February 07, 2012

What Can We Learn From Super Bowl Ads?

364 days of the year commercials are the time for grabbing snacks, doing homework, talking to friends, or, recently, fast forwarding. Then the Super Bowl comes and those rules are thrown out the window. Some watch the game solely for the commercials and in many cases, that is what is talked about most the next day. Some commercials even go on to become cultural memes, like the Old Spice Guy of the former Budweiser frogs.

When it comes to television, people are literally paying with their attention to commercials (yes, you pay for access but just for the service and does not cover the cost of producing the shows you watch). Advertisers pay to showcase their products based on each program's ratings and how many people are likely to be watching. However, if people can watch a show and just fast forward through the commercials they are no longer paying to watch the shows. So, television studios have been affected by DVRs in a way similar to how record labels have been affected by file sharing.

One common argument as to why the music industry has experienced a decline in sales is that quality has decreased and albums overall just aren't as great as they used to be.  Regardless of whether or not that statement is accurate, this does make sense from an economics perspective: the best prices are those where the seller and buyer both feel they are getting a good value. Currently, in music, this equation is off. So, is it possible that this is because consumers don't feel the value provided by the music is worth the asking price?

Most would agree that the reason they pay attention to the commercials during the Super Bowl is that they are particularly high in quality, entertainment value, and creativity. If people are willing to pay attention to something they usually might claim to be annoyed by, is it possible the same concept could be applied to music? Will people who generally don't buy music be willing to pay, in some form,  for music they consider to be truly great? According to the RIAA and NPD, only 37% of music is acquired illegally.   For argument's sake, imagine that there is one musician in the world who is unanimously loved by everyone. If this ideal artist were to release a new record, would that record see the same percent of illegal downloads as others do? Do you believe consumers aren't satisfied with the quality of most records and aren't willing to invest their money into them? Or at least that this was a catalyst for the success of Napster? Is there a way, like advertisers do at the Super Bowl, to use high quality content to make music fans more willing to pay?

What do you think?
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