Digital Music - Sony Business Model

Sony offers unlimited music for $12.99 a month as Aussie chief left red-faced

The Age

Asher Moses

February 18, 2011

"Sony's new service, which officially opens for business in Australia, New Zealand and the US today after launching in Europe late last year, is dubbed Music Unlimited and provides access to six million songs.The service will go head-to-head with iTunes but unlike on Apple's service, where consumers download individual tracks to their computers, Music Unlimited tracks are streamed from the web, so users can't store them. The $12.99 premium plan provides unlimited access to any music while the $4.99 basic plan works like an ad-free radio station whereby users can select the genre or era but not the individual song."

Q1. What would be the attraction of the 'Music Unlimited' plan?

Q2. What is happening to CD sales?

Q3. Why are Digital music sales declining?

On-line Shopping Trends

The strong trend in on-line shopping continues and is having an impact on traditional retails outlets.

From The Age 13/10/2010: Retailers face hit as shoppers go online

Chris Zappone
October 13, 2010 - 10:13AM

"Technology research group Forrester estimates that online retail sales will hit $28 billion this year, up 17.5 per cent from last year, with one quarter of those sales - worth an estimated $7 billion - going overseas.

But those figures are tricky to pin down. The Australian Bureau of Statistics, which counts online sales for more so-called bricks-and-mortar shops, has no precise measure of online purchases made by consumers directly to international retailers.

Australia Post's importation rules require declarations on goods only if they're worth more than $1000, freeing up consumers to shop directly online with outlets overseas - a trend that's likely to accelerate with the strengthening dollar."

Poll: Are you shopping more online?

Yes - mostly at overseas retailers

72%

Yes - mostly at Australian retailers

17%

No - I don't shop online

11%

Total votes: 2023.

Poll closes in 11 hours.

Disclaimer:

These polls are not scientific and reflect the opinion only of visitors who have chosen to participate.

Q1. Why shop on-line?

Q3. What are the pitfalls and risks?

Q4. How can businesses reduce the risk and increase confidence in on-line shopping?

The Future - According to Gartner

Gartner (www.gartner.com) is a global consulting and research organisation focussing on information technology and management. Periodically they publish a paper on what they analyse as major trends that will impact business. Here are some of their predictions:

Gartner Top End User Predictions for 2010: Coping with the New Balance of Power.

A. Internet marketing will be regulated by 2015, controlling more than $250 billion in Internet marketing spending worldwide.
Market Implications:

The potential backlash from consumers on Internet marketing cannot be underestimated. Eventually marketers WILL abuse the Internet channel and annoy customers enough to generate an outcry strong enough to push legislation regulating Internet marketing activity. Consequences will include:

• That companies focusing primarily on the Internet for marketing purposes could find themselves unable to market effectively to customers, putting themselves at a competitive disadvantage.
• Vendors that focus solely or predominately on producing Internet marketing could find themselves faced with a declining market, as companies shift marketing funds to other channels to compensate

B. By 2014, more than three billion of the world’s adult population will be able to transact electronically via mobile and Internet technology.

Market Implications:

Two trends are merging that will drastically alter the future of the world’s trading economy:

• The rapid rise of mobile and Internet technology adoption in emerging economies.
• Advances in mobile payment, commerce and banking.

Together they will open the way for a significant portion of the world’s adult population to transact electronically. For many of these newly enfranchised consumers from emerging economies, the ability to use short message service (SMS), e-mail or payment accounts will constitute their first and only access to the estimated $1 trillion global economy.

For global firms such as Coca Cola and Carrefour, it will provide electronic reach and the ability to transact with a significant majority of adults on the planet. For entities such as eBay, TaoBao or Craigslist, it will open a huge opportunity for consumer-to-consumer transactions.

For mobile operators, Internet companies and financial institutions, it will open vast new markets for the provision of transactional and funds transfer capabilities

C. By 2013, mobile phones will overtake PCs as the most common Web access device worldwide.

According to Gartner estimates:

• The total number of PCs in use will reach 1.62 billion units in 2012, all of which are capable of Internet access, even if some are not connected.
• By 2012, the combined installed base of smartphones and browser-equipped enhanced phones will exceed 1.69 billion units. From 2012 onwards, this combined installed base will be greater than the installed base for PCs.

Nevertheless, most users in 2012 will use a PC as their primary Web access device and their phone as a secondary access device. However, as use of smartphones spreads globally, they will overtake the PC as the most common primary device for Web access sometime in 2015.

This shift means that many websites will need to be reformatted or rebuilt. Mobile device users

typically make many fewer “clicks” on a website than PC users, and websites not optimized for smaller screen formats will risk reduced customer interaction and fewer transactions.

• This market barrier will be of particularly concern to:
• Organizations in geographies where the PC is not as prevalent.
• Organizations with consumer-facing websites.
• Informational portals used by educational institutions and the government sector
• Online retailers, banks and financial service providers will be the most exposed to this risk

Q1. How can internet marketing be regulated?

Q2. Will the ability to transact electronically favour small businesses or large multi-nationals?

Q3. What are some of the problems in using mobile phones for on-line transaction?

The Great Firewall of China vs. Internet Filtering

The position of the Chinese government on controlling the content and access to the internet has been in the news for quite a while. This has raised the issue of Google 'voluntarily' filtering search results, Yahoo providing blogger identities and monitoring of dissidents. Below is a link to a video from the ABC's Hungry Beast program from 03/03/10:

http://hungrybeast.abc.net.au/stories/great-firewall-china

In Australia the government is also concerned with 'illegal' content being accessible on the web. Hungry Beast has a video that explains how this works and puts a particular point of view.

http://hungrybeast.abc.net.au/media/how-internet-filter-works

Please note that both videos are 'Hungry Beast' points of view and may represent partisan interests.

Q1. How different are the approaches to internet 'control' between the Chinese and Australian Governments.

Q2. What are the implications for legitimate commercial activity on the internet in either

country?

Q3. What can marketers do in dealing with these internet restrictions?

$70 Million Lost in Scams

From the ACC web site:

http://www.accc.gov.au/content/index.phtml/itemId/916279

"During 2009, losses reported to the Australian Competition and Consumer Commission through scams totalled almost $70 million, ACCC deputy chair Peter Kell said today when launching Targeting scams - Report of the ACCC on scam activity 2009.

"Scams continue to make up a large proportion of total complaints that the ACCC receives and more than 20,000 scam reports were made to the ACCC in 2009 - a 16 per cent increase compared with 2008," Mr Kell said.

"Realistically, this figure is likely to be the tip of the iceberg – given people can be embarrassed about reporting that they have fallen victim to scams and lost money in the process."

Online scams are the focus for the Australasian Consumer Fraud Taskforce's 2010 Fraud Week campaign. The campaign, Online Offensive—Fighting Fraud Online runs from 1-7 March.

...The report notes that the dominance of online scams. "Nearly 70 per cent of consumers that contacted the ACCC about scams during 2009 said they were contacted by scammers via the internet," Mr Kell said."

Q1. How serious is this in relation to other crimes such as burglary and robbery?

Q2. Go to the Scam Watch web site: www.scamwatch.gov.au and find out how:

Identity theft works

What are 'Chain letter' scams?

Viral Advertising

This method of advertising is a popular way for organisations to promote themselves, their products or services. This can range from consumer products (Guinness) to self-parodies and political promotions.

The comments for this post are examples of viral advertising from students in the Graduate Certificate of Marketing at Holmesglen.

All very interesting and great examples of viral advertising! And one from me:

http://www.youtube.com/watch?v=vr3x_RRJdd4&feature=PlayList&p=31A99892D5AF7ED9&playnext=1&playnext_from=PL&index=1

http://www.youtube.com/watch?v=9lp0IWv8QZY

http://www.youtube.com/watch?v=1k08yxu57NA&feature=related

Q1. - How many views for each?

Q2. What are some common features of successful viral advertisments?

Email Hoaxes, Scams, Spam and Chain Emails

The power and ease of using email can also be abused. Emails are used for un-ethical marketing purposes, promotion of illegal schemes and for spreading false rumours. Some examples:

1. Nigerian scam

2. Get rich quick scams - work from home - stock market tips

3. Health and weightloss scams

4. Pharmacy items

5. Politically or racially motivated hoaxes

6. Chain letters to help child cancer victim

Hoaxes can be recognised by a number of characteristics:

1. It appeals to a common fear (heart attack/cancer)

2. It presents an explanation that is simple, seems intuitive and easily understood (but wrong)

3. It looks and sounds scientific or authoritative, and may contain some 'facts'

4. It does not cite or refer to any authority or provide any links to other sources

5. It asks you for forward it on to all your friends etc.

6. All it does is increase your internet download, wastes your time and creates anxiety

7. Hoax chain emails are often associated with viruses and spammers collecting email addresses.

Basic rule is that most chain emails are hoaxes. Check the chain email with one of the hoax web sites and other authorities and do not pass it on!

Check these web sites:

www.sophos.com/security/hoaxes

www.snopes.com

www.truthorfiction.com

www.breakthechain.org

www.scambusters.org

http://www.hoax-slayer.com

www.scamwatch.gov.a

http://www.afp.gov.au/national/major_fraud/internet_scams

http://www.ahtcc.gov.au/tech_crimes_types/fraud.htm

http://www.acma.gov.au/WEB/STANDARD/pc=PC_310529

Q1. What is the impact on internet marketing of these email scams and hoaxes?

Q2. How can consumers be protected in these cases?

Q3. What can ethical internet marketers do?