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Thursday, October 02, 2014

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FaceTime with the Content Guy: Higher Education

This commentary is available as both text and video; enjoy both or either. To see past FaceTime commentaries, go to the MNB Channel on YouTube.

Hi, I'm Kevin Coupe and this is FaceTime with the Content Guy, coming to you this week from Portland, Oregon - more specifically, from Providence Park, home of the Portland Timbers soccer team.

I'm here because the Portland State University Business School, where I work on an adjunct basis, held a faculty retreat just a little while ago, and I was lucky enough to be asked to moderate a panel of business executives who talked about what they are looking for in the students they are interviewing for jobs. It was a unique mix of industries represented - the clothing business, a technology company, an energy non-profit and, because this is Portland, a beer company.

What I found fascinating is that each of the business people had pretty much the same demands in terms of graduating students - they have to be good at data analysis, and they need to be able to collaborate and work in teams. Those were the hard skills. The soft skill that's most needed - the ability to write.

Now, I feel lucky. This is stuff that I know the PSU faculty is aware of and feels equally strongly about. This is stuff that Professor Tom Gillpatrick and I work on with our students each summer when we team-teach a course together.

Clearly not every student going into the job market has these skills. It's a big country, and there are a lot of schools.

But what I really found interesting about these conclusions is that when I was back home preparing for the panel, I was in the kitchen and had all my papers laid out in front of me. Mrs. Content Guy asked me what I was doing, I told her, and then she asked what the business executives were telling me in the pre-interviews. Data analysis, the ability to collaborate, and better writing skills I told her.

Mrs. Content Guy, who is a third grade teacher, laughed. That's exactly what we're teaching them in third grade, she told me.

So maybe not all the graduating college kids have the skills right now that they need. But hopefully, in about a a dozen years when my wife's students are getting out of college and looking for work, they will. And maybe they'll even remember where they started to get them.

That's what's on my mind this Thursday morning. As always I want to hear what is on your mind.

Thursday Morning Eye-Opener: Best Noodles. Ever.

by Kevin Coupe

The Washington Post has a great little story about a Chinese noodle shop in the northern Chinese province of Shaanxi, which had an unusual way of getting customers to come back again and again.

The owner put opium in the noodles.

People only found out when a 26-year-old year man named Liu Juyou, was detained in a routine traffic stop, drug tested, and told that "he tested positive for opiates. He claimed he had never used any drug like that in his life, but police weren’t convinced. On Sept. 3, they threw him into detention, where he stayed for 15 days.

"Liu swore it had something to do with the noodles — they had been too good. So, reported the Independent, he asked his family to test out his theory. Would they eat the noodle shop’s noodles? They did, took a drug test — and tested positive for opium.

"The police then started looking into the noodle shop’s owner, who confessed he had been adding parts of a poppy plant to his noodles so customers would keeping coming back. The owner, only called 'Zhang' in reports, conceded he bought 4.4 pounds of poppy buds for a little less than $100. He then mashed it into a fine powder, which he poured into his noodle mix."

Which is, in its own way, sort of funny. (I can only imagine that when they asked the chef, he shrugged and said, "Well, the menu only says 'no MSG'…")

Except for the story's kicker. According to the Post, "Despite the apparent evidence to substantiate Liu’s story, the police reportedly wouldn’t budge on their charges against him, saying it was a top priority to punish drug users."

It's an Eye-Opener.

Editorial continues after a word from our sponsor...

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Now back to regularly scheduled editorial...

Report: GMO Labeling Will Cost Consumers Less Than a Penny a Day

A new study says that "the median cost to consumers of requiring labeling of genetically engineered food, also known as genetically modified (or GMO) food, is $2.30 per person annually," or less than a penny a day.

The analysis was commissioned by Consumers Union, the policy arm of Consumer Reports, and conducted by the independent Portland-based economic research firm, ECONorthwest. Consumers Union supports Oregon’s GMO labeling ballot initiative, Measure 92, scheduled to be voted on next month, and says it "disputes claims made in ads opposing Measure 92 that labeling will force farmers and food producers to spend  'millions' and increase food costs for consumers," and takes issue "with the assumptions made by industry-funded studies that it says have overestimated the cost of similar GMO labeling proposals in California, Washington, and New York—putting the cost at $100-$200 annually" per person.

“Industry cost estimates incorporate unrealistic assumptions about how GMO labeling requirements will drive food producers to switch to all organic ingredients, which would be much more expensive," says Jean Halloran, Director of Food Policy Initiatives at Consumers Union. "However, there is no factual basis for this assumption and we believe producers will continue to sell GMO foods once they are labeled, and many consumers will continue to buy them, with no discernible price impact."

KC's View: I'm not smart enough to do the math and evaluate all the various components of these arguments, though I do tend to have a certain level of faith in the folks at Consumer Reports. Sure cost is a factor … but in the end, I just think it is important for people to be able to know what they're eating. As we've often said here, information is not condemnation.

I have no sense of whether this will pass or not in Oregon, but I can tell you this. In my trips there this year, I have been enormously impressed by the overall get-out-the-vote efforts that seem to have people on every street corner and most mass transportation vehicles, registering voters and urging people to cast ballots on November 4. And I've seen an awful lot of people out there lobbying for the GMO labeling legislation (almost as many as I've seen lobbying for marijuana legalization).

There does seem to be a grass-roots effort going on here. And I, for one, find it heartening when citizens are able to accomplish something that millions of dollars in corporate dollars have been fighting against.

Editorial continues after a word from our sponsor...

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Pepsi Sees Amazon As True And Exclusive Venue For New Soda

Business Insider reports that when PepsiCo launches a new soft drink later this month, described as a naturally sweetened soda called Pepsi True, it will only be available in one store.


The story says that the soda will be available "in 24-packs of 7.5-ounce cans, the company said. It will not be in brick-and-mortar outlets, though Pepsi said it plans to eventually sell True in grocery stores."

According to the piece, the decision addresses two issues for the manufacturer: "Pepsi's move comes against the backdrop of nearly a decade of declining sales of carbonated soft drinks in the United States, according to the trade publication Beverage Digest, as consumers have become more health-conscious. More recently, consumers have also shifted away from diet soda because of health concerns about artificial sweeteners."

Still, "the e-commerce space comes with risks as well as opportunities. Amazon could put downward pressure on prices in the consumer packaged goods category, as it did with e-books, analysts at Sanford Bernstein said in a research note in April. And Amazon's vast array of products could make it harder for brands to stand out. A Pepsi spokeswoman said prices for its other products sold on Amazon have been stable. The company says it decided to introduce True through Amazon after noting the success of other products such as its Starbucks Double Shot Light, Pepsi's top-selling item year-to-date in e-commerce. Pepsi sells the product through a joint venture with Starbucks Corp."

KC's View: Clearly this makes a lot of sense for Amazon because it gives it differentiated product that nobody else has … which is exactly what every retailer wants. And Coca-Cola did a similar thing when it reintroduced Surge on Amazon, saying that the decision allowed it to evaluate the demand for it.

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Dollar General Extends Family Dollar Offer

The New York Times reports that Dollar General has extended its $9.1 billion offer for Family Dollar by more than three weeks, even as Family Dollar has said it prefers an $8.5 billion offer from Dollar Tree that it believes will pass muster more easily with antitrust regulators.

According to the story, "Family Dollar has yet to call a special meeting where its shareholders will have the chance to approve or reject the $8.5 billion deal with Dollar Tree. Such a meeting is expected in November or December. Given that timeline, Dollar General may extend its tender offer, which values the company at $9.1 billion, at least one more time."

And, the Times writes, Dollar General has "revealed how few Family Dollar investors have tendered their stock for the $80 offer. Just 126,499 shares have been tendered so far, or about one tenth of 1 percent. That is to be expected at this early stage of a tender offer, but nonetheless serves as a reminder of just how far Dollar General has to go to win over Family Dollar shareholders."

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Crouching Tiger, Not-So-Hidden Competitor

Think of this as a cautionary tale about not being too sure about one's own competitive security.

Variety has a story about how IMAX, Netflix and the Weinstein Co. are making a sequel to the hit film Crouching Tiger, Hidden Dragon, called Crouching Tiger, Hidden Dragon: The Green Legend, that will, contrary to traditional practice, will be "available for streaming on the same day it hits theaters in 2015."

Almost as soon as the plans were announced, "the four largest exhibitors in the U.S., AMC, Regal, Cinemark and Carmike, pledged not to show the martial arts sequel next year. That represents 257 of IMAX’s 418 U.S. screens, and these theater chains were joined by Canada’s largest exhibitor Cineplex, and Europe’s second largest theater chain, Cineworld, in a boycott that has grown international in scope."

While independent films sometimes are available on services like iTunes and On demand before being shown in theaters, it does not usually happen with major releases. But this is seen as being just the beginning of a trend.

And, Variety writes, even if the major exhibitors "succeed in preventing the Crouching Tiger revival from showing in theaters while it bows on Netflix at the same time, the old release date patterns are starting to look too archaic to the current insta-generation of consumers … There’s a sense among many Hollywood leaders that the window between a film’s theatrical debut and its release on home video is too long, especially for the Internet age. Plus, studios spend tens of millions of dollars marketing films to the masses only to have to turn around and shell out again to re-familiarize audiences with a particular picture when it hits home platforms."

DreamWorks Animation CEO Jeffrey Katzenberg, the story says, "predicted earlier this year that theatrical windows would shrink to three weeks in the next 10 years, suggesting that audiences should 'pay by the inch' to see a movie based on the size of the screen they watch it on.
'A movie screen will be $15,' he said, 'A 75-inch TV will be $4. A smartphone will be $1.99'."

As yet another measure of how this particular segment of the world is changing, the writes that Netflix will announce today that "it has struck a deal with the comedian Adam Sandler to produce and star in four new feature films that will appear exclusively on the streaming service … Through the agreement, Netflix will solely finance the films and will work with Happy Madison Productions, which was founded by Mr. Sandler, on them. Netflix declined to comment on specific terms of the deal, but said the films would have the characteristics of theatrical releases, with similar-size budgets. (The production budgets for Mr. Sandler’s recent films have ranged from about $40 million to $80 million.)"

And, the Times adds, "Netflix has said that it will spend $3 billion on content in the next year. After initially focusing on original television series, the company has recently set its sights on film, too."

KC's View: I've long felt that in many ways it will be the type of movie that will determine where a film is seen … there are plenty of small movies that simply cannot make a splash in theaters, and it seems perfectly legitimate to debut them via streaming.

I guess my only real concern here is that Netflix should be careful about becoming a refuge for stars past their expiration date. Adam Sandler hasn't made a decent movie in a long time; he is, in fact, one of the few people who, when I see his name, I make a conscious decision not to see the movie. And since his last few films have bombed, a lot of people apparently feel the same way. Still, he is a brand name, and he will bring a lot of attention to the Netflix initiatives.

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MediaPost reports that Family Dollar "is debuting an 'Ad Match Promise,' matching competitor’s prices … the company will also honor competitors’ loyalty card promotions if they are printed in the competitive ad, even if they don’t have the loyalty card. 'Buy One Get One' offers are also covered, as long as the ad specifies the price."

The move even as Family Dollar is fighting of a $9.1 billion acquisition offer from Dollar Tree, preferring an $8.5 billion bid accepted from Dollar Tree, saying that the Dollar Tree offer will create too many antitrust issues.

• The Wall Street Journal reports that the Authors Guild, the nation's largest writers' advocacy group, is urging the US Justice Department to investigate how Amazon is reducing book availability as a way of pressuring publisher Hachette to reduce its prices. The Guild is suggesting that Amazon is in violation of antitrust law.

According to the story, "One person who attended the meeting said Justice Department lawyers listened attentively, but said this wasn't an indication of whether the government would launch such a probe. A Justice Department spokeswoman declined to comment."

Your Views

…will return.

From The MNB Sports Desk

In last night's National League Wild Card one-game playoff, the San Francisco Giants dominated the Pittsburgh Pirates, winning 8-0 as Madison Bumgarner pitched a four-hitter with 10 strikeouts. The Giants now go on to face off against the NL Champion Washington Nationals in one of two NL Division Series.

KC's View: One brief note … yesterday, I noted that in the American League, the Kansas City Royals will be playing the California Angels in one of two AL Division Series. I was showing my age in writing that … the California Angels haven't been called that since 1996.

I apologize … though apparently I gave some nostalgic folks in the MNB community a few chuckles…

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With a uniquely fast-paced, provocative and entertaining approach, Kevin Coupe identifies the ways in which consumers are changing, the reasons behind these changes (technology, the economy, culture, demographics), how new and unorthodox competitors are altering the marketing landscape, and what companies need to do to find and exploit differential advantages.

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