Music industry Plan B

Great minds think alike (actually it is relatively obvious and lots of people have been talking about it). From Mike Langberg at the San Jose Mercury News comes Piracy unpreventable. Plan B: Just make music free. Sounds a lot like what I have been advocating (most recently, see Music industry adjusts to file sharing). Here is what Langberg calls Plan B:

Musicians give away recorded music to build their reputation. They make money from concert tickets, licensed merchandise, selling rights to their songs for TV commercials and movies, and anything else that can’t be undermined by free online distribution.
. . .
Generating enough extra demand to sell out just one additional big concert during a tour could easily cover the several hundred thousand dollars required to create and give away a new album.
Songwriters who don’t perform would still get compensated through royalties for concert performances and soundtracks, and perhaps through one-time payments from performers who want to record a song for free online distribution.
Radio stations would operate much as before. Some people might be willing to pay a few dollars for the convenience of getting new albums in CD form, so CDs could still be found on store shelves.
Even the big record labels could re-invent themselves. The labels are very good at taking unknown acts, marketing them aggressively and turning them into stars. In exchange for these services, the labels could take a share — more than likely a big share — of concert, merchandising and publishing revenue.
In the end, my proposed world of free recorded music might not look that different from today. Musicians would still have to tour relentlessly to make a living, and big media companies would still call the shots. But at least we, the audience, could fill our iPods to the brim without guilt.

Langberg has done a great job is fleshing out how the new model might work.
He also points out the problems with the movie industry:

Online piracy of movies is starting to grow rapidly, and there’s no way Hollywood can give away its films and make up the difference elsewhere. What might work for Joss Stone, in other words, won’t work for Sharon Stone.

That echoes things I have said as well. However, in my earlier posting (see For the future of …), I argue that movies may have to learn from the video game industry and create a more interactive form in order to survive.
The business models just keep changing in this Information-Innovation-Intangible Economy.

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Trademark trolls

You may have heard of “patent trolls” – companies and/or individuals who buy patents for the purpose of making money off of infringement claims (rather than for the purpose of marketing/developing the invention). Well, here is the story of “trademark trolls.” From the New York Times, He Says He Owns the Word ‘Stealth’ (Actually, He Claims ‘Chutzpah,’ Too):

Over the last few years, Leo Stoller has written dozens of letters to companies and organizations and individuals stating that he owns the trademark to “stealth.” He has threatened to sue people who have used the word without his permission. In some cases, he has offered to drop objections in exchange for thousands of dollars. And in a few of those instances, people or companies have paid up.

For the record, this website does not use the word “stealth” in any of its trade names.
Maybe we should file for ownership of the word “intangibles”?

More than brands

One of the most important intangible assets for a company is how consumers perceived their product. Brand is part of this dynamic — a brand is an information short-cut that conveys an immediate perception. Design is another, increasingly important, factor in consumers’ response to a product (see my ealier post on Design awards). It is not just a matter of “good” design versus “bad” design (or, to be less judgmental: pleasing design versus not pleasing design). The design itself conveys information about the product to the consumer — tough guy versus cosmopolitan; sturdy versus frilly.
Another one of those elements of conveying information is language. Not just the words themselves, but the language of the words. Take for example, this story from today’s Washington Post It Might Not Be Right, but It Sells

With the beauty and personal care industry increasingly global — and U.S. exports soaring — foreign translations are needed more than ever. Marketing experts say manufacturers are seizing the moment to enhance their packages with non-English phrases, words, accents and suffixes — not just to inform but to catch the consumer’s eye and to make products appear more sophisticated and successful.
Whatever the political sensitivities between the United States and France, the language of choice is increasingly French.

But the point is not just to sound chic:

“When you have several languages on the label, it does show that you are a widely sold, respectable company that sells in several countries,” said Herberto Calves, director of marketing for the all-natural skincare product company Kiss My Face Corp., based in Gardiner, N.Y. The company is about to repackage its entire product line with bilingual labeling in English and French, he said, largely for marketing reasons. A very small amount of the company’s business comes from overseas.
“It does add something, seeing that we are a multinational company. Even though we’re a tiny company, it gives it a little more credibility,” Calves said. “If this product is accepted there, it’s good enough for here.”

That logic, as the story points out, extends to even made-up French words which are used only for marketing in the US, not overseas. Such are the perambulations of marketing.
Interestingly, there is an implication that the use of French is an offshoot of regulations in Canada to use both English and French labels. That would not be the first time when regulatory requirements where morphed into a key part of company strategic and marketing plans.

Innovation in the beef industry

A year or so ago, I started trying a new type of meat that showed up at my local butcher shop (inside historic Eastern Market on Capitol Hill). It is called an “flat iron” cut. Now I know, thanks to a recent article in Wall Street Journal, “New Steaks Shoulder Their Way Onto the Grill” that this is part of an innovation in the beef industry:

The new cuts are the product of the industry’s drive to re-map the way a cow’s carcass is butchered — something that hasn’t changed much in more than a half-century. The NCBA’s [National Cattlemen’s Beef Association] effort began in 1995, when producers realized that demand for cuts from the shoulder and hind quarters, such as pot roast and stew meat, was falling. The group spent about $300,000 on a “muscle profiling study” to get a better handle on the taste and texture of all parts of the animal.
Bucky Gwartney, a meat scientist for the NCBA, designed the study, in which he and scientists from the University of Nebraska and the University of Florida analyzed 5,616 cuts of meat from the chuck and round areas. They submitted the cuts to various tests, including chemical analysis and “sheer force testing” (a cutting procedure that determines, in technical terms, meat tenderness).
Panels of trained tasters ate samples of each cut to see how they stacked up. Mr. Gwartney says his personal favorite is the petite tender, citing “the shape, the versatility, the tenderness, and the flavor.”
The study results released in 2000 enabled the industry to identify eight key value cuts, four of which are among the 10 most tender cuts in the beef carcass. These include the flat iron, second in tenderness only to filet mignon, the shoulder center steak, the petite center and the sirloin tip center steak.

Take it from me, a flat-iron cut really is almost as tender as a filet mignon. It will be showing up on my grill a lot this summer – especially given the price differential, as quoted in the story:

Filet mignon now averages nearly $14 a pound. By contrast, a flat-iron steak costs less than $5 a pound, on average, says FreshLook Marketing Group, which analyzes fresh food sales.

It will also be showing up alot in my describtions of the importance of non-high-tech innovation in the I-Cubed economy.