Music Entertainment Experience

Daniel Chang Shaun Ching

Entertainment MarketingIMC

Project Goal….

Marketing communications guideline to

promote music as multiple form of

entertainment experiences in the US music industry

Presentation Outline

Situation analysis Music as entertainment experience Music creation process Marcomm guideline / strategy to promote

music

Trend at a Glance in 2006 15-19 yrs old the single largest audience group consuming music 25-44 yrs old comprises 33.5% of the largest block of audience Music industry annual global sales at $38 billion (2004) The global piracy industry is estimated to be worth about $4.8 billion (2004). Record store still registered 35.4% of the music purchase Digital downloads increase to 6.8% from 1997 to 2006 The long-tail of the music forms an aggregate of 21.8% (religious to

children music)

SWOTStrength

•Music is the most common entertainment resource

•Large catalogs allow licensing bundles and cross-promotion

Weakness

•Lack of flexibility in existing marketing models

•Regulations restrict royalty rates and intermediate rights collections

•Licensees dissatisfied with high royalty rates

Opportunity

•Internet expansion provides new marketing outlets and breaks the barriers to entry

•New technology eases identification of valuable rights and allows broad extension of sponsorship and music placement

•Increased consumer interest in “long tail” music

Threat

•Expansion of internet and fragmentation of audience threaten old model of promotion

•Piracy and P2P software make music cost nothing and easy to get

Acquired content (Song Writer) Content created by Artist

Producers Value Chain

Distribution Value Chain

Publisher

Artist / Performer

Record Label

Production/ Manufacturing / Of Music into distributable form

Distribution Marketing, Advertising, Promotion

Stores Consumer

Online Music Stores / stations

Artist / Performer

IP Rights protection body

Compose, Produce and Record

Copyright and Licensing Marketing and Promotion

Manufacturing and Distribution

Inventory and Sales

Consumers

IP Rights and Piracy enforcement

Digital Distribution and sales

Music Value Chain

• Physical distribution is increasingly moving away from music specialty stores towards big box retailers, such as Best Buy and Wal-Mart, and Internet retail stores such as Amazon.

• Supply chain radically transformed, intermediaries disappearing, power of the major record labels diminishing.

• Digital delivery methods democratized the power structure towards the artists, and strategic partner distribution become more relevant

• Consumers choose to share music, instead of purchasing .

Channels of Distributing Music

Acquired content (Song Writer) Content created by Artist

Producers Value Chain

Distribution Value Chain

Publisher

Artist / Performer

Record Label

Production/ Manufacturing / Of Music into distributable form

Distribution Marketing, Advertising, Promotion

Stores Consumer

Online Music Stores / stations

Artist / Performer

IP Rights protection body

Compose, Produce and Record

Copyright and Licensing Marketing and Promotion

Manufacturing and Distribution

Inventory and Sales

Consumers

IP Rights and Piracy enforcement

Digital Distribution and sales

Music Value Chain

Music as entertainment experience

Listening Live

Social Collection

Music Creation Process

John Legend

Recording Publishing DistributionMarketing & Promotion

Art & Repertoire

+

Marcomm guideline / strategy to promote music

General / Elvis

U2 Madonna

Listening Live

Social

Collection

Social

Collection

Listening Live

Social Collection

LiveListening

Social

LiveListening

Collection

Radiohead

Radiohead

40% 30%

Recording Publishing DistributionMarketing & Promotion

Art & Repertoire

Radiohead

40% 30%

Recording Publishing DistributionMarketing & Promotion

Art & Repertoire

Madonna

Recording Publishing DistributionMarketing & Promotion

Art & Repertoire

40% 30%

Marcomm Guidelines

1. Understand the product (the music artist/style)

2. Diagnose customer motivation and need3. Determine brand positioning of the music

artist

4. Develop targeted marcom strategy to serve customer’s music consumption need

Q & A

Thank you!