MarketLineIC_Global Online Music Streaming Market Supply Chain Analysis_170922.pdf

《MarketLineIC_Global Online Music Streaming Market Supply Chain Analysis_170922.pdf》由会员分享，可在线阅读，更多相关《MarketLineIC_Global Online Music Streaming Market Supply Chain Analysis_170922.pdf（20页珍藏版）》请在淘文阁 - 分享文档赚钱的网站上搜索。

1、Global Online Music Streaming:Supply Chain Analysis-MLVC001-080Global Online Music Streaming MarketSupply Chain AnalysisMLVC001-080Global Online Music Streaming:Supply Chain Analysis-MLVC001-0802Table of ContentsComplete Supply Chain:OverviewComplete Supply Chain:Overview(contd)Content Creators:Over

2、viewContent Creators:AnalysisContent Creators:Burning Issue Artist RoyaltiesDigitizing:OverviewDigitizing:AnalysisDigitizing:Burning Issue Gender Pay GapPromotion:OverviewPromotion:AnalysisPromotion:Burning Issue Smart devicesElectronic Distribution:OverviewElectronic Distribution:AnalysisElectronic

3、 Distribution:Burning Issue Unprofitable Business ModelsEnd Users:OverviewEnd Users:AnalysisEnd Users:Burning Issue Privacy concernsAppendixGlobal Online Music Streaming:Supply Chain Analysis-MLVC001-0803Complete Supply Chain:OverviewThe global online music streaming markets supply chain can be divi

4、ded into five distinct stages:content creators,digitizing,promotion,distribution,and end users.Content CreatorsMusiciansStudiosLive Event ProducersDigitizingRecord LabelsPromotionAdvertisingFree TrialsPartnershipsDistributionStreamingEnd UsersIndividualsCompaniesGlobal Online Music Streaming:Supply

5、Chain Analysis-MLVC001-0804Complete Supply Chain:Overview(contd)The global online music streaming markets supply chain can be divided into five distinct stages:content creators,digitizing,promotion,distribution,and end users.There is overlap in the promotion and distribution stages but otherwise com

6、panies are fairly independent of each other in this marketContent CreatorsEd SheeranDrakeThe ChainsmokersMajor LazerBeethovenDigitizingUniversal MusicSony/ATVWarner MusicEMI GroupIndependent LabelsPromotionSpotifyAppleAmazonWieden+Kennedy VirginDistributionSpotifyApple MusicAmazon PrimeDeezerAlphabe

7、tEnd UsersIndividualsPubsClubsRestaurantsHairdressersGlobal Online Music Streaming:Supply Chain Analysis-MLVC001-0805Content Creators:OverviewContent Creators are either artists that produce music for streaming services or artists of past music remastered for online streaming.Content CreatorsOrigina

8、l MusicEd SheeranThe ChainsmokersColdplayDrakeRemastered MusicFleetwood MacBeethovenBob MarleyGlobal Online Music Streaming:Supply Chain Analysis-MLVC001-0806Content Creators:AnalysisOnline music streaming companies need to secure content worth paying a premium for.Content creators are the crux of t

9、he market and record labels compete for artists.The most streamed artist on Spotify in 2020,with 8.3bn streams over the 12 months was Puerto Rican artist Bad Bunny.Musicians with a proven fan base,will exertgreater power in negotiating contracts than a new act but remain reliant on players further d

10、own the supply chain to reachtheir audiences.Artists and repertoire(A&R)is the division of the record label companies that scouts talent and oversees the development ofthe artists but because digital distribution has changed the way consumers choose their music,it is unclear what their role inthe fu

11、ture of the music industry will be.Artists themselves hold minimal power in the negotiations between streaming services,with label owners typically being thedominant force behind the distribution of their music.For instance,Johnny&Associates,a leading Japanese talent agencyand the agent to some of J

12、apans leading bands such as SMAP,Arashi and Kinki Kids has ensured that none of the bandssongs are available to stream online.There are claims that Spotify has made its own content by paying producers to create tracks that can fit certain themes suchas jazz,chill,and peaceful piano playing.The compa

13、ny pays a flat fee for the tracks but keeps hold of the master copyright,allowing the songs to be played without Spotify having to pay any royalties.Some of the tracks have reached more than500,000 streams and one over one million.When it comes to classical music,some fans criticize streaming servic

14、es because the metadata does not allow for the breadthof composers,conductors and orchestras.Global Online Music Streaming:Supply Chain Analysis-MLVC001-0807Content Creators:Burning IssueArtists tend to lose out as the record companies claim a large percentage of the royalties.The recording companie

15、s are the true winners from streaming services and there have been plenty of artists,including Prince,Taylor Swift and Coldplay,who felt that streaming exploited artists and that pay-outs were unfair.Taylor Swifts boycott ofSpotify made headlines in 2014 as she took all of her music off the service,

16、because of problems with royalties.She has sinceallowed her music to be put back on the service,with one new song breaking records for the most streamed song in its firstday.Swift has also previously attacked Apple Music for not paying artists during its free three-month trial,provoking thecompany t

17、o change its policy.Streaming has become the main way that people access music,and not even the most powerfulartists can stop its growth.Streaming music services share of total music revenues is bigger than ever.According to therecording industry association of America(RIAA),in the first half of 202

18、0,US recorded music revenues grew 5.6%to$5.7bn atretail value,continuing the positive growth trends of recent years.Streaming music grew to 85%of the market by value,compared with 80%the prior year.Piracy is still a major problem in the industry and many artists have realized the hardway that small

19、royalties are better than none and that the music industry may not be aslucrative as it once was.However,artists that can benefit from the online streamingbusiness plan include smaller,new artists that are looking for distribution alone andartists that no longer release any music,as they can benefit

20、 from royalties for musicreleased decades ago.Global Online Music Streaming:Supply Chain Analysis-MLVC001-0808Digitizing:OverviewDigitizing of new content occurs at creation while old content has be re-mastered.DigitizingOld ContentNew ContentGlobal Online Music Streaming:Supply Chain Analysis-MLVC0

21、01-0809Digitizing:AnalysisThe digitizing process includes compression,storage,processing and transmission components.The key,and somewhat obvious,feature of the market is that all of the content is digital.It is delivered in this form andmust therefore be recorded in a digital format or,if it is old

22、er media,converted.Digital music recording is now also the norm as it allows for excellent quality(depending on the sample rate used),easier delivery,and cheaper delivery.Audio files are then produced and can be uploaded on the music streamingplatforms.Lots of music predates the advent of digital an

23、d has therefore has to be converted.For example,Frank Sinatra songsfrom the 1960s can be streamed on Spotify.These have undergone a digitization process,which can be carried out bypublishers of digital warehouses,which typically deal with mass conversion projects.Many artists have forward integrated

24、 into creating their own record labels.For example,Jay-Z launched his own recordlabel Roc Nation in 2013 and has represented Shakira and Kanye West.Louis Tomlinson from One Direction startedhis own label in 2015,although it operates as a subsidiary of Simon Cowells own Syco label.Some streaming serv

25、ices allow artists to bypass using a record label.They can simply upload songs directly to theservices because the content is already in a digital format.Global Online Music Streaming:Supply Chain Analysis-MLVC001-08010Digitizing:Burning IssueRecord labels have been among those reporting some of the

26、 biggest pay gaps between men and women.Historically,the top spots in many media companies have been dominated by men but a wave of change has been called for,especially after the Harvey Weinstein scandal and the#metoo movement.In April 2018(most recently available figures),genderpay gaps in three m

27、ajor labels in the UK were revealed with Warner,posting a 38.7%average gender pay gap(down from 49%the previous year)in its report.Followed by Universal on 29.8%average gender pay gap(unchanged from 2017),and finallySony with 22.7%(unchanged from 2017).Furthermore,Sony Music Entertainment and Warner

28、 Music Group,do not count asole woman amongst their frontline UK label heads.The figures were met by a large amount of backlash when first released in2017 and the companies have been forced to make changes.However,the majority have been criticised for failing to make anysignificant progress.The gap

29、has been blamed on the cut-throat nature of the jobs at the top aswell as a lack of availability of flexible working.The companies recognise thatthose heading the music industry are still predominantly men but insist thatthings are changing,be it down to the companies themselves because ofpressure f

30、rom regulators.Universal has claimed that two of its five frontlinelabels are now led by female presidents promotions that the company hopeswill show it in a better light in the next report.Global Online Music Streaming:Supply Chain Analysis-MLVC001-08011Promotion:OverviewPromotion is critical for a

31、ttracting paying subscribers.Promotional activities can be carried out in-house or using the help and expertise of third parties.Both methods are used in this market.PromotionIn-houseFree TrialsEmbedded in contentExternalAdvertising CampaignsPartnershipsUse the services of ad agencies.e.g.Prime Musi

32、c included with Prime memberships.Global Online Music Streaming:Supply Chain Analysis-MLVC001-08012Promotion:AnalysisPromotion is critical as consumers must be convinced to spend money on a non-essential service.All online music streaming services are,in essence,non-essential to their customers.They

33、 therefore representdiscretionary spend for consumers.As a result,companies offering digital media sales and/or streaming services must workhard to promote their offerings and convince consumers to part with their cash.Promotional activity has therefore taken ongreat importance.In-house activities a

34、re carried out,the most common one being free trials.Spotify for example,offers a free month ofservice for new customers.They sign up for a trial offer and instantly gain access to the full service of Spotify.After the trialfinishes,the customer immediately becomes a paying one unless they actively

35、cancel it before payment kicks in.AmazonPrime and Apple Music offer similar trials in the hope that those on trials get hooked.Some players have tried other ways of promoting themselves.In Q3 2020,Spotify offered a promotion in the UK andCanada where premium subscribers could get a free Google nest

36、in an effort to boost premium subscribers.External advertising campaigns are used heavily and may utilize TV,social media,web advertising,and print media.Thesecampaigns utilize the expertise of advertising agencies.For example,Spotify uses Wieden+Kennedy for its campaigns.Partnerships have also beco

37、me an effective way of generating revenues.As services like wireless telecommunicationsbecome harder to differentiate for players,they seek advantages in the form of extras that they can offer customers.Streaming services are perfect as they also help sell data packages so partnerships such as Spoti

38、fy and Vodafone UK areevident.Global Online Music Streaming:Supply Chain Analysis-MLVC001-08013Promotion:Burning IssueHome devices are shaping consumer behavior,especially when it comes to music.As the world slowly moves on from an obsession with small screens,artificial intelligence and the interne

39、t of things are changingthe way consumers interact with technology.In 2019 prior to the COVID-19 pandemic,there was strong growth in the globalsmart speaker market,a total of 146.9 million smart speaker units sold across the world.Despite the growth of Chinesevendors,Amazon and Google were responsib

40、le for over three quarters of smart speakers sales in 2019.Moreover in 2019,Apple announced it would be launching HomePod in China following its initial launch in February 2018.Since then,a number oftech players have released smart speakers to capitalize on the strong demand.Unsurprisingly,the most

41、popular use for these devices is to play music andsound quality is the main differentiating feature.The Apple Homepod retails at$349,a huge jump from the Amazon Echo Dot at$49.99 but Apple insists thesound quality from its devices speakers is worth paying for.Each companysdevice promotes its own onl

42、ine music streaming platform and this intrinsicrelationship means that if sales of a device are successful,the relevantstreaming platform would benefit.Older generations,for example,may not haveneeded a music subscription prior to owning a smart device but may be temptedto augment the devices capabi

43、lities with a monthly subscription.Global Online Music Streaming:Supply Chain Analysis-MLVC001-08014Distribution:OverviewSome music streaming platforms are free to use but a monthly subscription removes adverts.DistributionPay SubscriptionPrime MusicSpotify PremiumApple MusicPandoraAd-basedYouTubeSp

44、otifyLast FMGlobal Online Music Streaming:Supply Chain Analysis-MLVC001-08015Distribution:AnalysisThe trend towards an on-demand music culture has greatly benefited online streaming distributors.Most change to the music industry came about at the turn of the millennium when Napster publicised the po

45、ssibilities ofpeer-to-peer file-sharing.Since then,it has become less common for people to go out and buy a particular song oralbum.Once people experienced the ease of getting any music at any time,they did not want to revert back and themusic industry had to change accordingly.Online music streamin

46、g is experiencing consistently strong growth in many countries around the world.While the USremains the largest market,other regions,such as Asia-Pacific are experiencing strong growth due to the emergence ofdigital natives and improving internet connectivity.4G LTE penetration varies across countri

47、es;for countries with low penetration rates,improved access will encouragethe use of online music streaming services as they become more accessible and performance improves.5G is alsoexpected to roll out in a number of countries in the coming years;the implementation of improved internet connectivit

48、ywill encourage the use of music streaming services across the globe.The inconsistent application of online liability laws has meant that certain services are able to claim they are not liablefor the music they offer.The value gap is seen as the biggest threat toward the long-term sustainability of

49、the marketand music industry.Global Online Music Streaming:Supply Chain Analysis-MLVC001-08016Distribution:Burning IssueDistribution providers are ultimately operating an unprofitable business model and pioneer Spotify will likely lose out to its rivals in due course unless its diversifies its offer

50、ings.Spotify became officially publicly listed on Tuesday,April 3,2018.Prior to its debut on the stock market,Spotify had traded ashigh as$132.50 on the private market,according to a regulatory filing.In a company that has yet to make any profit,it isdifficult to put a value on the shares.The openin