ENTR415 Developing an Entrepreneurial Venture

Issues and context of the case 

It was in 2007, when the US British band, Radiohead, promoted the digital opportunities to download the newly launched album, In Rainbows. Liberal approach towards deciding the price of the download, reflects effective customer relationship management, evoking the media coverage, catering to the public relations. The efforts of five friends, studying in a private English boarding school, bore fruits in the form of the seventh album, In Rainbows, which created huge popularity in the YouTube (Elberse and Bergsman 2009). This digitalization, distribution and consumption by bulk consumer market in the music production declined the retail sales of the recorded music by $4 billion in 2007. It was in the same year, that the traditional brick and mortar record stores acquired merely 30% of the overall album sales. In this context, competitive rivalry with Walmart, BestBuy and Apple’s iTunes, is one of the serious concern.

Subscription offers relates to the product differentiation and diversification strategy, for catering to the needs, demands and requirements of the customers in the form of benefits like unlimited access to million of tracks for $13 monthly fees. The benefits also included access to the free of cost music by the artists and bands in the social media (Elberse and Bergsman 2009). However, the issue of piracy in the internet downloading of the recorded music is a challenge, as it affected $12.5 billion, as an economic output value. Threat of substitutes still persisted in the form of illegal trading of the music CDs and recorded music, along with the internet downloads. The number of 20 illegal downloads for every music track sold. This issue evoked debates on the extent to which the illegal trading was practiced under the legal purchases. The adverse impact of this was felt on the emerging and established artists, who encountered experimentation with the promotion of their released album.

In view of all these issues, Radiohead, came up with the scheme of Music at Your Own Price. The benefit enabled the customers to preorder the album for the digital delivery, before the stipulated date of 10^th October. According to Cavaleri and Shabana (2018), liberal approach towards letting the customers fix the price, makes the scheme viable in terms of gaining an insight into their thought horizons, regarding the purchase. “Its really up to you” indicates the consideration of the viewpoints possessed by the customers towards the valuation of their purchase, the assessment of which is through the leverage of high returns on investment by providing easy downloading options, which are not pirated or corrupted.

Diagnosis of the problem

The issue of declining sales for the tradition brick and mortar retail recorded music stores is due to the dynamic shift towards the online marketing. Now, most of the consumers, download the music by the bands, from the online downloading sites, offering free of cost downloading options. Some of the sites need the customers to subscribe, which is also availed by the customers. However, Bolland (2017), states that for the middle-class customers, passionate towards the band music, this downloading through subscription is a little problematic. It is for these customers, that the minimal subscription rates of $13 have been set. However, the issue of piracy increases the threat of substitutes, raising concerns among the customers regarding downloading the music by the band artists and others. The issue of piracy affects the release of new albums from the artists, where the viewers cannot also access the old albums of the artists, in view of security. This scenario adversely affects the sales revenue and profit margin of the music industry, especially of the US. Media coverage for the pirated albums posted on the online channels and social media heavily affects the public relations between the artists and the media agencies (Ismail, Khater and Zaki 2017).

Argued conclusion 

As a comparison with Apple iTunes’ selective downloads, the digital downloading experience would allow the users to browse from the catalogue of In Rainbows album and select the tracks to be downloaded, by preordering and placing the price. The audio quality of Radiohead’s In Rainbow (160 kbps per second) downloading experience is also better than that of Apple iTunes (128 kbps per second). Along with this, Keiningham et al. (2020) argues that there are no restrictions on the devices on which the album can be played. The add-on of deluxe box set version of the in-Rainbow album for 40 pounds, evokes the viability of the scheme, “Music at Your Own Price. This is based on the marketing mix, where the product (two compact disks, a vinyl record, and a hardcover book of artwork), price ($80 including the additional charges), promotion (radio network, Xfm) makes the strategy of website and social media release and the scheme of Music at Your Own Price”, viable on a long-term planning (Yuliansyah, Gurd and Mohamed 2017). The measurability of success would lie in bulk positive response from the customers, effective enforcement of the copyrights and patents in digital promotion and music premier launch and album launch, increasing the market share of the US music industry by 10% by the end of the next financial year (Tallman, Luo and Buckley 2018).

References 

Bolland, E.J., 2017. Generic Strategies and Strategy Dynamics. In Comprehensive Strategic Management. Emerald Publishing Limited.

Cavaleri, S. and Shabana, K., 2018. Rethinking sustainability strategies. Journal of Strategy and Management.

Elberse, A and Bergsman, J. 2009. Radio Head: “Music At Your Own Price”. Harvard Business School

Ismail, M.H., Khater, M. and Zaki, M., 2017. Digital business transformation and strategy: What do we know so far. Cambridge Service Alliance, 10.

Keiningham, T., Aksoy, L., Bruce, H.L., Cadet, F., Clennell, N., Hodgkinson, I.R. and Kearney, T., 2020. Customer experience driven business model innovation. Journal of Business Research, 116, pp.431-440.

Tallman, S., Luo, Y. and Buckley, P.J., 2018. Business models in global competition. Global Strategy Journal, 8(4), pp.517-535.

Yuliansyah, Y., Gurd, B. and Mohamed, N., 2017. The significant of business strategy in improving organizational performance. Humanomics.

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