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The answer you all have been waiting for...
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AGMIS
IsraTrance Full Member
Started Topics :
63
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234
Posted : Apr 27, 2004 17:28
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Permission Downloading: Revolutionizing the music industry.
By Daniel Kovari (AGMIS) & Edgar Benjamin Cabrera
Lately, it appears that many top music executives are just begging to vaporize any chance of implementing the industry's greatest opportunity. On April 7th, 2004, Ethan Smith of The Wall Street Journal, reported that "all five of the major music companies are discussing ways to boost the price of single-song downloads on hot releases – to anywhere from $1.25 to as much as $2.49." This proves that rather than growing and maturing with the advent of online distribution, most music executives today still view the industry in an old world manner - $16.00 per album, $5.00 per single. After learning about such disregard and regression, we were forced into action with the hope of establishing a new mode of operation that would appease said executives, consumers, and the overall industry. We believe the following scheme has the potential of revolutionizing the music industry.
Before hastily increasing the price per unit (yet again), these insatiable executives should be asking themselves, “How can we charge consumers less, while maintaining a higher return?” The answer is quite simple: permission downloading (PM). Based on the fundamental principles of permission marketing, consumers will still have the option to buy a high quality digital version of a song for the full market price (99cents or less). However, this system presents an alternate path, as the listener will potentially be given the option to listen to or view a series of advertisements, resulting in the receipt of a lower quality version (128kb or less) of the song for free. With the opportunity to reach millions of consumers, advertisers would accept the bill enthusiastically. Through such a scheme, skeptical music listeners, who may otherwise hesitate before purchasing a song, can dispel their doubts free of charge, while advertisers gain the benefit of a captive audience. Moreover, given the clear demographic divisions in musical taste, advertisers have a new means of targeting a very specific type of consumer.
Under permission downloading, consumers are also given the option to choose which commercial they want to see or hear. Consequently, their interest in the advertisement would be greater, as the consumers have given the advertiser their “permission” to present their product to them. Alternatively, advertisers can choose the people viewing their commercials by assigning their ads to certain songs. For example, Nike can choose to have their ad for a new line of sneakers streamed only to users that download songs from 50 Cent, Justin Timberlake, or any other artist that proves to draw expressed interest in the product.
Targeted advertising of this sort is far more powerful than TV advertising and print advertising could ever be. Through PM, marketers can determine precisely how many people have heard or seen their advertisements, they can aim for quotas, and they can have campaign cycles, shifting focus to different people, depending on current market conditions and needs. For example, during a new product launch, Nike could determine that they need to captivate at least 500,000 people in order to create a sufficient buzz on the eve of their launch. Well, with music and PM, Nike can target trend setters by associating their product advertisement with new emerging artists and songs. After hitting their 500k quota, Nike may then aim for average consumers through top 40 songs.
Now, this is where the true “revolutionizing” takes place. In a matter of a few years, a forward-looking music industry would operate differently. SoniqCast’s Aireo, a device like Apple’s iPod except with additional wireless capabilities, hints at what could be the future. The difference from today’s iPod and the one that would exist is the method of delivery. For example, a pedestrian will be able to download a song she just heard over her web radio right then and there. She will press a button on her portable device, buy it, and download it instantly.
Six years ago, flat screen TVs cost $15,000 and were limited to a few willing consumers. Today, they cost $2,000 and appeal to a much larger market. Eventually the same economic rule of smaller margins for greater volume will apply to the music industry. The pedestrian, as well as billions of people all around the world, will have no problem buying songs over the internet because the song will only cost only 25 cents.
There is no greater opportunity than having billions of people as customers, especially when costs are trivial, making them particularly likely to buy on impulse. And if someone does not want to pay to download a song, do you really think there is a company that would not be willing to pay 25 cents in order to send their message/advertisement directly to the pedestrian’s headphones? We think not!
  I never apologize. I'm sorry, but that's just the way I am. Homer J. Simpson |
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Cactus Shmactus
IsraTrance Junior Member
Started Topics :
10
Posts :
47
Posted : Apr 27, 2004 18:12
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Yep, this article speaks the truth in my opinion. I work for Warner Music and the business model outlined above, has not sunk in the managements head yet. Although it is clear to me that this is the direction they are heading in. Anyway, I dont really think the advertising part of the article will work well for Psy Trance , casue its too small (But who knows). What is for sure, is that the 'smaller margins for greater volume' theory will defintelly work well (especially for the technological Psytrancers).
Anyway, great article mate. Do you have a link for the website it came from ?
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AGMIS
IsraTrance Full Member
Started Topics :
63
Posts :
234
Posted : Apr 27, 2004 18:34
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No link...I wrote it.
I never apologize. I'm sorry, but that's just the way I am. Homer J. Simpson |
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Cactus Shmactus
IsraTrance Junior Member
Started Topics :
10
Posts :
47
Posted : Apr 27, 2004 19:00
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Well writen  |
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pr0fane
Moderator
Started Topics :
418
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3816
Posted : Apr 27, 2004 19:59
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Mike A
Subra
Started Topics :
185
Posts :
3954
Posted : Apr 27, 2004 20:20
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Quote:
| The answer you all have been waiting for... |
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sorry I had to 
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Basilisk
IsraTrance Full Member
Started Topics :
168
Posts :
2984
Posted : Apr 27, 2004 21:28
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The topic is a little presumptuous... why would anyone sit through advertising to get a 128k copy when they can get higher quality files without delay by many other easily used methods? OK OK, maybe people into the pop/mainstream stuff aren't so computer savvy, so it has a market... but this has so little to do with the realities in the psytrance scene.
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AGMIS
IsraTrance Full Member
Started Topics :
63
Posts :
234
Posted : Apr 28, 2004 05:21
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this idea is not ment only for the psytrance community, it is directed for the entire music industry.
I never apologize. I'm sorry, but that's just the way I am. Homer J. Simpson |
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zooter
IsraTrance Junior Member
Started Topics :
44
Posts :
771
Posted : Apr 28, 2004 07:26
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"nice idea, but not practical"
that's how it will be dismissed!!! |
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