Musci Industry Pest

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1.0 Introduction
The marketing department of a record label plays a large part in portraying an artists’ image to its fan base and the music industry. Once an artist has produced their music and is ready to be made public, it is up to the marketing department to make sure that it is made available in all media formats. This is done solely through a range of distribution and promotion campaigns.

This case will look at the current situation of the music industry and analyse the effect the new technologies and the digital world are having on record labels and artists. Firstly by looking at a micro and macro environmental view point using various analysis models a better understanding can be made of the music industry in its current state. Once establishing the fundamentals areas by which record labels can advance objectives will be set and followed by promoting and distributing an up and coming artist to her target audience.

This record label is called Mystical Records and currently manages one, up and coming artists called Thallie. Thallie is originally from Mauritius, however is now based in the UK and is looking for her big break. Back at home in Mauritius she has be compared with the likes of Shakira and Whitney Houston due to her singing style. Thallie is an urban artist, producing songs in a range of genres from R&B to Dancehall. She has made a name for her self back in Mauritius, and now feels that is time to tackle the international markets in particular to the UK and US music markets.

2.0 Analysis
The music industry will be analysed through both a macro and micro environmental aspect. The macro environment will be analysed using a PEST analysis, therefore determining all external factors of the music industry. Examining legal factors concerning illegal downloaders which are affecting record label sales, and to establish any government action taken to tackle this problem. Economic factors will be analysed in terms of income and revenue of artists and record labels. The most important element being the technological factors which are also heavily influencing social factors within the music industry, through recent developments in social and mobile networks.

Secondly by looking at the micro environment using Porter’s (1979) five forces model a better understanding of the industries levels profitability. This model shows how customers, competitors, suppliers, distributors and dealers are all affected with the recent changes in the music industry. A major factor towards recent changes of power and relationships has been due to advances in technology over recent years. The internet has affected many industries, however with the surge in social networks and peer-to-peer (P2P) sharing systems the market share of major record labels has been hit hard.

2.1 PEST Analysis

2.1.1 Political / Legal Factors
• Major record labels are being turned against obtaining information on customer communications from telecom companies by European & American Parliaments. This is due to the greater risk of terrorism occurring. (Appendix 2). • This information could be also be used to gain access to private information by the music industry. (Appendix 2). • Many cases have been held against illegal downloaders by the music industry. (Now over 150 cases in the UK, according to the British Phonographic Industry.) (Appendix 2). • A large majority of illegal downloaders obtain music through peer-to-peer (P2P) sharing software; therefore by taking legal action against P2P operators, there can be a step forward in tackling a large number of illegal downloaders. (Appendix 3). • Kazaa (large P2P sharing software company) paid $115 million to record labels in compensation due to a case by the Australian Federal Court. (This has been the largest case of its kind.) (Appendix 3). • Similar cases have taken place under courts of law in Denmark, Netherlands, Russia, & Taiwan. (Appendix 3). • By signing agreements with record labels...
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