Category Archives: Big Businesses

How Tidal Goes Against All Current Product Development Theories

Posted by Andy in Big Businesses, Startups

I’m not an expert in the music industry. I have no idea what the future olds for Pandora, Spotify, iTunes and now Tidal, Jay-Z’s new streaming service that describes itself as, “Introducing the first music streaming service that combines the best High Fidelity sound quality, High Definition music videos and expertly Curated Editorial.”

However, I have spent some time in the last 4 years teaching some classes on marketing new products. I lean heavily on the insight of Steve Blank, because, well he seems like a really smart guy. And Mr. Blank espouses a product development process that leans heavily on the following:
1) Finding a problem that customers have.
2) Developing hypotheses on how the customer wants that problem solved.
3) Testing that solution with as many customers as possible.

You’ll notice that all 3 principles of the process include the term, “customer.”

Tidal seems to use a completely different theory. Summarizing bullets from the Washington Post, Tidal’s offering is based on the following:
1) Consumers will develop a sense of ethics, i.e. a willingness to see musicians actually make some respectable royalties from music streaming, which they currently do not.
2) People will want exclusive content and hear directly from artists.
3) Those who subscribe to the premium service will receive higher sound quality.

Let’s compare the Tidal plan to the Steve Blank plan.
1) Is my problem that I think musicians are underpaid? Do I really care what musicians make on each song I listen to? Probably about as much as I worry that the 1st Associate Director on House of Cards can afford her rent. Or that the Copywriter on AT&T’s Barles Charkley commercial is being paid fairly by his agency.
2) And honestly, there are somewhere in the neighborhood of 3.2 billion bands in the world. if Taylor Swift or Jay-Z stick their music someplace I can’t get it, will I even notice? What problem is being solved by taking music away from my channels of choice?
3) I’d love to see the research that says, “When Andy is at work listening to music on his headphones, what he really wants is higher fidelity music for $250 a year.” Even if this is true for some people, how many? How good can music sound? And won’t I need a pair of $800 headphones to even notice?

This isn’t a bash on Tidal. It’s simply an observation. They are taking avery non-technology product management approach, and that puzzles me because I live in my own little Seattle technology bubble. Obviously with the star power they’ve assembled, the deck is stacked in their favor, so they can skip some of “Lean Startup” type principles. They’ll have great marketing, get lots of exposure and be able to test the product in real time.

More choices for music is better than less, so I hope they do well. It will be interesting to see how their product development plan works out.

Trying to Decipher MLS Transfer Rules

Posted by Andy in Big Businesses, Soccer, Sports

Here’s something about MLS I don’t quite understand. DeAndre Yedlin could be headed to Anderlecht of the Belgian League. A friend of mine who knows a ton about soccer asked this series of questions:

Is this a big step up for Yedlin? I’m sure he’d get a raise, but I’m sure he could get a raise in MLS too. But in terms of advancing his career, does it make sense to go to a second tier (or third, or fourth?) Europe league? Or should he try to get a decent MLS salary after this year, and wait until England calls And what would the Sounders get out of this? Do they get any of the transfer fee? Do they get to set the transfer fee? Are we just out of luck? And we’re full on designated players too, right? So even if we got a ton of cash, we can’t really use it, right?

Here’s what I think I know. Please correct me if you know better.

1) Whether or not the play in Belgium is better than the MLS, there’s the perception in Europe that the play in the Dutch, Turkish, Norwegian, Belgian and Portuguese leagues is better than the MLS.

2) It’s easier for a Premier League, Spanish League, German League, Italian League or French League scout to catch a game in Belgium than Seattle.

3) The top teams in all the 2nd tier Europe Leagues at least get to compete in some round of the Champions League. Anderlecht won the Belgian First Division in 2013-2014, and are one of 22 teams to have already qualified for the Final 32 of the Champions League. That’s nice exposure he wouldn’t get here.

4) The MLS technically owns all the contracts of all the players. Essentially, the MLS is a giant talent agency that hosts matches in which to show off the talent they’ve recruited. Part of their revenue model is to find cheap players and develop them into players that other teams want to buy. They need the old guys to drive fans, but the real money is buying young guys low and selling high. It’s another reason the league wants parity and would rather have all the best players split amongst the teams to get playing time rather than having some great players sitting on the Sounders bench behind Dempsey and Martins for 34 games

5) There’s some sort of revenue split between the MLS and the team who scouts and signs the player. Not sure what it is.

6) MLS sets the transfer fee. I believe the team has some input based on whether they think the team and league would generate more revenue if they held the player another year.

7) Sounders would get some cash, but all it would do is help the ownership group. We can’t reinvest it into a higher salary cap.

Bottom line, the more Yedlins the league develops, the more revenue the league makes, the more revenue the teams split, the more designated players the teams can afford to have on each roster, the higher salary cap each team can have, and the more talent we can recruit to the league, which makes it easier to get the next Yedlin to play here, etc…

Let me know if you have more insight.

 

My Report From the Seattle Arena Town Hall Meeting

Posted by Andy in Big Businesses, Favorites, Seattle, Sports, Uncategorized and tagged with

I couldn’t resist.  I needed to check out the Town Hall meeting to discuss the SODO Arena Proposal.  I had no idea what to expect.

The Town Hall was hosted by King County Councilmember Bob Ferguson, and Seattle City Councilmember Mike O’Brien. I don’t have any previous knowledge of these two gentlemen, so I was able to enter this with an open mind.

  

In a word, the event was fascinating.  I now understand why so many dumb decisions get made in City Council.  You see, there are a lot of very old, very opinionated, very uninformed people who attend these meetings as a hobby.  They have the ear of the Councilmembers.  They ask questions  that are irrelevant, obtuse, confusing and just plain non-sensical. But they show up, and their voice gets heard over silent oppositon and common sense.

However, this Town Hall was filled with 150-200 Pro-Arena supporters (to go along with maybe 50-75 against).  And thanks to Sports Radio KJR, 710Sports.com, and SportsPressNW.com informing their listeners and readers with intelligent facts and data over the last few months, the Pro-Arena members of the crowd came across way more informed, way more intelligent and way more reasonable than those against it.  In some circumstances you expected the Anti-Arena person with the microphone to follow up with, “And how do we know they REALLY landed on the moon? Were you there to see it?”

That being said, it’s clear that while the arguments against the proposal aren’t 100% sound, they are loud enough to potentially kill the deal.  And with the Seattle Mariners, Seattle Times, and Port of Seattle working as hard as they can to stop it, you can’t just assume the deal will get passed because it makes sense.  There are clearly a lot of politics in the way. If you care at all, I urge you to attend the important meeting on July 19.

But I’m not an opinion writer and I’m not an expert on this subject. so I tried as best I could to transcribe the 26 questions that the crowd was able to ask Councilmembers Ferguson and O’Brien.  And I will say I was quite impressed with the two of them.  I thought they were reasonable, well informed and bright.

I captured the main points and tried to stay unbiased in my transcription.  I couldn’t keep track of which questions Ferguson was answering and which ones O’Brien was handling, so their replies are just mashed together.  Here are all the questions and answers they went thru in about 70 minutes, in order:

1. What is wrong with the Key Arena? Why would we build a new arena in an industrial area?
The Key Arena doesn’t work for NBA basketball.  It also doesn’t work for concerts. The proposal is to build a new arena in the stadium district. We do have to look at what effect that will have on our industrial area.

2. So is this deal for a stadium in SoDo or nothing?
For this proposal, yes. Chris Hansen has made it clear he’s not interested in building anywhere else.

3. Have the football and baseball stadiums worked out?
Yes (applause). However, we will have to ask, “Does the stadium reach a tipping point?”

4. Is 18,000 people at night a real traffic issue?
We’re analyzing. Independent reviews are being done to make decision based on data.

5. I’m not a sports fan, but why can’t you use the same footprint of the KeyArena?  We could bore straight down and dig out the ground and go as deep as you wanted to. (Crowd: murmurs and disbelief)
People at city have looked at this.  Not viable according to experts. I’m not an expert so I will have to rely on what the experts say.

6. Initiative I-91 passed to make sure we have no new taxes on sports arenas.  Also, how will you backfill the lack of events at Key Arena if a new arena is built?
The City operates Key Arena at break even.  We already wonder how long we will be able to continue to do so without giant improvements.  We don’t have a plan to support those kind of improvements.  This arena plan is also to support Key Arena.  If Seattle is awarded an NBA team, it would need to play for 3 years in an improved Key Arena while new arena is being built.  Mr. Hansen has committed to making improvements to Key Arena in this case, and those improvements would remain after the team moved to the new arena.

7. How can you submit to this kind of blackmail from a private property owner when the Port of Seattle is so important to us? (Crowd venomously boos this older woman.)
I hear your point on port.  This is not blackmail, its a choice.  Reasonable minds can disagree.  The Port’s point is important.  Reviews will be done, traffic and economic impacts. This isn’t an either/ or situation.  We are hoping to get data to figure out how to make it additive.

8. I am a Building trades member. I’ve heard that port will stay quiet if they get their overpass built. It’s them doing the blackmailing.  (applause)
We are all working on the (Lander St.) overpass issue.  It would cost $200m to build.  Mr. Hansen understandably doesn’t want to pay for it. If the Lander St overpass is most important issue, we will look at it. Impact of construction jobs can’t be understated.

9. Can you walk us thru the legal process of the MOU because it suddenly appeared without the knowledge of the public.
2 execs worked with Mr. Hansen and the Council was aware of what was going on. This wasn’t a backroom deal.  The Mayor and the County Exec have the authority to work on this without a committee.  That’s why we elect Execs.

10. A) Can we stop talking about Key Arena? (applause).  B) As someone who lost a job, I understand why the port complained. But traffic studies show there’s no traffic after 4pm.  Why isn’t the port on board with this?
There can be collaboration.  Disagreements now can be healthy and there may be chance to make changes.  Collaboration is taking place.

11. Has anyone seen any data from anywhere that backs up the Port’s claim that jobs would be lost?
(Raucous applause from crowd) No answer. (Note: Every time this question was asked, the Councilmembers tippy-toed around the obvious answer they didn’t want to say out loud.  That answer is – No, there is no data.  The Port is currently scrambling to pull together a report.  According to a source I trust, the port is not exactly nimble, so getting a study together at this kind of pace is causing them all kinds of hassle.)

12. In economic terms the Key Arena is sunk cost.  Key arena can make $1, new arena can make $2 .  Key arena is an asset now.  That property can be made into anything now. But this issue should go away. (No question asked)

13.  The Martin report says east side of port will be rendered useless. (No question asked)

14. How will you protect jobs of current Key Arena employees?
We have to look at how the deal will be set up.  We will look into ways that this is not something that would hurt Key Arena employees.  It makes sense to give Key Arena employees first shot at jobs at new arena.

15. A Sports palace should fund itself.  When the UW wanted us to build them a Sports Palace we voted it down and they got it built with tax dollars anyway. (Note: That statement was incorrect. The UW raised the money themselves.) We shouldn’t raise taxes to build a new sports palace.  When the Panama Canal is expanded, 1/2 the Port’s traffic will disappear.
There should be no absolutes on these issues.  This isn’t a tax it’s a bonding issue. (Note: No one seemed to understand the Panama Canal reference.)

16. Where does the NHL fit in? What are the safeguards if we don’t get an NHL team?
It’s not accurate to say that the arena deal needs the NHL.  Mr. Hansen is focused on NBA. Potential comes down road for NHL. Likely that in the 3 years of arena being built they would pursue a NHL team.

17. Please raise hands because our elderly friends are raising theirs better than us…..  It seems clear that the port is blackmailing us.  They say the arena will cost 100,000 jobs.  Where are they getting these facts?
We shouldn’t speak negatively about port, by insinuating they are blackmailing anyone.  The decision should be grounded in real data. We’re asking for this analysis and won’t consider a deal without seeing this data.

18. Note: Jason Rubenstein then brought the house down with a fantastic monologue filled with facts, figures and emotion that came so fast an furious I couldn’t keep up.  Well done, Jason.  Well done indeed.

19.  I’m hoping the council will consider what jobs will look like in the future arena. I don’t want to lose my family wage job in Key Arena.
The MOU states that jobs in new arena will be family wage jobs. No one is looking to outsource low wage contractors to replace current Key Arena employees.

20. The seawall repair will go to vote in November.  The Kingdome was a perfectly good building  (Crowd laughs in hysterics).  If the seawall needs to go to a public vote, why can the council make the decision on the arena?  After all, a seawall is a necessity, and a stadium is not. (Note: this man was 85 years old, so I don’t want to bash him too hard on the Kingdome comment.)
The Council can issue bonds, which are funds we need to pay back in some way. There’s no revenue model to pay back seawall bonds, so we have to raise taxes to pay it back.  Thus, it has to go to vote. Arena bonds are not reliant on taxes. Now, we do need to make sure we have the security to cover the bonds, but we don’t need tax dollars to pay them back.

21. Is the city evaluating the revenue the right way? The I-91 issue.
Onsite revenues and land value issues are hard to forecast. (I’ll admit I got a little confused at the response.)

22. Port of Seattle is responsible for 194k jobs. They are the widening Panama Canal.  I’m concerned about traffic.
(Note: Both the Councilmembers were perplexed by the non-question / unclear point the person was trying to make here, so they ignored it and moved on. It appears people against the arena are really concerned about this Panama Canal issue.)

23. The Stadium district is in the most transit rich area in the Pacific NW, and the perfect place to move people in and out of a stadium WITHOUT THEIR CARS. What’s the hangup here? (applause)
Relatively few people take mass transit to sporting events. While there is good transit, there will be 6000 cars going to games.  We need to examine the issue carefully.

24. The NBA didn’t treat us well.  How much money does the NBA have and why can’t they put the money up for a new arena?
If you are asking why the NBA won’t build an arena for us, well, that issue really isn’t on the table.  I opposed the last arena deal because all residents of King County would be paying taxes.  This deal is different.  We have plenty of private-public projects. I don’t take absolutes.  I don’t believe there can’t be public involvement in an arena.  There is a significant investment from private citizens in this deal. I am sympathetic to public investment, but there is city by city competition across the country and public investment in stadiums is part of that.  There are things to work on.

25. I live in West Seattle. There is so much construction these days. I can’t get home when I want to. Is a stadium the only thing that can go into the stadium district? Why can’t the stadium go in the Rainier Valley?
This deal is for an arena in the stadium district.  That’s the only place being considered in this proposal.

26. Why is deal different for one team (NBA only) than two teams (NBA and NHL)?
The ownership group is shooting for 2 teams. If they only get one team, then the city and council are only willing to put $125MM in bonds up, not $200MM. We’re hoping to get a win-win here.

 

Was anyone else there to check it out? Would love to get your slant.

If I Was The NFL Pro Bowl Director

Posted by Andy in Big Businesses, Media, Personal, Sports

It’s been a long time since I wrote anything here.   If only there was a tool that helped people write coherent blog posts…

Well no one asked me, but here’s what I would do if I had to make something out of the NFL Pro Bowl.  Keep in mind the following items:

  • The game is atrocious
  • The NFL needs it as a way to spiff their advertisers
  • Players dig the Pro Bowl because they get bonuses for making the team
  • The game now happens on that dead Sunday between the Championship games and Super Bowl.

So here’s my dumb idea.

High Level: Make the Pro Bowl a week long television extravaganza featuring all the TV shows on the network hosting the game.  Send the producers of all that network’s shows (that make sense) over to Hawaii to film programs that feature Pro Bowl players.  Heck, you can even create shows.

Let’s say that CBS was televising the Super Bowl.  Without doing too much thinking you could have some sort of episode of:

  • Amazing Race, where a bunch of sets of teammates are competing or players get teamed with a regular person.
  • A Survivor spin off
  • A live “taping” of one or two of their sitcoms
  • Plus Pro Bowl specific hows such as a Jeopardy like game show with Linemen vs Quarterbacks. a “teammate” version of the Newlywed game,  skills competitions, etc…

All of these shows could involve Joe Fan, and reach a cross over audience.  But here’s the kicker: You get to charge new advertising dollars for NFL related shows.  Super Bowl sponsors would have more ways to extend their Super Bowl buy into earlier in the week, and companies who can’t afford Super Bowl ads would have a way to invest marketing money into the game.

And really, I don’t really care what they do with the game.  You could still play it, but instead of 3 straight hours of dreadful football, you’d have mini-bites of content from some of the shows that just aired, and some that are going to air that week.

This is a kernel of an idea, not a well thought out plan.  Would love to get your thoughts.

Occupy Seattle Described as a Poker Game

Posted by Andy in Big Businesses, Creative Writing, Politics

You won’t see this analysis written anywhere else – this content comes from part of an email chain where a bunch of people were discussing the differences between the original Occupy Wall Street and the local spin-off versions such as Occupy LA and Occupy Seattle.  It all stemmed from an LA Times article that explained it would cost Los Angeles $2.3 Million to clean up the park which had been Occupied.  I’ll keep the whole email from this anonymous person for context, but the paragraph with the poker analogy is the one I found most compelling.

Note: At this point the discussion had moved to talk about whether the movement, or the offshoots of the movement, would be successful on getting student-debts absolved.  (And no offense to puppetry and history majors.)

People take risks and develop new and improved goods and services because they believe that they will profit from it. That is at the root of our free market economic system. That is exactly what Adam Smith wrote about all those years ago. Plus, where do you think all that money comes from to pay off people’s debts (whether student loans or mortgages or bank bail outs or whatever)? Government takes in revenue through taxes. The inhabitants of a country pay the taxes. So, if one group of people want money from the government (and that is exactly what asking to have your debts payed off is- getting money from the government), in essence those people are asking other people to pay for their choices. Why should I have to pay for the choices that another person made (that is the root of the whole social contract and the obligations of citizenship)?

For example, I am OK with helping to pay for education in general- most people are. That is why we have free public K-12 education. It is an investment in the future. I am also OK with student grants for college kids who can not afford college. That also helps society and is an investment in the future. But if some guy takes out a massive loan from a private business (i.e. a bank) to fund his two years in college to get a masters degree in literature or history or puppetry or what have you, and then the guy can’t get a job with his worthless degree, why should I have to pay to get his loan written off? That guy is in essence begging money from me. He better be able to explain why and persuade me to pay off his loan, or I will not want to pay it off for him. And if his first attempt to persuade me to pay off his loan is to “occupy” the park down the street from my house and threaten to stay there until I pay for his loan, then frankly he has failed at making his case from the get go.

To put it in poker terms,  imagine if some guy at the table made big risky bets over and over, chasing long odds on flush draws hand after hand, borrowed money repeatedly from other players to buy in on more hands, and when he finally craps out and has no more money, he demands that everybody else pony up money to pay off his debts. How would you feel about that? How would you react to that? How would the other players react to that? Now imagine if that guy- rather than to try to logically explain why you should pay off his debt- decides to go sit in the bathroom and “occupy” it for several weeks. He messes the place up, refuses to clean it up, disturbs other people who are just trying to use the bathroom, refuses to leave even though he is on private property and the owners ask him nicely to leave, and becomes belligerent when the police to evict him. How would you react to that?

 

 

McDonald’s “I Spy” Interactive Video Campaign

Posted by Andy in Big Businesses, Marketing, Personal

Another nice find by DigitalBuzzBlog.

This McDonald’s campaign asks you to watch a :50 YouTube video and look for a certain character hiding in the scene. If you click on the character, you move on to the next level.

It’s actually a little hard at first, so don’t lose your patience the first time to get to the end without spotting Grimace. It’s a neat gimmick for a campaign, and definitely something you could replicate if you have the creativity and motivation.

In the Battle of Sports Leagues, Here’s Why the NFL Wins

Posted by Andy in Big Businesses, Sports

I don’t really have a good opening paragraph for this post. I think I have a good point, but I don’t quite have the narrative to kick it off.

Now if I was the NFL, I’d have the perfect opening. I’d have crafted the perfect phrase, and delivered a genius punchline.

The NFL started today. And honestly, besides making sure no one on my Fantasy team was having neck surgery, I really didn’t think too much about it as the game kicked off.

Now throughout the evening, as I pounded out some work, handled some wedding stuff, and ran through some old emails, I had a Yahoo page open to keep track of the score.

What started as a blowout, slowly got better. And by the end of the game, I headed upstairs to catch the thrilling last minutes.

And as soon as the game was over, I felt regret. My brain yelled at me “Hell the Saints were on! Why weren’t we watching that??!!?? They were playing Green Bay for criminy sake!!”

The other half of my brain, the calm and rational part (fine, the other 25%), then replied, “Seriously, Andy. We can’t bring the laptop to the living room? That was a good game.”

And so we had both the emotional and practical sides of my brain lamenting about my overall error in judgement. (I find it interesting that my brain never seems to find fault in itself in these matters. It’s much easier to simply cast fault at me.)

And this is why the NFL wins. This is why the NFL will always win.

Yes, the league was on strike because the owners and players needed to figure out a better way to split ALL THE FREAKING PROFITS they are making. And all the fans cared about was how it was going to affect their Fantasy Football draft.

Over in the NBA, you have a different story. You legitimately have owners losing money because they have to pay out the remaining 4 years and 40 million dollars on contracts to guys who get too fat to run up and down the floor and would rather collect their paychecks from a villa at The Palms.

The NFL is the only sport around with this kind of marketing.
1) I sign up for a Fantasy Football League out of habit and as an excuse to to stay in touch with my old friends.
2) On a random Thursday night, while working, I keep the score on in the background, to follow how my opponent’s players are doing.
3) As the score of the actual game gets close, I go upstairs to watch.
4) As the game ends, I think, “Damn, I should have watched that whole thing, and all the commercials.”
5) I go write a blog post about why the NFL is so smart.

Now, you could say, “They got lucky. It could have been 42-7 and you wouldn’t have cared.”

And I would reply – “But that doesn’t happen in the NFL. The NBA would have made sure it was LA vs New York in the opening game, and it might have been 120-80. But the NFL took the 52nd largest market vs the 71st biggest market and put them out there. Which they can do since the 71st market has the reigning Super Bowl champs and both teams have QB’s that you wish you had as brothers in law.”

A conspiracy theorist would say it’s rigged. And maybe it all is. But if it is, somehow the guys writing the NFL scripts cut their chops on Lost, Weeds and Entourage, while the NBA guys were banging out Alf, Brothers and Melrose Place (the new one, not the old one).

Now this may seem like a rant against the NBA, but it’s not. Major League Baseball has almost worked their way into the irrelevance once relished by the NHL. And each now is able to claim a rabid, but niche, fan base that can’t compete head to head. And while soccer is growing, it’s TV viewership still only appeals to people who “get” why 0-0 can be exciting.

So I’d say you have the NFL leading the way, with NCAA football doing everything it can to screw up the halo the NFL provides it. Then the NBA who is arrogant enough to deny it has a problem. Then the other 3 leagues begging for attention.

But at the end of the day, for the forseeable future, the NFL is going to dominate the mind of the rabid, casual and indifferent sports fan. From revenue channels, to marketing, to PR, to labor, to organizational structure, it’s an absolute study in how to build a successful business.

Supporting Data for Why Butler Couldn’t Do Anything in the NCAA Final Game

Posted by Andy Boyer in Big Businesses, Sports

Anyone who watched the NCAA Final on Monday – or more accurately tried to watch it – acknowledges that it was one of the worst performances in a championship game in recent memory.  

Now, a few sports radio shows have lobbed theories that there was something wrong with the rims, whcih made the game unplayable.  And just about any sports organization that has reason to fear NCAA retribution has flat out denied that could be a reason.

I think the problem could be bigger.  There’s a reason we don’t see a lot of basketball games in 70,000 seat football stadiums.  It’s a bad environment for hoops.  And you get stuck using a temporary floor and temporary rims for your 3 most important games of the season.

This research is not complete, but here’s a first, albeit shallow, look at the last 10 NCAA Final games.  All I’ve done is taken the Team Field Goal % for the Winning and Losing Teams, and compare them to how the teams shot during the year on average.  Using FG%, and not Total Points, should take out some of the fluctuations that could arise from a shortage or abundance of foul calls during the game.

Quick math shows that Winning teams see their FG% drop from around 48.3% to 45.7%  And the Losing teams drop from about 46.4% to 37.1%.  So, if both teams see their FG% fall during the only games in which they play in 70,000 seat stadiums, maybe we have to assign a little fault to these temporary rims.  And if we are going to assign some fault to the temporary rims, maybe it’s possible the guys who set up THESE temporary rims in Houston were a bunch of numbskulls.  More data to come this weekend.