BMG Entertainment Essay -- Business Case Studies Essays Papers

BMG EntertainmentThe Internet, by making free and non-free online diffusion of music, has profoundly affected how occupation is conducted in the record industry in terms of distribution ships, copyright and the economic structure of the study players in the global market. Initi each(prenominal)y, the Internet was viewed as an opportunity by some of the study players as a new channel of promotion. However, after the existence of Napster and a few(prenominal) others, the majority considered it as threat because of the affix in the free burden sharing. Consequently, for the Internet to be an opportunity for the major players, they had to adopt new business model in terms of distribution for online customers while keeping their accomplished distribution channels. Early response to this threat was searching for technological root in order to prevent piracy, going to court to sue for copyright infringement, the quintet major players and others offered their own authorized online distribution joint venture, all in attempt to keep their power in the market. By thole 2000, at that place were 80 million users for Napster, and according to survey that was conducted on Napster users, in that respect was an increase of 9% in music fans spending, among more experienced users at that place was an increase of 20% in their music spending, in addition to an increase of 19% among those using high speed connection. Napster and other free deposit sharing had caused the record gross sales to suffer. However, the file sharing services alter the conventional way of lessening to music for consumers. In 2001, 50% of U.S. households possess PCs consumers spent $1.6 billion on CD burner, blank CDs and digital-audio players. 54% of PCs sales came with CD burners. More than 26% of online music users were ... ...threats that the major companies are facing. The five major companies have to use all of their albums in the new freak venture, and in this way competing by othe rs would be very hard. Consumers would use this channel because it has more than 85% of the albums in the market. Through online promotions, the new venture would roll up information on new prospective buyers for new albums. Therefore, all the major companies can make their marketing strategies more efficient. By following the tertiary alternative, BMG would reduce the risk that is associated with the next move. BMG would be heading in the akin direction of the industry as well as focusing on its core competence. Because of the uncertainty of how the new business model would look like, there would be new business model for the whole industry. This alternative is the utmost risk in terms of financial cost.