While they succeed at marketing to the next generation on a major level as witnessed by the sale of iPods, iPhones, and Mac computers, they prove that doing right by Gen Y is good for business among older customers.
A recent article in The New York Times shows that the physical Apple store -- brick and mortar -- is responsible for about 20% of Apple's record revenues. Some of you may remember that Apple CEO Steve Jobs took a lot of heat when he first decided to get into the retail business. Traditional wisdom told him stores won't work. Jobs defied traditional wisdom by seeking high end locations rather than cheaper sites arguing that his customers would not travel to out of the way sites just so Apple could have lower rents.
What's significant in reading the article is the ambiance and even the goodwill of the Apple stores. I realize that not everyone has a positive experience at their local Apple store, but more do than don't. Note the story about the out of work model who visited her Manhattan Apple store regularly to use their computers with their permission and encouragement. Where does this kind of thing happen today in a world where record labels can't trust listeners to sample a downloaded song before they buy it?
The traditional media moguls who don't understand the next generation think suing them is better than wooing them. Obviously, these misguided record executives don't drink at the fountain of knowledge known as Steve Jobs. In fact, record execs hate Jobs as much as 18-24 year olds hate the labels.
Meanwhile as Apple teaches us yet another lesson in marketing, look down the street at the mundane excuses we call record stores. I remember going to a record store with the same anticipation that I now go to the Apple store. Even when I am not in the market to buy, I try -- I hang out.
What works for Gen Y is also good for the rest of your customer base.
The music industry had a chance to be better than Apple. After all, it had what almost everyone in our society wants -- music. Borders and Barnes and Noble have found a way to do it with books and Starbucks is doing it with coffee.
Record stores are just not fun. Most are mausoleums in which to inter a dead record industry. Contrast that with the bustling, always interesting Apple store and you have another barometer for life and death in music-related entertainment.
The record business isn't fun -- they're laying off while Apple is hiring. They're protecting top execs who have passed their prime while failing to usher in a new generation. It's lawyers vs. innovators and the lawyers are losing.
That's why there is a big future for the entertainment company known as Apple.
And why there is no future for the tired, suspicious and litigious manufacturing companies known as record labels
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