The global digital music industry continues to evolve rapidly, resulting in extensive expansion of record companies into new markets, creating new business models, monetization of the market by the main participants, the increase in attractiveness of digital music. Both users and artists are interested in increasing the audience of digital music market. Digital music is one of the key sources of revenues of the global music industry, which is growing dramatically. It should be noted that in context of increased competition, the competitive advantage is the key prerequisite for companies working in the music industry to safeguard their positions. Moreover, brand recognition and ability to adjust production to current trends are the factors shaping competitive advantage for companies involved in digital music production.
The companies such as Universal Music Group (29.85%), Sony Music Entertainment (29.29%), Warner Music Group (19.13%), Independent labels (12.11%), EMI Group (9.62%) are the leading companies that together control over 80% of the digital music market. These brands are well known all over the world, and their products are largely protected by intellectual property right.
It is relevant to notice that the digital music industry faces the following challenges, such as the fight against pirated copying; changing consumption patterns of music content transition to listening to music through mobile devices change in consumer behavior: more and more users pay for content, especially in framework of iOS system.
Many market researchers have noted that the opportunity to distribute music content through mobile platforms is one of the most important factors that will positively influence the development of digital music industry. The competition by pirating companies poses significant threat to digital music companies because of lower price of copies in contrast to the authentic products. Some of copies are available at no cost, so the customers prefer the copies to the authentic samples. One of the main drivers of growth of digital music market in the US is streaming music services.
Global brands such as Deeper and Spotify apply regional expansion strategy and get the appropriate income. As a result, such regional services as Rdio, KKBOX and WiMP continue to attract new users. New players on the market, including Beats Music, implemented subscription model of music services or announce its introduction in order to gain competitive advantage. According to IFPI, revenues from digital services grew by 4.3% in 2015 and reached 5.9 billion dollars.
It is necessary to discuss specific strategies and competitive position chosen by market leader Warner Music Group. In early may, Warner Music Group became the first major brand that announced the streaming as the main source of income, an important milestone and an oasis in the shifting sand of the digital media economy and the recording industry in particular. In the past more importance was placed on rotation on radio, the weekly charts and sales. Now there is a battle for time and attention of people. Therefore streaming is specific promotion tool that occurs as the competitive advantage for this company.
CDs are not popular now, customers shifted to the digital format. The segment of digital music is growing rapidly worldwide. Now it is high time for digital music companies to find out new competitive advantageous in order to stay on the market. Another component of the digital music culture is audio recording. The mass recording is one of the most discussed topics among producers of phonograms that try to build the concept of the new music industry.
The main purpose of forming the communication system of mass recording is to ensure the proper coordination in the field of music recording among all actors that operate on this market. The concentration of resources on priority directions of development, improved efficiency and favorable conditions for accelerated introduction of new competitive musical products is necessary. The global record industry requires the modernization of communications platforms and the new formula of the phonographic organization and interaction. Lately the trend is to unite efforts of various actors in the music industry for the formation of new patterns of consumption of audio content.
References
Graham, J. (October 14, 2016). Musicians ditch studios for tech such as GiO for Macs. U.S.A. Today.
Rumelt, R. P. (2011). Good Strategy / Bad Strategy. Crown Business.
The Music Industry. (October 15, 2008.). The Economist, 55-79.
