Sony/ATV Music Publishing Company
Introduction
Sony/ATV Music publishing company was created in 1995 as a joint venture between Sony Corporation of America and the Michael Jackson estate. The company is among the top publishing organizations with rights to more than 700,000 songs. These include an estimated 250 recordings from the Beatles. Among other responsibilities, the company also licenses its songs for use in movies, TV shows, advertisements and the collection of royalties for its songwriters. One of the recent achievements made by Sony/ATV was the expansion of its catalog by about 1.3 million songs through the addition of EMI Music publishing to its properties (Wikstrom, 2013). Some of the catalogs of the company include All you Need is Love, You’ve got a Friend, I heard it Through the Grapevine among others. The company also acts as the representative for copyrights for legendary musicians and artistes like The Beatles, Wyclef Jean, Jay Z, Alicia Keys and Shakira among several others (Wikstrom, 2013).
Competitors
The two main competitors of Sony/ATV music publishing company are Universal Music Group (UMG). This is a subsidiary of Vivendi and enjoys the place of the largest music recording company across the globe. It owns about twenty record labels comprising of Interscope Geffen, A& M Records, Island Def Jam, UMG Nashville and Verve Music Group among others. Some of the popularly known and chart topping musicians who are linked to this company include Rihanna, Kanye West and Mariah Carey among several others. As the largest music publishing company in the world, UMG controls over a million copyrights. Besides, it also owns the largest catalog in recorded music, whose advertisements are made through the Universal Music Enterprise in the United States, and Universal Music Strategies in countries outside America (Wikstrom, 2013).
The other key competitor of Sony/ATV is Warner Music Group Corporation. This is one of the largest music recording and publishing organizations across the globe and is ranked at position three in terms of market share in the United States. The company operates two businesses, which include recording and publishing of music. The company’s recorded music collection includes some of the best selling albums. One of their greatest hits is The Eagles which dominated charts from 1971 to 1975. The publishing business owned by the company holds over a million copyrights from more than 60,000 songwriters. One of the company’s greatest achievements was in 2011 when it was acquired by Access Industries as a way of increasing its market share. In America, the company’s recorded music activities are conducted through its major labels like Warner Bros Records and the Atlantic Records. Outside the United States, the company does its activities through Warner Music International and its various affiliated companies (Wikstrom, 2013).
Music Production and Distribution
The main products of the company are musical recordings, licensing of rights for use in musical compositions, and also broadcasts. Other products and services include the production of master recordings, manufacture and packaging of physical compact disks (CDs) and production of databases for distribution and downloading of recordings. The demand for the company’s products is driven by consumer spending. The profitability of the products and services has significantly relied on the ability of the company to discover and promote new musical talent while obtaining revenue from its asset base of recording of publications (Lundvall, 2003).
Sony/ATV Music Publishing Company- SWOT Analysis
Strengths
Sony/ATV Music and Publishing Company enjoy the administration of an estimated three million copyrights, including the control of some of the best written songs in the world. These include songs like Hallelujah and Stand by Me, among others. Besides, the company also represents copyrights of some American and the World’s legendary artistes like The Beatles, Michael Jackson and Stevie Wonder. This wealth of ownership that is enjoyed by Sony/ATV from the copyrights of Music and other artistes gives the company, the ability of attracting and retaining an ever-increasing list of upcoming and chart topping musicians and song writers from various genres including Shakira, Lady Gaga and Kanye West among others (Naganathan, 2013).
The merger between Sony/ATV and EMI Music Publishing in 2012 increased the company’s market share. Sony eliminated a major competitor in the music and publishing industry through this way. The deal gave Sony the right to have control over more than 2 million song copyrights. Besides, the company also acquired a global market share of an estimated 31% (Halperin, 2012). As a result of this acquisition, Sony/ATV advanced to the top of United States rankings in terms of market share, since it stands nine points above the Universal Music Group, which is its key competitor. The merger is viewed as a strategy coined by Sony/ATV to enable it exercise control over the major activities in the market since it holds the largest market share. The company made this move in response to the growing competition caused by proposed EMI pubbery transaction (Booth, 2013).
Sony/ATV has a significant presence in the entertainment industry and this has enabled it to create a brand and a 
strong identity for it, thereby allowing the customers’ approval. The company has also been supportive of technological excellence agitated by the rich cultural heritage of technological knowledge. This is especially from its affiliate companies that have helped in the development of magnetic tapes and compact discs including the Blue-Ray, which is currently used in the video playback medium high definition.
Weaknesses
The planned budget cuts of $100 million or more by Sony/ATV has been viewed as a setback. This is because of the fact that the company has been experiencing poor management as seen in the poor performance of the releases made in summer. In the quarter ending September 30th, 2013, the company incurred a loss of about $197 million and this explains why it may be pushed to lay off some of its employees (Naganathan, 2013). Poor management of the company during the last quarter has also impacted suggestions that Sony should make an IPO of about 20% of its entertainment arm. This may in turn weaken the company and its entire management, as well as show inefficiency and potential loss of trust by its clients.
Opportunities
Sony/ATV is experiencing an increase in the number of international applicants who are interested in signing recording and copyright deals with the label. This is one of the key strides by the company in signing separate deals by Juan Luis Morera and Llandel Malave also known as the reggaeton duo Wisin and Tandel. The two who agreed to launch their projects with separate management, signed to Sony/ATV. The artistes were previously signed to Universal Music Publishing. Wisin and Yandel are music icons in Latin America and a move from UMG to Sony/ATV shows that Sony is increasing its borders, which enables the company to attract more international artistes (Naganathan, 2013).
An increased focus on BRIC economies (Brazil, Russia, India and China) is critical for the long term and sustainable economic growth of Sony/ATV Music Publishing. The countries present an opportunity for Sony/ATV to offer authors, songwriters and creators with the much required recognition and protection of their rights. When such countries provide the ideal platforms for investment by Sony/ATV, they also earn remedies related to the intellectual property and online creative content. Besides, all the stakeholders in the new digital era are offered avenues for the security of their property from those with ill intentions (Naganathan, 2013).
Threats
The ever-growing levels of competition on the leadership of the market from its key competitor, Universal Music Group, which has a strong global presence and an aggressive acquisition strategy is considered as a threat to the growth and development of Sony/ATV Music Publishing (Lundvall, 2003).
The development in mobile application software has ensured an easy way of accessing and downloading music via the internet. This threatens the safety of music in this company. The mobile apps enable free music downloads, thereby impacting an eventual loss to the organization (Lundvall, 2003).
The threat of piracy from countries with weaker or no anti-privacy laws is another threat to music copyrights. This is because in such nations, people are able to gain access to music protected by Sony/ATV without the fear of a possible jail term or any kind of punishment. This eventually leads to losses incurred by Sony/ATV (Lundvall, 2003).
Sony/ATV Music Publishing Company- Porter’s Competitive Strategy
The Five Forces designed by Porter represent a way of establishing the way level of industry competitiveness and its impact on the performance of a company. The forces include intensity of rivalry among the existing enterprises, threat of new entrants, bargaining power of suppliers, buyers’ bargaining power and the threat of substitutes. The stronger the forces, the less probability of the company of interest in gaining above average returns. This framework is applicable to Sony/ATV Music Publishing Company because it falls under the category of recording companies with downloadable music.
Intensive Rivalry
Rivalry in any industry arises when a competitor feels external pressure or sees an opportunity for enhancing their position. Despite the current ownership of the largest market share that results from the acquisition of EMI Music Publishing, other major recording companies like Universal Music Group also own significant shares (Halperin, 2012). Since they have an almost equal amount of market share, their powers are relatively the same in the music industry and this could impact rivalry. Rivalry between Sony/ATV and its competitors also comes from the same organizational structures. The companies have horizontally integrated organizational structures that are coordinated across the globe. These forms of organizational structures arise in the presence of affiliate organizations. Similar to market size, organizational structures and similar music that Sony/ATV shares with its competitors ensures a high competitive rivalry among these companies (Naganathan, 2013).
Threat of New Entrants
The intimidation of a new competitor depends on the entry obstacles that are prevalent in the industry and the potential reaction of competitors. The economies of scale are among the conditions. The longer an existing firm executes a task, the more proficient it becomes, thereby impacting lower costs of production. This might be a hindrance to new entrants since it might be challenging if the competitor requires a huge start up amount. The entry of smaller record companies is made complex by the existence of major companies like Sony/ATV. The smaller organizations pose minor threats provided that they have exclusive contracts with popular artistes. The threats are minor because Sony/ATV can easily lure the popular artiste to their label with a better contract or acquire ownership of the small company, thus, owning their music collection (Naganathan, 2013).
Bargaining Power of Suppliers
A powerful supplier is that whose products are important to the business of the buyer. Since suppliers of Sony/ATV and other recording companies are music artistes, they have low bargaining power since the supply of available talent is relatively elevated. This can also be attributed to the fact that artistes seek contracts with the recording companies at the start of their careers, thus, they do not have more advantage in the form of popularity. Recording companies are suppliers to music retailers. There are a few suppliers, giving them more bargaining power (Naganathan, 2013).
Bargaining Power of Buyers
The amount of power in the hands of buyers is based on the number of buyers, and value added on the goods. These conditions determine the prices of goods and services. Buyers of Sony/ATV are music retailers with low bargaining power. However, the end users who are buyers of the music lack massive bargaining power as a group. This occurs when determining the prices at which they are willing to buy music and any related software (Naganathan, 2013).
Threat of Substitutes
Substitutes are those goods or services that perform similar tasks in a given industry. Substitute products to those of Sony/ATV can limit the price that the company charges, thereby a cap on possible company profits. If the particular substitutes from the competitors are of higher quality compared to those of Sony/ATV, buyers might opt for them. It is the responsibility of Sony/ATV to make sure that its goods and services are of high standards because if the switching cost between the goods is low then clients might try different products (Naganathan, 2013).
Conclusion
Sony/ATV Music Publishing Company has global presence because of the brand that it has been able to crate. The acquisition of EMI Publishing Company enabled Sony/ATV to become a major market shareholder in the music recording and publishing sector. Although there are challenges and threats like the availability of free downloadable music, the company has a great market command that enables it to use the available opportunities in enhancing its power through the attraction of more clients across the world.
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References
Booth, W. (2013). Sony/ATV EMI Music Publishing. Retrieved from
http://www.prsformusic.com/aboutus/governance/PRSboard/Documents/William%20Booth.pdf
Halperin, S. (2012). Sold! EMI Music Publishing to Consortium Led by Sony/ATV, Michael
Jackson Estate for $2.2 Billion.The Hollywood Reporter. Retrieved from http://www.hollywoodreporter.com/news/emi-music-publishing-sold-sony-atv-estate-michael-jackson-343848
Lundvall, K. (2003). Markets in the Information Age. Swedish Competition Authority, pp. 7-10,
160- 162, 201-203.
Naganathan, V. (2013). A Comparative Analysis on Sony’s Approach to Problem Solving and
Decision-Making. Int. J. Manag. Bus. Res, pp. 72-80. Retrieved from http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=5&cad=rja&ved=0CEoQFjAE&url=http%3A%2F%2Fijmbr.srbiau.ac.ir%2F%3F_action%3DshowPDF%26article%3D1785%26_ob%3Da4e1251d8af13a8a09917d65ebf99f52%26fileName%3Dfull_text.pdf&ei=42sNU-WyHYu6ygPc8ILAAw&usg=AFQjCNHvuTaK5lRUeUB0MeTM3MOYM9X52Q&sig2=KDuZofQ3e1MAESwPeDP31Q&bvm=bv.61965928,d.bGQ
Wikstrom. P. (2013). The Music Indurstry: Music in the Cloud. John Wiley & Sons, pp. 45- 60.