SWOT Analysis - Sony Music Entertainment

BOC, Spring 2019
Group Presentation with Selina, Mae, Lynette, Artin

1. SONY MUSIC ENTERTAINMENT A SWOT Analysis By Artin, Lynette, Mae, Selina

2. Outline Market Overview SWOT Analysis TOWS Matrix W Weakness S Strength O Opportunity T Threat PESTLE Analysis Corresponding Strategies

3. Global Recorded Music Industry Resource: IFPI Revenues Grow 9.7% Stream Powered

4. 3 competitors V.S 21% 3 1% 18 %

5. Strengths High Market Share Strong Brand Awareness Successful Artists

6. Strengths Channels of Distribution C o-create a new daily satirical podcast focused on current events called “The Topical”

7. Strengths Channels of Distribution Social Media Marketing

8. Strengths Channels of Distribution Social Media Marketing

9. One Sony Dream Strengths Channels of Distribution Social Media Marketing Internal Resources Integration

10. Strengths High Market Share Strong Brand Awareness Successful Artists Channels of Distribution Social Media Marketing Internal Resources Integration

11. Weaknesses High Cost of Media Production

12. Weaknesses High Cost of Media Production Copyright Issues

13. Weaknesses High Cost of Media Production Copyright Issues Artists Management (Negative Image) Sony Music Waste $750Million on Buying Michael Jackson’s Copyright

14. Opportunities The legislation of protecting digital rights Music industry is prosperous worldwide The possibility of seeking profits in merchandising

15. Political Factors Government Stability Public expenditure controls Value-Added Tax (VAT) It will affect company incomes consumer preferences

16. Political Factors Legislation The Music Modernization Act (US) Modernisation of the EU copyright rules Copyright Directives

17. Economical Factors Consumer Confidence for music is up worldwide the market of music industry is expanding in a global scale

18. Global Music Markets 2018 in Numbers +9.7% According to IFPI Global Music Report 2019, Global revenue growth +9.7%

19. Social-cultural Factors Changing lifestyles People are replacing the conventional way of enjoying music highly dependent of the Internet: youtube Smartphones are very common now: Spotify, itune

20. Social-cultural Factors Consumers focus on artists’ styles and images. Merchandise T-shirt, vinyls, etc

21. Threats Piracy will drive music record companies to a decrease of their sales Physical sales are decreasing due to streaming music Huge cost of live performance stage set Violation of customer’s privacy l

22. Technology Factors Streaming music ( decreasing of pyhsical sales) Recording Industry Association of America (RIAA)

23. Technology Factors Company earn their major income through life performances, concert and merchandise Cost 23-31 Million 2019 / 7-15 Million 2012

24. Environment Factors Waste and Pollution of Music Concert, Music Festival Generates more than 679 tons of waste = nearly twice the average amount a U.S. consumer uses daily. Where do the stage set go after the show is over?

25. Legal Factors Violation of Customer Privacy through software(XCP) installation software that could secretly get your IP address unremovable left co m puter vulnerble to virus and spyware 2012 Sue and Shut down illegal digital music website(IsoHut)

26. PESTEL ANALYSIS Technology Factors Streaming music platforms Live performance stage upgrade competition Environmental Factors Waste and Pollution after music concert or festival Legal Factors illegal digital music website Invasion of costomers Privacy through software Political Factors legislation for the protection of music copyright in the US and EU Economic Factors Worldwide music markets are growing on the whole. Increasing demand for streaming music Social Factors Changing lifestyles: smartphones and the internet are the major ways of enjoying music

27. TOWS STRATEGIES S 1. High Market Share in Music Industry 2. Strong Brand Awareness 3. A Portfolio of Successful Artists 4. Channels of distribution 5. Better Social Media Marketing 6. Internal Resources Integration in Sony Corporation W 1. High Cost of Media Production 2.Copyright Issues 3.Artists Management (Neagtive Image) O Global music markets are stably growing legislations that protect digital copyright the promising sale of merchandise SO Transnational music collaboration OW Take advantage of Internet to reduce the cost Collaboration with different artists to add multiplication effect T Streaming music Concert pollution Piracy Invasion of privacy ST Replace concert tickets with digital tickets WT Use reusable stage set

28. Conclusion Despite the music piracy and other problems that arises huge damage to the industry, Sony Music strives to handle these matters legally and commercially. However, solving the environmental problems are not the music industries priority, we are looking forward to the future days that Sony Music could not only produce great works and performances but also adopt our analysis as a reference for their future plan.