Andrew Frank

One of my take-aways from CES 2009 was a renewed idea that, as our devices and services and personal networks become exponentially more complex, the role of convenience is changing from a product benefit to a first-order value proposition; something consumers will pay for in its own right.

To be sure, convenience isn’t the only thing consumers care about: hard elements such as pricing along with soft elements such as trust and brand still play crucial roles in consumer decisions. But convenience stands out as something you can design for and build alliances around, and something whose effects can be felt almost immediately. Building a trusted brand, not so much.

To illustrate the power of convenience, take the case of Nine Inch Nails’ best-selling MP3 album on Amazon’s MP3 store. The album, Ghosts I-IV, winner of two Grammy nominations, is licensed under a Creative Commons license that makes it legal to copy and distribute the work for free, and yet it was also offered for sale and became Amazon’s best-selling album of 2008. While it may be an outlier, it should make economists pause. An open MP3 file is, in economist-jargon, a public good, meaning everyone has access to it in unlimited supply. So the folks who bought it on Amazon weren’t paying for the album – they could get that elsewhere, for free. So what were they paying for?

The answer can only be: convenience. They were paying on Amazon because they knew they could find it there, that it would be easy to acquire, and that it would work. (You could file the last point under “trust,” but the nature of the trust is still to avoid the inconvenience of having to replace a defective free file with another free file.)

As media companies, manufacturers, service providers and portals contemplate what alliances they should form to best ride out this period of economic turmoil and disruption in their businesses, the convenience factor should be a core principle of product design and monetization.

We’ll be exploring the theme of monetizing content in the new world of consumer electronics in an upcoming research note reflecting in more detail on what we saw at CES.

1 Comment »

Category: Uncategorized     Tags:

Share

Tweet