Existing Business Processes
Music Mates, being an independent musical band, uses the most uncomplicated business process model. It is explained by the small size of the organizations and the fact that the band performs as an agent and musicians at the same time. The free distribution of music has helped spur the emergence of independent musicians like Music Mates. Artists have the opportunity to independently release and promote their work without the help of record labels. However, the collective has been an informal label for other bands in the North-West area, providing PA services for some time now. Thus, without the participation of a record label, an independent musical group can cope on its own if it has the resources for this in the form of sound equipment, creativity and excellent material (Eiriz & Leite, 2017). These aspects enable the collective to represent their name in the music industry adequately.
Proposed Business Processes
The business model of modern music labels is constantly changing. At present, the label signs a long-term contract with a promising artist. At the same time, it is not necessary for a musician to write an album as it is no longer relevant these days. Still, it is crucial to have enough content that can be shown to a sophisticated listener. Tasks include producing artists, organizing performances, marketing and promoting on social media, advertising contracts and acting as an official representative of the artist.
Music Mates musicians have experience and good connections in the music industry and see the opportunity in recording and distributing tracks from other independent musicians. Thus, the new goal is to help authors and performers negotiate the terms of cooperation with both classic licensees and streaming services. Therefore, the business model should be focused on their creativity so that it appears on the online storefront as quickly as possible and sell albums and tracks without the help of major labels.
The decisive task of agency Music Mates is to find the best musician, fitting the image and mission of the label. The next step aims at forming with the artist his/her creativity concept, selecting the best works. The agency should not influence the music format and genre. However, concerning the final release, tracks are always chosen together with the musicians and the agency. The content can be done independently; thus, the ideas about the successful compositions of both parties are connected (Eiriz & Leite, 2017). Even though Music Mates does not set a genre for itself, long-term relationships with musicians performing in different styles can impact the choice of songs published.
Effective communication between all actors in music production is essential for a business model. A new artist can send his/her music by mail, but the factor of personal communication and similar views on creativity is also essential. Hence, there is a need for a permanent studio where the agency meets with the artists. After discovering the musical concept, Music Mates should discuss the visual presentation and the message the artist wants to transmit. Consequently, it requires a plan for media promotion and finalization of the music in the studio.
The tasks of musicians and the agency are different; the first makes music, the latter creates a selling result out of it. They are also freed from planning and releasing the product, merch, and organizing concerts (Eiriz & Leite, 2017). All this is the responsibility of the label, which puts music on the Internet, prints vinyl, signs contracts with streaming services, and helps excellent artists to perform live on the stage. Consequently, one of the ways of development is a booking agency that helps organize musicians’ tours and collaborate with brands. For example, this includes the opportunity to work not only with artists within the brand but also with other labels and promo groups (Eiriz & Leite, 2017). In addition, agencies can arrange joint parties, music and art collaborations.
Strategic Analysis SWOT
In order to analyze in detail the current state of the Music Mates project, the SWOT analysis method is used.
This matrix gives an idea of what directions for the project’s development are currently available. However, this is not enough to state which opportunities have the highest priority and which threats must be eliminated first. In order to find out this, it is necessary to rank all the options according to the degree of influence on the project and the likelihood of their occurrence. The main threat to the project is the strengthening of the competitive advantages from the leading competitors. This can lead to the loss of competitiveness of the entire project and, consequently, its unprofitability. Eliminating these threats should be the number one task for project management. The weakest side of the project is marketing; in addition to influencing the quality of marketing, it also affects some other important indicators, such as fanbase and image.
The project’s foremost opportunity for development is the growing popularity of streaming services and mobile platforms, which is the locomotive for the growth of the entire digital music segment. Currently, the primary source of income for the project proceeds from the organization of live performances; nevertheless, with the growing popularity of digital music and, in particular, streaming services, the project’s profitability can be increased with almost zero labor costs by entering these new markets. However, it must be remembered that the same opportunities equally affect the main competitors of the project, which means that these opportunities can become threats if competitors take advantage of them, and Music Mates, for some reason, do not.
Open Source Software Comparison
The company expressed its willingness to implement open-source software. In that case, the source code of the created programs is open; it is available for viewing and modification. Choosing the right software solution, Music Mates should take several selection criteria: functionality, deployment, price, platform and company size suitability. The most important ones are platform, as the equipment of Music Mates primarily is based on macOS, price as the company has started developing recently, and company size suitability since the potential is to grow to medium enterprise business.
Background
The digital revolution and the globalization that followed it undermined the existing order in which conditions in the music market were dictated by large companies and eminent producers. Such a tendency allows independent musicians and agencies to enter the market, getting profit. As the Music Mates, a group of three musicians intends to grow to the medium music business; it can face some problems. For the group to compete with other participants in the music market, it needs to be recognizable and in demand, which requires a lot of effort and money to invest in its promotion. Therefore, it is essential to develop the proper business model with detailed steps and adopt software that corresponds to the needs of musicians and the business.
Business Model
A modern record label should be a community of people, where a complete cycle of tasks is carried out for each of their artists. These include musical concept, sound production, recording, visual concept and its implementation, for example, covers, internet resources, artist appearance, photoshoots, video clips, performance organization, PR, and music release. Since the label helps organize performances, it has a percentage, generally the artist’s primary income. With a tendency to develop, Music Mates can also sell music to advertisements and movies and distribute merchandise.
The first step is to determine the initial capital as investors are needed. Therefore, it is necessary to prepare a reliable business plan and optimistic forecasts of future income. Most small record companies start as a way of promoting and selling a single artist. Since Alexander, Sergei, and Vassily provide a PA service for several other bands in the North-West area, they have asked them to be agents for an agreed fee. Producing a small number of artists will reveal the potential for growth and development (Hepworth-Sawyer et al., 2019). After developing a business plan, the further actions will be the brand name and logo. It is necessary to choose the one that corresponds to the music genre promoted (Walzer, 2021). The suggested action is to conduct detailed research on existing agencies and brands. Over time, as the record company grows and becomes more public, the logo will become more recognizable.
To conclude contracts and other legal documents, the agency should consult with a lawyer or a reliable source. Regardless of whether these are documents that the company will use or those that require a signature, a hired legal consultant is needed (Hepworth-Sawyer et al., 2019). A bank account needs to be opened; this will require legal confirmation that the company exists (Hepworth-Sawyer et al., 2019). Having a business account will make it easier for paid musicians and distributors. After creating a record label and solving financial issues, it is necessary to start producing and marketing music. The marketing plan includes press releases, interviews and online advertising. As Music Mates have a website, a Facebook page, and the SoundCloud audio platform, it is recommended to hire web designers and IT specialists to implement Enterprise Resource Planning (ERP) and Customer Relation Management (CRM) software.
The artist deal should be in the form of a net profit deal so that the label can recoup costs as quickly as possible while still offering the artist a fair share of the profits. The net profit contract covers both the recording costs and the promotion and marketing costs. In other words, the label will receive 100% royalties until all costs are covered, and the agreed profit sharing will only apply to the net profit from the release – hence the name (Hepworth-Sawyer et al., 2019). In exchange, once the release pays off, the artist will receive a significantly higher royalty share than a traditional deal.
Software
According to the analysis of possible software solutions, the Odoo platform is the most effective. It combines two modules: Enterprise Resource Planning (ERP) and Customer Relation Management (CRM). Odoo is a modular system characterized by its flexibility, modern interface and user-friendliness. It is a system that both startups can successfully use with a single user and large international companies with more than 300 thousand users. The CRM module in Odoo is one of the most popular. It allows the business to manage sales, customer relationships and track processes from incipient to direct payment. The advantages of Odoo are that all modules can be integrated separately. As a result, Music Mates can use other programs for specific tasks. Any changes can be made relatively quickly by software developers. It is also a system that eliminates the need for an agency to use many separate programs and offers powerful, versatile solutions. The software is characterized by easy integration of external programs and relatively low implementation costs.
Possible Challenges
The first challenge is high competitiveness within the music industry. At the same time, competition in the market will continue to intensify with the emergence of new players. It is linked with virtualization, which has also affected the music industry. Physical media sales are falling more and more every year. Perhaps, in the medium term, they will completely disappear, and the digital form of presentation of a musical composition is becoming the main form (Eiriz & Leite, 2017). Moreover, the level of predictability is relatively low, depending on the final product. Until the music industry’s creation, for example, a music video is on the market, it is impossible to guarantee its success, including the financial one. This feature is directly related, in many respects, to the creative component of the production of the product.
Another challenge is new tendencies in the music business market as a whole. Streaming services are suppliers of music to the end consumer (Eiriz & Leite, 2017). Thus, the usual business model – when the label formed an image of the artist, promoted with the help of available resources and received relatively high revenue from the sale of music – ceases to work. Consequently, the uniqueness of the artist and his/her music begins to come to the fore. Despite the rapid development of music streaming, the live music market remains a crucial source of revenue for the music industry (Papies & van Heerde, 2017). At present, the music business has to consider COVID-19 pandemic outcomes. The ban on holding public events to diminish the coronavirus rates came at the peak of the concert season. Losses due to the cancellation of spring events are borne by musicians, promoters, clubs and concert venues. If the authorities extend the restrictive measures, then summer festivals will also be in danger.
Conclusions and Recommendations
Overall, the music industry has three main processes, including creating music, marketing, and distribution. The first combines writing lyrics, music, creating an arrangement, performing, and sound recording. Marketing includes branding, information, and building a music community. The main channels for branding and informatization are professional promoters, DJs, discos, radio stations and streaming services. These channels disseminate information about new releases and provide musical samples of these releases to potential customers. They also help in the development of the artist’s music community.
The tasks of a label included searching artists, financing and overseeing the production of audio recordings, promoting and selling audio recordings, and loaning money to artists for concerts. Small companies like Music Mates are forced to invest more energy and be creative because they have fewer departments and talent and have the same tasks. The suggested software for Music Mates is Odoo. Setting realistic goals and accurately predicting income and expenses guides the company towards its goals and helps attract future investors and artists.
Reflection
My contribution to the online discussion can not be determined as excellent. Concerning attribution of references, I understood that regardless of the purpose of writing work, the first step is to select the right resources. Much of the student’s work when writing a scientific article depends on the source material. Moreover, with the existing amount of information, a student can quickly get confused and lose interest in the work ahead. To prevent this from happening, and it is possible to move step by step towards the intended goal, it is advisable to draw up a plan for writing a scientific article and adhere to its implementation. For example, to avoid chaos and unnecessary fuss, you need to be able to distribute the entire amount of work to be done correctly.
Most of the time should be devoted to studying and researching a scientific article’s fundamental aspects, which are indicated in the topic. I should improve my working process on conclusions; I should learn how to briefly describe the work done and received in the main part, summarize. An example of the work that can be improved is https://campus.college.ch/forum/attachment/411699. The case of Denver airport could be discussed in a more detailed way from the business perspective. However, at the end of the work, I did not analyze whether the research goal was achieved or whether all the designated tasks were solved. Concerning the evidence of collaboration/ facilitation skills, I made a basic recognition of the contributions of others. However, I was impressed by the fact that many of my peers are interested in the topics and are ready to discuss them outside of class.
References
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Papies, D., & van Heerde, H. J. (2017). The dynamic interplay between recorded music and live concerts: The role of piracy, unbundling, and artist characteristics. Journal of Marketing, 81(4), 67-87. Web.
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Walzer, D. (2021). Towards an understanding of creativity in independent music production. Creative Industries Journal, 1-14. Web.
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