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With any B-Plan Purchase
425 Page Capital Directory
Through Apr. 30


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$425 Flat Rate
No Templates Used
7 Day Turnaround

All Purchased Plans
Are Updated for 2017


Record Label SWOT Analysis

 

Strengths

 

Although the competition is intense, record labels can be extremely profitable if they recruit the right musical acts to produce. The barriers to entry for a record label can be considered high. Once established, and as royalties start to be generated, the economic stability of a record label becomes strong. Ongoing streams of revenue can be reinvested into developing new records for the general public. The startup costs for a new record label are moderate. Including all necessary legal filings, record labels can commence operations for as little as $25,000. The biggest expense revolves around securing musical talent and producing a record. The risks associated with this business are considered high, and the ongoing operating expenses (especially before profitability is reached) are also considered substantially high. Provided that people enjoy the records produced by these businesses, they are able to remain profitable in any economic climate.


Weaknesses

 

Musical tastes can quickly change, and if a record label specializes in a certain genre of music - they can become unprofitable if people stop purchasing music. Most importantly, the costs of producing initial records are very expenses and carry a great degree of risk. Competition within the music and entertainment industry is intense, and record companies must proper acquire and promote musical acts that have a wide appeal to the general public.


Opportunities

 

There are numerous ways in which a record label can expand operations. Most importantly, a record company needs to continually sign new musicians and musical groups in order to expand their intellectual property library. Record labels can also acquire musical acts from other companies that have already signed talent. However, this can only occur once a record label is established and willing to place a large amount of capital behind the signed artist. Investors, once these types of businesses are established, are generally willing to place capital in order to increase revenues. It is very difficult to obtain a bank loan for a new record label.

 

Threats

 

Digital music piracy is an ongoing threat to all entertainment and media businesses. However, major technological advances have occurred that help record labels and related companies maintain protection for their produced content. This is something that a media entrepreneur needs to deal with on an ongoing basis.  


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