Polyphonic Hmi Case Analysis

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Definition of the problem: “Hay más probabilidades de ganar en Las Vegas que en el sector de la música” stated Ric Wake, an Independent music producer. In a US market where sales growth is declining by 10.4% in 2002, this situation weakens deeply the whole music industry and opens to the door to a change of pattern in the way executives of this industry predict future “hits”. Polyphonic HMI, a technology company, relies on a single marketable revolutionary product: Hit Song Science. HSS is artificial intelligence software that can assess the “hit” potential of a song thanks to an extensive analysis of millions of songs. This tool is the first of its kind to predict future “hits” with 80% accuracy which means a tremendous increase of…show more content…
They are likely to spend money on market research and would value the HSS software as a tool to decide whether to market an album (screening out the song that won’t be successful on the market) and therefore save money from their marketing budget. On the other hands, HSS would reinforce the effectiveness of the record company marketing department to help them focusing on high potential albums. At mid-term, it would mean for these Record companies: reduced fixed cost and therefore higher margin and the benefice of a good reputation for the executive. Considering a success rate of 80% in detecting a “hit” for HSS, the A&R’s executives will be eight times more effective in picking a song that would be ranked in the Billboard Top 40. Given the case information, a single that enter the Billboard Top 40 can generate 20 times more sales (from $100 000 to $2 000 000) and a album with a single in the Billboard Top 40 can generate more than 130 times more sales (from $300 000 to $40 000 000). Therefore, the use of HSS could mean a tremendous increase of profit for record companies. • Target 2: Music producers Producers are the second largest customer segment with potentially thousands of members: 20-30 very successful, a few hundred occasional hit producers and thousands of minor producers. Value Drivers: They might Value HSS as an effective tool to test

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