BMG

6 Pages 1481 Words

et industry in embryonic stage) and shipping expenses. As sales reach a threshold volume website expenses reduce sper unit sale. Thus in the long run CD price will be cheaper for end customer but still more expensive than the wholesale price.
b. If website is owned by record company:
i. Structure: distribution division supplies stock to customer directly, through a sub-division or a logistics company.
ii. Economics: No retail expenses. Distribution expenses come down as this expense is now limited to moving stock to company warehouses. Internet website expenses will come into picture. In this scenario reaching threshold is more difficult as company may not stock exhaustive list of records from other companies like a retail showroom has. Thus website operating expenses will be high per unit. Prices will be comparable to physical sales.
2. Downloaded music:
a. Structure: In this model there is no manufacturing, distribution, retailers, but there is a new division -digital distribution. Other struc...