Connecting the Real and Virtual World: Sony BMG’s Market Entry into Second Life.

 

 

Connecting the Real and Virtual World: Sony BMG’s Market Entry into Second Life.

 

 
Date:

March 24, 2010

Version:

1.1.0

 

NOTICE OF PROPRIETARY MATERIAL TSE & TSE BUSINESS & TECHNOLOGY CONSULTING INC.

.

 

Table of Contents

 

1               Revision History. 2

2               INSTRUCTIONS: 3

3               SECTION 1: discuss your ideas about how Sony can get involved in this virtual world from the perspective of the case. 5

4               SECTION 2: Go to Second Life and check out the Sony site in Second Life. You’ll also be basing your discussion participation this week (Discussion question #4), as well as this assignment, on your experience with Second Life. 6

5               SECTION 3: check out the new Sony site at http://www.FreeRealms.com.. 8

6               REFERENCE. 15

 

 

1         Revision History

 

Version Date Author Changes
1.0 Mar 24, 2010 Eric Tse
  • Product

 

 

2         INSTRUCTIONS:

This week you are going to enter the world of social marketing. There will be two stages to our exploration process: the first stage is to complete the assignment below, based on the case and your own experience of Second Life, while the second is to participate in Discussion 4 in the discussion area, where you can share your reactions and impressions of Second Life with your classmates.

First, read the case, “Connecting the Real and Virtual World: Sony BMG’s Market Entry into Second Life.” This case describes the market entry of Sony BMG, one of the leading international music and entertainment companies, into this multimedia adventure. In recent years internet-based virtual worlds have become increasingly popular, and this case will introduce you to the interactive entertainment industry, if you are not already familiar with it.

In this assignment, I would like you to discuss your ideas about how Sony can get involved in this virtual world from the perspective of the case. Go to Second Life and check out the Sony site in Second Life. (The link to Second Life is http://www.secondlife.com) You’ll also be basing your discussion participation this week (Discussion question #4), as well as this assignment, on your experience with Second Life.

After visiting the Sony site at Second Life, check out the new Sony site at http://www.FreeRealms.com. What has happened to the Sony site? What does this indicate to you about Sony’s concept of social marketing? It appears that Sony has gone their own way in social networks. For this assignment, you should cover why they might do this. Is this a good idea or not a good idea? Discuss how Sony’s engagement in these two different environments might fit into their business strategy. Your overall assignment should take a look at the environment as well as the capabilities of Sony, and should cover the financial aspects as well. Finally, you should suggest a concrete plan of action for Sony going forward.

Compose your answers in a Microsoft Word document and attach the document using the Add Attachments button. Remember to use the Submit button to complete your submission. Please put your name on the top of the document. This written assignment should be sufficient to cover the topic. A well organized and thought out paper would be three to four pages in length.

The second aspect of our introduction to social marketing is an open discussion of your real-life plunge into the virtual world of Second Life. For more information on this, go to this week’s Discussion question, “New Marketing Techniques and Social Nets.”

3         SECTION 1: discuss your ideas about how Sony can get involved in this virtual world from the perspective of the case.

There is a decline in the traditional recorded music/entertainment market caused by technological innovations from traditional music to Internet music and socio-economic reasons for the decline in the market.

The director of Interactive entertainment at the Sony skimmed through the newspaper and got eye caught with the headlines “Virtual World of Second Life becomes increasingly popular”.  He is thinking about if Sony should have its own virtual Sony BMG domicile in Second Life with different offerings and have all kinds of fancy stuff.

From the case perspective, senior management is assessing what possibilities an engagement in second life could offer the company. Financial aspects of such an investment had to be evaluated, taking potential risks into account.

Sony wants to use Second Life as an economy of its own, encouraging Second Life start-ups and supported companies to open subsidiaries. Also Sony can engage other business partners to Second Life as well as an affiliate, technological and user centric marketing strategies. (Jost, Koch, Strenger, and Wickert   2007)

 

 

4         SECTION 2: Go to Second Life and check out the Sony site in Second Life. You’ll also be basing your discussion participation this week (Discussion question #4), as well as this assignment, on your experience with Second Life.

 

Hamburg-based research firm Komjuniti published the first extensive survey of Resident attitudes toward real world marketing in Second Life. (KOMJUNITI, Brand Science Institute, 2008)

The main weakness is insufficient customer care and opportunities for interaction between Second Life users and companies. 72% of their 200 respondents said they were disappointed with real world company activities in Second Life; just over 40% considered these efforts a one-off not likely to last.

“We were able to detect that companies are transferring their challenges like-for-like from the real world, without creating sustainable solutions for the virtual one,”. “The brand sites on Second Life currently look like they’re being treated in pretty much the same way as advertising campaigns, placed with the hope of getting high visitor frequency and good PR scores” (KOMJUNITI, Brand Science Institute, 2008)

“These companies already have significant experience of location and experience marketing gained in the real world,” he continues. “This is the approach to marketing that is called for in Second Life activities, meaning that it makes sense to bring employees from traditional sales and event management departments into the planning process”. (KOMJUNITI, Brand Science Institute, 2008)

Nevertheless, “Experiences and learning effects from real-world leisure and pleasure parks could serve as a very useful basis for planning for manufacturers,”

 

5         SECTION 3: check out the new Sony site at http://www.FreeRealms.com

 

 

  1. 1.    What has happened to the Sony site?

The Sony site looks like it become another virtual reality game site like second Life, called “free realms”.

 

 

 

Second Life

 

 

 

Another Sony sites

 

 

  1. 1.    What does this indicate to you about Sony’s concept of social marketing?

Sony sees social marketing as a big opportunity. It is part of the company core strategy. This is like some sort vertical marketing to produce another virtual reality site for the same company. It seems that the realm site is targeting for kids market, while the second life is targeting for mature customers. They use different virtual reality products to capture different consumer clusters.

 

  1. 2.    Why Sony has gone their own way in social networks?

From “A Plan to Invent the Marketing We Need Today” (Wind, 2008), it talks about the world of marketing has changed. Thomas Friedman has sketched the outline of the new realities of our flat world and Kenichi Ohmae has discussed the requirements of operating on the new global stage (Friedman, Ohmae, 2005). New channels and technologies are transforming the media through marketing works. Virtual worlds are giving new meaning to the concept of “place” in marketing.

This change led a new brend of consumers, expecting customization, communicates (social network and be p[art of it), multiple channels, competitive value and choice.(Saaty and Vargas, 2006)

One of its trends is “Shift from traditional management to network orchestration”, as business ended to connect with markets and resources across the boundaries of enterprises and nations. Also managers also need to focus on optimizing both the company and its network, since competition is increasingly “network against network”. Companies within these networks focus on creating a marketing ecosystem with partners

They go their own way instead of joining way instead of joining the public way because they want to dominate and control the market itself. It is analogous to Microsoft building its own standard instead of following the general industry standards. It wants everyone to use its own standards instead of using the general industry ones.

Is this a good idea or not a good idea?

If they can successfully dominate the market using their own social marketing network strategies this is better. But it is harder to achieve. There can be case that different companies open their own virtual reality games themselves to retain their own customers.

On the other hand a common public standards that are vendor neutral may attract a border range of affiliates and make the open community stronger.

It depends how smart and how much effort Sony can drive these strategies. Optimistically, it can be the first leading edge and drive the market and the industry to their own standards before other powers go into the market and make their own.

Discuss how Sony’s engagement in these two different environments might fit into their business strategy.

They have two environments to fit two different sets of customer, one for adults and the other for younger teenagers.  They provide two environment mostly probably there are some mutual exclusions of their target clusters. People who go into free realm don’t like the style in second life, while people who go into second life don’t like free realm. I am not sure if there is legal content in second life that may drive a need to segment younger customer to another appropriate environment.

Your overall assignment should take a look at the environment as well as the capabilities of Sony, and should cover the financial aspects as well

The Internet’s three key technology components are: Sony is a global Player in the entertainment Industry. Based inTokyo,Japan, the Sony Corporation is a global technology and media conglomerate. The company’s main business activities are in the area of electronics, games, entertainment (motion pictures and music) and financial services. The major product categories are audio, video, television, information and communication as well as semiconductors. The company employed 158,500 people at the end of March 200, approximately 7000 more than the year before. It is business make the Sony Corporation one of the most comprehensive entertainment companies in the world. The business in the US include Sony Electronics Inc., Sony Pictures Entertainment Inc., Sony Computer Entertainment America Inc., and a 50% stake in Sony BMG Music Entertainment, the second largest record music company in the world. Global annual sales for the fiscal year 2006 were approximately US$64 billion, which includes US$16.7 billion sales in theUSalone (Sony Corp 2006)

Finally, you should suggest a concrete plan of action for Sony going forward.

Despite the fact that some rumors of the death of virtual world marketing are greatly exaggerated, there are several ideas to resuscitate revenue. (Au, 2008)

To refer to the Second Life “community” generally means its most active users, currently about 550,000 people who go “in-world” an average of 40 hours a month. It comprises numerous smaller communities, formed primarily around personal interests and activities. For this reason, the best entry point for outside companies is often through brands and products that already attract Second Life users.

The worst mistake that would-be virtual world marketers make is assuming their Second Life presence should mirror the real world—in other words, making their branded location look like a shopping mall. Smart marketers will imagine their brands not as they are in the real world, but as they fit within this free-form play space.

Everyday brands should seek out the most popular content creators, and then hire them to merge the real and virtual brands into a product release that only exists in Second Life.

As a platform for commerce, Second Life first repeated the Internet’s indulgent failures. But at the moment, there’s at least some hope it’ll repeat its successes, too. (Au, 2008)

If I need to download and lots of stuff and slow down my whole computer, I would prefer not to play with it. This may be a technical hurdle they need to overcome.

Also it would be scary if the virtual world game captures your consumption behavior in a meta data file on your machine. It can integrate with your adware, rss feed, pop up, and real life marketing bugs and tools. Then it may be a good way to close the gap between virtual and real marketing.

6         REFERENCE

 

[1] Jost, Koch, Strenger, Wickert. (2007). Connecting the Real and Virtual World, Sony BMG’s Market Entry into Second Life

[2] Wind. (2008) A Plan to Invent the Marketing We Need Today

[3] T.L. Friedman. (2005). “The World is flat: A brief History the 21st century”,London:Allen Lane.

[4] K.Ohmae. (2005). “The Next Global Stage: The Challenges and the Opportunities in Our Borderless World” (WhartonSchoolPublishing)

[5]T.L. Saaty and L.G. Vargas. (2006). “Decision Making With the Analytic Network Process: Economic, Political, Social and Technological Applications with Benefits, Opportunities Costs and Risks” (New York: Springer Science  Business Media)

[6] Wagner James Au. (2008). Second Life Marketing: Still Strong

[7] Komjuniti. (2008). First customer satisfaction survey in Second Life

[8] Sony Corp. (2006). Sony Corp. Annual Report 2006; http://www.sony.net

 

Eric Tse, Richmond Hill, Toronto
Tse and Tse Consulting -Security, Identity Access Management, Solution Architect, Consulting
http://tsetseconsulting.webs.com/index.html
https://tsetseconsulting.wordpress.com/
http://erictse2.blogspot.com/

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