ZuckerBucks

30 09 2011

I love urban legends.

I was a loyal reader of urban legend-buster columnist Jan Harold Brunvand for years, and bought all of his books before he retired from the professorate. What is it about our human condition that causes us to swallow whoppers hook, line and sinker? Is it just a flaw in our hard wiring that we add credence to anything told by another human being? Are we just naturally fearful? Suspicious? Implicitly preachy?

>Or gullible?

Like the AIDS-era legends about cryptic messages written on motel mirrors following a tryst with an infected partner. Or P&G’s supposed pact with the devil. Or email chain letters stating that Microsoft (or whatever company you wish to insert) will award a huge amount of money to the one millionth idiot to pass it along? Yeah, as if emails have counters.

Yes, this is the stuff of which Snopes.com is all about. Brunvand bequeathed his expertise to a handy website emporium of truth and mythbusting. I just wish more people would use it.

Which is why I continue to be amazed (frustrated, bemused, whatever) over how many people have bought into the legend that Facebook is going to start charging users. Yes, just this last Sunday I started noticing URGENT FACEBOOK SPOSTS FROM WELL-MEANING FRIENDS WHO DO NOT KNOW HOW TO TURN OFF THE CAPS LOCK. And this urgent message was that, if we did not follow instructions and pay up, come Monday morning we would be locked out of our FB account.

Yes, we ought always heed messages typed in all caps. About as long as it took you t read that last sentence.

Maybe it’s because Facebook has become such a dominant thread in the fabric of our 21C lives that we actually fear not having it available freely. But let’s face it: Facebook could never get away with charging. If you think there was a revolt at the last round of changes, you ain’t seen nothing yet, buddy.

If Facebook were to charge users, then Google should make us pay a couple of bucks every time we search for something. Why should Google miss this opportunity as well? Just think about all the added revenue.

But would you not quickly run…yea, jump, to Bing if Google erected a toll gate? Of course you would.

You see, Facebook and Google are not in the social or search businesses. They are in the advertising business. Facebook is on pace to rake in over $4 billion in ad revenues this year. They are comfortably monetized, thank you very much. And Google reported revenues of $9 billion for the second quarter of 2011 alone.

We may not like those pesky ads down the right pane of our social and search pages, but those folks are the ones paying the bills…and making it possible for us to play freely.

Now here’s an interesting question: Could Facebook and Google ever employ a freemium pricing model? Sure. The free model would contain adds, while a premium version would carry a price tag. That’s exactly how Hulu, Spotify and a slew of other content providers structure their services. If you don’t mind the ads, then you can hang out. But once you do start minding, then you better be prepared to pay.

As long as the ads on Facebook and Google don’t become too annoying, I suspect most of us will be perfectly fine with the current model. And both companies would be utterly stupid to ever think about charging for basic access. There’s just too much money to be made selling ads. Furthermore, if Facebook adopted a blanket pay-up-or-get-lost model, how many of Facebook’s 800 million users do you think would stick around?

Yeah, not many. Because then Google+ may actually start to sound like a good option. Maybe even Microsoft might be awakened from its slumber by that time and try its hand at something that people actually want.

Until that day, though, Facebook will continue to stay free. Just like its home page says in BIG BOLD LETTERS. While you can’t believe everything you hear, you can hang your hat safely on this peg. Now please forward this to everyone you know, because the one millionth person to do so will receive a new Amazon Kindle Fire.

Dr “FREE BLOGS FOREVER” Gerlich





Plus Or Minus

29 09 2011

In one of the all-time great marketing battles, Tastes Great and Less Filling duked it out in the grandstands. “Tastes Great!” “No, Less Filling!” It was an impassioned verbal tug of war, but in the end a truce was drawn: Miller Lite was able to keep everyone happy (and at least for the moment, beer flowing). If anything, it was comic relief, a frivolous battle that no one really cared about. Just play ball and pass the beer.

But not all wars are so easily resolved. Take, for instance, the battle for internet supremacy between Facebook and Google. Not content to just be the kingpin in their respective areas (social and search), both want to encroach on the other’s territory. Earlier this year Facebook added enhanced messaging capabilities, giving everyone an @facebook.com email address (if you wanted it), as well as limited web search capabilities courtesy of Microsoft’s Bing search engine.

And then there’s Google, whose “Don’t Be Evil” motto apparently does not include efforts to completely dominate the web experience. The one thing missing from Google’s portfolio is social.

But it’s not for lack of trying. Recent attempts with Google Wave and Google Buzz fell so flat, though, that they became a source of embarrassment. So when they unveiled Google+ this summer, I promptly leaned back and yawned. What could Google possibly have dreamed up this time in another misguided effort to lure people away from Facebook?

And before we continue, someone please cue Take me Out To The Ballgame. Yeah, the part about three strikes and you’re out.

Turns out that Google+ is Google’s best effort yet, and they have been aggressively rolling it out of beta and into the general public’s computers and smartphones.

But in spite of the fact that it has features that caused Facebook to stand up and take action, I still don’t think it’s got legs. Yes, FB is vulnerable, and the small round of changes it unleashed last week caused an uproar among many of its dedicated 800 million users. Privacy. Ease of use. Managing and curating. These are all weak spots that someone else could capitalize on. And when the new Timeline goes public next Monday, I bet there will be another uproar from folks who cannot find their cheese.

The real question, though, is this: Why should I start all over with Google+ when all of my friends are on Facebook? It’s kind of like going to a much smaller party down the street when the one you’re at is already rockin’.

And therein resides the problem. Google, after two massive failures, is very late in this game. And just because it is the elephant in the living room does not mean it can muscle its way in. Sure, the idea of Circles probably has merit. Being able to curate and manage is important. But in my very best Seinfeld voice I cry, “But I don’t wanna change!”

In the interest of fairness, though, I have taken it for a test drive. I understand there may be as many as 50 million others doing likewise. I downloaded the G+ app to my phone. And, as is par for my course, I set out to break it.

Not that I am malicious or anything (he says with a snicker). No, I always try to find the weakest spot in an application, and then determine if it’s worth any future bother.

The results? I give the G+ app a C+. It crashed three times while trying to shoot a pic from with the app. Each time I had to shoot the picture the regular way, and then attach it within the app. That’s annoying, especially if you’re a photobug like me. I am forever posting such things to my FB Wall. I will, however, give it props for geo-locating me 100% correctly (if you want everyone to know your precise location). And my lunchtime check-in at best Thai was also perfect. But if the idea of a mobile app is to enable people, then it shouldn’t be handcuffing them in the process.

While I will likely continue using my Google+ account off and on, I just do not see it replacing my Facebook. Why? because Facebook is not broken. Is it perfect? No. But if anything, Facebook has stolen a page right out of Google’s playbook: copy whatever the other guy does better, and then bury them.

That’s what I fully expect to see once Timeline is rolled out to the masses. I suspect we will find ourselves so enamored of the improvements that we will quickly forget the learning curve associated with it. I suspect we will fall in love again with Zuckerberg. And I suspect that Google will go back to doing what it does best: Search.

Because there are no fourth swings in this baseball game.

Dr “Yer Outta Here!” Gerlich





It Only Takes A Spark

28 09 2011

It’s amazing how a price can drop in three years.

Take, for example, the Amazon Kindle. Today CEO Jeff Bezos announced the latest base-model Kindle will open at $79. Not bad for something that launched at $399 in November 2007. At this rate it won’t be long before they’re paying me to take one off their hands.

Along with the new entry model come the Kindle Touch for $99, the Kindle Touch 3g (with free connectivity) for $149, and the Kindle Fire tablet for $199.

And it’s that latter model that has everyone abuzz (if not ablaze). You see, them’s fightin’ words to Apple, who has held firm to $500 as the starting point for iPads. Heck, the Fire is a more-or-less fully functioning tablet running Android, costs 50% less than the original Kindle, and 60% less than an iPad.

Do you think they’re nervous in Cupertino today?

Sure, we can argue that the Fire and iPad are two very different devices aimed at very different crowds. Remember, all other Kindle models are strictly for e-books. The Fire is an amped-up Kindle and the primary feature is that it is seamlessly linked with Amazon’s enormous e-commerce site. It’s almost like giving people a private entrance to the store. If you think that Amazon’s 1-Click shopping was convenient, this will make that feature look clunky.

It can also be argued that Amazon is following the pricing model established years ago by Gillette and Kodak. Give them the razor or camera cheaply, and they’ll be buying blades and film forever. If you are a reader and own a Kindle, from who else do you think you’re going to be buying your books anyway?

But as we head into the holiday shopping season, I can see these new bargain basement prices (and product improvements) catching the fancy of many buyers. We are well beyond that fashion-forward group known as Innovators; the Early Adopters already own one, too. It’s possible that some of the Early Majority have already bought in. But the remainder of that group and the Late Majority are next.

This is no small group of people. It is when a product category becomes mainstreamed. While the majority of the economic profit has been squeezed out by now, there is still money to be made on blades, film and books.

The big question, though, is if Apple will respond. Is it threatened by a tablet device at less than one-half the price? Or is Apple content with its coolness factor, thousands of apps, and overall greater functionality? And how will arch rival Barnes & Noble respond? Its Nook is a very similar and capable product, but Amazon just raised the bar on lower prices.

As for me, I am not only loyal to Apple, I crave that added functionality (I do much more than just read and surf the web on my iPad). I not only love the plethora of apps and app categories, I need them. My lifestyle needs them. My workstyle demands them. And guess what? I still buy a ton of stuff from Amazon…from my iPad. Including most of my e-books.

But if all I needed were a sleek e-reader and tablet with basic functionalities, the Fire would be my choice. Because for $200, this baby’s hot.

Dr “By The Book” Gerlich





If The Shoe Fits

27 09 2011

We Americans like to think of ourselves as a giving people. As one of the most prosperous nations in the world, there is an implicit social contract with everyone else that we should be happy givers. So when poverty takes center stage, or a natural disaster strikes anywhere in the world, we are quick to queue up to donate goods. T-shirts. Canned food. Medicine.

And shoes.

Maybe it is partially because we feel just a little bit guilty for being so well off. Heck, even our poor fare pretty well by world standards. So whenever there’s a campaign to “do good” (oh, how I hate that grammatical faux pas), we buy in with wallets wide open.

Like TOMS Shoes. It’s the BOGO of footwear. Every time you buy a pair, some shoeless kid in Timbuktu gets a pair.

Of course, it’s not the exact same pair. One of my FB buddies wondered a few months ago if maybe it was the pink wedges. Actually, it’s a more standard pair of lower price shoes. But the point is made: In buying oh-so-stylish overpriced TOMS shoes (manufactured primarily in third-world countries), we are also giving back. It’s the guilt tax. It’s the Sally Struthers sponsor-a-kid model, except now we’re fighting barefootedness.

But is sending shoes (or any other stuff) really doing any good? And as my students continue to plow through Kelsey Timmerman’s Where Am I Wearing, is it addressing the problem? For that matter, have we even correctly identified the problem?

Watch this:

Interesting. Or is it? Are we really harming local markets by flooding them with handouts? Or is this video clip a veiled form of protectionism?

For that matter, does the best way to help them help themselves involve us buying ever more imported goods. I know plenty of unemployed (or under-employed) people who will argue that we should be making more of our consumables right here in the good ol’ USofA.

Never mind what they taught in my International Economics class. The theory of comparative advantage doesn’t hold much water when you’re looking for work.

Timmerman has argued frequently that we need to be more concerned with helping teach people to fish, rather than tossing them fish. And while I cannot say with absolute certainty that he would concur with this clip’s conclusions, I would bet money on it anyway. That’s not to say that we should quit being generous Americans. We should never allow people to go hungry or be naked (those of the Christian persuasion might recall a certain verse here). It just means that maybe we should be putting effort into helping them learn to stand on their own, so that in the long run these things don’t happen as often. The price of poverty runs high, but the price of misguided assistance can run higher.

And maybe instead of altruistically sending container loads of cast-off stuff from our closets (or the second pair of shoes we never actually see), we should consider helping educate. If anything, that is where our wealth lays. And we should gladly be sharing more of it.

Dr “Laced Up And Ready To Go” Gerlich





I’ve Got The Music In Me

26 09 2011

I have been buying music for a very long time. Starting with the musically quirky Gimme Dat Ding by the Pipkins in 1970, and followed by Uncle Albert/Admiral Halsey by Paul McCartney and Wings (1971), both in 45 R.P.M. versions mind you, I went on to amass an enormous collection of recorded music. Hundreds of 45s. Hundreds of LPs. And starting in 1985, over 1500 CDs.

Yeah, I’m a music freak. And when I tell people I have a juke box playing inside my head all the time, I mean it. I suffer from ear worms.

But all that music buying changed drastically a few years ago when I quit buying CDs in favor individual song or album downloads on iTunes. I realized I did not need to actually take physical possession of a song to own it. How liberating.

But about a year ago, I endured another paradigm shift by subscribing to Rhapsody. And I quit buying songs from iTunes. For $10 a month I can listen to any of millions of songs and albums. I learned that I do not have to own anything in order to derive the listening pleasure I have always craved.

In other words, I could just rent my music.

This silent revolution of renting music just got a steroid boost last week when Facebook announced its partnership with Spotify, a similar listening service. With a three-tiered freemium model, Spotify is a newcomer to US shores (having cut its musical teeth first in Europe). It’s tied inexplicably to your Facebook account, so all of your friends will see (in the Ticker) what’s coming out of your speakers right now. For $5 or $10 a month, the benefits increase.

But not everyone is enamored of Spotify or services like it. In fact, one Harvard Business Review blogger has come down against it.

And after reading his rant, I could only think one word: Huh?

OK, I understand his argument. he says that listening to music is very different from watching movies. And he is right. We want to listen to manhy songs over and over again. Today. Tomorrow. next week. And we probably do not want to watch the same movie with such recurring frequency (if ever). I also understand his argument about Netflix and their recent price increase as being a distinct possibility at Spotify…once they get us hooked.

But Netflix had very little competition prior to its fateful announcement (the biggest being Amazon, and to a lesser extent, Redbox). But all that changed in quick order when Walmart bought Vudu, and Dish announced its repurposing of the Blockbuster brand. Suddenly Netflix has a bunch of competitors, all willing to scoop up disgruntled customers.

Furthermore, Spotify also has lots of competitors. In addition to Rhapsody, there’s MOG and Rdio, as well as “mixologist” sites like Pandora and LastFM that create stations on the fly based an artist or genre of your choice. Oh, and let’s don’t forget Apple, poised to introduce its own listening service in the very near future.

In other words, unless an entire industry puts it foot down on inexpensive music listening, I don’t think Spotify has much opportunity to raise prices. They will either all have to go up, or else be faced with the daunting prospect of having to prove to customers why your service is worth extra bucks.

Good luck there.

There are also concerns that Spotify is busy scanning your music library and uploading that information to its servers. While at first this may seem scary, consider this: Everything other service you are already using has been doing this for months. years. Google knows you better than you know yourself. Apple’s iTunes knows everything you have bought, everything you have ripped, everything you have stored on your iPod/iPhone/iPad. And Amazon knows every single item you have ever looked at in its online store.

So there. And so much for privacy.

As for me, I rather like Spotify so far. Although I am not quite ready to dump Rhapsody, I will say that Spotify’s music library runs deep. I played “Stump Spotify” last night and lost 64-3. And my three points were for very obscure songs.

The primary concern users should have is whether they want all of their music listening to be social. Do you want the FB Ticker to tell the world that you just listened to Green Day’s “Last Of The American Girls?” On your office computer? OK, so now we know that you like punk rock, and you might not be working very hard.

Wait. I just listened to Green Day, and I am hard at work…writing this blog. But to be safe, I accessed it from a different site.

As for the fearmongering, it happens every time change comes along. I am not worried about Spotify or Rhapsody or anyone else knowing my listening preferences. If any of them can offer up a few good suggestions, I will thank them. Even if this really is one big bait-and-switch, I am still saving far more money than if I purchased all the music I like. And I still kinda like The Pipkins. “That’s right, that’s right, I’m sad and blue, ’cause I can’t do the Boogaloo.”

Dr “A Dat’s Right!” Gerlich





What The Bear Will Market

25 09 2011

Each year in early September, you can count on my being online behind a closed office door, nervously trying to scoop up concert tickets for Trans-Siberian Orchestra. This year was no different (I got 11th row floor). My reason for grabbing tickets early? Simple. Because if I don’t get ’em while they’re hot, the scalpers will.

And then I’d be paying $200 a pop.

Scalpers have a storied history of having a first row seat at the concert of Supply and Demand. Whenever supply is dwarfed by demand, there must be a market adjustment. The price goes up…and stays up as long as people are willing to pay the inflated price.

Ticket brokers have sophisticated software that can bust through even the most complicated online buying procedure. The result is that, each year when I buy TSO tickets, I have to jump through ever more hoops just to get to the check-out stand. Enter your username and password again. Now type this Captcha (good luck there). What’s your shoe size?

Wait. Alright, 9 1/2 D.

As much as we hate to admit it, we have grown accustomed to concert and sporting event tickets being scalped. Never mind the ethics. Supply and demand is in our DNA, right? We have bought into the free market idea in this nation. Arenas can only hold a fixed number of people, and it is not unusual for demand to far outstrip supply. While we wince at the thought of paying more than face value for anything, apparently we get over it. Still, you will find me online the first Thursday of September next year as well buying my TSO tickets. Because I don’t want to be one of the ones paying the higher price.

But what if this notion of supply and demand applied to things you buy in a retail store? What if merchandise were so limited, and so highly sought after, that buyers scooped it up and put it on eBay? That’s exactly what happened recently when Target introduced Missoni clothing. Target is the master of cheap chic, and Italian fashion-forward Missoni was just the product line it needed to catapult into the zeitgeist.

And while you won’t find me in a bidding war for a Missoni dress, I will say that I don’t have a problem with this. Sure, there are lots of disappointed shoppers. Heck, the Target website even crashed this week when these items went live. As long as Target can handle the negative fallout and drive the PR race car to the finish line, it stands to gain a ton of cachet. Buzz. Coolness points.

Because Walmart doesn’t carry Missoni. They don’t even know who the Missonis are. And because Target has an opportunity to cement itself as the top dog of affordable yet distinctive merchandise…a far cry above Walmart, yet better (and cheaper) than mid-level competitors like Kohl’s and JCP.

True, Target is still at risk here, because if they successfully build Missoni hype and fail to deliver enough of the goods, people are going to walk. No, run away. It’s a tough balancing act. It’s also possible that in-store fights could occur, kind of like when Cabbage Patch Kids were all the rage in Christmases past. or like every Black Friday when 3000 people are fighting over the one cheap television at Best Buy.

Social critics will no doubt howl about this latest collision at the corner of Supply and Demand, but that’s how the market works. Sure, it means that some people will not experience the concert or see the Super Bowl. And it means that some women won’t be wearing that Missoni dress this winter.

Unless they want to pony up a few extra bucks.

As for me, I can’t wait to see TSO again. There’s something to be said for being extremely fast with a computer mouse.

Dr “Although I Would Entertain Offers…” Gerlich





Melt With You

24 09 2011

I love theme restaurants. OK, let me back up. I love restaurants. My monthly credit card statements read like a travelogue. My Facebook Wall is littered with check-ins (I am Lord and Master of Red Robin, just so you know). But it is the themed ones that really draw me. Done right, a thematic dining experience is worth its weight in calories. It’s eatertainment.

Which is why I can’t wait to stop in at The Melt, a new chain of diners specializing in grilled cheese.

Grilled cheese? Isn’t that about as low as you can go on the food chain? Last place in creativity. Ingredient-poor. Can’t-think-of-anything-else-to-do.

Yeah, that’s it. But be sure to add comfort food. We all do them, and if you summon enough epicurean energy, grilled cheese sandwiches can actually be a dining adventure.

For the record, my all-time fave grilled cheese was at 3 Floyds Brewpub in Munster IN (cheese, apple slices, pecans…sheer gustatorial delight). I know that this kitchen staple can be turned into an upscale pleasure.

The Melt is trying to capitalize on an American hallmark, add a splash of pizzazz, yet still keep it cheap. Started by high-tech entrepreneur Jonathan Kaplan (founder of the Flip videocamera), there could be as many as 500 stores within five years.

Of course, the restaurant space is crowded. Very crowded. And our urban landscapes are littered with the shuttered hulks of restaurants that didn’t make it. But we Americans love to eat out, and hope springs eternal in the stomachs of food service entrepreneurs.

Critics may rightfully questions whether grilled cheese is too narrow. And it would be a valid criticism, because it has been about five years since Cereality launched amid much hype and hoopla, only to be languishing today with only three locations. Cereal is as much a comfort food as is a tasty grilled cheese. Making it available as a cereal bar (little different from today’s second wave of fro-yo shops) seemed novel, but so far has had few takers.

And even though cereal is something many of us eat at non-breakfast hours (OK, confess…how many of you have had a Cap’N Crunch nightcap more than once?), the idea of paying $4-5 for a bowl of slurple has not resonated with the American public. So will $5.75 work for a basic sandwich?

That’s a question all would-be franchisees must ask themselves.

At its core, The Melt is a soup-and-sandwich boutique. The primary difference is that everything is based on one thing. Kaplan obviously has the dough (pun intended) to launch The Melt (his company that made Flip was bought for $590 million by Cisco in 2009, and then completely shut down in 2011). But financial backing is only one piece of the puzzle. There has to actually be demand for the product.

But I think that Kaplan is on to something here, even if the concept is self-limiting. While a bowl of cereal might be an occasional evening diversion, The Melt appeals to appetites for two of the three primary feeding times of the day. If I were a gambler, I’d put my money on this before a bowl of soggy flakes. And you can put that on my Facebook Wall.

Dr “Make Mine Sourdough” Gerlich