Posted by Mikal Lewis on December 3, 2009 under Analysis | 
Second post in the ‘Is Nook a Kindle Killer?’ series by Mikal Lewis, coauthor of Notsocommoncents & CEO of nascent Technology Startup Qworky.
At the conclusion of the last post on Barnes & Noble’s strategy I wrote:
What I would do if I was Barnes and Noble:
- Discover what business you’re in. You’re not in the book selling business. You decided that long ago when you let Amazon run away with online book retailing. . .
While this follow on has been delayed- lets resume there.
Step 1
Barnes & Noble must discover the business they are in- they stopped being in the book selling business when they ‘let’ Amazon run away with online book retailing. Much as Yahoo has discovered they are not in the search business after Google similarly ran off with the search market- Barnes & Noble must come to grips that their business is not about selling books.
And of course its easy for me to say they let Amazon run off with the online book selling business but- if they didn’t let Amazon, who did? There is plenty of room for innovation in online book retailing (not just eBooks either)- but Barnes & Noble is still behaving ambivalently. For example compare the two homepages for books:
Amazon vs. Barnes & Noble (go ahead click through)
Notice something? One company behaves as if price matters, the other doesn’t (opting instead to showcase ambiguous numbers like 50% off – yeah, but you were 60% more expensive).
People buy online because of price. Don’t believe me- JPMorgan “Internet Team 2007 Consumer Survey” cited the number one reason people buy books online is price (86%+ of respondents across income ranges)- with selection being reason number two (73% of respondents) and it drops off starkly from there. Lets face it with gimmicky members clubs, buy this discount card to save more money on books, and with the limited selection of the store, we don’t have it but if you drive to this other store might have it, just wait 5 minutes here while I call them and have them locate it on the shelf if they can find it, Barnes & Noble gave away this market.
If Barnes & Noble were in the bookselling business they’d have bet the house in order to increase relevancy in the digital era “If we don’t have it in stock at our store- we’ll ship it to you for free”, pushed the envelope for giving Barnes & Noble customers a digital inventory of books they’ve purchased- commit advertising to its brand and highlighting the ‘essence’ of what Barnes & Noble’s stands for, I posit Barnes & Noble : Books :: Hallmark : Greeting Cards. I go to Barnes’ & Noble all the time but I can’t say what their brand is about vs. say a Borders- bigger stores? More sitting room?
Barnes & Noble’s true Business
In Pour Your Heart Into It, Howard Schultz defines Starbucks’ value as a 3rd place. It’s not home, it’s not work but it’s this third place where you can see people, meet and interact. With a lot of societal shifts that have occurred- Starbucks came along just as a time when our culture demanded a third place, to feel connected, the most. Starbucks grew based on the value and the promise of its brand as a third place, they monetized this through selling premium coffee. Of course I’m trivializing the value of the coffee intentionally, only to focus on the importance the social aspect of this accessible, and inviting third place was that filled a void- the local pub may have for blue collar males in a different era.
Barnes & Noble should take heed. Their business is not selling books, their business is selling knowledge, and experiences. To simplify today they sell knowledge & experiences through two means: selling knowledge- non-fiction books; selling experiences: fiction books.
Selling Knowledge
Selling knowledge doesn’t have to be in the form of books, in fact Barnes & Noble has an asset Amazon cannot match at least not in the next five years- the physical presence of their stores. If Barnes & Noble were to realize the value of their ‘selling knowledge’ – they would, for example, utilize sections of their floor space for ‘learning centers’.
Imagine for a moment. Today if you want to continue education or learn in a new field you enroll in university, a community college, or . . . buy a book. There has to be an opportunity to ‘right size’ lessons in the way the information is scaled down to fit into self directed texts. If I want to learn to cook, why simply sell me a recipe book, when you can sell me a recipe book + Wednesday Night at 6pm class? There has to be lots of categories ([Category Name] for dummies, anyone?) that are waiting to be explored. And as any great chef rotates their menu, Barnes & Noble in the area could rotate their course and classes to cover most subjects at a price point and a distribution point that would be otherwise unmatched.
If Rosetta Stone can get $600 for learning a new language- how much would one pay for a lifetime classes on speaking a language?
Selling Experiences
I personally think this area is a bit more tricky- but in short the books people know and love, in many respects could be translated into other forms of experiences. Why wouldn’t Barnes & Noble be the brand to help book authors translate their experiences into games, sound tracks (what music might be on the lead character’s playlist?), documentaries, or movies. Perhaps Barnes & Noble could custom generate the accompanying manual for the books they sell- is it a period Novel on life in Rome? Why not sell the accompanying guide on life in Rome during that era to help augment the book- with images of areas described within the novel etc.
With a little programming magic- accompanying guides and info books for most of the major best sellers could probably be generated on demand extracting information and excerpts from books Barnes & Noble already sells.
And Step 2
Get out of the eReader hardware business, even if you win and build a profitable business- you lose, are you really expecting to over take Amazon as a digital brand? How long do you think eBook Reader margins will hold? My bet is they mimic the PDA with everyone selling an eBook reader at relatively low margins within three years. Barnes & Noble should figure out how to sell white label solutions and infrastructure to the companies that want to pursue this model- to challenge Amazon. And keep in mind, Amazon is fighting on multiple fronts- they have decoupled selling eBooks from the selling eReaders; which means Amazon may be fighting to get their bookstore on potential partner devices as well.
Step 3
Good luck!
–
In many respects as industry shifts and competitive environments change- it is on us to to focus on the value we deliver to our customers. Doing so and framing our marketplace accordingly will often open the door to unique opportunities in open competitive space. Of course after we identify these opportunities the fear of being pioneers often paralyze us into inaction. But that’s for another post, perhaps best covered by innovation strategist, Qworky cofounder and friend Jon Pincus.
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Posted by Mikal Lewis on October 23, 2009 under Analysis |
In a word. No.
Barnes and Noble execs (hopefully) know it, Amazon knows it. Everyone except for PC magazine knows it. But I don’t blame David Coursey’s cursory commentary, after all someone had to write the obligatory five reasons why… list.
Silicon Alley one of my favorite blogs has a good list of reasons explaining why ‘Nook is toast’ if you need a good logical reason.
But of course I’ll tackle this from the notsocommoncents perspective.
The biggest threat to Barnes & Noble is its not a digital brand. Ebooks are inherently digital. And while Barnes and Noble likes to tout itself as the No. 1 Bookseller Brand, the true data doesn’t lie. Amazon is the number 43 global brand as ranked by Interbrand. Barnes & Noble, not on the list.
Amazon is sells more media (books, CDs, and DVDs) in the U.S. than Barnes & Noble + BN.com- book sales alone aren’t broken out.
More people primarily buy books online and at a far greater frequency:
(Percentages, Source: Zogby, The Reading and Book Buying Habits of Americans)
Ok, so it’s clear, online is the dominant retail channel, Amazon compares favorably with Barnes and Noble, despite retailing online only, and Amazon’s brand has global clout. There is still one more data point Barnes & Noble should pay attention to when deciding to go to war with Amazon digitally:
(Data is in the Thousands 000s; Source: The Nielsen Company as cited on company blog Jan 2009)
Amazon is the 800 lb gorilla in the digital realm. They are mimicking Apple’s iPod strategy beautifully and I think their expansion to PC applications and iPhone applications are genius. Amazon Kindle needs to expand to new retail partners soon though- while 77 percent of people buy books online, gadgets are purchased offline. Amazon has already proven the Kindle can sell well digitally:
“Kindle has become the #1 bestselling item by both unit sales and dollars – not just in our electronics store but across all product categories on Amazon.com. It’s also the most wished for and the most gifted. We are grateful for and energized by this customer response,” said Jeff Bezos, founder and CEO of Amazon.com. “Earlier this week we began shipping the latest generation Kindle. Its 3G wireless works in the U.S. and 100 countries, and we’ve just lowered its price to $259.”
Source: Amazon’s Huge 3rd Quarter
As a product planner/strategist, it continues to surprise me the lack of strategic rigor that goes into big corporate decisions like this. The capital invested in this defies logic.
What I would do if I was Barnes and Noble:
- Discover what business you’re in. You’re not in the book selling business. You decided that long ago when you let Amazon run away with online book retailing. . . [Intrigued? Stay tuned for part two ... suggested strategies for Barnes and Noble]
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Posted by Justin McDowell on September 5, 2009 under Analysis, In the news |
When I first heard the news Oracle – Sun merger, I had high hopes that given a quick transition there would be some interesting disruptive effects.
This immediately threatens IBM who for years have used less expensive, home-grown hardware to propel sales in higher margin enterprise software. Oracle not only acquires the hardware to implement an end to end solution, but it acquires a very extensive software platform with the crown jewels being Java and MySQL, a technology that has propelled many companies looking to expand online. Oracle also acquires Solaris/OpenSolaris and thus fulfills its needs to own its own flavor UNIX based operating system which will no doubt further antagonize Microsoft and more importantly leave Oracle less dependent on the excessive churn in the myriad distros of Linux. — Justin McDowell — Jabian Internal Blog
While the DOJ has approved the merger the European Union recently launched an antitrust investigation that will grind the close of this merger to a slow walk. IBM, HP, and Dell have been using a serious ground and pound game to lure customer scared that their platform/server of choice will not be supported by Oracle, and for good reason. Oracle has been known to raise licensing rates after a successful acquisition – and kill products not in it’s core strategy. Developers have been forking projects and exiting the building in droves.
I still think all is not lost. Oracle will still have Java, MySQL, Solaris/OpenSolaris, and Xen. I think the question we should be asking ourselves is what else in the “stack” does Oracle need to acquire before it could theoretically run your data center top to bottom, and have a significant desktop software footprint (i.e. OpenOffice). IBM, HP, and Dell might be winning in the short term sales but none have made the strategic investments to be a single source provider.
A notsocommon prediction: Oracle still wins, but not by as large of a margin if it could have closed this merger in July.
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Posted by Justin McDowell on August 19, 2009 under Analysis, Notsocommon Ventures |
This is the second post of a two part blog series on some exciting news and future blog topics
Welcome to The Resume Lounge
After much delay, I am proud to announce the second piece of news. True to my word, you are going to get some inside access into The Resume Lounge as we start up and get our sea legs. So let’s start from the beginning:
We are Getting Real at The Resume Lounge, and that is already paying dividends operationally and philosophically.
We started on this journey realizing that even though our core team is located in the metro Atlanta area, our schedules would still lend towards working independently. Members of our core team all have full time jobs so we tend to burn the midnight oil, or rise early in the morning to work a couple of hours on the project. Therefore remote collaboration is essential to our success. Price is also a big deal. We are a non-profit and my default answer when it comes to spending my time or money is NO. I knew from the very beginning that we needed to be as laser focused on our mission and our tools needed little to no maintenance and needed to get out of our way. Lastly, none of us are using the same hardware and software. These requirements naturally lend itself to the notion that we needed a web office. We simply don’t have time to manage all of this ourselves, we have people to help. So without further ado here are some of the tools we are using to get things our work done:
Balsamiq Mockups – We use this extremely useful and flexible tool to mock up designs for our website and collaborate with our designers and developers. It makes my life at The Resume Lounge easier. I sent an email to Valerie Liberty at Balsamiq explaining what we are about. In 10 minutes Valerie sent us a free license. We can’t thank you enough Valerie (our thank you letter is in the mail)!!! Follow her on Twitter, she has interesting things to say.
Backpack – This serves as our company intranet and group scheduling calendar. We store all of our appointments, legal documents, our board of directors meetings minutes, our expense receipts, our staff meetings…. etc all. Anytime we need a quick webpage created or a quick to do list thrown up that isn’t worthy of a formal “project”, we put it in there.
Basecamp – We need a simple and flexible collaboration tool to help us with project management. It keeps us on the same page and soon we will roll this out to our partners and sponsors so we can keep track of what they have going on. It truly lives up to its motto “The Better Way To Get Projects Done.”
Highrise – is a dead simple customer relationship management tool. It helps James and I keep track of who we talked too and what was said. We need to keep track of our open deals (they might be pledged donors that we need to follow up with, a proposal for services that we will need to pay a third party vendor for, or corporate sponsorships) and if they were won or lost.
Gmail – We use gmail for our email platform, and Google Talk for our instant messaging capability. We occasionally use Google Docs.
MailChimp – We use MailChimp to create and track our email marketing efforts. There automagic integration with Highrise and attractive price point (including a discount for non profits:) made this an extremely easy decision. It saves me time and takes one problem completely off the table. The analytics and reporting really helps us slice and dice our target markets.
We are in the process of evaluating web accounting software, because for us Quickbooks isn’t an option. Right now Less Accounting is the front runner.
What other web office tools do you recommend?
– Justin McDowell
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Posted by Mikal Lewis on July 28, 2009 under Analysis |
Pepsi’s branding vs. Coca-Cola over the years.
Read more to see graphic.
Read more of this article »
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Posted by Mikal Lewis on July 22, 2009 under Analysis |
Building on Justin’s post: Who are you working for?
“No, that is not your problem,” he says.”Your problem is you don’t know what the goal is. And, by the way, there is only one goal, no matter what the company.”
That stumps me for a second. Jonah starts walking toward the gate again. It seems everyone else has now gone on board. Only the two of us are left in the waiting area. I keep after him.
“Wait a minute! What do you mean, I don’t know what the goal is? I know what the goal is,” I tell him.
By now, we’re at the door of the plane. Jonah turns to me. The stewardess inside the cabin is looking at us.
“Really? Then, tell me, what is the goal of your manufacturing organization?” he asks.
“The goal is to produce products as efficiently as we can,” I tell him.
“Wrong,” says Jonah. “That’s not it. What is the real goal?”
….
Wait a minute, I’m thinking. That’s it!
Technology: that’s really what it’s all about. We have to stay on the leading edge of technology. It’s essential to the company. If we don’t keep pace with technology, we’re finished. So that’s the goal.
Well, on second thought . . . that isn’t right.
The Goal, Eliyahu M. Goldratt p32
In life it’s easy to lose sight of the goal. Without acknowledgement of “The Goal” interesting things become important things – important things become critical things.
If you can imagine for a moment – the above conversation taking place but instead of proposing “technology” or “products efficiently” as the goal instead “Six Sigma” or “Brand” or better yet “Employee Morale” might be cited as “The Goal.”
Think about it though – why is it we do the things we do? In life my goal is to make the world better by having lived vs. how it would be had I not existed. The more I make the world “better” the better I’ve achieved “The Goal.”
The saying is raison d’etre it’s not raisons d’etre, and the reason is when it boils down to it there is only one target goal. I’m of the belief that while the goal may not necessarily be the only measure of success, it is most definitely the measure of failure.
How I go about my goal may be through learning, through impacting the business world, and by striving to be a good friend and family member. But in the event I no longer have friends or family (heaven forbid), I can no longer retain new things, or I no longer have the chops for the business world – my goal lives on. Therefore my goal is not to learn – learning is just a core element for how I go about my goal.
When I think about my goal and to continue along with Goldratt’s Theory of Constraints, the process to attain the goal and the barriers/bottlenecks to that goal, I get clarity around the things I should be doing, when and why.
What is your goal?
What is your business goal?
And how do your actions of today drive yourself and business to those goals?
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Posted by Justin McDowell on July 17, 2009 under Analysis, Branding, In the news |
Attitude
It’s good to be back!!
Yesterday I had a very informative conversation with a client of mine with a deep marketing background. The topic centered around “Web 2.0″ companies and could small to midsized, non “Web 2.0″ companies, borrow some of the same concepts to grow market share and brand awareness, social networking, and focused marketing strategies leveraging social networks. What immediately came to mind was “Web 2.0″ companies have attitude, and tons of it.
These companies have bold refreshing websites, take a strong position, will call out the big dogs or have an enemy in mind, and have attitude for days. They usually make it incredibly easy to connect with customers, other companies, and recruits. These companies tend to make extremely good limited feature products that are incredibly easy to use. Personally when these characteristics are exhibited, I am attracted like a moth to a flame. In these recessionary times, I actually want to patronize these people.
Here are some examples taken from some of my favorite companies right now…
Web applications today are too limited. They’re hard to use and don’t play well together. They’re also incredibly difficult to build. We want to change that. — 280North
Balsamiq Studios LLC is a fresh little software company, focused on adding flavor to your Web Office suite.
Life’s too short for bad software. Most applications have too many buttons, are ugly and boring. We focus on small problems, so that we can solve them really well.
The entire About us page at MailChimp.
Here are three examples of attitude presented in a tasteful manner that instantly separates these companies from the umpteen millions of large and small companies and firms that all seem to want to provide value, and are focused on customer service. When is the last time you heard AT&T talk about how they were focused on providing a kickass telecom network and customer service to support their myriad of consulting services. Can you even find out what consulting and data center hosting services they offer in less than 1 minute? Thus it is no surprise that large companies and mid-sized companies that want to be large corporate titans are having a difficult time using social networks to spread the word about their brand. It’s kinda hard to get twitter followers if your boring and monolithic. Luckily there is help, but I wonder how dynamic can you really be when your’re so large and can’t shake the irresistible urge to be conservative.
Here is an example of a marketing services agency that got it right.
Social Media isn’t a gimmick. It isn’t a fad. It’s not going away.
Social Media presents new and exciting opportunities for brands to
better understand and connect with their customers online. At Spring
Creek Group, we help our clients monitor and analyze their brand equity
online, develop their social media marketing strategy, and build their
social media brand presence and customer engagement programs. — Spring Creek Group
Talk about a tightly focused, strong position, introductory statement that really draws you in. It really isn’t that hard to do.+10 points for this description of their team:
Our team at Spring Creek Group consists of a growing group of Project Leads, Analytics & Measurement Leads, and Engagement Leads. Our titles don’t map to traditional marketing and advertising agencies, because our services and business model are quite a bit different than typical agencies. We are organized from the ground up to focus on our clients’ needs and driving brand insights and awareness in the social media channel.
You know who else is showing tons of attitude in a very engaging ad campaign…. Cuauhtémoc Moctezuma Brewery, a subsidiary of FEMSA (NYSE: FMX) and better known right now for Dos Equis. “The Most Interesting Man in the World” advertising campaign is another great example of a larger organization showing some attitude using the social networks to their advantage, and getting results for their brand. At this point who isn’t a fan of Dos Equis on Facebook? Who (unless you’ve been living under a rock) hasn’t seen those commercials on TV or YouTube.
However, to be fair, there are some large entities showing plenty of attitude in the midst of a downright brawl. Apple and Microsoft have been slugging back and forth for awhile now and their ads are indeed entertaining. In fact Microsoft has been showing a bit too much attitude because apparently Apple wanted the Laptop hunter ads to be removed. I’ll save my comments for later about what I think of Apple’s course of action on this, but it is worth noting that these two companies are definitely taking a stand and their attitude and fight are showing in their ads. I literally joked with Mikal that the “I’m a Mac” ads were a sucker punch to the head by Apple, and I was curious to see what the retaliation would be. It took a while, but eventually Microsoft came back swinging. That’s attitude, that’s where the web and popular culture is going, and people need to get on board.
What other “traditional” aka non Web 2.0 companies are showing some attitude either on their websites, or as a part of their marketing strategy?
– Justin
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Posted by Mikal Lewis on July 11, 2009 under Analysis |
A few weeks ago I came across an article by 24/7 Wall St titled: Why Yahoo! (YHOO) WIll Never Recover.
I fell for the hyperbole and read through the article.
What I uncovered was more notsocommoncents.
The general premise is that since Social Networks are challenging Yahoo in page views, and Microsoft has the money advantage in search (BING!) – Yahoo is lost and stuck in its low margin business of only $121 million on $1.82B Q1 revenue. Some excerpts:
Yahoo! has not developed any effective strategy to have any presence in the fast-growing social network sector. The same can be said of Microsoft (MSFT) and Google (GOOG). Each company may regret its lack of success in entering the the online world created by MySpace (NWS), Facebook, and Twitter. Because of its size in relationship to Microsoft and Google, Yahoo! can least afford to let major opportunities pass. It is still questionable whether social networks will make money…
Yahoo!’s most important strategic blunder is likely to be the refusal of CEO Bartz to form a search partnership with Microsoft quickly after taking the top job. The industry has known for months that Microsoft was about to launch the next generation of its search product. Bartz and many experts believed that Microsoft did not have the product development and engineering expertise to build a highly competitive search engine. This turned out to be an underestimation of Microsoft’s resolve, its willingness to invest great sums of money on risky ventures, and the prowess of its developers.
The fundamental flaw with this analysis is the assumption that there are only two potential ways to generate profit online, social networks (though their profit potential is unknown) and search. The fact is when you apply unproven present day constraints to the future outlook of an opportunity- you severely limit the way you see opportunity.
Lets call this: the gold rush fallacy.
When the California gold rush wound down, everyone who went there searching for gold probably was thinking: now what am I going to do to get by? The gold rush is over, all the ways to make real money are lost.
Yet for Levi Strauss the gold rush had just begun. So while everyone else had given up in despair- “woe is me the gold rush is over”, Levi Strauss was just digging in building a gold rush on the back of what were then, present day needs.
The fact is that each wave of new products and services we introduce into our life introduces a new wave of needs, be it sociological or physiological. Therefore The Gold Rush never ends.
Let’s take a look back at the Gold Rush Fallacy. After the dot com crash there was a Gold Rush Fallacy with regard to online advertising. Gold rush is over the bubble has crashed, there was no way to generate enough advertising revenue to sustain a tech business.
Along came Overture (And Subsequently Google Ad Words) – Illustrating that there was in fact a highly profitable billion dollar business to be had with online advertising, even after the “Gold Rush.”
Looking at this from an asset based thinking point of view: Yahoo has the top homepage of the internet, a top photo community, No. 1 in email, and No. 2 in messaging – world wide. Couple this with a technology portfolio that is rivaled by few companies, and probably the number one Question and answer communities in Yahoo Answers, not to mention their well recognized brand. With these assets, how could one really believe the gold rush is over?
I wish Yahoo much luck in uncovering additional business models, I specifically hope they ignore the wise business minds which would only encourage them to believe their opportunity to strike gold is over.
“What would I do? I’d shut it down and give the money back to the shareholders,” Michael Dell speaking on Apple’s prospects in 1997
The Gold Rush is only over if you believe it so.
Conversely the business models, products, and services that are economic drivers, will one day sunset to give way to another gold rush. But don’t take my word, ask Levi Strauss:
“In the old days, people used to risk their lives in India or in the Americas in order to bring back products which now seem to us to have been of comically little worth.”
- Levi Strauss
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Posted by Justin McDowell on May 19, 2009 under Analysis, In the news |
Wolfram Alpha, a computation search engine
Wolfram Alpha, the computational search engine, had a soft launch on Friday. While some are calling this a Google killer, I personally think the two engines will complement each other and allow for information to be served depending on your needs. Wolfram Alpha provides me with some capabilities that Google did not, i.e. the ability to ask the engine a question and have it compute an answer (think the computer on Star Trek).
Depending on my context, these search engines can provide me with valuable different perspectives on the question: What is the population of Metro Atlanta?
Google’s answer: Links to Wikipedia and other sources which is useful if I want to cite a source in a blog or a paper.
Wolfram Alpha’s Answer: 4.565 million people, which is extremely useful when my father calls me and expects me to recite this number from memory.
It becomes even more useful when you need to compare the financial data of two or more companies, say Coca-Cola (KO) and Pepsi (PEP). Simply typing the two stock tickers brings up all sorts of useful financial data on recent trades, market caps, volatility, revenue per employee, etc. You can even download the data as a PDF.
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Posted by Mikal Lewis on May 5, 2009 under Analysis |
As I noted in an earlier post, my posts will be semi-deep dives into under represented analysis or data points in business. As a music aficionado, looking at the media space in my daily role, figuring out what was going on in the music industry seemed like a natural first dive.
The good news is there are ways to influence whether or not consumers purchase music or download illegally… simply make good music that has replay value, that listeners would enjoy with friends, oh and identify with your listener. Sounds simple enough? Lets explore the study…
In a 2007 (that not surprisingly wasn’t covered by the blogosphere) Journal of Consumer Behavior, Jean-Francois Ouelle published a paper entitled; “The purchase versus illegal download of music by consumers: The Influence of Consumer Response towards the Artist and Music.”
The three part study looked at why consumers (college students were studied) decide to acquire music, and second what drives their decision to acquire it legally or illegally. The study was written sometime in late 2003 or early 2004 but as with most peer reviewed studies should present lasting implications. Bear in mind before there was illegal download, there was always some form of illegal acquisition – such as burning a CD from a friend, or dubbing a tape.
The study focused on two things: the listener’s response to the music, and the listener’s response to the artist. A response to listening to good music is the need to re-experience the music. Think of it this way – you hear a song, and the reason you want to download or purchase it – is you want to re-experience/listen to it again.
Study Findings:
- The music itself is the only proven determinant of whether or not someone will want to ‘re-experience’ the music. Meaning whether or not a consumer liked an artist – had no proven effect on whether or not they want to listen to it or ‘re-experience’ it again
- Consumers acquire music because they want to re-experience it. If you increase how much someone wants to re-experience music by 1 point you increase their likelihood of acquiring music 2.5 fold; consumers response to the artist did not have a statistically significant impact – meaning whether or not a listener liked the artist didn’t affect whether they wanted to re-experience (listen ot it again) the song.
- Whether or not someone wants to re-experience music, is the most important response to music. Essentially - Do you want to listen to it again?
- The consumer’s response to the artist, not the music, impacts whether consumers acquire it legally or illegally. A one point increase in the individuals response to the artist results in a 1.729 fold increase in the likelihood of acquiring music in question legally. So if a listener likes an artist they are much more likely to purchase it.
What this means for artists and record labels:
You need people to listen to your music.
This study finds that in general people decide to acquire music based on their need to ‘re-experience’ it. Of course, to make a decision about whether they want to re-experience it consumers have to experience the music first.
This is the problem with rap and the mixtape. Consumers have to make a decision to acquire the mixtape before they have actually experienced it. In theory this could work when one person acquires mixtape and plays it for others. But someone in the network has to make a decision to acquire the music before actually experiencing it. And the fact is that person in the network is more than likely experiencing a lot of music – because they are actively going out and acquiring music without having listened to it. So therefore your mixtape is one of many fighting for promotion among music mavens in a social network (and if your free mixtape is good enough to win this battle, it probably should be available for purchase).
Taking that a step further, , the sociability response (would a friend like to hear this) is the primary music response that leads to whether consumers acquire music legally or not, it also influences music acquisition. So not only do mixtape artists have to make good music notable enough for music mavens to listen – it needs to have traits that appeal to the non-music mavens in the network. And this is just to get a mixtape heard – no purchase has been earned yet.
A better model – is one that focuses on recording good music and making it available for purchase. Focusing on how to get people to hear it. This is why the radio and DJs are so important to recording artists. But perhaps instead of artists trying to woo sites that distribute and aggregate mixtapes, its most important to have your recorded songs (mixtape and otherwise) distributed through services such as LaLa, Last.fm and Pandora. This would allow your music to be experienced by groups beyond the most avid music aficionados. This allows consumers to make a decision to acquire it.
Perhaps there is an unmet need by Pandora’s and Last.fms here.
Record labels would be behooved to focus on understanding the characteristics of music that friends play around each other – as sociability responses are key drivers. Why do consumers choose to play one song or CD around friends vs. others? What impacts this decision?
A whole generation of consumers – don’t have an easy ‘acquire legally’ option.
Young people listen to and buy a lot of music. In its hey day if you wanted to score well on TRL – you catered to 12 year old girls. I assume these purchases were driven through some combination of tweeners spending their allowance as well as begging parents for a purchase at the point of retail (while at the store).
Today these consumers have a very convenient way to acquire your music illegally (P2P) but because they don’t have credit cards – they don’t have the most convenient way of buying your music legally. The record industry needs to place some thought here – about how to make legally acquiring music an easy to do thing here. Advertising campaign for parents gear around music allowance or family subscription plans.
Artists: Whether or not people like you, only matters if you make good music.
Only after you successfully created music people want to re-experience (preferably with friends) does artist response play a role. Artist response impacts whether people illegally download your music, or purchase it legally. As the study shows there are more factors that play into this than just artist likeability.
Most artist consider touring as the keys to building a fan base. This evidence supports that – but consider that as only the beginning. Every concert needs an audience interaction point either before or post the show where the artist can actually interact with the concert goers. For example a session before the concert where the artist talks about their recording process, mandatory autograph sessions after the concert. Pre-submitting questions and answering them during a section of the concert.
The key assumption here is that the artist is likeable. For every point an artist lacks in charisma – the artist’s music has to be that much better.
Lastly artists should focus their interactions with consumers on three things (in order) establishing confidence in their quality of music, identifying with your target audience (things you have in common with the consumer), and conveying likeable qualities (how well consumers feel they like you as a person).
Overall the study should be encouraging as it shows there is a formula that exists for how music is experienced, emotionally/mentally processed, and if successful purchased.
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