
https://www.rollingstone.com/pro/features/diy-artists-will-earn-more-than-1-billion-this-
year-no-wonder-the-major-labels-want-their-business-830863/.
Rolston, C. P., Macy, A., Hutchison, T., & Allen, P. (n.d.). Record label marketing, 3rd Edition.
O'Reilly Online Learning. Retrieved December 6, 2021, from
https://learning.oreilly.com/library/view/record-label-marketing/9781134705559/.
Real punk. real attitude. Manic Kat Records. (2021, November 26). Retrieved December 6,
2021, from https://www.manickatrecords.com/.
North American Industry Classification System - NAICS. United States Census Bureau. (n.d.).
Retrieved December 6, 2021, from
https://www.census.gov/naics/?input=71&chart=2017&details=711410.
How to find the perfect music manager for you. AWAL. (2017, October 16). Retrieved
December 6, 2021, from https://www.awal.com/blog/how-to-find-the-perfect-music-
manager-for-you.
Mulligan, M. (2021, March 15). Recorded music revenues hit $23.1 billion in 2020, with artists
direct the winners – again. MIDiA Research. Retrieved December 6, 2021, from
https://midiaresearch.com/blog/recorded-music-revenues-hit-231-billion-in-2020-with-
artists-direct-the-winners-again.
Written by Stefan Brambilla Hall, P. L. (n.d.). This is how covid-19 is affecting the music
industry. World Economic Forum. Retrieved December 6, 2021, from
https://www.weforum.org/agenda/2020/05/this-is-how-covid-19-is-affecting-the-music-
industry/.