Archive for the “economics” Category

One time, at podcamp, somebody stood up and talked about how her business - an art gallery - had invited local art bloggers over one night for a gallery tour and general chat, and about how this had been a wildly successful PR and community-building exercise. If any gallerists are reading, I suggest you take note. And if any expensive restaurants or clothing stores would like to try this, please do get in touch with me right away.

Yesterday, I got just such an invitation from one of my favorite institutions, WBUR-FM, an NPR station that is more or less permanently tuned on my home and car radios. The good people of WBUR have had the foresight to invest in new media initiatives, including the excellent blog, The ConverStation, ably helmed by Ken George, to which I referred earlier.

Ken invited local bloggers and social media types through facebook, twitter, and maybe even personal invitations, and despite biblical weather, about 15-20 people showed up for a tour of the station, networking, chatting and eventually, eating and drinking. See the WBUR socials flickr group for some not very incriminating photos.

What the heck is that, you ask? It’s a beautiful wooden sound baffle, on the wall of the engineering room next to one of the air studios at BUR. Reminds me of old type-sorting cases. I totally want one. You can see it with more context in the background of some of the flickr pics. Each box is few inches across and has a different depth, turning it into an acoustic black hole, especially at the lower frequencies. Bass checks in, but it doesn’t check out.

Unfortunately, this might be a metaphor for the future of public radio in a digital, on-demand world. Here are some thoughts from the free-wheeling discussion after the tour. I’m sure a lot more was batted around at the bar after, but I had to cut out early for dinner.

Everybody agreed that we all love NPR programming, and eveybody agreed that we all hate pledge time. Some even hate underwriting announcements, and they’re about as painless as ads can be. I learned that NPR underwriting messages cannot include any call to action or any mention of competition or offers. Sadly, this helps confirm why as a marketer, I consider underwriting to be a donation that makes the executives feel good, not a marketing program that drives business.

So what does a roomful of smart social media types say about this? Some suggested that they’d be happy to pay for an ad-free (no underwriting, no pledge driving) audio stream or podcast on a subscription basis. I’ll leave the logistics of pay per podcast - and what to put in the stream gaps left by excluding the pledge drives - to the techies. This hints at the basic problem the old commercial (or pledge) system has: you can’t fast-forward TV or radio, but you sure can fast-forward a podcast. Actually, with TiVo and the like, you can fast-forward TV, and I think there’s something similar for radio.

The next idea that circulated was wondering if people would pay for individual programs by subscription, or individual episodes on demand. This led to discussion of whether public radio looks at how much pledge money comes in from different shows (they do) and whether the pledge-per-show model might let some shows float themselves and others that can’t pay their bills just dry up and die.

I opined that the very premise of public radio was that some kinds of programming could not support themselves in the market, but had such redeeming qualities that it was in the national interest to subsidize them. The elitist and paternalistic nature of public radio is at odds with the both tough-love capitalism and the populism (Diggocracy?) of the internets. Ouch. I guess we really are all batch of quiche-eating prius drivers.

I bet that lots of public radio shows could be commercially viable: Car Talk, Prairie Home Companion, and even This American Life come to mind. (Not all examples are WBUR shows, and NPR syndication is a bit piece of the puzzle here that I’m going to skip for brevity) But what about the stuff that they are essentially subsidizing, Con Salsa, RadioLab, and most of the news? On the one hand, the low, low price of internet distribution could put some of those shows back in the black if they could avoid sharing the big fixed costs of terrestrial radio production and distribution. But on the other hand, dropping those shows from the air would likely make them even even less able to raise money, especially if the station cut them off from a share of the pledge pie.

I’m usually all about free marketeering, but for the small slice of my taxes that goes to support cultural stuff, I’m pretty happy to subsidize and then to pay again on top of that. I hope Ken and the WBUR crew can find their way in this brave new world.

Speaking of free and not so free markets, if you have any disposable income left after tithing to public radio, you might look into the latest in expensive wooden radios, the Tivoli Audio NetWorks internet radio, available in cherry, walnut and wenge, pictured below. (Wikipedia says its endangered, Tivoli says sustainably harvested, go figure)

You may recall that I have a thing for wooden radios, and I periodically check in on what’s new in tree-based audio products. I’ve been critical of Tivoli for getting things painfully almost right in the past, and I think this is another one of those. But the release to market of a $600 internet-only (FM radio costs you an additional $50) audio device has got to mean something to the discussion above. Tivoli is pitching hard on the angle that you don’t need a computer to use this thing to listen to hundreds of radio stations from all around the world, you just need an internet connection. If there’s a place where lots of people have high-speed internet but no computer, I must have missed it. Maybe they just mean you could put this radio in a room where you don’t have a computer, like your bathroom. If you need a $600 internet radio in your bathroom, you need more fiber in your diet.

I haven’t seen or heard or touched this device, but I’m going to tell you what I think anyway since I’ve seen and heard and touched many other Tivoli products.

It’s gorgeous - from the waist down. The geometry of the box and the speaker and their colors and materials look great. I love the wenge especially. I recognize that it probably needs a digital display, but couldn’t they come up with something less ugly? I would think that a color screen wouldn’t be hard to pull off at this price point. And maybe you don’t need those two rivets on the display frame? Ick. The credit-card remote looks like it has those awful blister buttons, too. There’s a button or knob on the top of the unit that might - just might - approach the joy of the geared-down knob on the Model One, but sadly, I doubt it.

It’s expensive - I’ve mentioned this a few times and I’m still a bit in shock. For $600 you get a mono internet radio. Other internet radios cost half that. If you already have a computer, you can get speakers for even less. And you have to add $50 more for FM and another $100 for a second speaker for stereo sound. I can’t tell if the second speaker is connected by cable or wireless. Conspicuously absent, an ipod dock. Clearly, this is a premium product, so I say, just take the whole kaboodle up to $800 or $1000 and don’t nickel and dime your premium customers.

It probably sounds great - I really don’t know, but the reviewers seem to like it, and it has some spiffy buffering technology that might reduce the chop of a lousy internet stream. The wooden case bodes well, too.

It’ll be interesting to see how this product goes for Tivoli. If they’re right, there are some people willing to pony up big bucks to get good looks and good sound with internet radio. If they’re wrong, the XM-Sirius monster might eat their lunch, or the internet radio generation will just pass them by. That would be a shame, I think the world needs more and better wooden cases for its electronics.

Until the phone carriers and MBTA collude to spoil it, my daily subway commute is the only time that I’m completely unavailable to the outside world. No phone calls, no email, no social networks. At only three stops, the journey is too brief to really get into a novel or do serious work, so I’m happy when I find an abandoned newspaper on a seat, usually one of those free papers designed to be read in the span of a typical commute.

Why don’t I just take one of those papers from the box or the people handing them out? Well, that’s where it gets complicated. I don’t want to take a paper because I know I’m going to use it only ever so briefly and then I’ll feel responsible for either leaving it behind - arguably littering - or recycling it right away - which seems wasteful. Throwing it in the trash or using it in some art project don’t even make the list.

The free paper publishers know that litter is a big issue - they are banned for distributing on MBTA property and made a donation of hundreds of recycling bins (bags, really) to try and appease the transit people. So back to my eco-neurotic quandary: Is it littering to leave a newspaper on the subway so that others might read it, and does it make a difference if you originally picked up that paper or just found it on the seat?

If lots of people regularly left free papers on the seats, maybe some people would stop taking papers and the total amount of paper would go down. But if nobody ever took those papers off the train, there would be an awful lot of litter at the end of the day. Like a car that loses value when you drive it off the lot, a daily newspaper gets worthless fast.

I’m sure the law is clear: leaving stuff on the T, even nice clean stuff, even leaving it on the seat, is still littering. I’d also say that once you pick something up, you’re responsible for it, so leaving found stuff is littering again. But I still recoil at the waste of reading matter. Like many people (of the Book) I have a hard time throwing away or defacing books.

So here’s my wacky utopian proposal for the morning commute and reading time:

• If you were born on an even numbered day, you take papers on even numbered days, odd birthdays, odd paper days, and you leave those papers on the seat when you get off the train
• If its not your odd/even day, you pick up a left paper and are responsible for taking it off the train and recycling it
• After the main morning commute time, say 9:30am, alternate rules are off and any everybody is responsible for taking papers off the train

If everybody did this, we’d use only half as much paper for disposable free morning reading.  Fat chance of that.  The free paper people certainly don’t want to cut their circulation in half, and typical Americans aren’ t going to be interested in second-hand papers.

So until everybody switches to a more ecologically sound morning read, I will continue to be quietly grateful for minor littering, and will do my best to take my found paper with me on both odd and even days.

I’m interested in charity from several perspectives - personally, I think it’s a moral duty; professionally, it’s baked into the business model where I work; and academically, I like to geek out on the behavioral economics. So, when this item came to my attention, I had to blog it. I blogged it at work, but I want to expand on the idea a bit here.

The short story is that somebody somewhere set up an online fundraising page that won’t take donations of less than $25. I think that’s foolish on a practical level and offensive on a philosophical level.

Why would you set a minimum donation? I suppose either it’s too expensive to process small donations, or you’re trying to encourage larger donations and are willing to take the risk that some people will just walk away.

First up, cost. I’m in this business. I know that fees for online transactions (or donations) are percentage fees and probably less than 10%. Credit card processing costs 2-3%. If there’s a service that charges a flat fee per donation, I don’t know about it. And if there is a service that charges such a fee that a $25 donation isn’t worth taking, I would call that service “theft.”

Second, encouraging larger donations. I think the $25 minimum is a bit too draconian. Look at how public radio does this - you can give any amount but you only get the mug or t-shirt at particular minimum levels. When you get a solicitation in the mail, it probably has boxes to check off at various levels, but I bet they wouldn’t send your check back if it were too small. And it might well cost them a couple of dollars to process a paper check. There are lots of positive ways charities can encourage larger donations, usually by giving recognition incentives or by demonstrating what good larger amounts can do, such as $x can feed a hungry child, $y can feed a family, etc.

Ok, I’m done with that rant. Well, actually, I’m not. Let’s suppose for a moment that it actually does cost $25 to process an online donation. Would you or should you accept a $26 donation? It’s a dollar, right?

I say yes, emphatically yes. In fact, I think if cost you $25 to process a donation, you should be willing to take a $20 donation, maybe even less, if it gets you one more donor, one more evangelist for your cause, one more address on your mailing list.

As a marketer, I regularly pay a few dollars for a sales lead.  Not a sure thing at all.  If I could pay a couple of dollars to get somebody on my list who has a proven track record of spending money on me, I think I would do it.  Wouldn’t you?

As a quant-oriented marketer, I’m open to the possibility that this restriction actually turns out to raise more money.  It’s possible that the people who up their donation outweigh those who walk away.  I suppose on some level it’s worth testing, but I also have to wonder about the message that this kind of thing sends to the donors.

High price and exclusivity are positive brand attributes for luxury goods but hardly for charities.  If you don’t want $10 more to help fight AIDS, I don’t think you’re really serious about fighting AIDS.  And if you say that $10 isn’t enough, maybe it’s all some people can spare today, but maybe in the future they’ll have more, and I don’t suppose they’re likely to give it to somebody who turned them down last time.

I was a little late to the new Battlestar Galactica thing, but I’m decidedly hooked. It’s some pretty good TV. But with no cable and no TV, I’ve had to be creative. I rented the miniseries and season one from the local video store. Then I bought seasons two and three from iTunes for $1.99 per episode, then I totally cracked and bought the Razor DVD. Now it’s season four, and the deal with iTunes is off for the usual reasons of greed and silliness.

I was generally resigned to poaching off friends or waiting until the end to get the DVDs, but it turns out that the SciFi channel is streaming full episodes delayed a week or so on their web site, http://www.scifi.com/battlestar/episodes/index.php so now I watch an episode on Saturday morning and pay nothing.

Sure, I can’t put it on my ipod, and the episodes could disappear from the site at any time, but I was happy to pay $1.99 to iTunes or about $4 per DVD to the video store. It seems to me that the SciFi channel people have missed out on some of my money. Too frakkin’ bad for them, I guess.

Last week, I wrote about my experience with DonorsChoose and their thank-you packages. I got a very nice comment from Mike Everett-Lane explaining some of the inner workings at DC. Yesterday I got two more emails of thanks which included links to six more worthy projects, which I thought I’d share here.

Dear David,

Thank you so much for making “Through the eyes of a child…” a reality for Ms. Thompson’s classroom. By now, you should have received your thank-you package in the mail. If you have not received it, please email zach[at]donorschoose.org. We welcome any questions or suggestions.

We hope the feedback illustrates the difference you’ve made for Ms. Thompson’s students. In case you’d like to help another classroom, we’ve selected some projects for you that are similar:

Proposals from Suffolk, Massachusetts

• This…Is…Jeopardy!
• All the World’s a Stage Part 2
• Blending Science and the Real World

Proposals involving Visual Arts

• Picturing Small Moments
• Colorful Self - Portraits
• Centered on Learning

Alternatively, you can see proposals that need less than $200 to come to life.

Thank you again for your generosity.

Sincerely,

Putting on the marketeer hat for a bit, I have to admire the clever customized upsell. Nice work. And remember, you can save everybody some work if you cap your gifts at $99 each. But please make as many gifts as you can.