Part 5The past, present and history of iTunes, in relation to attention/network economies

PREFACE: HAND IN HAND

iTunes and iPod go hand in hand Success from one relates to another - directly Marketing and advertising mention both (old/new) Part of the same ecosystem Henceforth mentioned together

Careful Consideration of Terms

IN BRIEF: AN INTRODUCTION iPod introduced in 2001 Shook up existing market (CD Player hardware) Marketplace fragmented and simply ‘existed’ Post Napster period of FREE MP3s Multiple producers, no design aesthetic Technology and services not fully realised Early attempts at marketing followed lead of other

producers – such as SONY - Discman Needed to gain traction some how?

IDEA: STEPS TO SUCCESS Needed to create and expand somehow? Current model (circa 2001) is to simply put out

hardware and hope for sales Sales slow in 2001 – mid 2004 Consumers must WANT the device (or its contents) Consumers must be TIED to device (a music

service required) At the time, this was a gamble Apple needed to win

– or face erasure from the known tech world Advertising was key, but they would need to

embrace the changing technological marketplace ways...

STEP ONE: PROMOTE! Promote like you’re going out of business (literally)

About to go under, but kept alive by competitor investments (Microsoft)

Took a gamble and invested in the Portable Media Player (PMP) Industry

Begun a small yet effective advertising campaign based around selling the player

Initially Macintosh-compatible only Would go on to sell several million units based on

strength of Apple name alone Get third party suppliers to promote & market their

contents

STEP TWO: BUILD! Build a network of stars

Needed to increase advertising effectiveness = consumer acceptance of product

Embrace Network Economy – ‘give to get’ Build networked relationship with stars = if player sells,

then music from linked artist will be purchased also High profile endorsements from music industry Harness appeal of already established/known artists =

relate the attention back to player = sales Make the product ‘cool’ in the eyes of the consumer

STEP THREE: REINVENT! Reinvent the Invented

The introduction of iTunes Music Store & Software service

Transform into an online music & other content reseller Further extend the notion of the Network Economy Partnerships with major record labels Sony BMG, Warner Music, EMI, etc House songs/artist catalogues Drive users away from free services Napster et al began to collapse

STEP FOUR: PULSE! Keep your finger on the pulse

Continue to drive the success of your hardware/software platform

Consumer mindshare had been won through previous steps

Take note of other ‘second movers’; SanDisk, Microsoft, etc

Incorporate the technological advancements of your competitor into your own product to stay ahead

Content is king, more songs & video content drives iPod sales and download revenues.

CONCLUSION: SUCCESS? What it all boils down to

Product and distribution innovation – changed from analogue to digital format

Grabbing the consumers attention with desirable content

Celebrity/artist endorsement and marketing Music industry acceptance, then dependence Not serving the demographic, but owning it

APPENDIX A: AD RESOURCES Original iTunes/iPod advertisement•http://www.techpinas.com/2009/02/first-ipod-television-commercial.html

Later iTunes/iPod advertisement http://www.youtube.com/watch?v=nljs4kzpebU

Microsoft Zune + Marketplace advertisement http://www.youtube.com/watch?v=AFimVbEuYsM

APPENDIX B: REFERENCESKahney, L .(2008).How Apple Got Everything Right By Doing Everything Wrong. Wired Magazine. Retrieved from

http://www.wired.com/techbiz/it/magazine/16-04/bz_apple

 

Kawamoto, D., Heskett, B., Ricciutti, M. (1997). Microsoft to invest $150 million in Apple. CNET News. Retrieved from

http://news.cnet.com/2100-1001-202143.html

 

Apple Reports First Quarter Profit of $38 Million. Apple.com. (2002). Retrieved from

http://www.apple.com/pr/library/2002/jan/16results.html

 

Apple Reports First Quarter Profit Results. Apple.com. (2010). Retrieved from

http://www.apple.com/pr/library/2010/01/25results.html

 

First iPod Television Commercial. Techpinas. (2009). Retrieved from

http://www.techpinas.com/2009/02/first-ipod-television-commercial.html

iPod iTunes Vertigo U2. YouTube. (2006). Retrieved from

http://www.youtube.com/watch?v=nljs4kzpebU

 

Music Industry VS Napster. Public Resource. (2000). Retrieved from

http://bulk.resource.org/courts.gov/c/F3/239/239.F3d.1004.00-16403.00-16401.html

 

Digital developments could be tipping point for MP3. Reuters. (2007). Retrieved

from http://www.reuters.com/article/idUSN0132743320071203