P
ProHub
English 简体中文 繁體中文
Medium Growth/Cost

Orange Music

#Media & Entertainment
ProHub Comment

This case requires candidates to synthesize two distinct problems—market share loss and rising ad spend efficiency—through both inorganic growth (acquisition) and operational optimization (marketing channel reallocation). The case is well-structured with exhibits that guide candidates toward recognizing Audio Auteur as the optimal acquisition target and identifying Display Ads' low conversion rates as the key cost driver.

Estimated Time 26 minutes
Difficulty Medium
Source Duke
10 / 100
Orange Music, a music streaming app, is losing market share to its primary competitor Soundhaven, for the past 3 years. Additionally, Orange Music’s Ad Spend as a % of revenue has been increasing and has become higher than Soundhaven’s. Orange Music needs your help to turn things around.

Clarifying Information

  1. OM’s main goal is to increase market share and reduce Ad Spend (% of revenue)
  2. OM operates in NA (North America), LAD (Latin America Division), and EMEA (Europe, Middle East, and Africa)
  3. OM has 4 main competitors; all have a higher YoY growth than OM
  4. OM earns revenue through in app ads, user subscriptions, and partnerships
Mock Interview
Interviewer

Orange Music, a music streaming app, is losing market share to its primary competitor Soundhaven, for the past 3 years. Additionally, Orange Music's Ad Spend as a % of revenue has been increasing and has become higher than Soundhaven's. Orange Music needs your help to turn things around.

You

Thanks. Before analyzing, I'd like to clarify a few key questions...

Interviewer

Good question. Let me provide some background information...

You

Based on this, I suggest analyzing from these dimensions...

AI Score
Structure Analysis Communication Business Sense Quantitative
Practicing...
Score coming soon
Practice this case with AI Mock Interview

Orange Music faces dual challenges: losing market share to Soundhaven while spending a higher percentage of revenue on ads than competitors. The solution involves acquiring Audio Auteur to rapidly gain market share and APAC presence, while simultaneously reducing ad spend by shifting budget away from low-conversion Display Ads to higher-efficiency channels.

Key Insights:

  1. Inorganic growth through acquisition of Audio Auteur is superior to alternatives (Play 360 has high ad spend; Boss Music too large and difficult to acquire)
  2. The root cause of rising ad spend percentage is increasing Display Ads clicks with low conversion rates, not rising cost-per-click
  3. A dual-track strategy addressing both growth and efficiency is needed: aggressive market share expansion via M&A while simultaneously optimizing marketing channel mix to reduce CAC