MOTORCYCLES AND THE ART OF CD-ROMS

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As a motorcycle road-racer, I've learned to keep things under control, even at high speeds. Now I apply lessons learned from racing to a fast-paced business environment also fraught with risks: marketing interactive CD-ROMs.

What are the key techniques required to maintain control at racing speeds? One is to concentrate far enough ahead to allow for reaction time. If you think about where you are instead of where you will be, you've already lost control.

Racers continually search for "reference points" ahead of them on the track-a turn-in point, followed by a corner apex, then a corner exit. They learn to sacrifice a little speed in one corner to gain a lot of speed somewhere farther down the track.

The market for multimedia software on CD-ROM is moving so quickly that CD-ROM publishers must use these same techniques to keep from getting off track.

Marketers need to look far ahead to see where the distribution channels are heading, and watch carefully for points where changes in marketing direction are required. And they need to ensure that they aren't committing themselves to retail and distribution channels that will slow their growth further along.

1. Look far enough ahead to account for your reaction time.

For the last couple of years, the CD-ROM market has been "virtual"; a mirage looming ever larger but remaining just over the horizon. Because even conservative forecasts predict 100% annual growth in CD-ROM drives and titles, and because the sophistication of titles is likewise increasing, it is clear that a publisher cannot assume it will have a big piece of the market to itself in coming years.

If a publisher, for example, plans to bring out a CD-ROM history of motorcycles in a year, he should expect that, by that time, several other motorcycle CDs will be crowding the shelves, and that all of them will be more sophisticated and will make better use of the technology than anything currently for sale.

2. Watch for reference points, where you'll need to commit to a new direction.

Until now, most CD-ROMs have been sold through the same distribution and retail channels that handle computer hardware and conventional software. As margins across the computer industry fall, distributors are consolidating.

A year ago, the average Egghead Software store carried about 300 CD-ROM titles. Now, you must ask, Have software resellers like Egghead, Babbages and Comp-USA had time to prepare for the avalanche of 3,000 stock keeping units expected on the market by the holiday season?

Book distributors and retailers are already staking out some of this territory. Media giants like Sony own content, distribution and retail outlets and might emerge as major retailers of CD-ROMs with their own house brands.

And Blockbuster, the giant video retailer, already is testing rental of CD-ROM cartridges. Should it decide to make a business of CD-ROM, Blockbuster could single-handedly shift the emphasis to rent-before-buying, as is currently the practice with cartridge games.

The shape of the future may also be seen at Media Play stores, currently being developed by Musicland Group. Each of these category killers stocks audio CDs (60,000 SKUs), books (75,000 SKUs) videos, computer games and an industry-leading 2,000 CD-ROM SKUs.

3. Sometimes you have to slow down to go fast.

Track designers always throw in a few corners which, if taken on the limit, will put the racer on a terrible line for a more important part of the track later on. Likewise, CD-ROM publishers who commit all their resources to maximizing sales into the current distribution and retail channels will not be able to take advantage of opportunities that will certainly present themselves in the next few months.

Since most of the people who could buy your next title, when it's released in a few months, don't even own a CD-ROM drive yet, conventional advertising yields few returns.

Marketing efforts are better spent pushing product into distribution and retail channels, where it will be waiting for the (expected) mass market when it materializes.

There are no risks in this type of business-to-business campaigning, as long as your campaign targets the right audience. It is more important to be perfectly positioned to move your product into book, audio or video channels, where the sales potential will be far larger later on, than to be tied to exclusive deals with traditional software distributors, even if they are the most effective means of moving product right now.

Although it is impossible to predict the outcome of the CD-ROM "race," it is likely the sheer number of publishers, investors, distributors and retailers on the track will guarantee a dramatic finish. What is certain is that the businesses wanting to figure in this industry can't lag behind, waiting to see its final form before entering.

Mark Gardiner is executive director of multimedia marketing at Axia International, a CD-ROM publisher based in Calgary, Alberta. He is also No. 13.

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