The MP3 Youth Movement

Brandweek, July 3, 2000 by Todd Wasserman

While acknowledging that the players aren't likely to become "the next DVD' Philips vp-marketing Lisa Haley said meager device sales may reflect an awareness problem. "One thing that was a little surprising in our research was that although young people are familiar with MP3, when we talked about MP3 players, we got some blank looks' she said. To remedy that, the Atlanta-based company hopes to augment its upcoming umbrella ad campaign with a college-focused effort this fall for its digital audio player, Rush.

If no one is forecasting strong sales for DAPs, then why are so many CE companies putting so much marketing behind them, rather than a hotter-selling product like DVD players? While the Consumer Electronics Association, Alexandria, Va., is projecting that 6.5 million units of the older-skewing DVD will be sold this year, the format is receiving comparatively little marketing support. RCA put just $671,000 behind DVD last year, per Competitive Media Reporting, while Philips backed the format with $1.1 million. Others, like Sony and Panasonic, cut their investments almost in half, from $5.9 million to $3.5 million and $7.3 million to $3.9 million, respectively.

Part of the explanation, according to experts, is that DVD is fast becoming an established category while DAP is still very new. But the category also gives CE companies, eager to disassociate themselves with old technologies like VCRs, a vehicle with which to refresh their brands among a younger consumer base.

Tom Wardrop, RCA's director of advertising, said the players fit with an overall strategy to make the brand more youthful. "It's an area where we can make a product statement again and build long-term viability" he said. Sinnreich added that most CE companies are getting into the category for "branding reasons" in order to appear cutting-edge.

They have their work cut out for them. Only Sony on the strength of its PlayStation gaming console, made the short list of "coolest brands" among teens in a recent survey by Northbrook, Ill., market researcher Teenage Research Unlimited. "If you bring up companies like Apple or Microsoft, they'll say, 'Oh yeah, they make cool stuff,'" said TRU analyst Michael Wood. "But not without prompting."

Companies are also hoping that young consumers, imparted with brand loyalty will in time move to more expensive items, like high-definition TVs. In the camera world, Eastman Kodak and Polaroid are making the same calculation, targeting low-end disposable cameras at Gen Y in the hopes that they will one day move upstream to digital cameras.

But getting into the DAP category is trickier than just slapping multi-colored clear plastic, iMac-style, on an old TV or VCR design. For one thing, companies have to balance copyright protection with user-friendliness. Reviewers and users have slammed Sony's Memory Stick Walkman and its predecessor, Music Clip, for its proprietary software design, OpenMG. The Sony products all convert MP3 files to OpenMG, a time-consuming process. "This thing sounds good, but all the hassle to download makes it a piece of crap," one user wrote bluntly on MP3.com's hardware message board.