Famous copywriting vs. copywriting: Scott Cohen thinks the current model is deadly for business

This is how music sellers see their average customer downloading free tracks.

Scott Cohen is co-founder of The Orchard, a company that distributes 20% of music online. But this is not Napster: Cohen makes money selling content. And it is this person who believes that the current music sales model is outdated from birth and needs urgent replacement.

Short story

It all started with the fact that the company selling music was launched in 1997. The channels of that time did not allow for the delivery of multimedia content to the user (well, except to the most patient), therefore the Internet was used only for advertising. Cohenn and his people wrote to people in a new, then-channel — email — and received very positive feedback. Plus sales. After 15 years of development, his company began to control 20% of all music supplied via the Internet and mobile networks.
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Scott Cohen and other business leaders

Scott believes that the biggest problem in the music industry is that people who are used to selling copies continue to believe that you need to use the same model in the virtual world. The problem is that in reality the carrier is inseparable from the work - and on the Internet, everything is no longer the case.

Therefore, the first thing they do - they look at the clients of the music business. And instead of treating them as music fans, they began to treat them as pirates, as bad guys, that is, these people steal our music. “They destroy our industry. We have now figured out everything for ourselves over the past 50 years, and suddenly they capture all this for free, and we can no longer make any money, ”they say. So, as in any other industry, they developed a game plan for how to solve this problem. The first thing they decided to do was to start a war against their clients.

The result of the war against customers is the collapse of the music industry. Sales fell 50% from what was sold at a peak 10 years ago. This is the 1973 level. Worse, measures were taken that only annoyed users: “triple blow” - two warnings about illegal downloads and disabling access by the provider.

You know, if someone sends me a message in which he says: “We control how much you download!” Probably I will find some free software to disguise my IP address so that they no longer catch me. Well, you know ... You get a viral warning on your computer, first, what are you doing? You find virus protection, you install an antivirus program. Thus, I am not sure that this is a winning strategy.

How to make money on music?

In 2004, iTunes appeared - and rocket sales of singles soared. And more people began to buy music than ever - the “average check” just changed. This average bill for a music buyer, for example, is $ 20-25 per year. In this case, the 80/20 rule applies: for example, a 2% average check is above $ 150, the next 3% has about a hundred dollars, and so on. Scott says that it is impossible to achieve maximum profit from the segment, if you keep the previous prices. It's about the complexity of evaluating music for the listener.


The number of sales.


Number of transactions: when sales decrease, the number of buyers grows.

One of the most promising models is to give a copy very cheaply, but rather expensively to give “impressions” to it associated with it. For example, when selling packages for Madonna’s concerts on a tour, a price increase system is used depending on the services included. At a standard concert, this can be represented as follows: normal places, premium places, the opportunity to look behind the scenes, a closed group concert, the opportunity to talk with an idol, various T-shirts and autograph disks with limited editions, and so on. The low price of the ticket gives access to everyone, and the high price of additional services generates a profit. And these services are in demand with a small but very solvent part of the audience. In some ways, he is close to his “sworn comrade” and Barlow , an advocate of freedom of information on the Internet, speaking about free copying development - a viral model that is very important for forming an audience.

And it turns out that the higher the price of the package they bought, the better they feel. The happier they are. And no one comes out and says to all his friends: “Oh my god! I just spent 99 cents to download a song. I am so shocked. Nobody talks about it. But they often go online and start bragging: “Oh my god! I just spent £ 99, or $ 99. I'm just shocked because I'm going to a gig. I will get this album, and I will meet with the guys, with my group. ” That is, the higher the price, the higher the perceived value for the end user. Therefore, instead of selling them cheap clothes, we sell them goods of higher value. And that makes the audience happier.

In essence, Cohen talks about the Google model: cool free services to attract a huge audience and paid services (such as corporate packages) for monetization. And related sales, like Google, have ads. The search engine does not take money for the search (it would be just nonsense), but earns on it. In music can be the same.

The world that we imagined 20 years ago, and which, we believed, is absolutely not connected to our reality, only in the near future can this reality become.

So, before you the person selling music, and selling successfully. It would seem that you should immediately throw stones at him, but ... because he wants just what the industry needs, right?

References:

• Lecture in Russian and English in Digital October;
• Lecture transcript ;
• His website is selling music;
• Lecture by his opponent Barlow.

PS The next lecture in Knowledge Stream - about the rules of survival for business, here is an event on Habré. Is free.