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Staying Ahead
of Your Napster
John Greene
Kellogg School of Management
May 16, 2014
Hello.
I believe the future of marketing
innovation can be inspired by the re-
invention of the music industry.
You want me to apply lessons
learned from the music industry?!?
Sometimes, re-invention
happens only when
there is no other option.
“For years, the record labels had a
business model that was consistent
and single-minded: (1) bundle
together a dozen song...
And then, suddenly, music could no
longer be sold like cereal.
The scary news:
Every industry
has a Napster.
Products in any
industry can be
quickly and
devastatingly
Napster-ed.
The better news:
You can be the
Napster.
Through a decade of
collapse, innovators within
the music industry have
had to re-invent their
approach to everything.
What do we
really sell?
Who are our true
competitors?
Who are our
customers?
What is our
media approach?
And the re-invent...
#1: What do we
really sell?
“We rent DVDs.”
“We sell film.”
“We sell newspapers.”
Products in any
industry can be
quickly and
devastatingly
Napster-ed.
“Customers don’t buy
hammers. They buy a
beautifully hung picture
on their wall.”
$0.05 $5.00
Shift #1:
Products Experiences
- Guy Oseary,
Madonna’s manager
“In the past, people would tour to
sell their albums; today they put
out albums to promote...
It turns out that a hefty number of “MDNA” albums
weren’t sold the usual way.
For every ticket sold online to Madonna’s up...
- John Philip Sousa, 1906
"I foresee a marked
deterioration in American
music and musical taste, an
interruption in the mu...
Designing contemporary
brand experiences
Design the molecule that
connects all of the experiences
that comprise your brand...
The Challenge:
Only 1 in 3 young adults
between the ages 21-27
have ever tasted
Budweiser.
But is
beer
what we
are really
selling?
Or are we in the
entertainment
business?
Celebrating the New Americana that is
being created each and every day.
“Makers of Tomorrow”
TV Spot Premieres During
Olym...
“MAKERS OF TOMORROW” TVC
1500% increase in Budweiser Social Conversation
TOTAL FESTIVAL ATTENDANCE
90,000+
TOTAL LIVE STRE...
Start with your mission.
From products to
experiences
Design the molecule that includes
everything your customers experien...
#2: Who are our
true competitors?
Business breeds
us to be fighters.
Direct Competitors
Original iPhone Launch
But often it’s not the
competitor right in
front of us that we
should be most
worried about.
Experiential Competitors
Experiential Competitors
Customer expectations are
becoming increasingly liquid
across every category.
Perceptual Competitors
Shift #2:
Static
Expectations
Liquid
Expectations
The Age of Liquid
Expectations
Direct They sell products that compete
with ours.
Experiential
They sell experiences that
r...
#3: Who are our
customers?
Customers:
Prices.
Purchasers.
Transactions.
Shift #3:
Customers Investors
Investors don’t see prices;
they see investments.
“Myth 1: People today just
want stuff for free and
won't pay. Yet, here, they
not only paid, but the
average amount paid w...
Investors think of themselves as partners,
not consumers.
“it effectively heralds the arrival of the world's
first bespoke album. Ten songs from a choice of
20 for £7.50 – no more,...
Investors don’t seek transactions; they are
drawn to experiences.
“No word on whether this new J. Cole track
is finished or not nor whether it’ll make his
debut, but it’s dope nonetheless....
Customers Investors
Prices.
Purchasers.
Transactions.
Investments.
Partners.
Experiences.
From customers to
investors
“Million sold
before the album
drop.”
#4: What is our
media approach?
24 million
Commercial views on YouTube from June 25 –
July 5
1.2 million1.2 million copies of the app were downloaded
AFTE...
828,773 copies worldwide in its first three days
(fastest selling in iTunes history)
“The	
  album	
  will	
  be	
  put	
  on	
  listening	
  display	
  in	
  
renowned	
  galleries,	
  museums,	
  venues	
 ...
Youtube's live stream of the event racked up over 8 million viewers --
setting a new record for the most concurrent live s...
Marketing
Plan
Shift #4:
Conversation
Plan
Media Flights News Cycles
Shown Seen
Saturation Surprise
The Challenge:
Get people to value
insurance agents in a world
of 15 minutes and 15%.
The Conversation:
Staying ahead of
Your Napster
What do we
really sell?
Products Experiences
Who are our true
competitors?
Static
Expectatio...
Thank you.
JohnGreene60614@gmail.com
http://thennowsoon.wordpress.com
Staying Ahead of Your Napster
Staying Ahead of Your Napster
Staying Ahead of Your Napster
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Staying Ahead of Your Napster
Staying Ahead of Your Napster
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Staying Ahead of Your Napster

In this speech, I talk about how the re-invention of the music industry illuminates new ways of thinking about four fundamental questions that can help any industry stay ahead of their Napster. I have given variations of this speech to several companies and classes over the past few years, and I'll deliver this version to students at the Kellogg School of Management on May 16, 2014.

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Staying Ahead of Your Napster

  1. Staying Ahead of Your Napster John Greene Kellogg School of Management May 16, 2014
  2. Hello.
  3. I believe the future of marketing innovation can be inspired by the re- invention of the music industry.
  4. You want me to apply lessons learned from the music industry?!?
  5. Sometimes, re-invention happens only when there is no other option.
  6. “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. “
  7. And then, suddenly, music could no longer be sold like cereal.
  8. The scary news: Every industry has a Napster.
  9. Products in any industry can be quickly and devastatingly Napster-ed.
  10. The better news: You can be the Napster.
  11. Through a decade of collapse, innovators within the music industry have had to re-invent their approach to everything.
  12. What do we really sell? Who are our true competitors? Who are our customers? What is our media approach? And the re-invention in the music industry illuminates new ways of looking at four fundamental questions that can help any industry stay ahead of their Napster.
  13. #1: What do we really sell?
  14. “We rent DVDs.”
  15. “We sell film.”
  16. “We sell newspapers.”
  17. Products in any industry can be quickly and devastatingly Napster-ed.
  18. “Customers don’t buy hammers. They buy a beautifully hung picture on their wall.”
  19. $0.05 $5.00
  20. Shift #1: Products Experiences
  21. - 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.”
  22. 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.
  23. - 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 forthcoming Song Reader will be "an experiment in what the album can be at the end of 2012," there will be no CD, no LP, no mp3.  Just the sheet music, ready to be performed by anyone willing.
  24. Designing contemporary brand experiences Design the molecule that connects all of the experiences that comprise your brand– from the customer’s perspective.
  25. The Challenge: Only 1 in 3 young adults between the ages 21-27 have ever tasted Budweiser.
  26. But is beer what we are really selling?
  27. Or are we in the entertainment business?
  28. Celebrating the New Americana that is being created each and every day. “Makers of Tomorrow” TV Spot Premieres During Olympics Opening Ceremony Print Ads Made In Parties in Local Markets Teaser Video on Life + Times On-Premise Promotion Instagram Flag Mosaic 30 Artists Perform on 4 Stages Project 12 Local Brewery Feature Made In America Merchandise Live Mural Painting R/W/B Project for Young Artists Mobile App Live FanCam Over 1.3 Million Festival Live Streams MadeInAmericaFest.com Over 600 Million Earned PR Impressions Commemorative Budweiser Bottles Forthcoming Documentary from Ron Howard Proceeds to the United Way
  29. “MAKERS OF TOMORROW” TVC 1500% increase in Budweiser Social Conversation TOTAL FESTIVAL ATTENDANCE 90,000+ TOTAL LIVE STREAMS 1,310,256 (Goal was 500,000) TOTAL MEDIA IMPRESSIONS Over 2 Billion NEW FACEBOOK FANS Over 1.19 Million (238% above goal) UNITED WAY DONATION $700,000 to Local Philadelphia Chapter Celebrating the New Americana that is being created each and every day.
  30. 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. Identify the gaps; and design for them.
  31. #2: Who are our true competitors?
  32. Business breeds us to be fighters.
  33. Direct Competitors Original iPhone Launch
  34. But often it’s not the competitor right in front of us that we should be most worried about.
  35. Experiential Competitors
  36. Experiential Competitors
  37. Customer expectations are becoming increasingly liquid across every category.
  38. Perceptual Competitors
  39. Shift #2: Static Expectations Liquid Expectations
  40. 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.
  41. #3: Who are our customers?
  42. Customers: Prices. Purchasers. Transactions.
  43. Shift #3: Customers Investors
  44. Investors don’t see prices; they see investments.
  45. “Myth 1: People today just want stuff for free and won't pay. Yet, here, they not only paid, but the average amount paid was a hell of a lot more than a typical album. If you're open, human, and awesome and you give people a real reason to buy, they will.” - Techdirt Investors don’t see prices; they see investments.
  46. Investors think of themselves as partners, not consumers.
  47. “it effectively heralds the arrival of the world's first bespoke album. Ten songs from a choice of 20 for £7.50 – no more, no less – but what those songs are, and the order in which they run, is down to you.” Investors think of themselves as partners, not consumers.
  48. Investors don’t seek transactions; they are drawn to experiences.
  49. “No word on whether this new J. Cole track is finished or not nor whether it’ll make his debut, but it’s dope nonetheless. I’m going to post it for download because the empty minute near the end of the song gives me a feeling it’s unfinished. As for the rest of “Cheer Up,” Jermaine gets his singing on and everything. Both catchy and conscious, I don’t see how anyone could hate on this man right now…” J. Cole’s album debuted at No. 1 and sold 217,000 copies in its first week. Investors don’t seek transactions; they are drawn to experiences.
  50. Customers Investors Prices. Purchasers. Transactions. Investments. Partners. Experiences. From customers to investors
  51. “Million sold before the album drop.” #4: What is our media approach?
  52. 24 million Commercial views on YouTube from June 25 – July 5 1.2 million1.2 million copies of the app were downloaded AFTER MIDNIGHT on July 4 16 millionViewers of the initial spectacle on June 16 3.5 billionTwitter impressions on June 16
  53. 828,773 copies worldwide in its first three days (fastest selling in iTunes history)
  54. “The  album  will  be  put  on  listening  display  in   renowned  galleries,  museums,  venues  and   exhibi9on  spaces  around  the  world  …  before  it   disappears  into  the  private  collec9on  of  a  buyer.       The  public  will  know  that  what  they  will  hear  will   be  a  once  in  a  life  9me  experience.”  
  55. Youtube's live stream of the event racked up over 8 million viewers -- setting a new record for the most concurrent live streams (the previous record for a single Web video service was 500,000 concurrent streams) Stratos conversation generated more than 61,634,000 likely impressions across social channels.
  56. Marketing Plan Shift #4: Conversation Plan Media Flights News Cycles Shown Seen Saturation Surprise
  57. The Challenge: Get people to value insurance agents in a world of 15 minutes and 15%.
  58. The Conversation:
  59. Staying ahead of Your Napster What do we really sell? Products Experiences Who are our true competitors? Static Expectations Liquid Expectations Who are our customers? Customers Investors What is our media approach? Marketing plan Conversation plan
  60. Thank you. JohnGreene60614@gmail.com http://thennowsoon.wordpress.com
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In this speech, I talk about how the re-invention of the music industry illuminates new ways of thinking about four fundamental questions that can help any industry stay ahead of their Napster. I have given variations of this speech to several companies and classes over the past few years, and I'll deliver this version to students at the Kellogg School of Management on May 16, 2014.

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