this PDF file - JMM - The International Journal on Media

Innovative Product and Customer Retention:
Strategies in the Music Business –
An Analysis of Santana’s Enhanced Album “Shaman”
by Michel Clement, University of Kiel, Germany;
Marcel Engh and Bodo Thielmann, Bertelsmann Corporate Network
Challenges
in the music business
The music business seems to be under
heavy pressure. The Recording Industry
Association of America (RIAA, 2003) reported a decline of CD shipments of almost 9% in 2002, while unit shipments
of all music formats (including DVDs)
dropped 11%. Rising consumer prices to
keep the revenues constant is risky, because the price elasticity is increasing
with the high diffusion of free, but illegal file sharing alternatives such as
KaZaA (Gosain/Lee, 2001).
With the rise of online and offline piracy, the focus of industry executives
shifted mainly towards strategies defending their terrain. The RIAA is staffing up their Anti-Piracy Unit to work
with law enforcement agencies and
prosecutors’ offices to encourage en-
Abstract
The music business is facing hard times with declining CD sales and increasing piracy.
Whereas the economic downturn is one reason for lower sales, the industry has decided to
target the second factor: the fast diffusion of technologies such as CD burners and peer-topeer networks like KaZaA allowing massive illegal distribution of music.
Some labels focused on an offensive strategy to promote their artists. New services are
being added to so called Enhanced CDs that create a new user experience. These CDs offer
bonus content (i.e. videos, additional songs, pictures, or lyrics) stored directly on the CD
that can be accessed on the PC. Other CDs offer (additionally) online access to actual bonus
content or services (i.e. tour dates or news) if the CD is entered in the PC.
The impact of these services on consumer experience has not yet been researched in depth
and it remains unclear if consumers actually use the offered services on Enhanced CDs.
The music label Arista has introduced several new albums on Enhanced CDs to the market
providing more value to the user instead of reducing the utility by focusing only on copy
protection. This article analyzes the usage of such services provided by Arista and focuses
on Santana’s new album “Shaman”. Using a unique data set provided by Javakitty Media
(Bandlink) and Arista, we show for the first time what services are actually used by Santana
fans and compare the results to albums of other artists such as TLC or Toni Braxton. Our
results indicate that Enhanced CDs are used frequently by a relatively small group of fans,
providing more value to the customer and creating a stronger relation between fans and
artists.
Michel Clement
([email protected])
is Assistant Professor for marketing at the Institute for Research in Innovation Management (Prof. Dr. Sönke Albers) at the Christian-Albrechts-University of Kiel, Germany. His
research focuses on media management, eCommerce, and marketing management.
Marcel Engh
([email protected])
is Director at the Bertelsmann Corporate Network in New York and Hamburg and doctoral
candidate at Leipzig Graduate School of Management. His research focuses on media and
brand management.
Bodo Thielmann
([email protected])
is Director at the Bertelsmann Corporate Network in Hamburg. He holds a doctoral
degree from the University of Regensburg. His research focuses on media management,
convergence and synergies.
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The RIAA has identified two main reasons for decreasing music sales. The
first is the recession: the global economic downturn has reduced demand
for all goods – including music and
other entertainment products. The second reason which has been highlighted as the major cause of the decline is physical and online piracy of
music. Since modern PCs are usually
equipped with CD burners, every
month millions of CDs are being copied without loss of quality, labeled with
printed covers downloaded from sites
like darktown.com, and distributed illegally (GFK, 2003; Durlacher, 2001).
However, not only physical piracy of
digital master copies (CDs or DVDs)
leads to significantly less demand for
CDs, peer-to-peer (p2p) networks enable
users to search for and download media files from other user’s PCs (Lechner/
Hummel, 2002; Schoder/Fischbach,
2003; Kwok/Lang/Tam, 2002). The popu-
larity of networks like KaZaA, Gnutella
or iMesh has not been stopped since the
pioneer Napster was closed down
(Becker/Clement, 2003; Clement, 2003).
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forcement of existing laws and modifications to existing laws to keep up with
rapidly changing and often open source
technologies (RIAA, 2003). Some music
labels implemented restrictive copy
protection or digital rights management technologies to address rising levels of piracy. These technologies sometimes lead to annoying consumer
experiences (see the comments on cdregister.de), because the implemented
mechanisms reduce the legal usability
of the content (Harmon, 2002; Burke,
2002; WSJE, 2002). For example, if a
user buys the new De Phazz album
“Daily Lama” he is not able to make a
copy for personal use of the CD without (illegally) using special software
that ignores copy protection. Additionally, the user can not play the CD on the
PC using the standard Microsoft Media
Player. The De Phazz album has a proprietary player on the CD which starts
if the CD is entered in the PC and allows the user to only listen to the music
at a low 80 kbps rate quality (universalkopierschutz.de). Although the label
reduced the utility of the CD to the legal consumer, the album is priced normally in the market. This defensive
strategy could also damage the artist’s
identity and image in the long run,
causing decreases in loyalty and size of
fan base – the record company’s most
valuable assets (Hamlen, 1991).
Legal online services from MusicNet,
Pressplay or the German site, popfile.de,
are growing, but they are still only offering a fraction of the available content. New songs and those in strong demand are sparse and, therefore, it is no
surprise that these legal services have
not been successful yet. But even if a
user finds the required content on one
of these services – the experience is not
as good as expected for the price the
user has to pay for the service (Harmon,
2002). The digital rights management
does not usually allow burning on CDs,
the standard media player can not be
used to play the file and so on. Nevertheless, there seems to be one exception
in the market: Apple’s iTunes service is
currently breaking all records with selling music online, allowing the user to
burn the tracks on CD.
During the last years, music labels have
carefully and without any public visibility tested new business strategies, including innovative approaches such as
online music services, ring tones, and
new physical formats to meet consumer
demand for easy and fun access to music (Krasilovsky/Shemel, 2000). The overall picture shows that the interest in
music is still high – besides the high
and mostly illegal p2p consumption
there are increasing revenues for i.e.
DVD-Audio (GFK, 2003). MTV is successfully expanding its music channel network internationally, and global music
T V franchises like “Pop Idol” (i.e.
“American Idol” or “Deutschland sucht
den Superstar”) are global pop phenomena that have a strong content and marketing approach across all platforms
and with multiple revenue streams.
Nevertheless, an important question
remains for the music industry (besides
questions how to restructure the music
value chain) on the record distribution
side: How to increase the desirability of
the CD in order to compete with pure
digital distribution channels? It still remains unclear what the critical “involvement” factors are that make consumers buy CDs instead of just listening
to the artist on the radio or MTV or
downloading the track.
Whereas other industries focused on
the web in order to achieve substantial
strategic advantages by offering more
services (Lederer/Mirchandani/Sims,
2001; Srinivasan/Lilien/Rangaswamy,
2002), only few labels offensively promoted their artists online (May/Singer,
2001; Moon, 2002). New services related
to the album or artists are being added
to so called Enhanced CDs. These CDs
offer bonus content (i.e. videos, additional songs, pictures, or lyrics) stored
directly on the CD that can be accessed
on the PC. The necessary software to
play the videos or to watch the pictures
is also stored on the CD. Other CDs offer (additionally) online access to actual
bonus content or services (i.e. tour dates
or news) if the CD is entered in the PC.
In addition, some Enhanced CDs have a
higher quality packaging to increase
the value perception by fans and other
consumers that drive these customers
into record stores.
The impact of these services on the consumer experience has not been researched in depth and it remains unclear if consumers actually use the
offered services on the Enhanced CD.
Academic research has mainly focused
on the forecast of music sales, i.e. based
on prelaunch sales (Lee/Boatwright/
Kamakura, 2003; Moe/Fader, 2002;
Fader/Hardie, 2001), or on lifecycle modeling (Bradlow/Fader, 2001; Moe/Fader,
2001) ignoring the new services on Enhanced CDs and their possible impact
on selling music. Other studies focused
on motives for downloading music
(Becker/Clement, 2003; Walsh/Frenzen/
Wiedmann, 2002), but they also ignore
the impact of Enhanced CDs on music
sales and analyze only on online issues.
The music label Arista has introduced
several new albums on Enhanced CDs
to the market that follow the offensive
strategy of giving the user more value
instead of reducing the utility by focusing only on copy protection. This article
analyzes the usage of such services provided by Arista and focuses on Santana’s
new album “Shaman”, which offers innovative value creating services to the
user without copy protection. Using
unique data provided by Javakitty Media, a U.S. based software company that
developed “Bandlink”, and by Arista, we
show for the first time which services
are actually used by Santana fans and
compare the results to enhanced albums of other artists such as TLC or
Toni Braxton. Our results indicate that
Enhanced CDs are used frequently by a
relatively small group of fans, providing
more value to the customer and creating a stronger relationship between
fans and artists.
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Figure 1: Cover of Santana’s album “Shaman” in Europe (US-version came without the sticker)
Adding value to CDs
as a new strategy
Instead of unsuccessfully protecting
the content with copy protection
(Clement, 2003), some labels use service enhancements. Universal, for example, provided the first two million
pressed CDs of its superstar Eminem
with a bonus DVD. Some labels also
produce CDs with access codes allowing users to enter the online VIP lounge
of their stars. If cleverly managed,
these codes can create a buzz around
an album: The cross-over rockers of
“Sum 41” or the French artists “Daft
Punk” successfully used secret codes on
their CDs that allowed users to enter
VIP content online. Santana’s label
Arista added a small sticker on the
cover of the new album “Shaman” motivating Santana fans to enter the disk
into the CD ROM in order to access the
additional online services added on the
CD (figure 1).
We have structured our analysis as follows: First, we present an overview of
new services provided on Enhanced
CDs. We analyze the Bandlink service
provided by Javakitty Media which is
used on several CDs from the label
Arista. Second, we analyze the usage of
the service and compare the results of
several artists. Finally, we conclude
with management implications.
Figure 2: Homepage of Santana on Bandlink
The CD includes software (i.e. a
browser to display offline and online
web pages, chat software, a video and
music player etc.) to access interactive
services provided by Bandlink.com.
With a few clicks a user can install the
software once the CD is entered in the
PC and is guided to the homepage of
the service which is displayed in the integrated web browser (figure 2).
Javakitty Media´s Bandlink software
provides a player that allows the user
to play the CD on their PC. Other players such as Microsoft’s Media Player are
supported as well. Using Bandlink’s
browser, the user has access to a wide
selection of services such as song lyrics, videos, reports, photos, tour dates,
fan articles, mailing lists etc. (figure 3).
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In addition to the bonus content on
Santana, a user can chat with other users of Bandlink (figure 4). As a unique
feature, this CD enables users to connect to chat servers and interact with
other Santana fans (or with band members etc.). The software displays what
Figure 3: Overview of Santana content on Bandlink
song the chat partner is currently listening to while chatting.
Santana is a good example how music
labels try to establish a new service concept. Instead of limiting the traditional
usage of CDs, a new user experience is
provided. Nevertheless, a user can
download all Santana songs on KaZaA –
even the bonus content is pirated and
available. A burned copy of Santana’s
CD also allows the access to the bonus
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Figure 4: Online chat with Santana fans
content on Bandlink. The current encryption technology (usually Key2Audio
or Cactus Data Shield 200) does not enable the services offered on Enhanced
CDs to be encrypted. Therefore, Enhanced CDs offering more than additional music tracks are not copy protected. New technologies are in
development addressing this issue, allowing copy protection to be used to
limit the use of bonus content to legal
versions (Hansen, 2003).
Although piracy is possible, the bundle
of the songs with the Bandlink service
included on the CD is an innovation
that offers CD-owners a higher utility
to pirated MP3 files. Services such as
Bandlink can be used by other artists as
well and labels can use this software as
a customer retention tool. The offered
services are designed to secure a long
term relationship with the Santana fan
base. The labels trust in a close relationship, because they hope that real fans
will prefer the original CD to an illegal
copy or ripped MP3 file. Especially if
specific elements of the offered bonus
content are copy protected, Enhanced
CDs may serve as a stronger segmentation instrument between fans that
want the original and pirates. The labels also believe that true fans have a
higher willingness to pay for specific
services, or that through the Bandlink
service new distribution channels are
established (Amit/Zott, 2001; Geyskens/
Gielens/Dekimpe, 2002; Webb, 2002).
Jordan Katz (Senior Vice President for
US Sales at Arista) states in an interview
given to the Los Angeles Times (11/17/
2002) that in the short term few new
customers are gained. But in the long
term he believes, the existing fan base
is secured. The identity and image
building process of an artist can be suc-
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cessfully managed by the label and fans
have a closer relationship to their star,
which increases their loyalty and turns
them into communication agents
within their social system. This kind of
marketing can initiate substantial
word-of-mouth effects (Goldenberg/
Libai/Muller, 2001; Vogel, 2001; Rogers,
1995). The new services allow labels to
interact with their fan base directly.
Arista itself does not believe it will gain
more customers on the short or mid
run and, therefore, only promoted the
Bandlink service on the CD itself and
with a few point of presence events. The
label sees the advantage of these services mainly in long term aspects, as-
suming a broader diffusion of the services in the market:
■ Building a fan database.
■ Direct interaction with fans (i.e. for
promotions of new releases or cross
selling).
■ Market research and A&R decision
tool. The Artists & Repertoire (A&R)
departments control the artist development process and find the ‘right’
artists, songs and producers and define the artist identity and image objectives. A&R is the ‘heart’ of the music business and monitoring the
listening behaviour supports the decision process to release new singles
from an existing album.
Figure 5: Accumulated US-sales figures (source: Soundscan)
2.000.000
Sold albums in USA
1.800.000
1.600.000
1.400.000
1.200.000
1.000.000
800.000
600.000
400.000
200.000
0
1 2 3 4 5 6
700.000
Santana – Shaman
Launch US 27. Oct. 2002
Week
7
8
9 10 11 12 13 14 15 16 17 18 19
Sold albums in USA
600.000
500.000
400.000
TLC – 3D
300.000
Launch US 12. Nov. 2002
200.000
100.000
Week
0
1
400.000
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
■ Identification of new trends in music
or managing image aspects of a star
by entering the chats. Negative image
aspects (i.e. fans gaining the impression that an artist is not performing
live in concerts) can be early identified in the chats and dealt with offensively (if necessary even with public
relations efforts).
■ Use the new channel for additional
revenue sources (i.e. merchandising
or ticket sales).
Bandlink users show a certain level of
emotional involvement with the star.
This involvement can be leveraged to
manage actively the fan-artist relationship and monetize on the fan community buying behavior, if the utility of the
services is sufficient for the users. This
aspect is analyzed in the next section,
where the usage of the services provided to Santana fans is presented and
compared to other artists.
Investigation of success
We base our analysis of the success of
Enhanced CDs on unique data provided by Arista and Javakitty Media
(Bandlink). The analysis covers six albums that have been released with the
Bandlink service included on the CD:
Santana (Shaman), TLC (3D), Toni
Braxton (More than a woman), Gob
(F.U. EP), Pacifer (Pacifer), and finally
Adema (Adema). The three top sellers
were Santana, Toni Braxton and TLC.
Contrary to many other labels, Arista
chose top selling stars to test the new
service. Figure 5 indicates the US-sales
of the three major stars albums from
their release until March 2003.
Sold albums in USA
350.000
300.000
Toni Braxton – More than a woman
200.000
Launch US 27. Nov. 2002
150.000
100.000
50.000
Week
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
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250.000
Usually about 40% of the records are
sold in the US, which allows us to estimate that in the first months of release
(until March 2003) Santana sold about
4,5m, TLC about 1,5m, and Toni
Braxton about 920.000 albums worldwide. Three years after Santana’s album “Supernatural” was sold to more
than 11m fans and won nine Grammies
another big selling hit was created with
Shaman. Considering the fact that the
market has been heavily declining
(RIAA, 2003) and “Shaman” was released with less hits than “Supernatural” the sales are satisfying. Also Toni
Braxton and TLC did well selling their
albums, taking into account that the
Toni Braxton album did not include a
hit. Bandlink was included on all CDs
with some exceptions in regional markets. Note that legally and illegally copied CDs also allow the use of the service.
Therefore, we can not conclude that
only legally bought versions of the CDs
have been entered in the PC.
Arista executives stated in an interview
given to us that the usage of Bandlink
depends heavily on the target group of
the artist. According to Diane Weiner
(VP Marketing at Arista) the artist
Santana is targeted to a broader and
slightly older audience. After his multi
platinum success with “Supernatural”
his audience starts with 24 and includes the 50+ audience as well. With
Toni Braxton and TLC Arista is addressing a core audience of 18-35. The image
of TLC is more cutting-edge and more
“urban” oriented than the image of
Toni Braxton and Santana, which is ref lected in a different marketing approach by Arista. For TLC communica-
Table 1: Bandlink usage
CD track
plays
Total
users
Total page
views
Average page views
per session
2.151.903
89.755
305.136
3,40
Toni Braxton
348.294
9.868
33.780
3,43
TLC
556.653
29.456
136.983
4,66
Gob
13.104
1.409
5.660
4,02
Pacifier
1.086
164
621
3,79
Adema
37.453
4.752
19.517
4,12
Santana
Source: Bandlink
tion tools such as music video or street
promotion are important to create a
“buzz”. For Santana and Toni Braxton
radio airplay becomes more important
to reach a broader audience. In order to
create awareness for Santana’s new album, Arista ran a national TV campaign
that covered all major TV stations.
Bandlink was used more often if the
fan base was young. Table 1 indicates
this especially for TLC in comparison
to Santana. The higher rate of using
Bandlink can also be explained if one
hypothesizes that younger persons
copy more CDs, which Bandlink did
technically not account for.
The usage data of Bandlink indicates
that a relatively small group of CD owners actually installed Bandlink and used
the service (assuming that no pirated versions are entered in the PC). Of Santana’s
4,5m buyers, only about 90.000 (2 %)
were converted to Bandlink users. Toni
Braxton converted about 1,5 % and TLC
3 %. These numbers may have been
higher if the service was promoted
more heavily. Some users just accidentally found the service by entering the
CD in the PC. The higher conversion
rate for TLC is according to Arista related to the younger urban target audience that might have a higher affinity
to technology and the internet. Never-
Table 2: Service usage
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Interest of Users in %
Home
Bio
Bonus Content
Discography
Santana
74,38
1,76
7,22
6,41
Toni Braxton
65,08
4,52
9,13
TLC
57,19
3,54
Gob
55,58
Pacifier
Adema
Mailing List
News
Photos
Tour
1,37
1,75
5,09
2,01
–
2,60
3,80
9,38
5,49
13,21
7,49
2,68
4,02
8,13
3,75
4,66
20,14
0,11
3,11
3,80
7,72
4,88
55,39
6,44
13,37
–
4,51
5,31
7,41
7,75
52,97
4,20
24,27
–
2,46
4,05
7,08
4,97
Mean
60,10
4,19
14,56
4,67
2,79
3,79
7,47
4,81
Standard Deveation
8,13
1,53
6,51
3,99
1,02
1,15
1,41
1,90
Min
52,97
1,76
7,22
0,11
1,37
1,75
5,09
2,01
Max
74,38
6,44
24,27
7,49
4,51
5,31
9,38
7,75
Source: Bandlink
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Figure 6: Services used in Bandlink (Mean values in %)
Tour
Photos
News
Mailing List
Discography
Bonus Content
Bio
Home
0,00
20,00
20,00
40,00
theless, it is wrong to conclude that the
Bandlink service was of very limited interest. The usage of the service by fans
of development bands, and therefore
less known, like Gob, Pacifer and
Adema was much more highly related
to their sales and chart rankings.
Table 1 also shows the usage of the different services. The 90.000 Santana fans
played more than 2,1m songs with the
Bandlink player and clicked on more
than 300.000 pages displayed in the
various sections of the service. We are
technically not able to provide numbers
about the chat service which was included, but the data of the usage of the
other services is displayed in table 2 and
figure 6.
60,00
70,00
80,00
raphy, and tour data. Of less interest are
news and the mailing list. These numbers are as expected, because of the
static nature of these services: Once a
user has read the biography he is not
likely to return many times. Nevertheless, the sparse use of the news section
is surprising. One possible reason for
the low usage is the low frequency of
updates in this section (especially for
Santana). The offered bonus content (exclusive music, videos and studio footage) has been used more frequently,
varying between the artists (table 2).
More than 14,5% of the usage is addressed towards this additional content. Whereas Santana users did not use
the offered bonus content so much, the
younger fan base of TLC or Pacifer and
especially fans of Gob and Adema entered this service section much more.
The analysis of the distribution of the
usage of Bandlink’s services indicates
that bonus content seems to be a service
of interest, whereas the other services
are of less interest.
Management implications
Using Bandlink or other related services, labels are providing additional
services and value to the loyal fan and
legal customer. The technology will allow future encryption of bonus content
(which has already been implemented by
Bandlink’s competitor Arcavista.com).
This would enable the labels to offer bonus content only to legitimate users.
But, at the same time, diffusion of the
service will need longer to create critical mass. The software provider aims to
penetrate its player in the market and
the Record Label may want to attract
even illegitimate users in order to keep
a consequent proactive strategy of offering value added services and gathering
usage data. Enhanced CDs will not be
the ultimate instrument to fight piracy,
but it might be an interesting tool to
secure customer and fan loyalty in the
long run. The offensive strategy without copy protection including more services has been chosen by Arista, but critics may ask, if the strategy has been
successful to reduce the challenges of
the music industry.
The usage of the interactive enhancements provided to music fans on CDs
from Arista has been moderate, because
the Bandlink services have not been ag-
First, the illegal use of the CD is not limited and the fact that Bandlink’s
bundled services are not available to
users that downloaded files from peer-
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The structure of the services and their
quality is comparable between all the
artists. Once the user enters the service,
he is linked to the homepage of the
Bandlink service which displays information about the music tracks (lyrics,
credits). The player can be directly accessed on the homepage. Therefore, if
users just want to listen to the tracks,
they enter the service by the homepage
which explains the high mean of 60,1
%. Between 4 and 5 % of the average usage is focused on the biography, discog-
50,00
gressively marketed. Also the content
on the service (i.e. news) was not frequently updated. Additionally, the installation and user registration procedure might have had a negative
influence on the adoption of the service. Nevertheless, if a fan decides to use
the service he spends considerable time
with it, playing songs from the CD and
enjoying the offered bonus content. The
interactive features deliver a rich data
set to the label and chat services can be
a valuable platform to interact between
artists and fans. Fans provide Bandlink
with additional demographic information that can be used to target users
with services and products. The labels
and also the artists have the opportunity of getting closer to their customers and fans – if they respect privacy
(McKnight/Choudhury/Kacmar, 2002).
to-peer networks will not lead to high
frustration levels of pirates. The
Bandlink software as well as the ripped
bonus content is available in peer-topeer networks and if Santana fans use
the chat more than once or twice remains an open issue. Nevertheless, the
CDs have been successfully sold in the
market, although there are no indications that more users bought the CD
because of enriched services. Arista
stated that especially Santana fans are
generally older, more loyal, and settled
which indicates a higher willingness to
pay for content. This makes them to
highly valued customers – even if they
did not use the service so much. Therefore, labels must monitor the profitability and long term effects of Enhanced
CDs carefully.
Second, Bandlink offers opportunities
for record labels if the value added services are of high quality. Additional revenues (i.e. via transaction fees) can be
generated with merchandising, sponsoring, advertising etc. that can be used
to subsidize the CD price, if the music
label controls the key elements of the
value chain and is able to exploit the
merchandise or endorsement rights.
Therefore, it is necessary for Bandlink
to reach critical mass within the music
community. But, the fact that the software had to be installed first in order to
use the services shows that network externalities are in place. The more users
have installed Bandlink on their PC the
more users are able to use the services.
If reaching critical mass is important,
then piracy might even support this
software diffusion process (Givon/
Mahajan/Muller, 1995). If the installed
base of the software is already high
then copy protected bonus content may
be offered widely. This strategy is followed for example by Arcavista.com.
Third, the Bandlink online community
serves as a cheap market research tool,
e.g. replacing focus group testing or
other traditional methods that might
be used alternatively. The likelihood of
success for a single release or other
versioning of the artist’s music can be
higher. Santana has been a good example that an offensive strategy can
lead to success, even within “Generation Napster”. The sales have been high
and loyal customers are rewarded with
an additional service bundle provided
on the CD. Further research needs to be
conducted on the individual level. Especially empirical studies analyzing the
effect of services such as Bandlink on
consumer’s willingness to pay will help
to understand the value of these services to customers in more detail. Our
analysis showed that some services, especially the bonus content, are frequently used. Comparing Enhanced
CDs to movie DVDs may be fruitful in
order to price discriminate. If users
have a higher willingness to pay for Enhanced CDs, labels could introduce a
higher priced Enhanced CD simultaneously to a normal audio CD without
special content in order to target the
different segments.
Finally, the music industry should experiment more with services that add
value to legal content which is bundled
to specific target groups instead of reducing the usability of CDs by using
copy protection. This proactive strategy
helps differentiating between “high involved” fans and “low involved” other
consumers, because real fans get more
value if they buy the CD. Therefore, Enhanced CDs can be used as a customer
retention tool with positive involvement impact. They also support a positive relation to the artist – which is a
very important issue, because pirates
generally do not want to hurt the artist, but they have considerably fewer
problems to cheat on labels (GFK,
2003).
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