Bundling and Distribution of Digitized Music over the Internet sought to identify how the internet has transformed the way music is produced and distributed (Altinkemer & Bandyopadhyay 2000). The article reviewed a variety of technological transformations that are shaping the music industry. In the article, the authors analysed the impact of unbundling music items in an album. Through it, the authors offered a model for analysing the transformational changes. As such, the model scrutinised a package of two separate music items. The items were distributed separately. Thereafter, the authors examined the items using two approaches.
One of the approaches analysed the impacts of fluctuating the percentage of the customers liking specific items and the package. The second approach analysed the impacts of fluctuating the set prices of the items and the package. Examination of the model with respect to a few particular cases authorised the legitimacy of some theories formulated in previous investigations.
A description of the research aims of the article
After reading through the article, I noted that the authors’ key aim of writing this document was to illustrate the numerous technological changes that are currently influencing the music business (Altinkemer & Bandyopadhyay 2000). Similarly, I noted that the authors wanted to initiate a debate about the effect of the changes to the music industry.
Through my analysis, I noted that the article aimed to educate the readers about the background of the forces influencing the music business. The authors illustrated that the music business had embraced innovative technologies. Advancements in internet technologies can enable consumers to download a complete album (Altinkemer & Bandyopadhyay 2000). The download can be undertaken within the shortest time possible without distorting the quality of the music. While analyzing the article, I also learned that the authors wanted to inform the readers about a number of previous researches focused on the topic.
I noted that although a number of studies had been undertaken on the effect of the internet on today’s businesses, a few studies had been done to investigate the impact of the internet on the music business. Based on the above illustrations, it is apparent that one of the key aims of this article was to encourage researchers to investigate the influence of the internet on the music industry in the future. Similarly, the article aimed to encourage more musicians and music producers to embrace emerging technologies in their production and distribution of music.
I also noticed that one of the aims of the article was to inform the readers that internet technologies have presented consumers with a choice of purchasing specific music depending on their preference. In the past, consumers could only buy music items bundled in an album. As such, the album comprised of a number of songs. Some of these songs were not necessarily in the preference lists of the consumers.
A description of the model and results of the article
While reading the article, I learned about the model presented by the authors. The model analysed the changes in the music industry in two ways (Altinkemer & Bandyopadhyay 2000). One of the approaches analysed the impacts of fluctuating the percentage of the customers liking the specific music items and the package. The second approach analysed the impact of fluctuating the set prices of the music items and the package. The model analysed the market for two clusters of songs. I noted that the figure of music items in albums was usually more than two. However, assuming that an album comprised of two items made the examination much more manageable for preliminary inquiry purposes. It was also presumed that the demand for the two pieces was not interrelated.
I noticed that the model was very useful for recording CEO’s and musicians. The model confirmed that bundling was useful in some circumstances and not practicable in other circumstances. The mathematical model illustrated that when two items have a considerable percentage of common enthusiasts, bundling resulted in more returns for the vendor (Altinkemer & Bandyopadhyay 2000). In this regard, I noted that before CEOs settled on the type of music, they wanted to bundle, they had to analyze the sales of separate items by consumers. The analyses determined the set of items that were purchased by a mutual set of clients. I learnt that the above technology was similar to the one Amazon utilized in recommending books to clients.
For the reason that music item’s preferences are subject to variation, I learnt that such investigations ought to be undertaken regularly. Modifications ought to be made to the artefact mix when preferred. The above is predominantly practicable because music items are accessible in digitized formats. The above implies that the budget for reproduction has become insignificant.
A critique of the strengths, weaknesses, and limitations of the article
After analysing the article, I noted its strengths, weakness, and limitations. With respect to its strengths, I noticed that the article was very authoritative. In the article, the authors utilised a number of recent scholarly articles. The scholarly article focused on the effect of the internet on the music industry. By utilizing the above articles, the authors enhanced the reliability and the authenticity of their claims. Equally, I noticed that the authors utilized simple English words and short sentences in their writings. Through this, the article is void of jargons. By doing so, the authors made it possible for a number of audiences to understand their intentions of writing the article.
With respect to weakness, I noted that the article assumed that most music stores via the internet were legal. Based on this, the article presumed that with every music item downloaded on the internet, the artists earned a royalty. In reality, some of the music stores over the internet offer pirated music items. A number of these items are accessed free of charge. The above implies that the artist does not earn royalties for every song downloaded (Fisher & Prentice 2010). I believe pirated music content available over the internet is the major challenge affecting the music industry. Therefore, in their analysis, the authors should have factored in the effect of pirated music content on the music industry.
Based on the above analysis, it is apparent that the article had some limitations. The article’s assertions were only valid under the assumption that pirated music content accessed over the internet is negligible. Similarly, the assertions were valid under the assumption that music items can be bundled with success. I also noted that the assertions were only true in western markets where internet penetration is high. In developing countries, internet penetration is very low. In this regard, very few individuals can access music content via the internet. In these countries, music content is still accessed via CDs implying that the sale of albums is still booming.
A proposed extension
After reading the article, I proposed an extension of the document. The extension focused on the application of the article to business situations. Indicated below is an account of the business situation, the time when managers should expect the situation, a detailed description of how the model can be applied to the condition, and a description of what insights an executive can learn from the model.
Recession in many markets combined with new sources of competition has raised the consciousness of customers towards value. Therefore, online retailers should note that value in today’s context does mean not only money but also the perceived benefits of the product offered (Church & Ware 2000). Customers are increasingly demanding products with benefits at a lower cost. Hence, in the future online companies should be focusing on how to offer goods and services at a lower price. During the early 2000s, there were few online retailers, unlike it is today. Over time, several players have entered into the market. More players are expected to enter the market in the next few years. The above implies that managers of online retail companies should expect the situation in the next few years.
Online retailers’ competitive success over the next few years can only come through offering differentiated products and services (McAfee 2006). Based on this, I believe that the companies should adopt the model illustrated in the article in their business. The model will enable them to bundle their services or goods based on the customers’ preferences. Through this, the retailers will be able to sell and recommend merchandise to their clients with respect to what other clients interested in a good or service have purchased.
I believe that through the model managers can learn many insights about online business. The managers can learn that for their companies to remain competitive, they must focus their attention on adding value to their products (McAfee 2006). The managers will also learn that by embracing new technologies, they can offer unbeatable services. In addition to learning to leverage their strategic capabilities and achieve a competitive advantage, the managers can also learn how to make it easy for customers to carry out business with them by adopting the best technologies and collaborating with the best partners.
References
Altinkemer, K & Bandyopadhyay, S 2000, ‘Bundling and Distribution of Digitized Music Over the Internet’, Journal of Organizational Computing and Electronic Commerce, vol. 10, no. 3, pp. 209-224. Web.
Church, J & Ware, R 2000, Industrial organization. Irwin McGraw-Hill, Boston. Web.
Fisher, T & Prentice, D 2010, Managerial economics, Routledge, New York. Web.
McAfee, R 2006, Introduction to Economic Analysis, Orange Grove Pub, Florida. Web.