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Can the drop in music sales be explained by Michael Porters Produ...

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Can the drop in music sales be explained by Michael Porters Product Life Cycle and will the CD in the near future be replaced by mp3?

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Contents

1. Contents

2. - Introduction

- Objectives

- Problem definition

- Sub-questions

3. - Demarcation

- Has the quality of music decreased?

4. - What were the causes of the CD replacing vinyl?

- What advantages does mp3 have over CDs?

5. - What advantages does mp3 have over CDs? - continued

6. - Are there any similarities between the transfer from vinyl to CD and the suspected transfer from CD to mp3?

- Do mp3 downloads affect CD sales in a negative way?

7. - Literature review

8. - At which stage of Porters Product Life Cycle model is the product CD?

9. - At which stage of Porters Product Life Cycle model is the product CD? - continued

10. - How saturated is the CD market and what are the consequences?

- Conclusion

11. - Abstract

12. - Appendix

13. - References

1

Introduction

The music industry blames mp3 downloading for the loss of CD sales. However, research (Oberholzer & Strumpf, 2004) has shown that the effect of downloads on music sales is indistinguishable from zero.

This is very much alike the 70's, when vinyl was replaced by CDs. Music sales had slumped significantly by the end of the 70's, but thanks to the introduction of CDs music sales soared again. The music industry was at first very skeptical about this new technology, but as soon as they realized that CDs were going to be the new way of selling music, they turned to CDs quickly and music sales increased dramatically.

Objectives.

My aim in this paper is to find out whether the CD is at the end of its Product Life Cycle, or is there another cause for the drop in CD sales, for example mp3 downloading, which is increasingly popular. Will music in the near future no longer be transported on a fixed carrier, and will mp3 replace CDs as the way of music distribution, or will it be suppressed by the music industry because it is easy to copy and reproduce, which gives difficulties on property and license rights?

Problem...