Originally Posted by Jon-LF
I agree with you completely, 3 years ago, Beats was the only brand I knew in the world of headphones. Having never owned headphones, I sincerely thought they were audiophile gear (I can see everyone bursting out laughing).
Also, not to take anything away from Schiit or Jason and the team, but Beats had two things going for them which Jason didn't have:
- A possibly much larger initial fund
- Celebrity backing (ownership?)
I think what Schiit has done with the tools they had is truly commendable.
Actually, to respond to the Beats phenomenon, yep, they are definitely dominant in the market, but I actually don't think it's largely due to their marketing--it's largely due to their distribution and celeb connection.
In addition to the two items above (much larger fund--yes, by probably 100 to 1000x), and celebrity backing (do not underestimate the power of this), they also had one huge thing going for them: Monster was in every distribution channel, every store, everywhere--from Home Depot to Best Buy to high-end boutiques. That made it very, very easy to drop new, shiny product into what was essentially a vacuum at the time.
Couple that with mainstream press slavering for any way to talk about a celebrity, and the results aren't a surprise. If you're a headphone newbie, you see them everywhere in the press, and you can slouch into a Best Buy and pick them up today, and they gots lots o bass, boom! Big bang, big growth.
The reality is that Beats revenue has been flat for 2 years. They're less exciting as a success story now, no matter how they flog the numbers. Remember LA Gear? They went from $5 million to $900+ million in a couple of years. Where are they now?
The reality is that we're in a transition time still--there is, as yet, no Coalition of Direct Manufacturers who know how to use the online channels and marketing to spread the word that (a) direct will always be highest value--always, no doubt about it, no arguing, full stop, (b) direct means better support, because you're working with the actual people who make the product and use it every day, not a dealer trying to juggle two dozen brands or an offshore call center, (c) direct means a direct connection between the company and the customer, for an even better understanding of the market.
But I need to shut up now. The next chapter is the one that will get me bumped off by the distribution mafia...