SWOT Analysis of Contemporary Music Industry - 2008

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Strengths

  • Australian Contemporary Music Industry (ACMI) substantial contributor to Australia economically, culturally and socially.
  • Success stories that provoke national pride.
  • Multiplicity and fusion of genres in Australia create a particular identity in the international market place.
  • Contributes significant economic value generating high levels of income employment and participation.
  • Musical product exists also as an input to other products and services.
  • Strong and growing independent recorded music sector.
  • Diversity in products and services.
  • Thriving independent sector.
  • Growing number of small to medium size independent businesses.
  • Strong and established collection societies.
  • Industry is currently acknowledging weaknesses and being proactive in driving resolutions.
  • Trend towards legitimate sale of music through digital channels.
  • Contemporary Music is linchpin of emerging lifestyle technologies.
  • Music economies value-add in the venues sector, production and delivery of recording, mediated performances, and support activities such as education and training.
  • High level of live participation in regional centers.
  • English first language.
  • Strongly entrepreneurial businesses and artists.
  • Strong ties with UK and US.
  • Existing trade links in other territories.
  • Relatively low cost structures in relation to manufacturing.
  • Strong sector representative bodies.
  • Genuine propensity to innovative use of technology.

Weaknesses

  • Political and economic environment not conducive to increasing presentation nor consumption of independent music. i.e share of radio airplay on commercial stations access to retail.
  • Industry is highly fragmented with poor communication between sectors.
  • Fragmentation can lead to information gaps.
  • Limited identification, aggregation and analysis of industry information.
  • Immature relationship with financing and investment sectors.
  • Under developed relationship with government.
  • ACMI (Aust Contemporary Music Industry) is small in global terms.
  • Small domestic markets in comparison to Europe and US.
  • Lack of access to capital and Inability to raise finance and capital.
  • Intangibility of product and short term nature of music projects decreases investment opportunities..
  • Shortage of relevant business and product packaging skills.
  • Lack of specialist investment vehicles that could raise the industry’s profile among investors.
  • Lack of access to critical industry information.
  • Lack of support for industry operators.
  • General lack of policy and fiscal acknowledgement of the cultural value of contemporary music.
  • Opportunities for presentation hampered by restrictive legislation – live venues.
  • Lack of whole nation and whole industry branding within international arena.
  • Potential to be a disparate industry esp. the division between multinational majors and the independent sector.
  • Lack of funds within the independent sector to support extensive export development. .
  • Australian consumer trends indicate Australia being a net importer of music.
  • Lack of access for the independent sector to radio and retail networks.
  • Lack of framework for industry and government to monitor the effectiveness of anti piracy enforcement provisions, and discuss future legislation and policy.
  • Lack of education model to prevent ongoing piracy.
  • Lack of critical industry information to support its case to industry government and investors.
  • Poorly developed business models for digital content and application.

Opportunities

  • Contemporary Music is a final product in itself and an input into a series o other products and services.
  • Potential for growth and innovation across the industry’s value chain.
  • Sectors of the industry are beginning to merge into a cohesive unit.
  • Large and growing number of small to medium businesses emerging.
  • The independent sector is an important and growing contributor to Australia’s economy.
  • The Industry is in a position where it wishes to drive solutions to its issues.
  • Overseas marketing – international trade fairs, showcase opportunities within Australia and overseas.
  • Evolution of self produced sound recordings (could be threat – quantity vs quality).
  • Rapid growth of online distribution methods (could be threat – illegal use).
  • Wholesale value of physical recorded music sales dropped significantly since 2003 opens up other consumption models (could also be a weakness – decreasing sales).
  • Digital sales have grown exponentially (could be threat depending on legal or illegal use of IP).
  • New technology creating new applications for music i.e ring tones.
  • Emergence of new products, revenue streams and distribution channels.
  • Emergence of new business models.
  • Shifting nature of global competition.
  • Growing Asian Export markets.
  • Potential for higher market share in other OS markets.
  • A shift towards increased import replacement (Australians buying more Australian music).
  • Investment in music business and training.
  • Increased cost efficient distribution models.
  • Independent alliances with majors.
  • Increasing importance of major retailers eg Kmart.
  • Increases in local output has potential for increasing employment and entrepreneurial opportunities..
  • Access to Asian market places, possibility to develop specialized skills to sell into this market.
  • Lack of time zone differences within Asian market.
  • Growing number of content hungry industries – film TV.
  • Overall growth of the creative industries model.
  • Global music market place is in transitional phase.
  • A whole of government approach that would address policy development and planning, industry education, integrated information collection, export market development, reinvigoration of the live music scene, financing and investing.

Threats

  • Process of recording and distributing music is changing rapidly (also an opportunity).
  • Perceived level of risk with intellectual property assets and the capacity for the industry to demonstrate the risk return profile of proposed investments.
  • Small scale of businesses operating within in the independent sector.
  • Operating in an increasingly competitive global and digital market.
  • Other smaller countries have established effective well integrated industry – government strategies increasing competition for ACMI within the global market place.
  • Significant barriers to export growth including small size of domestic market, difference in attracting investment, high cost of international touring caused by geographic location.
  • Distance to key international markets.
  • The recorded sector of ACMI has been dominated by the four multinationals, potentially threatening the cultural diversity of output. .
  • Per unit of primary physical music formats have fallen over time.
  • Industry fragmentation can lead to decreased collaboration, long term investment in that economies of scale cannot be captured..
  • Withdrawal of live music venues.
  • Difficult nationwide legislative hurdles.
  • High cost of insurance.
  • Security.
  • Growth of piracy.
  • Current government policies are skewing investment opportunities to particular sectors of the creative industries eg film .
  • Overall the ACMI is supported by government in a piecemeal manner.
  • Lack of coordination and unified representation within state and territory governments.
  • Trend of merging major multinationals threatens the creative diversity.
  • Lack of access due to internet access in regional centres.


Author

Jane Powles. Submitted 17 March 2008.

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