Staying Ahead of Your Napster: Kellogg School of Management, November 2017
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The document discusses how innovations in the music industry in response to Napster can inspire new approaches to marketing strategy. It argues that industries should focus on selling experiences rather than products, have a broader view of competitors, and approach new product launches as ongoing creations rather than finished goods. The music industry transitioned from selling albums to promoting concert experiences. It also faced new experiential and perceptual competitors. Kanye West's approach to album launches as unfinished works updated for the attention economy is given as an example of iterative creation over confidential product development.
Staying Ahead of Your Napster: Kellogg School of Management, November 2017
- 1. How the Re-Invention of the Music Industry Can Inspire New Approaches to Marketing Strategy John Greene Kellogg School of Management November 16, 2017 Staying Ahead of Your Napster
- 2. Hello.
- 5. I believe the future of marketing innovation can be inspired by the re- invention of the music industry.
- 6. You want me to apply lessons learned from the music industry?!?
- 7. Sometimes, re-invention happens only when there is no other option.
- 8. ¡°For years, the record labels had a business model that was consistent and single-minded: (1) bundle together a dozen songs on a CD, (2) ship the discs out to retailers, and (3) collect money. ¡°
- 9. And then, suddenly, music could no longer be sold like cereal.
- 10. Global Recorded Music Industry (in billion U.S. dollars)
- 11. The scary news: Every industry has a Napster.
- 12. The better news: You can be the Napster.
- 13. Through a decade of collapse, innovators within the music industry have had to re-invent their approach to everything.
- 14. Global Recorded Music Industry
- 15. And the re-invention in the music industry illuminates new ways of looking at three fundamental questions that can help any industry stay ahead of their Napster. What do we really sell? Who are our true competitors? How do we launch new products?
- 16. TODAY¡¯S AGENDA What do we really sell? Who are our true competitors? How do we launch new products? Pharrell¡¯s ¡°Happy" and How to Design Hit Brand Experiences Avicii, Aloe Blacc, and The Age of Liquid Expectations Kanye and Product Launches in the Attention Economy
- 17. Pharrell¡¯s ¡°Happy¡± and How to Design Hit Brand Experiences #1: What do we really sell?
- 18. #1: What do we really sell?
- 22. Products in any industry can be quickly and devastatingly Napster-ed.
- 23. ¡°Customers don¡¯t buy hammers. They buy a beautifully hung picture on their wall.¡±
- 24. $0.05 $5.00
- 26. -?Guy Oseary, Madonna¡¯s manager ¡°In the past, people would tour to sell their albums; today they put out albums to promote their tours. The pendulum has swung.¡±
- 27. It turns out that a hefty number of ¡°MDNA¡± albums weren¡¯t sold the usual way. For every ticket sold online to Madonna¡¯s upcoming shows, purchasers automatically receive a copy of ¡°MDNA.¡±? They get a link to a free purchase on ITunes, or they can send in their mailing address for a physical CD. It doesn¡¯t matter if the concert ticket is $52 or $350.
- 28. - John Philip Sousa, 1906 "I foresee a marked deterioration in American music and musical taste, an interruption in the musical development of the country, and a host of other injuries to music in its artistic manifestations, by virtue -- or rather by vice -- of the multiplication of the various music-reproducing machines."... The player piano and the gramophone strip life from real, human, soulful live performances.¡± In partnership with McSweeny's, Beck's Song Reader will be "an experiment in what the album can be now," there will be no CD, no LP, no mp3. ?Just the sheet music, ready to be performed by anyone willing.
- 29. What can Pharrell¡¯s ¡°Happy¡± teach us about designing contemporary brand experiences?
- 30. ¡°Danceable grooves have just the right amount of gaps or breaks in the beats. Your brain wants to fill in those gaps with body movement.¡± - Maria Witek, Arhaus University in Denmark
- 31. Witek says that people all over the world agreed on which drum patterns made them most want to dance: ¡°Not the ones that have very little complexity and not the ones that had very, very high complexity¡ but the balance between predictability and complexity.¡±
- 32. Designing hit brand experiences: Molecules, Gaps, and the Right Amount of Surprise
- 33. Think of your brand experience as a molecule of experiences from your customer¡¯s perspective.
- 36. Start with your mission. From products to experiences Design the molecule that includes everything your customers experience; not just those that you directly create/sell. Leave the right gaps for your customers to fill in on their own.
- 37. evolving the way the world moves Start with the Mission
- 38. evolving the way the world moves On-Demand Real-Time Tracking Invisible Payments Identify the Core Pillars of Your Customer Experience
- 39. UberBlack evolving the way the world moves On-Demand UberX Real-Time Tracking Invisible Payments Uber Taxi Uber Rush Scale Products off of Your Core Experiences
- 40. UberBlack evolving the way the world moves On-Demand UberX Uber Family Real-Time Tracking Invisible Payments Uber Taxi Uber Rush Whimsical Deliveries Uber Chopper Ice Cream Delivery Kittens Identify New Audiences and Moments of Need
- 41. UberBlack evolving the way the world moves On-Demand UberX Uber Family Real-Time Tracking Invisible Payments Uber Taxi Uber Rush Whimsical Deliveries And, Importantly, Identify Opportunities for Growth Uber Chopper Ice Cream Delivery Kittens What Other Consumer Markets Need to Have Movement Evolved? Why Not License the Software Experience (eg, Amazon Cloud Storage)? What Other Consumer Moments Need to Have Movement Evolved?
- 42. Shift #1: Products Experiences What experience do you sell? (only use words that one of your consumers would use!) Is your mission catalytic? (Does it immediately lead to ideas, or is it just ¡°accurate¡±?) Are you leaving space for dancing? (Finding the right balance of predictability and co-ownership?)
- 43. Avicii, Aloe Blacc, and The Age of Liquid Expectations #2: Who are our true competitors?
- 44. ¡°Avicii Unveils Bizarrely Twangy Mumford & Sons Reinvention During Ultra Set.¡± ¡°Hey, you got your bluegrass in my techno!¡± ¡°EDM Superstar Avicii Makes a Kazoo-Heavy Kinda-Country Record.¡±
- 46. #2: Who are our true competitors?
- 47. Business breeds us to be fighters.
- 48. Direct Competitors Original iPhone Launch
- 49. But often it¡¯s not the competitor right in front of us that we should be most worried about.
- 52. Customer expectations are becoming increasingly liquid across every category.
- 57. The Age of Liquid Expectations Direct They sell products that compete with ours. Experiential They sell experiences that replace ours. Perceptual They change the expectations our customers have for us.
- 58. Direct What competitors sell products/ services that compete with Uber? Experiential What competitors offer experiences that are threatened by Uber? Perceptual How does Uber change the expectations that consumers have for brands in other industries?
- 59. Direct For Londoners and tourists alike, Wednesday was a headache-inducing travel day in the city. In a new show of solidarity and anger against the taxi app Uber, around 12,000 London cab drivers suspended their service and took to the streets.
- 60. Direct
- 61. Direct
- 62. Experiential "We get customer feedback everyday saying, 'Hey I just sold my car; I don't need to pay for parking at home or work.' Lets say that's $500 a month for both. We just saved them $6,000 a year. ... I think that's why so many people are using Uber and getting rid of their cars." - Travis Kalanick Direct
- 63. Direct Experiential Perceptual Uber has made payments invisible by making the entire checkout experience, well, invisible. Getting out of the taxicab is the equivalent of checking out of the taxi, with payment automatically triggered at that moment. The overall experience is predictable and hassle-free.
- 64. Direct Experiential Perceptual Uber has made payments invisible by making the entire checkout experience, well, invisible. Getting out of the taxicab is the equivalent of checking out of the taxi, with payment automatically triggered at that moment. The overall experience is predictable and hassle-free.
- 65. Direct People who transport things for you Experiential The Auto Industry Perceptual Anyone who connects people to a service, anyone in the payments industry¡
- 66. Shift #2: Static Expectations Liquid Expectations Who is your biggest perceptual competitor? (the one that is re-shaping your future from afar) Who could be your perceptual inspiration? (The brand/experience that could inspire innovation) What opportunities could thinking perceptually inspire? (scaling your business off what you change, not what you ¡°are¡±)
- 67. Kanye West and Product Launches in the Attention Economy #3: How do we launch new products?
- 68. Traditional New Product Development Shrouded in secrecy. Predicated on ¡°perfection¡±. Focused on the end product.
- 71. ¡°In the current news cycle, artists spend years of their life eking out albums that hardly last for more than a week or two in the headlines.¡±
- 72. What makes a successful album in 2016? A No. 1 debut on the Billboard chart? Steady play across streaming services? A hit radio single or a viral music video? Kanye West¡¯s ¡°The Life of Pablo¡± has managed to achieve a level of online and cultural ubiquity, despite having none of the above.
- 75. ¡°Have you ever seen a finished picture?¡± the painter says. ¡°A picture or anything else? Woe unto you the day it is said you are finished! To finish a work? To finish a picture? What nonsense! To finish it means to be through with it, to kill it, to rid it of its soul, to give it its final blow: the most unfortunate one for the painter as well as for the picture.¡± -? Pablo (Picasso)
- 76. Launching a perfect product that everyone forgets about two weeks later isn¡¯t perfect.
- 77. If you had to choose, would you rather be interesting or right?
- 78. ¡°If I were President of the United States, I would rather be right than interesting. If I were a CEO of a company, I would rather be right than interesting. But I am a journalist¨C what journalist would rather be right than interesting?¡± - Malcolm Gladwell
- 79. ¡°If I were President of the United States, I would rather be right than interesting. If I were a CEO of a company, I would rather be right than interesting. But I am a journalist¨C what journalist would rather be right than interesting?¡± - Malcolm Gladwell In today¡¯s attention economy, you have no choice but to be right (enough) and interesting.
- 80. Shift #3: Creation of Brands Creating as Branding
- 81. Shift #3: Creation of Brands Creating as Branding Confidential creation process Open creation process Consumers Collaborators Finished product Minimum viable product Product Life Cycles News Cycles
- 82. Shift #3: Creation of Brands Creating as Branding What do you need to change to account for a 48 hour half life? (What¡¯s your 8 second pitch?) How are you inspiring others to author on your behalf? (Using the process of your creation to inspire publication by others)
- 83. Staying ahead of Your Napster What do we really sell? Who are our true competitors? Products Experiences Static Expectations Liquid Expectations How do we launch products? Creations Creating