Viability of Anapest as a revenue generating company. Case in brief: Anapest is a brainchild of Shawn fanning, launched on June 1 , 1999 as a peer-to-peer music downloading program for college students. Anapest became a one of the most popular sites on the internet, claiming some 15 million users in little more than a year. From the beginning, Anapest facing so many problems from the ARIA and music Industry players. Anapest violated the copyrights by allowing users to swap the music recordings for free. However, on March 5, 2001 Anapest was ordered by the U. S. Court to stop trading copyrighted material.
The following Year Anapest filed for bankruptcy and was bought out by Ratio Inc. Key success factors: ere main point in the case Is the Principle of copyright protection will enable the Anapest to transform Itself from a freeloader’s paradise to a revenue generating business In the face of competition. Before considering the availably of Anapest as a revenue generating company, analysis of key drivers of success Is required. Anapest Is the first success story of distributed computing which Is using unused capacity of he millions of computers on the Internet be an efficient source of processing power.
Anapest, with its central servers, is not the purest form of distributed computing, but is an important step in that direction. The development of MPH format and portable MPH players has played a major role in success of Anapest. Situation Analysis: If the Anapest providing a service of copyrighted materials, it has to charge for these services. In this case, copyrighted music is tightly held by the recording industry and the cost to acquire those assets are extremely high.
Given that copyrighted music is tightly held and the limited nature of Anapests financial resources, Anapest can only hope to acquire these assets through alliances. Moreover, an alliance will not be useful unless a minimum number of record companies commit to this alliance. Strategic alternatives: Despite the reluctance to pay for online content, have to create a awareness that content cannot remain free forever, driven by awareness of financial problems that Internet companies are having as well as by recognizing that content creators must chive compensation for their work.
The key to any subscription-based model is to understand the features that the consumer values (demand), and to offer those features with level of exclusivity (scarcity). To succeed in the dynamic music market, Anapest must offer a tiered set of subscriptions with different levels of payment and commitment. Service options could be In a following packages. * Pay per download: Small cost to downloading a particular song. Offers all kinds of control and flexibility to user. Would require registration with site. Incompetents might be useful here. Unlimited access to specific Anapest defined libraries: This could mean access to the popular content or even artist based access. * Unlimited access to all content based on limited time commitment: * Unlimited commitment: this could means commitment for a minimum of 1 year. The sustainability of a subscription-based service Is possible only If Anapest can align Itself with all the major record labels to have their content available on their site. The other key variable Is the need to develop a more secure format against the piracy. This can be achieved only with a software.
Creating an appealing pay service will be a steep hurdle, particularly with the fact that the users have got accustomed to the free service and the presence of competitors who can provide the same service free. In addition, the sentiment that they have been charged excessively by the music industry is prevalent among the consumers and needs effort from all sides to correct this problem. Anapest has sown the seeds of a digital revolution where the consumers have become tired of the rotational distribution model and have started expecting more.
But it’s hard to deny the compelling advantages provided by these new technologies. As technology advances across the board and online digital delivery slowly replaces CD sales, these issues will become more and more pressing for the major labels. Anapest needs to make recording companies realize a vision of a digital future. Recognizing and planning for future market needs now will allow these major labels – or anyone else No responds well to these market needs – to survive as the future of the music industry.