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M yTunes – Your Alternate Source For Digital Downloads and Social Communit IEs

M yTunes – Your Alternate Source For Digital Downloads and Social Communit IEs. Principles of Information Management Systems Michael Barnhart Kristin Corley Jamison Long Christopher Wallace Ryan Woodroof Jessi Yamiolkowski. What is MyTunes?.

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M yTunes – Your Alternate Source For Digital Downloads and Social Communit IEs

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  1. MyTunes–Your Alternate Source For Digital Downloads and Social CommunitIEs Principles of Information Management Systems Michael Barnhart Kristin Corley Jamison Long Christopher Wallace Ryan Woodroof JessiYamiolkowski

  2. What is MyTunes? • My Tunes is an innovative new e-business that has a pure play business structure. • Customers will use the internet exclusively to access My Tunes, giving millions across the globe a chance to subscribe. • We are a bit vendor that sells digital products in bit form to the public. • My Tunes employs a merchant business model that offers products via the internet; a merchant model for an e-business is like having an “electronic store front” that customers visit to purchase a product.

  3. What is MyTunes (cont.)? • The Merchant Model adapts to a tougher environment, allowing an e-business to become successful, doing so by allowing people to visit the site and become customers. • All albums purchased will come with complete artwork, photos and short biographies of the band. • With MyTunes, customers can download individual songs or complete albums from their favorite group or artist. • In just a few clicks, you can be listening to your favorite band!

  4. MyTunes Business Models • MyTunes will incorporate the advertising model and community model for secondary business models. • For advertising, much like Google and other search engines, targeted advertisements will be present on the user interface. A high volume of user traffic makes advertising profitable and leads to further site diversification. • The community model will be that of a social networking service, providing the ability of users to connect with each other along a defined common interest (in this case, music).

  5. Subscription Rates for MyTunes • All songs will be sold for 75¢, versus the 99¢ of most competitors. • Incorporating advertisements from various vendors will help reduce the overhead costs, passing on the savings to customers. • Albums will be sold for $8.00 • MyTunes is focused on providing customer service, not maximizing profit.

  6. Exclusive Features of MyTunes • With an album purchase, MyTunes will provide all artwork, photos and short biographies included in the physical album. • The biggest advantage to using MyTunes is the networking among other users. Customers can become friends with people that enjoy listening to the same music as they do. • There is a potential for more song and album sales as users discover new music through their friend list.

  7. Networking Opportunities • MyTunes website is customizable. • Users will be able to create a user name and password of their choice. • Subscribers will have the opportunity to create their own profile page, like many popular social networks, with the option of 10 different color schemes and 3 different layouts. The friends list will have numerous font styles, along with the option to upload pictures for icons.

  8. The MyTunes Interface • Users can apply different “skins” to the player. • The option to create folders and playlists will be available. • Since MyTunes is a social network website, as well as an online source of music, users will be able to copy the theme and playlist of another user if they like. • When customers purchase music, and if they so choose to maintain a personal profile similar to the ever so popular MySpace, the potential is there to make online friends with other music fans and artists.

  9. The Digital Music Download Revolution • With many “brick-and-mortar” CD stores closing across the country, there is no better time to start up a pure-play online music retailer. • As record chains close, sole competitor iTunes is gaining more market share every year in operation. They have nearly monopolized legal online music sales. • With a few competitive advantages and simply focusing on the weaknesses of iTunes, our pure-play company could potentially dominate the market share of the ever increasing online music retailers.

  10. Potential Market and Revenue • A comparison to iTunes is in order to speculate on MyTunes market and potential revenue. • A quote by Jon Fortt says “Apple has, after all, done an amazing thing: The company made it cool to buy a product that people before felt free to steal.” • The innovation of MyTunes will provide the “cool” factor that many young music listeners are looking for. • With the collaboration of a MyTunes social networking site, customers an not only download any song on any record label, but they can also network with artists and fans alike who may share similar tastes in music. • This feature will hopefully boost the “music consumption” and drive sales even further.

  11. Competitive Advantages • The social networking incorporation will allow users to discover new music, hopefully driving the sales of individual tracks and complete albums to new levels. • Also, the 25% reduction in the price of individual tracks, and a set price of $8 for an album, will provide users to stretch their dollar for more music. • The combination of both mentioned benefits will gives MyTunes the competitive advantage over iTunes.

  12. Integration of Advertising • To make up the difference in revenue, MyTunes will offer advertising spots on the user interface, which will help offset the overall costs. • Advertising will be sold base on CPM (cost per impression) per thousand of consumer impressions. • Once traffic is generated on MyTunes, much revenue can be earned through the sale of online advertising space.

  13. Competitors Revenue/Costs • iTunes information: • April 23, 2007 – AppleInsider writer Katie Marsal – “Based on per-song cost estimates, the ubiquitous iTunes service generates an operating profit of at least 10 percent, and possibly as much as 15 percent…”

  14. MyTunes Revenue/Costs • Estimated Profit per Song __________________________________________ + Retail price +.75 • + Advertising revenue averaged per song +.25 • (social site included) • - Wholesale cost -.69 • - Network fees -.05 • - Transaction fees -.10 • - Operating expenses -.05 ___________________________ • Operating profit per song .11 • Operating Margin 11%

  15. Works Cited • Fortt, Jon. “iTunes 2005 revenue could equal 5 percent of U.S. music sales: Call it a powerhouse.” January 24, 2005. <http://fortt.com/blog/2005/01/itunes-2005-revenue-could-equal-5.html>. • Marsal, Katie. “iTunes Store a greater cash crop than Apple implies?” April 23, 2007. http://www.appleinsider.com/articles/07/04/23/itunes_store_a_greater_cash_crop_than_apple_implies.html>. • “iTunes continues to dominate legal music download sales with a 90% share.” April 10, 2007. <http://macenstein.com/default/archives/579>.

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