Beruflich Dokumente
Kultur Dokumente
Presentation by
Lee Tillman Tomas Desset
Digital Age
Computers are everywhere and almost everyone has
access to the internet
The mp3 is slowly replacing the compact disc much in the
same way that CD’s replaced cassettes and vinyl
Consumer is able to buy product right away
By offering a product online you are essentially going into
the consumers home, they have instant access to the product
via a virtual store front such as iTunes or rhapsody
International and Global sales
In the past record companies would only focus on one
market in one country and then move onto the next
By offering digital downloads, your product is now available
to the international market and not just limited to one area
Creates record sales all over the world
Less cost
Less cost to create and sell product
No cost for packaging, shipment, store advertisement,
or store space
No cost for duplication
Less cost is more appealing to the customer
Product is always available to consumer
More chance for impulse buying with a lower price
Save the customer money on gas and wear and tear on
their vehicle as they don’t have to drive to a location to
attain your product
Teenagers
Vast majority of record buying public are teens
Most teens are computer literate
Teens communicate via the internet
Easy access to new bands and artist via web sites like
iTunes, MySpace, Napster, etc.
Most teens own an iPod to listen to music today
Most teens don’t want to have a physical product to
carry around, they would rather download the mp3 and
have it on their iPod
Adults
Use a computer at work
Much business and communication between companies
is done online
Most home in America have multiple computers
along with internet access
Many people have recently preferred to shop online or
at home
Don’t have to deal with crowds
Parking
Gas Prices
No actual physical product that you can hold in your
hand
Some people want to have the CD of a certain artist as a
display or to see album artwork, photographs, and pictures of
the artist
More product offered when you buy an actual physical
Compact
Some manufacturers in order to sell more CD’s offer something
that you cant get with a digital download
Music videos
Video games
Special offers on further product s to buy (T-shirts, concert
tickets)
Customer may prefer a product like this as opposed to
a digital download-more bang for their buck
Consumers are using computers more and more in their
everyday lives. They access the internet to do their shopping
around Christmas time and other events throughout the
year. With closure of such institutional record outlets such
as Tower Records and Silver Platters, it has shown that the
Compact is slowly becoming a thing of the past. The rise of
sites such as EBay, iTunes, Rhapsody, and Amazon.com has
shown the strength of the mp3 and digital download sales.
In order for Columbia records to survive in this new age
market they must seriously consider the Digital download
as a viable source of income. The record buying public is
feeling more comfortable doing their shopping online and in
some cases even prefers it. Columbia must take this fact into
consideration if it is to stay alive in the record buying
industry.
Will MP3's take over CD's in the future?
http://www.tomshardware.com/forum/47805-6-will-future
Music industry blames MP3 for sagging sales, Beth Lipton Krigel
Staff Writer, CNET News
http://news.cnet.com/Music-industry-blames-MP3-for-sagging-sales/2100-1023_3-223531.html
Are iTunes Sales Up Or Down? Antone Gonsalves InformationWeek December 14, 2006
02:48 PM
http://www.informationweek.com/news/internet/ebusiness/showArticle.jhtml?articleID
=196604330
Online distribution
NPV $336,904
IRR 124.4%
CD distribution
NPV $281,769
IRR 106.8%
Scenario Analysis
variable growth
probability sales price unit sales NPV
costs rate