Diffusion Of Innovation

By Tom Barnes

Offically called The Diffusion Of Innovation And The Adoption Of New Music This was my senior marketing thesis at Babson College. It was completed in December of 1985.

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Market viability and creativity are two concepts that have been thought of as mutually exclusive by artists and marketers in the radio and recorded music industries. Perhaps this belief is premature. Through the application of the diffusion of innovation curve and use of the tolerance of creativity theory, it should be possible to market good music without diluting its credibility. No mean task, as it appears impossible to explain or predict when a song will be a hit. There have been too many bands with high potential that never broke even. This paper is an attempt to offer accepted marketing concepts and apply them specifically to the recorded music and radio industries. It will try to open new avenues for marketing technique and research.

When examining the marketing budgets for the major labels, one can make some interesting observations. Most marketing funds go towards promotion. Experts feel that direct promotion is the key to sales. Advertising and market research to the final user takes up a small percentage of total marketing expenditures. Marketing management for the recorded music industry relies on radio promotion for its big dollar sales. "Word of mouth" is only second to radio as the source of new music information for the consumer. Potential new product popularity, at this point in time, is nearly impossible to gauge with any degree of statistical confidence in the recorded music industry. In this paper I will present some hypotheses that may serve to change the current state of affairs. These hypotheses are based on two concepts. The first is the theory of tolerance for creativity, and the other is the diffusion of innovation curve. We can correct the inefficiency of marketing management's effectiveness by re-examining the current approach to research in the industry.

There is a need for this work as the related industries have already taken steps toward research demand. Radio has absorbed most of the research costs to learn about the listening patterns of the public. Arbitron and Birch are the firms that study the raw listening of the public. Interpreted statistics gathered from this research form the basis for what is believed about the listener as a record buyer. This is an extremely dangerous practice, as Arbitron ratings give nothing but statistics for listener frequency based on demographics. While these numbers are quite valuable to a radio station's potential advertisers, they tell us virtually nothing about how people choose the music they listen to or what they look for in the music they like. Lately, The record industry has begun its own consumer research. The industry has begun to use more of the tools that are available to them. The problem lies in some of the ways the research is interpreted.

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