4.27.2009

Value Added Advertising?

Here is a typical ad for a computer deal (real names changed to protect the innocent from my rant):

NEW Dull Infericon 50:

Entel Plutonium Octo-Core Processor & 3GB memory
320GB hard drive stores up to 80,000 of your favorite songs
Featuring a glossy, widescreen 15'' display
Limited time offer - only $449 or $15/mo


No big deal, right? Sounds like an awesome deal so you can start that massive song collection and catch up to your buddies!

Here is a question: who has actually purchased 80,000 songs? If we think this through, probably more than the marketing people involved with this ad, we see waste in the computer industry:

What is the cost of purchasing 80,000 songs? An iTunes song is about $1.00. That means someone could spend $80,000 to fill up this hard drive. Or, they could take the cheap route out and purchase albums to reduce the per song cost. Assuming that an album has 20 songs per album, a consumer would need to purchase 4,000 albums. Assuming a low cost of $10 per album on iTunes, a consumer could fill up their hard drive for a paltry $40,000.

How long would it take to do this? A quick sample of my iTunes list yields an average song size of 8MB. At a download rate of 75kbs, I would need 2370 hours of time to download 80,000 songs. In other words, if I hired somebody to work for one year, and payed an additional 1% overtime, I could download 80,000 songs on my brand new 320 GB hard drive.

Can't afford a full time staffer in the house to manage your iTunes library? Well then, at 2 hours per day, you could easily fill your hard drive yourself with 80,000 songs in a mere three years. At that point, you will probably need an additional hard drive to back up your songs. And your hard drive will be obsolete as terabyte sized drives come down in price. Hopefully it wasn't corrupted in year one.

All of this comes down to a "right-sized" and "right place" question which should translate into a marketing message that makes sense. Who will bite on this deal and purchase this PC simply because it can store 80,000 songs? More importantly, who will buy 80,000 songs? Why do we need to manufacture hard drives that are too big for that market? How much cost has gone into the development of large capacity hard drive technology, only to have who knows how many terabytes of hard drive capacity run underutilized? Could that capacity been more useful elsewhere? Of course, for music lovers, the well known answer to this problem is the iPod. Right sized, affordable, portable, versatile, high quality and pretty darn durable. But all of this doesn't answer my original question: who purchases 80,000 songs? The current value proposition makes no sense.

If you must have a desktop PC for music, why not market a specifically built PC for that purpose? Have it preloaded with iTunes, CD burning software, or other music software innovations, mixing, recording, karaoke!, etc. and allow the user to sign up for the services during the PC purchase process. This additional configuration cost may be offset by right sizing the components: hard drive and monitor. Throw in a microphone and TV adapter and turn your PC into a karaoke machine that uses your iTunes songs! A 40 GB drive would hold 10,000 songs, still more than I can imagine owning. Now we are talking about a value added device, not a generic device that is marketed with one line of text that fools the consumer. Even as I type, I have a lot of questions about the viability of my right sized music PC/karaoke scheme. One thing makes me think it would work though: anyone ever heard of Guitar Hero or Rock Band?

I may not be right about how to reduce the waste in this situation. But almost always, asking "why" can uncover waste and prompt us to think of new and innovative things. This is something that can be done by everyone and everywhere - Lean is not limited to the factory floor.

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3 Comments:

At April 27, 2009 at 11:42 AM , Blogger Mark Graban said...

I think you're overreacting. They are trying to provide context to the data. They aren't suggesting you actually buy that many songs, but isn't it more useful to know "80,000 songs" than 320 gigabytes?

I have 3,000 songs in my iTunes (mostly ripped from CDs). It would be comforting to me to know that HD is plenty big enough.

 
At April 27, 2009 at 11:59 AM , Blogger Bryan said...

You bring up a great point. How does this add differentiate from every other add? What is the difference between 80,000 songs and 100,000 songs? For someone who doesn't know what 320GB is, do they have the ability to imagine what 80,000 songs looks like? It just seems silly to me that a PC manufacturer is trying to one-up the MP3 player market through non-value added advertising.

 
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