Vertygo Team
Apple Marketing Strategy - iPod

Marketing in the Music Industry

The Rolling Stones have sold 270 million albums.
The Doors have sold 60 million albums.
Pink Floyd have sold 220 million albums.
Led Zeppelin have sold 200 million albums.
The Queen have sold 190 million albums.

Music has a great appeal and has billions of hungry costumers.
Yet, Record Companies are in great trouble.

This is an unexplicable paradox.

In reality Record Companies are in a deep crisis situation since 30 years ago, since the 1980's.
Just, now their situation is worse than ever.
How is that possible?

How can these companies be unable to grasp such unbelievable opportunities?

The answer is simple: wrong marketing.

All the major record companies - EMI, Warner, Sony, Vivendi-Universal - have failed,
first in the transition from Vinyl records to CD, then in the transition from CD to the online digital format - mp3, aac, flac.

First they failed in exploiting their outstanding catalogue.
Think about EMI, for instance: In their catalogue they have Pink Floyd, The Beatles, The Rolling Stones, Queen - just to name a few.

The CD Pricing Mistake.

One big reason stems from the time of transition between the vinyl and the CD, in the mid 80's. Record Companies had set wrong price tags. CD's were - and still are - too expensive.

It was foolish to set the price for a CD at $15-$20 - or 15-20 euro -.
At that point why not $1000 for one CD?
This meant kicking away your costumers.
If the cartel of Record Companies had set the price for a CD between $4-$5. they would have sold 100 or 200 times more.
Take a calculator and just multiply to get the revenue results.

Record Companies Executives were just shortsighted and made the wrong reasoning.
And now it's too late. Another big mistake was to push for CD's full with 12-15 songs, of which only 3 songs were good songs and the rest was just rubbish to fill the CD.
They should have pushed for different formats.

Singles - that in the old times of vinyl records were highly successful and selling by the millions - which could have been easily priced at $1.50-$2.00 -, and CD's with 3, 4 or 5 songs - which could have been priced at $4-$5. More so, considering that the industrial cost of the CD hardware is just $0.30.

Wrong was also the revenues distribution to the composer, the performer, the record company and the retail chain.
Who really made the music - the composer and the performer - just got peanuts from each CD sold by the record company.

Adopting this alternative marketing strategy would have made Record Companies unbelievably rich, and never facing a crisis.

Music Marketing and Apple Inc.

Our point is further demonstrated today with Apple iTunes.
Until today iTunes has sold 25 billion songs.

And this is just the beginning.

Typically, costumers purchase 1 single song at $0.99,
or in other cases 3 or 4 songs, spending $3-$4.

The reason is simple. Is called inspiration.

Musicians are creative persons. They can write and play one great song, or in case of a time of great creativity 3 or 4, and these are valuable and appealing songs for their aficionado costumers.
If you pretend 12 or 15 songs from a band, you can be sure that 9 or 12 of them will be just rubbish.
Not to mention the stress of weeks and weeks of Recording Studio time with 48 tracks, editing and post production.

The Big Mistake of Record Companies.

But the big mistake of Record Companies from the 80's onwards
was to make the marketing of Music as if Music was toothpaste or mayonnaise.

Let us explain.
When in the 60's and 70's the Rolling Stones, the Who, the Beatles, the Doors, Led Zeppelin, Pink Floyd, Genesis, Yes, King Crimson were making their wonderful music, they were not following marketing directives.
They were not following what the Marketing Executive was telling them was pleasing the costumers.

They were simply making the music they were liking.

And, simply, many people in the world were liking their music.
So simple.

Music is not toothpaste.
Music is not mayonnaise.
Music is not a product.
Music is Art.

In the 80's the marketing approach of Record Companies changed,
they began using marketing techniques which were standard in many other industries, and began selling music as any other typical mass product - toothpaste, soap and mayonnaise -.

It happened that the Marketing Executives of the Record Companies began doing survey research and market analyses and then telling the musicians what would sell, what was pleasing the costumers, and directing the musicians how to make their music.

That was a foolish and gross mistake. It destroyed music and destroyed the Record Companies business too.
Music is a typical niche market, or, to put it best, is a market with a largest number of niches. And each niche has its music lovers, its costumers and its peculiarities.

Let The Band Play.

Music is Art and Music has to be considered and treated by Record Companies Executives as Art.
Therefore Marketing Executives have to step back, and adopt a smarter marketing strategy.
Which is "let the band play and just stepback" marketing strategy.

The best marketing strategy in Music is simple: Passion and Inspiration.
This should be the marketing drive in music.
The Rolling Stones, the Beatles, the Doors, Led Zeppelin, Pink Floyd were highly successful just because they were making great music,
and because there were many music lovers who were liking it. Nothing more, nothing less.

Album Sales Data - Worldwide - 1962-2016

Pink Floyd   220 million
Rolling Stones   270 million
The Who   40 million
The Doors   60 million
Led Zeppelin   200 million
The Beatles   400 million

The Next Logical Step - iTunes

What we now foresee in the Music business is that Apple will do the next logical step, Apple will develop iTunes from just the world leading e-business music outlet to become a full service Record Company.
Apple Inc. will buy the agonizing Record Companies - Warner Records, EMI, Sony, Vivendi-Universal - for peanuts, replace them, and make another big success, obtaining another de-facto worldwide monopoly.

Marketing strategy is essential and every single case has to be carefully considered and individually tailored.
Sometimes - as in the cited Ferrari case and in the Music industry case - the best marketing strategy is what appears to be a "no marketing" strategy.
In reality, it is simply a different kind of marketing strategy, more refined, crafted at a higher level.

Analysis Section

Ferrari Marketing Strategy
Apple Marketing Strategy
Google Marketing Strategy
Apple vs Microsoft
Marketing in the Music Industry

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