Audio equipment maker relies on Web tie-in
By Seth Seymour, Gannett News ServicePosted 6/14/2004 2:01 PM
As audio sales continue to decline nationwide, Klipsch Audio Technologies is adopting a new strategy to keep from singing the blues.
The Indianapolis manufacturer of high-end audio equipment is teaming with an online music site to reach what industry experts consider an untapped — and lucrative — market: young people.
By offering free music downloads on its Web site (www.klipsch.com), Klipsch officials believe they can nab themselves a new group of customers.
Beginning in August, the Klipsch Web site each week will offer 75 free downloads from GarageBand.com (www.garageband.com), which specializes in free music. Some will be from among GarageBand's most popular downloads and others will be chosen randomly.
Company officials have their fingers crossed as Klipsch jumps on the downloading bandwagon.
"Young people love music, and this is our way to get in front of new customers," said Klipsch Marketing Director Cris Pyle.
The link, Klipsch Garage, will give young folks incentives to visit the site frequently and — the company hopes — check out its products, she said.
"We're trying to give them reason to come back to the site," Pyle said.
For GarageBand, it's another way to spread the music of aspiring artists.
The deal is twofold: GarageBand.com provides free music and advertising, while Klipsch pays an undisclosed amount to the partnership and provides products to give away on the music site.
"It's mutually beneficial," said Ali Partovi, chief executive of GarageBand.com. "It'll give young people even more incentive to listen to music."
This may be the first partnership of its kind, but Klipsch believes others will follow. That prompted company officials to make sure GarageBand partnered with no other audio companies.
"It makes our relationship deeper," Pyle said. "When we signed the agreement, we wanted to go into it with an exclusivity clause so the music site can't deal with our competitors."
Though Klipsch has seen 20% annual growth yearly over the past seven years, other companies have not.
In fact, the audio industry saw a 9.6% decrease in sales last year and may experience another 3.6% drop in 2004, according to the Consumer Electronics Association.
More traditional audio products such as bulky speakers have seen drop-offs, but companies now are focusing on new technology like MP3 accessories and smaller speakers, says association spokeswoman Anne-Taylor Griffith.
"It's not surprising that Klipsch is trying to make a play in that younger market," Griffith said.
A music site is a good way to do it, she said. Klipsch officials agree.
"People are consuming their music differently now," Pyle said.
GarageBand.com has more than 400,000 registered members and 250,000 artists, making it the world's largest site for independent artists.
The possibility for new customers is big, Pyle said, and her company is ready:
"Just think of the opportunity."
