Three months after starting at Forrester, my first report for Interactive Marketers is now available: Tapping The Entire Online Peer Influence Pyramid. Forrester subscribers can click the link to read about the Peer Influence Pyramid, which describes and shares recommendations about three types of online influencers: Social Broadcasters, Mass Influencers and Potential Influencers.
Hello everyone, welcome to my first blog post as a Forrester Analyst.
I joined Forrester in late January after nearly six years at Alterian, an Enterprise Marketing software company, where I was Vice President of Platform Strategy, supporting Product Marketing, Analyst Relations and Corporate Development.
First and foremost, I’m thrilled to be on board at Forrester and I’m looking forward to getting to work! Many thanks to the Forrester team and our clients who have been so supportive.
I happened to notice an article yesterday on nytimes.com titled Choosing a Marketing Plan: Traditional or Social Media. It's a case study on E. P. Carrillo, a cigar manufacturer and distributor run by the Perez-Carrillo family. It reminded me of a conversation I had with an agency I visited a few months ago. The article begins by outlining the problem:
As I posted earlier in the month, the music subscriptions space is going through an important period of transition. It took much of the last decade to realize that the 9.99 premium rentals model was only ever going to appeal to a niche of music aficionados, and though global premium music subscribers total 8.25 million, we’re still no closer to mass market appeal for premium subscriptions. And yet we have a host of new entrants including, MOG, Spotify Premium, We7 Premium, Sky Songs, Virgin Media etc etc.
So what’s changed? Well, both a little and a lot.
The niche audience is getting bigger. Firstly, the appeal for premium subscriptions is still a niche addressable audience of tech savvy music aficionados, but that audience is growing. It’s still far from mass market (and never will be) but it’s a more attractively scaled base now. A few million per major music market perhaps. For a company like MOG that’s plenty enough addressable market. Also improvements in consumer technology and connectivity make it easier to deliver a high quality on-the-go cloud based experience, a crucial asset.
The mobile industry is in full swing. Its center of gravity is shifting from hardware to software, from voice to data and services, and from traditional telecom stakeholders to new entrants.
Google’s “mobile first” approach and the shadow that Apple cast over the show are forcing mobile operators in particular to redefine their position in the value chain. The traditional focus on infrastructure (LTE..) and this year’s debate on operators’ congested networks need to be put in the context of nontelecom players’ willingness to monetize mobile. Mobile World Congress is a unique opportunity to witness how mobile is reinventing itself and to see how it will become even more disruptive in consumers' daily lives in the future.
I’m going to admit something here. . . most of my fellow analysts here chuckle when I profess my love for the insurance industry. Why do I like it so much? Well, one reason is because when I do my "Carney. . . like Art" spiel when someone asks how to spell my last name, insurance people "get it". Yep, they watched "The Honeymooners" and "The Jackie Gleason Show" and know exactly what I’m talking about, unlike most of my co-workers who, with the "Carney. . .
Yesterday fan funded band site Sellaband was declared bankrupt by a Dutch court. This may be ‘just another digital music start up that burnt through its investment money with no proven business model’ but its demise is disappointing.
Semi-pro sites and services are a crucial part of the digital music ecosystem and despite this setback they will grow in importance. Services like Sellaband, MyMajorCompany, TuneCore, Sound Cloud and MySpace, each in their own way, lower the barriers in the artist-fan relationship. They enable artists to reach out directly to their audiences and develop engaged relationships that make the fans feel a part of things. The shift from photocopied fanclub newsletters mailed in the post, to active online fan communities is little short of a quantum leap. The advent of social music tools are the music business equivalent of the transition from the stone age to the bronze age.
Of course if you follow my analogy on, there’s still a lot of distance to go before we reach the iron age and beyond. SellaBand wasn’t the first high profile victim (anyone remember Snocap?) and it won’t be the last.
Back in December I predicted strong progress for semi-pro sites and services. And though I qualified my prediction with stating 2010 wouldn’t “be their year” I didn’t expect SellaBand’s demise either. I remain convinced of the potential of these sorts of services and it is crucial for artists and the music industry more broadly that these social music tools prosper. If they don’t then so much of the Internet’s potential remains untapped.
My latest report - Music Strategy For Brands: When Brands And Bands Collide - has just been published. This report is a bit of a departure, looking very specifically at the burgeoning trend of non-music companies using music to help sell their core products and services. Of course Apple set the trend with the iTunes music store, but nowadays we’re seeing many non-tech brands picking up the baton.
The report contains exclusive executive survey data that shows how brands and consumer product companies are working with music now, and how what they plan to do in 2010.
As the effects of the music industry meltdown bite, record labels and artists alike are turning to brands and product companies for new revenue opportunities. 2009 saw music tapped more heavily than ever before as a tool for differentiating products and brands and this trend will accelerate in 2010: 65% of brands and product companies interviewed by Forrester stated that they will spend more on their digital music strategies in 2010 than they did in 2009.
The overriding thesis of the report is that marketing professionals must subjugate their job titles in favour of their role as media product professionals when working on music strategy. If they don’t, the resulting poor execution will damage the brand as much as the band, which is exactly what happened with the Vasserettes:
I saw some interesting Forrester research this week. We asked over 4,000 consumers about Single-ID systems, which permit a profile to be used on multiple Web sites and eliminate the need to register, create and maintain separate profiles on each new site. While we didn’t ask consumers about the currently available options (such as Facebook Connect,