SM122+New+Music

SM122+New+Music - The Music Industry Disruption,...

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The Music Industry Disruption, Transformation and Innovation Michael E. Lawson Boston University School of Management
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Credits Much of the information about the changes in the music industry came from the PBS Frontline Program, “The Way the Music Died.” All other material is by Michael Lawson. © Michael Lawson and the Trustees of Boston University
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Disruption, Transformation and Innovation Disruption is often caused by technology, but others forces can also be disruptive What is disrupted? The way value is created What is viewed as valuable The way value is delivered The way value is captured (paid for) Disruptions require Transformation
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Recording Company Manufacturer Distributor Radio FM AM Jukebox Labels A G E N T Electronics Companies Retailer Woodstock -- Concerts Victrola Record- player Radio Car TV Tape- Player Walkman CD Player Cylinder 78 33 1/3 45 Tape CD Sun Universal Music Group EMI Group Sony Music BMG – Bertelsmann Warner Music Group Music Publisher © Michael Lawson
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Disruptive Forces in the Music Industry n The ‘Corporatization’ of the Music Industry n Scale (Supply-side) and Market Power n Push Marketing n The MTV Effect n Pull Marketing n The Invention of the CD n Fidelity and the ability to copy n The Wal-Mart Effect n Scale (Supply-side) and Market Power n Radio Consolidation n Scale (Supply-side) and Market Power PBS Frontline – The
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The Major Labels – With 85% of all music copyrights PBS Frontline – The Way
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T h e In v n ti o f t
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The Effect August 1, 1981
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The Effect Major labels insist that the low prices mass retailers such as Wal-Mart and Best Buy demand are impossible for them to achieve. But Best Buy senior vice president Gary Arnold counters, "The record industry needs to refine their business models, because the consumer is the ultimate arbitrator. And the consumer feels music isn't properly priced." Labels point to roster cuts and layoffs as evidence that they can't sell CDs cheaper.
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SM122+New+Music - The Music Industry Disruption,...

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