In its second-largest acquisition, Amazon buys the company for $970 million.
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“Not everyone wants to buy a CD to get a single song if they can get what they want on iTunes,” adds Freeman Evans. “Starbucks has shown it can move a lot of CDs through its stores, so there is no reason that can’t happen through iTunes.”
For iTunes, the hits just keep on coming.
An Oscar-worthy site
Netflix.com enables subscribers to argue all they like through its well-organized and unusually insightful social network. Just how insightful? Once two subscribers link as friends they can peek into each other’s rental queues to see what the other is renting and has rented. Linked members also can exchange all the messages they like and recommend movies and TV shows on DVD that can be instantly added to a member’s rental queue without leaving the web page they’re on. This bypassing of the need to move to a new page or reload the same page is accomplished through Netflix’s pioneering use of AJAX techniques, which makes it much easier for a customer to take action-an action they might not otherwise take.
Social networking and effective use of new technologies are only two factors that make Netflix.com stand out in the crowd. Its five-star rating system is a product review-like function that not only shows linked subscribers exactly what their friends thought of a film but works behind the scenes to generate web pages that contain films and TV shows the rating technology believes a subscriber will enjoy. The more movies a subscriber rates (films do not have to be rented in order to be rated), the more precise automated suggestions will become.
“Netflix is an innovative retail site that has beautifully harnessed the online consumer’s love of convenience and ease,” says Maris Daugherty, senior consultant at J.C. Williams Group Ltd. “Having seen e-retailers like BagBorroworSteal.com in other categories adopt the Netflix business model, I’m waiting to see how Netflix may perhaps expand its merchandise mix beyond movies.”
Retailer marketers that stand still quickly get lapped by the competition. That’s a lesson SimplyAudioBooks has kept in mind as it overhauls its marketing strategy to continue fueling its rapid growth. Gone from its marketing strategy despite growing sales 247.5% in 2005 are such standard techniques as banner ads. In their place have come such innovative concepts as free video clips of author interviews, a blog for customer testimonials, news and free offers sent to MP3 players and free downloads of select books.
“They are creating a more personalized marketing environment,” says Chad Doiron, a senior strategist for Kurt Salmon Associates. “That is what online shoppers want, especially consumers in their teens and twenties that can immediately sniff out whether a marketing strategy is not personalized at a glance. This segment looks first at how genuine the strategy really is.”
A central figure in SimplyAudioBooks’ marketing strategy is the MP3 player or iPod, which has become a hardware platform for entertainment retailers to leverage in new ways. “The iPod expands the audience for the audio book, because books can be downloaded onto the device, along with other marketing messages,” adds Doiron.
The inclusion of video author interviews is an example of how SimplyAudioBooks is using MP3 players to create a deeper connection between the shopper and the book by using visuals to provide an engaging dimension that neither print nor audio book reviews can match. The reviews are hosted by James Michael Tyler, who played Gunther on the sitcom “Friends,” and produced by Expanded Books. In the reviews, Tyler and others encourage authors to talk candidly about what inspired the book and its main message.
“It’s a great way to help readers determine their reading pleasures,” says Maris Daugherty, senior consultant for J.C. Williams Group. “SimplyAudioBooks is delivering a solution for technology-savvy customers that are asking for more options in consumption and procurement of their media needs.”
As a bonus, SimplyAudioBooks offers a loyalty program shoppers can use to earn points and apply to future purchases. With new marketing, SimplyAudioBooks is writing a new chapter.