The Seno article provides two examples of segments: 1) the market segment - Classical Music, Country Music, Rock Music; and 2) the product segment - physical CDs, digital music. What costs must be considered when determining the profitability of these various segments? Overall music sales have dropped drastically, although the digital music product segment has proven to be highly profitable amongst each of the market segments (much more so than the physical CD segment). Should music companies consider closing their physical CD divisions? Why or why not? What costs are relevant to this decision?

Warner Music's ADA-centered strategy - in which they only distribute smaller indie acts until they reach a certain level of success and then sign them - is very similar to the "make or buy" and "own or lease" scenarios covered in this unit. What are some relevant and irrelevant costs associated with the decision to sign an act (make/own) as opposed to just distributing one (buy/lease)? Identify at least 2 relevant and 2 irrelevant costs.