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:
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.
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.
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.
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.
The BBC recently aired a story that focused on some Forrester statistics regarding the number of people in the UK engaged in illegal file sharing. I’d like to provide more context in order to clarify any confusion about how we arrived at our estimate that the number of illegal file sharers in the UK is 6.7 million.
There are two parts to this issue, so let me take them individually:
Forrester has just published a report which lays out a radical vision of the future of music products.In the report we suggest that a comprehensive programme a product innovation is necessary to save the music industry from the current Media Meltdown it finds itself in.The CD is dying, the 99 cent download model clearly isn’t enough (nor is live), and ad supported and subsidized models all have much distance to go.
The immense challenge is to persuade consumers that music is worth paying for again.The scarcity that music value was built upon was disappeared with the rise of Napster.Content scarcity can never be truly regained so value must be reestablished with the scarcity of convenient, compelling services operating within three broad music release windows.These release windows will stagger content releases, with premium services getting releases first and ad supported services last (see chart below).
iPhones, DVRs, and navigation guides are thought of as devices for the early adopter. Or at least they used to be. Forrester released the results of its latest annual Consumer Benchmark Data Overview Report, which concludes that the use of digital devices has become a mainstream part of every day life. This finding, which is critical to how companies plan their product and marketing plans for the coming year, holds significant power in terms of where marketers spend their money during the rest of 2009 and into 2010.
I’ve spent the last couple of days with Nokia here in Stuttgart and have had some really interesting conversations.What is clear from these meetings, and from the official announcements at Nokia World, is that Nokia is wholeheartedly committed to its services strategy.They’re learning their way, but Nokia is a company that prides itself on renewal and they’re keen students of the lessons of their marketplace experiences.It is easy to see that Nokia’s Ovi strategy has much more focus and clear vision than 2 years ago and that focus will continue to sharpen.
Music is the spearhead of Nokia’s Ovi strategy, and Comes With Music is the key element of their music play.Regular readers will know that I’m a fan of CWM, and I consider it to be one of the best tools that the music industry has to fight piracy with.Unlike Spotify, CWM enables users to take their music with them on their portable device and to keep it forever.Those are strong assets for pulling kids off file sharing networks.But it’s no secret that CWM hasn’t set the world alight yet, even if it has had better uptake in emerging markets than developed markets.Some have used this as evidence of why the CWM model is flawed.I don’t agree.CWM’s slow start has been due to a combination of: