Case Study 1 - Question 3

It is often difficult for old, established industries to change business practices. How can this be observed in the impact of the digital music boom (MP3 file sharing) on record companies and their traditional methods of music distribution?

The main reason for the lost of customers interest towards traditional methods of music distribution such as CDs and tape cassettes is because there is a better way of listening to music. Customers always find a product which is more “user friendly” more practical and “cheaper”, and the reasons why they chose not to use CDs and cassettes anymore. Record companies, after they realised that most of their customers ran away, so does their money. Company couldn’t possible gain profits if there weren’t customers to buy their product. Hence, these old established companies need different approaches but to change their trademark in business, they need large amount of capital to start over. In following the customer needs, in which other companies may already established. It would be a 21^st century competition in Music Entertainment Industry amongst the music company.