BUS-G 202 Lecture 6: G202 Spotify Case
Document Summary
Old school: brick and mortar, online retail, radio/tv/movie. New: piracy (lost revenue, digital download, streaming. Become hyper competitive for 20% of revenue. Technology is the most prevalent in this case. Digital download is biggest tech shock: received by distributors. Concentrated benefit if piracy became completely illegal: record label. Concentrated cost for illegal file sharing: actual file sharing businesses. Interest group issue: file sharing: active interest groups on both sides, record labels have relative strength; they have copy rights. Biggest threat to record labels: can"t shut it down, made their own. Didn"t catch on because too much limitations. Wasn"t as easy: let the distributors handle it. Usual sources of market power: 1st mover (no) Innovative business plans (no: special backing from labels (no, good branding/marketing (yes, closed eco-system (yes, yes, yes!!) One click away from the itunes store. When apple first made itunes they lost 7 cents per dollar. Now they make around 3 cents per dollar.
