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Marketing Management

Question 1

Australian music industry has not been substantially impacted by the digital music trend yet. But the symptoms of perceived impact can be felt by looking at the mass digital music adoption rate. Digital music has shown tremendous growth of about 250% of value $ 27.8 million and 320 % in volume till end of 2006. This growth has increased the share of digital distribution from 1.5 % in 2005 to 5.5 % in 2006 in Australia. Amidst global trend of obtaining digital music online from legal and illegal source growing at a rapid phase. The Australian music industry on other hand is dominated largely by the physical sources of music like CDs and DVDs up to 95 % till 2006.

(Source: 2006 ARIA yearly statistics http://www.aria.com.au/2006AustralianWholesaleRecordSales.htm)

The future forecast of digital music is assumed to be $ 60 million in 2007 and around $ 200 million in 2010. The future of music industry is online digitalization, which would waive off the physical medium in times to come.

(Source: IBIS World http://cyberextazy.wordpress.com/tag/research-statistics/)

Target Markets for Online Digital Music

Internet is the prime medium to download the digital tracks from various online music stores. Hence understanding the degree of diffusion of internet in Australian consumers gives vital information about the consumer’s likeliness to purchase digital music online.

According to Australian bureau of Statistics, the accessibility of internet among the Australian household have grew from 16% in 1998 to 46% in 2002. In 2004-05, 56% of households were connected to internet which grew rapidly from 16 % in 1998. While the age group of 18-24 years forms 70% of total internet users in Australia.

(Source: Australian Bureau of Statistics (ABS) (2004) “Household use of information technology, Australia”, http://www.abs.gov.au/Ausstats/abs@.nsf)

Digital Music - adoption

The various factors influencing Diffusion of innovation of digital music:...