Please I need this tomorrow at 8am

Page

1

A Market Analysis for

Polydor Records

Great Student

Full Sail University

Project & Portfolio II: Business and Marketing

26th August, 2016

Page

2

EXECUTIVE SUMMARY

This analysis report looks at the current market in relation to Polydor Records. It looks at

the growth of downloads and streaming and the effect these are having on Polydor’s revenue

streams. The report has an overview of the company and some information on its parent

companies, Universal Music Group and Vivendi; Polydor’s market position in relation to other

major labels is also reviewed. The report includes recommendations on how Polydor could

increase their revenue streams and move the brand forward in today’s volatile music industry,

with renewed focus on production cost controls and better concert promotion, and suggests

future reports that could help the company continue its growth.

Page

3

OBJECTIVE

Based on the current market, suggest ways in which Polydor Records could increase their

revenue and keep the brand at the forefront of the industry.

RESEARCH METHODOLOGY

The information used in this report is mostly external, secondary information sourced

from the Internet and online databases and was gathered during the month of August 2016.

Financial information was current on the day it was sourced. Information on Vivendi, the owner

of Polydor’s parent company Universal Music Group, was based on the most recent year-end

figures from 2015.

RESEARCH AND KEY FINDINGS

Polydor Records is a British label

owned by Universal Music Group (UMG).

They are a leader in pop and electronic pop

music and they have been pioneers in the

music industry since their inception, tirelessly

promoting the British music scene. They have

many of the top British names in pop signed to them, such as The Rolling Stones, electronic pop

sensation Ellie Goulding, and American artists such as Lana Del Ray. UMG’s parent company,

Vivendi, is financially secure, having a net income, in 2015, of 1.93 billion Euros, (Yahoo, 2016)

and a net profit margin of 18%.

Ellie  Goulding  1

Page

4

Polydor itself is a strong player in the music industry; as of 2016, the label has a 7.5%

market share in single releases and 5.8% market share in artist albums, putting it above Warner

Bros. and Atlantic Records and on a par with Sony Music, (Music Week, 2016).

Although the company has recently lost some ground, it is hoping that the appointment of

Tom March and Ben Mortimer as co-Presidents will bring the iconic label back to the top

(Sutherland, 2016).

As Polydor Records relies very much on physical album sales, this lost ground may well

be due to the fact that digital downloads now account for 45% of industry revenue, compared to

39% of physical sales and there has also been a 45.2% increase in streaming revenue, (ifpi.org,

2016). Also, the production cost of physical merchandise is still high, which cuts into the

revenue, and illegal file sharing is still 48% higher in Western Europe than in the U.S., (Steele,

2015).

Page

5

CONCLUSIONS

Polydor Records is still holding well against it’s competition, but due to the fact it relies

on physical sales it’s revenue streams are a bit too narrow to compete with digital downloads and

streaming. Having UMG as its parent company has helped because it has enabled Polydor to

release various big American names, such as Lady Gaga and Eminem, to the European market.

The continuing problems with illegal downloading and the increase in streaming means record

companies must look at other ways to increase their revenue, and Polydor must find different

ways of reaching its target audience while continuing to promote its iconic brand image.

RECOMMENDATIONS

Based on the research and conclusions, Polydor Records needs to find other sources of

revenue and break away from the usual record label stance. As streaming and digital downloads

are becoming larger revenue sources than just physical sales, Polydor should focus on those

platforms. They should aim to have a download platform in place, showcasing their talent roster,

by January 2017. They should also have exclusive extras available for download that would

differentiate their site from other music download sites such as iTunes or Amazon.

There remains a market for physical CDs and records and Polydor should continue to

offer exclusive content in that realm too. To increase their revenue profits from physical sales,

Polydor should try to reduce the production costs of CDs. They could work together with their

parent company, UMG, to find ways of producing cheaper, more eco-friendly merchandise and

that would help increase their profits.

Another avenue that should be considered is live music. Polydor should look at

promoting live shows and events with its artists, offering special package deals that include

greater access to the artists, as many independent artists already do.

Page

6

Another analysis report should be produced in March 2017 to research how the digital

download site has impacted Polydor’s revenue stream. Also, it should look at how the streaming

market is in relation to both physical sales and downloads. This could create new

recommendations for Polydor Records.

Page

7

REFERENCES

IFPI Global Music Report 2016. (n.d.). Retrieved August 13, 2016, from

http://www.ifpi.org/news/IFPI-GLOBAL-MUSIC-REPORT-2016

Steele, R. (2015). If You Think Piracy Is Decreasing, You Haven't Looked at the Data... - Digital

Music News. Retrieved August 13, 2016, from

http://www.digitalmusicnews.com/2015/07/16/if-you-think-piracy-is-decreasing-you-

havent-looked-at-the-data-2/

Sutherland, Mark (5/16/2016). We’ll take risks and break artists. Music week, (5/16/2016), p1.

Accession number 116118321 Retrieved August 07, 2016 from Ebscohost

VIV.PA : Summary for VIVENDI - Yahoo Finance. (n.d.). Retrieved August 07, 2016, from

https://finance.yahoo.com/quote/VIV.PA?p=VIV.PA

Year to Date Total Market Shares Record Labels. Music Week, (8/1/2016) p3

ISSN: 0265-1548 Retrieved August 24th, 2016 from Ebscohost

IMAGES

Ellie Goulding. (11/3/2016). Retrieved August 26, 2016, from

http://www.idolator.com/7613674/ellie-­‐goulding-­‐keep-­‐on-­‐dancing-­‐listen-­‐

delirium-­‐track  

Vote the Polydor logo. (n.d.). Retrieved August 26, 2016, from

https://goodlogo.com/vote/polydor-logo-2425

Year to Date Total Market Shares Record Labels. Music Week, (8/1/2016) p3

ISSN: 0265-1548 Retrieved August 24th, 2016 from Ebscohost