Products Impacting Trends

Thinking back to trends as ocean waves and companies as surfers, an aspect of the analogy is interestingly incomplete. Although surfers enjoy the dynamic thrill of the waves, they do not reorient the waves themselves. Their position is changed by the waves, but their little surfboards do not change the direction of the ocean’s temperamental flow. However, products do impact trends at the same time that trends impact products. The iPod as a product and MP3 as a tech­nology are both reacting to and setting trends and expectations. MP3 technology allows consumers far more flexibility and demand in music than ever before. People download only the songs they want. The need for physical product gives way to choice and variety. For those who download complete CDs, there are web sites from which the CD cover can be printed. But for many, the album cover is no longer needed or desired. The social aspects of sharing move to a new level with international participation in shareware sites.

Even before MP3s were developed, music and entertainment delivery systems were continuing the drive toward miniaturization. smaller is better, and the inconvenience of needing any physical device is compensated for with the iPod through another Apple trend-setting aesthetic and lifestyle statement. For the early adopters, what is next is MP3 in every product that is a part of their life. Even cars today offer MP3 technology. The logistical problems and incon­venience of downloading music to the car stereo is still a roadblock to cross the chasm. But it will happen, and soon MP3 and downloaded music will be the norm.

The iPod holds more music than most people own and organizes it far better than most people organize their CD collection. The con­cept of portability has implications for producers of environments where people listen to music. Already BMW includes a connection for iPods within some cutting-edge-performance vehicles; customers can take their entire music collection into their car, play it over 10 speakers, and then take it with them when they leave. Also, high – quality speaker systems with an iPod docking station are available for the home and office, effectively replacing the traditional stereo system.

Never before has a music technology been driven by the con­sumer instead of the recording industry. Kazaa and Limewire are, today, replacements for the original Napster. Shareware software allows each participant to download music from the hard disks of oth­ers on the system and to make their music available to others in the same way. The desire and ability to access any music at any time immediately is an expectation of the Y generation today. it is also an illegal exchange format that, through the power and benefits of the Internet, is difficult at best to track down and stop. The original understanding that an individual can copy for himself or herself pur­chased music has been pushed to a new dimension. of course, peo­ple used to make copies of their albums for their friends. But one, two, or even the occasional hundred copies were noise in the music industry’s sales and profits. Today, in theory, one sale of one CD can be distributed to everyone in the world. All they need is Kazaa and someone to fork over $19.95 for the first copy to put online. Although many who use these shareware programs leave the music on their computer or MP3 player, it can easily be copied onto a CD with any burner, creating a perfect copy of an album for anyone who desires it.

The music industry did not push the technology to new formats; instead, the industry has fought the new platform tooth and nail. Lawsuits and arrests to keep shareware sites off the internet, or at least people off those sites, show the fear the industry rightly feels. For those isolationists who fear the impact China will have on our economy, the answer is that it is reality; learn to work with China rather than fight it. The same is true here. The Internet and compact digital audio technology have changed the business model for the recording industry. Instead of fighting it, the industry must look to new ways to earn the consumer’s business—something it has never had to face. Instead of overpricing CDs, companies must look to pro­vide added features to those who buy their product. They must demonstrate in their product the expected morals that people demand so that honesty of purchasing a product wins out over the piracy of Kazaa.

The impact on all of this for the Y and X generations is the demand for more. What they want. When they want it. Now. And free! The reality of the MP3 concept has reinforced the need and demand for immediate gratification.

For the long term, the implication for the music industry is to revisit what it means to be part of the emerging fantasy economy. The industry will produce more singles more often and fewer albums. It will price them at what consumers believe is a reasonable cost. It will support smaller artists. It will recognize that independent record com­panies have a legitimate business and place in the industry—that, like the MP3 players, bigger is not better. For the consumer as well, the quality of new music will improve. People will have the ability to pre­view for free anything they would consider buying. The music compa­nies will have to provide a positive enough experience through quali­ty sound and production to earn the purchase of that song. Trust will drive the relationship between the industry and the consumer.

For the majority of people who will pay for the service of down­loading music, the virtual stores to purchase the music will become commodities. Services like iTunes will become the Wal-Mart of music everywhere on the Internet (and Wal-Mart now has a music down­load service). Opportunities will emerge for high-value services that provide more than just access to the music. These services will offer suggestions for music that meet an individual’s tastes and will learn what a person likes and dislikes. They will offer virtual and possibly physical social experiences that encourage use of their service. They will provide access to quality entertainment-delivery systems far beyond the transfer of songs to MP3 players.

on a broader scale, the impact of compressed digital audio goes beyond music and entertainment. Businesses need to have accelerated product introductions with more rapid time-to-market development processes. Mass customization will become the norm, where consumers will choose what features they want in a product and what color and style it will be. Nokia was an early proponent of mass customization in what is called “postponement.” Consumers not only choose the style phone they want, they can also choose from 50 or more faceplates that allow them to express who they are. Nokia can design and manufacture those faceplates at the last minute to have the most up-to-date style, “postponing” the design of that part. In the future, people will create their own expression in almost every major product they purchase.

Personalization, immediate gratification, and immediate accessi­bility of the digital music realm spills out into the rest of life; it is part of the future of product development. Companies are constantly developing or seeking out technology to help them produce more, faster, cheaper, and smaller with higher differentiation. This is a global trend. There are others.