The effects of online piracy on Universal Music Group's distribution

¶ … online piracy on legal distribution on Universal Music Group

The effects of online piracy on the legal distribution of Universal Music Group

Lower prices

In order to prevent the theft of music from the Internet, Universal Music Group ought to make more appealing offers to music consumers. They should offer the products at more accessible prices. However, in doing so, the company might have to accept a decrease of their own incomes and also a decrease in the artists' revenues.

In this order of ideas, given the proved fact that most artists register high incomes from their live concerts, televised appearances and by becoming the face of a certain product (e.g. Beyonce and Christina Aguilera for Pepsi), they would not suffer severe consequences due to CD or DVD price reductions. Most artists have already taken a firm position regarding Internet piracy and stated that they would not be severely affected by a small reduction in the retail price. Furthermore, what now seems like a decrease in their revenues, for both artists and distributing companies, could in the future become a new source of incomes, as music consumers would feel tempted to buy an original product at a decent price, instead of illegally downloading it from the Internet. Therefore, in their constant battle against Internet piracy, artists, distributors and the adherent authorities should emphasize on the quality offered by an original product and several other benefits, such as numerous promotions.

3. Sell music in MP3 formats on the Internet

Last, but not least, Universal Music Group ought to find means of combining the new technologies in their favor. In order to do so, they could transform the audio files into MP3 files and legally sell them on the Internet. Throughout specially designed web sites, Universal Music Group would encourage legal downloading of the music files and also, they would enlarge the number of their customers. The web sites would contain clear mentions of the terms and conditions of usage and would forbid further commercialization of the items. Also, to make the web sites more attractive, the distribution company could host fan clubs and forums on which virtual members could share opinions and discuss about their favorite artists.

The costs of these actions would be rather low, but they would generate an increase in the company's and artists' benefits and revenues. Moreover, such promotional campaigns would help bring together fans, artists and distributors.