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Bullet point 3: growth and objectives - Coggle Diagram
Bullet point 3: growth and objectives
Growth strategies
Digital transformation and platform expansion
UK retailers and distributors are increasingly moving online to reach customers through streaming, digital downloads and direct to customer platforms
HMV
Website is the number one vinyl retailer in the UK
Vinyl heavy product mix and event based experiences in its stores, promoted through HMV live
Amazon Music
Allows customers to access purchased music on its Amazon Music subscription platform
Spotify and apple music
Investing in global presence: e.g. spotify now present in 180 countries.
Mergers and takeovers
UK based indie labels often acquired by larger distributors or labels, e.g. warner music bought Indie label 300 entertainment.
They increase the market share of record labels, strengthen catalogues and give much more negotiating power with digital platforms like spotify.
Vertical integration and diversification
Record labels increasingly moving into areas like merchandise, ticketing and social media content production
Sony Music and Universal Music have done this
Niche market growth and localisation.
Vinyl market growing: 5.9 million record sold in 2023.
Niche market strategies ued by Rough Trade: targeting specific demographics and creating experiences rather than competing on price.
Business objectives
Increase market share
Growing number of users is critical: Spotify holds a 58% market share in the streaming market.
Record labels do this by expanding shelf space in retailers or increasing artist placements on streaming playlists
Profitability and sustainable revenue
Streaming: recurring revenue through subscriptions but lower revenue per stream.
Record stores look to increase profitability through things like exclusive vinyl releases and participation in events like Record Store Day.
Customer retention and brand loyalty
Subscription models depend heavily on this
They invest in things like personalised playlist and artist exclusives to build this
Independents focus on loyalty through community events, knowledgeable staff and strong branding
Artist development and catalogue expansion
Signing emerging artists and acquiring back catalogues. Secures long term revenue
Beggars group focus on long term artist development over short term hits.
Challenges to growth
Market saturation
Lots of companies offering the same streaming services.
Most people already have accounts: businesses are fighting over the same customers.
Harder for new businesses to enter specifically the streaming market
Small companies like deezer and tidal struggle to compete.
Changes in consumption
Decrease in people buying CDs: Increase in people watching short clips of music on social media like TikTok.
Younger listeners often listen to just 15 seconds of a song before they like it (I am very guilty of this)
Changes in promotion might change in oredr to keep fans attention.
Artists not being paid fairly (low loyalties)
Most money, esp from spotify, goes towards the platofrm of label.
Broken Record campaigning for fairer loyalties
1 million streams on Spotify generate only 3000-5000 USD
Illegal downloading and stream ripping
Some illegal websites can download or copy songs for free. This means businesses lose money that they could gain from stream revenue.
Websites like sclouddownloader are popular
Harder for smaller shops to survive
In 2023, Creekside Vinyl closed down due to rising costs and the effect of COVID - 19
Record shops have to compete with online stores like amazon.