The United Kingdom online music market is a potentially huge market. Over the last eighteen months a number of legitimate music as we are to the benefit of the new model of the distribution of music, Napster’s Shawn Fanning in 1999. Although we currently employ 35% of the market for online music, we must continue to develop and our online strategy and practice, if we want our market share and compete with the big international competitors, namely the iTunes network. This document is an analysis of our current strategy and a proposal for the extension.
Analysis of the current system
The strategy we have in the last two years by selling songs centers on a price per song. It is a basic strategy for all providers of online music. One of the most important factors for the success of Apple was low celebrates its 99-cents per song. For this reason, we, like many other providers of online music, it is very difficult to compete on prices. According to popular legend, Apple has received this award by rejecting the signing of the conditions by the labels and then the launch of iTunes in some way, the audacity to withdraw CDs. The labels have always tried to renegotiate this agreement in vain. None of the labels are willing to take the risk from the iTunes network and the loss of her foot in the download business paid. As the pay per song “There are a number of other tactics for the sale of online music. A proposed method of Ken Hertz, Alanis Morris Sette, among other artists, a flat rate of collective license. In a flat cost of the collective License customers pay a fixed subscription for the right to be downloading content, so that they so wish. This income is then applied to all providers of content based on the percentage of absorption of its content, in contrast to the unit for the recording of their Content (Fisher. WW, 2004). Fisher believes that this model to reduce earnings per song, but a greater use of the service. It has already been demonstrated to be a model for efficient companies applied when the video rental . As was initiated by Blockbuster £ 13.99 with its online service for the rental of video, it has been adopted by the Amazon and the screen, select this option to similar services. I believe that this successful model is for us, because it allows the customer to believe that regularly use the service, they receive a good value for money. value of money was a bone of contention for lovers of music for a long time. Often many people justify the illegal use of services such as LimeWire or Emule, claiming that the costs for the legal purchase of music is too high
the product. The biggest problem with this model is that the owners of content (labels) for their work on the licensing of dealers.
Examination of competitors activity
Our market is currently divided between a number of legal issues and music illegally. It is in particular to services such as Amazon, where you can create a physical copy of a music CD on-line services such as the new Napster, where you can search and download free of charge and a charge for the music and (semi-) Illegal P2P services like Emule, where you everything you want, free of charge.
Napster:
Napster was in the online distribution of digital music, more than any other company, and is without doubt the best known company in this area. Napster was seen as a sharing of free music establishment in 1999, before legal disputes and from the beginning. He was finally forced to the business in 2001, the date on which he began six months process re-invent itself as a legal service. This brings us to the Napster we see today. Napster currently offers its customers three packages, “Napster to Go” for 14.95 pounds per month for Napster members € 9.95 lite and Napster. “Napster To Go and Napster composition allows customers to download as much music they want in their computers. “Napster To Go also allows the music for download via special terminals in shops and Internet-TV direct loans to MP3 players. Napster Napster Lite is free from basic package. It allows customers to pay for music on the basis of song to 79p. Customers can choose what to listen through the 30-second segment of the content, before they make a purchase. Napster lite allows the users to access the music stored on other users of Napster room, but it is carefully selected in order to prevent piracy. A vulnerability in the system of Napster is that the continued use of content that you download, you must pay to the service. The will to a certain skepticism of consumers, because the people are not the idea caught in their collection of music.
iTunes Music Store:
Itunes Music Store opened its doors for service on 28 April 2003. His greatest asset is its seamless operation with the Apple iPod. The iPod is the most popular MP3 players currently available and how most Apple products, ease of use was high on the list of priorities in development. The popularity of the iPod and iTunes combined minutes of the process of enlarging the commercial characteristics of the system a simple task. The music is the subject of Apple Fairplay digital rights management (DRM), but there are some hacks for Apple has so far failed to block it. Since its launch, the range of functions, it offers has continued to develop. You can now buy gift certificates, download and video content, create your own iTunes store and download your own music, which is above the garage groups, the music from Apple Production Suite. Through the user to produce and sell their own music apple opened the door to their service for use in many new ways. Stanford, for example, has recently started using iTunes to distribute, free of academic and special promotion focuses on the content of learning and living on campus.
P2P networks:
P2P networks are without doubt the greatest threat to our business model. Despite the frequent law suites and the attempt to sabotage of disks could not be stopped. A peer-to-peer network is essentially a distributed file system in which the contents of any computer to group in a super-directory. A search engine allows users to find and download what they want in their directory. Since the contents spread over the network, it is for other users. From the side of users, this has the advantage of free, but the disadvantage to be unreliable. The content is often incorrect or incomplete. There are a number of tactics, which the owners of content to disturb, in particular the P2P for downloading, distribution of content incorrectly identified and the distribution of content, a download to your computer. The panels have also tried to stop piracy at the source that prevent users download their music on their computers. However, this method is not successful, since they can be easily circumvented, with the coding in real-time software, which encode music directly to the microphone. The discs are also the subject of persecution by the rights of consumers and corporations have their reputation on the legality of such tactics.
Sales of CD Online:
Too many consumers appears to be a consensus to the music with CD and downloading music is free. Personally, I like a bit of physics, if I of the music. For this reason, online sales of CD are still very popular. CDNOW, Amazon and HMV online are some of the most popular for retailers in the United Kingdom. A CD has the advantage that a tangible fixed more than a download, and it is therefore better suited as a gift be given to making a big difference on the sales during the holidays. It does not require the same experience for them as a piece down. A CD works basically like a metal, a bit of vinyl version. It is the explanation for every generation the possibility of a CD drive plays CDs, while many people, especially in the older generations do not know how a computer. There is a CD a wider audience. May is an advantage for us, even to consider the sale of music on physical media.
E-commerce strategy
To plan our future we need to the point where we are today. We can do it with the help of a SWOT analysis.
Highlights:
1) We are currently 35% United Kingdom download music market, in business, which represents a majority. It is a broad base of customers, which we hope will remain with us, if we continue our services to compete with those of our competitors.
2) With the help of this plan, we have a number of new sources of revenue that we, as we hope quickly. This, if properly applied, lead to an increase in our sales and customers.
Weaknesses:
1) We did not try to international competition in the market for music downloads. It makes no sense for us only the sale to the customer the United Kingdom. Traditional geographic boundaries do not apply on the Internet. The complication to expand our system for the sale of music in many currencies is low in comparison to the benefit of our customers to increase possible hundred times.
2) We have not yet introduced systems to the property as a gift for good or coupons that are used to promote.
Possibilities:
1) We can present our customers to buy a song at a time from us. We could also purchase the albums or personalized content from us.
2) Well, that iTunes has a much better price per song, that we do not, currently a subscription service. Our second most popular competitors, Napster offers a subscription service, but their customers to pay for the service continues to use that the content downloaded. If we negotiate, you can not subscription service to customers to block, we as service quality.
3) iTunes are never known by itself. It is always “iPod. When we hear the same music player, to develop our software to work seamlessly with her to negotiate and cross-promotion will be doubling our exhibition and simplify the use of our service to customers. would also allow us expand our service in the same way as “Napster to Go”. We could start our content to sell in the shops with the help of Internet terminals or on television. This would be for our customers to develop on computer science.
Risks:
1) the networking of file-sharing the same service we offer free of charge. The attempts to close these services to this day, in most cases unsuccessful. Although the closure of Napster in 2001 was great publicity was unsuccessful, that from this point much more service with more tenable legal position.
2) Many people expect to receive something more tangible than a CD or DVD to buy if the music. One of the main tasks required to ensure that downloaded music industry people to convince the value of an intangible as a computer file.
3) Our main competitors, iTunes and Napster continue to play a greater international customers as we do. You have a greater visibility and more assets in their service should be extended. We can not hope to compete, and try to competition in the existing models, we must develop new methods of selling music.
4) Our biggest competitor, iTunes, negotiated with the prices of content providers. Without the same economies of scale on our side, it will be difficult, the same party.
To build what we have achieved on this day, I have the following list for the expansion of our services, which we could apply in the near future:
1) establishment of a subscription service - We have a service subscription to the fixed costs, the collective license case not only customers in the same way as Napster. This is seen as a superior product of our target group, because it allows them a good price-performance ratio of the service.
2) custom CD - to the advantage that the purchase of gifts to the celebrations at the end should we provide a service, whereby clients in the selection of a number of titles on a CD or DVD, cover design, and possibly a private message. The CD will be burned and then the printing and packaging to the client for an additional charge. Basically, what I propose is a Professional version of a mix of product band. This presents an additional income to help us on the audio tracks of sales and the customer is something Movement for a gift. It is a service that the music I found the company offers.
3) Ally ourselves with an MP3 player - A large part of the success of iTunes is the close and seamlessly with the iPod. With an MP3 player, perhaps the iRiver, we could also improve the integration of our software, to negotiate with it and promote the development of cross-terminals to sell our music in the stores, super markets, airports, train stations or elsewhere the People can subscribe to the need for quick entertainment.
4) expand our international presence - We must expand the functionality of our site so that the sale of music in many currencies. The adoption of the euro and the dollar would be that we expand our base of potential customers in twelve countries, Europe, America and a number of smaller countries. This provision may be ten times more customers.
5), a musical event - We must allow the customer to download and sell their own content, by a percentage of income for the administration. We get a lot better percentage of the income of self-employed d’artistes could trigger that we have a label with the greatest power of negotiation and experience. Some of the artists we have May and finally be the next big thing. It would be a great advertisement for our company.
6) play the vouchers, coupons and special offers - vouchers are a popular gift for Christmas. Coupons, in the journals of culture, music, or by e-mail as “purchase of two slopes, a free” or “first five titles in the free application” would allow people to try our service, to be the .
7) We could our system to see what kind of music a customer is likely to want the basis of previous purchases. Then we could have the right to the content of the users have the right, as long as they are, po Amazon has the same technology used in its website and he had me to buy books and DVD, I would not find otherwise. People are very often the music of taste, once we to determine what types of music, a customer may be an easy task to predict what they buy, in the future.
Social / judicial disputes
If we begin to sell, as at the international level, the concept of collective design? The relative value of currencies change daily. If, for example, we have our subscription service for £ 19.99 GBP per month, at the time of writing, which is changing at $ 35.00 USD and EUR 30.00 €. If the changes in exchange rates, what should our policy to update the price? A policy that is distinguished by a rapid development of the price system to be confused with our customers, but a policy, where prices can not change quickly could lead to by our service too much or too little return. Another option would be for us, our services at different prices in different countries. Then we could better understand the trends, prices in the local music industry. But if we decide that this option is possible that our customers until the early signing of the region, the lowest price.
In order to set up a part, we must first negotiate a mechanism for collective license with the owners of content. As we have a system of collective licenses can lead to a reduction of earnings per channel downloaded, but a greater use of the service. We must also convince the owners of content, that this model is potentially profitable that the current model of setting a fixed price per unit of collection or music.
We need to protect the rights of owners of content by the inclusion of combating piracy. Prevention of piracy is a very difficult task, the person has not yet developed. Each time a new measure against software piracy, it is often bypassed in the three months (Moser, 2001). Apple is currently using the FairPlay DRM and Napster is currently using Windows Media Digital Rights Management. These two systems have already been bypassed. The owners of the contents would not want a new service to a security system that is no longer effective.Read more information by clicking the links below:
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