Polyphonic
Seminar Innovation and Marketing
Polyphonic HMI: Mixing Music and Math
Marco de Graaf 350111
We Fong Ma 375268
Oliver Müller 373496
Instructor: Dr. G. Liberali
Master Business and Economics, Specialization Marketing
Erasmus School of Economics
Rotterdam, January 22, 2013
Diagnosis
The management team of Polyphonic is entering a market, which is currently facing permanent changes and a lot of pressure. Rapid technological changes, like the development from CD to DVD and movements towards digital downloading, forces recording companies to adapt their business models consequently. In addition, the music industry is facing negative annual unit sales growth in their most important markets: North America, which accounts for 41% of global music sales, showed a decline in demand of enormous 10.4 % in 2002. The European market, which is the second most important market, also showed a negative trend in most regions. This situation puts a lot of pressure on the recording industry: Funds have to be allocated wisely and it cannot be afforded to waste and risk any money.
In an industry, where the average success rate is approximately 10% and where a lack of tools to measure the potential of a song/artist efficiently is immanent, the task of not wasting money is a difficult one. The industry has to rely on the feelings, ears, guts and experience of its producers. The most popular scientific alternative currently available is the so-called “call-out research”. Depending on the method, this form of research can cost between $5,000-7,000 per song. Internet polling starts at $3,000 and focus research at $10,000 per song. Despite these traditional research techniques, only one out of ten songs that get promoted as a single actually charts.
Hit Song Science (HSS) could dramatically alter the business. The test of the software showed, that HSS is able to predict if a single reaches the top 40, eight out of ten times, which means a success rate of 80%. The accurate
Polyphonic HMI: Mixing Music and Math
Marco de Graaf 350111
We Fong Ma 375268
Oliver Müller 373496
Instructor: Dr. G. Liberali
Master Business and Economics, Specialization Marketing
Erasmus School of Economics
Rotterdam, January 22, 2013
Diagnosis
The management team of Polyphonic is entering a market, which is currently facing permanent changes and a lot of pressure. Rapid technological changes, like the development from CD to DVD and movements towards digital downloading, forces recording companies to adapt their business models consequently. In addition, the music industry is facing negative annual unit sales growth in their most important markets: North America, which accounts for 41% of global music sales, showed a decline in demand of enormous 10.4 % in 2002. The European market, which is the second most important market, also showed a negative trend in most regions. This situation puts a lot of pressure on the recording industry: Funds have to be allocated wisely and it cannot be afforded to waste and risk any money.
In an industry, where the average success rate is approximately 10% and where a lack of tools to measure the potential of a song/artist efficiently is immanent, the task of not wasting money is a difficult one. The industry has to rely on the feelings, ears, guts and experience of its producers. The most popular scientific alternative currently available is the so-called “call-out research”. Depending on the method, this form of research can cost between $5,000-7,000 per song. Internet polling starts at $3,000 and focus research at $10,000 per song. Despite these traditional research techniques, only one out of ten songs that get promoted as a single actually charts.
Hit Song Science (HSS) could dramatically alter the business. The test of the software showed, that HSS is able to predict if a single reaches the top 40, eight out of ten times, which means a success rate of 80%. The accurate