Case Study of E-Business www.jambase.com

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Case Study of E-Business www.jambase.com

Industry and Company

Being the music lover that I am, it is important to me to stay up to date with the bands I follow as well as be able to find good places to see live music. This becomes a difficulty when traveling abroad as I am this summer. However, with the ease of the internet and the e-business strategy of Jambase.com, I am able to find current news, music merchandise and concerts most anywhere in the modern industrialized world.

With the slogan “Go see live music,” Jambase seeks to promote the live music and concert industry by providing a database of band schedules and venues that are easy to search through on their website. Originally started in 1998 as a mere way of listing when and where shows were in the jam-band genre of music, the site has developed into an online music community that, while still providing the same basic service, also offers music, merchandise, news feeds, online memberships and music and artist promotion in a successful e-business platform that is unique and easy to use. Jambase is successful in large because the creators of the site and those who run it are themselves music fans and share the same interests with the site users.

Jambase works as a business because for each listed show that one may search for, links are generated to the band and venue websites as well as to ticket sellers for which Jambase earns commission on. Jambase also provides its own ticket service for customers to purchase tickets. Bands and venues do not need to pay to be listed in the data base, however, the site provides promoters and advertisers a great marketing tool because of how targeted the market is. Jambase mentions this on their “About” page as well, offering advertisers a niche group of viewers that allows them to “cut through the clutter of the internet to reach dedicated fans.” Other areas of the site that add to the user experience and the value of the site are the ease with which one can be linked to another site to purchase music, the various online merchandise stores, free membership subscription and up to date music and news feeds.

The site operates in a fairly competitive market as anyone can set up a similar site and provide the links to ticket and music sales. However, what Jambase does have that creates a strong competitive advantage for them is a highly targeted market as they have created a strong user base among the jam-band genre from which they emerged. The fans are interested in the music and have strong loyalty as users. Also, as this music genre is constantly expanding, the site’s appeal is reaching an ever larger number and has begun to offer its resources across many different genres of music and geographic regions. The branding that the site has accomplished has also come a long way as it made it through the dot-com crash and recently developed a new logo and website. The strong brand along with the growing customer base allows Jambase to succeed.

As a user of the site myself, I find the site an excellent resource for not only finding live music, but also for finding new music in general. This is largely because the advertising is so well targeted, not to mention, that as a user, I am actively pursuing these ads to find what I am looking for. Because the advertising on the site, with the interest in music as the main engagement device, is so effective and accounts for such a large part of the business’s revenue, it is this aspect of the main website I will focus my analysis on.

Website and Strategy Analysis

Upon entering the Jambase homepage, the user is presented with a catchy logo and a search menu for one to locate concerts. Along with this the user is drawn towards a “Featured Articles” section which offers inside news on the music scene. There are also both a show and CD review section which provide recaps and opinions on new shows and releases from a wide range of artists. And because the entire business is online, the reviews can easily come from all over and encompass a wide range of music.

With all of this information, the site becomes much more than a place to find out where your favorite band is playing. The site becomes a prime example of one of the “infomediaries” we discussed in our lecture. As an intermediary, the site functions in a B2B2C, or C2B2C in some instances, fashion whereby a band or event promoter that is a customer of Jambase can post information or advertisements on the site to be viewed by an individual who expresses some type of interest towards the material by visiting the site in the first place. The audience of the site is drawn to it because of the common interest in music, however, once on the site, there are many various transactions and resources the user can explore quite easily. It is also key to note here that because the site is used by those seeking out information, the nature of the business has to be very user based. What Jambase does effectively is connect the user with a predisposed interest to content where targeted advertisements appear. As Mr. Armstrong, Google’s Advertising Director of North America, said in The Economist article we read, “On the internet…advertisers have no choice but to ‘go with the user’” (Ultimate Marketing Machine, pg 5). This creates value for Jambase because the ads that appear can easily reach the appropriate audience. This seems to be an effective and profitable system for Jambase. Adding to this a user-friendly and simple website, Jambase becomes a very valuable network.

From looking at the main website, it is evident that the site generates much of its revenues from ads. Aside from its own links on the main page, the user is presented a wide array of advertisements from new CD releases to various concerts and festivals. What is most effective about these ads is that most of them are customized. They are not obnoxious animations or pop-ups, nor are they as simple as most of the generic text link ads like those provided by Google. (The site does also have a number of Google ads located at the bottom which are important in the business strategy because they create additional revenue as well as help advertisers target the appropriate people because the Google ads can change automatically with different location for example as users can access the site from all around the world). This allows the site to charge higher rates for putting up these ads because they take up more space and reach a very specific market without an intermediary like Google Adsense for example.

Because there is no physical store or business for Jambase, the business model falls under a “Pure Play” as we discussed in our B2C lecture. Under this category they could also be labeled as somewhat of a “Niche Leader” since they target a specialized and educated audience. Because the site is in fact specialized, there is a shift away from the mass music market and more of a focus on artistic and independently produced music. The nature of “long tail economics” allows Jambase to thrive in this independent music market because it is much less costly with the internet to provide a medium of exchange for these traditionally localized segments.

Market segmentation along with the fact that there is no physical business implies a lot for the website and its ability to generate revenues. Jambase.com must be effective in meeting the costs of running the site because it is in fact the entire business. This puts increased pressure on the advertisement effort which must meet the demands of those paying for the ads while ensuring customer retension. By providing links to events and merchandise that customers find appealing Jambase creates a strong relationship with its customers on both ends.

The ability for Jambase to put customer and client together effectively does a lot for the company’s branding effort and reputation. “Brand advertising is inherently about leaving an impression on a consumer, and thus about some sort of exposure” (Ultimate Marketing Machine, pg4). If the users have a positive experience on the site and find the information, including the advertisements, useful, they will be inclined to come back and use the services again. It seems that Jambase has been very proficient in creating returning users as their internet presence has grown considerably with the expansion of the geographical areas and musical genres that they cover. Furthermore they are continuing to operate successfully in their eighth year with no immediate signs of slowing.

Critical Evaluation and Conclusion

As a user of the site, I am familiar with a lot of its intricacies and very satisfied with most of its functionality. Jambase makes it very easy to find music, locate concerts and buy the tickets. By reaching the audience it has online, Jambase is able to drastically reduce some of the transaction costs involved in seeing live music. They have also greatly reduced some of the information costs surrounding this as well. In the transaction cost article we read, the author states, “search costs shrink in the information phase, when the physical search for the lowest price among alternatives can be compared by a mouse click” (Organization of Electronic Markets, pg 110). Although Jambase does not offer comparable price ticket shopping (this is not possible in the industry because tickets are issued from a venue through one vendor typically), the website still reduces costs for users where they would have to visit every band site individually or call a box office or even go to the local record store.

Jambase also, in my opinion, provides very well targeted and well placed ads in terms of not only reaching the correct audience, but generating clicks to the ads as well. After all, this is the intent of the advertiser and what they are paying for so if a site cannot generate visitors to its sponsors, the ads are in a sense ineffective.

Another aspect of the business that I like about Jambase is that they are up to date with a lot of their technology and seem fairly internet savvy. They understand the importance of branding and have made a strong effort in that. This is noticeable if you are a frequent user. They also recently added a feature called “Newswire” which is an RSS feed that automatically updates subscribers of articles, reviews and even music and other media. RSS is a growing phenomenon on the net and is becoming a very popular way for users to filter and organize content in an efficient and timely manner. That they have already integrated this material into their business model successfully, illustrates that they are current with trends and technology and that they intend to keep expanding their audience.

There are some critiques, however, as well. If you are not familiar with the layout of the site it could seem a bit cluttered when you first visit. Again there is a lot of information on the main page which is easy to navigate if you are used to it, but could prove to be confusing for a first time visitor. Also, their own ticket selling has just become available, which is a good thing, however illustrates a problem with the original business model. As an intermediary the site is heavily dependent on other services to provide many of the actual customer transactions. This is evident when your ticket selection forwards you to a Ticketmaster website, or when you click on an artist’s CD image and you are passed onto their Amazon page for example. If Jambase could find some innovative ways to reduce their dependence on others they would benefit largely.

Jambase does offer a radio show, which is, in my opinion, a very good offering from them as they have access to lots of good music that people may not otherwise hear or know of. What they could perhaps do in an effort to create some more independence and revenue for themselves would be to release some of these programs as pod-casts, or offer them to paid subscribers in a customizable media feed as is possible through RSS. Most of the innovation that Jambase will be able to offer its users is going to have to come from spilling its expertise over into the music market and finding new ways to adapt its site and products to changing music devices and products. Maybe they could find a way to supply i-Tunes with pre-arranged play lists for customers to download, or purchase recording rights to some of the shows they review and offer those for download through i-Tunes or their own interface.

As is shown by their current growth, the business is willing to expand and is also fairly flexible. Making changes for them does not seem all too difficult and they are still a small organization. They have a niche market with a loyal customer base and could benefit a lot from some creative innovation and independence in the future. The technological advancements in both the music and internet industries are booming, and the demand for music is certainly not going anywhere. This is a great time for Jambase to continue its expansion and delve into some new and more profitable ventures.

Logging on to Jambase this afternoon I found that a band of whom I am a fan of (I found them because I liked a song of theirs that I heard on the Jambase radio a year ago) is playing in London tonight. I hope to make it to the show.





Bibliography:


http://www.jambase.com

“Internet Advertising: The Ultimate Marketing Machine.” The Economist. July 6, 2006. San Francisco, USA

Picot, Arnold, Bortenlanger, Christine, Rohrl, Heiner. “Organization of Electronic Markets: Contributions from the New Institutional Economics.” Taylor & Francis. 1997

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