In February 2007, Octone Records founders James Diener, Ben Berkman, and David B
ID: 432525 • Letter: I
Question
In February 2007, Octone Records founders James Diener, Ben Berkman, and David Boxenbaum had been highly successful with the first two bands they had signed, Maroon 5 and Flyleaf. Known for its grassroots marketing campaigns, Octone operated through a unique joint venture model with SonyBMG Music Entertainment's RCA Music Group, which enabled the nimble record label to orchestrate mass marketing campaigns once an artist was ready for "prime time." Octone had been less fortunate, however, with its third act, Michael Tolcher. Despite significant investments, Tolcher's first full album had not sold enough copies to recover its costs and merit RCA's marketing support. Octone's executives faced a decision: whether to continue to support Tolcher's first album, increase the stakes by financing a second album, or cut their losses and instead focus on other artists. At the same time, Octone had to evaluate a proposal from Universal Music Group to buy out SonyBMG's interest in the joint venture. Allows for an in-depth examination of new product development and launch strategies in the context of the music industry. Provides rich insights into how grassroots and mass marketing approaches can facilitate new product/artist development. Octone's "hybrid" marketing structure is described in considerable detail, and supporting economic data is provided. By enabling an analysis of how long and how aggressively an artist should be supported before commercial success is achieved, serves as a vehicle for contrasting different approaches to the new product development process.
1. What were the factors, according to the case (not outside research) contributing to the decline of the pre-recorded music industry sales?
2. Should Octone be with Sony, Universal, or some place else? Please give rationale for your response.
Explanation / Answer
According to the case shift in mediums of creating advertisement as well as using Integrated Marketing Communication by shifting the whole process from old mediums to new mediums. This type of approach enabled companies to sell their online cleaning services rather than selling pre-recorded music reason behind declining sales of Pre recorded music industry. As the hybrid marketing structure focused on supporting the artists for a limited time, development of new product and initiation of streaming based services was the main reason behind decline in sales of pre recorded music industry.
Definitely octane should focus on working with Universal for the new album. As new albums are using the new hybrid structure and giving company more flexibility for improving the overall efficiency as well as productivity for the specific project. This type of approach would help the company to maintain a competitive advantage by being technically and operably advance. This type of approach would enable the company to maintain better structure of forecasting as well as to provide services according to the need of the people. Fulfilling the customer requirement would be easier as the company is using hybrid marketing structure which is imposed by economic data provided for the specific project.