INFS1602 Assignment

8/10/2019 INFS1602 Assignment

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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

Documents

INFS1602 Assignment