Babson Case Number: 058-C00 | Length: x Pages

Abstract

An online music retailer struggles to keep pace with rapidly changing Internet technology and competition. Competing with industry giants such as Amazon.com, MCI, and MP3, the young firm establishes its niche and is recognized by Forbes magazine as the "best in its class for hard-core collectors" of scarce or hard-to-find compact disks. Capitalizing on these serious CD buyers, the company successfully becomes membership-based in order to differentiate itself from the major retailers.

Suddenly, the company is confronted with a new challenge. Online digital music technology that allows users to download virtually any CD---free, threatens all online retail music companies as well as the entire music recording industry. EveryCD reacts with an "if you can't beat 'em, join 'em" attitude, leading them to reinvent the company using digital technology and to seek venture capital money to fund their new plans.