The attractiveness of the Music Industry for Warner Music

2225 WordsFeb 18, 20149 Pages
The attractiveness of the music industry from the perspective of Warner Group Music Summary Major transformation in the music industry over the last decade has resulted in the three major record labels; The Warner Music Group, Sony Music Entertainment and Universal Music Group finding themselves with rapidly decreasing revenues and company structures which no longer provide profitability. A brief analysis of the external strategic factors affecting the Warner Music Group has revealed the changes in technology and social habits of customers has had the biggest detrimental influence on the company. Further analysis of the competitive environment revealed a major change in industry dynamics and the need for this large companies to…show more content…
Customers no longer feel obliged to pay for music they do not want and individually purchase tracks or even listen to music online without making any purchase. These two factors have had the greatest influence on the industry and the value chain it created. The strategy might be to accept the predicted change and adapt to deal with it, or it might be to attempt to stop the change by countering the influencing factor, but these factors are not independent. There is a strong link between sociological and technological. Sociological is now argued to be the most dominate factor in the electronics industry - replacing technological (Viney 2013) and the same argument could be applied to the music industry. Warner Music Group must understand the sociomateriality associated within the industry. Keeping up with the pace of technological change can often be extremely difficult and expensive and may not be an area of competence for the Warner Music Group but by positioning itself correctly there may still be areas of profitability within the industry. To explore this Porters five forces framework is used. The Attractiveness of the music industry Industry attractiveness is determined by the level of profit in an industry and the prerequisite for profit is the creation of value for the customer (Grant, 2010) The opportunity to create value hence the economic structure of the industry is, according to Michael Porter a

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