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The music industry and the trends leading up to the present competitive environment in the
industry

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The 1993 release of the MP3 algorithm enabled the reduction of song files to a size that made
Internet broadcasting and uploading and downloading feasible.
Technologies opened the possibility of digital distribution.

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By Internet is possible to access music in two ways:
1. The first is downloading files, in a way that may be authorised (if the source is the
owner of the rights in the music, who make it available for downloading through
payment) or unauthorised (if the transfer is without the rights holder's knowledge or
approval).
2. The second is the access to the music on internet by streaming.

-SLIDE- MP3
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A compression program which reduces the size of digital audio files, making them quicker and
easier to distribute and store. MP3 can be sent to and from computers accessing the internet via
ordinary narrowband telephone lines.

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A significant feature of the global music industry over many years has been the continuing
dominance of the majors, who makes difficult the presence of independent record producers.

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Whith new technologies increase the possibility to obtain music file in an illegal way.
The Institute for Policy Innovation estimated that “global music piracy causes $12.5 billion of
economic losses every year, 71,060 U.S. jobs lost, a loss of $2.7 billion in workers’ earnings, and a
loss of $422 million in tax revenues, $291 million in personal income tax and $131 million in lost
corporate income and production taxes.”

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Sony Music Entertainment’s business model and strategy

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● In 2007, Sony Music Entertainment, in collaboration with BMG, promise finding new talent
and collecting more fans for its stars such as Daughtry, Alicia Keys, Avril Lavigne, Celine
Dion, Bruce Springsteen, and Foo Fighters.

● Sony began Myspace Music as a joint venture with an interactive online platform for music
sales, subscription services and ad supported entertainment; access to many of the
company’s artists’ hits was included on mobile phones, and an agreement with Amazon to
sell MP3s.

● On October 1, 2009 Sony Music Entertainment became a wholly owned subsidiary of Sony
Corporation.

-SLIDE- VEVO
In December 2009, Sony Music entered into a joint venture with Abu Dhabi Media and Universal
Music Group to form VEVO.
The company operated at a loss in 2010 and 2011, but it was profitable sometime in the middle of
2012, with revenue jumping from $150 million in 2011 to $280 million in 2012. In 2013, VEVO
had 227 million viewers from 13 countries and 5.5 billion monthly video views.
The company was valued at $500 million in 2013.

-SLIDE- MUSIC UNLIMITED

In December 2010, Sony Music announced Music Unlimited, a cloud-based music streaming
service powered by Qriocity.
On June 15, 2011, Sony introduced the Music Unlimited app for Android-enabled devices; the app
was compatible with all Sony Corporation tablets and smartphones. Sony Corporation also
partnered with Pandora and Slacker Radio, whose applications were compatible with Sony TVs,
MP3 players, smartphones, and tablets.
In 2012, Sony Publishing completed the purchase of EMI Music Publishing for $2.2 billion.
The purchase gave Sony Publishing access to 1.3 million songs, raising its total to over 2 million
songs. Sony Corporation’s revenues from the sale of music increased from ¥441.7 billion in 2012 to
¥503.3 billion in 2013, and its operating income for the division increased from ¥37.2 billion to
¥50.2 billion over the same period.