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Purple Cash Cow. The artist once again known as Prince is re-writing the book on entertainment marketing, as reported in a pair of USA Today articles by Edna Gundersen. Indeed, so innovative is Prince's marketing plan that its very premise has now been outlawed. But in the meantime, it is reaping huge sales and profits -- and enabling new levels of artistic freedom -- for Prince, who not so very long ago accused the record industry of slavery and oppression. Maybe you've heard about what he's done for the record industry lately? Prince gives a way a free copy of his newest CD, Musicology, with every ticket sold to one of his concerts. The kicker is, he convinced SoundScan, which tracks record sales, to count the giveaways as sold CDs. That has sent his record charging up the charts -- it's number six this week, having moved some 953,000 copies in nine weeks.
The magic is, Prince's high chart position generates "airplay, media attention and prominent store displays," resulting in more sales. Oh, but that was just a little too much success for SoundScan, which now says it won't allow anybody else to do what Prince did. Others might, however, take note of the innovative deal Prince struck with Columbia, his record label. Unlike a traditional deal, where an artist trades a huge advance for artistic control, Columbia simply handles U.S. distribution of Prince's record, and licenses sales overseas. The company paid Prince nothing up front, and he retains ownership of the master recordings.
The arrangement not only left Prince free to give away CDs at his concerts, but also to pursue a highly-profitable online distribution strategy with his own label, NPG, www.npgmc.com, where "hundreds of thousands of fans ... pay a one-time fee and standard download charges ... delivering music directly to fans and avoiding industry machinery and middlemen." Says Prince: "I don't really take a stance on piracy ... If I was only getting a few pennies off every album, I'd be worried. But I get $7 a pop for every album that sells for $10. That's enough." His lawyer, L. Londell McMillan, comments: "He's a free agent in the marketplace, and we've created a multi-delivery model that works best for him ..." Seems to be working quite well, indeed. His tour, so far, "has grossed $37.3 million from 40 shows attended by 599,444. "All I ever said was, 'Let me drive'," says Prince, adding "You have to take matters into your own hands."
Green Prize Inside. The Ford Motor Company is figuring out a way to generate electricity from paint fumes, reports John S. McClenahen in Industry Week (Jul 04). "For years, we've been taking the fumes coming out of paint booths and incinerating them to protect air quality," explains Jay Richardson of Ford. "Now, we have a system that can do that even more efficiently, produce clean electricity and allow us to improve paint shop flexibility." Ford developed the system, called Fumes-to-Fuel, with Detroit Edison. Basically, it "captures the volatile organic compounds present in paint fumes and concentrates them into a rich mixture of hydrocarbons, a source of fuel." Once perfected, the system is expected not only to protect the environment and generate electricity, but also produce better quality paints while potentially saving millions of dollars.
The Ford initiative is akin to other "green" initiatives at big companies that yield perhaps unanticipated dividends. At Hewlett-Packard, consumers "with used or outdated PCs, laptops and monitors" can take advantage of a $100 recycling e-coupon, "toward the purchase of a new HP product." The promotion is ongoing, but HP doubles its value during the month of April to celebrate Earth Day -- and perhaps to toast the success of the program itself: "By tying the consumer directly to the reycling program, the e-coupon programs promote customer loyalty and repeat business," says HP.
Meanwhile, over at Procter and Gamble, animal testing is in the crosshairs: "In the past 20, years, Procter and Gamble has eliminated animal testing for 80 percent of its products, investing more that $170 million in alternative methods," according to Lee Bansil, a company spokesperson. "It stems from the fact that we as a company want to get out of animal testing. We want to eliminate it." To that end, Procter "uses a combination of historical data, in vitro testing and computer modeling." The approach is more costly, but as Daniel Marsman, a corporate veterinarian notes, "P&G also benefits because the alternative methods ... achieve better results. Other companies pursuing the "green prize inside" include John Deere, DuPont, GE, Rolls Royce and Boise Cascade. Says environmental attorney Usha Wright: "When drivers are environmental, they invariably end up driving efficiency, reducing costs, creating value and contributing in other ways to our bottom line."
Tim Manners, editor
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