Summary of MP3 Portable Audio Players and The Recorded Music Industry

Summary of MP3 portable audio
players and the recorded music

industry.
Made by: Rabail Manzoor

The MP3 Portable Audio Players and the Recorded Music Industry case study is a Harvard
Business Review case study. The case talks about how electronic media generated music has
affected the digital music producers and how the gradual fall of disc’s began. The evolution of
music began when Thomas Edison recorded “Mary had a little lamb” with a tinfoil cylinder and
that alone lead to the making of discs. Companies constantly improved the quality of the discs
from 1901 to 1940-50’s which resulted in the widespread popularity of the vinyl records in the
1960’s. A change took place when compact cassette was launched and gained immense
popularity. The cassette was used in the first potable audio player launched by Sony known as
the Walkman.
Since the music was now being digitally produced, there was need to convert the audio to a
digital format. AT&T bell labs became a rising star in this work which used audio amplification
to record audio into digital formats. Since digitally generated audio had plenty of benefits when
compared to discs or record vinyl and could be created at essentially no cost, it created a further
threat for the records label companies. Sony and Philips joined together to create the very first
compact disc which used laser technology to imprint a series of tiny pits ( digital stream of 1’s
and 0’s) which were stamped together and kept 0.0000016 mm apart. A standard CD could store
around 80 minutes of music. The very first CD was by the band ABBA, “ the visitors” and it
gained so much popularity among the audiophiles that it 942.5 million units with a dollar value
of 13.2 billion was recorded in 2000, just because of the better sound quality it produced. The
CD created an uproar in the market which resulted in production of many supplementary
products such as the CD players and the last variation known as the CD-ROM.
Moreover, a constant development in the audio department lead to researchers trying new
innovations in the video department such as the digital conversion of video but it was a difficult
process since a video has tons more bits than an audio file and converting them meant a hassle in
itself. The researchers used CODEC a source to compress video bits for storage and decompress
for playback which lead to the widely used terms of JPEG for still pictures and MPEG for
motion pictures. The audio files used a lossless encoding system which meant no information
was thrown away however a research conducted in Germany proved information could be
deleted from audio files which a human ear could not hear which resulted in much space being
created on a CD and encoding of motion picture became possible. In Germany, while the first
encoding took place the researcher named the file extension “.mp3” which became commonly
used term. The CD’s containing motion pictures had a little downgraded quality of audio yet for
most PC users it was considered good enough.
The rise of internet brought further changes in the music industry as now it became easy to make
perfect copies of songs and this became possible because of 2 software that were winarp and
audio player. Winarp was used to copy songs which made peer-to-peer sharing easy and the
audio player made it easy to listen to songs on PC’s. Each song was standardized in a file size
state and the only thing remaining was an inexpensive medium to store the MP3 files, this was
countered by Saehan information system which developed the first MP3 player, it used a flash
memory to store the MP3 music files. MP3 players enjoyed no entries to barrier in the music
industry as this was a one-of-a-kind invention of the time.
The innovation of MP3 players had very interesting effects on the industry such as the
developers were now free from the hassle of making Walkman or portable CD players instead an
MP3 player was a much easy task. Another effect was the increase in competition on the
subsystem level which boosted the productivity and efficiency of the companies such as hard
disks which showed an annual improvement of 60%. This design shift lead to the industry from
being vertically integrated to horizontally integrated which lead to the growth of the industry as a
whole as much dependency was created.
Apple launched the “iPod “which was their version of the MP3 player, they used a slick design
which a wheel like user interface. They also used a 5 or 10 gigabyte hard disk which could store
thousands of songs, they also used their iTunes software for transferring of songs from PC to the
player. They also added the feature of playlists. The iPod soon gained popularity and gained 70%
of the market share in the western markets. However, it faced some challengers in the Asian
market such as SanDisk which launched the CompactFlash cards which were like hard disk but
used less space and they were soon used being used in cameras and mobile phones. The more
storage less space requirement led to the development of the USB by M-system which was later
bought by SanDisk and made an integral part of their company. SanDisk launched their first
MP3 player in 2004 which used their portable flash cards. It supported audio playing, video
playback and image viewing which a 1.8-inch color display and soon gained the No.2 spot
behind apple with a 10% market share.
As the world moved towards mobile phones the feature to playback audio had to be added to
phones. Apple had integrated itself into the MP3 players market with many big names going out
of business such as Sony, however different competition arose in the mobile handset makers
such as LG, Samsung and Sony-Ericson. The major change struck when Nokia the biggest
mobile-phone maker launched phones that come with music that will allow consumers to
download and keep music even after they changed their headsets.
Amazon also rode the bus wagon and launched its online music store with 3.3 million songs
from 270.000 artists with nominal prices for singles and albums. Although something like that
already existed (iTunes) yet amazon brought this up under the music industries distribution
channel. The record labels were down in the dumps with no money to promote artists and many
artists changing their business models. The record labels companies could not keep up with the
disruptive innovation and became obsolete over time. Hence, if record label companies had spent
their ample amount of money into something innovative such as buying concert agencies or
merchandising companies they would have stayed in the loop of the business.

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Summary of MP3 portable audio

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Made by: Rabail Manzoor

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