Recommendation: Target the record labels for promotion of HSS reports. Start with the initial enthusiasts like Ken Bunt of Hollywood Records and use their testimonials to win other record labels. Make use of the business connections of the advisory board at Polyphonic to get better reach to decision makers at record labels. Offer free trial reports to convince record labels and an initial lower cost for buyers along with discounts for high volumes ordered over a fiscal year.
In the long run, promote Human Music Interface as a complement for Hit Song Science to maximize the revenue earning capability of a song (by ensuring better listener penetration) that is marked as a winner by HSS.
Rationale:
Target segment rationalization: The …show more content…

If Sony embraces the HSS system the success rate in correctly identifying those successful 39 singles will move from 10% to 50% (assuming the conservative rate).
Reduction in number of required single releases to maintain the market share:
If 50% is the success rate then it means that for every successful Top 40 hit by Sony, the company needs to release 2 songs. Hence to have 39 hit singles, Sony would need (39 * 2) = 78 single releases. That’s a reduction of (390-78) = 312 songs or a percentage decrease of 80% in the number of singles required to maintain the same market share (given only successful songs make money).
Sony, thus, will have huge cost and effort savings in both production and marketing. Polyphonic can simply highlight the cost savings in marketing, mentioned below, to make a strong point about the cost saving potential.
Savings in marketing cost:
The marketing expenses for singles range from $300,000 to $1,000,000. For Sony, the required 390 singles (based on 13% market share and without use of HSS) at a conservative cost of $300,000 the budget will be $117,000,000.
If Sony uses the HSS software then instead of 390 singles the company will need to promote and market only 78 singles.
Cost of promoting 78 singles = $ (300,000 * 78) = $ 2,340,000
Hence, cost savings in marketing while maintaining the same market share = $ (117,000,000 – 2,340,000)
= $ 93,600,000 =