Millennial marketing strategy: Free!

August 7, 2012 Leave a comment

Millennials have grown up with free as a marketing strategyThough long a concept in software marketing, the use of free as a business model (principally in online and entertainment) seemed to gain popular traction with Chris Anderson in 2008 and continues to be a growing and lively debated strategy.  Starting with the basic concept of sampling to reduce consumer risk and increase trial, free has grown to become an accepted if not demanded marketing technique.  Now is the time to embrace it in arts marketing to millennials.

Millennials have lived with this model their entire life.  From apps and social media to videos and music, this generation understands the value of free and the trade-off.  They have grown up with in store sampling, street teams handing out free product and “try it before you buy it” opportunities.  To millennials, it simply makes sense to try something for free and then upgrade to a paid model to get a fine tuned version.

Freemium marketing presents an opportunity for arts entertainment to court a generation.  Adoption of it in the arts is relatively limited to contemporary music with Radiohead and Nine Inch Nails as the poster child’s of success.  Michael Masnick in “The Sky is Rising” writes about Jason Parker a Seattle jazz musician who has successfully put free to work.

Why can’t free extend to all arts experiences?  Why not free performances to introduce non arts or light arts consumers to your best reason for purchase: your product!

Free is a business model.  Don’t be distracted by debate or the “cheap” image of free as a giveaway.  Truth is, in the right place it works. With the millennial generation it’s an expectation.   It’s time for arts to actively search out appropriate free strategies and open the doors to an entire generation.

Room for discussion:

Clearly just giving away something doesn’t constitute a strategy of free!  Choose an arts experience – what idea can you come up with to present a free strategy that will entice trial?

Filed under Marketing, Music, Ticketed Events Tagged with , , ,

Average Concert Goer?

April 3, 2012 Leave a comment

Who do you think is most likely to be the average concert goer?Who is the Average Concert Goer?

  • Male or Female?
  • 18-24 or 25-34?
  • Married or Single?

The answers are often surprising and appear to run against intuition.  Most of my students would answer male, 18-24 and single.    According to Ad-ology 2012 Audience Interest and Attitudes  the consumers that have attended concerts are:

  • Women (56% of audience/ 5% more likely than the 18+ population)
  • 25-34 (32% of the audience/33% more likely than the 18+ population)
  • Married (58.9% of the audience/6% more likely than the 18+ population)

This research also covers other activities that concert goers connect with in high numbers (tailgating, playing music, skiing, attending other types of entertainment) all that provide information about the lifestyle; behavioral and psychographic, of the concert goer.

That said, these are average figures:  they don’t take into account variations in genres, or venues, or prices.  That requires digging deeper into even more research.   And is likely to reveal more unexpected information!

Filed under Music, Ticketed Events Tagged with , , ,

Digital downloads break records in 2011

February 7, 2012 Leave a comment

2011 marks a passing of at least two digital downloading landmarks; for the first time consumers were found to outspend hard copies in digital downloads in both music and books. 

Internet retailer cites Nielsen Co. and Billboard as sources showing that consumer’s digital music purchases outspent what they bought in hard music by a small but decisive margin of less than one percent.  The strong growth of 8% in music digital sales doesn’t mean that the loss in hard sales was completely offset.  Although the subscription growth in services of Spotify and Pandora muddy the total music measurement waters, industry pros continue to be cautiously optimistic that the digital gains will continue to grow to offset the hard cost losses.

In print publishing 2011 was the year when first Amazon and then Barnes and Nobles reported their respective digital products outselling the hard covers.  January 2012 saw a significant surge in ebooks  sales as holiday e-reader gifts were activated and consumers began to download to their new digital devices.

These music and book increases continue to be driven by digital delivery development.  2012 is likely to be a year where there is less anxiety about digital cannibalism and more concern about device developments to fuel the download growth

Room for Discussion

What do you think will be the long term implications of continued digital download growth for the music and book industry.  What competitive partnerships can you see growing from this trend?

Filed under Digital, Music Tagged with , , , , , ,

CDs outsell Digital Music 2 to 1 – Spotify to change that?

July 25, 2011 Leave a comment

Spotify likely to fuel digital dowloads...eventually sales?According to a recent Nielsen Soundscan Billboard research release CDs still outsell digital albums – but for how long?

Consider first, the music industry optimism from year over year growth for the first half of 2011.    The 8.5% increase in music sales for the first half of 2011 is dominated by digital with a whopping 19% growth in digital album sales and 11% growth in  digital tracks.

Enter Spotify – trumping the reining online music streamer Pandora by giving the listener choice over what they listen to.    The introduction of Spotify in the US  add fuels to the continued furious growth of digital but dampens prospects for the monetary support necessary to sustain or grow revenue, at least initially.  The first six months of Spotify is free.  Assumedly the enchanted new Spotify user will transition seamlessly into purchase mode or immediately fork out $9.99/month for the everything/mobile version.  But that adoption curve is as yet unknown.

The most likely early Spotify user, Forrester’s 12-15 year old Digital Native, is not only very comfortable with the digital downloads, they also embrace the idea of sharing instead of owning music. They aren’t attached to CD ownership.   Their 7 weekly hours of music listening can easily be transformed by the choice and access provided by Spotify.   What is yet to determine is whether the Digital Native is able to and/or will choose to put down cash for Spotify.

CDs domination is most definitely challenged by digital growth and the contest is accelerated with Spotify entering the market.  Digital downloads without the revenue… or long-term growth strategy for the music industry?  Stay tuned!

Filed under Music, SocialMedia Tagged with , ,

Entertainment, Media and Ad Biz Grow

July 18, 2011 Leave a comment

Entertainment, Media and Ad Biz Grow Ad Age reports 8.8% growth in 2010 for the leading national advertisers.   That growth marks the highest spending increase in six years. PricewaterhouseCooper’s global entertainment and media forecast predicts 5.7 percent compound annual rate growth through to 2015. Meteoric numbers compared to the usual glum economic indicators of consumer spending, unemployment rate and retail sales.

So why, with all the gloom and doom of economic forecasting, does the intersect of Hollywood and Vine looks so good?  It looks like product manufacturers understand the need for advertising in a slow market and recognize that entertainment and media provide the tools for getting their word out.

The winners for the entertainment gains are all things film related: TV (both advertising +4.9% and subscription/license fees +5.6%) , filmed entertainment +5.4%, and video games +4/6%.  Interestingly enough recorded music is the only category that was forecast negative growth -.4%.   Even the music category may be a surprise given the recent Nielsen report putting music sales up year to date in 2011.   Music sales are up over 8% overall compared to 2010 with of course digital music leading the growth at 19%.

In The Hollywood Report  article on the forecast, Stefanie Kane of PricewaterhouseCooper says “The global economy started recovering perhaps earlier in 2010 than we thought, and advertising has bounced back”. The battle for consumer’s attention is being fought on the frontline of entertainment and media.  As unlikely as it might seem – entertainment and media may indeed be the front line indicator of overall economic growth.

Filed under Marketing, Music, TV Tagged with , , ,

Little Monsters = Target Market?

June 20, 2011 1 Comment

What is a Little Monster?  Hard to describe in traditional target speak. Yet Lady GaGa’s little monsters have turned into a juggernaut with undeniable force. Lady GaGa's Target Market Little Monsters “In the past year, Lady Gaga was the first artist to reach 1 billion views on YouTube; she beat President Barack Obama to 10 million Facebook fans (she’s now closing in on 35 million); and most recently, she was first Twitter user to acquire 10 million followers.,”  touts a Mashable case study.

Again, what’s a Little Monster?  Is it a particular age?  Sex? Income level?  Does it fall in a VALS  category or a Prizm or Mosaic cluster?  Yes, all of the above. And yet none of the above by itself captures the little monster.

Marketers continue to be challenged with understanding and defining their target consumer.  Lady Gaga is a great case for seeing how this is done today, with the social media consumer.  Social media marketing is less about who you are targeting than who chooses to connect with you.  Marketing looks a little more like self selection.  And in order to be successful you need to be definable.  You need to mean something.  And you need to be genuine. Lady GaGa clearly is a champion for everyone who feels like they live outside the mainstream.  A little different:  A little monster.  Brilliant!  Who can’t identify with that?!  Lady GaGa’s success can easily be seen through the traditional lens of the 4ps as each is uniquely crafted to the Little Monster.

Is social media the right viewpoint for target market definition?  Given it’s enormity, growth and , transparent nature the answer “Yes!”.  Social media is a requirement for target market definition.  Pay attention to who self selects and hone your positioning to that Little Monster!

Filed under Branding, Music, SocialMedia Tagged with , , , , ,

Which is the Priciest Ticket: Sports? or Arts?

June 13, 2011 1 Comment

If you chose arts – you chose right!   At an average ticket price of $54.78 in 2010 (up 6% over 2009), the Arts & Theater category was the priciest average ticket sold as compared to the other three categories of  Concerts, Sports, and Family ticketed events. This average ticket price has a complex set of conditions with foreboding future implications.

First, let’s consider the good news: according to the Broadway League Broadway has just come off the highest grossing season ever.  Last night’s Tony Awards showcased some of the 42 new shows – the second largest number of shows launched in any Broadway season.

Average Ticket Prices in 2010

Arts/Theater is the Highest Average Priced Ticket

But the arts/cultural scene is much larger and more diverse than Broadway.  It consists of a multitude of regional and local theaters struggling with diminishing audiences and the high cost of venues, staging and talent – all operating with limited engagements.  The price charged for most arts/theater tickets is equivalent to only half the actual cost of the production.  According to Theatre Facts 2009, only 46% of theater revenue came from earned sources.  54% or the bulk of operating revenue comes from contributions.  Given that fact, the $55 average ticket  without contributions really would be over $100.  That’s twice as expensive as concerts and four times the average costs of sports and family events.

Clearly something has to give.  Our arts, already operating on a shoestring, need a bombastic overhaul to be priced competitively with the average entertainment ticket.

These average ticket prices come from LiveAnalytics,  a research arm of Ticketmaster LLC , which offers intriguing ticket research in their  2010 Live Entertainment Year In Review.  Ticketmaster should know.  They get their information directly from interaction with their over 200 million consumers buying 400 million tickets annually from over 11,000 clients.

Filed under Music, Sports, Ticketed Events Tagged with , , , ,

Live Entertainment Ticket Sales Struggle

May 24, 2011 Leave a comment

The economic recovery towards the end of 2010 did not apply to ticket sales. Year over year data from Live Analytics, a Ticketmaster company, shows the industry dropping 6.5% over 2009.

Ticket sales dropped in 2010However, there is some good news for the consumers; lower concert and family ticket pricing!

Entertainment is the sixth highest category of expenditure for the American consumer according to the latest Bureau of Labor stats.  It ranks right behind healthcare and in front of apparel and services and even education categories!  Every live entertainment executive in the US fights for their share of the $2,698 in yearly overall  entertainment spend and in 2010 it looks like certain categories survived by driving down prices.

Two categories of live entertainment consumers; Concert goers and Family event attendees benefited from dropping prices in 2010 according to LveAnalytic’s 2010 Live Entertainment Year in Review.  Concert ticket prices were down 5% from 2009 and family event tickets dropped 1%.  Which price drop worked best in increasing ticket sales?  Family events came out the winner with the average ticket sales increasing 2%.  Despite the drop in ticket pricing, concerts yearly ticket sales were down 8%

Concert business pundits point to the long tail  of music as a likely function of the concert attendance drop.  Fewer and fewer acts have football stadium mass appeal.  More growth in varied fare presented in smaller venues and/or festivals.   Conversely the increase in family numbers underscores more similarity in the family event experience and less long tail influence.

The 2011 summer season is getting underway and live entertainment will be watching the entertainment spend to see if, and where recovery happens.  Methinks the long tail will be evident somewhere in that equation.

Filed under Music, Ticketed Events Tagged with , , ,

“Glee” inspires “Grey’s Anatomy” musical episode

April 1, 2011 Leave a comment

“GGlee merchandised in a Macy's windowlee” as a juggernaut brand is influencing more than just a youthful audience. As evidenced with the “Grey’s Anatomy” musical episode (3/31/11) – TV executives are also Gleeking out!

What other entertainment brand has been able to push out content to so many different entertainment conduits as successfully or profitably as “Glee”?   The Hollywood Reporter (02/02/11) recently pegged “Glee” portfolio earnings estimates at:

  • $102m in TV advertising
  • $100m in albums
  • $50-$75m in merchandise and consumer goods
  • $39m in DVD sales
  • $6.3 in digital downloads

This doesn’t even include dollars from the additional “Glee” video games, streaming episodes, concert tours and merchandise, cable sales, international TV distribution and domestic TV syndication.  It’s an enviable portfolio, one that is increasingly seen influencing other TV shows as the industry struggles to maintain profit growth.

The most recent evidence of this influence was the musical episode of “Grey’s Anatomy” which aired to mixed reviews.   Synergies are strong for “Grey’s” to capitalize on the music convergence.  The series features musical content, has published compilations and has the advantage of Tony winner Sara Ramirez to power the musical episode.

What’s next? The multifaceted “Glee” success can only point to more of the same…

Filed under Music, TV Tagged with , , ,

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