Music Product Manifesto: The Product Features That Will Save Recorded Music

Forrester has just published the above title reported, the first in our new ‘Media Product Innovation’ series.  Following on from the strategy laid out in ‘Music Release Windows: The Product Innovation That The Music Business Can’t Do Without’ this report proposes some tactical implementations of that strategy.

 

As we’re now 100 years on from the first commercial album release with recorded music sales plummeting, the time has come for a radical overhaul of the recorded music product range. We believe that future music products will need to adopt a platform-agnostic world view that encompasses powerful and social interactivity to empower consumers to create their own unique experiences.

 

It is time to build music products around consumer needs, not business needs

 

That might sound like a truism, but so much of current digital music innovation falls short of this crucially important value.  This is why Forrester proposes a Music Product Manifesto of six basic consumer music rights that digital products should embrace.  These are spelt out in detail in the report, but include principles such as:

 

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Apple's App Store vs Apple Music Store: The Race is On

Apple today announced that 2 billion Apps have been downloaded from its App store in just over a year.  The App store has taken just 5 quarters to hit the same milestone that the music store took 14 quarters to reach (see chart below).

 

Granted we’re not comparing like for like here.  Many (most?) of those App downloads will be free, and the iTunes platform is mature now, whilst it was nascent during the emergence of the music store.  Indeed, the App Store’s success is built upon the prior success of the music store.

 

But even with those caveats aside, it is worth considering that whilst all iPods and iPhones support music store downloads, only 24 percent of all devices sold support Apps (i.e. the iPhone and the Touch).  Put a different way, to date the total number of iTunes tracks per sold supported device is just over 39, whereas the total number of iTunes Apps per sold supported device is 40. 

 

So in just over a year the App store has reached the same maturity of adoption among its addressable device audience as the music store took 6 years to reach.

 

This doesn’t mean that music downloads are dead: at 8.5 billion downloads to date Apple music store is more than 4 times as successful as the App store in absolute terms.  But in the context of potential, momentum and addressable audience adoption, the App Store is setting the pace.

 

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Can Media Products Ever Actually Deliver What Consumers Want?

The question may sound excessively controversial, but perhaps less so when worded in another way:

 

Where should the product development balance be struck between consumer wants and business imperatives?

 

All consumer products should meet the needs of the target consumers right?  Well yes and no.  Of course if you fail to meet consumer needs a product will fail.  But at the same time not every consumer demand can be met, certainly not at a price that those same consumers would be willing to pay.  For consumer product managers at consumer electronic companies these will be highly familiar concerns.  But now media companies are finding themselves thrust into a product manager’s crash course. 

 

Throughout the peak years traditional media companies didn’t have to worry too much about product innovation.  They focused on their core competencies of developing great content, and then marketing and programming it.  In the age of the Media Meltdown though those assets alone just aren’t enough.  The fundamentals of many media products need wholesale review (see my previous post for some specific analysis from the music perspective.)  But most media companies will find themselves needing to take a much more proactive role in this process. 

 

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Can the Apple TV reinvent itself?

I was in the middle of an ICTC (my new acronym for InterContinental Telepresence Conference) when I got an urgent message from Brian Chen at Wired News. Without any announcement, it seems, Apple had cut the price of its 160 GB Apple TV to $229, dropping the smaller model altogether. What did this mean? 

I've been following the Apple TV since its announcement 2.5 years ago. I bought one of the first, and I spent hundreds of dollars on TV shows testing it (I have all the episodes of Battlestar Galactica, seasons 1, 2, 3; and you don't). That said, I haven't used the Apple TV in months, even after I hacked it using Boxee. It's because the Apple TV doesn't make watching top shows easy enough to compete with cable, Hulu, and Netflix. 

Brian wrote a very solid piece in Wired News yesterday, click here to see the article. He managed to get in a lot of the big picture points I raised, which is always hard to do since I go there so quickly and barely pause to breathe. The point is this: The Apple TV is on its way out.

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Apple's Impact on Mobile Entertainment

Apple's announcements yesterday were mostly focused on iTunes and adding a video camera to the Nano (beautiful device by the way - shape, colors, form factor, weight (lessness) - blew me away). There were a couple of interesting things that came out about the iPhone platform though.

A few of the facts:

30 million iPhones sold to date

20 million iPod Touch devices with about 225 million iPods sold to date in all with 50% to new customers (wow!)

1.8 billion downloads of more than 75,000 available applications

100 million billing relationships with credit cards ... this impresses me the most and is what I consider to be one of their important competitive advantages

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Apple's Nano video camera further erodes the camcorder market

You've got to be hating life if you're a videocamera maker like Sony or Kodak and you've just been bested yet again. First, it was the immensely successful Flip video cameras that sold more than 2 million devices without a significant brand name simply because the camera was so darn easy to use. (
Personal anecdote, I recently spent a day at a major CE maker with a group of industry analysts -- they let us try their new Flip camera competitor and one of the smartest guys in the room couldn't figure out how to turn it on. Said a nearby analyst: "Hmmm, no wonder Flip beat them to this market.")

Now the game just got more complicated because Apple has decided to add video camera capability not to the iPod Touch line, but to its Nano iPods. Pause for reverential awe. This was a brilliant move. (see Wired's take on it here).

Not only because it hits Flip in a sensitive spot -- right in the high school and college market where Flip was such a hit -- but because it further disrupts the videocamera market, opening it to more innovation and rapid change. You no longer have the three tiers of videocameras (disc or tape storage, digital decent, and then your lousy phone camera), instead, you have a fourth competitor. A personal media device that is now capable of actual personal media. Oh, and did I mention it's made by Apple? Right, just checking.

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Is Apple Playing a Subtle But Smart Platform Strategy?

I have to admit to being a bit under whelmed by Apple’s announcements today.  I’d been hoping for something a bit grander from a music perspective.  I’ve spoken about the iTunes Album launch and explained my thinking that it falls short of what it could have been.  But on the other hand there is an argument that Apple’s relatively modest tweaking might be part of a bolder strategy: that of establishing iTunes as a platform that explicitly coexists with the big name social platforms, namely YouTube and Facebook.

 

Apple is all of course all about selling devices.  But part of that strategy is building compelling user experiences that establish and reinforce the value of usage scenarios of their portfolio of devices.  This is the context into which to consider approving the Spotify app, enabling posting of iTunes song information into Facebook and Nano captured video into YoutTube.  From that perspective Apple is playing a smart game that builds the social context of their devices as explicit extensions of the value proposition of the iPod an iPhone ranges. 

 

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iTunes Albums: A Decent Start, But Not the End Game

So today Apple announced the long anticipated new ‘music format’ codenamed 'Cocktail', productized as ‘iTunes Albums’.  There are some nice features (photos, exclusive videos, lyrics, customized artwork) that deliver a good user experience.  It’s a quantum leap from the standard album download.  But is it enough?  I think it is a useful transitory step, but not the end game.  I’d go as far to say I think it it pulls its punches.  The bottom line is that music buyers are rapidly falling out of love with buying the album. Downloads from stores such as Apple’s iTunes are predominately single tracks, as are P2P downloads.  Little wonder when you consider the fact that the first commercial album release made its way onto the shelves almost exactly 100 years ago in April 1909.  Since then it hasn’t changed in any meaningful sense.  Sure the actual mediahas changed, as has the number of tracks, but it remains essentially a bunch of linearly programmed tracks. 

 

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