Month: october

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Seven years ago, Apple came out with the iPod. Many thought that the expensive new device would fail not only because Apple was stepping into a new area, but also because the country was facing a recession. As we now know, the iPod was a great success for Apple and between that and iTunes, which came out in 2003 the music industry has changed as a result. Today, CD sales are still in decline, and unfortunately digital sales are not making up the loss. While the younger generations view music as free and piracy has become a large problem, a lot has been tried to try and bring in revenue. Giving away music and letting people give what they think the music is worth and subscription services are just two of the ways that the industry has tried to save itself, but nothing to this point has really worked. It has been hard to keep the music industry and its consumers happy with one another when it comes to people getting music. Consumers want unlimited music, while companies in the industry would like to use more of a subscription basis. The issues in the past is that the industry has had with the subscription model is that the people who use them can not access the music they have already received if they do not continue to pay for the subscription. At this time, seven years after the iPod came out , Nokia has decided to launch a product during a economical hard time. People are unsure if it will be successful, but it is a way that the industry can provide music in a way that will feel free for the consumer, yet generate revenue needed for the people and music involved. Nokia’s Comes with music model is a new one that is getting a lot of attention. When users buy a Comes with music phone, they will also be paying for a year subscription for unlimited downloads of music. The price of the subscription will be hidden in the cost of the phone. This model if it works, could be put to use in other areas of business. In the future, if this works there could be opportunities for other companies to bundle their products with a “free” music subscription, which could help it land loyal customers.

Month: October

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Microsoft has not been able to outshine Apple when it comes to the Zune and the iPod, but in one recent case Microsoft’s Zune come out on top. When it comes to music discovery, the Zune has advanced farther than the iPod and can give its users more of what they want. Today, 63% of Adults in the United States discover music on the radio, and 26% get recommendations from friends. The Zune has features that can help its users in both of those areas. Two years after the Zune’s release it has improved greatly. You can tag songs that you like from the radio and download them later, get music recommendations, be apart of a Zune community that can connect people who like the same types of music, and also it would allow music to be downloaded straight to the device. The music discovery feature is felt to be so strong that Microsoft is basing its marketing and advertising around this for the holiday season. Another thing that makes the Zune different from the iPod and is looked at as a positive is that to use the discovery feature the user has to pay $15 a month for the Zune pass subscription. Even though the subscription model has not been well receipted in the past, Microsoft feels that they can make it work. When looking at other Microsoft products like the Xbox and how it competed against the Sony Play Station, if Microsoft could go down that same path and achieve the success it did in that situation , the Zune maybe able to expand on its features and gain more of a market share.

Month: July

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iTunes' Complete My Album is emerging as a marketing tool for labels releasing new albums from their artists. In recent years, releasing an upcoming album's first single for digital download has been common practice. But many believe this takes away from full album sales when the release date comes along. That is where Complete My Album comes in. The premise is to release several singles in a timely fashion before an album's release. Consumers can purchase these singles to give them a better idea of what the rest of the album will sound like, paying the usual 99 cents per song. When the album comes out, they will be offered to pay a reduced price for the rest of the album. In reality, they are paying the same amount, but in smaller installments over time. Lil Wayne's latest album released six singles beforehand, and the Complete My Album sales accounted for 52% of the digital sales on iTunes. Labels are happy this option gives a better chance of consumers purchasing the album after getting the singles. The videogame industry has done similar marketing schemes by releasing demos and screenshots in anticipation of the release date to generate excitement and demand for the final product.

Month: June

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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.