Update: The Music Industry in 2006 Harvard Case Solution & Analysis

Global recorded music industry has been going through an important transition period in 2006. Sales have been declining for a decade, and consumers buy music in new formats and on different distribution channels. CD sales continue to account for most of the revenue, but sales of music in digital format (download, video, ringtones) were significantly increased and approximately 10% of industry revenues in 2006. Many thought the digital future of the music business, but the format is supplied with both opportunities and challenges. While he has breathed new life into the singles market, for example, has also contributed to the rampant digital piracy. The music industry has been the response by launching lawsuits against illegal peer-to-peer operators, such as the group caught downloading illegally. If it will be enough to reverse the trend was about much debate. Meanwhile, the industry continues to consolidate. In 2004, Sony Music and BMG, the third and the fifth-largest record company at the time, united in Sony BMG. Surprisingly, in 2006 the European Union's Court of First Instance overturned merger - that the European Commission approved two years ago - after a group of independent music labels complaining about the effect of the merger on competition. While the Sony BMG merger and defended in court, EMI Group PLC wondering if it wants to capture a group of Warner Music - which she held since 2000 - will never happen. If so, how the business will have a new face in a rapidly changing environment? All wondered how the industry will develop. "Hide
by John R. Wells, Elizabeth A. Raabe Source: Harvard Business School 13 pages. Publication Date: February 27, 2007. Prod. #: 707531-PDF-ENG

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