EM 775 Marketing Strategies

This Blog has been created as a forum for Milwaukee School of Engineering, Rader School of Business students to comment on various issues related to the subject matter of our class. The class, "Marketing Strategies" is an elective class in the graduate management program. The views expressed are those of the students individually and not of the professor or the university.

Sunday, December 17, 2006

Beatles on iPod?

One of the things we often discuss is "channels". Is iTunes a "channel" for music distribution? Of course it is. Why then, would some bands or their management choose NOT to be distributed in iTunes?

In the FORTUNE article, "Happiness is a warm iPod" the author, Tim Arango talks about the Beatles as well as a couple other artists who choose not to be available in iTunes. Some are Led Zepplin, Garth Brooks and AC/DC. It was only a few months ago that Metallica agreed to be in iTunes.

What do you think about these choices?

Why would they NOT want to be in iTunes?

What are the tactical issues associated with iTunes and other MP3 Distribution services?

Gene A. Wright

2 Comments:

Anonymous Anonymous said...

There is some history between Apple Corps, set up by The Beatles in 1968 to lease their songs and manage their affairs, and Apple Computer. The two companies reached an agreement in 1981 to share the use of the Apple trademark, as long as Apple Computer used the trademark only in the computer business and, specifically, not in the entertainment business. I have a hard time believing that an iPod, and more importantly, iTunes, is not part of the entertainment business. The courts will have to decide this one.

Considering classic rock bands such as The Beatles, Led Zeppelin, Rolling Stones, Aerosmith, and The Who, there are some real differences how the bands use their music archives. Metallica took a strong stance against music file sharing when Napster was introduced earlier this decade. They previously made its albums available for purchase online through retailers and its own website. In July 2006 Metallica will start selling four albums on iTunes http://www.usatoday.com/life/music/news/2006-07-28-metallica-itunes_x.htm. Similar to Metallica, “Led Zeppelin has always been very protective of its catalogue of songs, and has seldom allowed them to be licensed for films or commercials.” Some movies that Led Zeppelin songs have recently been heard include Fast Times at Ridgemont High, Almost Famous, and School of Rock. The Who, Aerosmith, and Rolling Stones have allowed their songs to be used more liberally. Songs from these bands are commonly heard in advertising such as commercials.

It’s a great question - Why is there some resistance with these bands to license to iTunes? These classic rock bands have incredible brand strength, and there is a balance between making money with royalties and mass marketing to obtain revenue from volume. The classic bands licensing to iTunes might allow an entire generation who is not extremely familiar with all their music, to experience their music for the first time. I don’t see the downside to this, or why the remaining band members would object to having new music fans. The main objection I can see is if the class rock bands agree with the percentage that they receive from online sales, versus what Apple will realize.

I’m curious if there are any bands that have been created since the creation the iPod and iTunes that have objected to online licensing. I can’t think of any.


David Wilson
EM775


http://www.answers.com/topic/led-zeppelin

10:38 AM  
Anonymous Anonymous said...

What do you think about these choices?

Dave chronicles very well some of the timelines for some of the bands and what they have done as far as their music is concerned. I think the choice should be theirs to do what they want with their music. I do believe the choice not to use this medium could eventually be a hindrance in obtaining new listeners/followers. iTunes is such a powerful force in the industry right now that flat out refusing your songs to be distributed through it may either label you as snooty or eventually forgotten.


Why would they NOT want to be in iTunes?


The only reasons I can think of are: 1)Bands many times take a stand on issues. They use their popularity and stardom to make these statements and maybe on the advice of lawyers. 2.) Also, some may want exclusivity or 3)Have contracts which forbid them to market other than the deals they signed with their record labels. 4)The last one I can think of is this limits distribution typically only to iPod users only and not other MP3 players.

What are the tactical issues associated with iTunes and other MP3 Distribution services?

I think its hard to keep track of the legalize associated with all these different systems. Legal fees can also be a hindrance. How to make sure your music is not pirated? Whose distribution service do you go with and why? How do you make sure you get all the royalties? What happens if the service goes belly up? I'm sure there are a lot more than the ones I mention here and some way more important in terms of marketing.

Brian G

1:33 PM  

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