To reduce the volatility inherent in the music development process and produce a consistent revenue stream for our business and customers via suggested marketing strategies, this report will address and analyze the issues and make recommendations for Polyphonic. Situation Analysis—Company, Product, Competitors,
Consumers And Swot Analysis
Polyphonic HMI was established to help market Grupo AIA's artificial-intelligence tools to the music industry. Grupo AIA headquartered in Barcelona, Spain, specializes in using its knowledge in the fields of artificial intelligence to solve complex business problems. Polyphonic is launching Hit Song Science (HSS) which analyzes the mathematical characteristics of music and compares them to past music hits, making it possible to determine a song’s hit potential. HSS could be valuable for three target markets: record labels, producers, and unsigned artists. Once a decision is made on the target market, a suitable marketing plan will need to be developed that helps overcome the likely resistance. Competitors
Polyphonic is the only company attempting to provide this type of service using AI technology. It competes indirectly with the intuition of record executives and producers (Exhibit 1). These record executives also rely on call-out services such as: internet poling, call-out studies, and focus groups. Although these services are more established, traditional research methods only identify Top 40 singles at a success rate of 10%, compared to 80% success rate of HSS. The call-out researches are at a fine line between indirect and direct competition. Consumers
Record Label (A&R) Executives, the smallest segment with less than a few thousand representatives, gain their reputations based on their ability to successfully select hits. They are more focused on economic returns and may spend more money on market researches. HSS could become the primary vehicle to evaluate incoming artists and assist in album production. However, some A&R Executives might feel that HSS is inferior to their “good ears”. Producers are the second largest customer segment with thousands of members. The way they succeed is by making their artists successful. They could maximize his or her time and effort in developing songs that will best suit the general audience. By doing so, producers will earn plenty of revenue via royalties from successful songs. Artists, approximately 10,000, signed to labels in the US and Europe. There are hundreds of thousands of hopeful wishing to secure a contract. If Polyphonic HMI could find a way to license its technology to these individuals at reasonable costs, these artists will flock to the company. At first being concerned with artistic integrity and originality, some artists may find that HSS removes too much creativity from the process, but in the long run, HSS could be the edge some artists need.
Retailers are essential middlemen that facilitate the transaction between a buyer and a seller as approximately 30,000 albums are brought to the market on an annual basis. Retailers are conscious of the shelf space opportunity costs. Having HSS in place will eliminate such costs. SWOT Analysis
STRENGTHS—HSS is a unique product well positioned to break into the music industry. With HSS, it is possible to evaluate an album’s sales potential before investing to market it. It would efficiently filter music and reduce the chances of missed opportunities, thus allowing record labels to have bigger promotional budgets at low risks of failure. Record labels would also have the ability to test unsigned artists potential before offering a record deal. Weaknesses—HMI’s precarious financial position with limited funds are tremendous challenges to overcome, but the biggest hurdle is to convince the industry that HSS could be the best predictor of potential music hits. Other inherent weaknesses are the overreliance of...