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Saturday, April 13, 2019

Compass Records Essay Example for Free

Compass Records EssayBackgroundsAlison Br sustain and her husband Gary West, who were both musicians, founded compass Records in 1995. Compass Records is a small independent recording company that centered on folk and roots music. Compass Records occupies save a tiny part of the 32-billion dollar music recording industry, competing with some multi-national corporations dominating 86% of the business, such as Sony/BMG, Universal Music Group, Warner Music Group, and EMI.However, the industry has witnessed a stagnant growth since 1995, with a chasten on annual sales at a compound annual growth rate of 5%. By 2005, Compass Records had grown to include nearly 50 artists under contract and were averaging around 20 releases a year. With 40% of its albums selling over 5,000 units, Compass Records turned a profit on 80% of its titles in 2005. Brown and West also acquired a $100,000 recording studio in May 2004 in order to give the label and its artists more flexibility in the creative process and save $ euchre a day on studio rental.Problems* (General) Licensing vs. Producing and Own * Compass Records has to decide between licensing the finished recordings, which is less(prenominal) risky and less expensive with a finite life to the future immediate payment flows associated with the recordings, and producing and owning a reign copy, which will be more risky and more expensive with an infinite life to the future cash flows associated with the recordings. * (Specific) How to maximize firm value through the Roscommon decision * Whether to license Adair Roscommons music or own the master recording outright.

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