{"id":18391,"date":"2016-11-18T15:14:47","date_gmt":"2016-11-18T20:14:47","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/sonys-struggle-with-music\/"},"modified":"2016-11-18T15:18:57","modified_gmt":"2016-11-18T20:18:57","slug":"sonys-struggle-with-music","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/sonys-struggle-with-music\/","title":{"rendered":"Sony\u2019s struggle with Music"},"content":{"rendered":"

Sony and Music<\/u><\/strong><\/p>\n

In 1979, Sony invented the Walkman. Since then, Sony has become a leader in the intersection of music and technology \u2013 the 1980s became known as the \u201cWalkman decade\u201d(1), with the word \u201cWalkman\u201d entering the Oxford English Dictionary in 1986.(1) In 1988 Sony acquired Columbia Broadcasting System Records Inc. (CBS), and renamed it Sony Music Entertainment.(2) With this acquisition, Sony started to increase its presence in the entertainment industry.<\/p>\n

\"walkman\"<\/p>\n

Figure 1: Sony’s Walkman Advertisement<\/p>\n

\u00a0 \u00a0\"sonyacquires\"<\/p>\n

Figure 2: Sony acquires CBS Records<\/p>\n

Digital Music<\/u><\/strong><\/p>\n

Fast forward to 2010. Sony was now one of the major record companies in music, but its audio-tech business (under the Walkman brand name) was struggling. Although Sony owned the contents and hardware related to music, it was unable to synergize its businesses. Organizational silos made Sony late in the game with the digital portable music players \u2013 the launch of the iPod in 2001 made Sony lose its position in the portable music industry.(3) By 2010, digital music was growing in the music industry. The presence of Spotify and other digital music players completely shifted the business and operational model for Sony.<\/p>\n

Digital music players created an online platform where users could listen to music through a subscription or free basis. For example, Spotify offered listeners a \u201cfree\u201d service to listen to music.(4) Spotify wanted to offer an alternative option to listen to music in a time when piracy was becoming prevalent in the industry.(4) Rhapsody and other digital music platforms offered the subscription model, in which customers paid on a subscription basis to listen to music.(4) Spotify on the other hand provided the Freemium Model, in which users could use their services for free and charge customers for upgrades.(4) By late 2010, Spotify had 8 million subscribers and almost 1 million migrating up from the free customer tier to the paid tier.(4)<\/p>\n

 <\/p>\n

Attempt and Failure: Music Unlimited <\/u><\/strong><\/p>\n

To compete with these new players and to regain its leadership in the music industry, Sony introduced \u201cMusic Unlimited\u201d in 2010.(5) Sony believed that they too could provide a music streaming service like its competitors but at an advantage given its rich resources in the music industry. With a subscription model, Music Unlimited charged its users $10 a month(6), provided users with unlimited listening and allowed them to make playlists.(7) Music Unlimited was accessed through Sony\u2019s PlayStation Network (gaming, entertainment, and media platform) and offered its services to customers in 19 countries.(7)<\/p>\n

\"musicunlimited\"<\/a><\/p>\n

Figure 3: Music Unlimited Advertisement<\/p>\n

Unfortunately, Music Unlimited failed quickly. While competitors who used a similar subscription model offered its services through any devices, Music Unlimited was only available through Sony devices.(8) Many customers complained about its limited use as well as its long time in loading the application.(9) By 2015, Music Unlimited had only 20,000 subscribers \u2013 well below its competitors.(9)<\/p>\n

 <\/p>\n

Surrender and partner with Spotify<\/u><\/strong><\/p>\n

\"spotify\"<\/a><\/p>\n

Figure 4: Spotify introducing its partnership with Sony<\/p>\n

In 2015, Sony decided to end Music Unlimited and instead decided to partner with Spotify. Replacing Music Unlimited and now calling it \u201cPlayStation Music\u201d, Spotify would use Sony\u2019s PlayStation Network.(9) This partnership defined Sony\u2019s surrender in the digital music space. Andrew House, President of Sony Computer Entertainment and head of Sony\u2019s Network Entertainment Business stated that “it became clear that it would be better for [the] unit to concentrate on service we have tremendous expertise in \u2013 which were videogame consoles rather than music subscription”.(6) For Spotify, this partnership meant that they would be able to tap into a new market through the PlayStation network which had 64 million active users as of 2015.(6)<\/p>\n

 <\/p>\n

Now what?<\/u><\/strong><\/p>\n

Sony\u2019s failure with Music Unlimited is a clear depiction of how organizations in silos could fail miserably in the event of a business and operational model disruption in the industry. Despite having rich resources and assets in the entertainment industry, Sony was unable to conduct synergies and worked in silos \u2013 business division in portable music and in music were not communicating and working together. If they had leveraged its resources, Sony could have introduced the iTunes and iPod, and even Spotify to the world. Although Sony could no longer become a leader in the digital music space, they could make sure to never deleverage their resources like they have in the music industry. For instance, they could collaborate with Sony\u2019s film production company (Sony Pictures Entertainment) and create exclusive contents like Tidal.(10) What Sony needs to do now is to understand what is coming after digital music streaming. Sony must figure out early on and hopefully this time they\u2019ll get it right.<\/p>\n

 <\/p>\n

Word Count: 755<\/p>\n

\u00a0<\/u><\/strong><\/p>\n

Sources:<\/u><\/strong><\/p>\n

    \n
  1. TIME.com. 2016. A Brief History of The Walkman – TIME. [ONLINE] Available at: http:\/\/content.time.com\/time\/nation\/article\/0,8599,1907884,00.html. [Accessed 18 November 2016].<\/li>\n
  2. Sony Global – Sony History Chapter22 CBS\/Sony Records is Established in First Round of Capital Deregulation. 2016. Sony Global – Sony History Chapter22 CBS\/Sony Records is Established in First Round of Capital Deregulation. [ONLINE] Available at: https:\/\/www.sony.net\/SonyInfo\/CorporateInfo\/History\/SonyHistory\/2-22.html. [Accessed 18 November 2016].<\/li>\n
  3. Hiroko Tabuchi. 2016. How Sony Fell Behind in the Tech Parade – The New York Times. [ONLINE] Available at: http:\/\/www.nytimes.com\/2012\/04\/15\/technology\/how-sony-fell-behind-in-the-tech-parade.html. [Accessed 18 November 2016].<\/li>\n
  4. Dolan, Robert J. “The Birth, Life and Death of Rdio.” Harvard Business School Case 516-092, May 2016. (Revised August 2016.)<\/li>\n
  5. The Guardian. 2016. Sony to expand music streaming service | Media | The Guardian. [ONLINE] Available at: https:\/\/www.theguardian.com\/media\/2011\/jan\/25\/sony-music-unlimited-streaming-service. [Accessed 18 November 2016].<\/li>\n
  6. Hannah Karp. 2016. Sony Bails Out of Music Streaming – WSJ . [ONLINE] Available at: http:\/\/www.wsj.com\/articles\/sony-bails-out-of-music-streaming-1422481528. [Accessed 18 November 2016].<\/li>\n
  7. The Guardian. 2016. Sony to expand music streaming service | Media | The Guardian. [ONLINE] Available at: https:\/\/www.theguardian.com\/media\/2011\/jan\/25\/sony-music-unlimited-streaming-service. [Accessed 18 November 2016].<\/li>\n
  8. TechHive. 2016. Sony’s Music Streaming Service: What Were They Thinking?! | TechHive. [ONLINE] Available at: http:\/\/www.techhive.com\/article\/220002\/sonys_music_streaming_service_what_were_they_thinking.html. [Accessed 18 November 2016].<\/li>\n
  9. New York Times. 2016. New York Times. [ONLINE] Available at: http:\/\/www.nytimes.com\/2015\/01\/29\/business\/media\/sony-teams-spotify-with-playstation-for-music-streaming-plans.html?_r=1. [Accessed 18 November 2016].<\/li>\n
  10. The Hollywood Reporter. 2016. 8 Things on Jay Z’s Tidal Streaming Service That Aren’t on Spotify | Hollywood Reporter. [ONLINE] Available at: http:\/\/www.hollywoodreporter.com\/news\/8-things-jay-zs-tidal-785468. [Accessed 18 November 2016].<\/li>\n<\/ol>\n","protected":false},"excerpt":{"rendered":"

    Sony is a household name when it comes to entertainment \u2013 films, TV, music, video games, you name it. But for some reason Sony\u2019s becoming an antiquated name and doesn\u2019t show up in the new digital music space. What happened?<\/p>\n","protected":false},"author":2472,"featured_media":18392,"comment_status":"open","ping_status":"closed","template":"","categories":[249,2291,147],"class_list":["post-18391","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-music","category-sony","category-streaming"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/digitization-challenge-2016\/","yoast_head":"\nSony\u2019s struggle with Music - Technology and Operations Management<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/sonys-struggle-with-music\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Sony\u2019s struggle with Music - Technology and Operations Management\" \/>\n<meta property=\"og:description\" content=\"Sony is a household name when it comes to entertainment \u2013 films, TV, music, video games, you name it. But for some reason Sony\u2019s becoming an antiquated name and doesn\u2019t show up in the new digital music space. What happened?\" \/>\n<meta property=\"og:url\" content=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/sonys-struggle-with-music\/\" \/>\n<meta property=\"og:site_name\" content=\"Technology and Operations Management\" \/>\n<meta property=\"article:modified_time\" content=\"2016-11-18T20:18:57+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/cover-4.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"650\" \/>\n\t<meta property=\"og:image:height\" content=\"488\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"5 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/sonys-struggle-with-music\/\",\"url\":\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/sonys-struggle-with-music\/\",\"name\":\"Sony\u2019s struggle with Music - Technology and Operations Management\",\"isPartOf\":{\"@id\":\"https:\/\/d3.harvard.edu\/platform-rctom\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/sonys-struggle-with-music\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/sonys-struggle-with-music\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/cover-4.jpg\",\"datePublished\":\"2016-11-18T20:14:47+00:00\",\"dateModified\":\"2016-11-18T20:18:57+00:00\",\"breadcrumb\":{\"@id\":\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/sonys-struggle-with-music\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/sonys-struggle-with-music\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/sonys-struggle-with-music\/#primaryimage\",\"url\":\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/cover-4.jpg\",\"contentUrl\":\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/cover-4.jpg\",\"width\":650,\"height\":488},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/sonys-struggle-with-music\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/d3.harvard.edu\/platform-rctom\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Submissions\",\"item\":\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/\"},{\"@type\":\"ListItem\",\"position\":3,\"name\":\"Sony\u2019s struggle with Music\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/d3.harvard.edu\/platform-rctom\/#website\",\"url\":\"https:\/\/d3.harvard.edu\/platform-rctom\/\",\"name\":\"Technology and Operations Management\",\"description\":\"MBA Student Perspectives\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/d3.harvard.edu\/platform-rctom\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Sony\u2019s struggle with Music - Technology and Operations Management","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/sonys-struggle-with-music\/","og_locale":"en_US","og_type":"article","og_title":"Sony\u2019s struggle with Music - Technology and Operations Management","og_description":"Sony is a household name when it comes to entertainment \u2013 films, TV, music, video games, you name it. But for some reason Sony\u2019s becoming an antiquated name and doesn\u2019t show up in the new digital music space. What happened?","og_url":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/sonys-struggle-with-music\/","og_site_name":"Technology and Operations Management","article_modified_time":"2016-11-18T20:18:57+00:00","og_image":[{"width":650,"height":488,"url":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/cover-4.jpg","type":"image\/jpeg"}],"twitter_card":"summary_large_image","twitter_misc":{"Est. reading time":"5 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/sonys-struggle-with-music\/","url":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/sonys-struggle-with-music\/","name":"Sony\u2019s struggle with Music - Technology and Operations Management","isPartOf":{"@id":"https:\/\/d3.harvard.edu\/platform-rctom\/#website"},"primaryImageOfPage":{"@id":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/sonys-struggle-with-music\/#primaryimage"},"image":{"@id":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/sonys-struggle-with-music\/#primaryimage"},"thumbnailUrl":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/cover-4.jpg","datePublished":"2016-11-18T20:14:47+00:00","dateModified":"2016-11-18T20:18:57+00:00","breadcrumb":{"@id":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/sonys-struggle-with-music\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/d3.harvard.edu\/platform-rctom\/submission\/sonys-struggle-with-music\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/sonys-struggle-with-music\/#primaryimage","url":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/cover-4.jpg","contentUrl":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/cover-4.jpg","width":650,"height":488},{"@type":"BreadcrumbList","@id":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/sonys-struggle-with-music\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/d3.harvard.edu\/platform-rctom\/"},{"@type":"ListItem","position":2,"name":"Submissions","item":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/"},{"@type":"ListItem","position":3,"name":"Sony\u2019s struggle with Music"}]},{"@type":"WebSite","@id":"https:\/\/d3.harvard.edu\/platform-rctom\/#website","url":"https:\/\/d3.harvard.edu\/platform-rctom\/","name":"Technology and Operations Management","description":"MBA Student Perspectives","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/d3.harvard.edu\/platform-rctom\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"}]}},"_links":{"self":[{"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/hck-submission\/18391","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/hck-submission"}],"about":[{"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/types\/hck-submission"}],"author":[{"embeddable":true,"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/users\/2472"}],"replies":[{"embeddable":true,"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/comments?post=18391"}],"version-history":[{"count":0,"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/hck-submission\/18391\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/media\/18392"}],"wp:attachment":[{"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/media?parent=18391"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/categories?post=18391"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}