Compass Records

The co-founder of Compass Records, a small independent music record company must decide whether to “produce and possess” the next album from an up-and-coming folk musician or simply “license” you finished recording. This case provides sufficient information to establish alternative cash flow forecasts for both investment. Discounted cash flow (DCF) analysis shows that the licensing will be the more attractive alternative when students evaluated the value of the options for follow-on albums include … Read more »

The co-founder of Compass Records, a small independent music record company must decide whether to “produce and possess” the next album from an up-and-coming folk musician or simply “license” you finished recording. This case provides sufficient information to establish alternative cash flow forecasts for both investment. Discounted cash flow (DCF) analysis shows that the licensing will be the more attractive alternative when students evaluated the value of the options for the follow-on albums in the “produce-and-own” contract included.
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from
Robert F. Bruner,
Kenneth Eades,
Sean Carr
Source: Darden School of Business
12 pages.
Release Date: 09 December, 2005. Prod #: UV1381-PDF-ENG
Compass Records HBR case solution