Though I realize that this board has become a trader's bulletin board (ah, how i yearn for the days of FA folks!), this might be of interest to some.
cbs.marketwatch.com
I want my CDNOW
Music to our ears: online tunes
By Rebecca Lynn Eisenberg, CBS MarketWatch
Last Update: 3:38 PM ET Sep 25, 1998
NewsWatch
SAN FRANCISCO (CBS.MW) -- What mainstream retail market could
be better suited for e-commerce than music? At $12 billion in size, the
retail music business is comprised primarily of digital products that
eventually, most believe, could be distributed online.
And, although online music purchases in 1997
totaled only $37 million (comprising a mere .03
percent of the whole), New York-based Jupiter
Communications estimates that by 2002, the online
retail music market will mean $1.15 billion to the
players who have established a stake.
Not surprisingly, battles among music e-tailers have
already begun. One merchant, fortunately,
understands the e-commerce promise: by
marketing directly to shoppers things that they
want, Net technology both helps buyers buy and
helps sellers sell.
CDNow Inc. (CDNW), having been first to the
Web, has consistently led the market and currently
accounts for one-third of the pie. The 4-year-old
music-only merchant now faces steep competition
not only from familiar rival N2K's (NTKI) Music
Boulevard, but also from online powerhouse
Amazon.com (AMZN), which added music to its
retail offerings in June, not to mention from the impending threat of offline
staples such as Tower and Musicland.
But if the recent news from its Jenkintown, Penn., headquarters is any
indication, CDNow gets the Net, and its future looks bright. Not only has
the e-tailer recently inked deals with Yahoo, MTV, Lycos and Movielink,
but this week it launched the best one-to-one marketing product the
commercial space has yet seen.
My CD, well, now
Called "My CD Now," the company's innovation passively creates
personalized music stores for each of its 600,000 customers. The
technology's features include low-exertion means to edit music
preferences, reasonably-effective intelligent-agent-driven music
recommendations, online address books and rolodex features, and -- best
of all - - the ability to create not just "wish lists" for future purchases, but
also (at last!) publicly accessible gift registries.
Experts approve. "I like the idea of being able to customize your retail
experience," said Ken Cassar, digital commerce analyst at Jupiter
Communications. My CD Now, he said, "truly leverages the things that
the Web, with its the databased, hyperlinked nature, is good at."
In particular, said Cassar, CDNow's promotion of an "electronic rolodex"
resembles the Web-based calendar- and contact-list functions that
Amazon.com acquired when it purchased PlanetAll. Although Amazon
has not yet integrated the database-driven technology into its Web store,
CDNow appears set to use its own version, giving the e-tailer a leg up on
the calendar-driven gift market - - a market which, Cassar said, "online
merchants have been overlooking."
In fact, said Cassar, the potential value to consumers and merchants both
is so great, that "Gift registries are going to be the next e-commerce killer
app."
In registry-fervor, Cassar has good company. Michael Sippey, consultant
at Internet consultancy Viant, has boosted for years the business model of
a "universal gift registry -- not just for weddings, but for every [gift-giving
opportunity]."
Why? Customers love wish lists and registries, said Michael Krupit,
CDNow's VP of Technology and Creative Services. And from the
company's point of view, "The one to one marketing that you get with
personalization like this is unquestionable. It improves our ability both to
promote the merchandise and to give people what they want to buy,
thereby increasing revenues."
600,000 stores in one blow
For example, said Krupit, "You can go to Amazon.com's home page, and
get blasted with the Titanic or Clinton videos, which is not necessarily
something you want to buy. Or you can come to CDNow, and see the
sorts of things that you want to buy. CDnow is no longer one music store;
it is 600,000 music stores with each customer having a different
experience."
CDNow wants to know you. And to most shoppers, that will be music to
their ears. |
