Bain Final Round Case - Streaming Services [NEW]

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Exhibit and additional information to be shared only under request or when relevant:

• Year 4 corresponds to the year of the last holiday season
• The relationship with artists and studios is always contractual
• There are no set timelines because it is difficult to manage the creative process
• The process of renewal of these contracts is not standardized
• The average production time in Year 4 is 6 months (value chain of the ENTIRE music production process)
• The client has made us aware that their current production methodology as well as technological capabilities are fully optimized
• Years 1, 2 and 3 had an end-to-end value chain length of 12 months but in Year 4 this decreased to 6 months thanks to technological improvements

Example of an excellent answer (score: 2)

An excellent candidate should:

1. Take the time to digest the information provided in the exhibit and ask relevant questions to understand the details regarding the value chain
2. Observe the inverse relationship over time between the ‘Artists & Content’ and ‘Streaming platform optimization’ as a probable cause for concern
3. Realize that due to the value chain length between Y1 and Y4 being different (12 and 6 months respectively) this means that the Artist and Content creation phase hasn’t changed much in absolute terms
4. Proactively seek to understand the underlying reasons behind this and offer novel suggestions as next step

Recommended score calculation: starting from 2, decrease the score by 0.5 points down to 0 for any of the following:

• The candidate did not take time to understand the exhibit data
• The candidate did not make any meaningful inferences or connections between the data points (i.e., identifying the inverse relationship between ‘Artist & Content’ and ‘Streaming platform optimization’)
• The candidate did not contextualize the inference with regards to the wider case narrative
• The candidate did not propose next steps after the analysis

If needed, clarify that 'Artists & Content' includes the creation of content for the artist that will be then uploaded on the streaming services (e.g., song writing).

Example of an excellent answer (score: 2)

A possible shortlist of why the ‘Artists & Content’ is taking a large proportion of time relative to the rest of the production process:

1. Artists don’t want to be productive
   1. Overly flexible contracts given on the basis of potential leading to a lackadaisical approach to music production
   2. The client may be taking a disproportionate cut of the overall sales disincentivizing the artist from producing music at a faster rate
   3. Many of the client’s artists have seen great success in the past and are now less motivated/driven to produce new music at a similar pace
2. Artists cannot be productive
   1. Lack of proper training to equip artists with knowledge of bespoke music creation software
   2. Lack of collaboration, there may be creative disagreements between featured artists, songwriters, etc.
   3. Lack of inspiration, where artists often draw from their external or lived experience to look for new ideas

Suggested score

An excellent candidate should: 

1. Navigate through the underlying reasons in a structured and well-communicated manner
2. Be logical and demonstrate business sense when prioritizing ideas (i.e., what is most feasible for a business)
3. Propose to move to the next steps (solutions) related to reduce ‘Artist & Content’ time

Recommended score calculation: starting from 2, decrease the score by 0.5 points down to 0 for any of the following:

• The candidate did not shortlist ideas in a structured and well-communicated manner
• The candidate did not structure with at least 2 levels (e.g., don’t want and can’t and then details for each)
• The candidate did not identify at least 4 options for improvements across all drivers
• The candidate did not offer to prioritize ideas with a hypothesis on the most likely causes

Share with the candidate that the client has made us aware that solutions related to the ‘Artist & Content’ phase are more difficult to implement; therefore, they would like us to explore first other areas of reduction.

Information to be shared only under request:

• The client wants the track production time to be reduced by as much as possible (data from previous question)
• Track production time is 180 days (data from the previous question)
• Assume the allocation of ‘Year 5’ will be the same as ‘Year 4’ from Exhibit 1
• Prompt the client to choose one strategy that would reduce the total time to produce a track the most. ‘Artists & Content’ should not be analyzed because as mentioned by the client it is out of scope

Suggested Approach:

AI Optimization:

• From Exhibit 1: Production and Editing Phase (20% of 180 days): 0.20 * 180 days = 36 days
• From Exhibit 2: Reduction with AI for Production and Editing Phase: 20% (0.20)
• Expected savings = 36 days * 0.20 = 7.2 days

Digital Sample Libraries:

• From Exhibit 1: Production and Editing Phase (20% of 180 days): 0.20 * 180 days = 36 days
• From Exhibit 2: Reduction with Digital Sample Libraries for Production and Editing Phase: 10% (0.10)
• Expected savings = 36 days * 0.10 = 3.6 days

Remote Recording Studio:

• From Exhibit 1: Streaming Optimization Phase (10% of 180 days): 0.10 * 180 days = 18 days
• From Exhibit 2: Reduction with Remote Recording Studio for Streaming Optimization Phase: 40% (0.40)
• Expected savings = 18 days * 0.40 = 7.2 days

Acquisition of a streaming service:

• From Exhibit 1: Distribution Phase (25% of 180 days): 0.25 * 180 days = 45 days
• From Exhibit 2: Reduction with Acquisition of a streaming service for Distribution Phase 37% (0.37)
• Expected savings = 45 days * 0.37 = 16.65

Note: ‘Digital Sample Libraries’ can be excluded immediately, as it provides 10% savings compared to 20% of 'AI Optimization' for the same baseline of time (36 days).

In summary, the ìAcquisition of a streaming service' offers the greatest decrease in track production by improving the efficiency of the distribution phase of the music production value chain. However, candidates should be aware that although this may in theory reduce the time for distribution, in practice, this may require a great deal of financial investment and take a considerable amount of time before the fruits of the deal are realized. 

An excellent candidate should: 

1. Take time to structure the approach
2. Communicate the structure to follow before starting computations
3. Perform the computations correctly
4. Contextualize the results in terms of addressing the client’s overall problem/goal

Recommended score calculation: starting from 2, decrease the score by 0.5 points down to 0 for any of the following:

• The candidate did not set up the right analysis
• The candidate did not communicate the approach before beginning with the computation
• The candidate made mistakes in the computation
• The candidate did not contextualize the results with respect to the client’s overall goal of finding where the renewal problem lies

Example suggestions from a good candidate:

1. Internal Methods
   1. Standardize the contract renewal process
   2. Focus to hire artists segments that have higher propensity to release songs
   3. Invest in training and skill development for artists to ensure they are using the latest tools and techniques effectively. Skilled artists can often produce high-quality work more quickly
   4. Use data and analytics to make informed decisions about which creative projects should be prioritized
   5. Incentivize faster content creation from artists (e.g., higher % share of sales if release a new album/year; ideally, the KPI should also be tied with quality metrics like average review score to ensure quality is maintained)
2. External Methods
   1. Consider outsourcing certain creative tasks to freelancers or external agencies. This can provide access to specialized talent, and flexibility in scaling creative work up or down as needed
   2. Consider licensing content from third parties rather than creating it from scratch. This can be especially useful for content pars that doesn't require a custom touch

Suggested score

An excellent candidate should: 

1. Take some time to come up with an answer
2. Structure the ideas according to different categories
3. Consider at least 2 categories with multiple levers/ideas within each category
4. Present the structure clearly

Recommended score calculation: starting from 2, decrease the score by 0.5 points down to 0 for any of the following:

• The candidate did not take some time to brainstorm
• The candidate did not divide the levers/ideas into categories
• The candidate brainstorming outcome is poor (i.e., they fail to offer at least 4 points across all categories)
• The candidate did not present the structure clearly

Example of an excellent answer (score: 2)

The candidate should:

1. Recap the objective
2. Provide an answer-first approach to the question asked
3. Mention risks and the next steps to take

RECAP OF THE OBJECTIVE

“Our client asked us to identify what might have caused the decrease in the number of tracks released onto music streaming services and what solutions could be offered to address the problem.”

ANSWER-FIRST APPROACH TO THE QUESTION

“Based on our analyses, our preliminary finding is that the problem lies in the ‘Artist & Content’  portion of the music production value chain. We recommend two strategies to decrease the production time and thus release songs faster:

1. Strategy 1: Acquisition of a streaming service. According to our estimates, this should provide a reduction of 16.65 days in the process, or around 9% of the total 6 months, thanks to improvements in the 'Distribution' phase.
2. Strategy 2: Provide a direct solution for the longer time in ‘Artist & Content’ . This could involve improvements including new training and incentives for artists and outsourcing of parts of the process to third parties. For this section, we are currently completing an analysis to identify the most promising options for savings.

RISKS AND NEXT STEPS

There are some key risks with the current solutions identified. This is because:

• We have not identified the underlying segments of music that are perhaps more disproportionately affected than other such as R&B, Hip-hop, etc.
• The solutions offered may not all be viable and may not be addressable within the client's target in practice as the music production process is variable by its very nature
• Our client’s potential acquisition may fall through and may take months to years to be realised

Therefore, we would like to analyse additional elements before making a final recommendation, such as: 

• Conduct further analysis on the breakdown of music genres to address why certain genres are slowing down the music production process more than others
• Perform a cost-benefit analysis of alternative possible solutions to optimise the ‘Artist & Content’ phase as this makes up the largest percentage of the music production value chain
• Double check the business case and potentially develop worst-, base-, and best-case scenarios”

Suggested score

An excellent candidate should: 

• Recap the objective of the case
• Firmly address where they believe the problem lies regarding the music production process whilst addressing possible solutions
• Mention possible risks and propose next steps related to the original structure and/or to implement the suggested approach

Recommended score calculation: starting from 2, decrease the score by 0.5 points down to 0 for any of the following: 

• The candidate did not have an answer-first approach
• The candidate presented the conclusion in a disorganised way
• The candidate did not provide reasons to sustain the need to act on the ‘Distribution’ and ‘Artist & Content’ phases
• The candidate did not conclude their analysis proactively, mentioning the next steps