Marketing management and strategy - The UK music industry

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The UK music industry is facing dramatic changes caused by shifts in the patterns people buy music tracks and albums. Online music distribution is changing the rules of the market introducing both major threats and growth opportunities for music labels and distributors.


Online market demand is dominated by teenagers who have shifted their purchases from singles CDs to mostly illegal downloads of singles tracks, stimulated by continually evolving software and P2P networks. In order to survive, market players have to reconsider their strategies and value propositions - by mergers of music labels; flexible pricing and value-added offers by online distributors and active ethical campaigns, the challenge before these companies is to convert the internet medium from a threat to copyrighted material into an effective distribution channel.
Rivalry among competing sellers in the industry - rivalry among legal internet music sites is not too intensive, because the legal online download industry is underdeveloped and growing at a very high speed, which means that companies gain market share from a rising number of new customers, converting their downloads from illegal to legal. Apple iTunes has over 70% of the market, which places it into an almost monopolistic position as a market leader. Still, rivalry is expected to increase, as the number of competitors increases, and as customers can easily switch from 1 site to the other (except for Apple and Sony that sell music in formats compatible for their own products).
Competitive pressure from substitute products - substitute "products" for online distributors can be considered to be rival traditional distributors for example. ...
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