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MEDIACOM Marketing Digest 18 August 2004

MEDIACOM Marketing Digest 18 August 2004

Legal NZ Music Downloads Coming Soon Planned to launch before the end of 2004: NZ's first legal music download web site (from Digital Media Distribution Ltd) featuring well-known artists and regularly updated content.

DMD's new service will enable you to browse online catalogues, download music to your PC and transfer it to your portable device - all legally. DMD are using Microsoft's latest Digital Rights Management technology to minimise file sharing, which will get them good brownie points with the recording industry - though no doubt the ethically challenged are already hard at work on a crack. The audio files will be offered in WMA format (Windows Media Audio), yet another in the collection of alphabet soup offerings associated with digital files.

Which artists? DMD are in negotiation with various record labels, so specifics aren't yet confirmed, but if offshore experience is any guide they'll be aiming to offer at least tens of thousands of tracks for your downloading pleasure.

The price point? We have our own views, which we've already provided to DMD by way of a survey on their website at . Let your mouse do the walking to that site and give them your own price viewpoint - there's a prize!

The digital revolution continues.

Shock! Horror! TV Goss! Because nobody demanded it! Because it wasn't there! Those are just a couple of the reasons why Kiwis will be waking up on the morning of the 18th of September to discover the newest addition to their monthly magazine menu: the New Zealand TV Update.

This gloriously trashy title, from the publishers of Australia's best-selling TV Soap magazine, will feed the insatiable appetites of the three million Kiwi followers of Shortland Street, Coronation Street, EastEnders and McLeod's Daughters. If Doctor Ropata ever makes a triumphant return from Guatemala, you'll read it here. Coro Street groupies will cling to this mag like a long-lost Elsie Tanner poster ...

Some of our more highbrow colleagues may scoff at the notion of such a magazine, but the enduring appeal of the soaps which the mag will cover is more than enough to convince us of the populist merits of the NZ TV Update. The name is a mouthful, the editorial probably won't win any Qantas Media Awards - and you might feel more comfortable reading this in the privacy of your own comfy armchair - but we reckon the NZTVU will happily occupy a niche nestled between the TV Guide and the weekly women's titles.

Initial print run is 75,000, target is Women 18-55, distribution through the usual suspects (including 60% via supermarkets) and the publisher is Horwitz - whose other titles include Inside Sport, Golf Australia, Sound & Image, Australian Mad Magazine and Australian Penthouse, so they know a thing or two about publishing populist magazines.

If the Listener is the television guide for people who hate TV, the NZTVU is the mag for TV junkies who hate to read!

The Luxury Market "Rich People are just like you and me, except they have more money". We may scoff at this cliché, but just-released research suggests that the idea contains more than a grain of truth.

The new US study, Luxury Market Report 2004 - Who Buys Luxury, What They Buy, Why They Buy, based on focus group research and a quantitative survey of 500 consumers (average income $152,000) who purchased one or more home luxuries, personal luxuries (fashion or jewellery), or experiential luxuries (travel, fine dining or spa/beauty services) uncovered these insights:

The luxury consumer is driven experientially; it's not about the money

The luxury consumer primarily interprets and participates in the luxury market experientially. Luxury just isn't about the thing any more. It is about the special experience one feels buying or owning that thing. For these consumers, luxury is about achieving a comfortable lifestyle, having those things that make life easier and more satisfying. But the real meaning in the luxury life comes through family, friends, and experiences that deepen one's understanding and appreciation of life. The luxury lifestyle is not necessarily about money but about the experiences and feelings that money can buy. Almost 90 percent of luxury consumers agree with the statement "Luxury doesn't have to be the most expensive thing or be the most exclusive brand."

Consumers are democratic in their approach to luxury; Americans value individuality over exclusivity

While much is made in the luxury goods industry about maintaining product exclusivity, usually through high price and limited distribution, luxury consumers don't particularly 'buy' the idea that luxury is better when it is something exclusive. Rather they have a democratic view of luxury, as 77 percent of luxury consumers agreed, "Luxury is for everyone and different for everyone."

Exclusivity, in and of itself, brings little luxury value to today's democratically-attuned luxury consumer. Still, luxury consumers yearn for "specialness" in their experience. Rather than exclusivity, the American luxury consumer values the ability to express a personal point of view, an attitude and one's uniqueness. The challenge for luxury marketers is to make their customers feel special, but never let it morph into class snobbishness.

Luxury goods are better; Quality counts

One of the primary experiences luxury consumers expect in luxury items is superior quality, finer details, superior workmanship and materials. Nearly 90 percent of luxury consumers agree with the statement, "When you buy a luxury item, you expect it to be a cut above the average." It's this expectation of quality that makes luxury consumers willing to spend more to buy that extra feeling of confidence. But extra quality need not necessarily cost more.

Luxury consumers are bargain shoppers always looking for a good deal

While these consumers appreciate superior quality, they also get an experiential thrill from paying less for the best. Over 80 percent of luxury consumers agree with the statement, "I enjoy the feeling of buying luxuries on sale and usually search out the lowest price or the best value." Today's luxury consumers demand more value with their luxury. Consumers who can readily afford to pay full price are hesitant to do so as they actively shop for luxuries at a discount. They get a kick out of buying on sale, finding a bargain, winning at the shopping game.

Luxury consumer are highly invested in their lifestyle; They risk little

The luxury lifestyle is something that consumers are heavily invested in maintaining. For luxury consumers once they have experienced luxury, they can't go back. It's a divide that says, "I have made it." Because luxury is tied up with creature comforts, consumers who achieve a luxury lifestyle are unwilling to make do with less or give up continued luxury. They continue to buy luxury because they appreciate the enhanced experience, but are not buying luxury to impart status or social advancement.

Luxury consumers exhibit differences of degree, not of kind

The differences we find within the luxury market are primarily behavioural, not motivational. Behaviourally, different consumers might buy more or less of a certain type of product, for example the more affluent buy more and spend more on luxuries. But as far as the motivations for buying luxuries goes, the differences are slight. All luxury consumers, up and down the income scale, gain their greatest luxury thrills from experiences.

So - if you ever wondered how the other half lives, the answer is: just like you, only better.

Yeah, right.

New Nielsen Readership Survey Pity the poor researchers. In days gone by, they could simply release results and leave recipients to draw their own conclusions. Now, however, new survey releases are accompanied by supporting explanations, audit statements and various caveats - and no wonder, given the somewhat gloomy picture painted by the latest survey. Accompanying today's latest release of the National Readership Survey for the 12 month period July 2003-June 2004:

* A note explaining that the Auditor (Professor Danaher) recommended that the survey report on the last 12 months rather than the intended 6 months, until further testing of a new weighting scheme for what would otherwise be a reduced sample size; * A warning to take population changes into account when comparing results across years - this year's reporting is based on a sample size of 3.058 million people 15 Plus, vs. last year's 3.002 million.

Okay, we've had the obligatory health warning. Now to the chase - significant movers and shakers in this year's newspaper results (for All People 15 Plus):

* New Zealand Truth, shedding 23,000 readers to drop to 102,000 readers * Sunday News, down 33,000 readers to 463,000 * Sunday Star-Times, up 35,000 readers year on year to 652,000 (though last calendar year results showed 669,000 readers, hinting at a drop in the first half of 2004). We should note that the Survey timing would exclude all but the first three issues carrying the new Sunday magazine. * The Dominion Post, down 17,000 to 256,000

In the magazine section, where data is for All People 10 Plus, just 15 titles showed growth, while 62 were in decline. Highest on the casualty list was NZ Gardener, where 81,000 readers wilted away, leaving just 266,000 pairs of green thumbs. Other significant changes:

* The Listener (pre relaunch), down 28,000 to 328,000 * Auto Trader, up 19,000 to 345,000 * Time, down 29,000 to 257,000 * Trade & Exchange, down 26,000 to 224,000 * Cuisine, up 22,000 to 381,000 * Foodtown Magazine, up 25,000 to 211,000 * Fashion Quarterly, down 23,000 to 196,000

Both Metro and North & South lost readers this Survey, drooping by 32,000 and 12,000 respectively.

And Air New Zealand Magazine - measured but not reported for some years - made a return to this year's list, boasting 199,000 readers (not reported for the same period 12 months prior, but rated at 182,000 readers for CY03).

Where did the women go?

Unhappy times were especially evident for women's' titles with this latest survey. The three sisters are all down: New Idea down 12,000 to 473,000; NZ Woman's Weekly, down 33,000 to 912,000; Woman's Day, down 22,000 to 847,000.

And the other major women's titles have also loved and lost: the Australian Women's Weekly lost 33,000, Cleo misplaced 26,000, Next fell by 35,000 and She was abandoned by 21,000.

Few magazine publishers will be happy with this year's results. We've already begun to receive press releases putting a positive spin on what are essentially glum tidings - if winter comes, can spring be far behind? But even the cockeyed optimists would struggle with these figures. Still, maybe next year?

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The Empire Strikes Back More promising survey results come from an unexpected source: the non-commercial radio sector!

A recent nationwide audience survey conducted by Research International shows that Radio New Zealand has attracted its highest cume audience in the last 5 years with both networks, National Radio and Concert FM, showing strong audience growth.

More than one in five New Zealanders aged 15 years and over listen to National Radio or Concert FM in any given week with 606,100 people now tuning in each week.

National Radio remains New Zealand's number one radio station in terms of nationwide audience market share among people aged 15 years and over. The share is 11.7%, compared to last year's share of 11.1%.

Actual radio audiences for National Radio: 518,100 listeners aged 15 years and over, which compares to 494,700 listeners in 2003. Concert FM attracts an audience of 168,000 listeners in an average week in 2004, up on its 137,400 listeners last year.

Radio New Zealand's news service has picked up a listener satisfaction rating of 91%. Less than 1% of listeners expressed any dissatisfaction with the news service.

Is now a good time to lobby the Government to allow ads - or at least sponsorships - on National Radio and Concert FM?

The Dragon's Den We are, we're often told, a nation of small businesses, usually starved of capital and just a few quid short of making a breakthrough. Given all that, we hope that one of our reality production houses will snap up the local rights to a new BBC2/Sony joint production under development in the UK.

Dragons Den is the made-for-TV moniker of this new series, which offers budding entrepreneurs the chance to make their business dreams come true. They will have the opportunity to pitch their business ideas to the Dragons - a selection of Britain's most successful entrepreneurs, to get more than a quarter of a million pounds seed capital from the Dragons.

Enter the Dragons' Den for the chance of a lifetime where the potential reward is capital investment in an idea, a dream or a company. But the dragons are no soft touch - they are five successful entrepreneurs and business leaders who've been there and done it.

They've heard thousands of ideas before and aren't afraid to say no in the harshest of terms (think The Donald and You're Fired times five). With just two minutes to pitch, it could get personal, but the dragons can sniff out the diamond in the rough, recognise an idea with that extra something special and make dreams come true. If they like the idea, they'll invest.

Or perhaps, to reflect the other side of the coin, we could create a TV series where there's a Community Grants Committee that gives money to just about anyone, for the most harebrained schemes imaginable? Nah - that just wouldn't be credible ...

ABOUT MEDIACOM MEDIACOM, with offices in 80 countries, is one of the world's largest and most respected media service companies.

We create media solutions that build business for a wide range of local, regional and worldwide clients.

With $13 billion in global billings, a commitment to strategic insight, total communications planning, tactical media brilliance and tough but creative media negotiating, MEDIACOM provides unsurpassed value in today's chaotic media marketplace.


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