Record Label and Napster S Strategy
Fanning, is a program that allows music to be traded over the internet. People were able to share high quality digital copies of music recordings over the Internet using Anapest. Anapest did not store the recordings, however. It allowed Its members who were logged onto the service to choose from an Index of songs. Anapest was one of the most popular sites on the internet. The site had some 15 million users In a year time.
Many college students downloaded so many songs that many colleges had to block the site from their system.A year after its launch, Anapest was sued by the Recording Industry Association of America (ARIA). The ARIA represents major recording companies. The ARIA claimed that copyright laws were violated by Anapest for allowing users to swap music recordings for free. The ARIA sought to stop the downloading of copyrighted songs, as well as damages for lost revenue. Song swapping had cost the music industry more than $300 million In lost sales. A few months later, Anapest was sued by a heavy metal band, Metallic, and rap star DRP.
Drew. They were suing Anapest for upright Infringement.In 2000, a Judge granted the request of the ARIA and ordered Anapest to stop making copyrighted recordings available for download. This would have shut Anapest down. Anapest was granted a last-minute reprieve until the lawsuits could be tried in court. Despite its many claims, Anapest was found guilty of direct infringement of the Aria’s musical recordings. The company was ordered to stop allowing its millions of users to download and share copyrighted material without properly compensating the owners of the material (Farrell & Hairline, 2008).
Anapest later offered $1 billion to the recording Industry to settle the lawsuit. Anapest also agreed that $1 50 million would be paid annually for the first five years to Sony, Warner, BMW, MME, and universal, and $50 million annually was allotted for Independent labels. The recording Industry refused the offer. The Industry wanted Anapest to shut down for good. Anapest tried many times to compromise with the recording industry, but to no avail. Anapest filed for Chapter 11 reorganization in 2002. The company also tried to reach a deal with Bertelsmann GAG, their strategic ratter.
A few months later, a Delaware Judge blocked the sale of the company to Bertelsmann. Anapest then laid off nearly its entire staff and proceeded to convert its Chapter 11 into a Chapter 7 liquidation. Many music labels were dabbling in online music distribution. Anapest had clearly beaten them to it and had done so efficiently, which was the main problem for the company. It was obvious to the record labels that online distribution was here to stay. Anapest’s name and assets were purchased by a company called RATIO. RATIO was a company known for Its CD-burning software.
RATIO had Intentions to reliance Anapest as a fee-based service. Anapest was renamed Anapest 2. 0 in 2003. Market. Rhapsody holds 10 to 15 percent of the market, and Anapest holds 5 to 10 percent of the market. The remaining portion is divided among several different companies (Farrell & Hairline, 2008). Anapest’s strategy focuses on being a subscription-based revenue model.
Computer users could download as much music as they wanted for a fee of $14. 95 per month. Anapest created partnerships with Lesotho, Ericson, and XML Satellite Radio as a means to connect with untapped arrests.Anapest partnered with Tower Records Japan and launched Anapest Japan in 2006. The company also began a partnership with Japan’s largest mobile phone company. About 90 percent of music downloads in Japan occur through wireless phones (Farrell & Hairline, 2008). Anapest has shown interest in being acquired by another firm.
Anapest hired UBS Investment Bank to help with the sale. A STOW analysis structures the assessment of the fit between what a firm can and cannot do Strengths and weakness), and the environmental conditions working for and against he firm (opportunities and threats).The STOW analysis for Anapest would consist of the following (Farrell & Hairline, 2008): Strengths ;Large music library ;Convenient and easy to use ;Strong brand name and reputation Insaneness ;Lack of compatibility ;Pricing ;Limited areas of differentiation Opportunities ;New technologies ;Decline in illegal file sharing ;Rapidly growing market Threats ;Powerful competition ;Potential for disintermediation Looking back at the weaknesses listed in the STOW analysis, one point that should be Nortek out is the pricing of Anapest services.Anapest is set up on a subscription- based model. If the price per subscription was cheaper, more customers would subscribe to the site. Anapest offers the same basic services as some of the other big names in the online music distribution industry. Another area to refine would be the lack of compatibility.
Anapest is not compatible with all MPH players, especially the technology is emerging every day. Anapest should work on creating avenues that will allow music to be downloaded to wireless devices, such as the smart phone, Pads ND other handheld devices.Anapest should put forth efforts to keep existing customers happy while also trying to expand the customer market. Keeping existing customers happy should always be company’s top priority. Having a solid core of customers to build on is very important to the stability and success of the company (Business Knowledgeable. Com, 2010). By keeping the existing companies happy, Anapest could offer a free one month subscription for those members who have been loyal to company for a certain amount of time.
Flyers or inserts could also be placed in the snacking of MPH players.This advertisement would entice users to connect with Anapest for all of their music downloads. With this deal, new users could download Jp to five songs for free before having to sign up for a subscription. Anapest could offer discounts to new users for a certain period of time. For instance, a new user could get the first three months at a discounted rate before paying the regular price. There are many ways for Anapest to expand their customer base. Finding out which plans work and which plans do not work is the key.