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BMG lessons - 1 of 2

Monday 21st November, 2005
Yes, I am blogging in reverse, here. As I was finishing the previous post, I wondered if that was at all relevant and over the weekend came across this post, which made me think.

This is a great example of a story that went from zero to complete unraveling, to the point BMG is recalling hundreds of thousands of CDs (we're talking probably several millions in damages, plus the cost of class action suits in California, Texas and Italy, plus a tarnished brand right when it hurts the most - the onset of Christmas shopping season) in two - three weeks.

And yet mainstream media (with some exceptions) did not cover it in a big way.

I do not wish here to elaborate on some massonic conspiracy linking a major label (and a major advertiser) to publishing concerns worldwide, as I think it's all crap.

What I would like to underline is that BMG was forced to move even in absence of a major media firestorm, which probably means that it felt the pain anyway. This is pure speculation, of course, as I have nothing in terms of sales data or market research, but my bet is that they felt it in sales of records, of digital cameras, of walkmans and the myriad gizmos that carry the venerable Sony marquee.

The damage may have been in reports such as the one from Gartner, but I suspect it was more in thousands of people choosing a competing brand of refraining from purchasing BMG's CD for fear of contaminating their computers.

So, companies pay attention: this story demonstrates that if you get yourself in trouble with Con2 , an acronym I just made up, standing for Connected Consumers, chances are you're going to feel the pain way before the suits at your traditional Crisis Management unit hear bells going off.

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