Part 5 The past, present and history of iTunes, in relation to attention/network economies
Preface: Hand in Hand Careful Consideration of Terms iTunes and iPod go hand in hand Success from one relates to another - directly Marketing and advertising mention both (old/new) Part of the same ecosystem Henceforth mentioned together
In Brief: An Introduction iPod introduced in 2001 Shook up existing market (CD Player hardware) Marketplace fragmented and simply ‘existed’ Post Napster period of FREE MP3s Multiple producers, no design aesthetic Technology and services not fully realised Early attempts at marketing followed lead of other producers – such as SONY - Discman Needed to gain traction some how?
Idea: Steps to Success Needed to create and expand somehow? Current model (circa 2001) is to simply put out hardware and hope for sales Sales slow in 2001 – mid 2004 Consumers must WANT the device (or its contents) Consumers must be TIED to device (a music service required) At the time, this was a gamble Apple needed to win – or face erasure from the known tech world Advertising was key, but they would need to embrace the changing technological marketplace ways...
Step One: Promote! Promote like you’re going out of business (literally) About to go under, but kept alive by competitor investments (Microsoft) Took a gamble and invested in the Portable Media Player (PMP) Industry Begun a small yet effective advertising campaign based around selling the player Initially Macintosh-compatible only Would go on to sell several million units based on strength of Apple name alone Get third party suppliers to promote & market their contents
Step Two: Build! Build a network of stars Needed to increase advertising effectiveness = consumer acceptance of product Embrace Network Economy – ‘give to get’ Build networked relationship with stars = if player sells, then music from linked artist will be purchased also High profile endorsements from music industry Harness appeal of already established/known artists = relate the attention back to player = sales Make the product ‘cool’ in the eyes of the consumer
Step Three: Reinvent! Reinvent the Invented The introduction of iTunes Music Store & Software service Transform into an online music & other content reseller Further extend the notion of the Network Economy Partnerships with major record labels Sony BMG, Warner Music, EMI, etc House songs/artist catalogues Drive users away from free services Napster et al began to collapse
Step Four: Pulse! Keep your finger on the pulse Continue to drive the success of your hardware/software platform Consumer mindshare had been won through previous steps Take note of other ‘second movers’; SanDisk, Microsoft, etc Incorporate the technological advancements of your competitor into your own product to stay ahead Content is king, more songs & video content drives iPod sales and download revenues.
Conclusion: Success? What it all boils down to Product and distribution innovation – changed from analogue to digital format Grabbing the consumers attention with desirable content Celebrity/artist endorsement and marketing Music industry acceptance, then dependence Not serving the demographic, but owning it
Appendix A: AdResources Original iTunes/iPod advertisement
Later iTunes/iPod advertisement http://www.youtube.com/watch?v=nljs4kzpebU Microsoft Zune + Marketplace advertisement http://www.youtube.com/watch?v=AFimVbEuYsM
Appendix B: References Kahney, L .(2008).How Apple Got Everything Right By Doing Everything Wrong.Wired Magazine. Retrieved from http://www.wired.com/techbiz/it/magazine/16-04/bz_apple
Kawamoto, D., Heskett, B., Ricciutti, M. (1997). Microsoft to invest $150 million in Apple. CNET News. Retrieved from http://news.cnet.com/2100-1001-202143.html
Apple Reports First Quarter Profit of $38 Million. Apple.com. (2002). Retrieved from http://www.apple.com/pr/library/2002/jan/16results.html
Apple Reports First Quarter Profit Results. Apple.com. (2010). Retrieved from http://www.apple.com/pr/library/2010/01/25results.html
First iPod Television Commercial. Techpinas. (2009). Retrieved from http://www.techpinas.com/2009/02/first-ipod-television-commercial.html iPod iTunes Vertigo U2. YouTube. (2006). Retrieved from http://www.youtube.com/watch?v=nljs4kzpebU
Music Industry VS Napster. Public Resource. (2000). Retrieved from http://bulk.resource.org/courts.gov/c/F3/239/239.F3d.1004.00-16403.00-16401.html
Digital developments could be tipping point for MP3. Reuters. (2007). Retrieved from http://www.reuters.com/article/idUSN0132743320071203