Analysis of the Bmg Entertainment
BMG entertainment, the world’s fourth-largest media company, was a subsidiary of Bertelsmann AG, a German media conglomerate. In 1999, it was a $4.6 billion music and entertainment company with more than 200 record labels and operations in 53 countries. Its revenue was derived from North America (51%), Europe (32%), Latin America (9%), and Asia-Pacific (8%). Despite of this BMG Entertainment’s ability of generating huge revenue, and its operating strategies to make the company sound, the BMG Entertainment, however, is now facing severe obstacles tough to overcome. 1) Executive Summary:
As new technology came out in this world, music industry was destroyed. The advent of broadcast radio as well as Internet made many record companies change their organizational structures to fit to the new technology. No one can stop technology being changed. To be a survivor in any industry, firms must be flexible to the changes of technology. Therefore, BMG also need to fully respond to this challenging environment by adopting well-structured digital distribution system and shutting down its physical production facilities.
2) Problem Identification:
In the late 20th century, the global music industry faced difficulties, as new technology, specifically Internet, was prevalent among people in the world. The new technology totally changed ways in which people used to buy goods and services, especially related to the music industry. The Internet accounted for 0.3% of all music sales in 1997, 1.1% in 1998, and amazingly 10% by 2005. Music was sold out over Internet through some well-known web sites, which uploaded samples of music by genre as well as information about the music and the musicians. Then, consumers listened the samples, and chose what they most enjoyed. An order from the consumer was received, and shipped by the web sites. Another way through which music could be sold was downloading music. New technology allowed surfers to download music directly to their
As new technology came out in this world, music industry was destroyed. The advent of broadcast radio as well as Internet made many record companies change their organizational structures to fit to the new technology. No one can stop technology being changed. To be a survivor in any industry, firms must be flexible to the changes of technology. Therefore, BMG also need to fully respond to this challenging environment by adopting well-structured digital distribution system and shutting down its physical production facilities.
2) Problem Identification:
In the late 20th century, the global music industry faced difficulties, as new technology, specifically Internet, was prevalent among people in the world. The new technology totally changed ways in which people used to buy goods and services, especially related to the music industry. The Internet accounted for 0.3% of all music sales in 1997, 1.1% in 1998, and amazingly 10% by 2005. Music was sold out over Internet through some well-known web sites, which uploaded samples of music by genre as well as information about the music and the musicians. Then, consumers listened the samples, and chose what they most enjoyed. An order from the consumer was received, and shipped by the web sites. Another way through which music could be sold was downloading music. New technology allowed surfers to download music directly to their