The online marketplace in the music industry is truly an amazing phenomenon for several reasons, least of which is the time it took to develop the market. Music stores like iTunes and Amazon have taken the concept of the album and completely reinvented it by offering songs individually to users as opposed to a bundled package. This concept is truly unique and could only be accomplished via digital platform as the cost to package and distribute single tracks from every album would not be profitable.
The online platform has also presented several other opportunities to consumers that were not available before in traditional music stores. In iTunes, the user has the capability to sample portions of songs. This is a huge advantage to these online platforms in that users can now have a chance to listen to some of the “B side” tracks that do not get radio airtime but may be a very marketable piece of the album. There is no doubt that Apple and Amazon are generating more sales of their music offering by allowing users to listen to samples of songs prior to purchase, for free.
In addition to the sampling aspect, iTunes has taken advantage of crowdsourcing by allowing users to comment on artists and music in addition to sharing the popularity of tracks in the iTunes store. This information is readily available in the store and can help consumers make decisions about tracks that they are looking for, what is popular and what their peers think about the music. iTunes as also taken the crowdsourcing to another level in that on the artist pages in the iTunes store, Apple not only lists the offerings from a particular artist but they also list top songs from that artist, videos related to their music but more importantly they list what other listeners also bought. Often this list is composed of music from the same genre performed by similar artists. This information is easy to leverage as the store is already accumulating this information but it also helps consumers broaden their pallet of what they like while also helping Apple generate more sales with minimal additional effort. Such tasks would be nearly impossible in a traditional music store as albums were often cataloged alphabetically. Sometimes albums would be categorized by genre and then alphabetically, but even then a traditional music store does not have the capability to flex the index of music that it is offering where as online store can flex this information with ease and minimal cost.
Building on the iTunes store, Apple has been able to put point of purchase in the hands of their consumers with iTunes stores available on mobile devices like the Apple iPhone. With developers constantly creating applications for the iPhone, there are numerous ways to engage consumers with these devices and drive them to a point of sale. The iPhone application “Shazam” is an excellent illustration of this concept. This application has been developed to allow the user to launch the application, hold the iPhone close to a speaker that is playing a particular song and the application will listen to the song for a brief moment. Once the application has listened to the song it then takes that audio excerpt, analyzes it and determine what track was played and what artist was performing it. From there, the user is then presented with several options to purchase the track, save it to a list or share it with a friend. This unprecedented point of sale in the hands of the user at all time is revolutionizing the industry. It has also overcame a hurdle that consumers often experience when thy here a track but to not know who the artist is or what album the track is on. The digital storefront for music will continue to innovate and push the limits with regards to copyright law and what artists consider to be acceptable distribution of their music.
Apple iTunes is truly embracing the digital marketplace and integrating it across all platforms.
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I totally agree with your commentary on the music industry--it is a laboratory of sorts to study and comprehend new developments in the digital era of marketing.
ReplyDeleteThe one thing that I would add to your coverage is the upheaval of the business model. While consumers respond very favorably to single song sales artists and record companies have to make a major adjustment. And, naturally, they have struggled with the reorientation. Note how some artists have boycotted iTunes. A few have aligned with Wal-Mart. And, Radiohead tried a radical approach to pricing: you determine what your willing to pay, customer. All of these "out of the box" approaches are indicative of the struggle to adjust. The new world of music sales represents a revolution of sorts.
And, I like your recognition that the apps for the iPhone are also breaking new ground. Some are free, some cost money. Some provide a sampling and tempt the buyer to ante up for the whole banana. My wife and I have had a good time with Shazam, although I admit in many ways it's a novelty to us. And, I remain astounded at how they can be so accurate.
Once again I find myself uttering, "What a world we live in!" More to come.