30 November 2009

The Risk of Not Taking Risks

In reading an open letter to Hollywood by GeekDad today, I started to ponder the why of creative remakes, reincarnations, and resurrections. GeekDad takes movie makers to task for ruining his childhood memories by producing terrible films based on cartoons or video games. Why would otherwise intelligent people actually make a third Teenage Mutant Ninja Turtles movie or even consider another He-Man movie?

The answer, of course, is the relatively low risk associated with playing out another thread on a spool that's already available. The existing fan-base from an original incarnation provides easier pickings for a marketer, it is thought, since there will be less need to persuade folks of the underlying value of a franchise. As a result, we get G.I. Joe not as a rugged leader in a team of skilled soldiers, but rather (to quote GeekDad): "Tough Action Guys in Power Suits Against Bad Guys with Nanotechnology". Not a good fit, even with the 1980s incarnation of Joe.

When the formula of existing fan base plus new creative works, it can be thrilling. Let's put "The Dark Knight" into this bucket. More frequently, though, the vision falls short of expectations. Sequels run a much greater risk of this shortfall. Let's put "Batman & Robin" into this other bucket.

The same trap applies to music, a market rife with remakes. Although I might prefer Pseudo Echo's remake of "Funkytown" to the original, that makes me the exception. More often, the telltale sign of an artist lack of enduring creativity is the issuance of remakes, riding on the momentum of an earlier hit to extend his or her career by that much longer.

This strategy can work in a category like movies, where a bait and switch proposition is applied to what is a one-time use product. Saw it, hated it, but then again, how many of us actually go back to the cinema for a second viewing - even for films we like? We consumers don't tend to apply brand loyalty discretion to the studios marketing the films. No, we focus on the title, with maybe some credence given to the director or actors.

This strategy most certainly does not work for a business that relies on on-going positive customer experience. To stretch the point, imagine Crest having originally put out toothpaste that tasted terrible or stained teeth? Bada-bing! End of that brand. Persuading some folks to the first purchase is possible, even with a bad proposition. The power of word of mouth and zero repeat purchase "significantly limits growth prospects", so to speak.

So why would studio execs give the green light to such projects? Because sometimes the known bad movie will still cover costs, whereas the unknown risk could flop. If someone is rewarded for failure avoidance versus pursuit of success, the decisions make sense.

All this brings several questions to mind: How are you rewarded? How are you driving your business? And, while we're at it, what if someone actually tried to make a film studio an enduring mark of quality in consumers' eyes? What might that vision look like?

27 November 2009

Blu-ray, Hot Prices, and Demand for Movie Rentals

This Thanksgiving weekend, film studios and major retailers are hoping that unprecedented pricing will increase household penetration of Blu-ray players and jump start consumer demand for purchases of movies in the Blu-ray format.

With Blu-ray players available for as little as $99.99, there is little doubt that the hardware will sell. Amazon, Best Buy, Walmart, and other retailers are all using the hot prices as a lure to customers. Consumers will benefit from the aggressive competition, paying $100 this year for a Blu-ray player which cost $300 only a year ago.

The hot pricing is not limited to the Blu-ray players, though. Films are being hawked at loss-leader prices, too. Recent hit films like "The Dark Knight" can be found on DVD for $3.99, with a new Blu-ray only $9.99. Older titles can be found for as little at $6.99 in the Blu-ray format.

How will these prices impact demand for movie rentals? In the near term, there will be a negative impact, though the scale of it is still to be determined. It all depends on how many people buy films and how many they buy. Consumers who take advantage of available discounts to buy DVDs for the same price as a rental at Blockbuster will curtail rentals for a period of time. They will watch their newly acquired films before returning to rental activity.

With the holidays a peak period for DVD rentals, this substitution of purchases for rentals should worry Blockbuster leadership. Unlike redbox or Netflix, which can still postulate a value advantage versus the hot DVD prices, Blockbuster now faces this new challenge in its efforts to bring customers back to its remaining stores.

The outlook for movie rentals in 2010 should be brighter as a result of the aggressive Blu-ray player pricing this holiday season. Yes, consumers will stock up on titles, increasing purchases for the moment. Yet, with the return of "normal" pricing after the holidays, many of these same consumers will once again face the realities of a macro-economic environment which rewards cash-flow conscious decisions on discretionary expenses.

With studio executives saying things like, "Consumers expecting $7.99 Blu-ray titles over the long term is not part of any business model we've been privy to," a return higher prices on Blu-ray movies is a certainty. The higher purchase prices will leave those millions of newly acquired Blu-ray players begging for films to play at a price that is comfortable to the proud owners of said devices. The solution? Rentals.

Blockbuster will continue to face the challenges from competing rental offerings, but overall the movie rental market in 2010 looks like a strong growth segment. Studio execs will continue to struggle with weak sell-through performance unless they learn the lesson from this holiday season: "normal" sell-through product pricing exceeds what the market will bear. Hot promotions will move more product, but also train consumers to value the product at the discounted prices. In their effort to boost purchases near-term, the studios themselves may be spurring even more rental behavior in 2010.

25 November 2009

Kindle Software Update: Pardon My Lack of Excitement

I just received an email from the kind folks at amazon.com. They inform me that the latest software upgrade for my Kindle will allow me to view PDF documents without losing the original's formatting and that I can... drumroll, please... I can manually rotate between portrait and landscape views.

Wow! Now that's a bundle of benefit. Or is it? Clearly, both bits of functionality are valuable, useful, and greatly desired by users. And yet, upon reading news of these introductions, all I could think was, "Really? Is that it?"

I've commented on the Kindle previously, and this new set of improvements left me once again feeling that the product is just plain clunky in several regards. It's not as utilitarian as a smart phone, not as productive as a laptop, and it still doesn't beat a good old-fashioned book in the hand for sensory experience. My phone and my laptop already allow me to view PDF documents, and what's more, they let me do it in bright, vibrant color. I can snip bits of copy or images and incorporate the content into other files, etc.

The Kindle is ideal for long trips, when schlepping a stack of books along is inconvenient and unwieldy. In these cases, I could see the PDF function providing access to reading material that isn't available for the Kindle, but really, it still seems an inferior experience overall.

Now, when is that Apple tablet device coming to market?

19 November 2009

Sticky or Engaging: What Silly Putty Teaches Us

Recently, my daughter fell asleep with Silly Putty in her hand. Of course, it didn't stay in her hand, and she awoke in the morning with a shriek. During her slumbers, the putty had more or less melted, adhering her pajamas to the sheet and effectively trapping her. Not to worry; we got her out of the predicament. Fortunately, it hadn't gotten into her hair, but she was pretty distraught over the sticky mess that was her pajama top.

During the 45 minutes or so that it took me to remove the goo from her pajamas, I had time to reflect on a conversation with my friend David from several years back. I'd made the mistake of mentioning I wanted our company's website to be "stickier", and David took me to task. In a moment of righteous indignation, he proceeded to point out the multitude of flaws inherent in this term.

Boiling down David's argument is easy. "Sticky" means "stuck". "Engaging", on the other hand, means "delighted to be here". I loved being put in my place on this point, and I frequently ask myself the resulting question when contemplating changes to the user experience of a website or product: "Are we engaging our users or just making it harder to get away?"

Which brings me back to Silly Putty... Roll it in a ball, and it bounces. Press it on newsprint, and it pulls off a nice duplication of the image. It's tactile, flexible, stretchy, and resilient. In short, it's delightfully engaging!

So, what's the lesson of the putty? Don't trap your users, engage them. And maybe also keep in mind that even the most delightful of features can, in the wrong circumstance, become a gooey mess. In those moments, just be prepared to clean things up lickety-split!

13 November 2009

And in this Corner... Google Chrome!

It's time for the the Rumble in the Operating System Jungle to begin. With the impending first launch of the Chrome OS from Google, Microsoft and its Windows may face the stiffest competition they've had in a long, long time.

Let's face it, Google is both formidable and ambitious. This first effort with the Chrome OS is likely to problematic, disappointing in some ways, and limited in initial impact. What I'm looking to assess is how much did Google get right from the git-go. This initial launch is just the first round of what could turn out to be an epic 15-round battle between two true heavyweights.

11 November 2009

New Puppy and the Price of Taking Risks

In the midst of trading emails with my friend, Bruce, he provided the following comments on how his kids are getting on with their new puppy:
The puppy is more of a squirrel-like creature with sharp pointy teeth. It bites. It bites everything. It is not discerning about what it bites as long as it can bite. It bites my son's feet and he flies to the top of a table. It’s sound judgment on his part to keep his feet up and out of the way. My daughter shows greater enterprise in her play with the puppy but not as sound judgment as her brother. She has scratches and bites all over her arms to prove her enterprising nature.

Of course, I laughed as I read the description, but then I thought of something. This story is a pretty good analogy for taking risks in business.

Though risk aversion often appears the safer route in the near term, avoiding painful "scratches and bites," is being overly risk averse conducive to long-term success? I think not. Without a willingness to absorb nicks and cuts in pursuit of greater success, how fruitful can any relationship-building with consumers be? How compelling is the new product that doesn't do something new?

I think the trick is to get to a process that results in, perhaps, "scratches and bites" only rather than deep flesh wounds. Fail fast and fail small is a good solution, and one I recommend in this regard. Got your own thoughts? Chime in!

09 November 2009

A Wall, A Change, and Hope

hunks of hope Where were you twenty years ago? I was in a place called Berlin.

Today marks the 20th anniversary of the fall of the Berlin Wall, what Germans call “Die Wende” – “The Change” for those not familiar with the language. There are few moments in our lives which rise above the norm, connecting us to something grander in humanity. The instant the Berlin Wall ceased to be a barrier was such an moment.

You know the background, right? Built to keep the masses of the German Democratic Republic from fleeing into the West, the Wall was portrayed to East Germans as a protective barrier against the evils of capitalist aggressors. Uh-huh. Sure. Did anyone truly believe that line? No. They didn’t.

The Wall was a “pragmatic” solution to stem the flow of humanity from an oppressive environment to one of greater opportunity. It imprisoned a people and embodied all that is wrong in a government and society ruled by mistrust. The East German regime mostly took value from its citizenry, rather than providing value to it. That said, a whitewashed historical perspective of the fall of the Wall as “good prevailing over evil” is too simple, too easy to fully portray the nature of this profound moment.

I had the good fortune to build a relationship with the city and the people of Berlin over several years. Having first arrived there in late 1984, I kept returning to this fascinating island of special status embedded in the midst of the German Democratic Republic. Berlin became my second home. It is the only place other than Northern California where I feel completely connected to my surroundings, a colorful thread in the broad, vibrant tapestry of life weaving its way through time.

During the years leading up to November, 1989 I had studied in West Berlin, worked on a construction site in East Berlin, and cultivated enduring friendships on both sides of the Wall. For most of us who grew up in the West, there’s this feeling that folks “on the other side” were oppressed, solemn, and sad. My experiences confounded such stereotypes.

East Germans were, yes, keenly aware of the elements of their government and the threat of its security forces. They were cautious about new acquaintances and openly skeptical of folks who acted too warmly, too quickly. Given the Orwellian aspects of the state apparatus, such skepticism was both warranted and understandable. With time to build trust and a relationship, though, the friendships I established in the East have proven among the strongest and most profound of my life.

And thus, we have set the scene for the events of late 1989. During the autumn of that year, pressure continually mounted within East Germany. As Hungary and Czechoslovakia took cautious steps towards greater openness with West, more and more East Germans manifested their dissatisfaction with their own government… by finding ways to “escape” to the West and by taking to the streets in unprecedented numbers. As the protests mounted in frequency and scale, many worried about violence erupting in an angry government backlash.

The cycle of protest, worry, and discussion, protest, worry, and discussion built on itself. The tension was palpable in West Berlin and positively oozing through the streets of East Berlin. And then, POOF! Tension gone. Exuberance, relief, joy, disbelief, and hope exploded in its place. The Wall - the impenetrable, deadly Wall - transformed into a convoluted concrete gateway, the anachronistic vestige of a rapidly warming Cold War.

To be in the midst of an outpouring of welcome, hope, and love shared by millions simultaneously was awe-inspiring. Life, with its daily nuisances and distractions, stood patiently to one side while History danced in the light for a bit. Complete strangers were welcomed as family at each border crossing. The distinctions between Easterners and Westerners were, at least temporarily, subjugated by elation and celebration.

Twenty years on, the sheen has dulled some, the hope dimmed considerably, but for those of us swept up in the current of that incredible moment of change there is a lingering desire to work towards a better future. We believe, I believe, in the potential of humanity to do good. The darkness of East Germany’s history made the brightness of reconnecting East and West the more bedazzling.

The optimism of that moment changed me and motivates me to this day. Some may call it na├»ve, but hope drives much that I do… and my hope sprang forth twenty years ago, in a place called Berlin.

04 November 2009

Slow Art Milwaukee v1.0: Warhol's Last Supper

I recently hosted a Slow Art event in Milwaukee, at the Milwaukee Art Museum. Think of Slow Art as the museum visitor’s version of chewing your food at least 25 times to get all the flavor out of each and every savory bite. With Slow Art, the idea isn’t to see everything. Rather, it’s to see a few things in depth, to spend the time with a selection of artistic creations.

For me, Slow Art also encompasses an observation of context and the reactions elicited from Joe and Jane Public while they view or interact with a piece. Here is the first installment of my thoughts from Slow Art Milwaukee v1.0.

Perhaps not surprisingly, in the Warhol exhibit people congregated, lingered, and engaged most in the gallery displaying Andy’s homage to DaVinci’s “The Last Supper.” Among the largest of all Warhol’s works, there is a figurative familiarity conveyed through his reworking of DaVinci’s famous fresco.

Mounted on opposite walls, juxtaposed purposely, are a screen print of the familiar last supper scene, albeit doubled and vibrant in black monochrome rendering on a bright yellow canvas, and a Warhol line-drawn rendering, black tracings on a white canvas, overlain with logos from Dove and GE plus a 59¢ price violator. The effect is remarkable, in its devotional aspects to DaVinci’s masterpiece and the modern contextual commentary on the role of religion and corporate iconography.

This was, it turned out, Warhol’s final project, and it is a fitting culmination to the career of someone who so frequently reflected simple, everyday images back at society, challenging us by – perhaps appropriately – elevating the mundane to “art” (Campbell’s Soup can) and reducing the famous to merely “image” (Marilyn Monroe). These last couple works reveal Warhol’s faith and dialog with his faith, and maybe, just maybe, reveal a bit of the inspiration behind his earlier, simpler work.

Please, feel free to comment and by all means, take Slow Art to heart. Savor the creative endeavors of humanity; you’ll be delighted by the experience!