Business Plan for a New Firm in the Music Industry Essay

Business Plan for a New Firm in the Music Industry - Essay Example The proliferation of technological advances in the current world market had facilitated numerous changes in the way business is done. The music industry has been revolutionized by changes in technology that ushered the internet which in turn spurred the introduction of peer to peer architecture and music file sharing. The digitization of music is also apparent in the advent of CDs, VCDs, MP3s, and the most recent advancement which is called streaming technologies. It is irrefutable that a new music industry has evolved, a sector, which began to take advantage of the benefits offered by these revolutions [1]. The utilization of new business models and strategies are essential in order for a business entity to efficiently compete in the current market environment. The new trend in the music industry posted radical changes in the overall industry value chain. It has streamlined the value chain by effectively lessening or fully eradicating some of the previously important players [2]. The most significant of these is the obvious displacement of traditional marketing channels by more technologically advanced ones. Brick and mortar distribution channels are now being complemented or fully replaced by online distribution systems [3]. These new trend necessitate the conceptualization and implementation of innovative business strategies to become profitable, capture a sizeable market share, maximize shareholder value, and compete head-on with other industry leaders. This paper will serve as a platform of a business, which will take advantage the advancement of technology in order to effectively compete in the new music industry. The creation of the company will show the responsiveness of a business entity to the new trend and changes in its environment. The Company The new changes in the music industry will give rise to the conceptualization of a company which will be known as eMusic Company. Business Operation The firm will be involved in the promotion and distribution of music of various artists of music labels and independent ones. Utilizing the present technologies available, eMusic will be employing an online distribution system of music in physical and digital format by establishing and building its own website where consumers can access their products and services. The website will offer a user-friendly interface where music lovers can find the songs that they want with the most convenience and speed possible. Realizing the new trend within the music industry, specifically the streamlining of the value chain, the company will try to bring artists with music fans directly. This will be done by adding a system where artists can directly upload their tracks and albums online to be viewed and heard by anyone online. Market Scope The evolution of a global market through the rapid spread and utilization of the internet technology will allow the company to service anyone in the world. The market scope therefore is a broad and as diverse as the total number of music lovers who have access to the world wide web. This eliminates the ageing population, as they are not usually familiar with the new technology. The most particular market segment to be serviced therefore, is mostly the young and middle-aged population. I. Competitive Environment (current) Figure 1 shows the recording industry's distribution chain. Since eMusic will be involved not only in the distribution but also promotion of music by various artists, it will be competing both with music producers (labels) and distributors. Production Production of music is currently undertaken by record labels which can be neatly classified in four major categories-major labels, independent labels, microlabels, and vanity labels [4]. 1. Major Labels Major labels are comprised of recording companies with over 100 artists. The labels' large number of artists implies a broad array of musical styles. Having huge financial muscle, these usually have national or international distribution