How NME broke the golden rule of market segmentation

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Following plans to transform established music magazine NME into a free title, marketers should consider the implications of their brand strategy.

NME, an abbreviation of New Musical Express, has been an iconic publication at the forefront of the UK music scene since 1952. The decision was made in the midst of a sales crisis with circulation once at 300,000 now down to a mere 15,000. If printed circulation is the yardstick, the glory years are well and truly over.

We shouldn’t be surprised. Cast your mind back; each of us consume news content differently now compared with a decade ago – particularly the NME’s demographic. Can you imagine a 16 year old – in 2015 – walking to a shop, paying for a magazine then coming home to read it… without getting distracted by Facebook, Snapchat or Whatapp on his or her iPhone? Me neither.

Every day we’re surrounded by content thanks to the internet. It somehow seems more disposable now, as if there’s no sense of ownership anymore. Even with music: now we’re all streaming we don’t even own any. Ironically, what NME has suffered from is essentially the same transformation the internet had on physical music sales. I digress.

The big news here is NME has decided to make its magazine free to boost circulation back up to the 300,000 mark, therefore enticing advertisers with a bigger reach. Copies will be made available through retail partners, universities and tube stations. There will also be investment in their social media platforms.

Unfortunately, NME’s new strategy goes against the very principle of good market segmentation.

Any marketer worth their salt will tell you that a small but engaged customer base outweighs a broader, scattered one. Falling to 15,000 print readers saw alarm bells ring for NME but is 300,000 casual readers, of frankly unknown demographics, flicking through a copy during their tube journey just because it’s free really any better?

It wouldn’t be a total disaster if NME is prepared to stick to its core competency: music. But no. The title will now cover everything from TV, film, politics, gaming, technology to (deep breath) fashion. If the intention of broadening the magazine’s appeal and circulation was to create an appetite for advertisers, it won’t work. Now they’re in danger of rubbing shoulders with – and therefore competing for advertising with – other free titles such as Time Out, who have credibility in their respective fields. Unfortunately, such diversification is likely to actually weaken the prospect of advertisers buying print space.

I can’t quite fathom how it’s taken so long for the brand to take strategic action. When circulation fell to below 24,000 in 2012 it’s hard to understand why no action was taken. Unfortunately, this has all the hallmarks of a poorly run, complacent legacy brand and it smacks of desperation.

Frustratingly it could have been so different. I can’t help but feel they’re focusing their energy on the wrong aspects of their proposition, too. The NME brand has a great legacy and has built up strong equity around the core of new music; it doesn’t need to diversify into other already well-catered, saturated consumer sectors. This isn’t brand extension, it’s brand dilution.

The Times charge for access to online content

The Times’ paywall has been successful, but the NME’s readership wouldn’t accept paying for online content

Instead NME’s number one priority should be the strategic opportunity that lies right in front of them: their digital proposition. Over the last few years many traditional publications – mainly newspapers – have evolved their business model to recognise the shift to online consumption of news. This has resulted in the introduction of the paywall, used like the likes of The Times.

Whilst the paywall isn’t a viable proposition for this demographic, NME should certainly be doing much more to monetise the online following they’ve built. They rightly recognise they were the first music title to embrace a decent web presence and now have a solid follower base across social channels. They boast the best part of a million Twitter followers within a neat demographic – more than @TimeOutLondon, @MetroUK and far more than music rival @QMagazine‘s 115,000 – in addition to over 500,000 Facebook fans. Print sales are in decline but that’s one healthy online following.

The bad news is that in all the time they’ve not worked on a way to mould that into a viable business model. As it stands all of their website content is free to view. Setting up a profile on the site merely allows users the option of commenting on articles, receiving newsletters and entering third-party competitions. These are all practical, functional reasons why users may register. Based on that, frankly, only a handful of the absolute super-fans would ever need to. Why haven’t they ‘locked’ portions of the high quality, meaningful content such as videos and reviews behind a sign-in barrier?

This in turn would bring a larger database, whilst not diluting the key demographic, of engaged users with which they can sell direct marketing opportunities to third parties as well as advertising space in the NME newsletters.

And as for print, of course it doesn’t have to die. But I’d have steered clear from nationwide circulation. Instead, limiting print circulation to music hotspots such as London, Manchester and Liverpool, plus the summer festivals in addition to those university campuses, not only manages cost but also creates an air of exclusivity much like XFM radio do. Who knows – they could even drum up some sort of strategic alliance…

The music industry found itself in a state of crisis when physical sales began to die. After a bit of panic it evolved, strategically, to ensure survival and it will continue to do so. NME had their chance to do the same but unfortunately their strategy will eventually prove to be the wrong one.

Once an all-powerful heavyweight of the music industry, sadly the New Musical Express finds itself in serious danger of grinding to a halt.

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