Change Management Using Kotters Framework For A Major Label Such As Sony In Adopting Streaming

Running head: CHANGE MANAGEMENT USING KOTTER’S FRAMEWORK 1

Change Management Using Kotter’s Framework for a Major Label Such As Sony in Adopting

Streaming

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CHANGE MANAGEMENT USING KOTTER’S FRAMEWORK 2

Change Management Using Kotter’s Framework for a Major Label Such As Sony in Adopting

Streaming

Executive Summary

It is apparent that moving forward, music labels such as Sony need to embrace the

changes taking place in the music industry. Companies such as Nordic label, Spotify, and Apple,

have brought a revolution in the music industry through streaming music. It is also evident that

traditional forms of releasing music, such as using the CDs are fading away. The implication of

this change is that label music companies such as Sony need to examine and change their

strategies of how their music is released to audiences.

Using the Kotter’s 8 steps of change management is one of the best tools for label

companies such as Sony to implement change. The model can be used for companies to change

from using the traditional platforms of releasing music, and adopt more technological-friendly

ways to release music. Streaming is actually cheaper and promotes young and established artist

to access markets on a global scale. As a matter of urgency for Sony to move forward, streaming

makes it easy for musicians to release music and earn more money than if they were using

traditional forms of releasing music such as on CDs. Companies such as Nordic label, and

Spotify, and Apple have embraced the changes on the use of technology and made steaming part

of their core business. The change has not only promoted artists, but made companies earn a lot

of money through a cost reduction strategy. Subscription streaming has been one of the best

avenues powered by the internet technology. Label companies such as Nordic label, and Spotify,

and Apple can sell music on the platform, something that Sony and other established companies

need to embrace by adopting a change management strategy using the Kotter’s 8 steps of change

management.

CHANGE MANAGEMENT USING KOTTER’S FRAMEWORK 3

Statement of Issues

Using the Kotter’s 8 steps of change implementation, it is apparent the music industry

and label companies such as Sony need to consider the use of streaming as an income source

potential they had at the expense of streaming, in terms of generating income for a company. The

experience of Guy Hands, a private equity manager in 2007 had revealed that companies that

have not embraced the use of streaming as a way of promoting music are losing a lot of money

on matters such as floral arrangements for concerts. Nordic cloud-rappers and South American

reggaeton artists, and the Universal Music Group are evidence that streaming has become big

business, something that needs to be embraced by music labels such as Sony.

Going forward, it is apparent that music labels such Sony need to embrace the use of

streaming since it is one of the biggest changes evidenced in the music industry at the present.

Most artists are fascinated by the use of streaming to release their music since they are able to

make money from day one, when the music is released. This makes the platform one of the most

appealing and profitable platform for artists, who are a significant market segment for the Sony.

Sony needs to undertake measures to implement change management to move from the

traditional ways of releasing music, to conventional means such as streaming.

Companies such Spotify have proven that if label companies such as Sony do not move

forward and adopt the use of streaming technology in the music industry, they may become

obsolete. The reason being that streaming is the best avenue for artists to release new music and

reduce the costs associated with the release and promotion of music. Using the Kotter’s 8 steps

of change implementation, it is evident companies such as Sony can implement actions which

enable artists release acoustic versions of their music through streaming, and be able to sell

CHANGE MANAGEMENT USING KOTTER’S FRAMEWORK 4

music at a cheaper cost. The fact that Sheeran and Drake received in excess of $50m from

Spotify, one of the platforms of streaming, makes it vital for Sony as a label company to

contemplate using the Kotter’s 8 steps of change management to adopt streaming.

Analysis

The first thing Sony needs to do is creating sense of urgency in the company so that

employees know that adopting streaming is crucial for the survival of the firm. This can be done

through convincing workers that electronic music has taken then industry by storm, and failure to

embrace change may lead to the closure of the company. It should is also apparent that Sony may

have lost customers through writing off some artists when using traditional forms of releasing

music. Since some of the artists may have found an afterlife through streaming, there are high

chances that the company can get back to business through the introduction of streaming.

The next step is for Sony to build a guiding coalition for implementing streaming as one

of the core activities for its label business. The step will be implemented through having a set of

professionals in the IT department who can use their expertise to develop a strategy for

implementing streaming as a core business for the label. The guiding coalition will be an

important team that will be used to implement the change effort in a powerful way.

The next step according to Kotter will be for the Sony label to form a strategic vision for

implementing streaming. The move will be done in a way which will eliminate time wasting in

the effort to implement change in the company. Going forward, Sony will also need to enlist an

army of volunteers, so that all employees are committed to the change effort. The step will make

it easy for workers to know that traditional form of releasing music such as using CDs need to be

phased away. According to Kotter, Sony should also go ahead and remove barriers that may

CHANGE MANAGEMENT USING KOTTER’S FRAMEWORK 5

impede the implementation of the change effort. The step will be accomplished by having

meetings with employees and assuring them that such an endeavor will not lead to layoffs.

Sony will also use the step in Kotter’s model of generating short term wins. The step

involves explaining to employees the immediate benefits in terms of sustainability and

profitability the company will get by using streaming to release of music. The step also involves

explaining to workers how streaming will promote artists, something that has an impact on the

sustainability of the company. This can be through clarifying to employees that adopting

streaming has the ability to make the company labels experience a 10.6% rise in earnings year-

on-year, which other label companies have achieved after adopting streaming.

After implementing streaming and making employees to use the short-terms wins that

have been achieved, the next step will be sustaining acceleration of the change effort. The step is

accomplished by making sure that results are consistent with the strategy that was put in place to

make streaming a core business for the company. The last step is for the company to institute the

required change. According to Kotter’s model, the step is all about making a connection of what

employees need to learn, and make them an active part of the change process, through training

them on technology used in streaming.

Recommendation

Since streaming has made British label companies to increase their incomes by about

45%, it is recommended that Sony embraces the use of this technology as music Label Company.

Adopting the use of streaming revolution in its activities is one of the things that will make Sony

be sustainable in the music industry. It is recommended that Sony should eliminate royalties as a

source of income from music sales. That should be replaced by the use streaming since this will

reduce the cost of releasing music and hence improve their bottom-line. Another

CHANGE MANAGEMENT USING KOTTER’S FRAMEWORK 6

recommendation is that Sony should employ an analytics expert who will be responsible for

following trends on streaming platforms so that he/she offers insight on how to change strategy

for the company. Even though Sony needs to maintain the traditional label platforms for music, it

needs to slowly adopt the use of streaming technology as a new revenue stream for its music

production segment. It is also recommended that Sony uses the Kotter’s model to implement the

change effort in adopting streaming since the model has been found to be very effective.

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