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Polyphonic HMI Case Presentation
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Polyphonic HMI : Mixing Music and Math
Entertainment Management
Action Plan
Situation AnalysisIssue Definition
Environment AnalysisStrategy Options & Choice
Situation Analysis
Situation Analysis(External)
Entertainment Management : Polyphonic HMI : Mixing Music and Math 1
So few songs actually become hits - Las Vegas gives you better odds than the Music Industry! You might as well just put a million dollars on red and spin the wheel...
- Ric Wake, Independent Music Producer
Entertainment Management : Polyphonic HMI : Mixing Music and Math 2
10%(only fewer than 300 of the approximately 3,000 singles released each year made it to the Billboard Singles Top 40)
Music Industry
Situation Analysis(External)
Entertainment Management : Polyphonic HMI : Mixing Music and Math 3
90%(The lion’s share of a record company’s revenue was generated through its established artists - not new artists.
For Warner Music Group established artists accounted for almost 90% of the 1.7 billion in revenues from newly released title in 2003. )
Situation Analysis(External) Record Labels
Entertainment Management : Polyphonic HMI : Mixing Music and Math 4
20 to 30(There were only 20 to 30 top producers who were responsible for the majority of successes,
a large group of a few hundred producers who had a hit once in a while, and thousands of people trying to establish themselves as producer.)
Situation Analysis(External) Producers
Entertainment Management : Polyphonic HMI : Mixing Music and Math 5
10,000(There were about 10,000 artists with a record contract in the U.S. and Europe,but only several hundred with some name recognition and commercial success.
Tens of thousands of artists were hoping to secure such a contract.)
Situation Analysis(External) Artists
Situation Analysis(Internal)
Entertainment Management : Polyphonic HMI : Mixing Music and Math 6
Polyphonic HMI was a Subsidiary of Grupo AIA that used A.I and Natural Science to solve business problems.
Founded in 2002, It was AIA’s first foray into the entertainment sector
Established specifically to market Grupo AIA’s A.I. tools to the music industry
Polyphonic HMI
Situation Analysis(Internal)
Entertainment Management : Polyphonic HMI : Mixing Music and Math 7
An Extensive analysis of millions of songs.This covered nearly all music released by music labels since the 1950s
And the Database was updated weekly with new releases
The process considered over 25 characteristics in total( including Melody, Harmony, Tempo, Pitch, Octave, Beat, Rhythm, Fullness of Sound, Brilliance, and Chord Progression)
Based on its Mathematical characteristics, each song was mapped onto “Music Universe”Songs with Mathematical similarities are positioned very close to one another
Basic Technology
Entertainment Management : Polyphonic HMI : Mixing Music and Math 8
Situation Analysis(Internal)
Polyphonic had initially used the technology to develop a music recommendation systemThe idea was to develop a device placed in music stores, thereby helping retailers to increase sales
Asked what music a consumer liked, matched that to Universe of Music, and used that information to recommend other music.
The difficult economic situation caused reluctance among retailers and hardware providers
Music Recommendation System
Entertainment Management : Polyphonic HMI : Mixing Music and Math 9
Situation Analysis(Internal)
Existence of clusters was evidence for the view that hit songs share certain mathematical patterns.
The extent to which new releases “fit” those clusters should indicate their hit potential.
The Clustering technique allowed Polyphonic to provide insights into the coherence of an album and a list of songs with similar mathematical properties.
By giving higher weights to songs in the Universe with higher sales levels, HSS could better pinpoint the significance of a cluster.By focusing on more recent successes among the songs in the Universe, HSS could incorporate the extent to which tastes might change over time.
Hit Song Science
Entertainment Management : Polyphonic HMI : Mixing Music and Math 10
Situation Analysis(Internal)
A score of 7.00 or abovedenotes clear mathematical hit potential.
A score of 6.75 to 7.00 is a borderline score. This reflects a song whose mathematical hit potential couldbe strong enough to perform in the market but might require a little extra marketing thought and push.
Other scores probably mean your material does not have the optimal mathematical patterns that will assure performance in the market.
Wonder Girls - Tell Me
Hit Song Science
Entertainment Management : Polyphonic HMI : Mixing Music and Math 11
Situation Analysis(Internal) Hit Song Science
Artist Song TitleHSS
Rating> 7.00
Weeks in the Singles
Top 40
HighestChart
Position
Outcast Hey Ya! Yes 29 1
Clay Aiken This Is The Night Yes 6 1
Santana Feat. Alex Band
Why Don’t You & I Yes 28 6
R.Kelly Step In The Name of Love Yes 22 9
Monica So Gone No 13 9
t.A.t.U. All The Things She Said Yes 26 12
Daniel Bedingfield If You’re Not The One Yes 15 12
Uncle KrackerFeat. Dobie Gray
Drift Away Yes 17 13
Brad Paisley I Wish You’d Stay No 0 -
Jennifer Hanson Beautiful Goodbye No 0 -
<Hit Song Science’s Success Rates: A Sample>
Hit Song Science can achieve a success rate of 80%
Issue Definition
Issue Definition
Entertainment Management : Polyphonic HMI : Mixing Music and Math 12
Record Labels
Producers
Artists
HSS could be helpful in deciding whether to market an album, in selecting which song to release first, and in testing new artists looking for a record deal
HSS offered a chance to test songs or album at some stage during the production process and “tweak” them to maximize their hit potential
HSS could add value in that it helped them check the hit potential of their songs and thus find out whether they had a shot at making it in the industry
Issue Definition
Entertainment Management : Polyphonic HMI : Mixing Music and Math 13
What was the best target market?
What was a suitable marketing plan?
Environment Analysis
Environment Analysis
Entertainment Management : Polyphonic HMI : Mixing Music and Math 14
$10,000
$20,000
$30,000
$40,000
2004 2005 2006(E) 2007(E) 2008(E) 2009(E)
$4,180$6,810
$10,480
$15,320
$20,440
$25,480
$33,573 $32,915 $32,463 $31,933 $31,437 $30,857
세계 음악시장 규모(in millions)
세계음반시장 세계디지털음악시장
Music Industry Analysis(1)
Environment Analysis
Entertainment Management : Polyphonic HMI : Mixing Music and Math 15
Music Industry Analysis(2)
$0
$150
$300
$450
$600
Broadband Lines Single Track Downloaded Album Downloads Mobile Subscriptons
$194
$22
$582
$57
$174
$16
$353
$43
U.S. Digital Music Market(in Millions)
2005 2006
Environment Analysis
Entertainment Management : Polyphonic HMI : Mixing Music and Math 16
15
30
45
60
75
90
2004 2005 2006E 2007E 2008E 2009E 2010E
34.3
44.0
59.863.3
72.0
78.7
85.0
Digital Music Device Shipment (in Millions), 2004-2010E
Music Industry Analysis(3)
Environment Analysis
Entertainment Management : Polyphonic HMI : Mixing Music and Math 17
Music Industry Analysis(4)
Portable Player
Music On Mobile
Free DRM
Digital Music Driver
Environment Analysis
Entertainment Management : Polyphonic HMI : Mixing Music and Math 18
높은진입장벽
Album Off-Line 음반
다양성 Singles On-Line 음원
A & R Labels Retailers Consumer
Value Chain
방대한 데이터 분석 및 주간 업데이트
시간 및 비용의 효율성
수치화된 정보를 통한 신뢰성
음악 외적 요소에 대한 분석 부족
낮은 산업내 인지도
Creative에 수학적 접근으로 인한 거부감
예산의 한계로 인한 마케팅 제한
전통적인 방식의 낮은 성공률
확실한 Needs의 존재
Customize된 Contents에 대한 욕구
음악 시장의 변화에 의한 활용도 증가
음악 소비 형태의 변화
온라인을 통한 정보 획득이 쉬워짐
예술성 vs. 상업성
WS
O T
방대한 데이터 분석 및 주간 업데이트
시간 및 비용의 효율성
수치화된 정보를 통한 신뢰성
음악 외적 요소에 대한 분석 부족
낮은 산업내 인지도
Creative에 수학적 접근으로 인한 거부감
예산의 한계로 인한 마케팅 제한
전통적인 방식의 낮은 성공률
확실한 Needs의 존재
Customize된 Contents에 대한 욕구
음악 시장의 변화에 의한 활용도 증가
음악 소비 형태의 변화
온라인을 통한 정보 획득이 쉬워짐
예술성 vs. 상업성
WS
O T
Environment Analysis
Entertainment Management : Polyphonic HMI : Mixing Music and Math 19
SWOT Analysis
Environment Analysis
Entertainment Management : Polyphonic HMI : Mixing Music and Math 20
시간 및 비용에 대한 비교 우위
성공에 대한 신뢰성 및 인지도 낮음
시장의 변화에 의해 실용성 증가
Strategy Options & Choice
Strategy Options
Entertainment Management : Polyphonic HMI : Mixing Music and Math 21
Strategy Goal
변화하는 음악 시장에서 Polyphonic의 HSS 기술을
효율적으로 포지셔닝 하고, 이를 통한 수익의 극대화
Online Retailer
Strategy Options
Entertainment Management : Polyphonic HMI : Mixing Music and Math 22
Record Labels Unsigned ArtistsProducers
Segmentation
Strategy Options
Entertainment Management : Polyphonic HMI : Mixing Music and Math 23
한정된 시장 but 성장 가능성 높음 음악시장의 변화 속에 Blue Ocean 마케팅 범위가 적음, 적합한 형태로의 기술 개발의 필요성, 단기적 수익 확보(B2B)
Online Retailer
한정된 시장 but 잠재수요 존재(신인가수) 기존의 Research Tool에 비해 저렴한 비용 마케팅 범위가 적음, 기존 기술 적용 가능, 단기적 수익 확보(B2B)
Record Labels
Targeting
시장 규모가 큼, 잠재 고객 풍부 Creative 영역에 대한 자부심, 틈새 시장 공략 가능 마케팅 범위가 넓음, 기술적 실용도가 떨어짐, 단기적 수익 창출이 어려움(B2C)
Unsigned Artists
확실한 수요층, 성장 가능성 높음 Major Label 보다 높은 Risk, 불확실성 넓은 마케팅 범위, 단기적 수익 창출이 어려움(B2C)
Producers
Strategy Options
Entertainment Management : Polyphonic HMI : Mixing Music and Math 23
시장 규모가 큼, 잠재 고객 풍부 Creative 영역에 대한 자부심, 틈새 시장 공략 가능 마케팅 범위가 넓음, 기술적 실용도가 떨어짐, 단기적 수익 창출이 어려움(B2C)
Unsigned Artists
확실한 수요층, 성장 가능성 높음 Major Label 보다 높은 Risk, 불확실성 넓은 마케팅 범위, 단기적 수익 창출이 어려움(B2C)
Producers
Targeting
Strategy Options
Entertainment Management : Polyphonic HMI : Mixing Music and Math 24
Positioning
Efficiency
Reliability Practicality
Strategy Choice
Entertainment Management : Polyphonic HMI : Mixing Music and Math 25
Record Labels Online Retailer
B2B
Unsigned ArtistsProducers
B2C
안정된 수익 + 인지도 확보
사업 다각화, 지속가능한 수익 모델 개발
ShortTerm
LongTerm
Action Plan
Action Plan
Entertainment Management : Polyphonic HMI : Mixing Music and Math 26
Short-Term Strategy Target 1 - Record Labels(1)
Track SongHSS
Rating
1 Don’t Know Why 7.21
2 Seven Years 4.55
3 Cold Cold Heart 3.31
4 Feelin’ The Same Way 7.29
5 Come Away With Me 6.57
6 Shoot The Moon 7.15
7 Turn Me On 7.32
8 Lonestar 7.26
9 I’ve Got To See You Again 7.59
10 Painter Song 7.12
11 One Flight Down 6.13
12 Nightingale 6.82
13 The Long Day Is Over 6.29
14 The Nearness Of You 7.03
Global Album Rating 6.68
기존 성공 사례를 바탕으로한 Reliability 향상을 위한 노력 부족
75%
25%
Major Record Companies’ Share of Music Sales, 2002
25%
14%
11% 12%
14%
25%
34%
41%
Region’s Share of Music Sales, 2002
3%3%
18%
34%
41%
Action Plan
Entertainment Management : Polyphonic HMI : Mixing Music and Math 27
North America EuropeAsia Latin AmericaOthers
Universal SonyEMI BMGWarner Independent
Short-Term Strategy Target 1 - Record Labels(2)
Action Plan
Entertainment Management : Polyphonic HMI : Mixing Music and Math 28
Short-Term Strategy Target 1 - Record Labels(3)
Product & Price
미국과 유럽의 Major Label을 대상으로한 Music Analysis Service
➡ 안정적 수익 확보 및 인지도 재고
Product: Music Analysis Service(HSS + Expertise Analysis)
Price: 년간 계약 + Running Guarantee
계약금 $ 100,000/year + 1 Album Free Trial 순수익의 0.1% Running Guarantee
Phase 1 Universal, EMI, Sony BMG, Warner 등 Major Label과의 직접 협상(B2B) “1 Single Free Trial”을 통해 Service 체험 후 계약 계약된 Label에서 HSS를 통해 분석된 Album출시 시에는 HSS 마크 부착
Action Plan
Entertainment Management : Polyphonic HMI : Mixing Music and Math 29
Short-Term Strategy Target 1 - Record Labels(4)
Promotion
Phase 2 A&R Registry를 통한 Minor Label에 DM(Direct Mail) 발송: 지금까지의 성과와 Technology 안내, 계약된 Label List Billboard와 같은 음악잡지 광고, 지속적인 성과에 대한 Press Release
HSS에 대한 Reliability와 Efficiency 이미지 구축
Major Label => Independent Label로 확장
Action Plan
Entertainment Management : Polyphonic HMI : Mixing Music and Math 30
Short-Term Strategy Target 2 - Online Retailer(1)
Music 2.0
Pandora is an automated music recommendation and Internet radio service created by The Music Genome Project.
Users enter a song or artist that they enjoy, and the service responds by playing selections that are musically similar.
Users provide feedback on the individual song choices — approval or disapproval — which Pandora takes into account for future selections.
Last.fm is a UK-based internet radio and music community website. Using a unique music recommendation system known as
"Audioscrobbler", Last.fm builds a detailed profile of each user's musical taste.device.
Action Plan
Entertainment Management : Polyphonic HMI : Mixing Music and Math 31
Short-Term Strategy Target 2 - Online Retailer(2)
0
500
1,000
1,500
2,000
2004 2005 2006 2007 2008 2009 2010
230.0
555.5
820.7
1,061.9
1,249.6
1,429.71,502.6
Download Songs through iTunes Store(in Millions)
47.5%
6.6%6.7%9.8%
13.8%
15.8%
Wal-Mart Best BuyiTunes AmazonTarget Others
Share of Total Music Sales in U.S.
Action Plan
Entertainment Management : Polyphonic HMI : Mixing Music and Math 32
Short-Term Strategy Target 2 - Online Retailer(3)
iTunes Store와의 제휴를 통한 Online Music Recommendation System
➡ 기존 iTunes 사용자들의 선호도 조사(다운로드 기록)
➡ Cluster Searching(유사 집군 검색)
Product iTunes Store 다운로드 Ranking에 HSS Rating Score 포함 iTunes Store에 HSS Rating Score Ranking 개발 iTunes Player에 HSS 메뉴 추가: HSS 기반 Cluster Searching
iTunes Player에 실시간 추천 기능 추가
Price : HSS 검색 및 추천 기능을 통한 다운로드시 곡당 10% Fee
Action Plan
Entertainment Management : Polyphonic HMI : Mixing Music and Math 33
Short-Term Strategy Target 2 - Online Retailer(4)
Product & Price
Action Plan
Entertainment Management : Polyphonic HMI : Mixing Music and Math 34
Long-Term Strategy Target 3 - Independent Producers
hitsongscience.com 을 통한 Producer 대상 서비스
Product Hit Song Science+ 단순 Rating Score산출 방식을 지역별 세분화 타겟 시장에 대한 적합성 판단 앨범의 조합, Title곡 추천
Price: 10곡 기준 앨범단위, Option에 따른 가격 차별화
Premium Package : 10곡 기준 $ 400 US/UK Package : 10곡 기준 $ 300
Promotion Producer Registry 를 이용한 DM 발송 최초 가입 후 “1 month free trial”을 통한 체험 기회 제공
Action Plan
Entertainment Management : Polyphonic HMI : Mixing Music and Math 35
Long-Term Strategy Target 4 - Unsigned Artists(1)
The SongSlide Web site is a tool for Independent Artists to sell their music to their Fans. SongSlide lets you pick the price you pay for Independent Music. The more you pay, the more you support the Artist.
Step 1 Artists Upload Music Step 2 Fans Find Songs or Albums They Want to Buy Step 3 Fans Pick the Price Step 4 Fans Pay with Credit Card or PayPal and Download Music Step 5 Artists Gets Paid
Creator로써 HSS에 대한 심리적 장벽 존재
➡ 우회적 공략
Action Plan
Entertainment Management : Polyphonic HMI : Mixing Music and Math 36
Long-Term Strategy Target 4 - Unsigned Artists(2)
Product Hit Song Science : “songslide.com”의 회원 대상 자신의 곡에 HSS Rating Score 표시: 곡 판매 및 Label, Producer 와의 계약에 있어 판단 기준으로 사용 가능 “songslide.com”에 HSS rating Score Ranking 개제
Price: 곡당 과금방식 + Running Guarantee 곡당 과금: $10/song 10$ 이상 수익 발생시 Running Guarantee 1%
Product & Price
Action Plan
Entertainment Management : Polyphonic HMI : Mixing Music and Math 37
Long-Term Strategy Target 4 - Unsigned Artists(3)
Phase 1 “songslide.com” 회원 E-Mail 광고: 성과, Technology, 계약된 Label List
“1 Month Free Trial”을 통해 Service 체험 Hit Song Contest: songslide HSS Score Ranking Contest 우수 곡 선정 정식 앨범 발매
Promotion
Phase 2 International Talent and Touring Guide를 통한 DM(Direct Mail) 발송 음악 잡지 광고, Press Release
HSS에 대한 Artist의 부정적 인식 전환
잠재 고객의 확대
Executive Summary
Executive Summary
Entertainment Management : Polyphonic HMI : Mixing Music and Math 38
What is the best target market?
What was a suitable marketing plan?
Hit Song Science
효율성의 인식 신뢰성과 인지도 향상 실용성 증가
Digital Music Environment
Short-Term Strategy
: Record Labels and Online Retailers
Long-Term Strategy
: Independent Producers, Unsigned Artists
Strategy
Entertainment Management
Thank You