Excellent Article

SXSW Interactive conference in Austin, TX wrapped up last week after noted participants contributed their thoughts on what lies ahead and how to best navigate. AdAge did a terriffic article recapping what was presented. All of the comments not only apply to the digital world, but the terrestrial [radio] world as well.

Seven Unthinkable Ideas From SXSW Interactive 2009

Savvy Marketers, Pay Attention to These Visions That Could Soon Be Trends

By Patricia Martin

Published: March 24, 2009

Patricia Martin

SXSW Interactive wrapped up last week, leaving the new-media mavens who attended a little more sober about the future despite the usual whirlwind of events and parties. Often dubbed the Sundance of new media, SXSWi is the bellwether for what lies ahead for digital culture.

Here are seven unthinkable ideas from SXSWi 2009. Savvy marketers should consider these the tremors that lead to trends.

1. Vision delivers ROI.
Among battle-hardened executives, the "vision" thing may feel more like a frill than a competitive strategy. But Zappos CEO Tony Hsieh proves that having a higher purpose is more than a good idea, it creates a striving culture that delivers to the bottom line. Mr. Hsieh spoke eloquently about the true mission at Zappos: to create happiness. Out of context it may sound soft, absurd even, for an online shoe outlet. But consider that he has had to double his offer to $2,000 to pay trainees to quit because too few were taking him up on it. With revenues in excess of $800 million in 2007, Zappos was projected to earn over $1 billion in 2008. Compassion for the customer and commitment to the culture have made Zappos a success. Pricing, distribution and many other standard operations are just details.

2. Marketing and customer experience are the same thing.
In the past, customer service was considered a way to fulfill on the brand promise. Witness the rise of customer service as the chief marketing tool. Here again, Mr. Hsieh made the case for redirecting what he might have spent on marketing and instead aiming those resources at an intensely customer-centric business with a 24/7 call center and operators who double as shoe therapists. In an age when reputation and word of mouth can quickly swell from ripple to tsunami, marketers cannot afford to overlook the cycle of reciprocity that good service delivers.

3. Avoid stupid, stupid.
Make the consumer brilliant. "Don't bother trying to get them to think you're brilliant," said Kathy Sierra, cognition expert and game developer, whose keynote was one of the most heavily blogged and Twittered events of the conference. According to Sierra, in a knowledge economy people hate feeling like they suck at something. Consumers like to master cognitive tasks. If your product has too many features, said Ms. Sierra, or is anything so high-concept as to be unmanageable, it will fail to find an audience.

4. You can make money from 'free' stuff.
So says Chris Anderson, author of the forthcoming book, "Free: The Future of a Radical Price," (Hyperion, July 2009). Mr. Anderson deserves credit for advancing the most unthinkable idea at SXSWi -- that businesses can make money by giving things away. His point is salient, that like it or lump it, the internet has made "free" a disruptive force -- deal with it or die. When I caught up with Mr. Anderson in Austin, he was earnest in his desire to provide a useful guide for businesses to navigate free vs. paying customers. Marketers coping with a phenomenon that is crushing many established businesses, especially those where intellectual property is what's for sale, will find insights in his rigorously researched and sharply written book.

5. Participation will be ubiquitous.
Allowing customers to voluntarily market your brand is one thing, but consumer participation will hack its way into other operations, including rarefied arenas such as research and development. A representative from Kraft Foods told me that the package-goods giant is moving toward a "participatory way for customers to share in the innovation process."

6. Dad is the new Mom.
And personal storytelling is no longer a "chick thing." In the "Dad Is the New Mom" panel, dad bloggers talked about the need to get real and personal to win audiences and advertisers. PepsiCo, a prominent presence at SXSWi, has begun working with the dad bloggers to win share of wallet as men take on household tasks including shopping.

7. Low overhead is the new currency. Especially for start-ups.
It may be very old school, but bootstrapping is back. With cash scarce and venture capital in hiding, Guy Kawasaki, author of "Reality Check" (Portfolio, October 2008), described how exploiting cost-saving web services will keep early-stage expenses very low. "A couple of talented people, time and energy are the critical resources now. So much of the costs of hardware have been converted into services." Kawasaki explained as we chatted in a hotel lobby. "The toughest part of bootstrapping in this environment is scaling up," he said.

Despite the economic climate, SXSWi is still a place where people put forth ambitious ideas. Some SXSWi veterans remarked that the tone this year was subdued. Perhaps that's what made the unthinkable ideas resound. Any one of these ideas is enough to make a marketer see how deep the change is we're experiencing. But they also point the way to many greener fields of opportunity.

Truth, Ignorance or Bluster?

***UPDATE***

Last Night On The Grammy's did you hear what Neil Portnow, the President/CEO of The Recording Academy had to say?

"We advocate for the rights of our music community in Washington , D.C. , and all across the country. This year, we will fight to pass legislation to once and for all ensure that, just like in every other developed country in the world, all music creators are compensated for their performances when played on traditional radio."

Seems like we will be hearing more and more on this subject. Stay tuned.

From Inside Radio:

Label chief Edgar Bronfman doesn’t seem to think radio’s much help. His company has this week’s #1 Top 40 song and last year’s biggest-selling CD, but Warner Music Group chairman and CEO Edgar Bronfman doesn’t think radio had much to do with it. He says “In today’s interactive environment, terrestrial radio no longer has the dominant promotional role for music sales that it once had.” So he’s talking up a move in Congress to do away with radio’s royalty exemption. Bronfman says “The legislation’s goal is simple — requiring those who profit from the use of music to pay for its use. We look forward to working to achieve the same fair standard in the U.S. that exists around the world.” On a call with investors yesterday Bronfman noted radio pays royalties in all but five countries: China, Iran, North Korea, Rwanda and the United States. Warner Music, the third-biggest record label, saw its CD sales drop 28% in the fourth quarter as the company skidded to a loss. Lobbyists expect the royalty fight between labels and radio to drag on for years.

Truth, Ignorance or Bluster? You make the call. I will say this: what better way to improve your bottom line than by trying to collect royalty payments from radio stations-the medium that uses your product to the tune of millions of spins every year.

Do we need to prove our worth? What would happen if stations (and it would have to be all stations) for a week or even a day stopped player their product? We'd better be prepared for the answer to that question. Whatever that answer might be.

On the one hand, how dare the labels kick their long time marketing partner in the teeth. After all, they have had free access to the airwaves all these years and sold a lot of records because of the promotion and airplay. No doubt radio has had lots of great music to play and it has served us very well too. But, on the other hand there are far more places to discover music today and while I still believe we continue to hold on to a dominant music discovery position one has to wonder, just a little, if Bronfman's comments are made looking through his crystal ball into the future.