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MCI may hang up on its Music Now retail venture

By Published on .

MCI Communications Corp. may soon be ditching its 1-800 MUSIC NOW service.

Although executives at the company wouldn't comment on the future of the service, MCI spokesman Mark Pettit said, "We're not as happy as we'd like to be and it may not be the way to reach consumers at this time. We're evaluating the situation now."

SALES A MYSTERY

Since its launch a year ago, MCI has never disclosed sales for the service, which allows consumers to sample and buy music via the telephone and a Web site. The telecommunications giant spent well over $10 million on a national print, TV and radio ad campaign tagged "You call. You listen. You like. You buy." Messner Vetere Berger McNamee Schmetterer/Euro RSCG, New York, handles.

"We're not just launching a new product or service," said MCI's President of Marketing Angela Dunlap last year at the launch party, a swank affair held at New York's Rockefeller Center. "We're establishing a new category for music retailing."

Finding new ways to sell music via interactive means is on the minds of many entertainment industry giants. The next one to make a big splash in the arena could be Blockbuster Ent-ertainment.

SAMPLING AHEAD

While Blockbuster's Web site now offers only content ranging from entertainment news to resources and custom destination maps, its goal is to allow customers to sample music and videos. By early next year, the company hopes to let customers purchase music products online, followed by videos and books, said Cici Kelly, Blockbuster's director of marketing and promotion for online.

"It's just another store for our customers," Ms. Kelly said, "and we'll continue to grow it and build it just like we would a regular store location."

Blockbuster definitely needs some help. Video rentals have flattened and sales at the company's more than 500 music stores also have not performed to expectations.

Ms. Kelly, who works with a staff of 18 in the year-old online division, believes the timing is right.

"It's a necessity in moving toward the future," she said. "If you sit back and just wait to see what's going to happen, you miss the boat. We are participating. We don't really know what to expect from a commerce site. But our goal is to offer our customers another avenue to shop or obtain information."

DEAL WITH SPRINT

Blockbuster earlier this month signed deals with Sprint and Lycos to create the Sprint Internet Passport-Blockbuster Edition. The product logs subscribers onto the Internet using Sprint's connection, and uses the Blockbuster navigational site as its home page.

Blockbuster is giving away some 1.5 million copies of the CD-ROM software free with any purchase or rental at Blockbuster video and music stores nationwide. A national campaign, from Sprint agency J. Walter Thompson USA, San Francisco, began running earlier this month in 55 U.S. markets, and the promotion will last through yearend.

Copyright November 1996, Crain Communications Inc.

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