My wife found this news brief this morning. Since our Brand Squared division specializes in licensing, I found it interesting enough to offer some thoughts.
As you can see, it seems like most of the former "Happy Days" sitcom stars (all except Fonzie and Richie Cunningham that is) are more than a little annoyed with CBS these days. That’s the network owner of their former hit TV show "Happy Days". According to a law suit that they filed together, none of them have received a dime of licensing royalties from CBS since the show since it ended almost 30 years ago. These royalties come from merchandise such as lunch boxes, greeting cards, comic books, t-shirts, etc., that all display their likenesses on them. They claim that CBS profited immensely from sales of these products, while they made nothing. And now, they are asking for $10 million in compensation to recoup these losses.
Wow. That’s a lot of Potsie and Ralph Malph lunch box sales.
This blogger thinks that these former actors (and that’s what all of them are), have either gotten plain greedy or just gone crazy because there is no way a Happy Days licensing program would be worth that much $$$,
Does CBS owe Potsie, Ralph and Joanie some dough? You bet. They have a right to a small percentage of the royalties that were generated and taken by CBS. But, it’s hard to imagine that CBS could ever generate $10 million on its own for "Happy Days", much less for all of the hit TV shows it produced over the last 30 years. That’s just a lot of licensing money that doesn’t come so easy for one single property.
In a trade article from last year, CBS reported $340 million in annual merchandise sales to consumers. After you factor in retail markups and average royalty rates, CBS actually generates about $20 million in annual profit from all properties they license out– "Happy Days", "Survivor", "Price Is Right", "NCIS", and many more. What would "Happy Days" as a property contribute to that $20 million (when the property was in high demand)? Maybe 5%? So you have Happy Days generating $1 million in merchandise-related profit annually, when the show was at its peak. Happy Days was on for 10 years. Essentially, a forgotten supporting cast with a $10 million lawsuit seeks 100% of what CBS earned (because after all, why should the producers, writers, creators, Richie and Fonzie get a share of that revenue). One might expect that collectively, the former stars could earn upwards of 5 percent on that figure (again being generous). That would equal a combined pay-out of $50,000 among all the parties involved. Clearly, a far cry from the $10 million that is being demanded.
While the publicity surrounding this law suit might unearth other hidden pay outs that CBS (and other networks) has failed to make, it certainly won’t help these desperados collect money that just isn’t theirs. My estimates are probably off, but within the general ballpark of reality. Therefore, this blogger thinks that the Happy Days crew should put on a happy face, take their fair payout of a few dollars and drop this bogus law suit.
April 25, 2011
April 05, 2011
When bankruptcy meant failure
Chapter 11 used to have a shameful and negative connotation in corporate America. Quite simply, it meant failure through bankruptcy.
That was the past, though. For decades, many companies have willfully utilized Chapter 11 protection laws to gain a second chance. We've seen it over and over again. Those over their heads in piles of debt, or companies that simply come close to running out of cash use these bankruptcy laws to erase most (if not all) their obligations and problems.
Even though Chapter 11 filing is used as a business strategy now, it's fair to say that most in the business world still view it as a failure to succeed. That's why I find today's news of Sbarro's bankruptcy filing to be so comical. More to the point, specific comments made by its CEO about this news are just plain odd.
Let's state the facts first. The company is suffering from a serious liquidity crisis. In its current state, it couldn't afford to keep paying off loads of debt, while operating its 1000+ restaurants. What pushed it into Chapter 11 is when Sbarro's financing options died. All of this happened because of recessionary matters which also forced the company to shutter 150 stores.
The bankruptcy will allow Sbarro to shed 195 million in bad debt, coming out of bankruptcy relatively quickly, but not unscathed and certainly not completely healthy as it will owe 175 million to debtors and creditors still.
Yet, its CEO Nicholas McGrane, said in court papers earlier this week, “Sbarro is a strong company that will quickly emerge from Chapter 11 and remain very competitive."
Huh? Is that comment just a tad too optimistic considering the company's current predicament? I mean the company has run out of cash.
It also makes the company's senior management come across as pathetically too optimistic, out of touch with what readers will believe and just plain silly.
Does the company have a bright future? I'm not sure anyone knows that answer. More to the point, if this CEO wants to be taken seriously, he needs to understand an important communication strategy— choose words and tone that are both believable and fit within the current scenario he is dealing with.
We often advise clients on this very issue. I've witnessed many cases where executives just didn't understand that their overly positive statements wouldn't come across well. Often, they were edited or changed to more acceptable language. Clearly that didn't happen in the case of Sbarro's CEO. Unfortunately, it's an egregious mistake.
March 21, 2011
Will you pay up?
The New York Times will now charge money for readers to access its online version. That's a big leap of faith for any online news provider.
Will it work?
This blogger says no. Here are three simple reasons why:
1) Free - The New York Times and pretty much every other competitor has already spoiled us rotten. Content is free. We like it free. And, with so many other news providers to choose from, free trumps anything else these days.
2) Where's the unique value? Sure, The Times might have exceptional writers and does clearly offer some interesting stories and exposes. But, most of what the online version offers is also generic, national/international news and trends. These stories are often covered similarly by dozens of other news and content providers. Unless this new outlet can bring its current readers more compelling content that they can't get elsewhere, the masses simply won't pull out their credit cards and subscribe.
As I was thinking about this post, my brother made a good point yesterday on this topic. He believes that there are specific sections of the paper (like the Arts and Book Review) which fall into the exception to this rule category. That's because the Book Review Section has a following based on the distinctive types of reviews it offers. Many New York Times readers buy the paper simply to read this section because the content is hard to find elsewhere. Some audiences might subscribe simply because of that. I agree with his viewpoint. But, the amount of loyal followers here, doesn't add up to a lot.
3) Duplication - I have a regular print subscription to the paper. And, I read it online (when I am traveling). Would I buy an online subscription, thereby duplicating my subscription (and adding to my cost). Probably. But, that's because I'm in a related news business and truly need to read it. My feeling (though) is that the general universe who already pay for the print version certainly won't feel the same need and thus will not fork over the money, thereby paying double for both versions. That means this media company needs to pull in an entirely new audience of readers to pay for the online version. I'm highly skeptical that any such audience exists for this sophisticated newspaper.
The New York Times is a great news outlet and I really enjoy reading its online version. But free is what sells now (uh...slight humor). Absent of that, my belief is that the changed model will fail.
March 14, 2011
Playing chicken with fans' loyalty is dangerous
NFL owners and players are dancing with the devil right now. The end result could be ugly.
The latest: the owners are giving their all to lock out players. Now, the players union has filed an anti-trust suit right back at the owners to block this move.
There are dozens of issues on the line and none make for easy compromises. Among them, owners want more games added to the schedule and a bigger slice of revenues. Players are pushing for better free agency rights, more guaranteed money and a host of other benefits.
In the end though, the fan doesn't care. He is lost in a sea of legal mumbo jumbo and a lot of "He said, he said." And, when we simplify all the issues, the average Joe just sees the players as rich and owners as even richer. Place these issues next to the reality of our current world back drop which includes scores of jobless Americans, revolutions in the Middle East and complete devastation of life in Japan, and these two opposing football groups look pretty darn superficial and silly. Average Joe is calmly saying, "Shut up and just play the game."
Collectively, players and owners all exist in a lifestyle that is typically envied, looked up to or even romanticized by fans everywhere— that is, when the season is in full stride, players are making exciting plays and owners are providing great entertainment value. Allow for a strike, work stoppage or anything else which takes the fans' focus off of the actual week to week game and instead shines the spotlight on just how much ‘easy’ wealth these participants have, and the NFL has created recipe for a brand disaster. At that point, I can guarantee you that Average Joe won't be calm anymore.
This is nothing new. We watched Major League Baseball nearly kill itself numerous times in the 80s and 90s with various strikes. In the worst of these, it lost many disheartened fans for years (some have never returned). Looking back, one can see how these strikes take their toll. Baseball ultimately lost its prominence as America's favorite sport. Now ironically, football has taken over that envious number one position.
And in my estimation, football has a lot more to lose. These quirky fans live and die knowing that from October until early February, they can count on Sundays for one thing. Through good or bad weather, work, play or rest, it doesn't matter. On Sunday, football always reigns.
Fans will lose patience ever so quickly after one or two missed games. Take away half a season or more, and an entire group of outraged fans will take their viewing loyalties elsewhere. The NFL brand will take a hit that won't easily be recovered from.
Legal maneuvering is fine right now. But, if this battle becomes an outright war, with no end in sight, in September, beware NFL. You'll be sorely testing your fans patience and loyalty.
February 03, 2011
Has this media empire out Foxed the rest?
Yesterday, Rupert Murdoch announced his next big media move. News Corporation introduced 'The Daily,' a digital-only daily newspaper.
Delivered as a news application designed for the iPad, Murdoch is taking a bold step forward by charging a monthly subscription rate of $39. According to his comments, he believes that this new venture will position News Corporation as the digital newsstand of the future.
The concept is quite interesting and controversial because it runs counter to how people consume their online news today. Instead of the ever popular push model where free RSS feeds and subscriptions allow any and all relevant news to be pushed on a 24/7 basis, this model literally creates a digital version of the USA Today model.
Murdoch believes that a more general interest, high- resolution color digital newspaper that offers readers news and gossip on dozens of topics will greatly entice them. He also claims that 'The Daily' will be the first to seamlessly bring photos, video and interactive features together, in this new “all in one place" format.
Murdoch's initial costs for this venture are purposely low. He hopes to build sales through subscriptions over time. No doubt the partnership with Apple will help. And if he's able to build circulation numbers, then advertisers should naturally flock to his outlet as well.
Yet, I wonder if 'The Daily' is still a few years ahead of its time. I do believe that many (including this blogger) would happily subscribe to this app if it was free. But, with so much other free content available at my finger tips, what motivating factor will compel me to want to offer up my credit card for this content? Thirty nine dollars isn't a lot. It's just the difference between having to go that extra step with a payment for content, versus continue to use my favorite model– free.
In the end, I believe that 'The Daily 'will need to provide some incredible value to generate mass subscriptions in this day and age.
I applaud Murdoch's moxy and continued innovative mind set. He failed big time acquiring soon to be 'has-been' My Space a few years back. This time, he's done a complete 180 degree change by establishing a first mover status. I just believe that unless 'The Daily' is offered as part of a larger package (i.e. buy an iPad and receive a six month subscription for free), with Apple consuming the cost, it will be a long and difficult climb to grow sales for News Corp.
February 01, 2011
NBA = National Bankruptcy Association
Everyone’s heard hundreds of stories about professional athletes going broke. They spend as if money grows on trees. And, they trust far too many friends, managers and agents. Many eventually steal or betray them behind their backs and suck them dry.
Sports Illustrated’s Rick Reilly wrote this interesting, tongue-in-cheek post highlighting many more sad realities on this topic. One startling and sobering statistic got my attention, though. Over 60 percent of NBA players go broke within five years of retirement. Wow.
The first question that runs through my mind is… why won’t they ever learn? The stories are always in the news. So, how many rags to riches to rags examples do these stars need to see or read about before they actually change their behavior? Then it occurred to me that one’s behavior can only change if that person understands he is doing something wrong/harmful and then is taught how to do it better (or not at all). Understanding that point, I wonder if the NBA needs to step up here and take more of a leadership role with its players. While the league has no legal responsibility to make sure its employees don’t throw away their lives, I think an ethical example still needs to be set.
I did a little research on the NBA. This league does some great work helping kids become more educated about staying in school and away from drugs. And, it also plays a pivotal role helping players with various maturity and emotional issues they inevitably encounter as they jump from high school or college into a celebrity life in the NBA. But, I’ve yet to find any literature, information or media coverage about how the league helps on the financial literacy front. That’s really a shame.
The image of this league has consistently fallen over the last decade or so for a variety of reasons. Attendance at games and viewership has also greatly waned as the fan base demographics are now limited to more inner city, lower income consumers (versus a healthy mix of middle class and more affluent fans as well.) It’s clear that this fan base still admires these talented basketball players and views them as bona fide heroes because of what they can do on the basketball court and the image they personify. Here’s food for thought: If the NBA actually took a position by teaching its players how to save the millions of $$$ they earn, then just maybe this new found personal financial responsibility would be emulated by the fans and spill over to a part of our society that really needs this help the most.
January 19, 2011
The leak that roared
Today's guest post is by Peppercommer Matt Purdue.
It is a PR pro's nightmare and a journalist's dream come true.
The leak.
Leaks are making news at a rate not seen since Deep Throat in the 1970s. Of course, there's WikiLeaks, masterminded by the creepy Julian Assange. Today the media is hot on the story of a Swiss banker who leaked information about rich tax evaders to Assange’s brainchild. But other leaks also abound. Goldman Sachs recently announced that it was going to bar US clients and all employees from investing in Facebook because someone leaked information about the deal to the media. Goldman is rightfully concerned that all the media attention could be construed as a violation of the prohibition against publicly soliciting a private placement deal.
With the economy stagnant and mistrust of our government and financial institutions running high, leaks are bound to happen. Disgruntled individuals with an axe to grind love to spoil a mar/comm executive’s day by leaking classified data.
So what's a PR pro to do to mitigate the risk of leaks and minimize their damage? Here are some tips:
Educate and train: Regularly remind all agency and client stakeholders that anyone caught leaking sensitive information will be disciplined and face legal action.
Password protect sensitive documents: It takes about three seconds in Microsoft Word to password protect a file. That password can then be shared with only folks who need to know it.
Use a document sharing site: Instead of emailing documents, set up a password-protected mini-site (a private version of GoogleDocs) where people can upload, view and download important files. These sites also enable users to track who viewed what files and when.
Pick up the phone: Secret emails and texts have a notorious knack for ending up in the Wall Street Journal. If you don’t want to see it in print, don’t type it. If you have a sensitive issue to discuss, use your voice.
Be your own leak: Happens all the time in politics. If you have super-sensitive info to disseminate, consider setting up an exclusive with a friendly journalist before you blast to the news to the world.
Have a crisis plan: Leaks happen. There is no excuse for lacking a strategy to deal with them. Denial is usually the worst option. But if you act fast with smart messages to key media outlets, you might be able to get out in front of the leak as soon as it occurs. Keep in mind that a leaker usually provides information to only one or a few media outlets. If you go to that outlet’s competition, you may be able to bend their ear. No reporter likes being scooped.
December 20, 2010
Where everyone knows your name…
That line from the title song of the 80s sitcom “Cheers,” represents such a positive feeling to most who remember it. It means something entirely different to me, though.
Saturday was my birthday. I had a really nice day. But, I also received about a half dozen emails like the one in this caption all wishing me a happy birthday. Ecommerce sites, web vendors and other service providers are just so sweet. They all must have really caring customer service people who spend their days writing down customers’ birthdays just to send us e-cards with a smile, right? Not. Instead, the reality is that they’ve acquired every bit of data and information on our personal lives and habits. Thus, sending me a birthday email probably takes very little effort. But for some marketers, it’s a smart way to establish closer bonds with audiences they care about.
Here’s the rub about this specific one. I hate Quicken Loans. Quicken wasted my time for over four months this summer when I tried to refinance my primary mortgage. Quicken deceived me and Quicken lost me forever as a customer or someone who will ever recommend its service because at the 11th hour, this banking intermediary told me that the type of mortgage I had been accepted to receive, was now dead and buried. That’s right. I had a closing basically scheduled, when Quicken pulled the rug out from under me and said it could no longer finance this product.
I’m pretty busy. The only care I have when doing anything like this, is that the service provider is dependable and makes it simple, quick and, ultimately, shows me the money. In the end, Quicken did none of that. Ironically, one month later, I chose another mortgage broker who promised me much of the same. You know what? This time the promise was realized in just three short weeks. I had a new mortgage. It was so easy, very quick and I got the money… at a much reduced rate.
What’s the point of this post (you might be wondering)? I had put the distasteful Quicken experience behind me. Then, I received this email. Some idiot there never took me or my private information out of the Quicken database, even after I ranted and raved for a few days at them when the fiasco happened. So, because this company has reengaged me, I’ve decided to now let everyone know that I hate Quicken.
Of course there is a marketing lesson in this tale. Mass marketing without any quality control can have some very real consequences to a brand. Problems always exist when a company promises one thing in its marketing messages but delivers a totally different user experience? I think it's such a huge problem that we're actually beta testing a possible solution.
I am not a fan of this company. Many people there heard my roar. Someone should have removed me from this smiley face database before this automatic email went out. Before, I was simply done with Quicken and the brand was no better or worse for it. Now, I’m actually an anti-fan who is passing on a negative experience to anyone else interested in hearing about it.
December 09, 2010
Going global?
Every few months, I find myself in situations where the same ‘global’ questions are raised by corporate marketers to their agency partners. Just recently, this emerged at some different meetings and lunches where a few clients and prospects asked their agency partners (which included Peppercom) what their global capabilities are and/or what’s the best strategy for leveraging agencies on a global scale.
In one meeting, a few different agencies from the advertising, digital and PR world proudly touted the breadth and depth of their 30 and 75 office global network. They walked the client through global campaigns that had been launched for other clients, dazzling the client with how simple this feat was and how the same natural replication could take place on this client’s behalf. I really didn’t say too much during these conversations, because although we do have an international partner network (comprised of good like-minded agencies across the globe,) on the surface it doesn’t trump wholly owned global offices.
At the end of one of these conversations the client finally came around to me and asked why I’ve been so quiet on this matter. (She clearly is used to my never shut up attitude.) She also asked what I thought could be the best solutions for her company as it needs consistent communications and branding around the world. My answer was simple. I exclaimed that there is no silver bullet solution to leveraging agencies to do this. I further elaborated by explaining that while global agencies have a ton or resources, the reality is that most have been put together through acquisitions creating offices in different markets that specialize in quite different services and core capabilities. At that point, I could feel the tension in the air from my agency partners (one actually gave me a pretty negative smirk.) But, I was on a roll and figured it was time to talk reality here.
So I explained my experience at the ‘biggest of the bigs’ (J. Walter Thomson) as a case in point. I told her that when we needed to offer strategy and/or execution for a consumer product client in 25 markets around the world, my experience was far from positive because the Frankfurt office only had financial services people working there and the Paris office really only focused on fashion. Thus, it was almost impossible to really offer in-depth experience and knowledge that could provide value to our client’s need consistently across the globe.
Now, I was feeling completely toxic among this group (for speaking the truth). But, hey… that’s what the client asked for. Naturally, her next question was, “OK, what should we do, then?” I reiterated that there is no one stop shopping, easy answer. My suggestion was to have one lead agency enforce the strategy across the globe and find the best partners in key pockets that have the same mind set and experience to become good local partners. Some of the local partners would undoubtedly come from offices of the agencies sitting around the table (including our International Partner Network,) but we may need to go outside this group to find a few new ones in areas where real gaps exist.
Interestingly, the dynamics changed among this group at that point. This was mainly because the client was starting to think differently about her situation and what she needed to do (and everyone saw that.) Any jockeying for position as the ‘one stop global agency’ stopped (at least at that meeting,) and we all started working together to figure out which shop had what pieces to make this puzzle complete. While I don’t think that anyone there (except the client) appreciated my candid thoughts, it served to open up a valuable lesson learned for this client. Easy to implement, ‘one stop shop’ global solutions for clients simply don’t exist. (Note to all clients: If you are being sold this bag of goods now, I’d think carefully before agreeing to anything.) As I wrote, there is no simple solution. But, if a variety of agency partners are willing to truly work together using an integrated philosophy (it will take a lot of work,) but the job can still get done.
November 29, 2010
The No Asshole Rule
It was that time again. Last Thursday, we all gave thanks for the good things in our lives. But, how many of us actually gave thanks for having fewer Assholes in their lives this year?
Sorry to be so crass. But, my thinking on this isn’t original. It comes from a great book I just finished reading called, “The No Asshole Rule,” by Robert L. Sutton PhD. The book superbly articulates why organizations are filled with managers and leaders who can’t help themselves to treating others in such rude and often offensive manners. Personally, I was impressed with the book’s content, because (like most) I’ve experienced quite a few Assholes in my career, but I’ve never seen anyone provide such accurate description of all the types that exist. Each time he brought up a new one, old memories from past jobs came back to life.
Let’s see. There’s the ‘Temporary Asshole.’ This is someone who is simply having a bad day or moment, yet can’t help him/herself from beating up subordinates each time. And, there’s the much worse ‘Certified Asshole,’ who Sutton describes as a persistently nasty and destructive jerk. Those who are labeled certified, tend to display a pattern of targeting anyone who gets in his/her way by belittling, putting down, humiliating, disrespecting or oppressing them within the workplace. Sutton names a number of highly acclaimed Certified Assholes including “Chainsaw” Al Dunlap, Harvey Weinstein and former Indiana Basketball coach Bobby Knight. For obvious reasons, these Assholes are incredibly harmful to their organizations because they suck the energy and most positive feelings out of a workplace or office
I’ve known a few Certified Assholes in my time (most were actually clients versus bosses). These guys are easy to see and understand because they are always yelling. Ironically, Steve and I experienced a Certified Asshole at our former agency (he actually ran it). Although he technically didn’t yell, his constant bitching and moaning about almost anyone who got on his bad side, created a funeral-like, negative atmosphere in our office. We used to joke that once an executive worked with this guy for more than 4-5 years, he/she became a ghoul because this CEO would figuratively take his/her soul (and any will power) away forever.
What I find most interesting and scary is what Sutton refers to as the ‘Backstabbing Asshole.’ These jerks are much harder to always identify. This is mainly because on the surface they are as nice and congenial as can be. It’s only when they are feeling most insecure do they begin to insult other colleagues or initiate some well placed angst by ripping into specific victims behind his/her back. Of course, all of this is done with the thought of either finding a new way to get ahead or by laying the groundwork to push aside someone who the backstabber thinks is holding him/her back.
It’s really difficult to completely root out the backstabbers from any organization. I know throughout the last 15 years, we’ve had many. The main challenge is that these people tend to be very good at placating their bosses or making it appear they are doing their jobs really well (and, in some cases they actually do). Yet, all the while in the background they are wreaking havoc by intimidating or even threatening people who work with or for them.
In one case about a decade ago, I actually remember an Asshole who worked for us who was perfectly charming on the outside. In fact, to us she seemed like a great senior manager who really understood how to run a large group and manage many accounts. What we were slow to learn (unfortunately for our people) is that she was actually a tyrant behind the scenes. She laid down a rule with all of her direct reports that they weren’t allowed to ever speak to the practice leader (even though they technically all reported into him) and they were never given permission to ever speak to Steve or I. She also constantly berated individuals on her team and played each of them off one another so that no one was ever comfortable or felt any certainty with his/her job. It wasn’t until we started hearing rumor after rumor about this person that I called a few into my office to plainly ask about the situation. I’ll never forget how deathly scared two junior staff members were that day. You see, I have a glass office door. So, at any time this supervisor could walk by and see them speaking to me. It was only when they asked me if it was possible to move their chairs about six feet over (so no one could see them), that I realized just how bad the situation was. Needless to say, this female Mussolini supervisor was fired very soon afterwards.
Sutton writes a lot about the importance of keeping an “Asshole Free Workplace.” He actually quantifies the amount companies lose in productivity hours/$$$ each year when Assholes are let loose to roam free. I love his philosophy and want to make sure that we follow many of his principles at Peppercom. The most critical principle to follow is to actually create rules that the organization lives and dies by. But, that’s not good enough. Companies have to teach their people both how to enforce the rules (especially when very real conflicts exist) and learn how to make sure Assholes are rooted out in the hiring process by all involved.
Everyone talks about being more productive, increasing quality and just generating better results. But, my thinking is that the “No Asshole” rule can create a whole new set of organizational benefits that simply can’t be matched.
Recent Comments