XBox 360 marketing still has a ways to go

Business Week has an unscientific online poll asking if an XBox 360 is on your holiday shopping list. The results are interesting: Nearly five percent claim to already have one, but another 13 percent hope to have one by Christmas. But more interesting is the nearly 60 percent number saying that consumers are holding out for a next generation console from Sony or Nintendo. And the rest? Nearly a quarter of respondents checked the box, "Not sure. What's an XBox 360?"

Meanwhile, we're two days away from the European XBox 360 launch. My prediction: shortages in Europe will be fewer than here in the US, because of less cultural acceptance of gaming and on-line activity in general. We'll know more on Monday.

Technorati Tags: Advertising, Games, Gaming, Marketing, Merchandizing, XBox 360

FCC wants to give cable customers the ability to refuse the tyranny of too many channels

Today, the Wall Street Journal reports that the FCC is suggesting that cable companies allow consumers to buy channels a la carte instead of in bundles as they do today. Bundling, of course, has been a marketing strategy to get consumers to trade up to more services in everything from software suites to car features for years. Cable TV has been one of the biggest proponents of bundling to raise average revenue per user (ARPU) and to be able to afford large amounts of programming.

But the trend today is actually the reverse, all because of the tyranny of too much. Now companies are unbundling products to unlock hidden value. Apple's iTunes music store has been selling music by unbundled songs for 99 cents as well as by $9.99 albums. And the reality is that almost no one really subscribes to cable TV for the dust and dirt channel.

So this will be a big change for the cable industry that will challenge it just as Verizon and at&t come after them with must-lose-money TV. In my mind, there's no question that the cable companies can survive and thrive in this world, but they'll have to get a lot smarter about creating simple, smart packages rather than bloated tyranny of too much product offerings. The question is, will they?

Technorati Tags: Advertising, Broadband, Business, Communications, Digital home, Marketing, Merchandizing, Cable, SBC, Telcos, TV, Verizon

Apple's next TV-related device

While still far short of the all-in-one flat panel home theatre product I have projected in Apple's pipeline, Think Secret claims that Apple will introduce a Intel-based Mac mini Tivo-killer product at January MacWorld 2006. Sporting Apple's FrontRow technology, DVR capabilities, and an iPod dock, the product would certainly cause a stir, while validating Apple's move to Intel dual-core processors quite nicely. Following what we expect to be a killer holiday season for iPods, such an introduction would quickly cement Apple's transformation into a true consumer electronics company.

Technorati Tags: Apple, Consumer Electronics, Front Row, Intel, Marketing, DVR, TV

Do you really want to value Google's eyeballs at more than $1.3 trillion?

John Battelle has some legitimately skeptical views on Om Malik's recent Business 2.0 article on The Return Of Monetized Eyeballs. I have to agree with John. While money is presently cheap and easy to come by, audiences aren't. And when Web sites and Web logs get bought, they often lose much of their value as a destination in the process. Imagine if GE or Disney bought Google; would it have the same cachet? Would it still be just as cool a destination or place to work? I'd bet not. Owners and companies have brands, and they have to align; if they clash, visitors leave and value declines.

Still not convinced? Well, if we accept Om Malik's valuation number of $38 per monthly visitor and the fact that Google has about 1.3 billion visitors a day worldwide, that puts Google's valuation at $1.368 trillion, more than Microsoft and GE combined. I like Google, but that seems a tad on the high side, even for a marketing guy like me.

Technorati Tags: Audiences, Blogs, Business, Google, John Battelle, Marketing, Web Valuation

iPods rule holiday shopping

Reuters reports that Apple's iPod nano is the hot product for the holidays. Current projections are that Apple will sell between nine and 14 million iPods this season, garnering Apple somewhere between $1.8 and $3.5 billion for this quarter depending upon the average selling price you assume. The biggest concern is whether Apple can actually manufacture enough units to satisfy demand, a situation that Microsoft can empathize with. The big difference though, is that Apple will garner somewhere between $1 and $1.7 billion in profit from these purchases, while Microsoft will lose somewhere between $113 and $245 million on sales of its XBox 360s. I wonder who will be having the merrier Christmas?

For those that believe Wall Street to be an accurate predictor of value (I actually don't; Wall Street actually seems best at valuing past results, not future value), Apple hit a new all-time high today near $70 a share, while Microsoft remains fairly flat and well below it's five-year high. And Piper Jaffrey today noted that 2006 should be a more robust product year for Apple. Yikes. If 2005 was just an OK year for Apple -- one in which the stock appreciated 96% since June and iPod became the dominant product in digital music -- it will be interesting to see what a robust year looks like.

Technorati Tags: Apple, iPod, iTunes, Marketing, Microsoft, Music, Video iPod

Panasonic's vision of the digital home

HDBeat.com has an interesting article on Panasonic's vision of a digital home that uses flat-panel TVs to monitor energy and security features.. The house will open outside Tokyo around the beginning of the year. Since Panasonic is one of the three largest producers of plasma displays, it's not a big surprise that they are huge proponents of the idea that flat-panel displays really do change everything.

Technorati Tags: Panasonic, Digital home, Plasma, Marketing, HDTV, TV

New blog design up

You may have noticed that the Blackfriars blog is now a bit more in visual alignment with our home page. I've done extensive modifications to the template; please let me know if you find anything awry in your browser and operating system. The new template is also designed to carry a few more Google ads as well; let me know if you find them overwhelming.

Evangelism: the kind-of-new corporate marketing strategy

US News and World Report has an article about how corporate evangelists recruit customers who love to create buzz about a product. Blackfriars has seen a rise in non-traditional marketing methods such as evangelism and buzz marketing this year. Non-traditional marketing is now the third largest category of marketing spending by companies, averaging about 14% of marketing budgets. This article does a nice job of talking a bit about the right and wrong ways to approach corporate evangelism.

Technorati Tags: Buzz Marketing, Evangelism, Marketing

The Googlization of TiVO

Digital Video Recorder (DVR) maker TiVO has announced it will provide a service that allows users to search for and view TV ads. This is a brilliant idea, comparable to that of Google when it decided to launch AdWords. It also allows TiVO to offer pay-per-view advertising comparable to that of Google's pay-per-click model. And just as Apple is beginning to monetize the value of previously free movie videos by selling them online, TiVO has the opportunity to do the same thing with TV commercials.

This move along with TiVO's service to move TiVO content to Video iPods could turn around its business once and for all. Note that the launch date is early next year. The obvious time to do this is before the Super Bowl. If they do that, all of us who watch the game just for the ads won't have to even see the game any more.

If you want to get a clear vision of how important this type of adverising move is, I encourage you to read John Battelle's book, "The Search: How Google and Its Rivals Rewrote the Rules of Business and Transformed Our Culture" He also has an excellent blog as well talking about the importance of search and his concept of the database of intentions. Will TiVO become the next compiler of such a database for video? And will Google end up buying them in the end? I'm betting on yes to both questions.

Technorati Tags: Advertising, Apple, Apple Movies, Google, Marketing, TV, Video iPod

The Beauty of Simplicity in Business

FastCompany has a great article talking about The Beauty of Simplicity, using examples from Google to the Apple iPod. And for the consumer electronics business, they have some very interesting data:

In a 2002 poll, the Consumer Electronics Association discovered that 87% of people said ease of use is the most important thing when it comes to new technologies. "Engineers say, 'Do you know how much complexity we've managed to build in here?' But consumers say, 'I don't care. It's just supposed to work!' " says Daryl Plummer, group vice president at Gartner Group.

But the case study that gets my simplicity award is that of Philips, a company that clearly grasped the issue of the tyranny of too much and did something about it.

Strategists recognized a huge opportunity: to be the company that delivered on the promise of sophisticated technology without the hassles. Philips, they said, should position itself as a simple company. Ragnetti was dumbstruck. "I said, 'You must be joking. This is an organization built on complexity, sophistication, brainpower.' " But he and Kleisterlee responded with an even more audacious plan. Rather than merely retooling products, Philips would also transform itself into a simpler, more market-driven organization.

That initiative has been felt from the highest rungs of the organization to the lowest. Instead of 500 different businesses, Philips is now in 70; instead of 30 divisions, there are 5. Even things as prosaic as business meetings have been nudged in the direction of simplicity: The company now forbids more than 10 slides in any PowerPoint presentation. Just enough, they decided, was more.

Technorati Tags: Philips, Google, iPod, Consumer Electronics, Marketing

300,000 Xbox 360s for Europe launch

Reuters is reporting that Microsoft plans 300,000 Xbox 360s at its European launch this Friday. That's a bit shy of the 345,000 XBox 360s allocated to the US at launch. I think that means an XBox 360 will be harder to buy in Europe than it was in the US, given the overall population for the EU is larger than the US. We'll have to see if the Sold out marketing strategy works better in Europe than it did in the US. Overall, what I've been reading is that the sold out strategy is generating more dissatisfaction than positive PR.

Technorati Tags: Games, Gaming, Microsoft, Retail, XBox 360

AT&T and Verizon plan must-lose-money TV

Today's New York Times business section has a long cautionary article about AT&T and Verizon's new initiatives in distributing television. And you know what? They're right to be cautionary. Despite their massive sizes, these telco giants are companies in trouble.

Nearly 10 years later, the core business of the Baby Bells - renting phone lines - is under attack as never before, shrinking by an average of 4 percent each year over the last three years. Nearly 13 million people are forgoing land lines, relying entirely on cellphones instead, according to CTIA, a wireless-industry trade group. While the erosion has been minimized by the ownership stakes that Verizon, AT&T and BellSouth have in Verizon Wireless and Cingular, the cable companies and small independent concerns like Vonage and SunRocket are picking off thousands of customers a day with their Internet-based phone lines.

In just two years, the cable industry alone has persuaded about two million households or businesses to forsake the phone company. Cablevision has signed up more than 600,000 customers. Time Warner Cable is nearing one million accounts. And Comcast, the country's largest cable operator, with 21.5 million customers, has finally turned its marketing machine on the phone business, meaning that the pace of defections is likely to quicken.

The Baby Bells "see their land-line business as an ice cube melting in the sun right now, so they need to become a purveyor of content," said Todd Dagres, a partner at Spark Capital, a venture firm focused on media and technology.

So telco fiber seems like a natural place to go to rebuild the business. After all, fiber can deliver countless new channels of TV, new interactive capabilities, and new revenue streams right? But that's a technology solution to an unasked question. As the article notes:

Few television viewers will scurry to sign up with Verizon or AT&T because they prefer those companies' network architecture.

So what is the unasked question? Its a marketing question, namely, "What consumer problem does this offering solve?" Do consumers want 300 more channels of TV? Again, the article takes a swipe at that question:

But just how much prospective customers care about receiving hordes of niche channels - like the Gospel Music Channel and Blackbelt TV - remains unclear.

"There's also too much of a good thing," said Joseph Laszlo, an analyst at Jupiter Research. "If Verizon added the Lint and Dust Channel, they would just end up with a program guide that is difficult to navigate."

Regular Blackfriars readers will recognize this problem -- it's the tyranny of too much, and Verizon and AT&T are just trying to make it worse by me-too'ing Comcast's offerings with more channels at a lower price. And this isn't going to be a cheap wager: just Verizon plans to invest $22 billion to do so by 2010 -- money that will almost certainly never be paid back in any time frame that will benefit current stockholders. And while SBC has a more conservative investment plan, it faces the same challenges of rewiring the US to deliver on this promise.

So what can the telcos do to rebuild their businesses instead of creating a new cable competitor? They could start by exploiting using their unique assets to solve real consumer issues and do so in a way that differentiates them from cable and satellite companies. Some early initiatives could include:

• Bring high fidelity phone calls to market. With fiber networks, there is no reason to constrain phone calls to 3 KHz any more. Even today, millions of aging consumers struggle to understand people on phone calls because the high frequencies are cut off. VOIP companies like Skype already are doing this, but the Baby Bells could make it a mainstream option.


• Sell upstream bandwidth. The whole concept of ADSL was created to deal with the limited bandwidth of copper wires. With fiber, there is no reason to throttle upstream bandwidth any more. Consumers who want to run a homework server for their elementary school or stream a video to grandma would no longer have to jump through hoops -- usually involving hosting companies -- to do so if telcos start to offer symmetrical upstream bandwidth. The great thing about this service? It's one that cable and satellite companies cannot easily replicate.


• Consider selling TV shows instead of renting them. Apple is already proving the market for downloaded video programs, and South Korean consumers already have shown a willingness to pay for downloading TV shows over their fiber networks. Time demands on modern consumers have already killed appointment TV; why not profit from the need for time-shifted TV instead of trying to replicate the cable rental model? And this type of service can be delivered over existing networks today.

There's no question these types of initiatives aren't as sexy as meeting with Eiger at Disney and negotiating a content deal. But they will serve telco customers' current needs better, generate revenue earlier, and cost less to deliver than this grand vision of Baby Bell TV. And at the end of the day, isn't the public interest what the telecom business is supposed to be about?

My prediction is that these TV initiatives by the telcos are going to be about as successful as the 500 channel video-on-demand cable experiments in Florida about a decade ago. And it's all because consumers are already overwhelmed with the tyranny of too much content and not enough time. Adding more content and services doing the same thing isn't going to help.

Technorati Tags: Telcos, Verizon, Disney, SBC, Broadband, Fiber, Business, TV

Training users on Office 12

Living as I do in the Commonwealth of Massachusetts, I've been observing the dialog regarding its decision to require all state documents to be in either Adobe PDF or OpenDocument formats by 2007. That all sounds reasonable, except that Microsoft is not planning to support OpenDocument formats with its forthcoming Office 12 suite. Instead, Redmond is choosing to support its own document formats and claiming that they are a standard instead.

One of the arguments Microsoft has been making is that moving to software that supports OpenDocument formats will cost the Commonwealth millions of dollars in retraining costs for its users. Well, as it turns out, InfoWorld notes that Office 12 has its own retraining costs. In the article, Oliver Rist writes:

As stated in my preview, the new suite is packed with new features, both big and small. The graphical ribbon menu is the one that’s sure to wrinkle the brows of new users the most. Gone are the File/Edit/View drop-downs with which they’ve become familiar. Instead, they are confronted with a fat, gray morass of options and icons that are actually more efficient after users are trained how to use them, but the change can be nerve-racking for non-techie users the first time they encounter it.

Further, there are underlying features that could cause many problems. A big one is the powerful new file format. Based on XML and Zip technology, it allows users to save metadata into a document and even store multiple versions of the same document in a single file.

If you have users take advantage of this feature, you need to train them to process each document with the Finish menu option, consolidating all changes and clearing the document of unwanted comments and such. Without that, you could wind up having someone send a client every copy of a proposal from draft to final -- with markups. And because the new file format has its own menu option under Save As, it’s easy to hit it by accident.

So while moving users to OpenOffice won't be any picnic, the irony is that it may actually be more familiar (it retains those old-fashioned drop-down menus that users are familiar with) and cost less to the state to use than going with shiny new Office 12. And that's a real marketing issue for Microsoft that will replay itself in installation after installation once Office 12 is released. Massachusetts is just providing a heads up of that battle to come.

Technorati Tags: puppy, Software, Marketing, OpenDocument, OpenOffice, Office 12, Massachusetts, Microsoft

Using the long tail to sell Narnia

Also in the realm of non-traditional marketing, today's Wall Street Journal has a great article about selling Disney's new movie, The Chronicles of Narnia. Their approach? Use non-traditional marketing across many niches from evangelical Christians to elementary and middle schools. Addressing many small niches to achieve a large return should be familiar to most bloggers; it's a strategy most refer to as the long tail. This quote says it all:

"We're not going after any audience we haven't gone after before," says Oren Aviv, Disney's head of movie marketing. "The difference is that this is the first project [where] we've gone after all of them at the same time."

Technorati Tags: Advertising, Disney, Marketing, Movies, Narnia, The Long Tail

Advertisers embracing the post-mass media world

Today's Wall Street Journal Morning Brief argues that mainstream advertisers are now embracing non-traditional marketing techniques. Blackfriars has been noting this trend for a while in our research reports. In our most recent survey, we saw some companies -- specifically those who don't measure their marketing results -- dedicating nearly 18% of marketing budgets to non-traditional marketing.

So what? Well for one thing, much of this investment is at the expense of traditional advertising budgets. So if you trying to sell 30-second spots on TV or running a Madison Avenue advertising agency, this trend bodes poorly for your business. But more significantly, advertising agencies are finding themselves having to reinvent themselves in significant ways. As Bob Greenberg, CEO and chief creative director of Interpublic Group's interactive ad agency R/GA, notes in the article:

Ad agencies now have to be conversant with information architecture, he says, and they also have to be able to design e-commerce, play in the world of personalized media, and create retail environments. In other words, this boils down to an agency that creates marketing -- or a marketing experience -- that blends the strictly functional with gamelike gewgaws to draw consumers on entertainment value alone. Says Jerri DeVard, senior vice president of R/GA client Verizon: "It's not just about putting something cool out there but looking at all the metrics first."

So ad agencies have to become more technology savvy, clients need to get better metrics for how their programs are doing, and both of these groups are looking for completely new ways to reach their markets. Given that we project US companies will spend $267 billion on advertising this year -- a quarter of the $1.074 trillion being spent on marketing -- this change is going to affect a lot of companies and jobs beyond Madison Avenue.

Technorati Tags: Advertising, Marketing, Marketing Measurement, TV

Black Friday retail discounting strong

The Associated Press notes today that retailers have gotten out their mark-down pens early this year. This confirms our view from yesterday that the 412 pages of ad circulars in yesterday's Boston Globe shows that marketers aren't leaving a good Black Friday to chance. But also from the AP, we hear that despite gas prices plunging since the fall, high heating costs are causing global economic concern already. That just shows how smart retailers are to discount early and get shoppers in the stores before they get their first monster heating bill.

Technorati Tags: Advertising, Black Friday, Business, Marketing, Retail

Moore's Law and Apple's Flash RAM pre-buy

I wrote yesterday about Apple's recent pre-buying of $1.25 billion worth of flash memory through 2010. The open question is what do you use that much flash memory for?

One factor I didn't mention is that the iPod nano was made possible by the advent of 32 Gbit/4 GByte flash chips. But Moore's Law won't stand still during the period of this deal. Current belief is that we'll see 128 Gbit/32 GByte chips by the end of 2007, and one more doubling before 2010 to 512 Gbit/128 GByte chips. So think about the following form factors available at the beginning of 2008:

• A nano-sized device with 32 GBytes. This is literally one chip of memory.
• A PDA-sized device with 256 GBytes of non-volative storage. This is a gang of 8 chips.
• A laptop-sized device with about 1024 GBytes (1 TByte) of solid-state storage.. The larger form factor allows us to pack in 32 chips.

One other note: $1.25 billion is about one half the cost of a new semiconductor fabrication factory (a fab, as they are called). And this is being paid for in advance. So one can easily imagine that Apple might be asking for a unique type of flash RAM part that would give it a special edge. For example, they might be making chips that have hardware support for digital rights management of songs or movies. Or, it might include a SATA disk interface, so that the flash RAM is simply a fully journaled disk cache.

As mentioned yesterday, my low-risk guess without any more data is that this deal is about allowing Apple to create even more stylish and differentiable iPods and laptops. But don't count out the possibility that this is also about allowing Apple to build the all-in-one home theater/HDTV systems and its own IP-based TV network. Flash memory allows Apple to make amazingly thin devices, and nowhere is that going to be a bigger deal than in TV. With flat panel TVs becoming just computers with very large displays, this deal could presage a very different consumer electronics market in which Apple has already locked in a lot of the needed parts supply.

Technorati Tags: Samsung, Semiconductors, Business, Intel, Apple, iPod, Flash, Gaming

412 Black Friday advertising pages and the missing $999 plasma

The Boston Globe here in Stow, Massachusetts has arrived, and of course, within it were advertising circulars for the Friday after Thanksgiving. So, being the good marketing and advertising analyst I am, I counted them. There were 206 double-sided pieces of paper making up the circular, accounting for a grand total of 412 pages of advertising. This is apart from any advertising contained in the newspaper itself; this was simply the advertising circulars tucked inside the actual paper.

I'm only had a brief chance to look at the content of those circulars, but of most interest was the fact that I didn't see the $999 Maxent 42-inch plasma TV noted on the
Black Friday 2005 Web site. Blackfriars has projected that high heating oil and natural gas prices will stunt retail sales this year. Of course, we don't yet know how big the effect will be, but given how much advertising was in the paper today, it looks like retailers are at least hedging their bets.

Technorati Tags: Plasma, Black Friday, Advertising, Retail, TV

XBox 360 crashes noted

XBox Scene notes that a lot of early XBox 360s are exhibiting crashes playing games on default settings. The data at the Team XBox forums indicates that about 15% of XBox owners are claiming that they have defective systems. Now that's not a scientific poll; anyone can vote. But it's not a good sign.

Blackfriars noted that we had seen some rendering defects in XBox 360 systems this summer, and that Microsoft had claimed that the systems weren't fully up to final rev. Is it possible that some of the released systems are suffering the same fate?

This isn't an iPod nano scratching problem affecting one percent of systems. If anywhere close to 15% of XBox 360 systems are crashing, this is a real marketing issue for Microsoft to deal with. The question is, will they?

Let's hope the problems are really just scratched game DVDs....

Technorati Tags: Apple, Games, Gaming, Marketing, Microsoft, iPod, XBox 360

Apple instant-on computers? I don't think so, but.....

Seth Jayson over at the Motley Fool has a fascinating speculation that Apple's suddenly voracious appetite for NAND Flash RAM (that's solid state memory that doesn't go away on power down -- these are the storage chips in the iPod nano) is to build instant-on computer systems based upon Intel's Robson technology.

I'm not sure this really makes sense. Is instant-on a major marketing benefit for Apple customers? I don't know about you, but I don't reboot my Powerbook for days and often weeks at a time. When I'm not using it, it goes to sleep. When I want to use it, I open the cover and it works. Boot-up time is not one of the top 10 issues I'm always wishing Apple would work on.

Conventional wisdom is that all this flash memory is for iPod nanos and the like. That is possible. After all, projections are for Apple to sell about 14 million iPods in December alone, and current indications are that that will not be enough to satisfy demand. But given this deal runs through 2010, I don't think that's enough reason for Apple to pony up $1.25 billion in advance to guarantee flash supplies.

No, I think Seth is right, but that the consumer benefits being targeted aren't instant-on, but more physical attributes. I'm betting on a new Intel-based Powerbook without any hard disk, just flash memory. It's less than half the thickness of today's Powerbook (i.e., about 0.4 inches or so), has a tablet form factor (that would finally make use of the ink capabilities built into today's Mac OS X), and would weigh about 2 pounds or so, and have a battery life of somewhere around eight to 12 hours. As an aside, since most of the tablet is screen, it would make a fantastic movie player as well. The big value is not in the shorter boot-up time, but that Apple could make such a device incredibly thin without any disk drives. Yes, you'd need secure ways of loading movies and other media onto the device to watch them, but Apple has DRM and digital movie delivery systems (iTunes) that could handle that.

What do you think?

Technorati Tags: Apple, Consumer Electronics Show, DRM, Flash memory, iPod, iTunes, Marketing, Powerbook, Intel, Semiconductors, Steve Jobs

XBox 360 production shortages roundup

Ars Technica has a great article today on Xbox 360 production shortages. Blackfriars has been projecting that actual pre-Christmas sales will be less than 1 million for a while. That prediction is looking likelier and likelier. One particular note caught my eye in the article:

The parents were leaving the store with sad looks on their faces. This is because one employee actually said that they do not expect to receive another major shipment of Xbox 360s until February of 2006.

I was shocked when I heard that. Microsoft had intimated that they would avoid a repeat of the miserable PlayStation 2 launch by keeping a constant supply of units floating into stores. But on the ground, that's not what I'm being told by people at the stores. The mantra today is "not in time for Christmas," as employees apologetically feign sympathy with the Xbox-less. It has been said that Microsoft wanted to avoid a December spike followed by the two month slump. Right now, it looks like we're going to see a November spike followed by a 2-3 month slump.

Based upon Microsoft's comments, I had expected resupply shipments to be every one to two weeks. What this article states is that the major retailers won't see resupply shipments for months. Yikes.

On the business side, Business Week is noting that Microsoft is actually losing more than $126 per XBox 360 Premium sold. Again, that's worse than our predictions, implying that XBox 360 sales will contribute nine-digit losses to Microsoft this holiday season. Double yikes.

Meanwhile, Google has about 7,450 articles on XBox 360 today, fulfilling our media blitz prediction for this slow news week. Expect the news of the backlash around XBox 360 shortages to hit a peak about second week in December when the rest of the world-wide XBox 360 launches are complete, and US gamers start asking, "Why do they get XBoxes when I pre-ordered mine in July?"

However, since Black Friday is bearing down on us, I'm going to try to shift topics to some other in-demand products in coming blog posts. Sounds like XBox 360 shortages are getting good coverage.

Technorati Tags: Consumer Electronics Show, Games, Gaming, IBM, Marketing, Merchandizing, Microsoft, Playstation 3, Processors, Semiconductors, Sony, XBox 360

Predictions for the XBox 360 launch marketing success.

Here are my predictions for what we'll be reading about the XBox 360 launch this week. It's mostly a recap of things we've said before, but this pulls it together in one place with some color commentary. I predict:

1. Media coverage will be everywhere. The launch will get coverage from every major newspaper and media channel at this point (although I didn't see anything about it on the network TV news). But tomorrow night, you'll be seeing video clips of Bill Gates playing games with gamers at Best Buy as well as the big launch event in the desert.
2. Selling out will be a two-sided story. Just as we have predicted previously, a lot of the people in line to buy XBox 360s will go home empty-handed. While Microsoft reps will point to this as an indication of high demand, it will also show that our prediction of production limitations to be true as well. I predict now that the sold-out marketing strategy will actually backfire into more negative publicity than positive.
3. XBox 360 excitement will fade rapidly. While the 360 will get a lot of press this week, I doubt we'll see any more coverage until Christmas week or so. Why? Because to first order, no one will have one, so there really won't be anything to write about.
4. Launch backlash will be muted but real. Just as with the original Sony Playstation 2, there will be a backlash to the fact that Microsoft launched this console before there were a lot of good games for it. Yes, it is launching with 18 titles, but the target market -- hard core gamers -- are already finding many of these games wanting in terms of game play. As has been noted in periodicals as notable as the New York Post, it may take as much as a year before the game library makes it worth purchasing an XBox 360 for games instead of "first on my block" status.
5. Final sales tally for Christmas sales will be low -- just under one million. As we have noted many times previously, there is only about a month between the launch and the end of the year, and the production rate of XBox 360s just couldn't ramp up fast enough to hit a target of 1.6 to 1.8 million units by Christmas. I further predict that Microsoft will not report specific Christmas XBox 360 sales for just that reason; instead they'll provide quotes like, "demand far exceeded our expectations" and call it a day.

This said, Sony now has its work cut out for it. There are already rumors that its Spring launch of PS3 could be delayed. But knowing Sony, its history in gaming, and its luxurious time schedule in comparison to XBox 360, I still suspect it will create more of a splash on launch, if for no other reason than a large stable of well-crafted in-house games.

But even more interesting is Nintendo, the company almost everyone seems to be writing off. However, Nintendo is likely to launch its Revolution system around the same time as the PS3. Further, Nintendo has its innovative new one-handed controller and a devout following built from its devotion to games first and technology second. Because of the low expectations for Nintendo to be a competitor, the company could vastly exceed expectations with its launch and cause real competition for both Microsoft and Sony.

And the real proof of this battle is who will make money from their gaming business. We fully expect both Sony and Nintendo to make profits from their consoles, while Microsoft will lose about $75 to $100 on each one (they lose less on the Premium versions, more on the Core version). Microsoft has already set expectations that XBox 360 will not pull its gaming business out of the red next year. The big question is, if not now, when?

Technorati Tags: Games, Gaming, Marketing, Microsoft, Nintendo, Playstation 3, puppy, Sony, XBox 360

P&G develops public relations results measurement tool

Trade publication PR Week has an interesting article describing a new tool developed by Proctor & Gamble to measure PR return on investment. The tool apparently goes beyond the more typical quality scoring typically used to evaluate PR campaigns. There really isn't enough detail to know what it is and how it works, but it certainly reinforces Blackfriars view that marketing measurement is becoming a necessity for marketing professionals.

Technorati Tags: Marketing, Marketing measurement, Public Relations, PR

Google invents the shipping container data center

Robert X. Cringely does it again. This time he has a fascinating speculation on a project being built by Google to distribute Google data centers to every network peering point in self-contained shipping containers. To quote Cringley:

We're talking about 5000 Opteron processors and 3.5 petabytes of disk storage that can be dropped-off overnight by a tractor-trailer rig. The idea is to plant one of these puppies anywhere Google owns access to fiber, basically turning the entire Internet into a giant processing and storage grid.

While Google could put these containers anywhere, it makes the most sense to place them at Internet peering points, of which there are about 300 worldwide.

Why would you do this? Because you could do some very cool stuff:

Where some other outfit might put a router, Google is putting an entire data center, and the results are profound. Take Internet TV as an example. Replicating that Victoria's Secret lingerie show that took down Broadcast.com years ago would be a non-event for Google. The video feed would be multicast over the private fiber network to 300+ data centers, where it would be injected at gigabit speeds into each peering ISP. Viewers watching later would be reading from a locally cached copy. Yeah, but would it be Windows Media, Real, or QuickTime? It doesn't matter. To Google's local data center, bits are bits and the system is immune to protocols or codecs. For the first time, Internet TV will scale to the same level as broadcast and cable TV, yet still offer soemthing different for every viewer if they want it.

As for the coming AJAX Office and other productivity apps, they'll sit locally, too. Two or three hops away from every user, they'll also be completely backed-up by two to three data centers down the line. Your data never goes away unless you erase it. Your latency and system response are as low as they can possibly be made for a network app.

Regardless of whether any of this is true, some VC ought to look at funding Robert Cringley ideas. They truly are interesting.

Technorati Tags: Cringely, Google, Internet

The Wall Street Journal notes XBox 360 logistics

In today's seemingly XBox 360 launch-obsessed news cycle, the Wall Street Journal took up the drumbeat, writing about how challenging it is to manage the logistics of assembling 1,700 different parts that make up the XBox 360. Not surprisingly, one analyst has this to say toward the end, echoing Blackfriars' concern about processor supplies.

Chris Crotty, a senior analyst at research firm iSuppli Corp., says one potential chokehold on production is the custom-made IBM processor. Unlike the console's hard drive, which is commonly used in PCs and made by several different manufacturers, the processor is only available from a single source, though two factories make it. "If they were to suffer stock-outs, that would really jeopardize their momentum," Mr. Crotty says.

One other tidbit in the article was that the capacity of the two factories they have running is "tens of thousands" per day. If we then look at Microsoft's claim that it will sell about six million XBox 360's in the first six months, my guess is that tens of thousands is actually between 20,000 and 30,000. Microsoft is scheduled to add another factory early next year - but only if it has enough processors to keep those production lines running efficiently. And of course, production scheduling out of IBM's Fishkill facility is going to get interesting as they ramp up processor production for Sony's Playstation 3 and Nintendo's Revolution.

Technorati Tags: Consumer Electronics Show, Microsoft, Processors, XBox 360

XBox 360 shortage complaints and the irony of chip choices

The Seattle Post Intelligencer (is that a real word? And if not, why is it the name of a newspaper?) notes that retailers and consumers are starting to question Microsoft's launch strategy that guaranteed shortages and sold out stocks. We had noted that Microsoft was likely to have production problems last summer, and we still expect them to ship fewer than one million units before Christmas. While this will be a hot product this holiday season, I have to question how good a marketing strategy it is to market a product to customers that they can't buy.

There is a profound irony here. For nearly a decade, Apple Computer tied its fortunes to chip-makers Motorola and IBM, and the media constantly slammed the company for not being able to produce enough machines at fast enough clock rates to satisfy customers. This past year, Apple moved over to Intel, when Steve Jobs admitted that they had not been able to deliver the products he wanted because he couldn't get the chips to do it. Meanwhile, Microsoft, who had been the beneficiary of Intel's seemingly endless production capacity, decided to move to the very same chip-maker that Apple rejected. IBM is now the sole-source of processor chips for Microsoft's XBox 360. Let's hope IBM has more capacity and capability for Microsoft than it did for Apple.

Oh, and did we mention that IBM also makes the chips for Sony's Playstation 3 (although there is a second source there)?

Technorati Tags: Apple, Games, Gaming, Marketing, Microsoft, Playstation 3, Processors, Semiconductors, Sony, XBox 360

Bruce Schneier kindly analyzes the Sony DRM disaster

In this excellent piece in Wired, Bruce Schneier, well-known security sage, discusses how much of a PR, technical, and marketing disaster the Sony copy-protected CD fiasco has been. I haven't revisited this story for a few days, but I have been noticing that even the Department of Homeland Security is now involved. and that criminal prosecution is now possible (but not likely) under the cybercrime act. As Bruce notes:

More than half a million networks, including military and government sites, were likely infected by copy-restriction software distributed by Sony on a handful of its CDs, according to a statistical analysis of domain servers conducted by a well-respected security researcher and confirmed by independent experts Tuesday.

If this were a 16-year-old kid doing this, he'd be doing the perp walk down to his local courthouse, but since it is Sony, this ethics-free behavior is just marketing and damage control. And as Bruce points out, the blame doesn't stop with Sony. Almost none of the so-called security companies have done anything about this serious security breech:

McAfee didn't add detection code until Nov. 9, and as of Nov. 15 it doesn't remove the rootkit, only the cloaking device. The company admits on its web page that this is a lousy compromise. "McAfee detects, removes and prevents reinstallation of XCP." That's the cloaking code. "Please note that removal will not impair the copyright-protection mechanisms installed from the CD. There have been reports of system crashes possibly resulting from uninstalling XCP." Thanks for the warning.

Symantec's response to the rootkit has, to put it kindly, evolved. At first the company didn't consider XCP malware at all. It wasn't until Nov. 11 that Symantec posted a tool to remove the cloaking. As of Nov. 15, it is still wishy-washy about it, explaining that "this rootkit was designed to hide a legitimate application, but it can be used to hide other objects, including malicious software."

As he notes, even Microsoft resisted detecting and removing the rootkit until forced to by public opinion. Why? Because Microsoft wants to work with media companies to become the media distribution channel of choice, and it is willing to put its business interests ahead of its customers.

The bottom line: businesses and consumers need security, but it now appears that they cannot trust 1) Sony, 2) security companies, or 3) Microsoft to give it to them. And with Sarbanes Oxley breathing down their necks and making CEOs personally responsible for the authority and security of their financials, it's only a matter of time before some large Fortune 500 firm CEO says, "Enough is enough; call Steve Jobs and see what kind of deal we can get on 50,000 Apple computers." It's going to happen; the only question is when.

Technorati Tags: Apple, Communications, DRM, Marketing, Microsoft, Music, Sony, Security, Steve Jobs

Photos from the CES press preview

You can see a few photos I took of the November 15 CES preview in New York here, courtesy of Flickr.com

Technorati Tags: CES, Communications, LCD, Marketing, Gadgets

New low for 50-inch plasma prices

Admittedly, this is a refurb unit, but the Philips Electronics Outlet is selling a 50-inch plasma HDTV monitor for $1,812.99. It's a nice complement to the $999 Black Friday 42-inch plasma special. I would view these as special deals rather than a general pricing trend -- I've been looking at overall advertised prices of 50-inch plasma displays and they appear actually to be going up rather than down at this point.

Technorati Tags: HDTV, Marketing, Merchandizing, Plasma, TV

$999 plasma offer for Black Friday verified

Paul, a commenter on my prior CES post noted that BF2005.com has a $999 42-inch Maxent plasma EDTV listed on the Best Buy ad circular for Black Friday. Thanks for the heads-up, and thanks to HDBeat.com for linking to the story too. They seemed to like the "flat unit volumes, increased revenue" story that was told at the event.

Technorati Tags: Advertising, CES, Consumer Electronics Show, HDTV, Marketing, Merchandizing, Plasma, TV

Web sites selling out of ad space

Today's Wall Street Journal notes that many top Web sites are sold out of ad space and are raising rates. This simply confirms what Blackfriars has been seeing in our quarterly surveys of business executives: companies are scaling back on traditional advertising in their marketing budgets and ramping up measurable marketing initiatives, such as on-line activities. And why not? Our data shows that companies that are able to measure their marketing results allocate more money and are more satisfied with their marketing because they can prove the results they get. And with the increasing fragmentation of TV audiences and the threats posed by new downloadable video content, companies want better data on what they get for their multi-million dollar ad buys.

Technorati Tags: Advertising, Marketing, Marketing measurement, TV, Video iPod, Web, Web advertising

First bits from CES: $999 42-inch plasmas for Black Friday?

I'm still waiting for Gary Shapiro, president of the Consumer Electronics Association to speak, but I thought I'd pass on a few of the bits I've gotten from the CES preview press conference today.

Sean Wargo, the director of industry analysis for the CEA gave a great presentation on the trends in CE, which he boiled down into two nice concise bullets:

• Healthy (CE) industry
• Dreary consumers

Overall, it appears that the CE industry is headed for about 9% growth for 2005, up to $123 billion (clearly that's a projection for the holiday season). The interesting bit about that stat is that it is based upon a projection of flat unit volume. That's right: average CE purchase prices have been going up, not down.

Now I'm sure someone out there is going, "How's that?" Well, here's a clue: based upon the CEA's survey of 1,000 consumers and a second survey of 2,000 consumers through CNET, the #1 planned gift for Christmas 2005 is an MP3 player, specifically, an Apple iPod. Now in the olden days, that gift was likely to be a $50 CD player, and now it's a $300 or $400 iPod. Yes, prices are going up.

What's another big gift item? Plasma displays. Now TV sales are down this year about 5% in units. But the category in general is up about 7% in dollars because of high-priced digital TVs, preferably flat ones. The result: the CE industry is making more money on the same number of units sold.

Now what's even more curious about this behavior is that those same consumers are very pessimistic about the economy -- 61% believe that the economy is worse this year than last, while only 11% consider it better. That's the worst attitudinal result in 12 years of surveys. Know why? It's those pesky fuel prices and cost increases from the hurricanes that Blackfriars warned about last summer. So we may see serious promotions coming on Black Friday -- the Friday after Thanksgiving. Sean speculated that we may see some 42-inch plasma TVs (almost certainly third tier EDTVs) going for $999 in the circulars on Black Friday.

So there's three things to remember from CES preview so far:

2. We're spending more this Christmas for the same number of CE units
3. iPods are the #1 gifts for Christmas, and
4. Look for $999 42-inch plasma sales as a way to get consumers primed on Black Friday

Pictures and more tomorrow.

Technorati Tags: Apple, CES, Consumer Electronics Show, Games, Gaming, iPod, LCD, Marketing, Music, Plasma, TV, Video iPod, XBox 360

More Web measurement for users

Google has launched its analytics service. I've signed up for it, but now am waiting for it to collect data from the Blackfriars site. And that's the weird part about this new service -- it's not real time.

Blackfriars has been using StatCounter.com for quite a while, and it does all its analyses in real-time. So given Google's expertise in building Internet services, why doesn't it do the same?

Technorati Tags: Analytics, Google, Marketing, Web analytics

CES preview tomorrow in NYC

I will be traveling to the big apple tomorrow to attend the Consumer Electronics Show press and analyst preview event there. I'll be bringing my trusty Canon Digital Rebel with me, so I hope to get a few pictures of new gadgets we might see at CES in January. But here's a question for those feeling inclined to comment: What do you want to see introduced at CES 2006?

Technorati Tags: CES, Consumer Electronics Show, Games, Gaming, HDTV, LCD, Marketing, Merchandizing, Music, Plasma, TV

New data on XBox 360 allocations to Best Buy in the US

Gamers Reports claims to have XBox 360 allocations for Best Buy stores in the US. For those of you keeping score at home, the total allocated to Best Buy for the launch is 42,200. They also claim the first shipment total is 250,000 premiums and 95,000 cores for the entire US. Assuming that this stock is refreshed once a week (I am skeptical they have the capacity to do this, but let's assume), that's 1.3 million units for the US through Christmas. My guess though is that it will come up short of a million -- I just don't think the the IBM chip supply and the factory Microsoft has running in China really has enough capacity to reproduce the entire stock for launch every week. A more reasonable estimate would be every 10 days to 2 weeks.

Blackfriars has previously estimated that the entire production for the US through Christmas will be fewer than one million units. We continue to stand by that prediction.

Technorati Tags: Games, Gaming, Marketing, Microsoft, XBox 360

Flat panel TV changes everything

The Weekend WSJ.com has a great article on the home life changes caused by the purchase of a cool flat-screen HDTV. Having just helped some friends install a 50-inch plasma display on their wall, I have to say, it is a truly addictive technology. I predict flat panel TVs will drive some of the biggest changes in home life we have seen in years, rivaled only by the wireless home network.

Technorati Tags: LCD, 1080i, Marketing, 720p, Plasma, HDTV, 1080p

Another marketing catastrophe: the Medicare drug benefit

A front page article in the New York Times notes the profound confusion around the new Medicare drug benefit being marketed to senior citizens. We noted the issues of giving people too many choices and the analysis paralysis it would create nearly a year and a half ago in our article on the tyranny of too much. Ordinary consumers find themselves paralyzed by too much choice in toothpaste; imagine the stress created by being confronted with thirty or more plans with varying coverage of drugs (not all of which are publicized) upon which you are dependent.

Regardless of what you think of the policy, this is a marketing disaster. The only possible way to make it easy for consumers to deal with would be to publish a large comparison table of all the plans. But the insurers would never support this, and the table would be too big to comprehend anyway. And what is even worse is the fact that even if a consumer evaluates all the plans and makes the best choice for themselves, few will ever be confident that it actually was their best choice. It's the perfect lose-lose marketing plan, guaranteed to make even good customers dissatisfied with the results.

Technorati Tags: Marketing Measurement, Medicare, Tyranny of too much

Xbox 360 backwards compatibility announced

OK, this is one we got wrong. Apparently XBox 360s will be backward compatible with a couple hundred original XBox games. There are just a couple details to be aware of:

1. You will have to download an emulator for each game individually, presumably from XBox Live, and
2. You need a hard disk to run emulated games (since original XBox's had and required a hard disk).

So provided you paid your $400 for the premium XBox bundle, it sounds like you'll be able to play Halo in 720p. I have to give Microsoft credit, they figured out that XBox customers were going to be very unhappy to have to buy all their old games again.

Technorati Tags: Games, Gaming, Marketing, Microsoft, Playstation 3, Sony, XBox 360

Sony BMG pulls CD software - Yahoo! News

Nice to see that Sony finally figured out that its CD copy-protection that installs a rootkit on Windows machines was a really bad idea. Now if they can just get rid of those lawsuits and restrain themselves from trying another type of DRM with a new set of CDs.

Technorati Tags: DRM, Marketing, Music, Sony

Sony DRM infects Macintoshes as well as Windows PCs

A reader on Macintouch notes that content-protected Sony CDs not only have Windows-infecting rootkits, but also Macintosh-aware End User License Agreements and digital rights management kernel extensions:

recently purchased Imogen Heap's new CD (Speak for Yourself), an RCA Victor release, but with distribution credited to Sony/BMG. Reading recent reports of a Sony rootkit, I decided to poke around. In addition to the standard volume for AIFF files, there's a smaller extra partition for "enhanced" content. I was surprised to find a "Start.app" Mac application in addition to the expected Windows-related files. Running this app brings up a long legal agreement, clicking Continue prompts you for your username/password (uh-oh!), and then promptly exits. Digging around a bit, I find that Start.app actually installs 2 files: PhoenixNub1.kext and PhoenixNub12.kext.

Personally, I'm not a big fan of anyone installing kernel extensions on my Mac. In Sony's defense, upon closer reading of the EULA, they essentially tell you that they will be installing software. Also, this is apparently not the same technology used in the recent Windows rootkits (made by XCP), but rather a DRM codebase developed by SunnComm, who promotes their Mac-aware DRM technology on their site.

Note to Sony: despite the fact that your DRM attempts to deal with multiple platforms, it's still a bad idea to modify customer computer software.

Technorati Tags: DRM, Marketing, Music, Apple, Sony, Macintosh

The fallout from Sony Music's ill-considered DRM begins

The Register notes that the first malware that takes advantage of the security breech caused by Sony's new digital rights management on its copy-protected compact disks has just started spreading. We noted that was a bad decision earlier this week. A lawsuit has already been filed in California. And the Electronic Freedom Foundation has noted that this is one of the first compact disks to arrive with an end user license agreement (EULA) that deprives buyers of their rights to actually own the music that they paid money for.

If anyone was looking for an example of the use of technology to create a marketing disaster, this is probably a good one. Sony had better be working hard to prevent similar faux pas during its Playstation 3 launch, or Microsoft is going to take it to the cleaners. As an aside, Microsoft is already expressing its concern and wondering whether it should take some sort of action.

Yikes, what a fiasco.

Technorati Tags: DRM, Marketing, Music, Playstation 3, Microsoft, Sony

Apple improves its retail stores starting Monday

Gary over at the ifo Apple Store notes that Apple is upgrading its retail stores in three significant ways.

1. Apple will run several separate service reservation queues at Apple Genius bars. Specifically, short term jobs will scheduled and handled at the Genius bar, while more serious repairs and work will get scheduled for a Genius Room area. That should provide better and more efficient service for both types of work.
2. At least one Creative staff member and new Studio bars will be added to each store to help customers understand how to better use their Apple purchases. This will also offload work from the current Genius bar system and build more customer loyalty and satisfaction with Apple purchases.
3. Apple staff members will get new mobile point-of-sales systems. These systems will allow store staffers to scan a barcode, swipe a credit card, and complete a sale, all without dragging the customer back to a register area.

Given the huge popularity of iPods nowadays and the upcoming holiday buying season, these tweaks to the Apple retail business -- already one of the best buying experiences in consumer electronics -- will only burnish its brand and its business results.

Technorati Tags: Apple, iPod, Marketing, Merchandizing, Video iPod

CBS and NBC's video deals? No big deal yet

Om Malik has a refreshing take on NBC's and CBS's decision to allow on-demand viewing of their content with commercials I think he is right; these companies are issuing press releases to try to show Wall Street that they are dealing with the changes being driven by the iTunes Music Store and video iPods. But closer examination of those deals, namely that they don't allow viewing on a PC, don't allow viewing on portable devices, and that they require viewing of commercials, shows that they haven't yet internalized how big a deal this is going to be. Maybe when Apple announces that they are launching a video viewing service they'll get it.

Technorati Tags: Video iPod, CBS, iPod, iTunes, NBC, Sony, TV, Apple

Three million XBox 360s -- but not before Christmas

It is a busy news day. Reuters says that Xbox Chief Financial Officer Bryan Lee said in New York today that Microsoft targets sales of 2.75 million to 3 million Xbox 360 units in the first 90 days after the launch date of Nov. 22.

Now we here at Blackfriars have access to some of the most advanced technology on the planet (in this case, a calendar and a calculator), and have used that access to calculate that since there are only 32 shopping days between the launch date of November 22 and Christmas, we shouldn't really expect to see all those units get made and sold by Christmas, especially given Microsoft's "Sold Out" marketing strategy. And if Microsoft expected most of those units to be sold in the holiday season, I would be willing to bet that Lee would have said so. Our call: I believe that many of those orders will be booked, but actual deliveries by December 25 will total less than 1 million due to production constraints.

Now given that Microsoft loses something north of $100 per unit on XBox 360, this is not necessarily bad news business-wise, and it will build a backlog (at least assuming that someone sells them for close to list price instead of in $1,000 bundles). But anyone expecting XBox 360 to cut into Sony's 90 million unit installed base is going to be disappointed.

Technorati Tags: Microsoft, Games, Gaming, XBox 360, Marketing

$1,000 XBox 360 bundles at Amazon

Gadgetmadness.com notes that Amazon is listing several XBox 360 bundles priced at $999.99. Sheesh. This makes the $600 and $700 bundles at EBGames look cheap.

Technorati Tags: Microsoft, Games, Gaming, XBox 360, Marketing

Ten commandments for marketing consumer electronics

David Pogue, technology writer for the New York Times, wrote a great article last week telling consumer electronics manufacturers 10 ways to please us, the customers. It's really marketing 101, since it mostly focuses on eliminating barriers to the customer buying, using, and enjoying the product. But given the sorry state of most consumer electronics marketing, especially by PC makers (although they are not the only offenders), the article really is a must-read for anyone selling CE today.

Technorati Tags: HDTV, Consumer Electronics, Marketing

Holiday blitz begins early to avoid the coming energy crunch

Blackfriars warned this summer that retailers would have to make special efforts to get customers into stores because of high fuel prices caused by this fall's hurricanes. According to today's Boston Globe, it sounds like many retailers are doing just that. The article also notes that many retailers are using free shipping and other incentives to get consumers to spend their dollars early before the first big energy bills come.

Technorati Tags: Marketing, Katrina, Rita, Marketing, Hurricanes, Economy, Taxes, Retail, Shipping, eCommerce

Worst marketing decision of the fall: Sony's Spyware CDs

This has been in a lot of publications and blogs lately, but I have to nominate Sony for one of the worst marketing decisions of the year. It's now been documented that Sony's copy-protected CDs secretly install spyware on user PCs -- spyware which will make their machine unbootable if removed the obvious way.

This was a bad decision on so many levels. First, it is a technology attack on the people paying money to Sony for its music products, i.e., Sony's customers. It does nothing to stop professional bootleggers, who will rip the CD bits from the traditional part of the CD. Secondly, it uses an inappropriate technology -- a rootkit -- that leaves the user's PC open to other attacks. And Thirdly, the spyware employed actually uses the user's internet connection to report back on his or her music listening habits.

Sony is now reaping bad PR and brand erosion from this poor marketing judgment. At the very least, I hope that the marketing manager who decided to employ that technology is now looking for a new job; it will take Sony Music months if not years to recover from this gaffe.

Technorati Tags: Marketing, Sony, CDs, DRM, Copy Protection

Gates, Jobs, & the Zen presentation aesthetic

We've commented previously that we believe Steve Jobs to be one of the best presenters in all of business. Well, an article just appeared on memorandum.com that does a very nice job of comparing the presentation Zen of Bill Gates and Steve Jobs.

Two points from the article really hit home with me. First, was the definition of kanso, or simplicity in the Zen aesthetic:

Says artist, designer and architect, Dr. Koichi Kawana, "Simplicity means the achievement of maximum effect with minimum means."

While that may sound awfully artsy, it's a huge contrast to today's tyranny of too much in most presentations, media, commerce, and every day life. Said another way, it's a differentiating philosophy for smart marketers and communicators.

The second point made by the blog was Jobs' use of blank slides in the presentation when he wants the audience to listen to him. I have watched many Jobs' presentations, but I never really thought about the fact that these blank slides provide emphasis for his story telling.

Overall, it's a great article and one that professional presenters (i.e., most business people) should read.

Technorati Tags: Marketing, Apple, Microsoft, Steve Jobs, Bill Gates, Presentations, Communication

NHK boosts TV past the resolution of 35 millimeter film

In news last week, Japanese TV network NHK demonstrated transmission of a 4320p TV signal more than 250 kilometers. NHK has named this 7680 by 4320 pixel image-- nearly four times that of the low end of what we've termed film definition TV and about 16 times the resolution of a commercially-available 1080p display -- Super Hi-Vision. Comprising about 33 million pixels per frame, this TV signal is also about four times the resolution of 35 millimeter film.

Just a reminder to marketers: names matter when you are trying to demonstrate and publicize your latest technology. At least NHK gave it a name that's more accessible to every day people than the geeky 4320p.

Technorati Tags: NHK, HDTV, 1080p, 2160p, 4320p, Marketing, Film Definition, FDTV,

Microsoft claims multi-core processors too hard for software developers

I saw this article this morning and shook my head is disbelief. Herb Sutter, a software architect at Microsoft, opened the Fall Processor Forum complaining that multi-core processors were making PC software development too difficult. Specific comments included:

Developers who have been creating applications for servers have already cleared this hurdle, since multi-core processors and multiple-processor systems have been common in the server market for several years, Sutter said. Many of these applications have been designed with multiple software threads that can take advantage of the parallelism of these systems, he said. Client application developers, however, have been stuck in a single-threaded world, creating what Sutter called "sequential applications" for many years.

Really? I led a group of software developers in the 1980s who were building parallel applications then for systems with hundreds of processors. Similar highly parallel efforts have been available in the commercial marketplace for years in software packages such as Adobe Photoshop and Premiere, Alias Wavefront's Maya, Oracle's database systems, Apple's Final Cut Pro, Motion, and Shake, and a variety of others. True, these aren't your typical Microsoft Visual Basic development shops, but they are commercial developers who saw multiprocessor machines coming, even on the Intel platform.

Given that Intel-based multicore Mac OS X systems may be here as soon as next spring, Microsoft might want to speed up work on its Concur multi-threading system. Because you can bet that there will be Apple and Adobe multicore-capable applications running on those platforms on day one of their launch (after all, Apple had their developers designing for multiprocessor clients years ago). And if applications developed on Microsoft's platforms continue to be stuck in single-threaded thinking, users will have even more incentive to switch away from Windows next year than security and sexy design.

Technorati Tags: Microsoft, Multi-threading, Apple, Windows, Software Development, Marketing