Sony Music (INDIA) Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Problem Diagnosis

In the recent years, the Indian music industry saw immense growth and disruptive innovation due to widespread technological changes. The changes in the technology redefine the way music was created and distributed as the cost of creation and distribution declined rapidly, and the current profit margins were not acceptable for the music companies. Sony music a major player in the Indian music industry is under real consideration of the options available for growth in this changing market situation and trends in the industry.

Analysis

Impact of Internet

With the introduction of internet in the music industry, the changes occurred brought many new opportunities and challenges for the Indian music industry. The changes saw new models of consumption and revenue as before the music was sold through tangible assets like CD’s but now the consumer can easily gain access to any album or song by downloading them.

The consumers now need to subscribe which was not the same as it was before, as in the past they used to buy the albums from a retail outlet. User experience got improved with the digitization of the music as the access was made easy for consumers. Secondly, the music record companies aligning with internet service providers and telecom companies played a vital role in improving the user experience.

The cost associated with physical music was much higher as compared to digital music as the cost of construction, building and maintaining technology platforms, distribution etc. are considered as the major costs in producing physical music which was minimized rapidly with the introduction of digital music.

On the other hand, social media provided a great medium of promotion and advertising free of cost thus, saving the marketing cost (Goyal, 2013). The advent of the freemium model was adopted by many players in the market and the concept of music videos was becoming popular on a global scale. The Indian market could see a vital opportunity in making music videos of major stars that could be a great source of advertising as practiced by many labels in India.

Secondly, streaming music or downloading it directly from the cloud made things easier for the consumers that gave the companies another way of earning revenue by licensing the content and selling a same track to millions of users. On the other hand, the concept of intermediaries has become an old school concept as the recording company gains the direct access to the consumer. On the other hand, music curation became easy for the music record companies as digital content could be sorted easily in no time on the internet.

Besides that, piracy was a major threat to the music producers and recording companies along with identifying the right owner of the intellectual property rights (Sudip Bhattacharjee, 2003 ). Other than that, payment methods were difficult to handle and were not convenient over the internet. Secondly, there was an increasing threat from the entrance of foreign players as the local companies were not advanced enough to assimilate the change.

Porter’s Five Forces Analysis

Porter’s Five Forces will help in identifying the threats that Sony music will have to face in the industry in India (Porter, 2008).

Bargaining Power of Buyer

The buyer in this regard has a high power to bargain as there are considerable players in the industry that are competing for a larger market share.Sony Music (India) Case Solution

Secondly, with the introduction of digital music and easy access to music, consumers have become more demanded and play a vital role in setting the price. On the other hand, piracy is also playing a major role that is giving an advantage to the consumer to bargain as a consumer can easily to switch to the illegal content. Whereas, switching cost in terms of legal content is not very high in giving more favor to the customer.

Bargaining Power of Supplier

Suppliers have low power to bargain with the introduction of digital music. The content can easily be uploaded on the internet and consumers can easily download the content. The connection has become direct, and the need of an intermediary has been abandoned from the industry..........................

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