Facts and Starting points for Sony Music Entertainment Chapter 1: Mission, Vision Core Competences Mission Sony BMW does not have a publicized mission statement. However, the mother company Sony has changed its mission statements several times in history, whereas it is the following: “To become a leading global provider of networked consumer electronics, entertainment and services. (Sony 2010) Vision Equal to the mission, SONY BMW does not have a publicized vision. The general vision of Sony Is: ;We Help Dreamers Dream, Sony is a company dedicated to the love of life. We develop things for any kind of imagination. We develop Products that stimulate the senses and refresh the spirit and create Ideas that always surprise and never disappoint. (Sony 2010) Core Competencies: – One of the worldwide leaders in information technology products ; broadband entertainment company – designing successful new products and brands – one of the most popular Innovative consumer brand – successful convergent revenue streams – own entertainment network From a hardware perspective, Sony strategy Is focused on four gateways to the networked world: 1) Digital televisions and set-top boxes; 2) VIII personal amputees; 3) Mobile devices, such as the CLICHE handheld devices and digital phones; and 4) Palpitation game consoles.
Sony has the vision, technology and content to forge a direction In consumer entertainment that no other company can match. Chapter 2: Analysis model of Sony BMW . To have the most up to date marketing model, results from the last 3 years will be used. 2009, 2010, 2011) * Analysts of 2009,10 and 11 * SOOT Analysts Sony Analysis Sony BMW 2009 Sony music entertainment business consists primarily of Sony Music Entertainment ISMS), which operates worldwide outside of Japan, and Sony Music Entertainment pan Inc. (SEEM), which operates in the Japanese market. Sony has changed its business segment classification from 2010, whereas in 2009 SEEM was part of all other income.
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Increase in Sales * Due to consolidation of Sony BMW However, when the consolidation is excluded, the sales would have decreased * Due to lower sales of Sony Music Entertainment * Settlement payment to copyright infringement Decline in Operating Income * Due to copyright infringement costs * Sony sold ; The Sony center am Potsdam Plant in Berlin, for 10 million yen less than the actual value Strategy 2009 Focus on generating hits for both well-known and emerging recording artists * Create new and Innovative business models for a music market in transaction * Licensing deals with Sony Ericson, Apple, Monika, Avoidance, Namespace and Amazon. He goal is to expand number of service providers who are offering music from Sony Artists and offer a diversified way of how the consumer acquires music. * Sony United Initiative; Integrating its music into wide range of Sony products and related services Sony Music Entertainment 2010 Sony has changed its business segment classification from 2010, whereas music is one segment. Increase in Sales * Sales included the full year result of SEEM which was consolidated on the 1st of Cot. 008 * Without the consolidation, sales in music segment would have declined with a percentage of 5 * Releases of Susan Bayle, Michael Jackson and Kimono-Karri Operating Income Increased * Declining expenses of the previous year * Improved results of Sony Music Entertainment & Sony Music Entertainment lapin Inc. (releases of the albums from artists above) * Focus on both well-known and emerging recording artists * Increased number of digital retailers offering music from Sony Artists The goal is to expand number of revive providers who are offering music from Sony Artists and offer a diversified way of how the consumer acquires music. Launch of VIVO * 8 of top 20 global albums in 2009 * Increased market share through psychical sales strong demand of new releases and catalogue albums * Susan Bayle – I dreamed a dream * Michael Jackson – This is it * ‘kimono- Karri – Highchair no ATA Sony Music Entertainment 2011 Decrease in Sale * Due to negative impact of the appreciation of the yen against the U. S. Dollar, especially strong performance of Michael Jackson product in the previous fiscal year ND a continued contraction of the physical music market.
Increase in Operating Income * Due to decreases in marketing, restructuring and overhead costs SOOT Analysts Strengths ;Very popular artist base. ;More than 750,000 copyrights on songs. ;Strong online service. -Ability to cross sell with other Sony products. -Many 360 deals with artists including management rights. ;Are able to fully utilize the fox tail effect with their many labels Meanness ;Try and make money by selling to consumers. -Bad reputation for suing people who ODL illegally. -Depend on third parties to be vendors for them.
Slow to adopt new policies to increase public image. ;Lack of innovation Opportunities ;Sony Entertainment Network streaming. -More sponsorships for tours. -Higher distribution through SEEN. Digital Market -More intimate interaction with customers. ;Full acceptance of social media and 360 deals that would allow them to reach out to the public Threats -The Internet ;Piracy ;Lack of attention from consumers ;No need for physical distribution channel. -Home recording programs. -Lack of regulation to stop piracy around the world.
Digital TV Recorders. -Too many viewing options of television without commercials. Says much less that real radio for rights. Chapter 3 Marketing -Internet radio which Marketing is the social process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others. “tier, 2010) Marketing Mix According to Kettle the marketing mix is the set of controllable tactical marketing tools (product,price place and promotion) that the firm blends to produce the response it wants in the target market.
Product CD: A tangible good that is mass produced or manufactured on a large scale with a specific volume of unit Brand name I SONY I Functionality I Music carrier I Quality I good I Packaging I Single/album/ double album I Digital Track A tangible good Brand name I SONY I Functionality I Music I Packaging I none I Price Physical Sales – Cad’s, 14,99 (Euro) per album Several products are combined in the same package. (Double album etc. ) Premium Pricing Use a high price where there is uniqueness about the product or service. This approach is used where a a substantial competitive advantage exists.
Digital Sales – tracks J, 99 (Euro cents) per track Price Skimming Charge a high price because there is a substantial competitive advantage. However, he advantage is not sustainable. The high price tends to attract new competitors into the market, and the price inevitably falls due to increased supply.. Place See chapter distribution Promotion Promotion is focusing on how the product is going to be communicated to the public. There are different means for promotion, think here of: Personal Selling, Sales Promotion, Public Relations, Direct Mail, Trade Fairs and Exhibitions, Advertising and Sponsorship.
Sony Music Entertainment has advertising as main promotion. There has been a shift from the traditional advertisement tools as newspapers, magazines, elevation and radio towards the internet. As mentioned before, Sony increased licensing deals with other companies (Apple, Monika, Amazon) to expand the number of service providers who are offering music from Sony Artists and offer a diversified Nay of how the consumer acquires music. Another promotion tool is the Sony United Initiative whereas Sony is integrating its music into wide range of Sony products and related services.
Chapter 4: Current Distribution Model Nat is the current distribution model of Sony Music Entertainment? Now, let’s take a look at the current distribution model. SEEM uses a lot of different striation channels, but doesn’t really stand out from its’ competitors. Or should we say didn’t? Because for the largest part of its’ history Sony has been using the traditional channels, as did their competition. But this is going to change. We’ll start off with the more traditional limbs of this incredibly varied distribution octopus Nothing the company.
Labels Sony Music Entertainment is the second-largest global music company (behind Universal Music Group). In order to make this function, SEEM has divided it’s recording catalogue among a large number of labels -ranking Columbia Records, Epic Records, RCA Records among them-, most of which owning the rights to several smaller labels Music Entertainment. Retail Let’s start off with the oldest way of making money out of music: physical sales. Neither it’s sheet music, Lips, cassettes, Cad’s, or DVD’s, selling physical music has been a huge part of the distribution model since we Sony Music Entertainment started out in 1923.
And we’ve been buying them in bulk. But since the invention of the internet, physical sales have been dropping and are being replaced by digital downloads. But we’ll focus on these later on in this chapter. Next to these sales is a age market for merchandise and memorabilia that focuses on a specific artist instead of the music performed. Consumers want to express themselves more than ever and what better way is there to do this than through music? Clothing, utensils, toys and items even as inconceivable as coffins can be ordered with the logo or mage of your favorite band or artist.
Radio One of the oldest forms of music distribution is through radio. Ever since it’s Invention in the late 19th century, the radio has been a huge success. And even today, this is still a huge market. Estimates varying from 87% to 98% of households round the world owning one or more radios tells us that we shouldn’t underrate its ‘alee. Even though traditional FM- and AM-distributors aren’t producing huge amounts of positive numbers anymore today, the market for radio-distribution is still growing.
Digital forms of radio are taking over from the traditional ways and more radios are being sold with an internet-connection every day. Internet-radio tends to sound cleaner (depending on the connection, obviously) and are transmitting on a global network enabling one to listen to his/her local radio station all over the world. Sony and its’ labels are pushing songs and artists on the radio, so they can be heard by a large audience. And we can see by the numbers stated above that these audiences can be huge. Television ere same transitions are visible in today’s world of television as well.
The internet is becoming a more powerful player in the way we consume entertainment (in this particular case music) every day and TV-producers have clearly acknowledged this, by adding internet connections to their latest models. Worldwide household penetration Isn’t as large as its auditory counterpart (estimations ranging from 81% to 89%) it is till a mayor contribution factor in global distribution. Every film, TV-show or -series is provided with supporting music and a soundtrack. And let’s not forget the power of MAT.
Although they aren’t broadcasting as much music videos as they used to do in the late 20th century, it functions as one of the biggest influences on an entire generation, which is known as the MAT-generation today. Everyone remembers Sonny’s ‘ideas to enrich their songs. SEEM uses television and radio mainly for marketing purposes today, but digitization of both media might be a step towards a new way of consuming music. On Demand- features are growing in popularity and digital streams can be very easily monitored, since it is no longer a one-way connection.
Live performance As soon as record labels, including SEEM, noticed the decline in physical record sales, they went looking for other business concepts where a larger margin of profits could be made. Which was found in live performances. Concerts are growing in numbers, size, value and in some cases exclusivity to attract more visitors. When at the same time, the ticket prices have skyrocketed as well, arguably adding more value to the concert. Internet he internet has offered a lot of difficulties for the music industry. It has introduced a new way of sharing/copying music on a huge and incredibly fast scale.
Digital files can be copied very easily and uploaded for everyone else to enjoy. For free. In theory only one person needs to purchase an album to serve a potential demand of 6. 8 billion people. But we mustn’t forget that the world wide web offers a huge variety of opportunities as well. Most important of all: global distribution. Legal downloads are exceeding the amount of physical sales by a huge factor when shipping and reduction costs are nigh on zero (we have to take contributing factors like server space rental and internet access into account).
The internet can also be used as a incredibly cheap and multifunctional distribution-, marketing- and commercial tool. Audio and video files can be streamed on websites of the artist in question, tracks and bedposts can be downloaded, subscriptions can be acquired for services and social networks can function as a marketing tool as well as a platform for the fans to stay in touch with each other and the artist. And we’ve only covered a tiny layer of the numerous possibilities that are available today.
Sony Music collaborated with Universal Music and the ABA Dhabi Media Company by creating Vivo, a Youth channel where all the content of each music label can be found. These clips are preceded by commercials, making it a new revenue stream for the company. Sony Entertainment Network (Curiosity) out there is one distribution channel that sets Sony Music Entertainment apart from all the other music companies today. In 2011 Sony introduced Curiosity, a subscription based music network that we know today as Sony Entertainment Network or SEEN. Is network offers an On Demand-service for Sony Corporation’s (parent company of SEEM) music, films, e-books and videotapes. It can be accessed via all of Sonny’s Ericson smartness, Home Theatre Systems and VIII computers, turning themselves into a huge competitor to Apple’s soft- and hardware I-series. This is a big step into future forms of music consumption and distribution. Sony has opted to endorse the subscription business model, but this could be enhanced to a pay-per- feature model or a one-time all-access acquisition version in the future.
But so far, Sony is a step further forwards in comparison to its competitors. Distribution Version 2 Arises Sony Music Entertainment has many big and emerging artists signed to its record label. Its artists include such hit artists as AC/DC, Bribery Spears and Beyond, while also having up and coming artists as Kings of Leon. By signing such high profile artists and keying in on developing newer artists, Sony Music Entertainment is able to exploit this to their advantage. Music Sales Sony has come to embrace the digital age of music.
They have signed deals with many companies including Namespace, Apple and Amazon in order to have many outlets for their digital catalogue. This has helped them keep their second place market share ahead of such companies as MME and Warner Brothers. They have also started their own music subscription service called Curiosity which has begun the evolution towards Sony Entertainment Network, which will collaborate with Sonny’s other ventures to offer all of Sonny’s media in one source. By having their strong artist selection they have been able to see an increasing market share.
Concerts Sony Music Entertainment highly promotes its artists and with the big names that they have signed it has been able to exploit their ability to sell concert tickets. Over the last three years Sony Music Entertainment has seen over one billion dollars US in concert revenue for the artists that it currently has signed. Being lead by AC/DC who from 2008 to 2010 on their Black Ice World Tour grossed $441 , 121,000 and sold over four million tickets. Tours such as Bribery Spears Circus Tour also grossed well over one hundred million dollars to help add to the total.
Music Publishing Sony owns or administers over 750,000 music copyrights. They own or administer copyrights to songs from such artists as the Battles, Bob Dylan, as well as newer artists including the Jonas Brothers and Taylor Swift. By having these rights, every time the song is publicly broadcast or used in film or television Sony is able to claim a Ninth one of their songs included in it, be it a DVD or a CD or a digital copy. With their current catalogue, Sony is able to create much revenue for a long period of time since unless it becomes public domain, Sony has the right for the life of the song.
Other Sony Music Entertainment is also involved in many other ventures in order to promote higher revenue. They manage some of their artists and therefore gain an extra income from their artists. They are also a great consolidator, purchasing many smaller record labels, some they bring under the Sony Music Entertainment name, Nile others they leave in order to avoid alienating customers who like to support smaller labels. Some labels which are included but not limited to are Epic Records, Columbia Records, and RCA Records.
Chapter 5: Competitor Analysis Nat competitors are existing and how are they doing (revenue, user, profit….? ) Due to the fact that there are no platforms yet, which are based on creating new experiences of music for consumers, the research is mainly based on existing littorals that offer content and allow users to share, recommend, customize experiences or integrate different services. The main problem though is the fact that these are all relatively new concepts, is the lack of information available.