BMG Case analysis
... In the late 1990’s technology once again changed the structure and economics of the industry, and companies such as BMG are faced with the problem of confronting downloads, independent labels, and the growing dependence on the Internet. ... BMG thus far has reacted respectfully in its approach to the Internet. BMG has been very eager to enter the digital environment and was one of the first companies to focus its efforts online. In fact, BMG was the first major company to create a set of branded web sites tailored to particular genres of music to attract music fans. ... However, BMG missed the opportunity to sell music to customers focusing only on promotion. Additionally, it was essential for BMG to promote the sale of downloads and collaborate with online giants such as America on Line to ensure technology synergies. The bundling of BMG with AOL and vice versa was a unique strategy for BMG and introduced traditional BMG customers to the net and traditional Internet users to BMG. However, BMG cut the project short by entering into other joint ventures with various Internet providers such as Time Warner. Although this strategy created numerous possible due diligence contracts, it also held BMG from making any dominant Internet presence. The music industry is technology driven so BMG has been able to easily adopt the new technology. BMG should continue to invest in the Internet to stay ahead. Although it is difficult to speculate what the Internets role will be in the future, BMG cannot afford to wait and watch. ... BMG initially used a traditional middleman such as CDNow and Amazon. ... If BMG participates in a standardized and secure procedure, established customers would convert with the company. Therefore it makes sense for BMG to move early, establish standards and attempt to gain Internet dominance.