So, who’s done more for music, Apple or Starbucks? Interestingly, neither of the options are musicians, music producers or labels. We’ll get to that later.
Apple has been credited for re-inventing – if not saving – the music industry after Napster turned the market on its ear. When peer-to-peer music sharing spawned a global underground of people illegally sharing copyrighted music, the music industry fought back by suing anyone and everyone who facilitated or was complicit in the activity. Famously, the late Steve Jobs took a different approach.
If You Can’t Beat ‘Em…Join ‘Em
Instead of fighting the system, Jobs, then-CEO of Apple Computers, understood that the manner in which people consumed music was changing and that there was no use fighting it. If you can’t beat ‘em, join ‘em…and so iTunes was invented. Apple wasn’t trying to be a computer company; it wanted to be the WAY people engaged across digital channels. It wasn’t about the music, it was about the experience.
Starbucks, in its own effort to reinvent its brand, looked beyond the caffeine people purchased to the experience they have once in the store. Starbucks doesn’t sell coffee; it sells an experience (if you doubt that, check out the price of their coffee…no coffee alone is worth that much!). Part of this effort was to associate the experience of drinking a Starbucks coffee with new, cool, and hip music. Experimenting with many campaigns including live indie music in store and selling CDs at point of purchase, Starbucks now provides free music downloads on iTunes.
Those of you who frequent Starbucks, probably already know about the “Pick of the Week” campaign. Through its mobile app or the promotional cards found at cash registers, each week Starbucks features a new artist and song and, courtesy of Apple, provides customers with a code to download that song from iTunes at no cost.
What Does This Mean For The Music Industry?
Apple’s theory is that by receiving a free track on iTunes from a popular or up-and-coming artist, consumers will be more likely to buy the full album. The bet is necessary because music downloads, like the purchase of physical albums before them, are down. Apple is falling on old “sampling” campaigns to acquire new customers.
“After you get that one free iTunes song, courtesy of Starbucks and Apple, you are, increasingly, accessing, not buying the tastes that initial tease triggered. You’ll head to Spotify or Rdio to get exactly what you want or to Pandora to use Kings of Leon, ‘Temple’ (that’s their single) or whatever else as a seed to create a personalized radio experience.”
Of course, Apple offers streaming music through iTunes Radio. However a short visit to the channel confirms the goal of the streaming services is to encourage consumers to download the track they’re listening to. It’s not about the music experience, it’s about hawking products. How old school.
It doesn’t seem that long ago that MP3s and iTunes revolutionized the music industry, yet here we go again.
Pendola suggests that Starbucks’ efforts to introduce music to the masses is more valuable to the future of the music industry than Apple’s efforts to drive up iTunes sales. The ink on the wall says the future of music is in customizable and personal streaming music services and so any business that drives consumers to the music will be more valuable those who simply try to profit from it. Apple, he offers, is a hardware company and not a music company; its impact will be short-term as a result.
What Business Are You In?
As I wrote at the beginning of this post, interestingly, neither of the players in this arena are musicians, music producers or labels. Apple is hardware provider and Starbucks is a coffee retailer, yet each is inextricably linked to the ups and downs of pop culture. It’s often said that McDonald’s, the world’s largest hamburger chain, isn’t in the business of selling hamburgers; it’s in the real-estate business. Fans of Nike have claimed it’s more a lifestyle brand or an attitude than an actual sporting goods brand.
Forget the music industry; can any business become an industry leader today without extending its brand to a larger, more inclusive brand persona? The Internet created a paradigm shift in how businesses operate and social media created an equally seismic shift in how people communicate. Together, they’ve ignited an environment of unprecedented change for businesses. We can no longer think in a linear fashion.
Nothing is constant. Nothing is forever. Nothing is simple.
Building a business means building an experience, becoming part of the heart and mind of the customer or their society.
In five years, will Apple still be a dominant player in the music industry?
Can a business be just a business anymore?
– Does it have to be a ubiquitous brand and presence in the lives of its audience?
– Or is re-invention the key to market dominance?
Feed Your Community, Not Your Ego
Image Credit Martin Terber, via Creative Commons