|
08.30.10 – OLD SPICE, MIKE POSNER, RAY LAMONTAGNE -- QAULITY, QUANTITY, PRICING
So Old Spice gained a ton of attention for all of their efforts on the internet. But did it move a lot of Old Spice? Not really -- according to this article in Advertising Age, it was good old-fashioned sale pricing, rebating, and couponing that moved the needle.
25 year old Mike Posner has had millions of YouTube views and tons of singles sales, yet only sold 30,000 albums his first week out. But grizzled old singer-songwriter Ray LaMontagne sold nearly twice as many albums with almost no buzz when it debuted last week. What's going on here?
The problem with everything right now is that the entire world has gotten too big for its own britches, and businesses out there have been spending too much to fill all these channels, and consumers just can't take it, or afford to take it, any more.
Movies tried to boost revs by adding 3D, but have just as quickly scared audiences away by adding $5 to the ticket while still offering the same crappy movie. And things just got worse for the studios as Blockbuster whispered bankruptcy, having been felled by better selection on Netflix and better prices via Redbox.
After years of raising prices / shrinking boxes, consumer brands are being forced to discount and coupon like crazy, while trying to hold on to insanely high price points. Why pay $5 for a body wash that smells like a $.50 bar of soap? Why pay $6 for brand name corn flakes or detergent when the store brand will do just fine?
Sound familiar? Seems like the entire world is waking up to a reality the music industry has known for quite some time.
After years of paying $20 for a CD with one good song and a bunch of filler, consumers ran to $.99 singles (or free videos) when given the chance. After years of raising ticket prices for the same tour by 10% (or more) year after year, consumers finally said enough and hopped on to Goldstar, Craigslist, or scalpers to get tickets for a fraction of the face mere days before a show.
Fans will still pay filet mignon prices for a filet mignon, but they ain't gonna pay filet mignon prices for a hamburger.
NOTHING is a must-buy, must-see, must-do anymore -- nothing. But if you take the time to cultivate a quality audience and provide quality goods at a reasonable price, YOU CAN MAKE MONEY and continue to make a decent living doing what you love.
The only way any band or brand is going to make it moving forward is by providing quality goods at a reasonable price. You offer VALUE, you offer CONVENIENCE, you offer QUALITY, you offer a PREMIUM PRODUCT, you offer STATUS, you offer COMMUNITY.
The Chemical Brothers haven't had a hit in years. Most of their early fans are more likely to be waking up at 6am these days, rather than just getting home at 6am. Yet they sold out last night's show at the Hollywood Bowl -- the guys haven't played in LA for a while, the tickets were (semi-) reasonably priced, and the venue is top-notch; anyone in LA knows that going to see a show at the Bowl is (almost always) going to be a great experience.
Apple's laptops command prices that are double most PCs, because that extra money spent is an unspoken guarantee of less hassle, less lost time dealing with setup and bugs that plague most PCs. It. Just. Works.
7-11 rakes in the dough selling kids 20-ounce Cokes for more than what you would pay for a 2-liter at Ralph's (but to hedge their bets, 7-11 has been sliding in more of their own house brands to make higher margins at lower prices). And for some unknown reason, "energy drinks" and "protein bars" tap $5, while mass-market colas have to discount like crazy.
Privately-owned semi-regional grocery store chain Trader Joe's quietly makes billions annually by providing middle-class hippies a tight selection of dangerously addictive affordably-priced house brands, most of which is privately made by name-brand companies.
Going to get a Godmother at Santa Monica-based Bay Cities Deli can be a bit difficult, but people have to have those damn sandwiches, and perusing an entire aisle of olive oils and pastas while you wait (and grabbing a cannoli on the way out) only adds to the ritual. By my estimates, Bay Cities does $50 / minute during peak hours = $20 / minute all day = $12,000 / day = $3.6 million a year -- not bad for a 2000-square foot deli / grocer.
Previously special occasion / tourists-only Hollywod hilltop restaurant Yamashiro brings in massive crowds by hosting a weekly farmer's market in its parking lot, which offers stunning views, a great local vibe, and the best damn $2.50 seabass tacos you could ever imagine.
You get the point -- quality sells. And I think in time Mike Posner will sell, it's just gonna take some time for his base to solidify before he can start building a house on it. But for the record, I totally believe that terrestrial commercial radio stations will not regain lost listeners until they learn to intelligently program new music to suit local tastes, instead of playing Sublime eighty times a week because they still test well in call-out research. Until we regain this important distribution channel it's going to be extremely difficult to create the next generation of acts that will fill the amphitheaters and the arenas -- and if terrestrial radio can't pull it off, then I'm sure Pandora and Slacker are more than happy to scoop up new listeners with targeted programming as Wi-Fi blankets the nation.
If you wanna make it in the music business, you gotta be freaking big, or you gotta be freaking small -- but either way, you gotta be freaking GOOD. Audiences and outlets have zero room for mediocrity, which is why you see so few acts making it in 2010. We all had a good run for a long time, but nobody's got the time or money for "just okay." No matter what size you are, you HAVE to resonate with a fanbase. And hope that zeitgeist or some hand of God gives you a leg up to be recognized, because even being good isn't a guarantee of success.
Said it before, say it again – pick up Predictably Irrational, in which Duke Professor of Psychology and Behavioral Economics Dan Ariely discusses, in a very easy to read manner, topics such as anchor pricing, decoy pricing, social vs market norms, free does not equal free, how expectations play into results, and numerous other issues that affect your long-term viability.
Apologies for the long piece, thanks to Lefsetz for the thumbs up last week and welcome aboard those of you that signed up to this mailing list because of his recommendation.
Permalink: http://www.newmusictipsheet.com/page.php?id=read_commentary_archives&comm_id=186
|
