The love letter:

Dear Viacom,

You’ve entertained me for years whether it be Nikelodeon, MTV, Comedy Central, VH1, or Paramount (didn’t even realize you owned that one). As a long time viewer, someone who respects and loves the product you put out I was saddened to hear that in your first go at Google you did not succeed in exerting your intellectual property rights.

You see, I’m an informed consumer and I respect the ownership laws granted by this country. Unfortunately, with lawmakers there is often short-sightedness in the drafting. How else could a law like the Digital Millennium Copyright Act (designed to keep frivolous lawsuits from targeting internet hosts and ISPs) be utilized as a shield for a corporation that keeps illegal content on their service and servers through which they directly profit from? Sorry, I understand that it’s not Google’s fault that people upload the videos but creating the service means policing it. Google is profiting from Viacom’s content either through the additional traffic it generates (which facilitates a higher asking rate on advertising) or utilizing it in negotiations shakedowns of content holders. It’s a lot easier to bargain with someone whose content is already exposed when it comes to setting the tone of the partnership agreement.

Here’s to hoping in 5 years the Supreme Court sees things your Way Viacom.

Yours, Nick

The Hate Letter

Dear Viacom,

How is it you can be so good at creating amazing content and so terrible at serving it up to the world? I can access your content at YouTube just fine (yeah I know it shouldn’t be there). You might want to get on those take-down notices since their site doesn’t hang/ spend minutes buffering and I don’t even have to watch a commercial there.

Or better yet learn from NBC and actually post your content on Hulu ,rather than using Hulu point back to your overwhelmed site. See I don’t mind watching the commercials, I just mind the buffering time. I know Hulu is a little more appeasing than Google, who you still have that nasty back and forth legal fight with.

So in closing fix your website or I’ll just hit up YouTube.

Regards, Nick

Gotta say loving my new job, having an amazing time driving strategy for a large client. After the “vacation” its great to be thrown to the wolves and have to start executing immediately. Needless to say as always finding time for blogging is difficult when you’re consumed by other tasks in your life. I saw this today though and thought it would make a good post.

First off I’m not going to say giving to charity isn’t a good thing, but I have to look at this article and really take in what it says. I find charities to be a challenge, because of the structure and nature (including tax implications) there really isn’t an incentive to run a charity efficiently. The problem is not enough people asking how can we stretch this budget, what are our goals, how do we run this “business” in a manner that will maximize the return on investment.

I’ve in my past career life worked on these problems at a University, these are very real problems that do impact charities and educational institutions. Unfortunately, unlike businesses which are forced to address these issues many charities shift the focus onto driving more donations and endowment use.

In the end though I can’t find fault in giving, even if its an imperfect system its a necessary system; so some waste is permissible.

I’ve sounded off on this topic before. I’ll continue to be more in Viacom’s corner than Google’s so long as I can find a video any time day or night thats sitting on a Google Server that can be viewed illegally. Hiding behind the safe-harbor provision inserted into the DMCA that was designed to remove the possibility of ISPs being sued, or having to police their users rings hollow to me for Google.

There’s something to be said though for practicing what you preach, and while I’m sure Viacom’s site isn’t nearly as slathered down with content that was “borrowed” as YouTube was it makes for a compelling humorous video when you get to catch a company doing something hypocritical.

Apologies, video embedding is acting up.

http://www.youtube.com/watch?v=-1PIICmNlH0

Satire or Prediction

On February 18th 2004 the Onion a satirical online news source decided to cover a growing battle of Gillette and Schick the two powerhouses in disposable shaving. The premise was Schick had raised the stakes by introducing the Schick Quattro a 4 blade shaving system, and now Gillette with their Mach3 was in a fury to catch up.

For the full story (WARNING STRONG LANGUAGE)

F*** Everything, We’re Doing Five Blades

Gillette Raises the Stakes

Early in 2006 Gillette seemingly took a page out of the Onion and launched the Gillette Fusion 5 blade shaving system. The end product sounds remarkably similar to the joke product outlined in the satirical news article.

By squeezing in two additional blades 30% closer than the previous Mach3 setup Gillette had answered the challenge Schick had laid out, if not quite in the profanity laced way that the Onion had pushed.

Conclusion

It’s interesting at times seeing good satire that’s so chillingly accurate in its depiction of the subject matter. It’s hard to say how much information the writer had, but writing an article 2 years before the product was release is pretty compelling.

In the end with the heated battle between these two companies, as well as the high stakes (the Gillette Fusion went on to sell $1 billion) it’s not hard to imagine how much pressure Gillette was under to answer this challenge.

As always when we enter into these sorts of conversations its important to note I’m not a lawyer. Any expertise you place in me is on you, this information should be used for enlightening purposes only and you all should consult lawyers. Keep in mind outside of costing a ton of money, lawyers are generally quite useful.

So having gone through an Intellectual Property Management certification, and being a zealot for copyright holders I feel quite confident I can give an interesting look into the world of copyrights.

What is a copyright?

According to our friends over at the USPTO (who you may remember from our trademark discussion):

“Copyright is a form of protection provided by U.S. law to the authors of “original works of authorship” fixed in any tangible medium of expression.  The manner and medium of fixation are virtually unlimited.  Creative expression may be captured in words, numbers, notes, sounds, pictures, or any other graphic or symbolic media. The subject matter of copyright is extremely broad, including literary, dramatic, musical, artistic, audiovisual, and architectural works.  Copyright protection is available to both published and unpublished works.”

Wow that’s a lot to take in. The first sentence really is the most important one in that blurb though, as it identifies protected works as being original works, fixed in any tangible medium of expression. So we’ve seen how broad and powerful this protection is but why is it so important?

The Vision Behind Copyrights

This may not come up on a citizenship test, or have been a huge component of your US History class, but copyrights were a Congressional granted power via Article 1 Section 8 of the US Constitution.

“To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries”

The key our forefathers settled on for how to best further arts and science was by granting property rights to intellectual property. This was a very new concept, and has pretty much been the backbone for much of the innovation found in this country. By securing ownership rights, this enabled authors and inventors to more freely share their collected works without concern of being cheated.

What Are All the Rights granted by Copyright?

Reproduce: This right grants the copyright holder the right to reproduce or authorize another party to reproduce the work.

Adapt:This one is a little more problematic for me (think I need to look it up) basically modify, adjust format etc. Think adapting a book to a movie etc. 

Distribute: Grants the right to distribute the work through some medium. think television, movies, the internet.

Publicly Perform: A Public performance of the work, think a play or a concert.

Publicly Display: This allows a work to be displayed in a public setting. Think art, or a landmark.

Publicly Perform by means of Digital audio transmissions: Think performed via radio. this one is always cracks me up but will make sense later.

When Do 6 Rights Make a Wrong

You may be wondering right now why do we need 6 separate categories for copyrights, why not just group it together throw a heck of a lot of commas at it, have a run-on sentence (like this one), and call it a day? Because the genius of copyrights are that you can pick and choose which rights you want to grant to interested parties. One of the best examples are artists that do public works projects for free, granting the city the right to only publicly display the work; while continuing to assert their rights to the copyrighted image.

Think about this for one second, you go to Seattle and see the Space Needle for example (note I’m not entirely clear on the actual rights ownership, and privalages for this landmark so its being used as an example only). You take a photo of the landmark, and decide to reproduce it on a t-shirt as it looks amazing. If the group behind the Space Needle had only granted certain rights such as public display, and restricted others such as reproduction then you’re now infringing on their rights. 

Conclusion

While this is a massive post, its just touching the surface of copyright law, and how it impacts businesses. The reason for this article was a discussion on the last blog post surrounding Google’s side wiki. Side wiki is interesting in that it does create some tension by undermining the ability of the copyright holders to enforce the rights given under our current copyright laws.

Its going to take a little work to get this firing on all cylinders again.

In the ongoing debate over my commentary on Unions and striking an idea was championed that Unionization in some respects was the reason for GM’s fall from grace as a dominate Auto-Manufacturer. This makes perfect sense; other companies can utilize cheaper labor pools, and the auto industry is remarkably lean thereby not offering a lot of opportunities to create a high margin product to offset higher labor costs.

So why am I going to argue the Union is not to blame?

That’s easy, because monopolies are to blame!As absurd as that sounds, its exactly what I think happened and we have the laws of unintended consequences and short term thinking to blame. This idea actually isn’t mine either, go figure I heard it on a conservative talk radio show (not usually the people who champion unions).

Additionally we’ll look at product mix as a contributing factor as well.

Background on Auto Manufacturing

According to a Michigan in Brief a non-profit group dedicated to Michigan state government and public policy, at its height Michigan produced a full 25% of the entire world’s automobiles (the US was a full 75% of world’s production). My guess is that in addition to the 75% world production figure; domestic sales were probably approaching 90-95% (unfortunately I wasn’t able to dig up the number).

In effect if you bought a car in the US before 1980 most likely you bought “American”

Monopolies vs. Unions

When you have as much market power as Ford and GM did the primary concern motivating almost any decision is how do I keep “printing money”. With unions having shown a track record of striking from the late 30′s, keeping them working was the absolute top priority.

This led to a “give them what they want mentality” including fully paid hospitalization, and sick leave benefits, as well as profit sharing. Which has led to autoworkers being compensated on a level that was substantially better than their counterparts.

Without significant compensation in effect US automakers were only competing against themselves, and keeping the assembly lines rolling was the largest obstacle to profitability. With so much money flowing in both sides (employers and union leaders) acted in their short-term best interests.

Enter the Japanese

By the early 80′s Honda and Toyota were off the ground and becoming a legitimate offering stateside. The Japanese offering was cheaper, smaller, more fuel efficient, and had the perception of being more reliable as it aged. With a new competitor coming in concessions made to workers (unions) now had a substantial impact on GM, and Ford’s ability to compete with this new low cost model.

Compounding union wages was the the Japanese auto manufacturer’s mastery of the “Just in Time” manufacturing approach of stocking inventory which reduced costs by maintaining leaner inventory levels.

It didn’t take long for Japan to supplant the United states as the largest producer of vehicles in the world, a distinction they maintained until 1992.

Product Mix

It also almost seems as if US auto manufacturers have been 1 step behind in every trend in the automotive world outside of SUVs since the 80′s. The fuel efficient car has never been a mainstay focus of the US based product lineup the way it has been with Honda and Toyota.

An indifference to the rising price of gasoline by leveraging a product mix with better feul economy has been a glaring issue. One could even argue it was the product mix, as well as the financial crisis that has put all of these companies on death’s door. At the height of Oil costs in 2007-08 SUVs and small trucks were as close to a toxic asset as you could get.

Lack of fuel economy is also one of the significant reasons Japanese cars were able to splash so largely in the US market in the early 80′s.

Take-Away: Its really easy to get away from fundamentals and deep financial analysis of your business model when you are flying high. The idea of putting the brakes on is almost counter-intuitive to a businessman, but sometimes its exactly what you should be doing. You see examples of people paying too much for a deal/merger (Google and YouTube come to mind), or of employers paying through the nose for a resource they need to  continue hitting a high growth rate.

That being said your job in a company is to ask: What is the outlook for this business? Does it make sense long term to make these concessions? Am I being a good steward for the company. In the end these are really hard questions to answer especially since Wall St. and corporate incentive structures tend to support short term growth as the goal instead of longer term sustainability.

In the case of the US car manufacturers when it came to their product mix, and employment decisions I personally have a hard time thinking someone sat down and thought about what impact these decisions would have down the road.

You know some people have a hard time grasping Supply and Demand theory. Its one of those theoretical concepts that most people have a hard time grasping.

The idea is that consumption/pricing is determined by the intersection of the supply and demand curves. The idea is that there is a fixed point that is supplied at a certain level of consumption desired. Anyone whose reservation price doesn’t align with the intersection doesn’t take the deal.

This is a bit complex. So lets simplify with an example.

Its halftime at a football game, you’ve had 2 beers, and there is a fixed number of toilets. Here’s what supply and demand looks like in that occasion:

Yes that is about 50 people in front of me waiting for the bathroom

While this isn’t a supply and demand curve, it does ground the concept in people’s minds. In this case with a fixed supply, and no real substitute its obvious there is an insatiable demand to use this restroom.

A Blue Ocean Strategy was coined by W. Chan Kim and Renee Mauborgne, I read the book its definitely worth a look.

So how would I describe a Blue Ocean Strategy? Its leaving behind the murky cut throat bloody waters to strike out in an uncharted territory where predators and competition are non-existent.

I was having lunch today and came across one such example of a Blue Ocean Strategy: Burger King

Hail to the King baby!

Got that sinking feeling

A few years ago Subway came out with a rather disruptive premise based on a man Jared Fogle who lost 245lbs. eating at the franchise. The advertising promised a healthier fast-food solution that would help customers lose weight. This in its own right was a pretty great Blue Ocean Strategy, as for years fast-food was known more for the grease than goodness.

In just a few short years traditional fast-food franchises stumbled over each other to make up ground on the health food craze.

Why Health Food?

Fast-food has become a juggernaut especially with the rise of two parents being employed at the same time, and as workers began working additional hours. Unfortunately there was a market that is harder to capture for the traditional fast-food fair…… women, who tend to be more concerned about the healthy aspects of the offering.

As all these restaurants moved to target this space, the offerings became more focused on creating offerings that appealed to women.

The King Strikes Back

With its major competitors going health crazy (which is slightly amusing given most of the offerings still are not very healthy) Burger King decided to embrace their traditional offering. Turning their marketing and branding focus towards capturing the males (the traditional audience that was now being left behind).

Viral advertising by Crispin Porter +Bogusky coupled with product offerings like the Angry Whopper, or Burger Shots completely captivated their core audience. I must say just sitting down today to my Angry Whopper with the Most Valuable Bag gimmick I definitely felt that Burger King had hit their audience.

Take Aways: Blue Ocean Strategies remind me of  a famous quote from a ballplayer from the early 1900s used to give as advice to new players “Hit ‘em where they ain’t”. We’ll see if the bet pays off for Burger King, but its defiantly a solid differentiation strategy.

Poker is a great metaphor for life. There’s a ton of ups and downs, a mixture of luck, and skill, and of course there’s a hell of a lot out of your control. I’ve selected the video below to give you an idea of what a “bad beat” is, and give an indication of how I feel right about now.

Bad beats are just a part of life.

Bad Beat: Playing your cards right, reading the situation right, having the cards in your favor, and at the last minute having the world change with a flip of the last card. Its the appearance of winning when an important piece of missing information would tell you, that you were losing.

Lets set the stage: I’m a successful Product Manager working part time at a respected company. Due to some forces in my life the overwhelming need has become going full-time. This led me to ask my manager for expanding my role within my group. After a discussion this was deemed impossible and I was invited to seek employment elsewhere within the company (a great proposition). However, a few weeks later my manager indicated the need to utilize the position I currently hold for a new candidate (as he was under the impression I’d have no problems seeking out other opportunities within the company). Finding the right position has been somewhat elusive, but I found one major opportunity.

The Opportunity: Work with a group that I have a strong track record with, have 4 people recommending me for, and whom I’ve had the opportunity to have an informal interview with. My manager’s put in a good word to these people as well, and they mentioned they would be starting their interview process in a few short weeks.

Fast forward to today:

9am: Manager wishes to speak with me. Typical good news/bad news conversation.

• Bad news: They’ve put an offer out to the candidate who will take my space
• Good news: He just spoke with the group behind the opportunity and they’re going to be interviewing me

He tells me I better nail the interview because I’m now on the clock.

9:10am: I’m in an operational meeting that is mission critical. I see an email come in from the gentleman who has the opportunity. Given the conversation with my manager, I just can’t resist seeing when my interview is.

9:11am: Yep that bad beat feeling just crept in. They’ve decided to go with another candidate without even giving me an opportunity to interview. The only position that was aligned with where I’m at, the one with all my network trained on this one target, the one I am within spitting distance with given a solid track-record of working with the group.

9:15am: I fire off an email to my manager letting him know of the unfortunate turn of events.

9:30am: I get back an email that my manager needs me to execute on my deliverables while I’m out looking for my next opportunity.

The sad thing is I knew immediately this was a bad beat. I’m analytical enough to know immediately this has nothing to do with my value, what my offer is, or anything I had any control over BUT DAMN IT SUCKS. Now I’m on the clock and I felt pretty bummed when my manager didn’t identify with how I must feel given such a terrible outcome.

How does one deal with a bad beat and keep going?

1. Understand that you played your cards right.
2. Accept its beyond your control.
3. Prove to the world the outcome was wrong, not you.

Unfortunately while these are great steps we’re all still human. So its going to take a little time for me to work through the 3 steps, but hopefully reading this post will get you thinking about your own bad beats in life.

Additionally if you’re ever in the position of having to deal with an employee who is experiencing a bad beat think about the impact it must have on them and comfort them.

Care of CreativeCommons.org and teamstickergiant

Jason Calacanis CEO of Mahalo had a recent interesting article around Apple and why someone should be opposed to them. If you haven’t read it please take a look. He’s a great business man, has some interesting points but to me has it all wrong at least on this front.

Its amazing to see someone with a 5-6 year track record of support for a company could be so upset over where they are going today. Myself I’ve never been a fan of Apple unlike Jason who has spent $20,000 in 6 years, I’ve only ever spent $120 for a used iPod Nano. That being said I’ll tell you now why he is wrong about Apple.

First Point Jason gives: “Destroying MP3 player innovation through anti-competitive practices”

Lets start by being clear the iPod wasn’t the first MP3 player on the market. Creative had a product but it wasn’t designed with the American Consumer in mind. The key was to incorporate a store, a program to manage your music, and an intuitive device design.

Next lets talk about the range of devices that are available in Asia. They’ve not been able to work with content owners (lets face facts not a lot of Intellectual Property holders are beating down the door with China with their track record of IP infringement)

Last Microsoft answered the call to build an integrated device because they saw Apple got it right. Consumers want it to just work, they don’t want 13 different parties to deal with, and they want everything easily accessable at their fingertips.

Second Point: “Monopolistic practices in telecommunications”

It seems ludicrous to blame a company for the position their business partner enjoys. Last time I checked though AT&T wasn’t even the largest US telecom Verizon is. That said the iPhone has actually held enough pull they have actually taken away some of the power of these telecoms (thats not to say Apple could have picked a better data subscription service, but Jobso wanted the $$$).

Third point: “Draconian App Store policies that are, frankly, insulting”

Requiring a distributor to carry every product is absurd. We don’t require Walmart to carry both Coke and Pepsi they choose to because of the fact it provides them a revenue opportunity. If selling Coke wasn’t in Walmart’s best interest it wouldn’t be stocked on the shelf. It seems so often we expect the internet to play by different rules than the real world but at the end of the day its just a new channel for existing products and services.

Fourth Point: “Being a horrible hypocrite by banning other browsers on the iPhone”

Business is a dirty place, and competition isn’t a gentleman’s game. When Apple piled on Microsoft it was a stone’s throw from bankruptcy with Michael Dell saying when asked about the companies future what he would do “What would I do? I’d shut it down and give the money back to the shareholders,”.

At the same time Apple enjoys the luxury of always having catered to a subsegment not mainstream. This has allowed them to navigate without anti-trust issues for the most part. Its one thing to say this is my 5% share stay out, and another to have a defacto monopoly.

Fifth Point: “Blocking Google voice Application on the iPhone”

Of all the reasons laid out this one seems the most obvious why it’s happened. You have a competitor who has a disruptive business model targeted at your device and revenue stream. Any company would make the same decision. But wait the FCC is investigating Apple for this? They also investigated Janet Jackson’s breast and almost any complaint that they receive in their office. They’re a government entity dedicated to acting on behalf of the peoples’ best interest.

So if I think Jason’s wrong why do I dislike Apple?

• I think their integrated approach is admirable but at the same time I choose choice, and a good thing we have plenty of strong competitors to give it to us (see RIM, Google, Nokia, Intel, and Microsoft)
• You will pay a premium for their products, Apple makes no bones about this (although their claim is savings or additional value through a fully integrated product)
• I personally dislike the style and business philosophy Steve Jobs has (although I respect the hell out of him)
• I don’t think they play nice with others
• My perception is they tell customers what they want/need even when the mass market begs to differ

Sorry Jason this isn’t really new behavior. Apple’s always said “Think Different” and they always meant “Think of Us”. I appreciate you as a consumer find the current delivery less than appetizing but this is what you signed up for 6 years ago when you jumped into Apple products head first. They’ll work amazing, but don’t expect the best support for an ecosystem.