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Zuora Inc.

05/29/2020 | News release | Distributed by Public on 05/29/2020 18:37

Fender Plays at Home

ByTien Tzuo May 29, 2020

Everyone knows Fender. They make amazing guitars, amplifiers and more. They also have a popular digital learning program called Fender Play, and judging from responses, it's people's most favorite story from SUBSCRIBED. In March they decided to start giving away free 3-month subscriptions to their Fender Play tutorial service, and the response was overwhelming. I talked to Ethan Kaplan, Fender's General Manager-Digital, about the experience.

Ethan, I'd like to start by thanking you. I'm a Fender Play convert. I started with the Peter Gunn Theme, then moved on to Bob Marley and Salt-N-Pepa, and now I'm tackling three-finger chords. I even played guitar on our last employee all-hands meeting. I owe it all to you!

You and one million others!

Whoa, hold that thought. Let's start at the beginning. Your CEO Andy Mooney told us at our Subscribed event a couple of years ago that Fender Play started because most people quit playing guitar after six months. If you could reduce that abandonment rate by 10%, you could basically double your market.

That's right. And we raised a lot of eyebrows. What was a 75 year old guitar manufacturer doing, thinking people would pay to watch videos that taught them how to play a guitar.

I know! But it turned out to be a good idea. You've seen some decent uptake the last couple of years. And then of course, we all found ourselves sheltering in place. Can you tell us about the decision to open up Fender Play?

Right after folks went into lockdown, we started talking about how we could help people get through, what our part was and it was clear with the power of music. A free three-month offer felt like a good idea. So we started by offering it to 100,000 people. And we blew through that number in around 36 hours. Then we opened it up to 500,000, and we closed it at a million.

That's amazing. You got a million new subscribers in a month! Was that absolutely terrifying from an IT perspective? Did it melt your servers?

Everything got put to the test: autoscalers, customer service, video delivery, new geo expansion. Everything went up 10x, basically. I'm not going to say it wasn't hectic at times, but we came through it okay. I look at the analytics every day, so before the crisis happened I got used to certain patterns in terms of sign-ons, trial starts, time to the first lesson, lesson completion ratios, and overall engagement.

Suddenly, we've got a million new guitar players in the world. And what does all that usage data look like now?

We are in a completely different world. All those usage patterns went out the door. Everyone's at home, and lots of guitars are getting dragged out of closets and from under beds, and suddenly everything's different. For example, Matt (one of our instructors) has been making these ridiculously cute ukulele videos with his daughter that are blowing up the Internet right now. It's early days, but we've got a huge new cohort. So we're adapting as we go.

So in addition to making great guitars and amps, is Fender also a streaming media company now?

Sure, but there's a big difference. Netflix is all about pure video engagement, but we're kind of like a streaming video service with a lot of extra furniture around it. So we have 3,000 pieces of video content, but those lessons also include scrolling tabs, chord settings, backing tracks. So we're a video platform with all these extra dimensions.

It's definitely not 'Fender Play and Chill.' You've got this instrument in your hand, you're watching the instructor, you have all these other tools. It's a way more engaging and rewarding experience than sitting through ten hours of Tiger King.

I agree completely.

I also think Fender Play is a really interesting IoT story in that it's a different IoT story. When most people think about IoT, they think about electronics with sensors and connectivity. But you chose not to connect all your guitars to the Internet. You didn't need to! You just wrapped this new digital service around your guitars.

Yes, there was absolutely no need. We make great guitars, they vary in price point from affordable to collectible, they sound great out of the box, they're easy to play. They're configurable, so people can evolve with the instruments. That's what we've been doing for 70 years, so there's really no need to mess with that. We have some connected amps, and a tuning app that's very popular, so we're getting plenty of feedback from that. And we've also got a lot of positive feedback from our dealers and retailers because people are more invested in their instruments, so they're buying more stuff.

What other subscription services are you guys looking at for inspiration, particularly in terms of how they're responding to the crisis?

I think what we're all discovering is that the strength of a service or a product is how well it enables people to make their day-to-day lives easier. And so I think you've seen that with Zoom, you've seen that with Slack, you've seen that certainly with Apple, Spotify, Netflix, Disney+, you name it. What they're doing is not being opportunistic because of the circumstance, but being empathetic with their offering because of what the circumstances have now afforded.

What lessons should other consumer-facing subscription companies be taking from this crisis?

This is the biggest shift in consumption that we've seen in our lifetime. There are around 130 million households in the U.S., and that's where you need to be focusing now if you're a consumer-based company. The entire commercial model has basically been inverted. It flipped from going somewhere to consume things, to consuming those things where and when you want to. I can't articulate how just yet, but I know in my bones we are a completely different company today.

There were a lot of arguments against Fender Play when you launched. People were asking Andy Mooney why he was spending all this money on instructors and studio time when there was so much free stuff available on YouTube.

Yes, you are right, we definitely got some feedback. A lot of our competitors thought we were crazy as well. But as it turns out, people who want to learn will pay for structure and quality. Andy's vision was completely right. I can't imagine trying to just sell instruments in stores and hoping for the best right now.

Well this is just my opinion, but I think Fender Play gave you a direct dialogue with your customers, and that's ultimately what allowed you to adjust to this current situation. You have such a huge lead on all the other instrument manufacturers now. It's like the Beatles versus Herman's Hermits or something. Thanks for your time, Ethan!

Likewise.

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For more insights from Zuora CEO Tien Tzuo, sign up to receive the Subscribed Weekly here. The opinions expressed in the Subscribed Weekly are his own, not those of the company. The companies mentioned in this newsletter are not necessarily Zuora customers.

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