Staying Ahead of Your Napster

12,241 views

Published on

In this speech, I talk about how the re-invention of the music industry illuminates new ways of thinking about four fundamental questions that can help any industry stay ahead of their Napster. I have given variations of this speech to several companies and classes over the past few years, and I'll deliver this version to students at the Kellogg School of Management on May 16, 2014.

Published in: Marketing, Business
1 Comment
61 Likes
Statistics
Notes
  • why download is not available? :(
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
No Downloads
Views
Total views
12,241
On SlideShare
0
From Embeds
0
Number of Embeds
905
Actions
Shares
0
Downloads
0
Comments
1
Likes
61
Embeds 0
No embeds

No notes for slide
  • Here are some titles that you never really seem to see in business schools or magazines:“Kodak on Digital Marketing”“The Pinto on Product Safety”“The BetaMax on competitive strategy”An equally-unlikely title is the one that I’m tackling today: “Innovation Lessons from the Music Industry.”So why is it that I believe the music industry is such a fruitful hotbed of innovation in marketing?
  • Earlier this year, at the Coachella music festival, one of the artists who made an appearance was TupacShakur.There’s just one little wrinkle: Tupac has been dead for 16 years.During the set of Snoop Dogg, Tupac made a surprise appearance via some innovative (and frightfully-real) hologram technology.This event was a re-invention for two artists who had no other option.Snoop’s career had been left for dead and Tupac was actually dead.Only through this innovation could both artists come back to life. And only because they had no other option did these artists think of such innovation.Necessity is indeed the mother of (re-)invention.
  • When you combine these traditional marketing approaches, you see that for decades, music was sold almost exactly as if it were cereal.Packaged goods sold on shelves in ways occasionally clever but almost always traditional.Every year, independent of anything other than avarice, the price crept up a bit more.Fat margins propagated an industry that was massively myopic and immune to innovation.
  • Napster and its progeny laid bare a deeply disruptive fact: music was content, not plastic discs.
  • And the resulting collapse was both sudden and severe.In the wake of the disappearance of CDs, the industry has traded analog dollars for digital pennies… when they’ve been lucky.
  • Napster and its progeny laid bare a deeply disruptive fact: music was content, not plastic discs.
  • And the resulting collapse was both sudden and severe.In the wake of the disappearance of CDs, the industry has traded analog dollars for digital pennies… when they’ve been lucky.
  • Napster and its progeny laid bare a deeply disruptive fact: music was content, not plastic discs.
  • Like Tupac and Snoop on the Coachella stage, sometimes innovation only happens when there is no other option.
  • And the resulting collapse was both sudden and severe.In the wake of the disappearance of CDs, the industry has traded analog dollars for digital pennies… when they’ve been lucky.
  • And the resulting collapse was both sudden and severe.In the wake of the disappearance of CDs, the industry has traded analog dollars for digital pennies… when they’ve been lucky.
  • And the resulting collapse was both sudden and severe.In the wake of the disappearance of CDs, the industry has traded analog dollars for digital pennies… when they’ve been lucky.
  • And the resulting collapse was both sudden and severe.In the wake of the disappearance of CDs, the industry has traded analog dollars for digital pennies… when they’ve been lucky.
  • In a music world where it’s easy to think that people expect everything for free, let’s look at a video made by an artist by the name of Amanda Palmer.
  • Have you ever seen a video of an eclipse?There are few things more underwhelming. It’s like reading the proverbial book on dancing.When you approach content distribution, think about where and how you can create these eclipse moments– how you can create events that you can’t quite re-create.Moments that people will want to witness… not just passively re-watch.-Youtube's live stream of the event racked up over 8 million viewers -- setting a new record for the most concurrent live streams-The previous record for a single Web video service was 500,000 concurrent streams, which Google served up during the Olympics this summerStratos conversation generated more than 61,634,000 likely impressions across social channels. That means Red Bull garnered more than 60 million instances of peer-validated earned media through social as a result of Stratos.
  • And the resulting collapse was both sudden and severe.In the wake of the disappearance of CDs, the industry has traded analog dollars for digital pennies… when they’ve been lucky.
  • And the resulting collapse was both sudden and severe.In the wake of the disappearance of CDs, the industry has traded analog dollars for digital pennies… when they’ve been lucky.
  • And the resulting collapse was both sudden and severe.In the wake of the disappearance of CDs, the industry has traded analog dollars for digital pennies… when they’ve been lucky.
  • Staying Ahead of Your Napster

    1. Staying Ahead of Your Napster John Greene Kellogg School of Management May 16, 2014
    2. Hello.
    3. I believe the future of marketing innovation can be inspired by the re- invention of the music industry.
    4. You want me to apply lessons learned from the music industry?!?
    5. Sometimes, re-invention happens only when there is no other option.
    6. “For years, the record labels had a business model that was consistent and single-minded: (1) bundle together a dozen songs on a CD, (2) ship the discs out to retailers, and (3) collect money. “
    7. And then, suddenly, music could no longer be sold like cereal.
    8. The scary news: Every industry has a Napster.
    9. Products in any industry can be quickly and devastatingly Napster-ed.
    10. The better news: You can be the Napster.
    11. Through a decade of collapse, innovators within the music industry have had to re-invent their approach to everything.
    12. What do we really sell? Who are our true competitors? Who are our customers? What is our media approach? And the re-invention in the music industry illuminates new ways of looking at four fundamental questions that can help any industry stay ahead of their Napster.
    13. #1: What do we really sell?
    14. “We rent DVDs.”
    15. “We sell film.”
    16. “We sell newspapers.”
    17. Products in any industry can be quickly and devastatingly Napster-ed.
    18. “Customers don’t buy hammers. They buy a beautifully hung picture on their wall.”
    19. $0.05 $5.00
    20. Shift #1: Products Experiences
    21. - Guy Oseary, Madonna’s manager “In the past, people would tour to sell their albums; today they put out albums to promote their tours. The pendulum has swung.”
    22. It turns out that a hefty number of “MDNA” albums weren’t sold the usual way. For every ticket sold online to Madonna’s upcoming shows, purchasers automatically receive a copy of “MDNA.”  They get a link to a free purchase on ITunes, or they can send in their mailing address for a physical CD. It doesn’t matter if the concert ticket is $52 or $350.
    23. - John Philip Sousa, 1906 "I foresee a marked deterioration in American music and musical taste, an interruption in the musical development of the country, and a host of other injuries to music in its artistic manifestations, by virtue -- or rather by vice -- of the multiplication of the various music-reproducing machines."... The player piano and the gramophone strip life from real, human, soulful live performances.” In partnership with McSweeny's, Beck's forthcoming Song Reader will be "an experiment in what the album can be at the end of 2012," there will be no CD, no LP, no mp3.  Just the sheet music, ready to be performed by anyone willing.
    24. Designing contemporary brand experiences Design the molecule that connects all of the experiences that comprise your brand– from the customer’s perspective.
    25. The Challenge: Only 1 in 3 young adults between the ages 21-27 have ever tasted Budweiser.
    26. But is beer what we are really selling?
    27. Or are we in the entertainment business?
    28. Celebrating the New Americana that is being created each and every day. “Makers of Tomorrow” TV Spot Premieres During Olympics Opening Ceremony Print Ads Made In Parties in Local Markets Teaser Video on Life + Times On-Premise Promotion Instagram Flag Mosaic 30 Artists Perform on 4 Stages Project 12 Local Brewery Feature Made In America Merchandise Live Mural Painting R/W/B Project for Young Artists Mobile App Live FanCam Over 1.3 Million Festival Live Streams MadeInAmericaFest.com Over 600 Million Earned PR Impressions Commemorative Budweiser Bottles Forthcoming Documentary from Ron Howard Proceeds to the United Way
    29. “MAKERS OF TOMORROW” TVC 1500% increase in Budweiser Social Conversation TOTAL FESTIVAL ATTENDANCE 90,000+ TOTAL LIVE STREAMS 1,310,256 (Goal was 500,000) TOTAL MEDIA IMPRESSIONS Over 2 Billion NEW FACEBOOK FANS Over 1.19 Million (238% above goal) UNITED WAY DONATION $700,000 to Local Philadelphia Chapter Celebrating the New Americana that is being created each and every day.
    30. Start with your mission. From products to experiences Design the molecule that includes everything your customers experience; not just those that you directly create/sell. Identify the gaps; and design for them.
    31. #2: Who are our true competitors?
    32. Business breeds us to be fighters.
    33. Direct Competitors Original iPhone Launch
    34. But often it’s not the competitor right in front of us that we should be most worried about.
    35. Experiential Competitors
    36. Experiential Competitors
    37. Customer expectations are becoming increasingly liquid across every category.
    38. Perceptual Competitors
    39. Shift #2: Static Expectations Liquid Expectations
    40. The Age of Liquid Expectations Direct They sell products that compete with ours. Experiential They sell experiences that replace ours. Perceptual They change the expectations our customers have for us.
    41. #3: Who are our customers?
    42. Customers: Prices. Purchasers. Transactions.
    43. Shift #3: Customers Investors
    44. Investors don’t see prices; they see investments.
    45. “Myth 1: People today just want stuff for free and won't pay. Yet, here, they not only paid, but the average amount paid was a hell of a lot more than a typical album. If you're open, human, and awesome and you give people a real reason to buy, they will.” - Techdirt Investors don’t see prices; they see investments.
    46. Investors think of themselves as partners, not consumers.
    47. “it effectively heralds the arrival of the world's first bespoke album. Ten songs from a choice of 20 for £7.50 – no more, no less – but what those songs are, and the order in which they run, is down to you.” Investors think of themselves as partners, not consumers.
    48. Investors don’t seek transactions; they are drawn to experiences.
    49. “No word on whether this new J. Cole track is finished or not nor whether it’ll make his debut, but it’s dope nonetheless. I’m going to post it for download because the empty minute near the end of the song gives me a feeling it’s unfinished. As for the rest of “Cheer Up,” Jermaine gets his singing on and everything. Both catchy and conscious, I don’t see how anyone could hate on this man right now…” J. Cole’s album debuted at No. 1 and sold 217,000 copies in its first week. Investors don’t seek transactions; they are drawn to experiences.
    50. Customers Investors Prices. Purchasers. Transactions. Investments. Partners. Experiences. From customers to investors
    51. “Million sold before the album drop.” #4: What is our media approach?
    52. 24 million Commercial views on YouTube from June 25 – July 5 1.2 million1.2 million copies of the app were downloaded AFTER MIDNIGHT on July 4 16 millionViewers of the initial spectacle on June 16 3.5 billionTwitter impressions on June 16
    53. 828,773 copies worldwide in its first three days (fastest selling in iTunes history)
    54. “The  album  will  be  put  on  listening  display  in   renowned  galleries,  museums,  venues  and   exhibi9on  spaces  around  the  world  …  before  it   disappears  into  the  private  collec9on  of  a  buyer.       The  public  will  know  that  what  they  will  hear  will   be  a  once  in  a  life  9me  experience.”  
    55. Youtube's live stream of the event racked up over 8 million viewers -- setting a new record for the most concurrent live streams (the previous record for a single Web video service was 500,000 concurrent streams) Stratos conversation generated more than 61,634,000 likely impressions across social channels.
    56. Marketing Plan Shift #4: Conversation Plan Media Flights News Cycles Shown Seen Saturation Surprise
    57. The Challenge: Get people to value insurance agents in a world of 15 minutes and 15%.
    58. The Conversation:
    59. Staying ahead of Your Napster What do we really sell? Products Experiences Who are our true competitors? Static Expectations Liquid Expectations Who are our customers? Customers Investors What is our media approach? Marketing plan Conversation plan
    60. Thank you. JohnGreene60614@gmail.com http://thennowsoon.wordpress.com

    ×