Blue Ocean Strategy Case Study

The Napster Sour Note in Bertelsmann’s Symphony

OR

Abstract:
Bertelsmann, one of the biggest media conglomerates in the world, faces two lawsuits, thanks to a decision made during the dot com boom to partner Napster, the highly popular and controversial peer-to-peer network. The lawsuits filed by the music publishers, and two of its competitors, claim damages worth $17 billion. The lawsuits charged that the loans provided by Bertelsmann to Napster helped the company to keep its services, which facilitated a copyright infringement by its users, running for eight months longer than it would have otherwise done.

Pedagogical Objectives:

• To discuss Bertelsmann's motives behind its decision to partner with Napster
• To discuss the merits and demerits of the lawsuits filed against Bertelsmann

Keywords : Bertelsmann; Thomas Middelhoff; Media conglomerate; Reinhard Mohn; Gunter Thielen; Napster; Shawn Fanning; Recording Industry Association of America (RIAA); Innovation Management Case Study; The music industry; Bertelsmann Music Group (BMG); Copyright infringement; On-line music; Sony BMG Music Entertainment; Universal; EMI (Electrical and Music Industries)

Contents: 
Introduction
Bertelsmann: The Evolution
Bertelsmann and Napster: An unlikely partnership
The Ensuing Trouble
The Bertelsmann Empire
Earnings of Major Companies in the Entertainment Industry in 2001