FORWARD-THINKING COMPANY: Perhaps epitomizing the fear and confusion that the Internet engenders in the music industry, Taylor Guitars [1], a manufacturer of high-end acoustic guitars, last week told its dealers that as of May 1 the dealers would no longer be able to advertise or sell the company’s guitars on the Internet.
In the high-tech industry, manufacturers often temper their own online commerce efforts in order to avoid competing with their distributors and retailers. But I’ve never heard of a company shutting down its online channels completely, so I called the Montpelier, VT-based music store, Play It Again Sam, from which I’d heard the news. Kevin Crosset there explained the situation.
It’s actually quite common for musical instrument makers to prohibit its dealers from advertising nationally — including on the Internet — in order to protect local markets. But for the last year, according to Crosset, Taylor removed all such Net restrictions, leaving dealers free to sell online. Some, like Crosset’s store, did very well, moving 75% of their Taylors through online sales, and increasing their inventory to match the new volume. Pre-Internet, Crosset used to stock 5 or 6 Taylors worth $1,000-$2,000 apiece, or about a year’s inventory. Last week, he had 23 Taylors in stock, anticipating future Internet sales.
Apparently the “anything goes” policy led to a wide disparity in pricing for Taylors. Savvy Net shoppers could find the same guitars for hundreds of dollars less just by checking several different online stores. That’s not good for the perceived value of the company’s products, and leads to price competition — not a good thing for a manufacturer going after the high end of a market. The Taylor company responded by shutting down its online dealers altogether, with a week’s notice — disingenuously describing itself as a “forward-thinking company” for doing so.
You can read more about the story from Crosset’s point of view in his monthly newsletter, to be posted May 3 on his store’s site [2].
[1] Taylor Guitars
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I HATE BANKS, as Mojo Nixon sang a few years back. Worst of all is when the banks merge with one another, leading to confused and incompatible information systems — as I discovered when I tried to finance a car purchase online last year.
Now the bank that holds my checking account has been acquired by Washington Mutual. The bank’s new owners shut off — without warning — online banking through Quicken, a move that I’m sure will endear it to millions of Quicken users. I can access my account information through the Web, the friendly customer service people informed me. But I don’t keep my records on the Web, I keep them in Quicken — and so I’m back to manually retyping every transaction in my check register. This is progress?
One moral of this story is that just because an application is Web-based doesn’t mean it’s more accessible or more useful. If you’ve got a large installed base of legacy applications (e.g. Quicken users), you better make sure your new Web application integrates with those programs, too.
Second moral: Bank mergers are a pain in the ass for the banks’ customers.
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NEWS FEED /// Fairly fresh news, sites, events
Acquisition mania
Still hungry for more:
Amazon buys three companies
Let’s hedge the Beanie Baby play with some Chagalls and Toulouse-Lautrecs:
eBay buys Butterfield & Butterfield
Microsoft’s latest acquisition targets, err, e-commerce partners:
IEC: Microsoft launches e-commerce initiatives
Duh:
Going, Going, Gone – Auctions Represent a New Way of Doing Business Online
If you thought government bureaucracies were Kafkaesque, check out the cable companies:
Get a cable modem … go to jail
This hyar site takes enny Web page, o’ plain text, an’ translates it into one of 7 dialecks, includin’ Redneck, Jive, Elmer Fudd, Cockney, an’ Pig Latin, as enny fool kin plainly see. It wawks purdy fine, too! Fry mah hide!
The Dialectizer
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INBOX /// What you’re telling me
MP3 SUPPORT: Khalid writes “MP3 is unstoppable, like any other grassroots movement in the net it has given the power back to consumers, who will be really foolish to trade a proprietary closed format against a free one.”
Andy: “Every musician and music consumer I know now uses MP3 every day. As a musician myself I am overwhelmed by the fact that, as of this writing, I can sell my own music over the internet free from corporate censorship and more importantly without the middleman.”
Edward Bauman: “Yes, thousands of bands are putting out MP3 files, but most of it is swill and will be of no threat to the music industry, whose savvy scouts are more likely to find the real talent — maybe even from listening to MP3 files and seeking out the bands that seem to have what it takes.
“Like the VCR, an MP3 player makes it quick and easy to put together an hour of music that I can take with me from all of CDs I have bought from the very companies that are fretting over the format. The music industry would do well to review how movie studios, universally sure that video tape would destroy their business, came to be the largest beneficiaries of the technology.”
And a tip from Thane: check out http://www.mp3.com/hardware/ for a list of currently available and upcoming portable MP3 devices for your pocket, PC, or car.
Plus: NET PROPHET: I-commerce on the cheap
Programmer Serge Wilson has spent a lot of time studying how businesspeople think. That’s why I’m betting that his Internet-commerce start-up, Freemerchant, stands a good chance of success. … click for more …
~ Back issues ~
Digital Darwinism? – QuickTime 4 – MP3 David vs. industry Goliaths (4.26.1999)
Online multimedia – Cluetrain feedback – Consumers, unite! (4.19.1999)
Commerce reigns at Spring Internet World – privacy legislation – online wine – Not just business as usual (4.12.1999)
