Sony Music case study

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Competitive Approach used by Sony Music

Sony Music is currently the second largest member of the music industry following the Universal Music Group, having the virtues of a good variety of labels and artists throughout the world. It is one of the pioneers in the industry, which came into effect from 1929 by the name of American Record Company. Competitive forces in the industry have changed course since the introduction of the music company that has often been attributed as rising, as it imposes a greater degree of challenges to the industry members. It was thus that in order to survive and be profitable in such an erratic market, Sony Music had to develop innovative strategies that would help it to maintain its position in the global music industry. The discussion further elaborates on the competitive approaches adopted by Sony Music to counter competition threats in the industry in its recent endeavors.

Signing of Promising Music Artists

People are always attracted towards fresh and new music coming from their favorite artists. In view of this aspect, Sony Music began to sign a good number of popular and promising new artists to attract more audiences. Some of the famous artists signed by Sony included Avril Lavigne and Celine Dion, who proved to be the greatest finds of Sony Music of the early 21st century (Strickland, Kennedy & Pharaoh, 2014). This helped the company in building a solid platform to search for other innovative techniques and have a strong grip in the market.

Myspace Music

Having a good variety of music stars and artists cannot generate revenues of its own unless the music coming from those artists is sold to the audiences through effective marketing strategies. It was thus that Sony Music came up with the concept of Myspace Music, which is an online interactive space for the purpose of entertainment and selling music was brought up by the company (Strickland et al., 2014). This particular competitive approach has helped the company to reintroduce modern image of its brand among the consumers in the present era, having a strong and long lasting influence to the digital music sharing segment. It has in turn also increased competitive pressures on the other players in the market to innovate in order to sustain.

Online Music Video Streaming

The first decade of 21st century saw a huge trend shift in the music video section. Consumers’ preferences shifted from listening to music to viewing the song videos, creatively designed by the associated artists. Mass release of such videos were not possible through CDs and DVDs, as it would be very time consuming as well as costly to the music companies to do so. Sony Music at that time went into a contract with Google to have their music videos on the web so that the users could access them from anywhere in the world without any cost (Vu & Garner, 2008). Although the viewers did not have to spend any money to watch the videos online, Sony Music as well as Google would still make profits from such videos by means of Google advertisements (Strickland et al., 2014). This gave a competitive edge to the company, as it was introduced to be a unique selling proposition for Sony Music that increased its loyal customer base and reduced substitution effects by differentiating it from other brands.

Formation of VEVO

The increasing interest of the viewers towards music videos prompted Sony Music to form a unique video hosting platform that current acts as a licensor as well as aggregator of music videos. Sony Music joined hands with two big players of the industry, Universal Music Group and Abu Dhabi Media make the concept of VEVO a reality (Strickland et al., 2014). It was running at a loss for the first two years of its operations due to low popularity and very little subscriber base, but as soon as it started gaining attention of the viewers, the subscribers increased steadily and so did the revenues. In the year 2013, VEVO was at its peak with a wide range of viewers from different countries of the world (Strickland et al., 2014). This collective approach by the company in partnership with some of its major competitors is likely to increase entry restriction for the new entrants in the industry, thereby retaining better hold on the market share.

Music Unlimited Application

In the year 2011, there was an advent of devices having android as their OS base. While android enabled devices were spreading in the markets, the demand of applications that supported android aggravated at large. At that time, Sony Music came up with an application that was called Music Unlimited, which provided the audiences with fresh music coming directly on their personal portable devices, such as tablets and mobile phones. In order to use this application, users had to pay a subscription fees that went as a source of revenue for Sony Music (Strickland et al., 2014). The application was not very successful as it had old competitors like Slacker Radio and Pandora that were much more convenient to the users. Though it was not so fruitful for the company, it must be noted that Sony Music kept up the pace with the evolving technology and environment through its innovative approaches (Strickland et al., 2014).

Sony Music has also been keen towards music piracy and illegal music downloading by different file sharing websites. It was in order to stop illegal downloading of music contents that Sony Music introduced a platform called PressPlay in 2001 (Strickland et al., 2014). In addition, Sony Music too came up with watermarks, copyright protections and effective encryption techniques for their music contents. This prevented piracy to a great extent. Some of the essential facts such as changing market environment, evolving technologies, variety of customer base and the number of competitors demanded a constant focus of the management of an organization like Sony Music to promote innovative competitive ideas to survive profitably. From signing current international music stars such as Sia, Future and The Chainsmokers among others to launching Android applications, Sony Music has been focused on preserving customer loyalty towards its brand image (Sony Music Entertainment, 2017). It has also diversified its revenue sources with a blend of online subscriptions along with direct sales revenue while cutting down costs on various occasions, offering it with better sustainability in the industry (Strickland et al., 2014).

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  1. Sony Music Entertainment. (2017). Featured artists. Retrieved from https://www.sonymusic.com/artists/
  2. Strickland, A. J., Kennedy, S. & Pharaoh, A. (2014). Sony music entertainment and the evolution of the music industry. Case 12, C-179-C187.
  3. Vu, H. & Garner, S. (2008). Firm strategy. Sony Music Entertainment Company Analysis, 1-33.
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