Explore the crisis that Internet file sharing of copyrighted music recordings has caused for Vivendi Universal, Sony Music, EMI, and AOL Time Warner Music, which together formerly supplied 70 percent of the global music industry.
Questions
- How would the Internet firms Napster and Kazaa be reflected in a Porter Five Forces industry analysis?
- Why was the Internet a disruptive technology for Sony Music? Did the new digital file transfer technology favor album-size transactions which Sony Music under-stood very well? Or did the new technology favor Steve Jobs’s vision of an Apple iTunes Music Store focused on easily accessible 99-cent singles? What aspect of the iTunes Music Store made it more desirable that simply transferring stolen digital music files one by one?
- What should be Sony Music’s competitive strategy in response to this crisis? Include a discussion of resource-based capabilities, business opportunities, and a road map of future innovation.
- Is your competitive strategy for Sony Music a product-differentiation strategy, a low-cost strategy, or an IT strategy? What is your strategic focus?