Case ID: 707531
Solution ID: 1210

Update The Music Industry in 2006 Case Solution

Case Solution

The worldwide recorded music industry was going through a significant transition in 2006. Sales have been decreasing for any decade, and customers were purchasing music in new formats and thru different distribution channels. Compact disc sales still paid for for almost all revenues, but sales of music in digital formats (downloads, videos, ring tones) were growing considerably and comprising roughly 10% from the industry's revenues in 2006. Many considered digital the way forward for the music business however the format posed both possibilities and challenges. Although it had energized the singles market, for example, digital had also caused rampant piracy. The music industry was retaliating, starting legal cases against illegitimate peer-to-peer operators for example groups caught installing unlawfully. Whether this is enough to prevent the popularity was dependent on much debate. Meanwhile, the industry ongoing to consolidate. In 2004, The new Sony Music and BMG, the 3rd- and fifth-biggest record firms at that time, merged to create The new Sony. Remarkably, in 2006 the ecu Union's Court of First Instance annulled the merger--that the European Commission had approved 2 yrs earlier--after several independent music labels were not impressed with the merger's impact on competition. While The new Sony and BMG were protecting the merger in the court, EMI Group plc wondered if it is preferred takeover of Warner Music Group--which it absolutely was going after since 2000--would ever happen. Whether it did, just how much business would the brand new entity have within the quickly altering atmosphere? All wondered the way the industry would evolve.

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