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Assessing the business opportunity for royalty-free music in public spaces targeting SMEs

Akervall, Pontus and Laurens, Richard (2017) MIO920
Production Management
Abstract
The digitalization of the music industry has meant a drastic increase of public accessibility of
recorded music, which has transformed the way in which music is being consumed. From
initially being restricted by the physical disposition of CDs and vinyl, the prospect of digital
downloading and music streaming has rapidly transformed the music landscape as the world
knows it. The music industry revolution has partly meant a legislative turmoil regarding direct
licensing and unauthorized use of copyrighted material, but has also enabled several
innovative business models to leverage the possibilities which the new industry conditions
has set. For Company X, having established ownership of professionally produced and
customized songs,... (More)
The digitalization of the music industry has meant a drastic increase of public accessibility of
recorded music, which has transformed the way in which music is being consumed. From
initially being restricted by the physical disposition of CDs and vinyl, the prospect of digital
downloading and music streaming has rapidly transformed the music landscape as the world
knows it. The music industry revolution has partly meant a legislative turmoil regarding direct
licensing and unauthorized use of copyrighted material, but has also enabled several
innovative business models to leverage the possibilities which the new industry conditions
has set. For Company X, having established ownership of professionally produced and
customized songs, the new industry environment has meant opportunities to bypass
incumbent music distributors on multiple music markets. One of these music markets is the
so-called In-Store Music (ISM) market, where businesses are approached with curated
music in order to build brands and enhance customer experiences.
The purpose of this master thesis has been to provide an explanation regarding the
dynamics of the ISM market, to describe and understand its underlying key drivers, and
evaluate the business opportunity for Company X to approach the market given its business
model, capabilities and market position. The master thesis has further aimed to formulate
how a software streaming service, a SaaS (Software-as-a-Service) solution, should be
outlined and distributed to target SMEs (Small and Medium-sized Enterprises) on preferred
ISM market segments. To investigate the business opportunity for an ISM software solution,
comprehensive literature studies were applied to understand music consumption patterns,
customer surveys were sent to strategic ISM service users to investigate user receptivity,
and extensive competition analyses were completed in order to determine the level of
market rivalry.
When segmenting the ISM market in relation to both macroeconomic and industry-specific
information, results showed that the countries deemed most attractive for a
subscription-based SaaS solution were highly clustered around northern Europe, especially
characterized by Sweden, Norway, and Denmark. Weighing in digital music consumption
trends and market size as decisive parameters affecting ISM market potential, the
Netherlands, Finland, the UK, and the US constitute further prime examples of profitable ISM
market segments. For several emerging markets, e.g. Mexico and Spain, a freemium
business model can be applied by Company X to leverage their royalty-free ISM business
model and gain market presence. Compared to ISM alternatives offering commercial music,
a royalty-free solution has competitive advantages especially in terms of cost structure and
pricing strategy flexibility. The software streaming solution should be outlined to specifically
suit SMEs, implying an increased need for a scalable solution maintaining a premium feel.
Consequently, for a SaaS solution to gain ISM market traction, the necessity to include SME
customer opinions in the design of the service is vital. In addition, a competitive ISM solution
should take into consideration the offerings of competitors to adequately differentiate and
emphasize its service. A go-to-market strategy aligned with the software streaming service
should be highly customized to fit the market segment targeted, but increasingly dependent
on organic SEO, i.e. content marketing, and strategic partnerships to gain market influence. (Less)
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author
Akervall, Pontus and Laurens, Richard
supervisor
organization
course
MIO920
year
type
M1 - University Diploma
subject
keywords
In-store music, Royalty-free music, Software-as-a-Service (SaaS), Small and medium-sized enterprises (SMEs), Market assessment, Value offering, Go-to-market strategy
other publication id
17/5582
language
English
id
8919126
date added to LUP
2017-06-27 15:37:59
date last changed
2017-06-27 15:37:59
@misc{8919126,
  abstract     = {The digitalization of the music industry has meant a drastic increase of public accessibility of
recorded music, which has transformed the way in which music is being consumed. From
initially being restricted by the physical disposition of CDs and vinyl, the prospect of digital
downloading and music streaming has rapidly transformed the music landscape as the world
knows it. The music industry revolution has partly meant a legislative turmoil regarding direct
licensing and unauthorized use of copyrighted material, but has also enabled several
innovative business models to leverage the possibilities which the new industry conditions
has set. For Company X, having established ownership of professionally produced and
customized songs, the new industry environment has meant opportunities to bypass
incumbent music distributors on multiple music markets. One of these music markets is the
so-called In-Store Music (ISM) market, where businesses are approached with curated
music in order to build brands and enhance customer experiences.
The purpose of this master thesis has been to provide an explanation regarding the
dynamics of the ISM market, to describe and understand its underlying key drivers, and
evaluate the business opportunity for Company X to approach the market given its business
model, capabilities and market position. The master thesis has further aimed to formulate
how a software streaming service, a SaaS (Software-as-a-Service) solution, should be
outlined and distributed to target SMEs (Small and Medium-sized Enterprises) on preferred
ISM market segments. To investigate the business opportunity for an ISM software solution,
comprehensive literature studies were applied to understand music consumption patterns,
customer surveys were sent to strategic ISM service users to investigate user receptivity,
and extensive competition analyses were completed in order to determine the level of
market rivalry.
When segmenting the ISM market in relation to both macroeconomic and industry-specific
information, results showed that the countries deemed most attractive for a
subscription-based SaaS solution were highly clustered around northern Europe, especially
characterized by Sweden, Norway, and Denmark. Weighing in digital music consumption
trends and market size as decisive parameters affecting ISM market potential, the
Netherlands, Finland, the UK, and the US constitute further prime examples of profitable ISM
market segments. For several emerging markets, e.g. Mexico and Spain, a freemium
business model can be applied by Company X to leverage their royalty-free ISM business
model and gain market presence. Compared to ISM alternatives offering commercial music,
a royalty-free solution has competitive advantages especially in terms of cost structure and
pricing strategy flexibility. The software streaming solution should be outlined to specifically
suit SMEs, implying an increased need for a scalable solution maintaining a premium feel.
Consequently, for a SaaS solution to gain ISM market traction, the necessity to include SME
customer opinions in the design of the service is vital. In addition, a competitive ISM solution
should take into consideration the offerings of competitors to adequately differentiate and
emphasize its service. A go-to-market strategy aligned with the software streaming service
should be highly customized to fit the market segment targeted, but increasingly dependent
on organic SEO, i.e. content marketing, and strategic partnerships to gain market influence.},
  author       = {Akervall, Pontus and Laurens, Richard},
  keyword      = {In-store music,Royalty-free music,Software-as-a-Service (SaaS),Small and medium-sized enterprises (SMEs),Market assessment,Value offering,Go-to-market strategy},
  language     = {eng},
  note         = {Student Paper},
  title        = {Assessing the business opportunity for royalty-free music in public spaces targeting SMEs},
  year         = {2017},
}