ContentSphere - Music & Media in an Online Culture

At this year's Midem, Mike Masnick from Techdirt gave a presentation focussed on how Trent Reznor/NIN is doing music business. It is worthwhile watching the video. Masnick's accompanying article can be found here. You will find additional comments there.

Unsurprisingly, there are some issues mentioned which might be familiar if you read my previous articles on here. Discussing the "Ralph Lauren Model" I pointed out how important the added value to a generic content is. Masnick again summarises the five most important facts:

• Motivate consumers by involving them.


• Add real value to generic content.


• Create hype to promote the product in the long run.


• Implement a pricing strategy that makes use of long tail strategy.


• Most importantly: There's a wide variety of strategies to choose from. Be creative.

In case you are reading this within your email feed, the video might be missing. Do yourself a favour and visit my blog to watch it.

At SIIA Industry Summit 2009, Pearson CEO Marjorie Scardino described the framework for Financial Times' digital and pricing strategy. Financial Times is published by Pearson.

Sardino, referring to print content, stressed the difference between generic content such as news and the value Financial Times provides by quality analysis. Apart from the brand value, it is in particular the supplier generated extra content which defines the product's market value.

But where is Ralph Lauren?

The newspaper's price has been increased which led to an increase in number of readers too. Now this is what Scardino calls „The Ralph Lauren Effect", in marketing more commonly known as snob effect.

Certain target audiences have a need to "feel" quality and identity of a product by price. Customers expect exclusiveness and social prestige in buying. You might compare it to car enthusiasts buying a Porsche's sound, or like the fact a vacuum cleaner has to be noisy to be efficient. It is about feeling the product and consumer’s identification with it. Lower the price or reduce the noise – sales figures will go down.

This phenomenon works well with exclusive goods. The price indicates the quality of product.

Print vs. music media

So can digital distribution in print media be compared to music in terms of pricing and product structure? Is it possible to transfer the Ralph Lauren model?

Let us start with one premise: The basic situation to be analysed here differs in print and media. Scardino refers to standing the competition within several print outlets. The core issue in music business is not based on rivalry. It is about 1) Upon which sources do I generate revenue? and 2) Is there a way to beat piracy?

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