Regardless of your position on the economic stimulus plan, the war in Iraq, or the breed of the White House dog, some good decisions are actually made by the Presidents of the United States of America. We’re not talking about Bush or Obama here, no, we’re talking about PUSA, that music band from the ’90’s with such memorable hits as Lump and Peaches. So what’s a two-hit wonder like PUSA have to do with making good decisions a decade after their day in the sun? Hint: it has to do with visionary marketing that takes advantage of the iPhone platform to reinvigorate fan interest, and maybe even reinvent the the music industry. Find out why we think the new iPhone app from the Presidents of the United States of America is so special, and why the RIAA should sit up and take notice.
CD Sales - Outlook is Dismal
It’s no surprise that music sales continue to plummet as the RIAA struggles to leverage burgeoning internet technologies to distribute music to consumers. Let’s face it, the RIAA has no one to blame but themselves. They were late to the internet party, and when they finally did show up they were brandishing lawyers instead of trying make friends. It cost the music industry tens of millions to take down Napster, and seemingly, all for naught. P2P networks continue to flourish and the á la carte commerce model of iTunes has all but destroyed CD sales. Yet, CDs continue to stock the shelves of local music haunts and big retailers alike, which means the music industry really hasn’t changed as much as we had expected, at least not by now. It’s been ten years since the fall of Napster. Where is this new music business model that will turn the industry upside down?
In the last few years we have seen some new internet music business models that have shown some promise. iTunes is, of course, one major success story. The remaining contenders in this space are, as Simon Cowell would say, forgettable. Last year we watched Lala reinvent itself with an awesome music service that could threaten iTunes, but has yet to gain traction in the marketplace. Then of course, there’s the iPhone darling app, Pandora, which has a tremendous user base but really only serves to drive more sales out of iTunes. Instead of creating a new business model, Pandora has built upon the existing success of iTunes.
With the invention of digital music, and subsequently iTunes, two major shifts occurred. One, CD sales slumped because there is little reason for consumers to buy CDs instead of downloading the music and burning their own discs. The music industry has not yet figured out a way to add value to CDs in a way that is attractive to consumers. Then along came iTunes which offered an á la carte music menu to consumers to buy a song-at-a-time. This may seem like a win-win for everyone, except that it came with an unexpected side effect for the artists. Since most consumers will only buy the singles that they hear on the radio, they don’t have an opportunity to discover other songs in the artist’s repertoire, and in the end, the artists suffer.
CD Stimulus Plan from the Presidents?
Now, along comes the iPhone app from an almost forgotten band of the 90’s which could potentially pave the way for adding value to CDs while giving consumers more access to a band’s entire catalog of music. How? The iPhone app from the Presidents of the United States of America offers users unlimited access to all of the band’s music. It’s like paying $1.99 for an entire box set of albums. There are a couple of catches, though. You can’t listen to any song of your choice, instead you have to listen to a random song from the band. Also, the music streams which means you have to be connected to the network in order to listen to the music. That said, this app could be the prototype of a new marketing vehicle for bands while giving the music industry a new way to add value to CDs that sit on the shelves.
Imagine buying a CD from an artist that comes with a code to unlock an iPhone app which gives you unlimited streaming access to the entire collection of music from that artist. It’s great for the artist because the fan gets exposed to music outside of the radio spectrum. It’s great for the fans because they get more value than just the songs included on the CD. It’s also great for the music labels because it will encourage more music sales. Even better still, the iPhone app could easily include loads of additional information about the artist including tour dates and ticket sales, merchandising, messaging and alerts, games, wallpapers, and the list goes on and on.
Presumably, the PUSA app is priced at $2.99 to cover the royalty fees for the music because this app wasn’t created by the band or the label. However, if the RIAA were smart, they would create an app like this for every artist and then include it with CDs as an incentive for consumers. The labels own the music so there’s only the cost of development, which they can easily foot as a marketing expense.
We love the potential that the PUSA iPhone app has for all artists and their fans. This kind of app could eventually save the music CD by adding real value to it, but only if the RIAA sees the light. Until then, a pay-for app like PUSA’s will probably only appeal to the band’s die hard fans willing to pay $2.99 in the App Store.
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