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The Lefsetz Letter

XM's Ads

by Bob Lefsetz

Somebody at XM needs to be fired.

Is there anybody who's unaware of satellite radio? Anybody out of the loop with a chance in hell of actually SUBSCRIBING?

Thank Howard Stern for elevating the category, for making everybody aware of the service. Unfortunately for XM, he's done more good for Sirius, where he broadcasts. Suddenly XM is the girl you were dating in your neighborhood before you went to the melting pot junior high and found out about all the POSSIBILITIES!

All XM indicators are bad. They missed their targets. And then when they met them it was only because they were scaled back. Meanwhile, Sirius has all the momentum and is outsigning the pioneering/first to launch service. It's kind of like the Rio and the iPod. The Rio was first, but the iPod trounced it, because it was better.

But is Sirius better?

Well, if you want to listen to Howard, or the NFL... But what if you're into music? What if you like fewer dropouts? What if you like a service that doesn't SOUND like terrestrial radio without commercials. Then, which service do you sign up for? XM!

But none of the new ads convey this. (http://www.xmradio.com/on/index.html?refsrc=homepage_bb)

Whilst fighting for its life, its employees demoralized because they've been working for years and their options are underwater, XM does IMAGE ADS!

This is what Coke does. To keep themselves in the public consciousness. Because everybody's already drinking Coke. But when you're second, what do you do? TRUMPET YOUR ASSETS! Which is what Pepsi did. By saying it tasted better.

Make no mistake, XM, although possessing more subscribers than Sirius today, is the also-ran here. But acting like the big winner (and just ask the Street, XM is ANYTHING but a winner), it's doing image advertising. When it should be DIFFERENTIATING itself from Sirius, convincing people why they MUST sign up.

Watch these ads. Tell me if they encourage you to sign up.

Well, maybe if you're a baseball fan. But isn't baseball about to end in a week? Oh, but these ads are for Christmas. Well do you really think someone who wants the service for baseball is going to sign up and pay for MONTHS without any games???

Fucking ridiculous.

How about ads comparing playlists. How about ads delineating programming philosophy. How about trying to convince those BUYING satellite radio that XM is the service to get?

MEANWHILE, how in the hell are these ads going to convince those DISINTERESTED in signing up to do so? Aren't these ads like trying to convince someone to buy an album without letting them hear the music? When marketing cries out for INFORMATION, XM gives touchy-feely. These ads aren't BAD, they're just the wrong thing at the wrong time. In 2001 they would have been perfect, better than the original Bowie ads. But in 2006??

How about the number of songs in the playlist? How about the NAMES of the channels? How about the heroes of programming? SOMETHING to hook the actual potential customer other than demonstrating to Wall Street that you're doing SOMETHING, since you know your financials are fucked.

Believe me, ad agencies only do what you tell them to. They want to continue to get paid. And someone at XM didn't tell them the right thing. And it's THIS person who needs to go. Shit, I could come up with better marketing out of my ass in the middle of the night. Because I know first and foremost you focus on the CUSTOMER, what he WANTS! And these ads don't speak to this.

And if you're cheap and/or smart, why don't you energize the FANBASE! The subscribers are as disgruntled as the employees, seeing all the thunder stolen by Sirius. Give them a free year for every ten people they sign up for a year. Turn them into evangelists. Shit, you don't even have to PAY them, that's how much they BELIEVE! It's kind of like America after 9/11. The public was ready to conserve gasoline, do ANYTHING if only the Administration asked. By telling customers to shop Bush finds himself where he is today... About to lose the House and maybe the Senate and possessing an horrific approval rating.

If only we could vote out the prick at XM. The one killing a service that's so alive, such a pulse, that a radio can save your life.

Bob Lefsetz, Santa Monica-based industry legend, is the author of the e-mail newsletter, "The Lefsetz Letter". Famous for being beholden to no one, and speaking the truth, Lefsetz addresses the issues that are at the core of the music business: downloading, copy protection, pricing and the music itself. His intense brilliance captivates readers from Steven Tyler to Rick Nielsen to Bryan Adams to Quincy Jones to EVERYBODY who's in the music business. Never boring, always entertaining, Mr. Lefsetz's insights are fueled by his stint as an entertainment business attorney, majordomo of Sanctuary Music's American division and consultancies to major labels.

While Rhino may occasionally disagree with some of Bob's opinions, we certainly agree with his right to state them. At the bottom of each column we give you, the reader, the opportunity to respond and we encourage you to do so. We will post select comments.


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