Whilst the measures for evaluating what a brand is worth are well established, those for quantifying a brand’s potential seem less so. In general, brands are valued on their residual equity (what they are associated with and the depth and competitiveness of that association), their competitive performance and how much they are assessed to be worth.
At one level Taylor Swift’s split with Spotify is the story of ongoing upheavals in the music industry and one artist’s approach to contain the impact. At another, it is symptomatic of a struggle for the relationship with the end customer that is going on across much of B2C.
As technology and globalised business models continue to deliver efficiencies and new opportunities, every sector will face disruptive pricing that in effect re-costs what the market would otherwise pay. Many of those movements will naturally be downward; others will lift the entry point. Amazon has effectively reframed the cost of books; Samsung and others are resetting the cost of owning a tablet; Tesla has redefined what an electric car is and also the cost of owning one.
Marketers put a price on something and call that its value. They arrive at that amount through a bunch of internal references – cost, margin, goodwill, disbursements … Then they talk about that value as if it is real. It isn’t of course. Value is simply an ongoing judgment call based on this equation:
Chris Anderson once observed that every abundance creates a new scarcity – and vice versa. So if digital is the abundance, what’s the new scarcity? I think it’s analogue – and by that I mean the things that are hard to reproduce and share quickly.