Dealers Compress MP3 Promotions: Beyen Research

Niagara Falls, N.Y.— Retailers scaled back their promotion of Internet audio portables in the first 10 months of the year following a rapid ramp-up during the year-ago period, when many new brands broke into the brick & mortar retail channel, Beyen International Market Research found.

The market research company also found an increase in the number of times that Creative Labs, Iomega and Samsung products were advertised and a significant decrease in the number of times that RCA and SonicBlue (and its sister brands Sensory Science and Diamond) were advertised by retailers.

In tracking retail ads in more than 90 newspapers and catalogs, Beyen found that the total number of Internet portables appearing in ads fell 13.3 percent to 9,636 from January to October 2001 following a peak of 11,119 during those months in 2000.

Beyen also found that, even though retailers were promoting the category less often, the number of brands appearing in their January-October ads grew to 43 from 31, reflecting a still-growing number of new entrants into the market.

Internet portable advertising hit a peak in 2000 as more brands entered the brick & mortar retail channel, Beyen said. That year was the first full year in which multiple brands of MP3 portables were advertised. By contrast, in 1999 multiple brands began appearing in ads only in the second half. Before then, only one brand, Diamond, made it into retailers' print ads.

The number of Internet portables advertised might have shrunk because of a growing number of other products that play MP3 files, Beyen speculated. They include headphone CD players that play MP3-CDs and PDAs and cellphones that play MP3 or other compressed-audio files.

In analyzing the advertising frequency of the top-10 advertised brands, Beyen found:

• The top-10 advertised brands accounted for 90 percent of all advertised products during the 10-month period, down from 96 percent during the year-ago period.
• The number of SonicBlue products advertised (including the sister Diamond and Sensory Science brands) fell 46.7 percent to 1,969, and the brands' advertising share slipped to 20 percent of all Internet portable ads from 33 percent.
• Creative Labs' share rose to 12.6 percent (1,211 ads) from 6.4 percent (708 ads) of all advertised products.
• Samsung's share rose to 9.8 percent from the year-ago's 2.6 percent.
• Sony's share shrank dramatically to 8.5 percent from 24.2 percent.
• Dlink's share rose to 7.6 percent from 6.5 percent.
• RCA's share fell dramatically to 7.6 percent from 19.3 percent.
• Iomega's share grew to 6 percent from 1.3 percent.
• And I-Jam fell off the chart, while newcomers Intel, Compaq, and Kidboard broke into the chart.