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E-commerce case study

Jazz music aim is to introduce to a web site to their business model and adopt e-commerce to their business. E-commerce will increase jazz music customer base and sales as customers will be able to buy music at any time of the day. They want to produce mp3 which will be then sold online through their website. This is in spite of its customers showing concern as mp3 has lower quality than the traditional formats. However the benefits of e-commerce are more than the drawbacks. To compete in today’s word jazz music need to adopt to new ways of doing business.

Jazz music is a small independent company owned by two partners. It has been in existence for 20 years. Its specialisation is producing music in vinyl and cd which are sold directly on the phone by retailers. The cd and vinyl are produced by outside parties. Recording equipment is hired to record the music. Invoicing and payment is done by manual process using a pc. Jazz music is a private organisation in partnership and therefore the reliability falls on both partners. Its stake holders are the users, artist, government, digital enables, hardware industry, public interest groups, retailers, and collecting societies.

Structure of music industry The diagram below shows a typical music industry structure, with an explanation of the different entities and explanations of how they relate to each other below it. Source: http://www.planetoftunes.com/industry/industry_structure.htm

They are the creators and the ones who possess the talent for music. They perform in concerts and in recording studios. Artists need good songs to perform and sometimes they need composers to create or compose the songs. However an artist can compose their own songs and sing them. Managers The representatives of composer, artist and the producer are the mangers. They manage the daily dealing of the above mention people with the recording companies and the publishers. They generally manage the day to day aspects of artist careers.

The production companies may be made up of producers, composers, musicians and tour managers. Their main job is to create an image or brand of an artist and then sell it to record companies. Their main job is to develop the career of an artist or musician. Publishers The copyrights of a composer are put in hands of publishers who in turn licence the use of these rights to a record company. A publishing royalty is made whenever a cd is sold. This royalty is paid by the record company the MCPS. This is then given to the publishers who take their share and give the rest to the artists. Depending on the deal agreed with the artist/composer, between 15% and 35% maybe taken by the publisher. Further income may also be generated by selling to commercial business or film producers.

Record companies

These exist to facilitate the artist talents. They do this by providing money and organisation backbone to help in recording, manufacture and promotion of an artist’ recorded work. They risk greatly financially when they sign a new artist, as there’s a chance that a particular artist may not succeed.Distributors Distributors are mainly responsible making the music available to customers. They make sure that the music is sent to the retail shops for the customers to buy.

Convenience

E-commerce enables customers to compare prices by visiting multiple websites in the comfort of their home without having to go out. The time to shop is not limited to opening hours and hence customers can shop at any time of the day. Increased choice Customer are able to buy anywhere in the world thereby they have a bigger range of products to choose from because they are not restricted to buy from store in the local area. The global market is available at a click of a mouse.

Online products are cheaper In comparison to shop fronts as shop owners can afford to price lower because of low running costs. This is because there’s no shop assistant, no physical shop to pay rent and utilities bills. Greater control over purchases Easy ordering systems allow customers to customise orders according to their needs and specification. An example is at dell.com where customers, are able to specify the components of their product. Inconsistent return policies Customers may become frustrated because there is less customers service especially when returning or exchanging a product, when dealing with electronic retailers.

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