Iomega makes music

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As iomega corp. enters the consumer electronics market this fall with its HipZip portable digital audio player, the company's main marketing thrust will be showing people how the device works in one-on-one demonstrations and promotions.

In an ambitious national tour that started this month and concludes Dec. 23, Iomega is taking two mobile marketing operations on the road to college campuses and other young adult meccas, hoping to fuel demand for its $299 HipZip player by letting people handle the device.


Iomega won't be alone. Dozens of other new battery-power MP3 players are expected to heat up the category this holiday season, as they allow consumers to play music they download from the Internet. Industry experts say more than 50 manufacturers will sell $1.25 billion worth of the devices by 2002.

The opportunity for selling portable digital audio players is huge because many young adults are heavy users of digital music through their desktop computers, but many have not made the leap to portability yet, said Richard Johnson, director of marketing communications for Samsung Electronics America.

Samsung, Diamond Media and Good Technology are among other marketers targeting the same youthful audiences this fall through retailer demonstrations and events, hoping to cut through some of the confusion caused by the new technology.

"People want to get to this Internet music and have it on a portable player, but there's a whole series of technology hurdles you have to go through first to get there, not to mention the legal confusion surrounding Napster and Internet copyright laws," Mr. Johnson said.

Samsung is organizing in-store demonstrations and promotions with consumer electronics retailers this holiday season for its Hip-Hop and Techno YEPPS portable digital audio players, which range from $169.99 to $249.99.

Iomega faces an additional challenge: Its brand wasn't previously associated with consumer electronics, thanks to its heritage as the maker of Zip disks that store personal computer data. But as PC hard drives improve, the demand for Zip disk storage is shrinking, and Iomega is shifting gears to sell entertainment and digital photo storage solutions, including its new FotoShow product.

"The tour's purpose is to promote the `wow' factor by showing people how the HipZip works and driving home the value equation of our product vs. the competition," said Chris Romoser, director of communications for Iomega.

"We're targeting a young, college-age audience that doesn't tune into TV like generations before," he said, "and to get to them, we have to go out there to their neighborhoods."


On the tour, Iomega invites people to handle and experiment with the HipZip and see its trademarked PocketZip disks for storing music files. Visitors to Iomega's tour trucks get a chance to enter local and national sweepstakes to win a HipZip and other prizes. Consumers also can enter online at

The Iomega tour isn't for HipZip only. Several other Iomega products are going along for the ride and will be promoted in kiosks accompanying the tour. Iomega will gather consumer feedback and cross-sell consumers on different types of technology, said Tim Regan, director of sales for Addison, Texas-based Field Source, which is executing the tour.

"We're undergoing a revolution right now in music and photography where it's all going digital," Mr. Regan said, "and hands-on demonstration is absolutely the best way to cut through all the confusion and show people how to use it, store it and move it all."

Earlier this month, Iomega broke an estimated $35 million TV and Internet campaign via Publicis & Hal Riney, San Francisco, but only one of five spots mentions HipZip.


Iomega still has a strong business in selling Zip disks, and this month the company announced plans to introduce Club Iomega, an Internet site offering digital music downloadable to Zip disks and playable on PCs "to capitalize on nearly 40 million Zip drives out there in people's PCs," Mr. Romoser said.

For the portable digital audio players, prospects beyond the holiday season are expected to continue skyward. Samsung's Mr. Johnson said that 2000 is just the beginning: "Next year -- with more people breaking through this ball of technology to understand the possibilities of downloading digital music -- will be the really big year for MP3 players."

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