Leasing Everything?

I heard about a pretty cool idea on the Harvard Business Review podcast today. There's a company (can't remember the name) that is basically leasing high-priced handbags to women. Women can't afford to buy more than one or two of these things but they'd like to be seen with way more than that. Leasing them allows them to use several different handbags based on the season or to match the outfit they plan to wear. The idea could easily be applied to cars as well -- you could have a convertible in the summer and an SUV in the winter.

I suppose you could also do it with a high-end snowboard and a high-end bike. Maybe an HDTV during football season? Or a BBQ during the summer?

I think this model is consistent with consumer's increasing demand for mobility. That is, I believe consumers want less stuff and more of the ability to move around; freedom is becoming more important than material items. If I'm right the economics could work for this model.

I think we're going to see a lot more leasing in the future.

Advertise and Monetize

I'm still trying to get my head around music surviving as an ad supported business and I don't think it works.

Fred Wilson, the great blogger, seems to -- he has an interesting post on it here.  

Let's take it from the top.

Advertising, a marketing activity, is a way for sellers to communicate with buyers.  Along the chain of communication there are many opportunities for people with many different skills to cash in; creative people, copywriters, distribution networks and really anyone that gets people's attention.  The problem with the last group is that, generally, those companies that get people's attention don't get it because their clientele wants to see advertisements.  They're providing them with some other form of value and they say, in return for that value you have to look at these advertisements. That's the deal.

So given this logic I suppose it makes sense that the music industry should use the ad model to monetize its product.  But doesn't this model have the same problem as the copyright model?  Technology did away with that one and won't it just do away with the ads as well?  TiVo and other ad killers are brilliant but they're only going to get smarter as the demand for avoiding ads becomes more intense.

Music (a form of art) can be reproduced and shared extremely cheaply because of technology.  Ads can also be avoided with technology.  Technology is killing both models.

So instead of searching for a way to monetize the music, artists need to realize that it can't be effectively monetized -- at least in the long run. 

Therefore you've got to start selling something else.  I say give away the music and sell interactivity -- that's a sustainable business model.  Something that people will pay for that can't reproduced.

So really, I think the songs are the ads -- the ads for the artist.  Once the consumer is hooked, then the consumer can be monetized.

The bottom line?  Everyone can hear the music but not everyone can talk to the band.

Bloomberg

Most of my friends know that I'm holding out on choosing a candidate until I'm certain that Mike isnt running. I simply can't imagine a better candidate.

After seeing Romney drop out, though, it occurred to me that Americans always seem to talk about wanting a businessman President but they never actually elect one.

This doesn't bode well for Mike.

Super Bowl Advertisers

I need to remember to post the list of companies that advertised during the Super Bowl and see what happens to their stock prices over the next 6-12 months. My theory is that these companies clearly haven't realized that broadcasting is dead and haven't embraced the new marketing - or at least they're doing it slowly.

I'll post the prices as well as the S&P 500 on the day of the game. In the meantime, here are the companies that were responsible for the top 10 ads - E-Trade had two.

Anheuser-Busch

Bridgestone

Coca Cola

Life Water (Sobe >> Pepsi Co.)

E-Trade

NFL.com

Pepsi Co.

Doritos (Pepsi Co.)

FedEx

Straight Talk Express

The next time I hear someone refer to McCain as a straight-talker I'm going to jump off a building. No politician that ever made it past town Selectman is honest or trustworthy.  Those virtues are simply not compatible with success in politics.  He may not be worse but he's definitely not better than anybody else that's running.

Music & Business Models

I've been thinking more and more about monetizing music and I have to say that I would much rather continue to pay $14 for a CD then to see the whole industry shift to an advertising model.  Supporting art with ads is depressing and just plain wrong.

I mean how far can this go?

Imagine if museums didn't charge admission?  Instead, you could get in for free but all of the art would be covered in advertising?

Salt Lake City and Online Shopping

Experian Research Services released a report the other day saying that women in Salt Lake City are more likely to shop online than women in any other metropolitan area in the United States.  Women in Laredo, Texas were the least likely to shop online. Interesting study.  But what on earth does it mean?

Microfinance

The other day I joined Kiva.org and made a couple of loans to entrepreneurs in Azerbaijan; one cafe owner and one animal trader.

What a great sentence...

Anyway, after working in the microfinance industry for two years during business school I am absolutely thrilled at the popularity of this site. 

But while Kiva is doing great things, I still think microfinance has an awful long way to go. 

The industry will never truly succeed until its investments become regulated and indexable.  Regulation and reliable indexes will allow large institutional investors to use the asset class as a way of adding additional diversity and solid returns to their portfolios.  The industry can't rely on individuals making loans simply because it's a nice thing to do (which it is by the way). 

In order to move money from the top of the developed financial world to the bottom of the developing financial world, microfinance must become a real investment for serious investors.

The Music Industry & The Long Tail

There's a brilliant post from Seth Godin today on the music industry that's worth reading a couple of times.  And not just for people that work in the music industry. Check out it here.

Here's what I think is the most powerful sentence in the entire post:

"You used to sell plastic and vinyl. Now, you can sell interactivity and souvenirs."

I've been thinking about this for a while but it's nice to finally hear an expert say it so plainly.  To me, selling copyrighted music in the digital age is like selling the Mona Lisa  -- once you've sold one copy you've sold em' all.

Knowing how quickly old industries can disappear and new opportunities can pop up, here are a couple questions that we should all ask ourselves at least once a year...

If record companies can go from being extremely profitable to being forced to sue their customers to having a superfluous product and being forced to sell souvenirs and interactivity in about a decade, what could happen to my product?  And what am I doing about it today?

Top 1,000 Blogs

Bloglines tracks the top 1,000 most trafficked blogs on a daily basis.

I know people love these lists but doesn't this conflict with the  spirit of blogs?  To me, the value of blogs is that they give every nobody a voice and provide really targeted and interesting content about really targeted and interesting things.  So if you're a left-handed vegetarian Red Sox fan living in Dubai you have a forum to talk about things that are interesting to you and meet other left-handed vegetarian Red Sox fans living in Dubai

If this is indeed the spirit of blogs, who cares which one gets the most hits?

Remarkable Advertisements

LifeLock, an identity theft protection company, has come up with a really cool ad campaign.  Basically the CEO of the company is showing the entire world his social security number -- ads in the WSJ, on their website, etc.  The idea is that he's so sure that his product works that he's not afraid to show everyone his social security number.  Check out one of their ads here. Seth Godin likes to say that to succeed you must make a product or service that is remarkable (worth making a remark about).

LifeLock's product isn't all that remarkable.  But this ad campaign is.

Facebook's Top Two Questions

What are Facebook's most valuable assets? 1.  Attention from high-value consumers. 2.  Data (behavioral, demographic and preferential) on these high-value consumers.

How should they leverage these assets to make money?

If it were me, I'd simply broker the sale of that attention and data to interested parties (advertisers that want it to sell stuff and advertisers that want to learn more about consumers).  There's no shortage of either.

But here's the catch.  Much like a real estate broker wouldn't sell your house with you knowing it, Facebook can't sell a consumer's attention or data without them knowing it. Everything is op-in and the user always gets a portion of the transaction.