The Tom Dougherty Blog


Posts categorized “Information Technology”

The Time Warner-Comcast merger is what consumers deserve

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Time Warner and Comcast are looking to merge. Good luck trying to fight this one. If we learned anything by the approval of the American Airlines/US Airways merger, it’s that the “brand of the American consumer” is dead.

You better have a much stronger reason to block this merger than simply saying it is not in the consumer’s interest.

comcast-time-warner-press-releaseReally, can anyone argue that this merger is in the consumer interest? Let me get this straight, the two largest cable providers in the US want to merge even if the merger does not even promise the possibility of consumer savings.

After the American Airlines/US Airways deal, it is not even a necessary condition that the merger must provide consumers with more choice or market competitiveness. All that matters is that the merged companies make more money for its shareholders. This is about increasing their margins as we unplug our cable boxes.

Why is the consumer no longer represented? Because we have laced our consumer brand with indifference.

There is no such thing as the American Consumer and, because the brand no longer exists, it is no longer represented. Don’t mistake what I am saying with the idea that no one is speaking to the consumer’s benefit. What I am saying is that no one listens.

In an age when the business of America is absolutely the business of investor return, we actually believe that we sit squarely in that seat. We believe we are more investor than we are consumer. As long as we believe that, we can predict where the axe will fall. On us.

Brands are owned and honed by those that hold it dear. All great brands do this – Apple, Google, BMW, and your favorite beer. But we all hate the cable companies and yet no one really cares.

Think about it. The cable industry says it won’t limit competition because it doesn’t currently compete. And it would be right. Shame on us. We don’t get the oversight we need. We get the oversight we deserve.

Yahoo! needs more than a new CEO

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Yahoo’s Scott Thompson is stepping down. The swinging door reminds me of the Union leadership during the Civil War. There were so many changes in generalship that the average enlisted man could barely keep count. Each was shown the door by a less than impressed Abe Lincoln — hoping he would eventually find someone who could beat General Lee.

Until Lincoln found U.S. Grant, each promising general fought the war according to standard practices of the day. And each ran from the battlefield, tail between his legs after that old grey fox, R.E. Lee, bested them again. The stakes for Lincoln were high. He had to find a way to beat Lee and the Army of Northern Virginia or the game might be up.

Yahoo is in the same life and death struggle. It doesn’t need a new CEO. It needs a new approach to the battle and it needs to find a way to beat an enemy (Google) that so far has won every battle.

Will Yahoo succeed and win?

What Yahoo needs is to rebrand, desperately. I am not talking about a name change. I am talking about a new strategy that delivers a meaningful relationship with its search engine.

Rebranding is not just a marketing ploy. It is a cultural shift in thinking that challenges all of the assumptions of the past and moves with alacrity and vigor towards a new vision for who they are and what they need to accomplish. These secrets will not be found by the “smartest guys in the room” but they will need to be embraced by the very same.

Grant understood Lee’s weakness and doggedly pursued his celebrated rival until the tide of war had turned. Yahoo will win or lose depending on how out of the box it is willing to go, who it puts in charge, and its willingness to rebrand. Anything less and it will fade away to become another “Lotus” — a company instrumental in the formative days but obsolete in the new ways of computing.

Steve Jobs: A bulb that burns twice as bright burns half as long

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I was thinking about typing this note on my old Mac Plus, which I pulled from under the attic eves last night. I abandoned the idea, not because my old Mac no longer worked (it did), but because I realized I had no way to email or connect to what I wrote except with 3.5 floppy discs. I suddenly realized that my personal connection to Steve predates the Internet and goes all the way back to 1984.

I’m not going to write a blog that lauds all of Steve’s insanely great accomplishments and I need to say upfront that I never met him personally. But that is Steve’s magic after all, isn’t it? The products that Steve created are so intuitive, simple, personal, intimate, and magical, if you will, that I feel as if he is family. I took personal satisfaction in his success and now suffer a deep personal loss at his passing.

Do you remember the pop culture book that was popular a decade or so ago “All I Really Need To Know I Learned In Kindergarten”? Well, I can honestly say that everything I ever needed to learn about branding, simplicity and focus I learned from Steve.

So today I am deeply sad. Greatness passes as naturally as time, but Steve passed much too soon. I assumed it was soon to happen but found myself completely unprepared.

Will I ever again tune into another Apple Keynote with childlike anticipation? Will I stay up all night ever again trying to place my order for the newest and coolest product from the pied piper of elegance and simplicity? Will I still visit the Apple Store with the smile of a kid in a candy store? Will I still feel like somehow everything Apple creates in the future is somehow a personal win for me?

I do hope so. Steve showed me a path and I will settle for nothing less.

Sometimes, when I get full of myself, I remind my ego that Steve is one day older then me. Very humbling. He changed the world.

Fare thee well Steve Jobs and thank you for sharing. I know I will never see your like again.

Microsoft and Smartphone is an oxymoron

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The question I ask is not, “Is Microsoft too late in the smartphone market?” That is what all the technology pundits and Wall Street analysts are asking. Instead,  I ask a more fundamental question, the answer to which will determine Microsoft’s success or failure in this endeavor.

Does the Microsoft brand have brand permission to even have a smartphone?

Let’s think for just a moment about the three leading brands of smartphones currently. The Blackberry, iPhone and the Droid. What do the two fastest growing brands have in common (Droid and iPhone)? Worldclass industrial design, elegance, simplicity, intuitiveness, and something harder to pinpoint — Elan.

The Blackberry has some of those attributes and an entrenched enterprise userbase. On a recent flight, the fellow sitting next to me was speaking on his iPhone4 with a Blackberry in his lap. When he finished his conversation, I asked him why he had both?  He said he was a Federal Government employee and the Government did not yet support the iPhone and he had to use the Blackberry for the enterprise server. He added that soon the US Government would support Apple devices and the only folks who were against it were the government IT guys, whom he added would be out of a job if it happened.

So, as a brand, which one of these attributes do you think Microsoft owns and has permission to leverage?

  1. Worldclass industrial design
  2. Elegance
  3. Simplicity
  4. Intuitiveness
  5. Elan

The answer, of course, is none. What about innovation? I think Microsoft reminds me a lot of Kodak, a great and powerful relic of the past that will be attempting a rebrand of sorts in the coming weeks. Rebranding is a difficult challenge, much harder than a brand launch. It can be done because change can be your brand’s best friend.

You might find this little movie entertaining. But it is very much on point. It is a funny look at what would have happened if Microsoft had created the iPod packaging

Microsoft iPod

Being first does not always mean you will dominate a market

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Your brand needs to evolve and change if it is going to grow and steal share. Your business model needs to do the same, and it needs to remain true to your brand’s promise.

I remember, many years ago, when Bell South launched its Interactive Pagers (these were manufactured by RIM and were the forerunner to the Blackberry).  The brand promised instant connectivity in that you were able to text a message to another Interactive Pager much the way we do today when we text to a cell phone.

However, the brand promise did not match the business model. First, you were limited to texting to another owner of the Interactive Pager and, secondly, you were billed by the character. Not only was it hideously expensive to use but no one thought in terms of characters. So your bill was always a major surprise every month. A bad surprise.

The technology changed, the business practice morphed into something much more user friendly so you could pay a flat fee for unlimited text and the Blackberry took the market by storm.

Just yesterday, I was thinking about all the innovators in business that had the right idea but failed to have their business models adapt to the needs of the end user. Despite the fact the service was far ahead of its time, this model represented the needs of the company and not the requirements of the end user. As a lesson to us all, most of these innovators and trailblazers are gone. The need they fostered has grown and blossomed but their role in the revolution was stymied because they couldn’t get out of their own way.

Here are a few that come to mind: The Source (one of the first Internet content portals from the 80s and an expensive subscription service on a dial up modem), CompuServe (same basic model as the Source), Commodore Computers (the list could go on and on in the computer business), and Aldus Persuasion (an early form of presentation software), and Word Perfect. Who is next? Well I can make a guess or two: AOL, (insert name of any cable company here – Time Warner, Comcast etc) and Redbox. Or, how about any cell phone network?

Lessons to be learned from Blockbuster’s demise

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  1. Never define your brand by a technology or delivery system. No one has seen, let alone watched, a “video” in to years or more. When you define your brand by what it is you are selling, you open yourselves to the risk of a change in technology that renders your brand obsolete. Look to Apple as an example of a brand that has defined itself in terms of a brand promise rather than a technology. That’s is why the company is no longer called Apple Computer but rather just Apple, Inc.
  2. Evolve your brand constantly to reflect and anticipate changes. All economies trend towards efficiencies (that is why they are called economies). This means that all markets will inevitably evolve towards the most efficient delivery system of the served benefit. If you can receive a benefit, without the inconvenience of having to go somewhere to purchase it, the destination aspect of your brand business will become a hindrance rather than an asset. Netflix is an example of this principal with its Instant Viewing availability. However, Netflix is in violation of the first principal if the delivery system moves from Internet to some other delivery system. After all, “Net” is part of their name.
  3. “Local” is a value only in a market with inefficiency. Having stores on every corner is not a value. It is a cost. It only speaks to the brands inability to attract loyalty beyond what is “on the correct side of the road.” Markets trend once again to efficiencies and the value of local (as in your local bank) becomes way overstated. Anyone who forms an attachment to a brand believes the attachment is local and personal. Fashion has understood this for years. When someone buys a designer purse, they have developed a personal bond that transcends distance.

Brand evolution too often is shelved because the price of diligence and change is not insignificant. It requires every CEO and CMO to constantly reevaluate the brand’s proposition and adjust it to reflect customer changes. It is the textbook example of the epoch battle between what the company wants to have transpire and what the customer desires. At the end of the day, all that matters is the customer’s beliefs. The brand’s proposition needs to reflect it.

If we do not heed the lessons of Blockbuster and invest in the brand’s evolutionary cycle — recognizing that the investment may not be a short-term profit center but a long-term strategy — there will be a cost to sticking our head in a hole like an ostrich. Just ask Blockbuster. Unless it asks for help from us, whatever it does will be too little to late.

How Walmart is copying Apple

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T-Mobile is an example of a brand with absolutely no meaning whatsoever. As a result of this emotional void, T-Mobile finds itself scrambling for preference and survival.

Yesterday, it was announced that Walmart was “partnering” with T-Mobile and launching Family Mobile, a cell phone plan offering unlimited talking and texting for $45 a month.

As things are now, this plan, available at Walmart stores everywhere, is cheaper then any plan currently offered by T-Mobile through its traditional outlets. Napoeon was right, “The logical end to defensive warfare is surrender.” And the new alliance with Walmart makes sense as a last ditch effort to grab sales — even as the brand driver changes hands and we discover that Walmart is now the low-cost champion of yet another market segment.

The difference this time is that, while you might buy a SONY flat screen at Walmart and save a few bucks, you were buying a SONY. Now you are buying the Walmart cell phone and the carrier is secondary.

Will this strategy work?  I don’t know. Ask Apple.

The iPhone 4 – in case you just moved from another planet, goes on sale today

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What is the top business news of the day? For some, in the US, it might be the US victory yesterday in the World Cup game. In France, it might be its crushing defeat and team revolt. (And make no mistake. These are business issues because of the brand ramifications and the alternately increasing or decreasing value of those brands.)

For some, it is the durable goods figures due out today. But who are we kidding? The big story of the day is the lines of campers pitching tents outside of the Apple Stores today as the faithful clamor to get the new iPhone 4. As if last week’s pre-order volume collapsed everyone’s ability to handle the volume affected the coveting of the Apple brand.

Make no mistake about it, the Apple phenomenon is unparalleled in brand history. A technology company has succeeded in getting under the skin of the developed world’s citizenry unlike any previous company. When Apple whispers about a new announcement, that whisper becomes the biggest news since the moon landing. When the product is releasee, the campers line up. And this is not to “resell” the iPhone or iPad like the first release of the Xbox. Nope. This is simply to have and to hold.

Do you want to know how to steal market share and grow shareholder value? Simple. Be as single minded as Apple and cut no corners on your brand.

Here is one for you to think about: Next year, when this new generation of iPhone is a year old and gets sold as second hand to make room for the new one, they will all be available in the original boxes. Yup. Apple takes such care in its packaging that those that buy it keep the packaging.

CNN has no brand. It has personality, and that is the problem.

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What is wrong with CNN and why are its ratings dropping faster than a meteor? Well, it is not the fault of Larry King or Anderson Cooper. They are a result of the problem.

CNN is a brand without a promise. It claims to be a news channel, but delivers the same playful entertainment content as TLC and the History Channel. At CNN, news is secondary to the personalities that host it.

This is the reverse of the heady days of CBS news when the program came first, even before icons like Walter Cronkite. It was the CBS News with Walter Cronkite. We knew very little about Walter. Knew nothing of his politics or personal life until well after his retirement. He hosted the show, announced the news, and reported on it. He did not fill the broadcast with alternating talking heads where, in the service of “fairness,” he had to alternate between interviews with Martin Luther King Jr. and the Grand Wizard of the clan. No, he was able to make the distinction of what is responsible and fair, and only reported the words of the former. That was news.

Today, we watch the CNN personality Anderson Cooper (AC 360), Wolf Blitzer in the “Situation Room” and Larry King Live. The star is not the news. The star is the personality of the celebrity. Haiti is not the big story for CNN. For it, the big story was how worn out, tired, concerned, deep feeling, and dedicated Anderson Cooper is.

CNN does not compete with FOX News. No one chooses between the two. We choose between Pawn Stars, Dancing With the Stars, Glen Beck, and AC 360. If we want news, we tune in Headline News.

Maybe we don’t want news any more. One thing is for sure, we don’t want the personality tainted entertainment cloaked as news from CNN anymore.

The future looks grim for Redbox. Actually, things look bad for a lot of brands.

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Talk about chasing a business model into the ground. Redbox is “testing” a price point of anywhere between a buck and a buck and a half for their video rental kiosks.

Redbox toys with higher DVD rental prices

Already the king of the DVD rental kiosk market, Redbox recently announced that its 25,000th kiosk has rolled off the assembly line. But even as Redbox consolidates its position and signs deals with Hollywood studios, it’s again tinkering with its famous buck-a-night pricing scheme.

The problem with renting a DVD or Blu-Ray disk is that it is nowhere to build a brand today. The physical medium does not matter any more. It does not matter if it’s a CD, DVD, or Blu-Ray disk. It is yesterday’s story.

Everyone that distributes any entertainment medium needs to recognize that its market space is closing. The Redbox kiosk is not as convenient as going absolutely nowhere to receive content through cyberspace.

So listen up. If your brand delivers a physical medium in any form, don’t worry about price point. Worry about cyber-distribution. If your brand manufactures CD, DVD, or Blue-Ray players, find another model because soon we won’t need you at all.