NBA and NFL Locked Out

It’s not a surprise, but now it’s official: the NBA has locked out its players.  And to quote the article I just linked, it’s bad news:

“The NBA… is about to show the NFL how to conduct a truly contentious labor war and stage a lockout likely to do real damage in terms of dollars, goodwill and reputation.

The NFL was never going to miss anything meaningful.

The NBA might miss the entire 2011-12 season.”

If you’re not in the know on this, the fundamental problem is that the NBA, well, has fundamental problems.  The NFL is like Scrooge McDuck, whose biggest problem is where to put the piles of gold coins, jewels, and stacks of bills.  The players say their wallets should be where more of it goes, and the owners retort that it should stay in their treasure vaults.

The NBA’s problem is that many teams just aren’t making it.  Sure, there are accounting shenanigans, but if you’re a small market NBA team, it’s a tough business model to make work.

The sad part is that the NBA had been on a tear, after a few years of waning relevance.  A lockout now is like a person who was unemployed and almost lost their house, who finally gets a job and starts paying off all the credit card debt they racked up, and who, just as they’re breaking even, marches into the bosses office and quits because he didn’t get the raise he wanted.

The metaphor doesn’t work for so many reasons, not the least of which is that the NBA isn’t a single “person” and because for some of the teams, not playing a season is a more profitable exercise than playing a season.

If I look deeper at this, the real issue is that we are still going through the period of disruption that started with the Global Financial Crisis and won’t end for probably 5 to 10 more years.  The fundamental structures of the late 20th century and early 21st century in many places and in many ways simply don’t work, no matter what you do or how you tweak them.

I see the exact same thing, really, in the Detroit and Cleveland Orchestra strikes as I do in the NBA lockout: a 20th century business model that floated through the 2000′s because it was a last gasp of boomer-driven consumption, but now it needs fixing at a base level.  Do we need a major symphony orchestra in Detroit or an NBA team in Portland, Oregon?  Valid questions.  Of course, they’re nice to have, but is it important to save them?

Amazon Terminates Affiliate Program in California-Just Sit Back and Watch the Money Roll In, CA!

As a totally inactive Amazon affiliate and a Californian, I got two emails from Amazon yesterday.

One said this: “For well over a decade, the Amazon Associates Program has worked with thousands of California residents. Unfortunately, a potential new law that may be signed by Governor Brown compels us to terminate this program for California-based participants.”

And later in the day, the second one said this: “Unfortunately, Governor Brown has signed into law the bill that we emailed you about earlier today.  As a result of this, contracts with all California residents participating in the Amazon Associates Program are terminated effective today, June 29, 2011. Those California residents will no longer receive advertising fees for sales referred to Amazon.com.”

The crux of the issue seems to be sales tax, and whether the state of California can collect them on Amazon’s purchases.  Amazon has carefully avoided creating a ‘tax nexus’ in California for a very long time, and having online affiliates has never been considered ‘nexus’.  Until now, it appears.
In other words, Amazon’s choice comes down to letting Californians continue to be Amazon affiliates or making all California residents pay sales tax on purchases on Amazon.  That’s a no-brainer, but it’s unfortunate.  According to Amazon’s letter, the bill was put forward by ‘big box retailer’ who want to take a chunk out of Amazon’s affiliate sales.  I’m sure they’d put it differently and say that it’s unfair that they have to collect state taxes and Amazon doesn’t.

Still, as one of the godfathers of online affiliate programs (I built one of the biggest affiliate programs in the world at the time at GeoCities and signed up tens of thousands of individual affiliates for Amazon and many others), I can’t really see this doing anything much for anyone.  No one really has the breadth to replace Amazon as a go-to place for people who make a living on affiliate links, and California’s not going to realize much or any revenue from this.

In my view, it’s just bad government doing something because why not? That’s why.

Dodgers File Bankruptcy

If you haven’t heard, you will, but you can catch up here.

I feel a little too close to this to give anything resembling objective commentary, but I will say this. That it’s possible for this to happen is a good explanation of the kind of times we’re living in.  Some say the McCourts managed poorly or some  say that MLB didn’t let them do what they needed to do, and that’s expected, but whatever has happened here has happened in the past with baseball, and rarely if ever gotten here before.

We are living through the great Jump Ball, where things that seemed immovable, unbreakable and permanent can change in ways we would never believe just a few years ago.  It’s not always good, but it’s where we are.  A baseball franchise has traditionally been a license to print money.  The Los Angeles (and formerly Brooklyn) Dodgers are the team of Jackie Robinson, Sandy Koufax, Steve Garvey, Fernando Valenzuela, Vin Scully, Branch Rickey, Tommy Lasorda and a dozen others who command legendary status.  The team itself helped bring pro sports to the west coast.

The team isn’t disappearing or anything.  There’s still a tremendous organization and value embedded in it, but that this has happened is, for us here at Goldstar, sad to see.  To our friends at the Dodgers, we’re sad to hear this news, but we know better days are ahead.

Deception and Obscurity as Business Plan?

I saw this today on Ticketnews, and it’s worth a mention.  (BTW, you know what else is worth a mention if you’re in the live entertainment biz? Ticketnews itself.  It’s a great resource that gets bashed a little because, well, I don’t know why exactly, but it deserves more credit than it gets for covering a lot of ground.)

Anyway, it’s a piece about the practice that many ticket brokers have of building dummy websites that look like the websites (kinda, if you’ve never used the internet) of the venue for the tickets you’re looking for.  For example (and I could go find examples, but I’m off to a meeting in a few minutes and need to prep), a website themed in blue and white with some old-timey baseball script fonts in there saying “Los Angeles Baseball Tickets.”  Well, at a glance, it may resemble the Dodgers website, and some people get caught up in that.

It happens that in Denver, this took place at the Denver Center for the Performing, who don’t play that.  Here’s the key piece:

“The Denver Center for the Performing Arts, which operates the Buell Theatre, has received complaints from some fans who were allegedly duped into buying resold tickets at a premium from Web sites they thought were part of the official box office. As a result, the center has posted signs at the theatre drawing attention to its real Web site, according to KMGH-TV.

Please be advised that The Denver Center for the Performing Arts – denvercenter.org – is the ONLY authorized online seller of tickets for Denver Center Attractions (the Broadway touring productions) and the Denver Center Theatre Company (the resident theatre company productions),” the sign states. “Currently there are scalpers, also known as ‘second party vendors,’ selling tickets online at a rate more than double the standard price – and up. Tickets bought through these vendors MAY NOT BE VALID. You could not only be refused admission, but also lose your entire investment.”

It’s a tough time to be a secondary seller, no doubt.  People in that biz thought 2007 was just the way things were from now on, but they were very, very wrong.  Markets do correct themselves and that’s what happened. Now, they have to be extremely hard-nosed and break out those green eye-shades to look at the numbers and make some money.  Part of this, yes, can be grey to black hat shenanigans like this.

As a primary seller, my perspective is pretty liberal.  I think there’s a place for the secondary market, and not everyone in the primary side agrees with me.  Why not let someone else take the risk with your tickets?  It’s part of a free market economy, and I’m definitely in favor of that, all in all.

But, I’ve said this in many different contexts, if your business plan involves deceiving customers, even the ones in the gullible part of the market, you’re on the wrong track.  Hiding, shifting, concealing or even just making things unclear are varying degrees of working against the long-term megatrend in our society where the customer has more information and more power than ever.  If your strategy is to obscure and deceive, be prepared to move further and further out of the mainstream and into the dimwitted fringes of the market.  I’m not saying there’s no business to be done there.  After all, there’s still a business in timeshares and extended warranties.

Is it Always Good to Have an Open Kitchen?

One trend over the last 10 or 20 years in the restaurant business is toward having an open kitchen.  This is a setting, like you’ve seen in a million places, where all the cooking happens in plain sight of you, the diner.  It works because food is very personal:  It goes in your body; it’s prone to contamination; and people really like thinking about what’s in their food and how it’s prepared.

But is it always good to have an open kitchen?

I’m not really talking about restaurants here.  What I’m talking about is the interplay between openness and mystery.  Food mysteries, we do not care for.  Not really. But other kinds of mysteries, we like a lot.  For example, if you saw Mickey Mouse standing outside with his head off smoking a cigarette next to the snack bar at Space Mountain, it would probably puncture the illusion for you in such a way that it wouldn’t ever work for you again.

Yet we know that inside that outfit is a person who does need to take a break and might smoke.  Disney does a tremendous job of concealing the seams between the illusion that we enjoy and the reality that is, well, real.  It’s not an open kitchen, and we wouldn’t want one.

Here’s why I thought of this:

The NFL is, as I have said before, perhaps the most powerful live entertainment organization in the world, or at least the United States.  But despite the massive win streak the organization is on, the players and the owners are embroiled in a long and stupid murder-suicide pact of a labor dispute. Football fans, and there are armies of them, are fascinated by just about anything related to the NFL.  They’ll listen to people drone on about Brett Favre’s shenanigans or speculate on who put what newspaper article quote from a rival player up on a locker room bulletin board or even yammer on incessantly about changes to the kickoff rules.

But nobody wants to talk about the labor dispute and its ins and outs.  Nobody, nobody, nobody.  Now, ESPN and the rest have to cover it, but nobody wants to talk about it because there’s really just one question on the mind of fans: when’s it going to end and is it going to ruin the season?  (I suppose that’s a two part question, or possibly just two questions.  Anyway.)

In this case, the NFL would be better off with a closed kitchen.  I don’t mean they should clam up about the lockout.  That’d be even worse.

What I mean is that one of these professional sports leagues should take it upon itself to become the League Where No One Ever Has To Think About the Business Side of Our Business.  If I were the emperor of the NFL, I would strive, on the basis of this, to make sure that fans never, ever have to hear about the Collective Bargaining Agreement between the owners and the NFL Players Association ever again.  In 10 years, or whenever, when the new one they end up signing expires, there will be a back page item in the sports section saying, “the NFL and its players extended their collective bargaining agreement with minor modifications today a year ahead of the expiration of the current agreement.”

Preserve that mystery.  Conceal the seams in the experience.  People may want to go back stage and drink with the band, but nobody wants to go backstage and sit in the accountant’s office.

For the league that gets this, this could be a major marketing advantage.  Unfortunately, it doesn’t look like the NBA is that league.  Hockey? Baseball?  We’ll see.

“Marketing To Your Own Team”

A while back, the remarkable Andrew Warner of Mixergy asked me to do a long interview with him for his site, and I agreed. It was a ton of fun.

Then a couple days ago, someone at the 37Signals blog picked up on a specific comment I made and extended it into a larger point. Here’s the snippet:

Jim McCarthy, the co-founder of Goldstar, talks about his days working at Noah’s Bagels and recalls a corner cutting moment that revealed a deeper change in the culture there:

The culture of Noah’s began to change…There was a point where the management of Noah’s said, “Only 7% of our customers keep kosher.” But having kosher in the store means we can’t have a ham sandwich or even a turkey and cheese sandwich. So the logic went, “OK. If we lose the 7%, because we’re not kosher, we’ll replace it by selling these other things.”

I remember at the time thinking, “That’s not how it is going to work,” and saying, “That’s now how it is going to work,” and it did not, in fact work. Because you’ve taken the 7% of people who love you, think of you in a way that brings goose bumps to them, and told them to, “Go to hell.” You’ve told them to leave your store.

And more importantly, you’ve said to the employees, “Remember how we used to stand for something other than just selling bagels and cream cheese? We don’t stand for that any more.”

It’s long, but I’ll embed the interview here if you want to watch it.  (The embed looks a little fussy, so if it fails, go here to see the video instead):

Revenue Per Seat Widget

This is a widget you can use to calculate your current and potential Revenue Per Seat.

If you’ve been tuned in here for a while, you know that I talk about Revenue Per Seat a lot. I thought I’d do more than just talk about it and provide a simple tool for evaluating changes to your RPS with a few simple keystrokes. Give it a whirl and tell me what you think!

Work with Me!

Literally.

I’m looking for a Director of Customer Acquisition who is a whiz at online customer acquisition and optimization techniques.  We’ve got great momentum in this area at the moment, and I need someone who can do it and take it to the next level.  The bad news is that this person would be reporting directly to me and have to put up with my stories about the old days, when CTR on ads was 5%…

Anyway, find out more about the job description and apply.  It’s a senior level job, and my hope, candidly, is the person who comes into this role can stretch to Marketing VP in a relatively short period of time.

Pass it along if you know anyone who’s right for it, please!

What Do You Mean “Brand”?

“Brand” is one of those terms that you hear a lot if you hang out in the general vicinity of marketers.  Even non-marketers, as long as they’re vaguely involved in the selling of something, throw the term around a lot.

After listening to this for the last decade or so with a growing sense of unease, here’s what I’ve realized: most people say “brand” when they mean something else.

For example, “we’re trying to build this performer’s brand” usually really means “we’re trying to build this performer’s sales.”  There is nothing wrong with trying to build sales, but it’s not the same thing as building a brand.  Another misuse is when people talk about logos and imagery synonymously with brand, as in “we really want to get our brand out there, so we need the logo bigger.”

A brand is a distinct set of characteristics to a product, service or, yes, a person that help consumers understand what it’s for.  In other words, it’s who the product is.  Building a brand is a process of uncovering that identity, constantly adding to the truth of it, and then doing a good job of telling the resulting story.

Most of the time, if we’re truthful, the identity of a company, product or performer is nothing special, at least not the way they’re seeing it.  If that’s the case, and that entity hasn’t figured out how to accentuate the strong points of what they’re about, “building the brand” is beside the point.  If there’s nothing special about who you are, the second and third steps are irrelevant.

To say that a different way, here’s what “building a brand” is really about, in its most abstract form:

1.  Being interesting and distinct, or if you’re not naturally interesting and distinct, figuring out what about you might be interesting and distinct and putting it at the forefront,

2. Doing more and more of what makes you interesting and distinct

3. Doing a good job telling the world (in all forms) about how interesting and distinct you are.

So if part 1 isn’t there, parts 2 and 3 are a waste of your time: you don’t want to do more of something that’s boring and you don’t want to go around screaming to the world about your boring qualities.  That’s not “branding.” That’s just pushing a product.

Branding isn’t about image.  It’s about identity.