News December 2008
Posted in News on December 4th, 2008_______________________________________________________________________________________
Lost on a desert island: what consumers really want when push comes to shove
It’s the kind of question researchers love to ask: if you could take only three things to a desert island from a list that included a mobile phone, digital camera and cable TV, what would you bring? Stumped? Most people aren’t.
We recently conducted a multi-faceted study into consumers’ digital wants and needs across the Asia-Pacific region. I’ll talk about some of the findings in future blogs. But in Australia, we also added the desert island question. The answers came back fast and furious, with men and women having pronounced differences.In fact, it seems there’s no agreeing between the sexes on what to pack even if the destination is an imaginary desert island – unless it’s a PC connected to the internet. That’s what the vast majority of respondents would take with them as their 1st item.But from there men and women diverged widely on the ‘toys’ to bring along.
For example, 60% of women of all ages would take a mobile phone with them to keep in touch compared to just 46% of men.Being more interested in capturing the moment, women were also more likely to bring a digital camera (28%) along in sharp contrast to 19% of men. And in keeping with the spirit that boys just want to have fun, younger men were keen to have access to Foxtel TV (26% compared to 16% of women) and their games consoles (14% vs. a mere 9% of women).
We also asked about daily newspapers and, perhaps not surprisingly in the internet age, interest was low with only 16% of respondents from both sexes interested in having access to the scribes, except for a lofty 32% of men aged over 45.
While the island was imaginary, the consumer sentiments that were expressed were very real. With a full-on recession happening in the United States and one hovering over Australia, our question may uncover some home truths: if consumers are going to take a harder look at what they really need to have, what will they prioritise? Will it be it their internet connection, landline or mobile phones, cable TV, or that shiny new digital camera? There may well be scrutiny of those monthly subscription bills now rolling in and some cost cutting to be worked out to keep household budgets under control.
In the USA, thousands already have cancelled their cable TV subscriptions, a first for the TV-hungry nation whose denizens had stubbornly hung on to their precious cable throughout previous boom and bust cycles. The Americans are also, in many cases, getting rid of their landlines and turning to their mobile phone as their primary contact source which is fairly radical behaviour in a market conditioned to free local calls. Will the same happen here? Cable TV has never taken off in quite the same way in Australia and Australians were amongst the earliest adopters and fans of the mobile phone.
Looking at our study, the computer with broadband connection is likely to be the keeper for most Australians. It polled top spot thanks to its versatility. As one respondent noted, computer and broadband substitutes for many other devices. With just one device, you can access movies and TV programs plus other forms of paid content, allows access to phone services like Skype as well as online versions of books, newspapers and magazines amongst other things.
People won’t mind paying for one thing if they can get all this and more for free.In contrast, the digital tools that may lose out include landline phones as people reject the expense of keeping both landline and mobile – and Cable TV – seen as low on the totem pole by all age groups except for young men who like their sports. Undoubtedly this is why we are seeing such aggressive pricing from Foxtel right now.
In addition, newspaper circulations may continue to decline as people turn to more online print publications for their daily dose of news and gossip. Our survey certainly reflected that with such low interest in the scribes except among older men.What will be interesting is watching how consumers struggle to decide what to keep and what to jettison in economically challenged times. You can be sure that marketers will have a busy time assessing this fall out. Source
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News puts launch of Glamour magazine on ice
NEWS Magazines has postponed the planned launch of its handbag-sized fashion magazine Glamour next year due to the effect of the economic downturn on the magazine’s prospective sales.
About 15 editorial, advertising and marketing staff are expected to be affected but chief executive Sandra Hook said the company, which is part of News Limited (owner of The Australian) would try to find other jobs for them in the group.
"We’re working with the newspapers and magazines to place people in suitable positions if that is their preference,’’ Ms Hook said.
The magazine arm of News Limited, which publishes The Australian, has also restructured its magazine titles into three divisions: food, lifestyle and specialist titles.
Marketing director Fiona Nilsson will be publisher for the food group, which includes Delicious, Donna Hay and Vogue Entertaining + Travel.
Head of the men’s division, Mark Kelly, becomes publisher of lifestyle titles including Vogue Australia, GQ and Inside Out, while Alpha editor Rob Pegley will head the specialist group, which includes Australian Football Weekly, Big League and Alpha.
In other changes, the editorial director of titles including Inside Out, Karen McCartney, will join the executive management team and Tim Sligo becomes chief operating officer. The company also confirmed group publications director Phil Barker had left "by mutual agreement’’.
Ms Hook said Glamour was "a fantastic magazine’’ and would be "a huge hit’’ in Australia when the time was right.
"But, with difficult retail conditions Glamour’s strong potential would be affected if we went ahead next year,’’ Ms Hook said.
She said advertisers and newsagents were supportive of the title, which was to have been published under licence from US company Conde Nast, which also licenses the Vogue and GQ titles to News Magazines. Source
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Ambulance fundraising scam warning
THE Ambulance Service of NSW has warned the public to be wary of anyone attempting to solicit money for the organisation. "The Ambulance Service of NSW does not solicit money by way of asking businesses or the public to buy advertising or for donations," the service said yesterday."These people are not authorised by ambulance in any way. "If you are approached by these people you should ignore any requests for money." Source
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Festival a big money spinner
VISITORS spent nearly $9 million during the 10-day Mildura Country Music Festival. A survey by Mildura Rural City Council has found the festival was a big winner for Mildura with the 12,000 people, who attended the September-October event, big contributors to the local economy. “It’s an event that brings more than 12,000 people from across Australia to our region over 10 days and whether you welcome it or tolerate it, it certainly brings life to our economy like no other event,” musical festival president Col Alvey said. “This year the 22nd Mildura Country Music Festival was enormously successful despite fears petrol prices, the share market and general economic downturn would discourage country music devotees. Source
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Digital market offers hope as music sales slow
DENVER (Billboard) – Ever since Apple’s iTunes store launched in 2003, the digital music market has received an annual Christmas gift in the form of a sales boost, as consumers unwrap new iPods and gift cards for the holidays.
This year, though, as recession ends a year of relatively sluggish growth in sales of digital music, some executives are wondering if they might get a lump of coal instead.Even before the credit crisis hit this fall, analysts predicted holiday growth would be modest. So far this year (through the week ending November 16), digital album sales are up 30 percent, according to Nielsen SoundScan, and sales of singles have climbed 28.8 percent. That sounds impressive, but it’s less than last year’s gains: 56 percent for albums and 46.5 percent for singles.
A Merry Christmas season could turn this situation around. The number of new players that come into the market has made December just as important for digital music as it is for CD sales. Through November 2007, retailers sold an average of 4 million digital albums and 68 million tracks per month in 2007. In December, they sold 5.1 million and 93.5 million, respectively.
This year, some analysts are concerned about sales of new iPods and downloadable gift cards. Fourth-quarter iPod shipments could fall by about 15 percent from last year, according to Piper Jaffray’s Gene Munster. And budget MP3 players might not make up the difference: Overall consumer electronics spending is down 22.1 percent for the first two weeks of November, according to MasterCard Advisors.
Overall gift card sales could fall by 5.6 percent, according to the National Retail Federation, which doesn’t break down data by category. That would hurt digital retailers. NPD Group estimates that about 40 percent of iTunes track purchases in first-quarter 2008 were made with gift cards.
There is some good news. Digital growth is slowing partly because its consumer base is growing; digital downloads now account for about 10 percent of U.S. music sales, according to NPD Group.
And retailers have come up with new ways to promote digital music as a gift idea. iTunes now allows users to send gift cards through e-mail or directly buy songs as gifts that the recipient can download through a link.
"Overall economic pressure may keep the media wallet share tighter this year than last," Gartner analyst Mike McGuire said, "but the tools are there now to let people make that digital look first, rather than heading to the store to get the physical disc. A $10 download card for iTunes or Amazon is a nice, cost-effective present for a lot of people."Source
