Case Study 3 SOUNDBUZZ’S MUSIC STRATEGY FOR ASIA PACIFIC Q1 : Analyze Soundbuzz and its business strategy using the competitive forces models. What strategies did it develop for dealing with competitive forces? There are four concepts of the competitive forces models: new market entrants, substitute products and services, suppliers, and customers. In terms of customers, Soundbuzz were really well responded to situation that they faced.
When they launched B2C model, they found that because of customers` behavior (customers are seeking to download music freely) they cannot make much margin compared with the time when they used B2B model. So they aim other business as their customers. In terms of products and service, they serviced new encrypted MP3 format which makes them be able to sell music in their web sites. Also, they started to treat the music video contents which never treated on-line before. Finally, they launched ISPs billing systems for customers, which makes customers easily purchase their products.
Q2 : What are the critical elements for an online music service? Using the value chain model, analyze Soundbuzz’s business processes. Administration and Management : Online and Mobile music company. Technology : Source from local and independent record label and content is secured using digital right management technologies consisting of web server , license server , database server and media server. Procurement : Internet and finance industries Q3 : Why did Mototrola acquire Soundbuzz? What synergies will be created through the partnership?
Through its MOTOMUSIC service, Motorola has more than two years experience delivering mobile music to consumers with its carrier customers in China, Hong Kong and Taiwan. The acquisition of Soundbuzz allows Motorola to expand MOTOMUSIC beyond China, into India, Southeast Asia, Australia and New Zealand. With well over 90 percent of all digital music content in Asia sold via mobile channels, a level expected to remain in the coming years, Motorola’s strength in music delivery will help its carrier customers access this growth opportunity.
The expected timetable for completing the proposed transaction between Motorola and Soundbuzz, future financial and operating results, benefits and synergies of the transaction, future opportunities for the combined company and products, any other statements regarding Motorola’s or Soundbuzz’s future expectations, beliefs, goals or prospects and any statements that are not statements of historical facts might be considered forward-looking statements.
While these forward-looking statements represent managements’ current judgement of future events, they are subject to risks and uncertainties that could cause actual results to differ materially from those stated in the forward-looking statements. Important factors that could cause actual results or events to differ materially from those indicated by such forward-looking statements, include: i. the parties’ ability to consummate the transaction. ii. the conditions to the completion of the transaction may not be satisfied, or the approvals required for the transaction may not be obtained on the terms expected or on the anticipated schedule. ii. the parties’ ability to meet expectations regarding the timing, completion and accounting and tax treatments of the transaction. iv. the possibility that the parties may be unable to achieve expected synergies and operating efficiencies within the expected time-frames or at all. v. Motorola’s ability to successfully integrate Soundbuzz’s operations and technology into those of Motorola and the possibility that such integration may be more difficult, time-consuming or costly than expected. vi. evenues following the transaction may be lower than expected. vii. operating costs, customer loss and business disruption (including, without limitation, difficulties in maintaining relationships with employees, customers, clients or suppliers) may be greater than expected following the transaction. viii. the retention of certain key employees at Soundbuzz. ix. the other factors described in Motorola’s Annual Report on Form 10-K for the year ended December 31, 2006 and its subsequent reports filed with the SEC.
Motorola assumes no obligation to update or revise any forward-looking statement in this press release, and such forward-looking statements speak only as of the date hereof. Q4 : Explore the Soundbuzz Website (www. soundbuzz. com). Briefly describe its products, technology platform, payment methods and revenue models. Product : – downloadable music and video. – digit right clearance. – acquisition of licenses from music publisher and recording company. – music video. Technology platform : – bundled with creative ‘s MP3 players. – Windows Media Player 10. Payment methods : multiple billing channel through Internet Service Provider bills. – mobiles operator bills to its customers. – Trivnet payment solution. – making micro payment. Q5 : Do you think Soundbuzz is successful? What are the things it can do to improve its business model? What can it learn from iTunes? No. Along with the dramatic demise of Motorola’s mobile phone business in the past two years, Soundbuzz now also faces closure of its own. It’s an ironic end for a company that seemed ahead of its time when it came out selling legit music in 1999 – at the century of illegal downloads.
Many were surprised at the time, when Soundbuzz CEO SudhanshuSarronwala, a former MTV stalwart, managed to court the music labels even when they were more interested in blocking people from ripping CDs. Its music collection was built up very fast, providing users in Singapore with a legit alternative to pirated songs. But soon, the competition came for “Suds” and his company. Though Apple iTunes is still not officially here in Singapore now, Nokia has launched its own music store and Sony Ericson has partnered with SingTel to offer a direct-to-mobile music download service too.
Soundbuzz, meanwhile, was a much smaller player and had a less extensive music collection. Plus, it somehow only supported the Internet Explorer browser, likely because of its Windows Media back-end, which kept out a lot of users. The final mistakes is the sale to Motorola, a company that invented the cellphone, but somehow failed to manage its own cellphone business due to poor management and decision making . Soundbuzz shall support the popular browser like Google chrome, Mozilla Firefox, Opera and Safari and expand its music collection.
This will attract more users since most internet users are no more using Internet Explorer due to it slow performance. iTunesoffers a catalogue of albums, user reviews, album art, Internet radio, and podcast listings for free. Consumers can benefit from iTunes’ content and services without ever making an online digital purchase. Apple even gives away new content every week, so users can expand their music collection without any commitment to buy anything. Soundbuzz shall synchronize and reform a convenient and fresh look to attract consumers. Soundbuzz is shut down on 15th July 2009