Polyphonic HMI: Mixing Music and Math - Case Solution

Polyphonic HMI and Hit Song Science (HSS)

The Chief Executive Officer of Polyphonic HMI, Mike McCready, was in the planning stage of launching an AI tool. The artificial intelligence is known as Hit Song Science (HSS).

The said tool is designed to identify the characteristics of current music in relation to past hits. The analysis would be used to determine the potentiality of the current song to become a hit as well.

Mike McCready is looking into which market to target with the new tool. Should he target record companies, producers, or independent artists? And how could he protect his creation from possible future replication?

1. What is the Break-Even point for Polyphonic HMI?

The break-even point for Polyphonic is as follows:

Scenario 1: Recover upfront expenditures in one year and cover ongoing costs at 100% above costs (=$600):

= ($600,000 + $500,000) / ($600 - $300) = 3,700 sold reports to break even

Scenario 2: Recover upfront expenditures in one year and cover ongoing costs at the lowest competitive-parity price (=$30,000):

= ($600,000 + $500,000) / ($30,000 - $300) = 37 sold reports to break even

2. How would you evaluate the Markets for Polyphonic?

ACCORD Model* of New Product adoption applied to Polyphonic HMI Markets