Merchants of menace

This is a guest post by Jay Lebo. Jay is one of the founders of Gravitas Business Architects and has over a decade of experience helping companies of all sizes multiply growth and outperform the competition. Business leaders who work with Jay get actionable strategic insight that contributes directly to the bottom line. Startups, small, medium and large enterprises and government agencies have worked with him to set critical strategic goals and, more importantly, develop the road maps to get there. The focus is always on exploiting opportunities and eliminating obstacles wherever they are and not on employing a standard toolkit of proprietary models and methods. This approach helped him to co-found Expatica.com. Headquartered in Amsterdam and getting over half a million visitors a month, Expatica is a tremendously successful news website for English-speaking expatriates in Continental Europe. Jay blogs at www.getgravitas.com and tweets from @GetGravitas. He has an MBA from Ivey and is currently writing a book on business troubleshooting.

Online mega e-tailers like Amazon and Apple’s iTunes Store promise upstart producers unprecedented access to the market. But not without claiming their pound of flesh. 

A few weeks ago the Ivey School of Business, Canada, announced that its huge collection of business case studies would be available through Apple’s iTunes Store. This is great news for anyone who likes the idea of getting top-quality business material from a simple and familiar source, but is it such great news for Ivey?

The cases represent highly specialized material and sell for $3.99 apiece, so making squillions from the hordes flocking daily to the e-store clearly isn’t part of the plan. No, the cases exist to promote the Ivey brand and establish the school as a world leader in business education.

The trouble is, the iTunes store, like its electronic megastore brethren (including, most famously, Amazon), ruthlessly marginalize all brands but their own. Just compare this iTunes Store screenshot with the Ivey Cases website. If building a brand is really your primary objective, this is a problem.

The problem seems to arise any time producers are numerous and weak and a small number of distributors (or just one) monopolize access to the market. Brands looking for greater exposure and recognition don’t find it, and brands just starting out never gain traction.

Self-published books, satellite radio broadcasts, and crowdsourced creative material are among the latest trends to run into this brick wall.

But if having your brand relegated to a thumbnail image isn’t bad enough, it’s also subjected to a raft of intricate electronic hamstringing to keep buyers coming back — but not to you.

When you sell through Apple or Amazon, you don’t get to collect buyers’ contact details and preferences for data mining and marketing. The e-tailer gets that. Want to free your customers from oppressive digital rights management? Sorry, that’s not up to you — iDevices only please in Apple’s case, and just one per customer.

This isn’t entirely new: traditional retailers have had a major say in how and where a producer can market its goods for a long time. But we’re seeing something new here because, in certain areas where producers are abundant and puny, these distributors have become dominant channels to the market that can (and do) cut consumers off from the brand touch points of producers, to the detriment of both parties.

Neither the producer nor the consumer is served by Apple getting in the way of data collection and customer engagement. Buyers seeking graphic design services and creative designers, for example, are both done a disservice when crowdsourcing sites present the false impression of a commodity market. And potential broadcasters and the general public are both hurt by SiriusXM’s stranglehold on access to their digital ‘airwaves.’

For most brands, these limits are just part of doing business — some retail outlets work better than others, but as long as they contribute to the bottom line, it’s all good.

But for a first-time author, a fledgling creative company or an ambitious business school in Canada, the bottleneck that these e-tail outlets erect seriously hamper building a global brand and direct engagement with fans. The e-tailer has scooped out the long-term intangible value from the transaction and kept it for itself.

So does that make Ivey’s iTunes debut a bad idea? Probably not. There’s little to lose, and appearing in the iTunes store is consistent with Ivey’s cutting-edge image, so maybe the medium is the message here. But time will tell if lesser known brands can really turn a profit for the long term in a marketplace where you’re just a thumbnail and a price tag.


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