Music Industry 2006: Stuck

1
Music Industry 2006 Stuck?

• David Stiebel
• MAS.111
• May 5, 2006

2
Overview

• The Problem
• Market Need
• Available Tools
• My work

3
Music Industry in Trouble

• The fact is that all traditional media
  companies are facing the same core
  problem viewers and advertisers are steadily
  migrating toward new media. 
• All of the media companies are now on the
  defensive, trying to prove that there's still
  growth opportunity in their businesses, and
  desperately trying to find ways to get some
  positive momentum going in their stock price.
• Lex Suvanto, SVP at Abernathy MacGregor

4
The Problem

• The music industry does not know which songs will
  be successful and which will fail

5
Market Need

• Today, Artist and Repertoire (AR) at major
  record labels has a success rate of 10
• source Recording Industry Association of
  America (RIAA)
• The record industry improves their bottom line by
  taking 90 of all CD releases, and throwing them
  in the trash

6
Market Research

• RIAA says that major labels spend 13.5 billion
  annually on marketing and distribution MD
• HBS study suggests that AR applies same MD
  budget for successes and failures
• The industry wastes over 12 billion on MD for
  unprofitable CDs (i.e. 90 of 13.5B)

7
Available Tools

• There are several tools available that major
  labels can use to get a leg up

8
Subjective Data

• Focus groups/radio call-outs
• Pro Asking directly, gathers demographics
• Con Measures music taste in captivity
• Disk Jockey Review
• Pro Experienced opinion
• Con Easily swayed opinion

9
Objective Data

• Peer-to-Peer searches/file offerings
• Pro Tracks what people are looking for
• Con Not necessarily what people will buy
• Music Purchase Records
• Pro Reports whats hot and whats not
• Con Reports after budget is spent

10
What am I doing?

• PeerReviewMusic.com
• A new approach for the music industry
• Market Research Executive
• Gather information about the current market and
  our competitors
• Patent Searches

11
Top Notch Experience
12
Latest News

• MIT 50100K Semi-Finalists
• Winners announced Thursday, May 18
• 700 - 900 PM
• Kresge

13
Thank you