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Polyphonic HMI Mixing Music and Math

Solution Id Length Case Author Case Publisher
2360 1410 Words (4 Pages) Anita Elberse, Jehoshua Eliashberg, Julian Villanueva Harvard Business School : 506009
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In order to effectively reach the record companies and convince them to use HSS, I recommend offering trials on existing albums that the record company has already released. This gives the record company a more personal experience with HSS allowing direct comparisons to their own opinions about an album. Additionally, to increase use, a portion of new album demos could be analyzed free of charge. If HSS is priced at $5000 per use, the typical cost of call-out analysis, all 20,800 demos submitted over the year could be analyzed and Polyphonic still looks to make $6.5-7 million per year. If each record company gets 2000 demo album free trials per year, and they pay for the rest, Polyphonic will be looking at profits upwards of $100 million.

All things considered, my final recommendation is to focus on the multi-faceted benefits that HSS provides to record companies. Allow these companies the ability to have a considerable number of free trials in order to familiarize them with HSS on albums they are routinely working with. This all will result in a highly profitable Polyphonic ready to expand to the other parts of the music industry.

Following questions are answered in this case study solution:

  1. What is the Break-Even point for Polyphonic HMI?

  2. How would you evaluate the Markets for Polyphonic?

  3. Estimate the Value Created by Hit Song Science.

Case Study Questions Answers

1. What is the Break-Even point for Polyphonic HMI?

Mike McCready and Polyphonic as a whole are facing the decision that will determine the success of their novel service, Hit Song Science (HSS). With restricted marketing plans, they have come to the point where they should consider which part of the music industry they are targeting and how it will obtain the product.

With a background in Grupo AIA in artificial intelligence and the natural sciences and the regulatory board with an extensive thoroughbred and knowledge in the music industry, Polyphonic aims to succeed. HSS, which uses its spectral deconvolution process, was initially planned as a music consulting service, but sales dropped by 14%. Polyphonic evaluated the intrinsic properties of HSS and actualized that it could be utilized for identifying mutual mathematical features in "heat layers" and compare them with new layers to demonstrate if they would be effective. After a bit of optimization, HSS is aware of their consumers, which should be the target market for Polyphonic, and how it should be marketed for them. Manufacturers can mainly use HSS to evaluate short haircuts in order to find the perfect combination for the next "click". However, just like record companies, producers prefer to trust their ears and intuition rather than the math in HSS. Manufacturers seem to offer a limited market where it can make a marginal profit from HSS.

In terms of price, the price is meager around $ 350 due to the number of albums released each year. This is provided that the publishing company uses HSS on every demo album and every released album. An adjusted ratio of 10% reflects a more realistic picture. In this case, the price is around $ 1650, which is still much cheaper than calling the method. HSS can be competitively priced by calling methods to provide significant ROI.

At the same time, most major regions of the world have experienced several consecutive years of falling music sales due to factors such as piracy. Although, the music industry still had a worldwide market worth over $32 billion at the retail level in 2002. On a different note, as there is no substitute for Polyphonic’s HSS technology which could give Polyphonic a high bargaining power. However, the music industry has always chosen what songs to market based on what “sounds like” a hit. In contrast, the HSS technology is counter-intuitive in that it’s based on mathematical similarities, not the sound of the music.

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