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