Friday, September 05, 2003
STRATEGY: Simple is better.
That is the bet that Universal is making. The Wall Street Journal reported on 4 September that Universal slashed prices by up to 30% for CDs. The move was greeted warmly by music resellers as leveling the field between Wal Mart (who sells CDs for as low as $8.99 as a loss leader) and music shops.
Mature products benefit from simplified channel pricing. Universal will benefit because it reduces channel expenses from administering co-op, from reduced account management, from reduced headcount and from reduced conflict. Perhaps Cisco could do the same to reduce the imbalance between its smaller VARs and the large solution providers.
For a VC's perspective on Universal's move and its impact on the music industry's channel, look at Tim Oren's Due Diligence blog.
I am more optimistic about the impact on the channel because if sales rise, the entire channel will be better off. Without the move, resellers were doomed anyway due to sluggish sales.
Regardless, savvy channel professionals must find ways to simplify their channel infrastructure while driving the same results.
Scott@ChannelVentures.com
That is the bet that Universal is making. The Wall Street Journal reported on 4 September that Universal slashed prices by up to 30% for CDs. The move was greeted warmly by music resellers as leveling the field between Wal Mart (who sells CDs for as low as $8.99 as a loss leader) and music shops.
Mature products benefit from simplified channel pricing. Universal will benefit because it reduces channel expenses from administering co-op, from reduced account management, from reduced headcount and from reduced conflict. Perhaps Cisco could do the same to reduce the imbalance between its smaller VARs and the large solution providers.
For a VC's perspective on Universal's move and its impact on the music industry's channel, look at Tim Oren's Due Diligence blog.
I am more optimistic about the impact on the channel because if sales rise, the entire channel will be better off. Without the move, resellers were doomed anyway due to sluggish sales.
Regardless, savvy channel professionals must find ways to simplify their channel infrastructure while driving the same results.
Scott@ChannelVentures.com
