The Wall Street Journal reports Real Networks has slashed prices for downloading music. The RealPlayer Music Store will charge 49 cents a song and $4.99 to download an entire album. In comparison, Apple, which supposedly commands a near 70% share of the download music business, charges 99 cents a song and $9.99 for an album.
So … in an attempt to slice market share from Apple, the Real Networks Marketing Department came up with the BRILLIANT idea to run a three-week clearance sale on its digital inventory of music.
As Seth Godin wrote in the Purple Cow … a low price strategy is the last refuge of a marketer who is out of great ideas [Purple Cow, page 106].
Real Networks needs to realize there is a HIGH PRICE to pay for this low price marketing strategy.
Besides losing loads of money … low price sales promotions means lower margins, lower perceived value of a product/service, and it lowers the ability of a company to raise prices in the future. Plus, it antagonizes competitors to lower their prices resulting in a price war where there will be few, if any winners.
The easiest marketing strategy for any marketer to activate is low price. But aren’t we, as marketers, too smart, too savvy, and too damn creative to fall for this low price trap? This is why I say the Real Networks Marketing Department is defunct. They are investing millions of dollars to focus a promotion based on the low price fallacy.
So, what should Real Networks do instead of promoting 49 cent downloads?
Ditch the low price promotion all-together and focus their Freedom of Choice campaign supremely on their remarkably cool and rebelliously hip Harmony technology. Harmony basically hacks the proprietary iPod music format and allows for RealPlayer downloads to be played on iPods. This is big stuff, really big stuff and … THIS IS A BRILLIANT MARKETING OPPORTUNITY!!!!!
"Harmony enables consumers to buy and download music that plays on more than 100 portable devices, including the Apple iPod. Before RealPlayer with Harmony, consumers buying digital music were forced to buy music that only worked on a particular brand of portable device, meaning that they could easily get "locked in" to that device, often without even knowing it." [source: Real Networks press release]
The Real Networks Marketing Department should focus all promotional efforts on the high value of Harmony and not on the low value of low price. Promoting 49 cent downloads will only clutter the bigger (and better) message of universal digital music formats.
Focusing the Freedom of Choice campaign 100% on Harmony will change it from a trite sales promotion to an all-out movement. And we all know ... movements are far more powerful than promotions.
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