Music Product Strategy For Digital Natives

Last week I posted this question on Twitter:

“Need some help: if 'Buy & Listen' was 20th cent. music consumption, 'Rip & Burn' the 1st digital generation, what's it for Digital Natives?”

I got a lot of good suggestions and though there was great diversity in the responses sharing featured heavily.  What’s interesting is that though Digital Natives do share music a lot, it is more in a social context than the peer-to-peer kind of file sharing more common among Millennials.

 We are working on a new report to try to help our clients understand what the next generation of music products should look like.  I of course advocate music product innovation to such an extent that I sometimes sound like a stuck record (spot the oh-so-analogue metaphor).  But the early results of the consumer data we’re mining for this report are building a case for a music product strategy reset so extensive in reach that it makes my previous protestations look too modest by far.

Researching the report (which we’re provisionally calling ‘Digital Natives, The Generation Music Product Strategy Forgot’) has been eye-opening.  Whilst record labels have been focusing energies on winning over CD buyers and converting Millennial file sharers, the Digital Natives have been left without music products that meet their needs.  The Millennials used digital to reinvent analaogue behaviors (such as replacing the CD with the paid or free download) but Digital Natives are creating their own rules of social context, experience and visuals.

The result is that YouTube emerges as digital music’s killer app.

Which is why I’ve opted for ‘Share and Watch’ as the tag line for the Digital Native’s (see below).  What do you think?  Does this slogan sufficiently capture the essence?

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How To Turn Social Media Assets Into Social Co-Creation Assets

While co-creation is certainly a hot topic these days, the fact is that for most companies, social co-creation is relatively immature. Based on a panel survey of consumer product strategy professionals conducted in Q2 2010,  just 38% of companies use social media to to involve consumers directly in the product creation or innovation process (that is, 46% of the 83% of companies who engage with consumers using social media). Consumer product strategy professionals who are using social media assets to enable co-creation are doing one or more of the following: 

  • Engaging with fans on Facebook, Twitter, corporate blogs and public communities to generate ideas and opinions about products and services;
  • Generating new ideas through dedicated ideation sites (like Ford's "Your Ideas" site);
  • Leveraging existing listening platforms to reveal product ideas from online conversations, either on the company's own site or elsewhere on the Web;
  • Analyzing online product ratings and reviews to uncover areas of improvement or unmet needs in the marketplace; or
  • Using private online communities to create a dialog with a specific audience for product creation purposes.
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Sky Songs Becomes Bye Songs

Sky’s much vaunted music service Sky Songs in the UK has announced that it is closing its virtual doors a little over one year after launch.  As I’ve been saying for some time, digital music is at an impasse and the end of Sky Songs illustrates the point. There was nothing fundamentally wrong with Sky Songs, but there was nothing spectacularly right about it either. It was a cookie-cutter premium subscription service with a few nice twists but one that fundamentally played by the record label licenses' standard rule book and consequently lacked differentiation in the marketplace.

However good Sky might be at marketing premium subscriptions to mass-market customers, if the product is a dud, it’s just not going to fly. At launch, I stated that to succeed Sky needed to leverage its differentiated assets (i.e., integrate into TV hardware and bundle with TV packages). It didn’t. Instead it left Sky Songs tied with chains to the PC as a premium rental service whilst Spotify pushed on to 10 million users.

I have to admit I thought Sky was playing a smart long game where it would leverage those assets and make serious inroads into the mainstream. I wonder how much of its failure to do so is down to its business objectives and how much is down to what it could secure licenses for at what it deemed financially viable rates.

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