Wednesday, August 29, 2007

Music Industry Is Missing The Train... Again!

For years the music industry pretty much ruled with an iron fist. They decided when and how to release music no matter what the consumer wanted and in what format. They would put a bunch of crappy music on an album with one good song and force the fans to buy the entire album for that one decent song. They also decided who would be blessed with star status, whose music would be reviewed and who would get lucrative recording contracts. Then the Internet arrived...

The music industry chose to ignore this and file sharing grabbed a hold of the market and after years of piracy and demands by music fans finally they [music industry] were forced kicking and screaming into the Internet age by releasing music one song at a time for .99 cents each. Many of us Internet industry guys watched this and marveled at the sheer power of the Internet to force change where it was needed.

However the music industry decided it might move into the Internet age, but it wasn't going to be nice about it. They have and continue to develop extremely draconian policies and security to stop piracy. I can understand after the entire Napster era their need for this, but they are again missing the train.

Now I am no sound recording genius, but I quickly figured out that music that was compressed from CD into MP3 format lost some of its quality and sound. I found as did probably many others that the sound quality just wasn't there.

However the market was quick to develop a solution, a software company developed a special plug in that as music is played from your favorite MP3 player jukebox software that it essentially "re-processes" the music and really brings it a lot closer to its original sound. I have no idea how this works nor do I care. I just know that it does work. The company that invented it used the Internet to distribute said software to everyone. Life was good.

However in an effort to again be idiots the music industry has put protections on music you download so that this third party application can't re-process the music and so it sounds terrible if you are used to hearing it the old way. Essentially they have stopped the players from feeding the music through this processing software because they believe it could jeopardize their iron-fisted grip on the Internet music market. Unfortunately customers like me who have already paid for this music and essentially own it for private use are unable to play it in a format that makes it better. They have seriously diminished my and many other's customer experience so that they could keep iron fist control of the industry.

Now if that isn't bad enough most of the players won't or can't allow users to burn this music to a CD. Again the whole piracy issue. As if I am really going to rip thousands of CDs and distribute them worldwide for my own profit potential, really, get real.

So again music that I bought online is again controlled in another fashion to "protect" the industry. So let's summarize, shall we, they were forced onto the Internet, which they reluctantly entered, but then decided to be as absolutely unhelpful and restrictive as possible.

Unfortunately this won't stop creative programmers from finding a way around this and when they do the music industry will again be forced to make changes, but not before they miss the train again. You see this draconian security they are using here is simply a way to make the Internet market a little less attractive than buying that CD in the store. Another very feeble attempt to hang onto their control and power and force the consumer to adopt to them instead of the other way around. One would hope that one day they will get smart enough to realize in the Internet age it really is about the customer and not your pathetic control that matters.

When software companies and innovative programmers find a way to again work around the fools in the music industry they will again be behind the curve and not in front of it. They will again be playing catch up. If they would simply find ways to make the customer experience number one instead of number 306 on their list of priorities they wouldn't have so many people trying to stick it to them.

At .99 cents per song, even hard core pirates have to acknowledge that it might just be easier to do it the right way instead of constantly dodging the music industry law suits and harassment's. Unfortunately when music purchased over the Internet is inferior, consumer will simply seek out alternatives, i.e. non-protected, i.e. non-Internet purchased music.

Too bad that means most likely pirated music which doesn't have the security and therefore isn't subject to all the restrictions. It is superior and superior product leaves the market wide open for pirates to keep doing what they are doing and you will have plenty of consumers willing to skirt the law to get the "good stuff".

To quote Mr. Smith from the Matrix 3... "Do you know what that sound is Mr. Anderson? It is the sound of inevitability!" In an open message to the morons running the online music industry...

That sound of pirated music is the inevitable sound of change and it is coming for you. You can be ahead of the curve or behind it the choice is yours, but know that the Internet and willing consumers are a powerful economic force that will and has changed many industries, including yours.

Tuesday, August 21, 2007

Internet Marketing Finds Offline Advertising Important

A new study recently completed by Jupiter Research revealed that 67% of online searches were driven by offline advertising channels, such as TV (37%), Word of Mouth (36%), Magazine ads (30%) with the balance coming from other sources.

In addition, 39% of the above cited searches converted into actual sales. Now that is impressive! One other interesting note about the study is that apparently after viewing the advertising the primary key word used in the search engine was the company name (44%) followed by other key words related to products or services (24%) with the balance coming from other items like company slogans or other product names/advertising.

I found the study very interesting for a number of reasons. First, it validates a strategy I have been advocating for years. On of my suggestions to many companies is an aggressive offline advertising campaign with the stated purpose to drive traffic to the site. My primary offline advertising has been direct mail and display advertising, which has worked very well for my clients.

Push vs. Pull

I believe this strategy is so powerful for a couple of reasons. First, mass market advertising has two principles to make it work, one that it is frequent enough for people to remember the ad and number two be memorable enough to have someone take any type of action. A key principle is that mass market advertising is very much a "push" type advertising where you are pushing your messages to people. Internet marketing is different in the sense that it is, in most cases, a "pull" type advertising meaning that the person is actually seeking you out and listening and absorbing your message.

Utilizing a relatively low cost offline channel to influence people from the "push" mentality to the "pull", i.e. your web site you change the psychology of the situation 360 degrees on the spot. Now add to that the power you have on your web site with the rich multi-media, such as video, audio, strong copy, testimonials, information collection tools, etc. and you have one very powerful marketing vehicle on your hands.

Strong Strategy for Local Marketing

This strategy works very well for companies that operate in a limited geographic area and it doesn't pay for them to obtain visitors and inquiries from other geographic areas outside of their area of operation. However as this study indicates it also works for companies that use the strategy to drive traffic to a site regardless of geographic operation.

Now to make this strategy work well, especially if you use direct mail or display advertising as I have is to...
  1. Use a strong headline to get attention
  2. Use the company name in the headline
  3. Use well written and hard hitting copywriting and direct response strategies.
Without a strong headline you will never have anyone even notice your ad, which will make it a waste. Not using your company name in the headline is also a big mistake according to this study since a bulk of the searches done after viewing offline advertising were on the company name.

Finally, failing to use persuasive and well written copy for your ads and direct mail packages will not convince someone that taking the time to even sit down and search for your company is worth their time. You need to give them a reason, benefits, and irrestable offers to take time to actually sit down and search out your site.

If you accept the findings of this study it will have a dramatic impact on the convergence of Internet marketing and offline advertising, which some of us have known for a while now, but it is good to have your strategies validated by others, even if they are bit late to the party.

Michael Temple

Tuesday, August 07, 2007

Open Source vs. Pay to Play Software

A new article in InfoWord wonders if open source software will eventually take down the big pay to play software companies/applications from Microsoft, Oracle, and SAP. The article goes on to state they don't believe this will happen.

Personally, I love open source software and whenever I get a chance I have my developers develop web based applications in PHP with MySQL. I think the open source movement is an excellent one for a variety of reasons. First, from a security standpoint with so many companies and individuals working on applications a lot of the security holes that appear in Microsoft applications find a way of being worked out in Open Source. Now obviously this isn't always the case, but more times than not you don't have the same types of security problems with open source as you do with other vendor specific applications.

Second, open source applications can work extremely well. I have several open source tools that I use on a daily basis and even a few I openly recommend to clients for specific purposes. In these specific cases I find it difficult to even find a pay to play application that works as well.

However, sadly, I have to agree with the writer of this article. I don't believe the open source movement is going to eliminate the vendor specific applications anytime soon. For several reasons. First, at the end of the day we have a market economy and it takes money to continually develop, improve, and market a software application. The open source movement is one of volunteers and voluntary collaboration and while this does work for the open source movement many IT directors and corporate managers will not be willing to risk their butt on applications that may not be supported or have regular production schedules associated with them. There is an old saying that nobody ever got fired for buying IBM. This saying developed because at the time IBM had the best systems in the world and gave outstanding support to their clients and buyers knew that if they had a problem that IBM would fix it.

Unfortunately open source can't compete with that... yet. Many times if you have an open source application and need help you must spend a great deal of time posting and reading in various communities to find a solution to a problem and sometimes you never find one. Now this happens with Microsoft applications as well, but if you need it you can call a company that can offer support. They can offer this support because they are making a profit on the sales of their application and the corresponding support contract.

In addition, open source programs are released as people work on them and don't have specific releases and dates for releases. This makes it very tough on the company that needs to carefully plan upgrade schedules and roll outs to users. In addition, if a feature or problem is present in an application often times there is no guarantee when or if a new release will come out that will address the problem, which creates a problem for managers when they must answer to their bosses, boards, and shareholders.

I believe the strongest contribution that open source provides to the market is its ability to scare the pay to play vendors into constant improvements and innovations in their products. They know that if they fall asleep for even a little while that the open source guys can and will be there to eat their lunch. I love the fierce competition these guys must endure to stay alive because it ensures that we the consumer always have the best products and applications to choose from which is a fundamental principle in economics.

I will always use and endorse open source programming and movements, but I simply don't think they will eliminate the pay to play vendor. However if they keep that vendor on his toes and constantly innovating then they have provided a priceless service to the industry.