Kaiyzen Group

Apple makes great designed products and people love them for it.  Does this mean that Jobs and co should be able to just boss whomever they want around when it comes to digital media sales?

TimeOnline is running a story about Apple threatening to close down iTunes if the royalty rates are increased for digital download from 9 cents a piece to 15 cents.

This is quite a large percentage increase but if Apple wants to complain about things and threaten closure they should disclose exactly what the cost/profit structure is on their side.

If all is said and done Apple is only making 7/8 cents per song and this royalty hike is going to kill pretty much 100% of their margin, then yes, they should be complaining and trying to nock a couple cents off it.

If Apples expenses are 60/70 or even 80 cents all said done.., or god forbid less.., they should shut the hell up and eat it.  7 cents time the next billion downloads is a chunck of change to could go to more iPod billboards around the world but threatening to close down b/c of it is just them throwing another temper tantrim.

I have written before about the growing traffic of the CPG players web properties as they start to embrace digital ad solutions more.

AdAge has an article about OfficeMax and their digital site they launched for the holiday season in ‘06.  The site ElfYourself attracted an astounding 26.5 Million visitors during the holidys.  The site enables you to upload a pic your selfself and paste your face on a dancing elf body.

According to Anne Bologna, president of the agency that created the campaign, in its second year of existence the site had a 10x increase in traffic and 123 Million elves created.

These are pretty remarkable numbers.  Just as with the CPG guys, its impressive to see big brands be able to leverage their vast audience and drive what adds up to a TON of traffic when measured against the average consumer site.

When they are valued, especially in VC/investment scenarios, consumer internet sites typically garner most or all of their evaluation on the number of unique monthly users.  If you have created a site that is getting 500K-1 Million visitors, and have ANY sort of revenue model, including the dreaded AdSense only even.., you have a site that is worth some moula.

This brings up two questions in my mind.

1) If a consumer site with 1 Million monthly visitors is worth, lets say a $10 Million evalutation, and they are providing some random service like videos, address book, calendar, whatever…, what is a product/brand site worth that has the same amount of traffic?

2) Given the rediculous aggregate traffic that product/brand sites are starting to generate, what are some new business opportunities for these companies to leverage their audience and make increased side income through their web properties.

For #1 who knows.., a handfull of the valutations on startups are B.S. in my book, so who knows what a product/brand site is worth, but it has to be something.  For #2 I think there is HUGE potential for these companies to make incremental income per customer/user on an anual basis.

Lets say I am a company with a brand website that gets the 1 Million users per month.  If I can figure out how to garner an incremental 10 cents per user/year…, which is absolutely nothing, than that means another $1.2 Million in revenue for just conducting business as usual while putting some together to generate that 10 cents on average.  It could be banner ads (ughhh), PPC links (meerrgghghg).., affiliate solutions (not too bad).., or something new where I provide something of value for free in exchange for the opportunity for direct marketing maybe.

Something to keep an eye on this year as more companies increase their digital budgets to move more campaigns and efforts online.

Just registered to attend an event at USF regarding Net Neutrality. Click the image or here to link to the events website.

I am kind of torn regarding this subject…, on one side you have scheming ISP and telcos, on the other you have free loader software companies .

This event will help educate me further, or just annoy the hell out of me with some of the opinions given.

For those lawyers out there, you get 6.0 MCLE credits for this, should be good.

Thumbs down for holiday sales figures.  Lots of projections and speculations on whether or not this xmas would be kind to retailers.  The numbers are in and as Cletus would say.., “thing aint look so good with dem retail totals”.

I have read multiple articles attribute the slack in sales to the shift in consumer shopping patterns.  We have the big splash on black friday right after thanksgiving, then various other bumps with the online price slash day and other big sales as xmas approaches.  AdAge has an article on this and writes how we had only 23 shopping days

There has also been a HUGE increase in gift card purchases over the years, each year greater than the previous.  This causes retailers to claim the gift cards as sales, but a lot of consumers wait until after the holidays for the post xmas sales to redeem these cards.  This is cutting into their margins when customer redeem those gift cards during the post holiday sales and the $100 gift card will get them more bang for the buck.

A posting over at TechCrunch talks about Plaxo introducing a tool.., in a private beta now.., to scrape your contacts from Facebook.  Robert Scoble, the popular sillicon valley blogger, supposedly had his Facebook account de-activated for running Plaxo’s tool and violating Facebook’s terms of service.  His account has since been re-activated.  I HIGHLY doubt the average user would have received such swift re-activation.

The TechCrunch posting already has over 70 comments.., one from myself, so this is obviously a hot topic.

I disagree with the people out there that support Facebooks stance of locking up some pieces of information and not others.., in this case they render your email address as an image so automated scripts cannot read the information.  Plaxo would have just used the Facebook API IF it were to support access to all of the contact information.

 This is SOOOOOOO hypocritical of Facebook.  It wasnt too long ago that they were touting their openess while MySpace was shutting out flash and iframe plugins from their user accounts.

Of all places where personal information is shared and exchanged, the social networks should be the ones to allow you to take your info elsewhere as you see fit.  Afterall, they respect your privacy and provide you with the tools to say whether or not strangers can access your information.

 If you compare this to the email scenario where you have a TON of contacts in your email account that you have exchanged messages with, but are not necessarily your friends.  The recent outcry about Google Reader sharing your feeds with your contacts from Gmail is a good sign about people not considering all of their email contacts to be friends to share info with, let alone private information.

Here is a screen shot of Facebook’s import tool where they will scrape your addressbooks from all of the major email portals, and some ISP’s as well:

So…, Facebook is very concerned for your privacy and control to your information when you want to pull it out of Facebook.., but should you want to add to Facebooks data set..,

Well you better read their terms of service before you get banned.

I still need to catch up on my writings from the FTC privacy event.., but just left this comment on a story over at Techcrunch on Ask releasing their Ask Eraser product.

For those of you unfamiliar with the topic, the search engines.., and all sites in general track everything you do online.  They track to provide you will a more personal experience on their sitees, tailor content, study usage of their systems.., and of course target you with better Ads.

After getting slapped on the hand by EU regulators Google lowered their data retention time on your search activities to 18 months…, immediately all other players followed suit and met or exceeded that 18 month mark.

Ask Eraser is a new feature, which was first announced back in July of this year that allows users to erase their search history any time they choose.

Techcrunch’s Nick Gonzalez isn’t too impressed with the Eraser and gave it a “Yawn”…, citing that they are a major player and the introduction of this offering wont matter because of the lack of market share.  I like Nick’s postings, but have to greatly disagree on this one.

 Comment on the story below:

Sometime in the next week I will organize my thoughts and notes from the FTC event and put together some postings.

Check this out:

It is a picture of a McDonalds advertisement on a report card…, you heard me correctly…., a report card.  Click the image for full size.

As part of the program McDonalds is paying to print the report cards in exchange to advertise.  AdAge has an article on this story.  They are also providing a free happy meal for students with good grades and no more than two absenses from school.

Overall a pretty creative program in my opinion.  AdAge estimates the cost is about two cents an impression with is pretty fantastic for the type of advertising.

Ultimately though it kind of grosses me out…, not so much that McDonalds would advertise on report cards.., but that schools would ever entertain the notion of implementing such a program.

I do particularly like the fact they are rewarding kids something for not being absent.  I was part of a business plan that made it to the semifinals of the Global Social Venture Competition a couple years back for a plan covering a “rewards programs” for the public school sector to reward kids for high attendance rates.

Most people do not realize that pretty much all of public school funding comes from the attendence levels.  Typically, schools lose between $25 - $40 per student day that kids are at school.

McDonalds needs to bust out some triple bottom line accounting on the program and show how they are benefitting school funding by encouraging the little butterballz to show up to school each day.  For the size of the school district they ran the program in…, by increasing attendance just 1%-2%, they could account for a few hundred thousand dollars in funding increases.