A few weeks ago, I bought what I declared to be my last compact disc ever! It felt like a pivotal moment for me as a music consumer because I finally declared myself free of the physical and embraced the digital wholly.
I am a voracious music consumer; live shows, compact discs, digital tracks, even the occasional tour t-shirt. Philosophically, I’ve never balked at paying for music, but I still look for the value in what I’m buying. The value of the music is itself inherent but the music industry has long tried to convince consumers to value the packaging at least as much. Compact discs used to be works of art (as were music videos at one time) when cds were valued as an enhancement of the music experience.
Digital sales wiped out the presentation aspect of cds (even if downloads do come with the album artwork) in exchange for a cheaper price point. It created a new model for music distribution that eroded the artistic value of the compact disc and at the same time, provided an easier mode for sharing the music without paying for it (remember the days of mixtapes?) The net effect? The value of music is being judged solely on how good it is.
In way, it’s a great thing, and I think the artists themselves would agree. The problem though is that the music industry on a whole hasn’t figured how to continue to be profitable and still embrace the new era of change. And ironically, though compact disc sales are slumping, digital sales, despite modest growth, still only represent 5% of music sales annually. So how are consumers getting their music?
It’s a question that the record companies have been grappling unsuccessfully with for at least half a decade. Remember when the RIAA -- Recording Industry Association of America -- was suing consumers for piracy? A the time, the move sounded like a bad joke; and it stank of a desperation tactic. Worse, the lawsuits had zero impact on music piracy and did little more than confirm what everyone had already agreed upon in the first place: the record companies (and in some cases, the musicians) owned the music. The consumers had no problem owning up to it; they just weren’t paying for it anymore.
More recently, pile on the overpricing of concert tours, and it’s worth asking: how are consumers getting their music fix?
There are some obvious answers. Pandora is still free, as is radio (both internet and more traditional airwaves). Music file sharing is still happening. Artists are more cognizant of how giving away free music can be a useful promotional tool (not for nothing, but the record company has been slow to figure it out). But does it have to be free to get people to listen?
I’m no more sure of the answer than the record companies, so I can only look at my own experience as a music consumer. I will only buy a compact disc for an album that I’ve already heard. If I know I like the music, I’m more than willing to pay for the disc itself (and that has been true for years, not just recently). I actually rarely buy complete digital albums (occasionally if I deem the “bonus tracks” worth buying the whole album, I’ll go for it) so most of my music consumption is individual digital tracks. So in fact, my consumption habits fairly accurately reflect the overall consumer trends of the music industry. My digital purchases: maybe 10% of my overall purchases. My compact disc purchases: down (way down) from 10 years ago. And the rest of my music consumption are tracks I come across in the course of my day to day, either shared from friends or heard on the radio or offered free directly from the artist.
Despite my intention to stop buying cds, the truth is, my habits haven’t changed. If I know the music, buying the compact disc is worth it to me. Otherwise, I am perfectly comfortable seeking out individual digital tracks, either free or purchased as the opportunity presents itself.
I recognize that the music industry is facing a lot of pressure from consumers like me because not that long ago, I was the type of person supporting the existing business model. But that model is busted and I just don’t see what is going to replace it. The truth is, despite a few music purchases here and there, I’m just not buying it anymore. And from what I can tell, neither is anyone else.
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Andrew Marx is the author of Thank You is Implied: The Annotated Smart ReMarx, a collection of essays from his 17-year writing career, annotated with new commentary, anecdotes and the occasional apology.
In order to compete with other e-readers, Amazon has dropped the price of the Kindle Wireless Reading Device to $189.00. The move is designed to keep Amazon’s product competitive with other devices, in particular Barnes and Noble’s e-reader Nook and the iPad (which is able to read any pdf).
Amazon in particular faces an uphill battle for its product because of the proprietary file format required to view books on the Kindle. The Kindle file format is built into any digital book purchase directly from Amazon, but requires conversion if you purchase the e-book from any other source. (For what it’s worth, Kindle-formatted digital books can be read straight from your desktop without paying for the device, which at least offers some flexibility for the buyer.
The new Apple iPad includes the ability to read pdfs directly from the screen as well as using the Goodreader application (which right now only costs $.99 to purchase) making it the most economical choice if you already are an iPad owner. Plus, assuming you were intending to pay for the book anyway, most smartphones can read pdfs, making it a cross-compatible format from most e-readers.
The fact that the Nook and the Kindle both now sell for lower base prices is a significant concession by the companies that the competition for e-readers is heating up. If you prefer one company (or e-reader) over another, or want to try out the digital book market, now might be the time to jump onboard.
Promotion is a tricky business, but whether you go through an advertising agency or take a do-it-yourself approach, you need to know the value of your promotional campaign.
Determine your outcomes
Promotion can create awareness about a brand or new product, or sell a brand or new product. It can also be used to let customers know about a special, limited-time offer. You need to determine what you really expect to happen from your promotional campaign in order to measure its success. It pays to be as specific possible. If you just launched a kindle line of books, you might want to say “x sales of kindle titles” not just “x sales.” It might sound persnickety but the true measure of success is if you meet your specific goals.
Set expectations
But before you dive into the world of advertising, you need to have reasonable expectations of what success means for your advertising campaign. If your outcome is sales, then it’s likely going to be a dollar figure or quantity sold ie. 10 books at $3.50 revenue is a target of $35 of revenue.
Determine how much is advertising going to cost you
Are you hiring an advertising agency? Are you working with a promoter? What are the fees for their work?
If you’re doing it yourself, where is the campaign running? Is it in a store? Online? Do you need staff? Do you need physical props (like banners or giveaways)? What is the cost of inventory you need to purchase in advance? Are there rental charges? Are you serving food?
Obviously, an online advertising campaign can have a greatly different cost structure than running a promotion in store, or even placing an ad in a newspaper. Paying someone to do the work for you is an added layer of cost (but may be a time-savings) that needs to be factored in to truly understand the worth of the campaign.
Determine the time investment
Even free campaigns can drain your time. You need to find a way to incorporate an estimate of the time needed to complete the campaign into your value assessment in a measurable way. The amount of time you spend (or pay people to spend on the project) needs to be in proportion to the expected outcome.
So how much is your ad worth?
Total the cost of your promotional campaign and divide that number by your per unit cost of revenue. Let’s say per unit, you earn $2.50 for every sale. Then if your promotion costs $250, you need 100 sales just to break even. And of course most businesses want to come out ahead, not even. So that break even point is simply a marker of minimum success.
This is the kind of measurement you must be able to do yourself, regardless of whether you hire an agency or promoter to work with.
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Andrew Marx is a long time writer on SmartReMarxcom and recently published a new work of fiction Accidents Happen. You can contact him on twitter or leave a comment below.
Okay, I love talking personal finances. One of the original purposes of this blog was to talk about financial health for the individual, but the focus shifted pretty quickly. Here’s why.
The thing about blindly accepting advice from financial experts is that everyone’s situation is so unique that it really requires an analysis of your financial health, not just a discussion of best practices. That’s why, in some respects, Suze Orman is a better financial guru than Jim Cramer. Financial strategies that are right for one person aren’t necessarily right for another, even if both people seem to have a lot in common financially-speaking. In personal finance, the small details make big difference.
It is widely acknowledged that the economic picture can change dramatically from the time you start working to the time you are of retirement age. But what is sometimes lost in the conversation is that your personal financial picture changes dramatically too. Financial advice is often based on the notion that our income is always going to increase as we get older. But as the last couple years have proven, that’s not always the case.
It was based on these two principles that I made a conscious decision to avoid becoming a financial guru on my blog. I still love finances, and frankly, I have seen it done well (consumerismcommentary.com is a great website for basic financial strategies and lot of interesting research). So while I don’t act like a guru of personal finances on the blog, it is always on my mind.
This week, I used a financial calculator to determine the impact of my current budget on my retirement plans. I have approximately 30-35 years left before I am of retirement age. The bottom line, according to the calculator, is that I need to save for retirement somewhere between $175,000 and $400,000 to comfortably retire at my current means.
Doing some research, I found a stat that most Americans expect to need $250,000 in retirement savings in order to retire comfortably. So on the surface of it, the retirement calculator seemed to have produce some reassuring numbers.
Let me just state right now that I think $175K is a gross underestimation of the amount of money I will need to retire comfortably (defined, in this case, as approximating my current lifestyle adjusted for inflation). Furthermore, if life expectancies continue to increase, it’s entirely possible that my income will need to stretch for up to 30 years after retirement. So let’s say that $400K is a bare minimum target.
So what would it take to get there? One, consistent employment for the next 30 years. The calculator assumes that my employer match will continue to be available for my 401(k) (not a given if you ask me) and that I am making at least my current salary for that entire time, adjusted for inflation. Two, that I will be able to save at least $5,000 per year in liquid savings and another, very modest $1,000 per year in an IRA on top of my 401(k). (The reason for only $1,000 extra is because I used numbers based on my current budget, so that’s what I can afford this year).
And more generally, the calculator assumes that I will never take on any more debt than I have now. This is a questionable assumption. I have about $100,000 of debt in student loans and a $30,000 car loan. So assume that I take on a mortgage payment at some point, but both my student loans and car loan have been substantially reduced in the meantime. And of course, it certainly requires that I stay out of credit card debt.
The lesson here is that using the calculator, I have established target amounts to invest in my 401(k), an IRA, and in my savings account that gives me a good chance of meeting my retirement goal in 30 years. But personal financial situations change (lose of job, health issues, children, mortgage, etc) and when mine do, I will have to reassess my target savings. Some people, depending on their situation, might have to do a reassessment every single year. (A 2% raise, for instance, isn’t probably going to require much adjustment, but a 10% increase probably would). For me, if my income continues to steadily increase for the next 30 years, chances are really good that I will retire just fine, regardless of by how much it increases.
My point is two-fold. One, you can only assess your financial health by looking at your specific financial picture. And no matter what any financial expert says to you, unless they have looked your finances, no amount of advice is going to be dead on. Two, regardless of your age, income level, or any other factors in your life, your current financial assessment is only good for as long as your financial picture remains steady. If something changes, good or bad, then in order to truly appreciate your financial health, you are going to have to calculate everything over again.
So listen to the experts on TV, read the money blogs, but remember that the best financial advice is the kind that is tailored only to you.
Giveaways make people feel like they are getting more bang for their purchase. It’s a way to offer an incentive to the customer to purchase your book, and reward those who were probably going to purchase it anyway.
As a writer, my primary product is storytelling. I can dabble in videos like this jokey one we filmed in the snow
and sell promotional posters like this but let’s face it, those things are not my primary focus. Since I am an author first and foremost, my product is a book. The best giveaways to promote what I do are going to be books.
Of course economically, giving way books isn’t always going to make sense. But there are other ways to give out your writing. In part one, I talked about maintaining a blog that offered free material. Another idea is to offer a free download of a complete story. It can be a short story, a e-book novella or a full-length novel. The idea is to reward people for purchasing the book.
Here’s one way it can work. If you sell the books yourself, send out a download link (zip files and pdf documents are the standard for book downloads) to your buyers. They save the files to their computer and read them at their leisure. It’s definitely not as sophisticated as a book reader like the kindle but your customers will still recognize it as a value-added component of the sale.
Another way is to ask them to e-mail their purchase receipt to an e-mail address you own. You set up the autoresponder to send them back an automated message which includes the ebook link to download. Whether they choose to participate is up to them, but it offers your customers a reward for their loyalty. And the workload on your part is manageable. (If your e-mail skills are subpar you could respond to each e-mail individually).
One caveat to all of this: Whatever you offer electronically, whether it’s hosted on a website, or included in a download, you have to assume it could be shared around the world. There is just no realistic expectation of keeping people from sharing it. And why would you want to?
It sounds irresistible in theory. A completely free marketing campaign that reaches potentially millions of prospective customers. But how do you know if it works? (Click here for part one or part two of this article)
There are some obvious answers. 1) It works if your friends forward your message to other friends and their friends forward it on to people who you would never reach otherwise. For instance, the best viral videos get 100,000 hits or more, usually within the first few days. 2) If you have a subscriber-based service (like a podcast or mailing list) you can measure success in the increase in subscribers that you gain and keep. 3) The most obvious of all: did you see a spike in sales?
Depending on how technology-savvy you are, you can gather a lot of hard data on the success of your campaign. You can track the number of times an e-mail was forwarded. You can google search for your campaign keywords and see how many results pages come up related to your viral campaign. You can use some facebook metrics to track the popularity of your fan page. You can use twitter search to look at the trends for your particular keywords (by the way, trend tracking is available even if your keywords aren’t appearing a lot -- they do not have to be in the top ten most popular trending topics for you to track them). In addition to that, your website can have a hit counter, google has its own analytic package, and you may be able to track clicks through any of the social networking tools you end up using.
Here’s a strong caveat: if you have to beg your friends to help viral your message, then you already don’t have a strong campaign message. It doesn’t hurt to ask them to spread the message along, but the true success of viral marketing is to get other people to do the work for you. Remember, what you have at its core is a word of mouth campaign. The success of your campaign is grounded in your ability to create a message that people want to share on your behalf. You are capitalizing on a culture of endorsement for your product. Whether you achieve that through humor or creating a thought-provoking message or some other catch that makes your pitch shine, it is really the power of your message that propels it to viral stardom. But the vehicle that takes you there is other people’s interest.
__ Writer’s Income is a weekly blog that covers all aspects of writing for publication. Topics include writing, publishing, and marketing with an emphasis on doing all the work yourself.
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to $189.00. The move is designed to keep Amazon’s product competitive with other devices, in particular Barnes and Noble’s e-reader 
