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The whole Music Recording Industry has passed through different stages of changes and
challenges not only within any record label company but all together they have been affected by
advancement of technology, consumer movement and some political issues. Not even key
players and leaders in the industry such us Sony Music Entertainment, Universal Music Group,
Warner Music Group and EMI group have been exempted with all the changes happening around
the music world. In the present, macro-environmental factors like the increasing number of tech-
savvy consumers, arising downstream competitors, opportunities of new technologies and even
privileges from government policies seem becomeever changing and inevitable that company
like Warner Music Group has to keep up with these changes happening around them
For Warner Music Group (WMG), the company faces heavy challenges of competition in
the music industry. To see how competition could be a factor for WMG, the pie charts will show
the current market share and position of the company against its larger

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Data values of market share percentages from: IFPI. (2005). IFPI releases definitive statistics on global market for recorded
music. Retrieved last October ^^, 20^0, from http://www.ifpi.org/content/section_news/20050802.html
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In 2005, Warner Music has the lowest market share in the world industry among the 4
key players in the record label industry. However, a noticeable market share that has been
increasing for a decade now is the independent or commonly called ³indie´ labels. Even though
WMG has a bigger share in US, it still has the burden to find ways to battle against a competitive
market. Furthermore, competition among these companies is not really the focus of WMG
challenges. More external threats had undermined big record label companies like WMG in the
present because of external players or stakeholder¶s activities and changes around the company
that has affected them in the present.

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Independent labels are increasing in early 90¶s until
today. That is why they capture a relatively large market in
the record label industry. Many of the successful ³indie´
record labels started as home businesses. This is not

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2
Data values of US market share percentages from: Associated Press. (2008 October, ^0). Top record labels: artists, market
share. Retrieved last October ^^, 20^0, from http://www.usatoday.com/tech/products/2008-^0-^0-367^43278_x.htm
surprising because According to Jennie Bev (n.d.)3, home recording equipment has become more
widespread and less expensive in the ^990s which means personal computers have found their
way into the majority of homes. Starting your own recording theater in you house is not even
impossible today. This had lead to more opportunities for artists-to-be to start recording even at
their homes. Bev emphasizes that with little capital you can put together a studio in your own
home or in a rented office space. The battle is now for Warner Music Group to sell their artists
and products against technology advancement.
Starting an indie record label today is much easier
than before because of technology and a potential non-
competition market segment against the big four record
label companies. With sufficient preparation and
confidence on this industry, any indie recording artists
should be able to break into and succeed in this highly
lucrative field well (Bev, nd.).

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 According to The Economist online (2008)4!  music industry since 2000 has been
troubled and plagued by the Falling CD sales. This was caused by the online file-swapping
services. To stop the undermining factors of Internet issues, the four big record companies,
which include WMG, have advocated using DRM (digital rights management) software to
protect music files. ?
However, support for DRM began to shake in 2007 with EMI even dropping their
support for it. With that, today¶s music industry finds ways to surpass challenges of economic
issues on the demand of music products and services. These ways are hoping to be cost effective
than going mainstream with the big four record labels. For instance, talent manager are
pursuing internet radio stations; artists are making more money than ever from concerts, live
music, merchandise and endorsement deals; music subscriptions on mobile phones; and even
video games are also said to help in boosting artist¶s music sales (The Economist, 2008).

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3
Bev, J. (n.d.) How to Start an Indie Independent Record Label. Retrieved last October ^2, 20^0, from:
http://www.stylecareer.com/indierecord_label.shtml
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 The advent of personal computer and
improving technology has provided some
opportunities and also threat to any company that
relies on technology¶s power to provide service and
produce product. As much as for any company, the
challenge is to provide products and services that are
not readily available at home. For Warner Music,
entertainment is what they provide to the consumers -- an entertainment that was made possible
by technology. However, as years passed by, technology became much available in a personal
level. Services provided to us by businesses before could
now be done at home with machines and gadgets available
for us and could be performed by our selves. We could not
deny that with adventmusic stores in the internet and
computer advancement like music recording gadget that
would help connecting sounds made from instruments with
the computer ± recording and editing made easy ± are some
of the reasons why music industry has slowed down in the
present.
With technology today, selling of music products are not only through retail stores. 2004
was a landmark year for the growth of digital services as over ^80 legitimate music download
services were launched globally on that same year. Sales of digital music players continue to
increase, spurring growth in online music (IFPI, 2005)5.


    

  




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?IFPI releases definitive statistics on global market for recorded music. Retrieved last October ^^, 20^0, from
http://www.ifpi.org/content/section_news/20050802.html?
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Intellectual property right is still an issue today. Music
record labels are having hard time to combat legal rights about
copyright infringement and piracy problems that didn¶t only
compromised music artists profits but also employees in the record
companies that rely on sales of artists albums. Internet peer-to-peer
sharing through torrent downloads and reseller or pirated copies of
albums continue to cause decline on original copies sales.
Piracy issues, with the help of technology of course, are
still rampant until today. According to IFPI, Research in March
20^0 measured the economic impact of piracy on the creative
industries. Tera Consultants suggest that the EU could lose ^.2
million jobs across the creative sector by 20^5 if no effective
action is taken to tackle piracy (20^0)7.
Through Internet, peer-to-peer (P2P) piracy remains the most prevalent channel for
illegal distribution of unauthorized content, accounting for more than 20% of internet traffic
globally (Sandvine, Global Broadband Phenomena 2009).

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6
Lars Ulrich, Roger McGuinn Testify Before Senate Judiciary Committee on Downloading Music on the Internet
7
IFPI. (20^0). IFPI publishes Recording Industry in Numbers 20^0 Retrieved last October ^2, 20^0, from:
http://www.ifpi.org/content/section_news/20^00428.html
8
The listed programs from: http://www.wmg.com/wmgreen?
 Warner Music has been active in their CSR programs especially in environmental waste
management. The company is more into green initiatives. The following are WMG¶ company-
wide campaign through  c to:

? Convert CD/DVD products to
environmentally-friendly packaging;

? Practice ecologically superior paper
procurement;

? Reduce waste;

? Enhance recycling;

? Reduce greenhouse gas emissions and offset its
carbon footprint; and

? ÚGreenÚ its large-scale corporate events

Today, Warner Music Group work hand in hand with other environmental awareness
organization and even with other big record label companies to continue their projects and
advocate on a) waste reduction, recycling and ecologically superior paper practices; b)reducing
greenhouse gas emissions and; c) environmentally friendly events and tours.