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Contents
1. Executive Summary ......................................................................................................................... 3
2. Introduction .................................................................................................................................... 4
3. Target Market ................................................................................................................................. 5
4. Business Canvas Model ................................................................................................................... 6
5. Value Proposition ............................................................................................................................ 7
6. Business Analysis ............................................................................................................................. 9
7. Industry Analysis ........................................................................................................................... 11
8. Technology Approach Strategy ..................................................................................................... 13
9. Conclusion ..................................................................................................................................... 15
10. References ................................................................................................................................ 1611. Appendices ................................................................................................................................ 17
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1 Executive Summary
The purpose of this report is to design a business start-up strategy for OzStream to create a media
streaming service which will align Australian emerging artists with the listeners. The objective is
achieved through: recommending Australian indie community as a target market; designing valuepropositions that focuses on providing a unique Australian experience that is community focused,
affordable, accessible, and that has impeccable customization and management; proposing a business
model that ties well with the value proposition mentioned; analysing the industrys opportunities and
threats by using Porters 5 forces; and illustrating the technology strategies that will enable
OzStreams strategy and operations.
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2 Introduction
This report will discuss a business start-up strategy to create a service that will align Australian
emerging music artists to their listeners. The company and the product will both be named OzStream
that will provide a streaming service for the listeners and a channel for the emerging music artists toupload their songs. The definition of a listener in this report is a person who uses OzStream to stream
songs and concerts; and an emerging artist is a music artist who has started his/her music career for
up to 5 years and is not currently in contract with any label companies. Throughout this report, we
will discuss the strategy by identifying possible target markets, stating the value proposition and how
the business model ties in, analysing the industry, designing a technology concept, and conclude the
report.
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3 Target Market
An effective and specific target market is needed to design a strategic business model. As OzStream
wants to focus on the Australian market, we will have a specific target market that consists both
emerging artists and listeners in Australia. There are several possible target market group options forOzStream, they are: Australian mass market, Australian aged 18-30 years, and Australian indie music
communities.
Australian mass market
An Australian mass market consists all Australian emerging artists and undistinguished listeners in
Australia. They can be of any gender, occupation, interest, social level, background, etc.
Australian aged 18-30 years old
This market group consists Australian emerging artists and listeners, who both are aged 18-30 years
old of any background. This age range is chosen as indie labels target market concentrates highly inlisteners with any gender and income aged between 20 and 30 years old (Ingram n.d.). Silverman (as
cited in Swanston 2013, p. 214) has also explained that listeners aged between 18 and 24 years old
are the least likely to pay for music, thus are more attracted to the free legal access to music that
OzStream provides.
Australian indie music communities
Australian indie music communities are formed by Australian music artists and listeners of any
background, who are particularly interested in indie music.
Target market recommendation
From the three proposed alternatives of target market, we believe that targeting the Australian indie
music communities will be most effective because they are the most interested parties in Australian
emerging artists music, as the other market groups are too broad and may not be as effective. Indie
music communities may be the smallest market compared to the other available alternatives, however
it is the most effective target market and is an arguably suitable market size for a new business to start
with.
.
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4 Business Canvas Model
Key Partners Key Activities Value Propositions Customer Relationships Customer Segments
Emerging artists
Website and apps
developer
Collaborating apps
developer
Cloud storage company
Provide media streaming
Website and apps
development and
maintenance
Database management
Content management for
uploaded media
News feed management
Marketing
Customer service Community mediation
Unique Australian experience:
Less competitive local market for emerging artists
Ability to find and discover new local emerging artists for
listeners
Community focused:
Intimate connection between artists and listeners
Supportfor local emerging artists (fair royalties payment)
Introduces new artists and new songs to the listeners
Access to latest news feed
Affordability:
Provide free legal access to music for listeners
Provide affordable solutions for local emergingartists to
release their music
Accessibility:
Web-based media streaming application on website that
can be accessed on any internet browsers
App is also available on portable devices
Social network integration (Facebook, YouTube, and
Twitter)
Collaborating Apps
User friendly and visually appealing
Concert streaming
Customizable and Manageable:
Content management for artists Content analysis (i.e. statistics, top charts)
Personalised music and preferences for listeners
Provide a unique place for local
indie music community
Self-service and automated
service for listeners
Self-service and a priority
customer service (personal
assistance) for artists
Co-creation of music
discussions and reviews
Dual Multi Sided Market:
Emerging local artists The
person who upload and manage
their media (i.e. songs) to our
system
Listeners The person who
use our system to listen and
discuss music uploaded by
artists
Key Resources Channels
Cloud storage server
Web hosting server
App hosting server
IT Staffs (Web developer,
Apps developer, IT Support)
Customer serviceand
Marketing staffs
Computers
Web-based application and
community
Mobile apps (iOS and Android)
Social media (Facebook,
YouTube, and Twitter)
Office
Cost Structure Revenue Streams
Royaltiesfrom songs and concert streaming for artists
Data storage and web hosting costs
Web and apps developer fees to design and deve lop the website and mobile apps
IT Support fees to provide support and maintenance
Customer serviceand marketing staffs salary
Office rent and utilities
Advertisements
Artist membership fee
- Free : Limited to 10 releases a year
- Gold : Unlimited releases a year
Featured music fee Promote a music better with a fee
Concert streaming fee
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5 Value Proposition
As seen in the business canvas model, OzStreams service will cater to two customer segments, which
are emerging local artists, who upload their songs to our system; and listeners, who stream the
uploaded music. Since both segments are interdependent on each other to generate value from theservice, OzStream is serving a dual, multi-sided market.
Not only will this service allow listeners to legally stream music from emerging Australian artists
wherever they go for a low cost, but it will also serve as a new marketing platform for the artists to be
able to upload their music onto the database no matter where they are located. The value propositions
offered by OzStream can be separated into five sections and will be explained in more detail below:
Uniquely Australian Experience
Artists will have a less competitive market to reach local audience as they dont have to compete with
well-known global artists, while listeners will be able to discover emerging Australian artists. These
characteristics make OzStreams service unique and will deliver a completely local experience to the
users.
Community Focused
By providing an online community forum, OzStream can contribute to the local indie music community
by creating an intimate atmosphere where both listeners and artists can connect through discussions.
It also supports local emerging artists by giving fair and standardised royalty payments to all of them,
as it acknowledges that there are many large competitors, such as Spotify, who is believed to be paying
too little to properly support the artists (Linshi 2014). It also aims to support them further by marketing
their debuts and new releases through continuously updating chart lists and news feeds. This also has
the added advantage of providing listeners with up-to-date news on the indie music industry.
Affordable
OzStreams service heavily focuses on the affordability and the freedom to choose. Listeners will be
able to stream songs for free and can pay for each live streamed concert that they want to watch.
Artists are given the opportunity to trial the service and judge their own needs. If they see the need
to exceed the upload limit of 10 songs per year, they can purchase a premium account, which will
allow them to upload an unlimited number of songs per year.
Accessibility
Since the service is delivered through a web-based media streaming application, it is accessible on anydevice that can access the Internet. Customers will therefore be able to access it anywhere, as long as
they are connected to the Internet. It will also be available as an application for mobile devices with
Android and iOS operating systems. These two systems are chosen because they are the most used
operating systems as of February 2013 (Lella 2013). Developing applications for other operating
systems is not recommended as they take up significantly smaller market shares and therefore cost
more than they are worth.
OzStreams service will also be integrated with Facebook, YouTube, and Twitter. This feature will
further expose artists, facilitate artists and listeners account creation, and makes it easier for listeners
to share songs, playlists, and music news across the Internet.
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To further enhance listeners experience and convenience, OzStream will be collaborating with
application developers (e.g. musixmatch, shazam) to add more features to the service, such as being
able to read lyrics while listening to songs. Finally, through concert streaming, OzStream enables
listeners from different locations within Australia to stream exclusive live performances by artists for
a per-view fee. This feature will benefit both artists and listeners, as artists will receive a major portion
of the concert fee and listeners do not have to travel in order to watch the artists performance.
Customisable and Manageable
Artists can use the service to manage uploaded works and a public profile, which they have the
freedom to customise. Data analysis will be provided to help the artists analyse their creations against
the current market and manage their uploaded works. Furthermore, OzStream enables listeners to
personalise the music that they listen to by selecting from a list of variant song characteristic
preferences (i.e. song mood, genre) or by creating their own playlists. OzStream also offers an
automated suggestion feature that will further customises the service by suggesting songs and artists
based on listeners streaming history.
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6 Business Analysis
In order for the value proposition to be properly delivered, OzStream will have to engage in several
key activities. Since the music streaming service will be delivered through a website and mobile
applications, they will need to be regularly developed and maintained. Uploaded media and anyinformation stored on the companys database will also have to be properly managed. Other activities
such as marketing through social media, providing customer service, and moderating its online
community forum are all key activities that need to be carried out regularly if OzStream wishes to
attract and retain customers.
To support these activities and properly carry out its value proposition, OzStream will have to create
a strong network of partners. Emerging local artists, the cloud storage company, the website and
applications developers in short, anyone who supplies the company with a resource should be
treated as a partner and carefully managed. OzStream will also need a variety of resourcesphysical,
intellectual, human, and financial. A full list of key resources can be gleaned from the business model
canvas above.
Delivering the value proposition does not, however, come without a price. Some big costs that
OzStream has to carefully consider include paying song royalties and concert streaming profits to the
artists, web hosting costs, developers and customer service salaries, and office rent. To cover these
costs, OzStreams service will have to generate revenue. Below are some identified revenue streams
that the company can take advantage of:
Non-intrusive advertisements can be shown on the website and mobile applications. OzStream can
either use Google Ads, or invite any company who wants to market themselves to pay an advertising
fee.
As mentioned in the Porters 5 forces model, emerging local artists have little bargaining power.
OzStream can capitalise on this by charging them an annual fee if they want to upload more than 10
songs per year on their account.
OzStream can also introduce a featured music fee. If an artist wants their creation to be heavily
marketed on both its website and mobile applications, they can pay a fee to do so.
OzStream may also set up a concert streaming fee. For every live concert stream that a listener wants
to watch, they have to pay a fee. This fee should be determined through negotiations with the artist,
since ultimately, most of the profit from the fee will go to them.
If OzStream wants to be successful in the long-term, however, this revenue will have to be sustainable.
In order to achieve that, OzStream needs to satisfy its customers through serving them in various ways
through a variety of channels. For example, it can have personal assistance for artists as they have
more complicated needs than listeners, both artists and listeners can also browse through OzStreams
website in order to gather information and solve any problems they may have. OzStream can also
serve them through its online community forum, which also adds value to the overall service because
it serves as an intimate gathering place for the local indie music community. With the help of website
and mobile application developers, it can even set up an automated service on both its website and
mobile applications that can satisfy every individual listeners needs by personalising music and artist
suggestions based on their past streaming history.
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Strength of the business model
OzStreams business model has shown that the all the sections between the model is interconnected
as they all collaborated and merged into a business model as whole. The business model has also
maximized the competencies of the unique and distinguished value propositions that is not yet offered
by OzStreams existing competitors. These characteristics, as deduced by Dubosson-Torbay,Osterwalder, and Pigneur (2002), are the characteristics of a well-designed business model.
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7 Industry Analysis
Porters 5 Forces Model Australian Music Streaming Industry
Force
Rating
Explanation
Competitor
rivalry
High It is currently saturated with big international competitors
such as Spotify, Rdio, and Pandora.
Threat of
substitutes
Medium
CDs are one possible substitute, but sales have been
declining ever since music streaming was introduced.
Piracy remains rampant and is considered as a huge threat
to the music streaming industry.
Buyer power Medium
Listeners are extremely price sensitive. With many other
music streaming competitors in Australia, they have low
switching costs.
Emerging Australian artists do not have many venues
available to properly market themselves on and therefore
have little buyer power.
Supplier power
Low
While there are many competitors in the Australian music
streaming market, very few cater towards emerging artists,
leaving them vulnerable to services that do cater to their
needs.
Threat of new
entrantsHigh
Low start-up costs. No need for an office and the building
and maintenance of websites can be outsourced.
Do not really need any specialised knowledge or skills.
Depending on business model, acquiring song copyrights
may be easy or difficult.
OverallAttractiveness
Medium
Overall, we conclude that the Australian music streaming industry, while not extremely attractive due
to the presence of a few threats, does present enough opportunities for OzStream to capitalise on.
These opportunities and threats are listed below and should be carefully considered should the
company decide to proceed with its business start-up plan.
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Opportunities
There are three main opportunities to be aware of:
Although the music streaming market in Australia is currently saturated with many competitors,
none of them really cater towards emerging local artists. By specialising in this niche, OzStream
has the unique opportunity of catering to a small, but growing, consumer market that is looking
for something new and fresh.
The current big music streaming servicesSpotify, for examplehave had mixed reactions. Many
lesser known artists are extremely displeased with the royalties they earn and how little these
services actually showcase their works to consumers. OzStream can exploit this by having its music
streaming service solve these issues.
Emerging artists do not have many opportunities to market themselves. The company can fill in
this opportunity gap by presenting their service as a new marketing platform.
Threats
There are two main threats that OzStream has to be aware of:
As the model shows, the threat of new entrants to the music streaming industry in Australia is
fairly high. The company will have to capitalise on this new opportunity quickly, otherwise other
people will steal it.
Listeners have extremely low switching costs due to the near over saturation of the music
streaming market in Australia. They are also price sensitive. OzStream will have to be careful with
its pricing plans and try to differentiate its service from the competition. Otherwise listeners can
easily move on to another competitor.
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8 Technology Approach Strategy
This is the diagram of the conceptual design of OzStreams system. There are three main sections in
this illustrations: cloud media storage, server, and user interface.
Cloud based storage is used to store system database as well as media data uploaded by artists to the
system. OzStream will be using this service from a hosting company, thus it will not have to worry
about the maintenance of the storage and the streaming traffic to the media database will not affect
server performance.
OzStreams server has two main components: web server and apps server, which are used to cater
different channel platforms. Web Server generates the website and provide interactive actions for the
users. While Apps Server provides service responses to apps on mobile devices. Both servers are linked
to ubiquitous cloud media storage, which acts as application database and media streaming bank.
The user interface of the system will be provided in three different platforms: website, iOS apps, and
Android apps. Apple and Android devices are chosen as both have the most share in mobile device
market. For other mobile platforms, such as Windows Mobile and Blackberry, the users need to access
OzStream via website through the devices web browser, as the website is a seamless web application
(Web2.0) that utilises HTML 5 technology to provide interactive application through web browser.
HTML5
HTML5 has made new capabilities available for web browsers, such as: video and audio playback on
web browsers without third party plug-ins, device adaptation that can adjust the website page to any
mobile devices (e.g. devices screen size, keyboard type), and also enhanced user interactions that
supports touch interaction (Juntunen, Jalonen, & Luukkainen 2013, p. 1056). This technology allows
the delivery of OzStreams accessibility value proposition, and also to facilitate users with Windows
and Blackberry mobile device operating systems that are not able to use the app version. Juntunen,
Jalonen, and Luukkainen (2013, p. 1059)have also disclosed a limitation of user experience in HTML5
compared to an app version, that regardless the capabilities that allows HTML5 to closely imitate an
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app, HTML5 is still inferior because of certain gestures that are only enabled in an app (e.g. the use of
certain hard key in mobile devices). However, as we mentioned before that the market share of
Windows and Blackberry operating system mobile devices are considerably small, hence we believe
that the advantages of an app version compared to the HTML5 does not worth the apps development
cost.
Database Management System and Data Analysis Algorithm
A database management system is required to organise both data and information, such as streaming
data (amount of stream and who streams it), artists and listeners account information, and music
information. These data will then be analysed using a data analysis algorithm to provide information
to artists and listeners such as content analysis and song suggestions, allowing OzStreams
customizable and manageable, community focused, and accessibility value propositions to be
delivered.
Music Information Retrieval (MIR) Algorithm
Music Information Retrieval is an algorithm that OzStream will use to recognise the content in songsand classify the songs by its characteristics. This technology will enable OzStream to deliver the
customization value proposition by giving listeners the ability to pick a set of songs that are categorized
by moods, rhythm, and other characteristics.
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9 Conclusion
The report has discussed a business start-up strategy from the proposed business ideas. It
recommended Australian indie music community as a target market for OzStream as the group is
considered the most effective for OzStream to target; proposed a strong business model that ties wellto the essential value propositions for OzStream, the value propositions that are offered are unique
Australian experience, community focused, affordability, accessibility, customizable and manageable;
analysed the industry by the Porters 5 Forces and concludes that OzStreams strengths are such as
the unique service and marketing platform that OzStream offers to the emerging artists as the existing
music streaming services are not very suitable for them, while OzStreams weaknesses are such as the
threat of new entrant and available substitute products for the listeners; designed a concept for
OzStreams system and proposed the technologies that will be used to enable the value propositions
to be delivered to OzStreams users, such as HTML5, database management system, data analysis
algorithm, and music information retrieval algorithm.
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10 References
Dubosson-Torbay, M, Osterwalder, A, and Pigneur, Y (2002), E-business model design, classification,
and measurements, Thunderbird International Business Review, vol. 44, no. 1, pp. 22,
accessed 22 December 2014,.
Ingram, D n.d., Marketing Plans for Indie Labels, accessed 19 December 2014,
.
Juntunen, A, Jalonen, E, & Luukkainen, S 2013, HTML 5 In Mobile Devices - Drivers and Restraints,
proceedings from the forty sixth international conference of the Hawaii International
Conference on System Sciences, IEEE, pp. 1056 & 1059, accessed 21 December 2014,.
Linshi, J (2014), Heres Why Taylor Swift Pulled Her Music From Spotify, accessed 22 December 2014,
.
Lella, A (2013), comScore Reports February 2013 U.S. Smartphone Subscriber Market Share, accessed
22 December 2014, .
Swanston, K 2013 A Case Study on Spotify: Exploring Perceptions of the Music Streaming
Service. MEIEA Journal, Vol. 13, No. 1, pp. 214, accessed 22 December 2014,
.
http://onlinelibrary.wiley.com.wwwproxy0.library.unsw.edu.au/doi/10.1002/tie.1036/pdfhttp://onlinelibrary.wiley.com.wwwproxy0.library.unsw.edu.au/doi/10.1002/tie.1036/pdfhttp://smallbusiness.chron.com/marketing-plans-indie-labels-12125.htmlhttp://smallbusiness.chron.com/marketing-plans-indie-labels-12125.htmlhttp://smallbusiness.chron.com/marketing-plans-indie-labels-12125.htmlhttp://ieeexplore.ieee.org.wwwproxy0.library.unsw.edu.au/stamp/stamp.jsp?tp=&arnumber=6479961http://ieeexplore.ieee.org.wwwproxy0.library.unsw.edu.au/stamp/stamp.jsp?tp=&arnumber=6479961http://ieeexplore.ieee.org.wwwproxy0.library.unsw.edu.au/stamp/stamp.jsp?tp=&arnumber=6479961http://ieeexplore.ieee.org.wwwproxy0.library.unsw.edu.au/stamp/stamp.jsp?tp=&arnumber=6479961http://time.com/3554468/why-taylor-swift-spotify/http://time.com/3554468/why-taylor-swift-spotify/https://www.comscore.com/Insights/Press-Releases/2013/4/comScore-Reports-February-2013-US-Smartphone-Subscriber-Market-Sharehttps://www.comscore.com/Insights/Press-Releases/2013/4/comScore-Reports-February-2013-US-Smartphone-Subscriber-Market-Sharehttp://www.meiea.org/Journal/Vol.13/Swanson-MEIEA_Journal_vol_13_no_1_2013-p207.pdfhttp://www.meiea.org/Journal/Vol.13/Swanson-MEIEA_Journal_vol_13_no_1_2013-p207.pdfhttp://www.meiea.org/Journal/Vol.13/Swanson-MEIEA_Journal_vol_13_no_1_2013-p207.pdfhttp://www.meiea.org/Journal/Vol.13/Swanson-MEIEA_Journal_vol_13_no_1_2013-p207.pdfhttp://www.meiea.org/Journal/Vol.13/Swanson-MEIEA_Journal_vol_13_no_1_2013-p207.pdfhttps://www.comscore.com/Insights/Press-Releases/2013/4/comScore-Reports-February-2013-US-Smartphone-Subscriber-Market-Sharehttps://www.comscore.com/Insights/Press-Releases/2013/4/comScore-Reports-February-2013-US-Smartphone-Subscriber-Market-Sharehttp://time.com/3554468/why-taylor-swift-spotify/http://ieeexplore.ieee.org.wwwproxy0.library.unsw.edu.au/stamp/stamp.jsp?tp=&arnumber=6479961http://ieeexplore.ieee.org.wwwproxy0.library.unsw.edu.au/stamp/stamp.jsp?tp=&arnumber=6479961http://smallbusiness.chron.com/marketing-plans-indie-labels-12125.htmlhttp://onlinelibrary.wiley.com.wwwproxy0.library.unsw.edu.au/doi/10.1002/tie.1036/pdf -
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11 Appendices
We have made several assumptions as follows:
Emily and Mitch have proposed the name OzStreamas both the company and the
products name.
Emily and Mitch have already rented an office to operate