Magazine Bundling – Bundling That Works?

Cable bundling is bad for consumers. We can all agree on that. Fortunately, consumers are voting for Netflix et al with their wallets, and will in the process, eventually, kill this model. 

But what about Magazine bundling? In other words, what if you could read tens of magazines for a flat monthly fee?

That has legs and some serious growth potential thinks KKR, the major Private Equity firm, which just invested $50m in Next Issue. As Steve Perlberg at the WSJ writes on CMO today:

Call it the Netflix of magazines. Next Issue Media, a subscription service where readers can have access to as many as 145 magazines for a monthly fee, has closed a $50 million financing round with KKR, WSJ reports. The private-equity behemoth — which will take a minority stake in the company — is hoping that magazine readers will show the same love toward the subscription model as music-lovers have to Spotify, book-readers to Oyster, or TV-watchers to Netflix. Next Issue Media has quietly gained more than 150,000 subscribers, who can pay $9.99 a month for publications including Vogue, Esquire, and Fortune, and tack on $5 more for weeklies like the New Yorker and Sports Illustrated. Publishers, for their part, receive a portion of the revenue based on how much time readers spend with their content — an incentive to publish quality stories at a time when the economics of web publishing often encourages a race to the bottom of lowbrow, yet popular and “shareable”, content.

The biggest differentiator vs cable bundling is that if someone wanted to just read 3 or 2 or even 1 of the  magazines in the bundle, they can go get them directly from the publisher – something that is not possible with cable today. And that’s a good thing.  

Still, with reading itself shrinking, I can’t help but wonder if growth for this model will be capped beyond the hard-core-reader market…

The Young – And How To Lure Them Into Theaters

“For many teenagers, the idea of focusing on a single screen for an extended stretch is anathema”, writes Brooks Barnes in the NYT.

What does this mean for the movie industry?

…what really has the exhibition industry unnerved are two statistics released in the spring by the Motion Picture Association of America. Last year, despite a glut of extravagant action movies, the number of frequent moviegoers ages 18 to 24 dropped 17 percent, compared to a year earlier; the 12-to-17 age bracket dropped 13 percent.

Will billions at stake now and tens of billions at stake in the future (if changes to consumer behavior today persist into the future, as they most certainly will), movie theaters are experimenting with everything from

…seats buck and dip in close synchronization with the action on the screen. Compressed air blasts from headrests to simulate flying bullets. Fans provide a gentle wind effect.

to letting audiences bring in their iPads, showing text messages next to the big screen (!!!), providing a “270 degree” experience and more, says Barnes.

And the results?

Audiences – in the coveted 18-24 young male segment that’s being targeted here – seem to like many of these “innovations”. But since the 24+ demographic segment bought 58% of all tickets sold (source: this MPAA report), at least in in 2013, there is hope for purists such as this blogger, at least for the next 3-4 decades. 

Beyond that, we’ll probably just get movies streamed directly into our brains, with direct  neurological stimulation to produce just about any emotion or feeling (who needs real seats that shake when your brain feels the ground shake with just a few micro-amps of directed current?), Matrix-style.

Driverless vs Self-Driving Cars: GM Makes A Bet

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Remember that scene from Minority Report with those amazing self-driving cars? 

That we will eventually end up there is not up for debate (IMHO), but when, is certainly still up in the air. On the face of it, Google’s self-driving cars – now being aped by many other car makers who are creating their own self-driving cars – are the most logical way to get there. 

But, given human and consumer behavior, is that the next step?

Maybe not, GM, which just announced “hands free driving” cars that will launch in 2016, seems to think:

General Motors Co. plans to launch by 2016 cars with a hands-free automated driving system and Wi-Fi-enabled vehicle-to-vehicle communications systems designed to help avoid collisions, intensifying the race among the world’s auto makers to build cars that can partially drive themselves and avoid crashes without the help of their human drivers.

The company will offer its “super cruise” system, which will allow a driver to ride in a car with hands off the steering wheel on a freeway with proper lane markings, on a yet-to-be named new Cadillac vehicle. Cadillac officials have said they intend to launch by 2016 a large sedan to compete with rivals such as the Mercedes S-Class.

GM officials declined to say how much the “super cruise” feature will cost. A package of optional driver-assistance features currently sells on Cadillac models for about $3,000.

Officials with the auto maker said the super-cruise system will be designed to require that drivers remain attentive and ready to retake control of the vehicle. They also stressed the distinction between this “automated” driving feature and the vision of a fully automated, “driverless” car promoted by Silicon Valley’s Google Inc.

This is quite clever on GM’s part. The technology is incremental and likely easier to market and sell to consumers. Regulars may not be as averse as they might be to true driver-less cars, and the option is probably not going to break the bank. Finally, it lets GM curate the path to true drive less cars sometime in the future as opposed to letting Google and others take the lead. 

A very clever strategic bet, if you ask me.

Is There A Formula For “Virality”?

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Ever use a great product or service that inexplicably fails to catch on and is soon discontinued…and you wonder what in the world went wrong?

Welcome to the world of “virality” – where that thing you thought was the best thing since sliced bread falls off the market with barely a whimper. And something that should never have existed sells 25 million copies and its  founder retires to St. Thomas in 6 months. 

So what does make something go “viral”?

Wharton Marketing Professor Jonah Berger has a book out about that called “Contagious”. Since I haven’t read the book yet – and probably won’t for a while – here are some excerpts from an interview with him on Knowledge@Wharton that might serve as a short-term substitute (if you’re going to find yourself in the same boat as me).

1. The science:

Knowledge@Wharton: In the book, you actually outline a framework of six principles for why things catch on, using the STEPPS acronym. Can you describe those for us and discuss how you developed them?

Berger: The books talks about the six key steps to drive people to talk and share. STEPPS is an acronym for:

  • Social currency:, It’s all about people talking about things to make themselves look good, rather than bad
  • Triggers, which is all about the idea of “top of mind, tip of tongue.” We talk about things that are on the top of our heads.
  • Ease for emotion: When we care, we share. The more we care about a piece of information or the more we’re feeling physiologically aroused, the more likely we pass something on.
  • Public: When we can see other people doing something, we’re more likely to imitate it.
  • Practical value: Basically, it’s the idea of news you can use. We share information to help others, to make them better off.
  • Stories, or how we share things that are often wrapped up in stories or narratives.

2. And, here’s an interesting example about everyone’s favorite amazing-product-and-brilliant-marketing company Apple:

Think about Apple’s headphones. It used to be that we all carried portable CD players. It was like carrying a pizza. You had to run like this, to make sure it didn’t skip. Then, they came out with these things called mp3 players. Really great technology, but they were super expensive. Is it worth adopting this new product? How do I know if it’s worth adopting this new product? If you looked around on the subway or the bus, you couldn’t tell [which products people were using] because everyone’s headphones were black. It was impossible to see what device someone was using, as opposed to another device.

But what Apple did really smartly is they used white headphones. Once you start seeing a number of people wearing white headphones, you say, “Wow. A lot of people are using this. It must be really good,” which encourages you to adopt that product as well. It’s just like if you’ve gone to a foreign city and you don’t know where to eat. How you decide? You look for a restaurant that’s full of people. It’s a totally offline example. But you assume if it’s full of people, it must be really good. Thinking about how to make the private public, particularly in an offline environment, is a great way to help your product catch on.

Find the full article here. When you get there, if you have 16 minutes, watch the video – or skip it and scroll down to the transcript. 

Aunt Jemima, Branding And It’s “Unsavory Past”

Building brands, as anyone knows, takes a lot of time. And effort. And money.

But what if a brand that’s been around for a very long time rose to prominence in a not-quite-Kosher way?

That’s the story of Aunt Jemima, PepsiCo, Quaker Oats and Pinnacle Foods, writes Claire Zillman on Fortune magazine.

So what’s going on?

In a class action lawsuit, D.W. Hunter and Larnell Evans claim that PepsiCo Inc., its subsidiary Quaker Oats Co. (which sells Aunt Jemima syrup), and Pinnacle Foods (which makes Aunt Jemima frozen pancakes) schemed to deny that their great grandmother, Anna Short Harrington, had worked for Quaker Oats while refusing to pay her royalties for 60 years, as products bearing her image brought in millions of dollars in sales.

The lawsuit alleges that Quaker Oats recruited Harrington as she cooked pancakes at the New York State Fair, after which the company used her recipes and trademarked her likeness as Aunt Jemima. A November 1935 ad in Woman’s Home Companion magazine that pictured Harrington’s likeness in a red bandana appeared with the title “Let ol Autie sing in yo’ kitchen”—a headline that the plaintiffs say capitalized on Harrington’s Southern accent and distinct dialect, which stems from the Gullah Geechee culture that was prevalent in South Carolina.

“Throughout the 1930s, the bulk of Aunt Jemima advertising continued to concentrate on the romantic world of ‘plantation flavor,’” the lawsuit says.

More damagingly, for the brand, Claire adds:

Indeed, the Aunt Jemima character has long come under fire for its racist past. In a 2007 interview with NPR, Maurice Manring, author of Slave in a Box: The Strange Career of Aunt Jemima, said that the marketing of Aunt Jemima came of age in an era when middle-class housewives were not able to employ black maids as easily as they once did. The ads targeted the nostalgia for those earlier days. “You can’t have Aunt Jemima today but you can have her recipe and that’s the next best thing,” Manring said, explaining the ads. “And so what we’re talking really about is trying to ease the transition from having someone do something for you to doing it yourself, and that’s where the slavery nostalgia was particularly effective,” he said.

That’s pretty reprehensible…But will the companies settle?

Not sure about the $2B that the lawsuit wants, but maybe at a much lower point – something that just about offsets the cost of rebranding and any negative publicity resulting from a potentially embarrassing lawsuit. Maybe…we shall see in the not too distant future, I think. 

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