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TK's MORNING BUZZ: Packaged Media and Retail Stores May Not Be Doomed After All -- If Consumers Have a Say in the Matter

14 Mar, 2001 By: Thomas K. Arnold

Advanstar show director Joey Cruz (left) and group sales director KimbirlyOrr flank VSDA president Crossan "Bo" Andersen. (Hive Photo News)

ORLANDO, Fla. -- If consumers have a say in the matter, packaged media — andthe brick-and-mortar retail store — may not be doomed after all, as some analysts believe.

Part two of the Digital Music SuperSession at this year’s National Association of Recording Merchandisers (NARM) convention here yesterday focused on consumer research. And the results were a dramatic counterpoint to part one's findings, the day before, in which one analyst predicted packagedmedia would soon be extinct and the others pretty much agreed software stores were dinosaurs.

Mercer Management Consulting held eight focus groups in three cities, with a total of 52 consumers. This was followed by two surveys, last December and the other in February, of 1,800 college students.

The consensus: While the PC is certainly emerging as the new music center for the younger generation, replacing the stereo, consumers want the best of both worlds. They want to download music over the Internet and assembledigital collections of tunes on their computers, but they also want to maintain their CD collections and buy more CDs at the record store.

"Is there a continuing role for stores? Research says an emphatic yes, yes, yes," said Mercer v.p. Jon Fay, who moderated a nearly three-hourpresentation filled with video clips of focus groups and actual consumercomments.

"They [consumers] love the shopping experience," Fay said. "This is even moretrue of high schoolers. When you talk to them about the notion of taking away shopping and only sitting in front of a computer, we begin to think we’ve violated some constitutional right."

Both focus group and survey research also found that consumers don’t seedownloading and packaged media as an "either-or" proposition. Instead, theybuild parallel, or what Fay calls "shadow," collections, buying the music they really love on CD while downloading the more experimental fare.

Mercer’s two surveys found parity even among online "power users whodownload, on average, a song a day. They have an average of 394 songs archived on their computer. But they also have an average of 93 CDs, with 300 to 400 favorite songs. And there’s very little duplication, Fay maintains.

"The biggest limiting factor [of downloading music] is the value of tangible product in this increasingly intangible world," Fay said.

Some sample consumer comments:

"It’s something you have that’s your own thing."

"There’s a permanence about having a CD in its actual jewel case in your collection."

"I like to look through and see pictures of the bands, see who’s involved, and I really like the words."

"I have friends who have downloaded a whole CD and still bought it, just because they really liked it."

Said Fay: "We heard these themes time and time again. The emotional appeal of the product, the sense of having something original, somethingdurable, something special. It’s like a book, an antique book, in particular.

"There’s something there beyond the content. There’s value in the tangible. Folks love their collections. We heard that time and time again, from young, old, different ethnic groups."

Now those are words I like to hear -- and words I can believe.

Comments? Contact TK directly at:TKArnold@aol.com

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