Recommendation: Target the record labels for promotion of HSS reports. Start with the initial enthusiasts like Ken Bunt of Hollywood Records and use their testimonials to win other record labels. Make use of the business connections of the advisory board at Polyphonic to get better reach to decision makers at record labels. Offer free trial reports to convince record labels and an initial lower cost for buyers along with discounts for high volumes ordered over a fiscal year.
In the long run, promote Human Music Interface as a complement for Hit Song Science to maximize the revenue earning capability of a song (by ensuring better listener penetration) that is marked as a winner by HSS.
Target segment rationalization: The…show more content… In addition, the software doesn’t produce enough value for the artist segment. Suppose, HMI promotes specifically to this group and the members show enough enthusiasm resulting in satisfactory initial penetration. Once, the initial curiosity about the quality of her own performance is satisfied the artist won’t find any alternative use of the report. If the report says their song has enough potential to be a great hit, that conclusion does little for them because the record labels are not likely to acknowledge the credibility of the HMI report.
All exhibits are restricted to the US Market.
Exhibit 1: Why USA is the best choice of geography?
The rationale behind the choice is obvious when we consider that it has the highest music market in the world and is [(12609 - 5001) / 12609] ~ 60% more in dollar values than the second highest, Japan. Graphically, when compared to the top 5 music markets, USA looks significantly higher (for 2002):
Exhibit 2: Cost savings to record labels
The HSS software will identify potential top 40 singles at an 80% success rate (based on trial run) as compared to the industry average of 10% success rate. However, assuming a conservative approach let us assume that the actual success rate for HSS will be 50%.
Now let’s run our analysis based on Sony where Polyphonic has the highest chances of making a good penetration. There are about 3000 singles released per year; of which 10%