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.

Smart Clothing – Gaining Momentum?

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First, our phones became smart(er). Then our cars. Soon, our homes. And very soon, our clothes as well?

Consider this excerpt from a CrunchBase email:

Athos, a smart workout clothing startup based in Redwood City, has raised $12.2 million in Series B funding from True Ventures, DCM, Social+Capital Partnership, Golden State Warriors owner Joe Lacob and NBA player Jermaine O’Neal. Athos makes flexible sensors that can be printed on workout clothing to gather information like heart rate or calories burned and communicate with a smartphone. Founded in 2012, Athos has raised nearly $15 million to date and will use the latest cash to launch its first line of wearables this Fall.

OK…so does it work, and more importantly, does it work well?

Couldn’t find any reviews yet, but seems promising. As Joshua Brustein writes on BW,

Its clothing is made from sensor-laden fabrics that sit tight against the skin, sending information about how hard each muscle is working to your phone, through a transmitter that sits in a small pouch on a shirt or pants. In addition to information about muscle groups, the company says it can also measure more commonly-tracked metrics like calories burned and heart rate.

Not 100% sure there’s a huge market for this. Especially when each item of clothing is priced around $200. Maybe there is, maybe there isn’t. But it seems the promising “use case” for true wearable clothing might be the medical market, for convalescents and seniors.

Those are the groups that need something monitoring their vitals around the clock, alerting loved ones and/or medical professionals when things are going awry, or more importantly and interestingly, before things start to go awry.

In 10 years perhaps?

 

Marriott And The Millennials

Large global companies that sell to consumers directly are in the process of making sure that they continue to be relevant to tomorrow’s buyers – the millennials, who will shape their profits and growth for the next two decades. And you can see this not just in terms of marketing and Ads but also products and platforms across diverse industries – cars, electronics, food and so on and so forth.

Marriott, which operates more than 660,000 rooms across 16 brands globally, is no different.

So what is it trying to do? Brooks Barnes writes in a highly readable NYT piece that

To win over younger business travelers — and, even more important, to keep them in the Marriott fold when they travel for leisure, particularly overseas — the energetic Mr. Sorenson (Arne Sorenson, the first non-family CEO at Marriott International – Ed.) is relying on a range of strategies.

Core hotels are getting gussied up. In September, the Chicago Marriott O’Hareunveiled $40 million worth of improvements, including a better bar, historically a Marriott weakness. (Some analysts trace that to the company’s Mormon roots.) The Detroit Marriott at the Renaissance Center begins a similar $30 million upgrade in February. The company has been trying to improve what it calls the “guest-room beauty experience” at Marriott-brand hotels — stocking bathrooms, for instance, with a Thai skin care line.

A new ad push, “Travel Brilliantly,” estimated to cost roughly $90 million over three years, reflects Mr. Sorenson’s focus on younger consumers. TV and web ads, taped at international resorts like the Bangkok Marriott Hotel Sukhumvit, intone: “This is not a hotel. It’s an idea that travel should be brilliant. The promise of spaces as expansive as your imagination.” Marriott also offers Xplor, a free smartphone app combining reservations with games; players win loyalty club points by completing challenges at virtual hotels.

“We want people to be saying, ‘Hey, do you see what Marriott just did?’ ” Mr. Sorenson said.

And it is starting new brands and not explicitly associating them with the Marriott name in some parts of the world. In others, it is trying to explicitly link the Ritz Carlton name to its Marriott owners, etc.

A terrific read, that piece.

Targeting The Un-networked Masses (5 Billion Of Them)

Facebook and a bunch of wireless carriers are getting together to make it easier for the rest of humanity (5 Billion people) to get online. 

An excerpt from Tuesday’s press release

MENLO PARK, CA, — Mark Zuckerberg, founder and CEO of Facebook, today announced the launch of internet.org, a global partnership with the goal of making internet access available to the next 5 billion people.

“Everything Facebook has done has been about giving all people around the world the power to connect,” Zuckerberg said. “There are huge barriers in developing countries to connecting and joining the knowledge economy. Internet.org brings together a global partnership that will work to overcome these challenges, including making internet access available to those who cannot currently afford it.”

Today, only 2.7 billion people – just over one-third of the world’s population — have access to the internet. Internet adoption is growing by less than 9% each year, which is slow considering how early we are in its development.

The founding members of internet.org — Facebook, Ericsson, MediaTek, Nokia, Opera, Qualcomm and Samsung — will develop joint projects, share knowledge, and mobilize industry and governments to bring the world online.

More specifically, how do they want to do it?

Vindu Goel writes on The NYT that

The immediate goals of the new coalition are to cut the cost of providing mobile Internet services to 1 percent of its current level within five to 10 years by improving the efficiency of Internet networks and mobile phone software. The group also hopes to develop new business models that would allow phone companies to provide simple services like e-mail, search and social networks for little or no charge.

On top of that, the coalition plans to optimize the amount of data needed for apps to work on cheap data plans. As an example, Vindu says a typical Facebook user on Android “consumes” 12MB a day. Facebook, as part of these efforts, wants to cut that down to 1MB.

Of course neither Facebook nor the other members of the coalition are doing it as a charitable exercise. They are doing it with the hope that as the unnetworked masses start to use the Web, their services’ usage goes up (which they would then monetize). But at the same time, the masses will also start to use and hopefully benefit from other commercial and non-commercial services. So everyone comes out ahead. 

Which is why I think this is pretty laudable. 

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