al berrios & co. CONSUMER STRATEGIES REPORT 10.14.03: al berrios & co. Celebrates 3 yrs With Thanks To…

[1] UPDATES: 3 Years and Going. Thanks…
[2] TRADE EVENT: Russell Banks' CEO Leadership Lectures at Baruch College Featuring Leo Hindery, CEO of the YankeeNets Yes Network, + + + + +
[3] TRADE EVENT: TIA & Toy Wishes Holiday Preview (Trade Show and Press Conference) + + + +
[4] TRADE EVENT: Scoppetta, Kelley & Lee Luncheon Presentation Featuring Thomas Metz CEO, Mitchell Madison Corp. + + + + +
[5] CONSUMER: Finding Grunts On A Budget Is Tough When They Know They Have A Choice
[6] PREDICTION: Review: Arnold Won!

"Don't discriminate blatantly, discriminate subtly" when offering new programming to operators. - Leo Hindery, CEO of the YankeeNets Yes Network

Good morning execs,

At what point do you know too much? This month, al berrios & co. is 3 years old. And in that time, my knowledge of industries and strategies has grown exponentially. I've written thousands of words on hundreds of subjects related to consumers in each industry. And the biggest problem I have now is preventing the little details (like people's names and important dates) from being forgotten in order for me to retain new stuff.

But I can't help it. I'm an information junkie. Everything fascinates me. Focusing bores me. The benefit is that I'm able to see the big picture and solve most problems within seconds. The bad part is that I get overly stressed if I'm not plugged in.

How do I shut my brain off? Any suggestions?

But while on the subject of anniversary, I'd like to send oodles of thanks to the following people (who's names I won't ever forget) who helped me and my firm make it one more year: Clariza; Alta & Mom; Shane Mora; Bonnie Sanchez; Irwin and Mike Persaud; Terry Williams; Jeremy, Vinny and Mr. Russo; Tony Martinez; Bruce Rogers; Mahesh Krishnamurti; Joel Rudenstein; Myron Gluckman; Roberto Ruiz; Simone Harris; Jack Donahue; Jorge Gonzalez; Stan Kravitz, Isaac Simon, Sergio Fernandez, Howie Balsam, Jae Lee, Laura Milkowski and the rest of the team; Theresa Evangelista; Tammy Quan; Randolph Hernandez; Mac Lipscomb; Prof. Gary Soldow; Prof. Al Lieberman; Prof. Jim Coyle; Dean Elliott; Allan Bauer; Gladys Malibrian; Nicole Icenogle; Jane Tabachnick; Bob Siegel; Cres Coutinho; Stella Varveris, Milwood Hughes and the media crew; Tim Herrick; Joyce Lee; Susan Banks; Loiett Gore; da fellas Al & Ant; my students; and well, I've met several thousand people so far, and I'm sure you don't want me to go through my list... but thanks to all.

Enjoy your REPORT!


Russell Banks' CEO Leadership Lectures at Baruch College Featuring Leo Hindery, CEO of the YankeeNets Yes Network, + + + + +

Leo says media consolidation is bad, even if he's responsible for most of it. Leo says cable operators just aren't paying "fair market value" for programming any more, mainly because they own 40% of cable channels. Leo says independent programmers, such as his YankeeNets Yes Network, exist to add value to consumers' media choices so operators should be forced to carry them.

I asked Leo, "what do you think of a la carte pricing of cable programming?" Leo believes it would destroy choice and should (or would) never be allowed. But Leo, wouldn't everyone pay to watch Yankees and Nets 24/7? Apparently, not at the extortion rates he's charging. (Which is why Leo's in court right now with Cablevision, aside from the fact that Cablevision would much rather use their network to promote their MSG regional net instead of Leo's.) But Leo, if you asked someone how much they'd pay for something like milk, for instance, they'd all tell you the same thing. And if you asked them how much they'd pay for content, you'd get different answers from each one. So, who determines "fair market value"? You? Or the operators, who've paid for their networks, that you're so eager to accuse of anti-competitive practices?

I know, I know, Prof. Stan Wine at Baruch reminded me that cable operators are public utilities, like the bells and energy companies. In exchange for a regional monopoly, the feds force them to accept all sorts of programmers. (So, just owning as many cable channels as they do is a major conflict of interest.) However, two things have happened to change the operator's business model: owning content is more profitable than paying someone else for it and at the rate of consumer churn (to satellite), the more choices they have on cable, the more likely they are to stay with their cable operator.

But another interesting trend is the unstoppable tidal wave of digital networks - hundreds in all - that are making marketing media more and more expensive for programmers. The average consumer only watches a maximum of 12 channels, according to Leo, yet they have hundreds to choose from. Imagine the free-for-all. It's like the early days of the industrial age. The natural consequences of this is a fragmentation of audiences and a decrease in the value of the programmer's airtime. Ouch! So why, Leo, why, would you possibly want to stop the consolidation you started?

In a study I authored on pay cable consumers, it's clear consumers don't differentiate between programmers; that programmers' marketing strategies are aimed at each other, not consumers; and that consumers are willing to pay on an a la carte model for quality programming. All these trends prove just one thing: the industry needs some consolidation.

There are still a few serious bumps, including broadband (using networks to move data, a.k.a. high-speed internet), VOIP (phone calls via the internet), and Wi-Fi (wireless fidelity which allows us to access the internet without wires.) And even more amazing, broadband through electrical wires. So the argument that consumers will lack alternative choices from their media is mute with so many avenues available to us to access content.

Leo spoke at Baruch's new Vertical Campus Building (where all of al berrios & co.'s events this year are being held), a state of the art academic institution, with glorious panoramic views of New York City, comfortable seating, and plenty of space to stretch your legs. Airy and not-too-clinical, it inspires networking with subdued rooms and a sense of becoming smarter just standing around. I sat within spitting distance from Leo, where he sat on a lowered stage, so it was as if he was talking to the first three rows directly.

Overall, I give this event 5 pluses (+ + + + +) and whole-heartedly recommend you attend future events. (Especially if they keep it free.)


TIA & Toy Wishes Holiday Preview (Trade Show and Press Conference) + + + +

I wouldn't typically admit something like this, but the PR firm responsible for this event, Litzky PR, is what really made this event special. Media-only, it was our job as gatekeepers to identify the hottest toy trends. Litzky even arranged for kids to be present to play with the toys, so we can see them in action. But the coolest thing Litzky did was set it up as a charitable event, with a donation of new toys made to needy kids (or something like that.)

Anyway, the venue was the Metropolitan Pavilion, always a grand place ("New York New Media Association Technology Showcase 2002"), all decked out with sappy holiday cheer. But it worked. All Litzky staff were courteous, easily identifiable, and well coordinated. The snack table sucked, but it wasn't about the food, it was about the toys.

The toys. Let me tell you about the toys. Most were whack. Others were extensions of evolutions of prior toys. Many were simple and wildly successful. Others were deeply psychological and complex. This season, cheap is in and collectability is rearing its confusing head again. From Spinmaster's character-driven collectibles MightyBeans to Upper Deck's upcoming new YuGiOh-based gaming cards, parents are interested in two things: empowering their kids with kid-friendly games and getting them interested in cheaper toys.

Action figures like Bandai's Power Rangers, Bratz Dolls, and Mattel's Barbies are perennially in demand for all these reasons. And Lego's continues to expand their story-line based Bionicle as they seemingly become more profitable for them than licensing other properties from content companies. Developmental toys for infants has released a tidal wave of companies in the niche, among them, previously mentioned Tiny Love and Neurosmith, all focused on identifying infant play patterns to help them become leaders, (as opposed to grunts.) And of course, athletic toys, such as Razor scooters, which endeavor to solve our national teen-obesity problem.

Overall, the event merited 4 pluses (+ + + +) and I would recommend attending again.

Since toys are an important part of any youths learning process, we'll be discussing them and their manufacturers further in our continuing series on consumer education. I'm particularly interested in why consumers collect and if there's any differences in the way collectors turn out vs. non-collectors. You'll see.

> "Analysis of Toy Industry's Survival"


Scoppetta, Kelley & Lee Luncheon Presentation Featuring Thomas Metz CEO, Mitchell Madison Corp. + + + + +

Without a doubt, this was the most amazing sales training/presentation I've ever heard. Tom Metz has clearly been around, selling the interesting and mundane. He's got more ice-breaker stories than you've got interesting-articles-you've-been-meaning-to-get-to. Sitting through his presentation felt like discovering the missing link in my life. Sure, I know how to present, schmooze, and manage clients, but I didn't know how to sell and close properly, (which for me fits in between schmooze and manage.) At 61, turns out Tom gets paid (a crap load of money) as a consultant to inspect your sales efforts and prescribe the most appropriate medicine. Is he worth it? You bet your 6-figure salary he is!

Bursting with energy and enthusiasm, you will get to like this man in minutes. But can you train obnoxious, annoying, unhygienic, ignorant, paycheck sales-folks to be the same? That's the challenge for any sales consultant. Lucky for Tom's clients, he's also blunt and straight-shooting. He'll let you know if your sales guys can't cut it. And I think that's what warmed me up to Tom. He didn't waste my time, he learnt me somethin' new, and best of all, I realized that even though he didn't make me money, he taught me how to.

The venue was the offices of corporate attorneys Scoppetta, Kelley & Lee, at their ridiculously huge conference room. (Ridiculous to me, probably shabby to some of you.) The catered food was actually pretty good. And the crowd, all serious pros, and even after that tremendous sales presentation, none too pushy. And the price, a mere $20 (which was deferred for friends and acquaintances.)

Overall, I'd recommend you check it out more of these events. 5 pluses (+ + + + +) for a record week of quality events for me.

(No, I'm not going to write about what I learned. I can't give away all my pearls, you know?)


Finding Grunts On A Budget Is Tough When They Know They Have A Choice

What a horrible thing catch-22s are. Last week, I revealed an epiphany I had about the world we live in. However, I forgot to mention that grunts can also become leaders. And when they do, they adopt the same mentality as leaders. What happens if you're a grunt who starts a business and you need staff? Naturally, you're strapped for cash and need more than your budget allows. So you hire grunts, knowing that they work cheap and are easily trained. But then, your neighbor starts her business and she needs grunts, but her budget's bigger than yours, and all your grunts know it. They love you, but can't work for you knowing they can earn more with your neighbor. Do you advocate choice among your grunts or keep them in ignorant for your benefit?

One of the reasons Wal-Mart is responsible for 2.3% of our GDP is because they keep their grunts ignorant of their choices. They do not allow their grunts to deviate from corporate strategy or plans, dictating even the most mundane details of their duties. Grunts are forbidden to bargain collectively and grunts are programmed with repetitive simply phrases, cheers, and other propaganda designed just for them.

"All propaganda must be popular and its intellectual level must be adjusted to the most limited intelligence among those it is addressed to. Consequently, the greater the mass it is intended to reach, the lower its purely intellectual level will have to be." -Adolf Hitler, "Mein Kampf".

<< "Us Vs. Them: An Abstract Discussion on Programming Consumers"


Review: Arnold Won!

I know, old news. However, it's important to remind you when I was right ("Politics: No Longer For Guys Too Ugly To Be Actors").


Disclaimer: The recommendations, commentary and opinions published herein are based on public information sometimes referenced via hyperlinks. Any similarities or likeness to any ideas or commentary from any other sources not referenced is purely coincidental. al berrios & co. cannot control any results occurring from advice obtained from this publication nor any opinion(s) conveyed by any reader of this publication.

(c) 2001-2005. All Rights Reserved. al berrios & company, inc. Published by al berrios & co. This Report may not be reproduced or redistributed in any form without written permission from al berrios & co., subject to penalty.


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