Creative Content in a European Digital Single Market - Literature review Example

Global Business Environment Background of the Company and their Products Hong Kong Popular music distribution services limited is a well re-known company that specialise on distributing Chinese pop music. The company is working with recording studios that are major in Hong Kong, as well as studios located in China and Taiwan. In addition, the company also is owning and operating a chain of recording stores and Karaoke Lounges. However, these are both popular with the public for their convenient locations, helpful and convenient service and more, reasonable prices. An Analysis of the Country’s Environment In a country, political factors can refer to the extent that the government intervene in the economy. The regulatory and legal factors can include tax policies, labour laws, employment laws, consumer protection laws, environmental regulations, and trade restrictions and tariff. The music labels keep on continuing trying to stop and prevent the infringements of copyright; suppliers are being sued of filesharing individual as well as technologies. In October 2010, a peer hub had to be sentenced by the court to a close to a four-month suspension and prison, and finally music companies compensated for copyright holders up to the value of about 307,450 Euro. In addition, a Spain-based distributor and the representative of the music industry filed a case for 13 million euro against an individual for networks designing that allowed the transferring and distribution of music just for free (Preston & Rogers, 2011). Since 2007, the record industry has been successful in achieving legislation from governments that hold responsibility for an operation that led in copyright infringement on their networks. In Belgium, for example, the court ruled that an ISP must install a filter to prevent users from illegally sharing and downloading music (Preston & Rogers, 2011). In 2009 in the UK, a court had seized close to 70, 000 pounds from sellings of counterfeit Compact Discs and spend those seized funds in compensating distributing and labels companies (PwC and Wilkofsky Gruen Associates, 2010). However, this was the only first time in the United Kingdom that distributors were awarded the compensation. Social factors included diverse demographic and cultural aspects of society that forms the macro-environment of the organisation. The digitization and internet have undoubtedly had a major impact on the music industry. After a period of sustained increases in sales and revenues following the introduction of the Compact Disc in the 1990s, the music industry faced significant losses of revenue for subsequent years (European Commission, 2009). Technology keeps on evolving rapidly, and this means consumers become too tech-savvy. However, with the new technology advent, the older technology is getting obsolete and outdated at the same time. In United Kingdom, major changes in the popular music followed on developments of technology that made it possible to dissemination of music on a bigger scale. Most transitions in the music sector had followed on the new technologies introduction. However, developments in the music industry are not determined by technological innovations alone. They have always been the result of the interplay between technological innovations, the actions and strategies of music firms, consumer behaviour and the wider cultural, social, economic and political context (MacManus, 2008). The Market and Competitive Situation The music sector in United Kingdom is a two-tier market: music distributing companies engage in the publishing, selection, and marketing of singles as well as albums that are eventually sold to consumers by online retailers. Like the majority of other content and media sectors, the music industry in United Kingdom is characterised by very high upfront investments, low marginal costs and high risks. The structure of the market is being dominated by quite a number of multinational, and integrated music firms that fund and own different labels, promote channels, distribution, and a large number of distributors. Up to November the year 2011, major labels dominated the global music industry: the Warner Music Group, Sony Music as well as Universal Music Group. EMI Limited was the only company based in European. However, in year 2011, the French investor Vivendi that owns Universal Music had acquired the recording music business of Sony and EMI as well as buying the EMI’s publishing unit. However, the recent merger until now not yet been given approval by the competition authority in United Kingdom and it would make Universal Music’s position to be more dominant as it would eventually own three-quarters selling of music globally. Music publishing firms and organisations derive their income/revenues from four main sources that include: performances, synchronisation, reproduction, and distribution but revenues based on reproduction have been on the decline. United Kingdom is among France, Sweden, Italy, Germany, and the Netherlands with the largest music publishing firms in the Europe in terms of value added. In addition, consumers have shifted their patterns of music consumption. They can listen to music on various diverse devices, anytime and anywhere. The application of online music services, illegal and legal, has grown tremendously, and most music retailing shops have been closed. Currently, in the digital environment consumers have a lot of active function in remixing music, uploading, sharing and commenting (PwC., 2011). The Challenges and Opportunities in UK The music industry future is not clear as new technology keeps on changing the way in that music consumers keep on searching and obtaining their favourite new and old music. Therefore, as older methods exploitating music proves to be increasingly ineffective, majority and major entertainment organisation are shifting their platform for growing, finding, and ultimately selling artists music. The driving factor of these notable changes is not only the new technology. There are also challenges affecting the distributing companies in United Kingdom. This complex system stems out of an economic, political, social, as well as technological factors also factor in. Currently, in United Kingdom and Globally, in general, the distributing companies extremely focus to recover lost Compact Disc sales that occurs through the exploitation of artists and further legal action under their control. However, the boom in profits generated from consumers that replaces their vinyl collection with Compact Disc is over, and therefore it offer a great challenge to distributing companies, as well as recording studios. Perhaps, it is not the end for such companies because there are also other ways of sourcing revenue through taking advantage of online services that would be used for huge promotion (Cooper, 2008). However, there are presentable opportunities, for instance, recommendation websites that include Imeem.com, Pandora.com, and Lastfm.com. All these websites are acting as an engine that draws consumers to new music. However, this takeaway revenue from Compact Disc sales and towards touring and merchandising (McManus, 2008). As such services are continuing to develop, so, would the distribution and record companies’ understands how valuable can be. Instead of just relying solely selling of album to ensure the success of the investment in a growing artist and new artist, the distributing companies in partnership with a recording company might work to spread the music of the musician across the Internet by offering a stream of their work. However, this would hopefully build consumers and strong fan base, and at the same time when the music is most readily available on the Internet the consumers would pursue a deep involvement with the music, purchase tickets to shows as well as buy the merchandise (Leeds, 2007). Hong Kong Popular music distribution services can adopt many of these possible small models. This would enable the artist and distributing company to crossroads between the pure commercialism and artistic expression. Market music in United Kingdom is booming and in order for the company to establish base and maintaining their consumer’s base as well as the revenue through merchandising, the Hong Kong Popular music need to be a consistent and maintain accessible image so that they cannot drive consumers away. After establishing their consumers fan base they must be accessible, recognizable, and hip. However, the opportunity is that the hopeful majority of these consumers will be attracted through websites recommendation, and those that generate the revenue for the company, artist and the recording company. By doing so, they would be able to get a die-hard fans for the clients. In addition, the Hong Kong Popular music would have to maintain an image for these consumers (Preston & Rogers, 2011). Additional Important Information It is becoming more difficult because times goes on for musician to become discovered by a major label, but partnership or discovery, or even recognition, would be important for them to reach a wider and broad audience with huge promotion that results to exploitation to compensating the overall decrease in Compact Disc sales. Communities are Internet based, Soundclick.com, for instance, offer methods and means for undiscovered and unsigned bands to upload their songs for selling are somehow promising, but the only disadvantage is lacking widespread promotion opportunities. Therefore, the distributing company need to begin to network with all people across the globe through the Internet, and this bridge gaps and allows cultures to cross nation’s borders digitally. This enables music around the globe to be accessed by consumers worldwide, instead of one’s accessing music being limited to distributors’ stores. In addition, it enables artists to reach out to an a broader economy, broader audience, and is forcing the music sector to shift its business model to addressing these major changes in the past 20 years. However, distributing companies and their labels need to reconsider drastically their methods of thinking and carrying out their business so that they can adapt to these shifts or else other companies would leave them much behind. References Preston, P., & Rogers, J. 2011. Online Content: Policy and Regulation for a Global Market. Social Networks, legal innovations and the new music industry. MacManus, R. 2008. Future of online music- industry players discuss. http://www.readwriteweb.com/archives/future_of_online_music_discussion.php, accessed 31st March, 2015 Leeds, Jeff (2007 November 11). The New Deal: Band as Brand. http://www.nytimes.com/2007/11/11/arts/music/11leed.html?_r=1, accessed 31st March, 2015 PwC. (2011). Global Entertainment Outlook 2011-2015. PwC and Wilkofsky Gruen Associates. Global Entertainment and Media Outlook. PriceWaterhouseCoopers. Cooper, M. (2008). digital intellectual property wars. Economic fundamentals, notpiracy, explain how consumers and artists won in the music sector. Telecommunications policyresearch conference. European Commission. 2009. Creative Content in a European Digital Single Market:Challenges for the Future - A Reflection Document of DG INFSO and DG MARKT. Accessed 31st March, 2015 Read More