management by matrices

a fresh perspective on management.

Worldspace, are you listening?

I have been watching Worldspace's brand building initiatives over the last few months with some interest. First was the tie up with A.R. Rahman as brand ambassador. That was a fantastic move. Clearly Worldspace and A.R. Rahman are two brands that have a number of common characteristics - music, innovation, generation next, international etc. The tag line - 'There's so much to hear.' - also hit a home run. I expect that things should be finally looking up for Worldspace as a brand. It has probably finally made a move from the 'Awareness' stage to the 'Consideration Set' stage. However, there are some sore points that remain.


Product Placement in Lage Raho Munnabhai
This was a great move. Good product placements are inevitably those that are tied in closely to the film's script, unlike those that are in your face for no reason (Eg. Elf in Viruddh). The Worldspace guys got that much right. However, they showed actors in the movie listening to Worldspace 'on the move', in taxis, using receivers worn around the neck(!) etc. Of course, all this is not possible with a real Worldspace receiver, which needs to be stationary and aligned in a certain direction at all times. In my view this is a serious mistake. One of the biggest negative points about the product is that it is not portable. Now, covering up this exact point is not going to help. You don't want customers landing up at the retail shop, armed with their credit cards and then discovering this critical piece of information.

Subscription Fees
The second problem with Worldspace is the fact that it charges a subscription fees. I expect this to be the biggest roadblock in the way for success. When all other competing music offerings in the market - FM radio, AM radio, MP3 music(!), MTV - are free, why would a customer want to pay an annual fee to listen to music on a Worldspace. MP3 music is of a comparable quality as Worldspace, and happens to be portable too, in addition to being free. If ICICI bank suddenly comes up with a paid credit card in this era of free cards, I would consider it only if it had a USP that no other alternative provides. Worldspace has no such USP (digital quality music? that's a commodity. 40 channels? Maybe. Niche channels? Yes, but I can get the same music on mp3, I-tunes, Yahoo Launch Cast... ). With this being the case there is no choice but to be free. There are other ways to bring in revenue, such as advertising, up-selling receivers to existing customers etc.

The Iridium Story
Many years back, Motorola launched Iridium, which was supposed to be this satellite phone that you could use anywhere in the world. Unfortunately, the cellular phone wave killed it (of course there were other factors too). I suspect that Worldspace too may be the wrong technology coming into the market at the wrong time. Gone are the days when customers would be in awe of 'digital cd-quality music'.

The music devotee
So, could it be that Worldspace does not care about common customers like you and me? Are they going for a very niche target group that has specialized tastes in music, and would be willing to pay for it? If that were the case, why are they going for mass market promotions like the Lage Raho Munnabhai example? Niche brands are successful when they stand for only one thing to one group of customers, not when they stand for everything under the sun. If you want to stand for everything, be a mass market brand.

What I would do
If I were the marketing manager at Worldspace, I would firstly scrap the subscription fees. It is a major nuisance factor, and a mental roadblock for any customer to seriously consider the product. Secondly, I would storm the market with receivers (probably priced a little more than what they are priced right now, so that the subcription fee can be recovered) and ensure that there is a big base of users in the first place. Once a critical mass of users is in place, I would then considering selling 'add-on' niche channels at a price. Alternatively, I would launch a plain vanilla free suite of channels, and let users add on a bouquet of other channels. It is important that the customer experience the product in the basic form first, before you do an up-sell. Worldspace seems to be entering the market directly with an up-sell (offering all channels to all people at fixed, and exorbitant subscription fee).

Yes, there's so much to hear. Worldspace, are you listening?

4 comments:

  1. Neo
    Said

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    Cnt believe this.

    a day back i blogged on WorldSpace and share your views

    12:56 PM
  2. Neo
    Said

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    nice to c this coincidence.

    i too agree with the LRM prodcut placement. It was well done and have helped WorldSpace to increase awareness.
    But the main problem lies in content,pricing and portability

    1:00 PM
  3. yell
    Said

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    WorldSpace = Satellite Radio.

    USP is -

    1 - [ Satellite ] It works anywhere on the continent ( three continents actually ) without signal fade. All channels are available in all cities and villages, so lots of content, lots of niches.

    2 - [ Radio ] By definition it is very different from playback of a stored music collection ( mp3 players, cd, etc ). The radio experience, if implemented properly , involves jockeys, content mixing, playlist management features that you don't have in your iPod.

    Listen to Radio Voyager on WorldSpace, Good Jockeys, Clear Niche, 30 second International News Headlines every hour to break the monotony.

    This would explain why Satellite Radio technology has taken off in a good way in the US and UK ( Significantly, they also have Car receivers, which is a huge market ). Internationally Sat Radio audiences do not tolerate too much advertising and therefore all these systems depend on a subscription model.

    Is it valid in India as a model ? Are there any takers for this price ? I do not know, but increasing a one-time payment to be able to provide a free service is not possible till you bring advertising in ( in India, niche channels would not be able to sustain purely on ad revenue, which is why all your FM Stations sound exactly the same ).

    5:05 PM
  4. gravatar

    Yell, all valid points from the perspective of a music devotee. Don't know how valid it would be for a regular consumer though.

    I would atleast like to see mobility, before rushing to buy a Wspace receiver.

    That Worldspace can't give me ad-free content if I ask for zero subscription fee is Worldspace's problem. Let them figure out how they can do it! :-)

    6:30 PM