The promising success of legal digital music services, such as iTunes, as well as the outlook of newer types of music features, including ring-tones and ring-backs, represent both a growth area and challenge for the music industry, according to Shahid Khan, a managing director with the Media & Entertainment practice of BearingPoint, Inc. (NYSE: BE - News), one of the world's largest business consulting and systems integration firms.
"The issue is essentially being forced on the music industry, both from a content owner's perspective, as well as from a new business venture's perspective," said Khan. "Ignoring or fighting these growth areas is no longer an option. Record companies must now transform themselves to take advantage of the market, or be left behind.
"For new business ventures, the opportunities for the industry are clear and diverse, especially in the infrastructure and support services areas," added Khan, a veteran of the business with more than 12 years of experience with such leading companies as Bertelsmann, Viacom and Scholastic. In addition, Khan led the activities of the various IBM Global Services groups focusing on Entertainment, Publishing and Information Services clients.
Khan explained his insights during the recent Billboard Music and Money Symposium, where he participated as a panelist for the "Investing in the Digital Future" discussion. The panel explored such growth areas in the music industry as digital downloads and ring tones, as well as the outlook for new ventures.
Khan is available to discuss the following related issues:
* There is a limited room for "me-too" models, and new ventures must
demonstrate the potential for both profitability and survivability, as
well as innovation in business models and customer value propositions.
* There will be future market opportunity for niche players and for
support services around these growth areas, such as end-to-end
operational infrastructure, including billing, digital rights
management, rights tracking, sales audit, and royalty reporting.
* New ventures may come from new geographies, as consumer desires
globalize. However, disparate infrastructures may vary in different
geographies and impact the ability to support globalization.
* Owners of intellectual property (publishers and recording companies)
need to re-orient their internal processes and systems from release
planning, product creation, contracts management, and royalty
distribution to be more agile in order to respond quickly and strongly
to market opportunities.
* Rights acquisition -- especially around future rights -- in artist and
songwriter contracts will become a greater issue, as will a focus on the
elimination of specific approval clauses in licensed music.
* Owners of intellectual property will need to focus on catalog depth
available by usage and by territory so that "celestial jukebox" concerns
of labels and publishers are met.
About BearingPoint, Inc.
BearingPoint, Inc. (NYSE: BE - News) is one of the world's largest business consulting, systems integration and managed services firms serving Global 2000 companies, medium-sized businesses, government agencies and other organizations. We provide business and technology strategy, systems design, architecture, applications implementation, network infrastructure, systems integration and managed services. Our service offerings are designed to help our clients generate revenue, reduce costs and access the information necessary to operate their business on a timely basis. Based in McLean, Va., BearingPoint has been named by Fortune as one of America's Most Admired Companies in the computer and data services sector. For more information, visit the Company's website at Bearing Point
This press release may contain forward-looking statements, the accuracy of which is necessarily subject to risks, uncertainties and assumptions as to future events that may not prove to be accurate. Factors that could cause actual results to differ materially from those expressed or implied include general economic conditions and the factors discussed in our most recent Form 10-Q. We undertake no obligation to publicly update or revise any forward- looking statements, whether as a result of new information, future events or otherwise.
