Appendices
Appendix A
1: Apples relationship with major labels ... 55
Appendix A
2: The single revival ... 56
Appendix A
3: Pan-European licensing of music copyright for online services... 57
Appendix B: Fair use onder artiesten en consumenten... 58
Appendix C: Een ontologische benadering van het business model concept ... 59
PRODUCT... 60
CUSTOMER INTERFACE... 61
INFRASTRUCTURE MANAGEMENT ... 62
FINANCIAL ASPECTS... 63
Appendix D
1: Screenshot iTunes Music Store ... 64
Appendix D
2: Business Model Pilars iTunes Music Store ... 65
Appendix D
3: Price & Value Gap Analysis... 66
Appendix E: Werking Digital Rights Management... 67
Appendix A
1: Apples relationship with major labels
Apple, record labels to face off over pricing
Reuters
September 23, 2005, 4:59 AM PDT Source: http://news.com.com
NEW YORK--The love affair between record labels and Apple Computer could be headed for the rocks as they bicker over prices ahead of licensing renegotiations set for early next year.
The licensing agreements between the record labels and Apple--maker of the wildly popular iPod digital music player and operator of the most widely used music download service--and are set to expire next spring.
Both sides, which have benefited enormously from music sales created by the iPod phenomenon, are jockeying for position.
Apple's chief executive, Steve Jobs, believed by some to be the savior of the music industry, insists that prices should be uniform at 99 cents a song and $9.99 an album, saying that the buying experience for consumers should be simple.
Record executives, however, are seeking some flexibility in prices, including the ability to charge more for some songs and less for others, the way they do in the traditional retail world.
"There's no content in the world that...doesn't have some price flexibility," said Warner Music Group Chief Executive Edgar Bronfman at the Goldman Sachs Communacopia investor conference here. "Not all songs are created equal. Not all albums are created equal.
"That's not to say we want to raise prices across the board or that we don't believe in a 99-cent price point for most music," he said. "But there are some songs for which consumers would be willing to pay more. And some we'd be willing to sell for less."
Apple's Jobs blasted the record industry for mulling higher prices. "If they want to raise the prices, it means that they are getting greedy," he said at a press conference, adding that if the price goes up, the industry faces a higher risk of piracy.
Hit hard over the past five years by the rapid spread of illegal song copying over the Internet, record companies--Universal Music Group, Sony BMG, EMI Group and Warner Music--have struggled to revamp their business as sales shift to more legal digital downloads from physical CDs.
The music industry was also aided by key legal victories against so-called peer-to-peer services, which allowed people to use the Internet to download music from one another's computers without permission from artists and labels.
Apple, for its part, played a huge role in setting that transition in motion with its iTunes service, by far the most popular legal Internet music service with about 70 percent share of digital downloads. iPods have a similar share in the digital music player market.
With that commanding lead in digital players and rave reviews for its new ultra-slim and sleek iPod Nano, some have speculated that Apple will have the upper hand in negotiations over new licensing agreements.
"The launch of the iPod Nano continues to demonstrate why Apple is likely to remain the dominant force in digital music at least over the next 12 months, if not considerably longer," wrote Fulcrum Global Partners analyst Richard Greenfield in a recent note.
"With Apple's dominant market share, we believe music companies such as Warner Music and EMI have very little power to alter pricing from the current 99-cent level," he said, noting that Apple is more focused on selling iPods than increasing the profitability of music sales for the labels.
Bronfman downplayed Apple's leverage. "iTunes needs our music as much as we need iTunes," he told Reuters on the sidelines of the Goldman conferences.
One record executive who requested anonymity countered that Apple's dominance is somewhat overstated. "The fact is that 50 percent of digital sales is ring tones," he said. "Mobile phones are going to get a bigger share of the download market over time."
He also noted that subscriptions services, such as Napster and Yahoo will gain traction.
Jupiter analyst David Card said the labels have a love-hate relationship with Apple. "On one hand, they're suspicious of them because of how big their market share is and the fact that they have that uniform pricing," he said. "On the other hand, they legitimized the digital music business."
He does not expect Apple's dominance to last forever, however. "Like any other consumer electronics innovation, over time it becomes a mainstream item and becomes commoditized. At some point, its market share will decline," he said.
"But what innovations like the Nano prove is that dominance could last much longer than many people in the industry expected it to."
Story Copyright © 2005 Reuters Limited. All rights reserved.
URL: http://news.com.com/Apple,+record+labels+to+face+off+over+pricing/2100-1027_3-5878295.html
Appendix A
2: The single revival
UK digital downloads spur singles revival
Simon Aughton Tuesday 11th October 2005 Source: http://www.macuser.co.uk
The UK record industry has reported booming sales for the latest quarter led by the growth of digital music.
Single track downloads have revitalised the 'singles' market, regularly making up 60 per cent of singles sales, compared to less than four per cent at the beginning of 2004. Almost 17 million tracks have been sold so far this year, and the figures do not include downloads from music subscription services.
Such has been the impact of digital sales that the singles market grew by 49 per cent in the third quarter despite a 21.8 per cent decline in physical sales, although it is worth noting that the average price paid for a UK download is 88p, compared to £3.05 for a physical single. Interestingly 7in vinyl singles, which tend not to be as expensive as their CD equivalents, continue to buck the trend with sales growing by 80 per cent over the past 12 months.
'This year digital made the transition from mere potential to becoming a significant revenue stream,' said Peter Jamieson, chairman of the BPI, 'But this is just the beginning.'
The wide variety of choice that digital music stores provide is reflected in the greater number of different tracks that are being sold: 80,000 in August compared to 55,000 last year. Eighty-one per cent of download sales are outside the charts.
Until now men have dominated the market. But whereas in January 2004 they made 96 per cent of all purchases, they now account for 69 per cent. Somewhat surprisingly under-20s are starting to make an impression, despite, on the whole, not having their own credit and debit cards.
'This time last year, the market was driven by technologically-savvy early adopters, usually older male buyers, but young consumers and female music buyers are clearly beginning to take advantage of these new services,' Jamieson said.
Despite the widening demographic, the majority of purchases are made by a minority of downloaders. Moreover just three per cent of the UK population have paid for digital music.
Apple claims over 70 per cent of the UK downloads market through its iTunes Music Store and with a record iPod
sales to be announced later today in the company's quarterly financial results there is little to suggest that its
dominance is set to wane.
Appendix A
3: Pan-European licensing of music copyright for online services
Music copyright:
Commission recommendation on management of online rights in musical works
Brussels, 12 October 2005 Source: http://europa.eu.int/
The European Commission today adopted a recommendation on the management of online rights in musical works. The recommendation puts forward measures for improving the EU-wide licensing of copyright for online services. Improvements are necessary because new Internet-based services such as webcasting or on on-demand music downloads need a license that covers their activities throughout the EU. The absence of EU-wide copyright licenses has been one factor that has made it difficult for new Internet-based music services to develop their full potential.
Internal Market and Services Commissioner Charlie McCreevy said: “Today we have made workable proposals on how licensing of musical work for the Internet can be improved. I want to foster a climate where EU-wide licenses are more readily available for legitimate online music service providers. These licenses will make it easier for new European-based online services to take off. I believe that this recommendation strikes the right balance between ease of licensing and maintaining the value of copyright protected works so that content is not available on the cheap. In the interests of better regulation, for the time being and as a first step, I am making a recommendation as to how the market should develop. I will be monitoring the situation closely and, if I am not satisfied that sufficient progress is being made, I will take tougher action.”
In order to improve EU-wide online licensing of music, the Commission considered three options: (1) Do nothing; (2) improve cooperation among collecting societies allowing each society in the EU to grant a EU-wide license covering the other societies’
repertoires; or (3) give right-holders the choice to appoint a collective rights manager for the online use of their musical works across the entire EU (“EU-wide direct licensing”).
Stakeholders were consulted on the three options in July 2005. 85 stakeholders, from right-holders, rights management societies and commercial users, submitted their opinions on the three options. There was broad consensus that Option 1 is not an option.
Stakeholders are divided between Options 2 and 3, with commercial users favouring Option 2, the majority of collective rights managers favouring modified versions of Option 2 and the music publisher’s community, the independent record labels and certain collective rights managers favouring Option 3.
After analysing the different options and stakeholders’ comments, the Commission recommends that right-holders and commercial users of copyright-protected material should be given a choice as to their preferred model of licensing. Different online services might require different forms of EU-wide licensing policies. The recommendation therefore proposes the elimination of territorial restrictions and customer allocation provisions in existing licensing contracts while leaving right-holders who do not wish to make use of those contracts the possibility to tender their repertoire for EU-wide direct licensing.
The recommendation also includes provisions on governance, transparency, dispute settlement and accountability of collective
rights managers, which should introduce a culture of transparency and good governance enabling all relevant stakeholders to
make an informed decision as to the licensing model best suited to their needs.
Appendix B: Fair use onder artiesten en consumenten
Artists, Musicians and the Internet
PEW INTERNET & AMERICAN LIFE PROJECT Mary Madden
December 5, 2004 Source: http://www.pewinternet.org/
They have embraced the internet as a tool that helps them create, promote, and sell their work. However, they are divided about the impact and importance of free filesharing and other copyright issues.
Samenvatting van resultaten
Appendix C: Een ontologische benadering van het business model concept
THE BUSINESS MODEL ONTOLOGY A PROPOSITION IN A DESIGN SCIENCE APPROACH
These par Alexander Osterwalder (HEC, Lausanne 2004) Source: http://www.hec.unil.ch/aosterwa/
Figuur C.1: Business Model Framework (Osterwalder 2004)
Osterwalder komt beïnvloed door Balanced Score Card
1tot vier hoofdelementen of pilaren van een business model:
• (I) PRODUCT: Welke waardepropositie wordt er gedaan aan wie? In welke business is de organisatie actief?
• (II) CUSTOMER INTERFACE: Wie zijn de klanten, hoe wordt de waardepropositie aan hen geleverd en hoe worden sterke relaties met hen opgebouwd?
• (III) INFRASTRUCTURE MANAGEMENT: Hoe worden de infrastructurele activiteiten efficiënt uitgevoerd en met welk partnernetwerk?
• (IV) FINANCIAL ASPECTS: Wat zijn het inkomstenmodel en de kostenstructuur van de organisatie? Wat is de houdbaarheid van het model?
Elke pilaar bestaat uit verschillende elementen die onderling gerelateerd zijn. In totaal bevat het raamwerk 9 hoofdelementen (E1..9) die weer bestaan uit verschillende subelementen en attributen.
1
De Balanced Score Card is een methode om van verschillende aspecten van een organisatie strategische
doelstellingen te definiëren, te meten en te monitoren. Kaplan en Norton (1992)
PRODUCT
De eerste pilaar, PRODUCT bestaat uit de waardepropositie van een organisatie aan haar klanten (E1: VALUE PROPOSITION). De waardepropositie beschrijft de bundel producten en diensten (subelement: OFFERING) die tezamen een bepaalde waarde bieden aan een gesegmenteerde doelgroep (E2: CUSTOMER SEGMENT). De VALUE PROPOSITION is gebaseerd op een of meer CAPABILITIES.
Figuur C.2: Product Pilaar
Een OFFERING beschrijft een product, dienst of een feature van een dienst en de beredenering waarom deze van waarde zou zijn voor de klant (reasoning).
Door het VALUE LEVEL van een bepaalde OFFFERING (of VALUE PROPOSITION) te meten kan een organisatie zich vergelijken met haar concurrentie. Hiertoe introduceert Osterwalder een kwalitatieve schaal die de geboden waarde relateert aan die van de concurrentie. Het VALUE LEVEL deelt hij in van {me-too}, via {innovative imitation} en {excellence} naar {innovation}.
Het tweede attribuut van het VALUE PROPOSITION element (c.q. OFFERING) is het
PRICE LEVEL. De schaal kan ingedeeld worden van {free}, {economy} en {market} tot
{high-end}.
CUSTOMER INTERFACE
De tweede pilaar beschrijft hoe de organisatie de markt betreedt, hoe ze haar klanten bereikt en hoe ze met hen communiceert. Het bestaat uit de elementen klantsegment (E2: TARGET CUSTOMER), kanaal (E3: CHANNEL) en relatie (E4: RELATIONSHIP).
Figuur C.3: Customer Interface Pilar
Het klantsegment waaraan de organisatie bepaalde producten en/of diensten levert bestaat uit een aantal criterea (subelement: CRITERION). Deze criteria kunnen bijvoorbeeld
geografische of demografische factoren zijn waaraan het klantsegment aan voldoet.
Het kanaal-element vormt de connectie tussen de waardepropositie en het klantsegment van de organisatie. Het beschrijft via welk distributiekanaal de waarde aan de klant wordt geleverd. Met betrekking tot e-business organisaties kan men eigenlijk beter spreken over communicatiekanaal. Kanalen hebben tegenwoordig namelijk steeds meer de potentie om ook waarde te creëren.
Het kanaal-element kan verder gedecomposeerd worden in een aantal LINKs. Een LINK beschrijft een specifieke marketing taak, zoals awareness, evaluation, purchase en after sales.
Het relatie-element beschrijft de soort relaties die de organisatie met de klant opbouwt.
Relaties kunnen in drie categoriën ingedeeld worden, namelijk acquisition (nieuwe klanten), retention (nieuwe klanten behouden) en add-on selling (additionele verkopen aan bestaande klanten).
2Het relatie-element bestaat uit mechanismen (subelement: MECHANISM) die bepaalde functies hebben voor het bouwen van relaties met de klant. Deze functies zijn personalization, trust en brand.
2
