Filed under: Rumors, Products and services, Competitive strategy, Starbucks (SBUX), Marketing and advertising

Following the groundbreaking signings with Madonna, U2, and Jay-Z, Live Nation (NYSE: LYV) is rumored to be courting The Rolling Stones away from privately held EMI Group, according to British music newspaper NME. The newspaper quotes a report from the print edition of The Observer, that the band is going to sign a deal with Live Nation that would grant the live music events company to “take over the marketing of the group’s back catalogue, worth over

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Filed under: Consumer experience, Competitive strategy, Marketing and advertising, Citigroup Inc. (C)

The recent challenging market conditions created much not only on traders and companies, but also cause some huge names to break promises they’d made to consumers. Eric Dash of The New York Times tells of one such promise that might now be repealed. Last year, Citigroup Inc. (NYSE: C) promoted the “deal is a deal” slogan, promising to millions of people that the company would no longer lift reserve interest rates on cards at any time, for any reason.

However, as Dash explains, times have changed and in the current weak environment the bank is reconsidering its decision because of financial troubles. A year ago, the company stated it would no longer use the “universal default” practice where a card issuers can raise the holder’s rate when that person is late paying any bill. What the bank still held was the right to raise rates every two years, when people renew their cards.

At the time, it looked like Citigroup’s decision was efficient as rivals such as Chase Card Services followed the company by announcing it would abandon the “universal default.”

What made Citigroup change its mind were the $40 billion in write-offs the company has taken during the last year on mortgages investments. In addition, the slumping economy has added pressure on its credit card business.

A major impact on credit card lenders has been federal banking regulators and Congress, which have set up rules designed to protect consumers amid the weak economy, limiting the banks’ flexibility to increase rates of riskier customers.

Now, after a year, Dash writes that the company is disappointed over its “Deal Is a Deal” policy as results were not as expected. “We have been disappointed with the results we’ve seen so far,” Citigroup stated. Probably consumers will have the same thoughts after the bank will be forced to break its promises.

Eliza Popescu is a financial writer for the on the web investment advisory service Investor’s Observer.

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Filed under: Products and services, Management, Consumer experience, Apple Inc (AAPL), Marketing and advertising, News Corp’B’ (NWS)

Billboard reported early Friday that English band Coldplay’s fourth album, Viva la Vida or Death and All His Friends, is set to see nearly 300,000 copies sold before the weekend is over after being released in the UK on Thursday. The trade magazine reports as well that in the first day of sales, 125,000 duplicates were sold, making the album well on its way to passing by the band’s last album, X&Y, which sold 464,000 copies in the UK during the first week it was released.

Official UK Charts Company, the chart compiler in the UK reported to Billboard as well that the album’s sales of 125,000 easily “outsells the rest of the top five biggest selling albums, which have benefited from a full week on sale.” In the UK, Coldplay already holds the record for second best first-week seller in chart history with X&Y from three years ago. The number one spot is held by Oasis with 695,000 copies sold for 1997’s Be Here Now.

These early sales figures must be a nice boost for the band’s label, privately held EMI Group. In current weeks, rumors and critics of the company and its current owners, the private equity firm Terra Firma, have revealed that Viva la Vida is an album that the label is hinging its summer and possibly its year-round sales on.

The album’s success was never in doubt by many onlookers, but with EMI’s troubles growing after layoffs and management shuffling, its success will be a great relief. Unfortunately, marketing and advertising for the album has seen more of a push from the band on its own website, News Corporation’s (NYSE: NWS) MySpace, and through a TV commercial for Apple Inc.’s (NASDAQ: AAPL) iTunes Store, where a pre-order has been offered with bonus tracks.

Viva la Vida will be released by EMI’s Capitol Records in the United Says on June 17.

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Filed under: Products and services, Consumer experience, Apple Inc (AAPL), Amazon.com (AMZN), Marketing and advertising

Apple Inc. (NASDAQ: AAPL) reported Thursday that the company’s iTunes Store has passed the five billion download mark from the store’s “catalog of more than eight million songs, over 20,000 TV episodes and in-excess of 2,000 film titles.” Most impressive are the number of movies customers rent or buy everyday, which is reported to be in excess of 50,000 movies. This announcement comes as the price of Apple’s stock has fluctuated slightly Thursday.

Despite this seemingly great news for the music industry, some artists are not as happy about iTunes’ share of music sales and distribution. According to Pulse 2.0, Kid Rock has decided to “completely boycott iTunes” because it is an “old system” where the store and the record company take all profits and do not share it with the artists. Even more revealing, when asked his view about music piracy, Kid Rock advocated “leveling the playing field” calling for people to steal everything, from music to gas, because either way the executives and distributors have enough money and will not “miss” what consumers steal.

Thinking about those sentiments and how much pull iTunes has in the music market raises questions about other stores that have emerged in the past year, like Amazon.com Inc.’s (NASDAQ: AMZN) MP3 store. That store notoriously acts as nothing more than an agent for the music companies, with Amazon.com taking a small fee versus the power that iTunes exerts. Whether artists see any more money from Amazon.com’s arrangement is unknown, but without Amazon.com working as another distributor it would seem hopeful and more likely.

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Filed under: Press releases, Products and services, Consumer experience, Marketing and advertising

Industrial progressive rock band Nine Inch Nails’ most recent album The Slip will be available in physical formats on July 22, Billboard reported Wednesday. First reported on Might 5, the album is the band’s third album in a tiny over a year and the second since leaving music company Universal Music Group. Unlike other physical releases though, a CD version will be limited to 200,000 duplicates in the United States, Canada and Japan, while a later vinyl version will be unlimited. Band leader Trent Reznor also told Billboard the album “will remain free to download ‘indefinitely’ from the band’s site.”

The availability of a vinyl copy of The Slip versus that of the CD version mirrors similar sentiments that I commented about yesterday. Music company EMI packaged the vinyl version of Coldplay’s Viva la Vida or Death and All His Friends with a CD version, indicating that despite vinyl’s allure, the industry is aware that listeners want versions that can be transferred to portable devices.

NIN leader Trent Reznor was obviously aware of this desire from his fans, since the album will feature an unlimited release for the vinyl version. It could also indicate his own preference, which wouldn’t be surprising. Either way, when The Slip is released physically, consumers and listeners will still have the option to download the album for free if they decide to purchase a physical copy, whether it’s the limited CD or the unlimited vinyl. Numerous formats might seem tedious, but if the experience is part of the joy of listening to music then it is being accommodated.

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Filed under: Products and services, Marketing and advertising, Hershey Co (HSY), Wrigley, (Wm) Jr (WWY)

Hershey (NYSE: HSY) is having growth problems. Not only is it tough just navigating this high-inflationary period, but it’s difficult keeping up with the competition. Consumers have a lot of candy choices, and even though Hershey is a large brand name in confections, it thinks it can do better in the marketing department. According to this Wall Street Journal (subscription required) piece, Hershey intends on implementing a 20% increase in spending for promotions.

This double-digit jump in marketing is a smart move, but it won’t be simple to digest. With the aforementioned inflationary pressures on the rise, Hershey is going to be sufficiently challenged to push growth while balancing the upward trends in input costs. But is there really a choice here? When you’ve a super brand like Hershey running into trouble, the thing you need to do is get out there and prop up the inherent equity of the product portfolio.

Yet, there’s a bit of a conundrum here, I think. Hershey needs to get people to purchase its delicious candies (I’m certainly a fan of the awesome Reese’s Peanut Butter Cup). Which demographic adores sweets? Younger children. They would have represented a great group for growth opportunities, but Hershey has to be careful about marketing too much to this demo since the country has, rightly so, been focusing on healthy alternatives to fatty foods. Even though Hershey has been trying to make some of its portfolio healthier, the flagship brands will always be, one assumes, sugary and full of empty calories. In fact, Hershey is more than aware of this issue, as this corporate link demonstrates.

Hershey’s management will have to be as creative as possible to produce innovative advertising campaigns that are both fun and aware of who is being targeted. If it were up to me, I’d go after the college-age demo via a crafty, humorous TV campaign, something really funny, like those messing-with-Sasquatch ads. Differentiating its brand is more important than ever considering the recent marriage between competitors Mars and Wrigley (NYSE: WWY).

As for the stock, it isn’t far from a 52-week low, and although I believe very long-term investors will do well with it considering its yield, I think the shares will be stuck in the basement for a lengthy period of time. Once Hershey gets its act together, things will obviously improve for shareholders, but for now, Hershey is hitting a difficult rough spot.

Disclosure: I don’t own any company mentioned; positions can change at any time.

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Filed under: Products and services, Industry, Consumer experience, Marketing and advertising

A British trade group that reports on music retail has published new findings to Billboard Friday “indicating Britons buy more CDs than any other country, and are more massive consumers of legal downloads than any of their European neighbors.” It’s the fifth year the British have led CD buys, buying an average of 2.3 CDs in 2007, while Americans only purchased an average of 1.7 CDs. These findings come from the International Federation of the Phonographic Industry’s new handbook out this week: the Recording Industry in Numbers.

Digital figures for British music downloads totaled $169.5 million in 2007, and were announced at the New Music Conference at London’s Earls Court by the Entertainment Retailers Association Thursday. The association’s chairman commented that British retailers offer “more and better music retailing than anywhere else in the world,” but seemed to connect the higher CD and digital sales in the UK with consumers’ love of music, rather than where the real strength of the report is: consumers apparent continued satisfaction with CDs and interest in downloads.

Even though this news indicates that CD sales are still steady, consumers buying an average of two CDs a year can hardly be that great for the music industry. In a market where CD sales continue to be seen as the lifeline of the industry, the reality of CD sales indicates how much digital downloads have to make up in order for some form of equilibrium in the industry. Clearly these numbers should force the industry to build up efforts to solidify and strengthen digital sales, but since it was put out by retailers, that group may resist such moves.

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Filed under: Google (GOOG), Time Warner (TWX), Marketing and advertising, Walt Disney (DIS), Viacom (VIA)

Google (NASDAQ: GOOG) wants to see if the attention span of its YouTube users can be stretched a bit. According to this Fortune article, YouTube seems to think that short clips might not necessarily be the backbone of long-term growth. Instead, longer videos might make the site more valuable. Why is this? Well, the article intimates that the founders of the site, Chad Hurley and Steve Chen, think there’s a market out there that might want something more than simple, user-generated content that focuses on the banal side of life for about three minutes per clip.

I see the point here. Google wants to figure out, once and for all, the ideal way to monetize its YouTube investment. This isn’t the easiest thing to do, since users of YouTube are, in theory, only interested in seeing short content as fast as possible. They don’t want to be burdened by ads. But YouTube is betting that maybe, just maybe, by going against theory and putting on longer material of superior quality, the eyeballs will become more intrigued and will perhaps be willing to view a greater quantity of videos. It all comes down to the quality of the content.

I find this to be a very interesting concept, and I think testing long-form content is justified. But I wouldn’t hold out much hope for huge success with this initiative. The article cites the success of Francis Stokes, who received a development deal with the Sci-Fi Channel based on a long-form piece of content. But for each Francis Stokes, there’s going to be many examples of long-form content that people could care less about. And you still have the issue of ad-resistance in terms of the users. Even YouTube’s spokeswoman, Julie Supan, states that the brief-clip format is the essence of YouTube’s initial attraction for web surfers.

Courting short filmmakers also is a way for YouTube to prove that it isn’t just a platform for items pirated from the portfolios of media companies like Disney (NYSE: DIS), Time Warner (NYSE: TWX) and Viacom (NYSE: VIA). That’ll help build brand equity for the social-networking site. But again, it’s difficult to state if long content will suddenly transform YouTube into the stuff of advertisers’ dreams. And the other confusing thing is the whole about-face nature of the issue. Wasn’t everyone fascinated by the artistic challenges of making three-minute films? Guess that isn’t so hip anymore. YouTube seems to want it all. It wants to be the king of the four-minute video and the forty-minute film. I’m not sure these two worlds can exist in serenity.

Disclosure: I own Disney; positions can change at any time.

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Filed under: Press releases, Products and services, Consumer experience, Marketing and advertising, Sony Corp ADR (SNE)

Sony Corporation (NYSE: SNE) has made two deals with Napster and 7digital.com to bundle music with “certain Walkman-branded portable music devices.” Both deals apply to products sold in the United Kingdom, and offer similar vouchers and trials for tracks and the services to consumers.

Sony’s deal with 7digital.com will package vouchers with the “Walkman Wirefree” series that give consumers the chance to download five free music videos. It is the first such deal with a hardware manufacturer for 7digital.com, a British-based digital store. Ben Drury, the company’s CEO, acknowledges that the partnership is intended “to provide more choice for consumers, encourage more competition in the digital music market and ultimately offer a better deal for the consumer.” The same devices will also come “pre-loaded with the Napster service” and those models will offer users “five free downloadable tracks, and a free 14-day trial of the Napster To Go service.” Napster’s VP of sales and marketing for Europe, Thorsten Schliesche, comments that the partnership is designed to “offer music lovers a complete service from the moment they buy the product.”

The goal of offering consumers and listeners a complete service right away indicates that at least hardware makers and digital stores are aware that music fans want the product. Easily available and quick access mean that users of this product will at least have access to a massive range of tracks already available. Other devices have featured similar services, but never bundled with free music. Although the amount offered free of charge comes with limits, the ease of listening to future music should make it desirable.

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Filed under: Products and services, Consumer experience, Marketing and advertising

Teen rocker Teddy Geiger is leaving the track listing and final release details of his new album, due in September, to a consensus among his fans. Billboard reported Tuesday that the album, tentatively titled The March, will be comprised of eleven songs pulled from the thirty three he has recorded for the album. Fans will be able to simply listen to the tracks and vote on them or buy the songs individually for 99 cents apiece from his official website.

Per the website now, fans have the option of buying all 33 tracks, which might be a stronger marketing tool than the eventual CD release, but Geiger is apparently “not worried about whether the promotion will cannibalize album sales when The March comes out in September.” The singer told Billboard that he’s “just happy [fans] have the music” but noted “they’re still buying the music, so that’s nice.” The album’s final tracks will be determined by votes from fans, but also what songs are bought most.

Despite the promotion’s promise of giving fans total access to what Geiger has recorded for his new album, at the end it still states that money and profits are driving what the musician and label executives want for the music. It would be an entirely different story if the teen rocker only offered streams or even free downloads for the votes and final track listing, but asking fans to purchase digital downloads and later a CD comprised of the most popular tracks says quite the opposite.

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