Missing In Action
Page: 20,
Date: 06/07/2008
Full Text:
The main competitors for Apple in the realm of digital music all meet the prerequisites for existing customers, flexible pricing and business models, and willingness to invest in new technologies. The key problem that Amazon, Napster, and Wal-Mart have in their efforts to compete with Apple is their marketing. Especially with TV ads, these three companies seem to have non-existent promotional strategies for their DRM-free digital music services. Apple has spent $400 million since 2003 on their successful iPod + iTunes TV ads, along with more on billboard and print ads. Napster has cut down advertising costs since their Super Bowl ad due to low quarterly earnings in an effort to cut their net loss. Amazon and Wal-Mart, who both had billions in revenue last year, have still shown next to no advertising for their services. Amazon has a lone ad with Pepsi that advertises a point system where consumers can purchase anything from Amazon with Pepsi points, not just music, that has been running since February. Amazon's system is also still in the beta format, so it could be waiting for a broadening of its service. Wal-Mart has not advertised their service at all and has been in the midst of a transition to the DRM-free model with the addition of WMG content. It is possible there are campaigns waiting in the wings for these companies, but nothing has come about as of yet. A group effort from these companies and labels alike will be necessary to compete with Apple's chokehold on the digital music world. DRM-free music service-providing companies need to increase their messaging and record labels need to make artists available for promotional purposes in these new marketing campaigns.
