Offer Analysis

BMG Mails out to Hispanic Music Lovers


1. The Offer:

BMG’s Ritmo y Pasión Latin Music Club sent out a direct mail offer in late June and received on June 28th. The offer is to receive twelve CDs for the price of one. The customer first chooses 7 Cds that they will receive free of charge.  That customer must then purchase one CD at regular club price - $14.95 – within the next twelve months. Once this is done, they may choose four more CDs to receive free of charge. The customer must pay for shipping and handling for the twelve CDs – a total of $33.48 – amounting to $2.79 S&H per CD. When the $14.95 is added for the one purchased CD, the price per CD for al twelve averages to about $4.04.

The online offer - like the one offered on www.media-clubs.com/bmg-latin - also advertised twelve CDs for the price of one, but was structured a bit differently. Under this model, the customer chooses two CDs up-front to receive free. The customer must then purchase one CD at $14.95, at which point he chooses the remaining nine free CDs.


2. The Mail Piece:

The bi-lingual mail piece arrived in a 6”x10” envelope. It consisted of an order form explaining the process in three steps:

1)      Choose 7 CDs right away---Free!

2)      Then buy one CD within the next 12 months

3)      You get four more CDs---Free!

Included in the envelope is a sheet of stamps, each one with a different CD cover on it representing the available choices. On the order form are seven boxes where the customer can affix the stamps for their selections.

The envelope also included two letters to the recipient – one in English, the other in Spanish – introducing the program and explaining the offer.


3. The Product
:

Ritmo Latino is a subsidiary of BMG, or Bertelsman Music Group which has 36 offices in 25 countries. BMG Music Publishing is the third largest music publisher in the world and the largest independent music publisher. In 2004 BMG Music Publishing merged with Sony to create BMG Sony, a move that reduced the “Big 5” music publishing companies to what is now the “Big 4,” which consists of Universal Music Group, Sony BMG Music Entertainment, EMI Group, and Warner Music Group.

Ritmo Latino itself is based out of Indianapolis, Indiana. It is essentially the Hispanic adaptation of BMG’s classic “12 CDs for the price of one” paradigm that was first unveiled in the early 1990’s.


4.  Related Activity

Some Spanish-language music and book clubs offer ride-alongs to brands who want to insert image-compatible, non-competitive ads. Columbia House Latin Music CD and Cassette Club, BMG's Latin Music Club “Ritmo y Pasión,” and Mosaico Book Club all offer this option (see “Bookspan develops different strategies for its Spanish book clubs,” page 27, Portada® No. 14, February/March 2005).

Club Música Latina (Columbia House) and Mosaico (Bookspan) are two of the largest Hispanic book clubs. While Club Música Latina has close to 2.5 million “active” buyers, Mosaico has only 225,000 club members (see page 27). What can explain such a large difference in club membership? Do Hispanics like music that much more than books? Mosaico's Hugo Pinzón points out that Club Música Latina has been in the market for 15 years, while Mosaico is only 3 years old. But there are also structural differences. “Music is a different product. Anyone, not just Hispanics, can listen to it,” Pinzón notes. “Reading a Spanish-language book is more difficult; fewer people can do it.”


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Editorial Staff

Portada Staff

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