Organization Snapshot

Muzak is a privately held company founded in 1934 specializing in music programming for businesses. It is based in Fort Mill, South Carolina and currently has 3,000 employees and over 200 sales and service locations.
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Blue Ocean Strategic Move

Muzak created a Blue Ocean when it started offering businesses pre-packaged "easy listening" music programs over wires that they could use as background music in elevators and at their stores and workplaces.

The founder of the company, Major General George Owen Squier, realized that music makes people feel better and could improve the customer experience. Background music, carefully selected and programmed, could also help boost productivity, reduce errors and improve employee morale.

Programs initially involved instrumental versions of popular songs piped through wires, but have evolved to sophisticated, integrated programs of music and voice delivered by satellite, over broadband, and on high capacity disks.

Over the years, Muzak has built its capabilities to help companies - especially retailers - increase their emotional appeal through what it calls audio branding. The company develops audio programs that are customized to musically evoke the themes, emotions and attributes of each brand's unique personality.

Success

Muzak has grown its business significantly over the years. According to the company, the firm has 350,000 clients and supplies 60% of commercial background music in the U.S. It also serves customers in at least 10 other countries around the world. As of 2005, revenues were $247 million and EBITDA margin was 22%. Considering that the greatest competitors to Muzak are silence and regular radio which are free to listeners, its value innovation and blue ocean creation are quite remarkable. Even new satellite radio subscription companies such as XM Radio and Sirius have not yet entered Muzak's custom audio programming space.