Evolution or Revolution in the Music Industry?

9 Pages Posted: 16 Jun 2009

See all articles by Paul Farris

Paul Farris

University of Virginia - Darden School of Business

Ervin Shames

University of Virginia - Darden School of Business

Eric Gregg

iLoyalty

Sonia Almedia

affiliation not provided to SSRN

Abstract

This case allows students to explore the impact of the Internet on an industry structure, value chain, and business models. The combination of broad band Internet access, faster computer processing, and compression software (MP3) has encouraged the evolution of online music trading and distribution. The case encourages students to view appropriate actions for all industry participants: retailer, music companies, performing/recording artists, government regulators, and emerging online distributors.

Excerpt

UVA-M-0684

EVOLUTION OR REVOLUTION IN THE MUSIC INDUSTRY?

We had to compete with free.

Chairman Doug Morris,

Universal Music Group

Between the end of 2000 and mid-2003, CD sales in the United States declined by 31 percent. An estimated 60 million Americans were using online file-sharing programs, and many industry observers believed the music industry would have to make radical changes to adapt to the new environment. On September 3, 2003, Morris announced the Universal Music Group (UMG) plan to cut the suggested retail price of the record company's CDs by nearly a third beginning October 1. The short-term question was whether the price cut would stop the volume decline. A long-term issue was whether UMG could find a winning solution for the company, artists, consumers, and the channel.

. . .

Keywords: channels of distribution, pricing

Suggested Citation

Farris, Paul and Shames, Ervin and Gregg, Eric and Almedia, Sonia, Evolution or Revolution in the Music Industry?. Darden Case No. UVA-M-0684. Available at SSRN: https://ssrn.com/abstract=1420581

Paul Farris (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
434-924-0524 (Phone)

HOME PAGE: http://www.darden.virginia.edu/faculty/farris.htm

Ervin Shames

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

HOME PAGE: http://www.darden.virginia.edu/faculty/shames.htm

Eric Gregg

iLoyalty ( email )

1001 SW 5th Ave
Suite 1520
Portland, OR 97204
United States
503-977-6295 (Phone)
503-228-1995 (Fax)

HOME PAGE: http://www.theloyalclient.com

Sonia Almedia

affiliation not provided to SSRN

No Address Available

Register to save articles to
your library

Register

Paper statistics

Downloads
192
Abstract Views
974
rank
156,813
PlumX Metrics