People often examine aspects such as the quality of a product or service, its uniqueness, and even its longevity to determine the success a company will have, but that is certainly not what success is limited to. Frequently, people underestimate the value and impact intangible assets have on a company’s standing, such as goodwill and the source from which this goodwill originates, ethics. A company’s ethics and moral standards are often a determinant as to what type of individuals comprise their consumer audience. For this reason, marketers and advertisers input significant effort into maintaining these ethics in the public eye and executives into implementing policies that coincide with the ethical standards.
Advertisement has graduated from the simple days of newspaper ads. Today’s advertisement environment is far more complex and requires much more skill and tactic to master than that of previous decades. In a now digital world, a great deal of advertisement is done online as opposed to just television commercials. Today, it is very seldom one is browsing through a website without being overtaken by advertisement. It is everywhere from your favorite music platforms and fashion sites to your very own social media pages. In fact, social media ads make up a significant part of a company’s advertisement campaigns due to their specialization in targeting specific audiences.
Marketing and promotions is the largest single investment for a record company standing at somewhere between $200,000 and $700,000. Most of the promotion is focused on streaming services such as, Pandora, Souncloud, and Spotify. This is because marketers need to focus their efforts on very specific target audience groups in order to yield the profits they do. This need is reflected in the decline in usage and investments in TV and radio ads, wherein it is much more difficult to focus efforts on a specific audience. Another aspect of marketing and promotion that has been experiencing a decline over the years are newspaper and magazines, but for a different reason. These platforms are declining because users are losing interest due to everything being converted to digital marketing which is more accessible. Despite this decline there are still some musically related magazines that have loyal customers who care enough to read their products monthly. One of the largest of these is Rolling Stone magazine, and even they are looking to sell the magazine because of this decrease in usage and this digital conversion.
Marketing and promotion are essential parts in building awareness of a product for any business. This is especially reflected in recording company’s investments in its artists. The major recording companies typically invest between $200,000-$700,000 annually per artist into promoting their music, their largest single investment. This investment is mainly focused on digital platforms as it allows companies to better target niche markets. These platforms are dominated heavily by streaming services such as Spotify, Pandora, and Soundcloud. Although many other platforms in the music industry have experienced a recent decline in investments and usage for advertising, such as TV and radio, they are not yet obsolete and still make up a significant portion of record company’s advertising investments.
Interscope Records is one of the largest and most lucrative record labels the U.S. It has been extremely prosperous since its inception in 1989 and continues to dominate the music industry as it has acquired dozens of top artists, many of whom hold multiple gold and even platinum records, including artists such as Madonna, Imagine Dragons, and Kendrick Lamar. Though very successful, Interscope Records has many weakness and threats as the music industry is a massive market.
Here is a bulleted SWOT analysis highlighting these as well as its strengths and opportunities:
- One of the largest record labels in the country, giving them an advantage over competitors in amount of resources and broader customer/consumer base.
- 16.15 billion dollar music industry in the U.S, leaving Interscope much wealth available to be acquired.
- Is the parent label to many record companies, often heading smaller labels album distributions, further broadening resources for their artists and increasing revenue.
- Made up by dozens of record-breaking artists, proving to be very lucrative for the record label.
- Has connections to other parent labels via joint ventures, which could be appealing to artists looking to sign to Interscope.
- Differing from other labels in giving more decision-making power to those seeking talent for the label, maximizing talent acquirement, as these people are specialists in their department. This could be attractive to potential employees seeking to fill such positions.
- Comprised of top music industry executives which is attractive to young up-and-coming talent.
- Marketed toward a young audience, of whom make up the top consumers in the main-stream music industry
- More competition among A&R’s considering label size and decrease of workload, as artists are becoming more developed upon their first interaction with a label. This poses a problem as Interscope might have difficulty acquiring employees in the future.
- Having to go through numerous people to get minute tasks accomplished due to size, which could delay various processes that need to take place promptly, potentially decreasing efficiency in some areas.
- Album delay criticism from other artists, giving the label a bad reputation and decreasing customer attractiveness.
- Less creative control for artists possibly reducing number of artists, as many value complete creative control over their music.
- General major label reputation for being, “strictly business” without having artists’ best interest.
- Capitalization on the Latin and Country genre as there is much wealth to be acquired there.
- The internet’s maximization of the number of artists, which gives Interscope more opportunities to acquire more artists.
- Vast amount of resources at disposal, which could increase revenue.
- Ongoing increase in the revenue of the music industry, which gives Interscope more opportunities capitalize
- Increase in streaming among music consumers, again another opportunity to capitalize on the increasing market.
- Decrease in album purchases over the years, which could lead to a potential loss of revenue.
- Artist independency becoming more popular making the need for record labels more obsolete
- Other top record labels posing a threat as they take from Interscopes consumer base.
- Other top distribution service, again providing another option to the customers of Interscope
- Former artists slandering the company making Interscope less attractive to artists and consumers alike.
Interscope Records, despite its weaknesses and threats, still remains at the top of the music industry as one of the most prominent and sought after record labels. They face more pros than cons and will continue to thrive and dominate their market for years to come.Sources: