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    Published on: July 14, 2011


    by Kevin Coupe

    Content Guy’s Note: Below is a commentary on the same subject as the video piece, but it isn’t word-for-word the same. You can look at both, or either...it is up to you. I look forward to hearing from you.

    Hi, I’m Kevin Coupe and this is FaceTime with the Content Guy.

    There were three stories that came out while I was on vacation that seemed indicative of how fast things are changing, and how things that so many of us took for granted may simply no longer be so anymore. Maybe not today, maybe not tomorrow, but soon .... but not forever, because inevitably change will rear its head again and once again surprise us.

    For one thing, there was a story saying that those heavy bags that airline pilots carry with them whenever they fly - 40 pound bags, as it happens - apparently won’t be required equipment anymore. The reason? All that information, considered absolutely imperative for pilots to have with them while flying, can be put on an iPad, where it is not only more easily accessible, but also more easily updated. It also is good for the pilots’ health, because they don;t have to lug that bag around anymore; the airlines testing the system say that it also will save fuel because they’re eliminating weight from the aircraft.

    The only thing I can’t quite figure out is why pilots are allowed to keep them on while they’re taking off and landing, and I can’t read a book on my iPad. But maybe they’ll figure that out, too, one of these days.

    There was another story along the same lines, saying that an item that we all take for granted as part of our daily lives is headed for eventual extinction: the key.

    That’s right. The New York Times reported that the technology exists that allows people to lock and unlock their doors using a coded and secure iPhone application. After all, why not? OnStar already does it with car doors, so why should I not be able to open up my office or house using my iPhone?

    A fair amount of infrastructure change has to take place for this to become commonplace, but apparently a lot of people in the know think this is a slam-dunk...so many people have smart phones, and the penetration of this technology grows every day, and so they think acceptance will be relatively swift.

    And the status quo will take one more hit.

    And finally, there was a Times story the other day about how tablet computer technology, especially the iPad, is changing the way young kids interact with books. Instead of just having paper and ink, books on a tablet computer can be highly interactive, can provide audio narration, interactive artwork, related videos and a host of other applications that can improve and augment the reading experience.

    I get a little nervous about this, simply because I’d like to think that the act of reading should be entertaining and engaging enough ... but kids are different, and anything we can do to help engage them with books and the whole process of learning probably is a good thing. And it’ll be interesting to see how the process also is adapted more and more to all forms of literature.

    Ultimately, it doesn’t matter whether I’m nervous about this or not. These things are happening.

    We all have a choice. We can resist these changes, or we can embrace them and get excited about how they can change our lives and businesses.

    I vote for the latter. Because ultimately, I think it is all really cool. And I’m a sucker for a new experience.

    That’s what is on my mind this Thursday morning. As always, I’d like to hear what is on your mind.
    KC's View:

    Published on: July 14, 2011

    by Kevin Coupe

    Yesterday, MNB reported that Netflix announced in an email to its customers that it is raising prices by 60 percent, with much of the hit being taken by people who gets DVDs by mail, as opposed to streaming movies and TV shows via the internet.

    As the New York Times reported, “What cost $10 a month — online streams of movies plus one DVD by mail at a time — will now cost $16 a month, the company said, tacitly acknowledging the high costs of mailing physical DVDs, but also admitting that many people still want the skinny little discs. Online streaming alone will remain $8 a month. Netflix advertised the change as a new choice for consumers.”

    It appears, just 24 hours later, that a lot of consumers are making a choice ... and it won’t be good for Netflix.

    Many Netflix customers appear to believe that the company has gone too far in this price increase, that Netflix has somehow violated whatever levels of trust existed between it and its customers. And these customers are choosing to longer do business with the company.

    As of this writing, more than 55,000 people appear to have registered their displeasure on the Netflix Facebook page. (I’ve scrolled through a number of pages, and I can’t find anyone who says the price increase is a good idea or defends the company.)

    The Wall Street Journal writes, “The price increase caused a firestorm among Netflix customers online, who jammed the company's corporate blogs with mostly negative reactions, until maxing out the number of comments allowed on the site at 5,000.”

    Here at MNB, we got a number of emails responding to the story - and my suggestion that Netflix may be forced to backtrack - that were noteworthy for their passion.

    MNB user Tom Devlin wrote:

    I could not agree with you more on Netflix may change their minds on this decision. This Netflix price increase and change in strategy  is going to go down has one of the top blunders in marketing and bad financial decisions in business history. As of this morning I know four people already in my office are canceling all business with Netflix. The main issue I see is separating the streaming and the DVD rentals. The timing is not right because there are not enough good movies available to stream. Classic movies like The Godfather still have to be viewed by mail delivery.  Consumers would accept a price increase in the old program but this is just not smart business.  Only time will tell.

    MNB user Claire Penn wrote:

    I just love your articles and enjoy them immensely.  I am so glad you addressed the Netflix price increase.  It seems to me that Netflix, about a year or so ago, had a price increase.  Didn't they?  I seem to remember it going up from maybe $7.99 to the present (and going away as well) $9.99.  My memory probably is failing me,  however I DO remember what I did yesterday when I got that email saying the price would be increasing by $6.  I immediately clicked on the link in the email and canceled my DVD service.  I thought to myself, I am NOT paying for DVDs when I can get what I want at Redbox, Blockbuster etc for $1. My last Netflix  DVD is in the mailbox as I type this email and I will continue to enjoy the streaming for $9.99.  I also am a member of Amazon Prime and get free streaming on a lot of movies/tv shows that way as well.

    I have a Redbox available to me TWO minutes from my house and right now I am going up to my theatre room to watch "Insidious" that I rented yesterday.  I think this is a decision that Netflix will live to regret, but I won't be running back to them if they do.  They can have their DVD rental  program.  I (and I'll bet a lot more like me) won't miss them!


    And, from another MNB user:

    I will probably discontinue my Netflix subscription unless they scale back the rates a little.  All the articles mention how Netflix says a lot of people still like DVDs.  What they don't say is that a very significant percentage of Netflix offerings are still "DVD only".

    From yet another MNB user:

    I, as it seems you do, value the DVD's more, however, this is strange, I tend to use the online streaming more.  I suppose the reason for this is I am lazy and do not return the DVDs in time to always have a choice at home. In addition, the DVDs I get tend to be for me, while my spouse tends to not like my choices (of DVDs) which leads us to stream a movie.  Make sense?  This is just reality getting in the way of my vision of what things should be.  Other than perhaps that marital issue which I will not bother you with, I was without an unwatched DVD the other night, and my wife unexpectedly out with friends (this means I get to watch some I want). I was looking to watch something on my queue list. I spent about 30 minutes looking through new releases to watch instantly  and I did not find anything that was enticing.  There were many movies that were DVD only however the choice of streaming videos was not good.  Therein, for me, lies the problem.  I will be leaving Netflix in September, although I have been a member of theirs for about 6 years.  I thought they had a great insight on the consumer at that time, however to me, they are now just another shark at my entertainment dollars.  I have many more choices nowadays, especially since I have a dedicated computer hooked up to the flat screen and my DVR.  Just a thought, and besides it gave me a chance to watch Kelly's Heroes again....

    MNB user Dave Stoll wrote:

    All right Kevin – It’s a pretty sad commentary when I feel my blood pressure rise, and my anger swell within seconds of reading the name Netfllx, when legislature at the state and federal levels don’t get a second look from me, but I’m human and an American.  I received my email yesterday at noon, and my first impulse was (and still is) that’s IT, I am done with these guys, how dare they.  I’m canceling.  They are taking what I have right now, and with not adjustment, charging me 60% more.  Now, I probably wouldn’t mind an increase if the streaming library were expanded.  If you had the option of DVD or streaming a movie for ALL titles not just some of them.  I like the streaming aspect, but when I stream I’m usually “settling” for what’s available.  I have not had a single moment when I went to find a video, and cheered because my first, second, or third choices were available via streaming.  I usually end up adding it to my queue, bumping it to the top over my son’s latest Lego adventure and hope that I’m still excited to see it when it arrives.

    Then the striking blow!  I went last night to cancel Netflix, remember I’m still pretty peeved six hours later, about this increase AND the other increase they took earlier this year.  I go to cancel, and they state that the cancellation would be immediate and NO REFUND for partial months.  I’m not sure about the rest of your readership, but do you know when I was charged for my most recent month’s service?  Yep, MONDAY, and Tuesday I get the email!?! Unbelievable.  So it’s good-bye Netflix, I was a loyal and faithful customer for 6 years.  I am leaving and I’m not turning back.


    Now, to be fair, not everybody’s service was renewed on Monday; I checked my bill, for example, and it does not come up for monthly renewal until the 20th.

    This is all, I think, an eye-opening lesson for every retailer and marketer. The connection to the consumer, no matter how profound, can also be fragile, requiring nurturing and care. Shoppers who have made your product or service a big part of their lives will go along with you as you increase prices or change formulations, but only so far. And if or when they turn on you, especially these days, they may do so with enthusiasm that will be instantly communicated to thousands or millions of other people.

    Netflix clearly sees a strategic imperative. But sometimes, odd as it seems, pursuing own’s own strategies actually can get in the way of how one serves the customers. That seems to be what has happened here.

    Will Netflix back off? Maybe. Will it be too late? Perhaps. Will this be an irreparable hit on its reputation and remarkable run of growth? Hard to say.

    But it certainly won’t help. And it is hard not to think that when Netflix made this decision, it did not do so with its eyes wide open.

    A mistake that other retailers and marketers need to be careful not to make.
    KC's View:

    Published on: July 14, 2011

    The Indianapolis Star reports that “an increasing number of retailers are offering to send receipts by email, touting it as a convenient, environmentally friendly alternative to paper receipts. Gone, they say, are the days of digging through your purse looking for that crumpled slip of paper.”

    The trend is “part of a growing effort by retailers to electronically reach out to consumers via their smartphones and computers. They send emails and text messages alerting consumers to deals. They have websites and Facebook pages and smartphone apps -- all aimed at making the store more than just a bricks-and-mortar shop.

    “Typically, emailed receipts will contain offers for consumers to receive coupons and other deals from retailers in the near future.”

    Some suggest that it is a subtle way for retailers to find ways to invade shoppers’ personal lives, and some customers are “still loath to give stores their email addresses.”
    KC's View:
    The great thing about paperless coupons is that people have a choice - they can yes or no when the checkout person gives them the option. And you’d think that paperless coupons would give people additional ways to track their purchases, identify and quantify their own patterns, and even develop future shopping lists.

    I’ve always thought that paperless receipts are one of the best things that the Apple Store does. I’d be thrilled if everybody would offer me this option.

    Published on: July 14, 2011

    Kroger announced that it is building a website themed around its Comforts line of baby products - “ComfortsForBaby.com enables busy moms to access and exchange ideas online, offering a community where mothers can -- between breaths -- share their insights and experiences parenting newborns, infants and toddlers. The website is available in English and Spanish, with the latter designed specifically to engage Latina moms ... The website will offer advice-oriented articles, such as how to soothe a crying baby or make mealtimes more fun and nutritious. Articles focused on newborns, infants and toddlers will be updated weekly.
    Another feature will focus on products. It will provide an opportunity for moms to share their feedback online with other moms.”

    Paula Andruss, a mother of three and the site's official ‘Chief Comforts Mom,’ says that “ComfortsForBaby.com speaks to a cross-section of moms. It's a place where they can share, support and learn from each other.”
    KC's View:
    Brilliant.

    Moms would much rather listen to each other than to so-called experts.

    Now, I want to see Kroger do a website for men seeking comfort. Hell, I might even want to write it for them...

    Published on: July 14, 2011

    The Wall Street Journal reports that “Japan grappled with a fresh radiation scare Tuesday, as authorities found that beef contaminated with radioactive cesium had been shipped to shops and restaurants throughout the country.

    “The beef, from six cattle raised on a farm near the stricken Fukushima Daiichi nuclear plant, registered radioactive-cesium levels up to seven times that permitted by Japanese food-safety standards. Some of the meat had already likely been eaten, government officials said.”

    The story continues: “Experts said the level was too low to create health problems in people who ate just one or two servings. But the discovery dominated local news and TV shows, reminding Japanese consumers that they will be living with the threat of radiation for a long time to come - and highlighting holes in the way Japan is testing cattle for radioactive exposure.”
    KC's View:
    This must be both ironic and troubling for the Japanese, who have been highly vigilant about food safety when it comes to mad cow disease, blocking imports that they thought had any chance of being contaminated.

    Published on: July 14, 2011

    The Associated Press reports on an opinion piece that appeared in the Journal of the American Medical Association almost certain to generate a lot of debate.

    David Ludwig, an obesity specialist at Harvard-affiliated Children's Hospital Boston, and Lindsey Murtagh, a lawyer and a researcher at Harvard's School of Public Health, wrote an op-ed piece suggesting that the parents of extremely obese children ought to lose custody of their kids, at least temporarily.

    Roughly two million children in the US would fall into this category.

    State intervention "ideally will support not just the child but the whole family, with the goal of reuniting child and family as soon as possible. That may require instruction on parenting," Ludwig says.

    Adds Murtagh, "Despite the discomfort posed by state intervention, it may sometimes be necessary to protect a child.”
    KC's View:
    The AP says that Ludwig and Murtagh are not alone in this belief, that they join “a quiet chorus of advocates who say the government should be allowed to intervene in extreme cases.”

    This is a tough one.

    I have to admit that my first reaction is negative - that this seems like the ultimate in government intrusion in people’s personal lives.

    On the other hand, I’m intrigued by this line in the story: “University of Pennsylvania bioethicist Art Caplan said he worries that the debate risks putting too much blame on parents. Obese children are victims of advertising, marketing, peer pressure and bullying - things a parent can't control, he said.”

    Maybe that’s true, but the fact is that parents are supposed to be there to protect their kids from these kinds of things, or to help their kids be autonomous and self-sufficient and make intelligent decisions. If kids are eating themselves into illness and disease, parents do bear responsibility.

    But does this mean that the government ought to take kids away from their parents?

    I find it hard to wrap my head around this one.

    Published on: July 14, 2011

    The Los Angeles Times reports that French researchers writing in the Canadian Medical Association Journal argue that “many countries' alcohol consumption guidelines - which typically define a moderate, ‘sensible’ level of drinking designed to help consumers drink safely - fail to take into account long-term risks associated with drinking.”

    Consumption guidelines, the researchers say, “may have kept people from getting too drunk, but they failed to take into account the growing body of work linking alcohol use with cancer ... In recent years, alcohol consumption has been shown to increase the risk of mouth, throat, breast, colorectal and possibly liver cancers ... And no: the reported benefits of drinking for heart health don't change that, they added.  Recent research has pointed out flaws in studies showing a positive link between alcohol use and cardiovascular health, they said.  The team also pointed to a World Health Organization committee's recent conclusion that ‘there is no merit in promoting alcohol consumption as a preventive strategy’ for heart disease.”
    KC's View:
    I find it really, really hard to wrap my head around this one.

    Published on: July 14, 2011

    Retailing Today reports that the Great Atlantic & Pacific Tea Co. (A&P) has introduced a new line of locally raised beef, chicken and turkey products under the Mid-Atlantic Country Farms brand name.

    According to the story, the “products are raised by family-owned farms using humane and sustainable farming methods, reducing the environmental impact of shipping food products over long distances ... the animals used in the product line are fed a 100% vegetarian diet made from corn, soybean meal and a blend of vitamins, minerals, amino acids and oils.”
    KC's View:
    Now, if A&P could find itself some local customers, maybe it could really turn its declining fortunes around.

    (Okay, that was a cheap shot. I couldn’t help myself. But I kid because I love.)

    Published on: July 14, 2011

    Marketing Daily reports that “Pepsi is employing a Foursquare badge on a global basis as a key component of its ‘Summer Time is Pepsi Time’ campaign ... Pepsi has designated locations around the world, including beaches, parks, ballparks, concert venues and pools. Fans who check in from any three of them earn badges, which qualify them for being entered in sweepstakes for prizes.”

    • The New York Times reports that “the Borders Group may be near liquidation after a committee of its unsecured creditors on Wednesday rejected a proposed takeover by the Najafi Companies, a private equity firm. In a motion filed with the federal bankruptcy court in Manhattan, the committee said it was concerned that the agreement could allow Najafi to buy the company at a low price and then liquidate Borders later without letting creditors benefit.

    “The committee’s motion essentially argues that Borders may be worth more as a court-supervised liquidation than as a company sold to a bidder.”
    KC's View:

    Published on: July 14, 2011

    There are a number of emails included in the Eye-Opener above, but there was one thing I did want to address this morning.

    Thanks to all of you who wrote to point out that I had a small typo yesterday. In writing about NYC video stores, I wrote about “rarefied tastes.”

    But I wrote “testes” instead of “tastes,” until a deluge of email brought it to my attention, and I fixed it.

    Sorry about that. Though I am glad I was able to give so many of you an early morning laugh.




    On another subject...

    Yesterday’s Eye-Opener took note of a Washington Post story saying that First Lady Michelle Obama, who has been such an advocate for fighting childhood obesity, went to a new Shake Shack in the nation’s capital and had a burger, fries, shake and diet coke, which came to about 1,700 calories. Some suggested that this reflected some level of hypocrisy on her part, but I disagreed:

    Obama has spoken passionately about the importance of making sure that everybody - especially children - have access to healthy food. She has spoken passionately about the importance of exercise. And she has spoken about the importance of moderation.

    The point of living a healthy life, I think, is being able to enjoy a Shake Shack burger and fries, (or whatever your gastronomic passion happens to be) and then go for a jog or a bike ride or just shoot some hoops with your kids later in the day.


    One MNB user replied:

    When I started to read your eye-opener today I have to admit I started to get a little fired up until I saw you were taking the other side. I think what Michelle Obama is doing for children and health is great! As a mom of 2 I love her spots on the Disney Channel with the young actors. I could not agree with you more, moderation is key!

    My 3 year old will have a tendency to order broccoli as her side when we go out to dinner and the servers about die when they see she has made that choice for herself. But, we also enjoy the occasional McD’s run as well (of course we choose the Play-Place so she can run it off at the same time)! Even then she’ll often choose apples over fries. Parents need to be the ones to instill these values early on.

    I don’t think it’s fair that the first lady to ridiculed for one meal because we all should be allowed to indulge on occasion. Thank you for your open minded view on this and to Michelle Obama for being a real person!


    And MNB user Mark Boyer added:

    Amen to the notion that you can enjoy any food you want, as long as you do it as part of a balanced diet, and exercise to help burn the excess calories. Taking someone to task for indulging themselves is crap. While food is part of sustenance, it can also be one of the more enjoyable things a person can do.

    And another MNB user wrote:

    I just had to comment on this one. Thank you for staying positive on Michelle getting “caught” enjoying a less than healthy meal. Moderation is definitely the key. But it’s a hard one to teach. It doesn’t water down all of her amazing efforts to teach and  set the example for her children and all of ours. We know she’s just as passionate about fruits and veggies as ever!

    The more I thought about this story yesterday, the more it annoyed me.

    If anything, Michelle Obama is a walking billboard for the importance of moderation. She seems like a happy, healthy person who is raising her kids in an intelligent, responsible manner, gets plenty of exercise, and has a good relationship with food ... including an ability to indulge herself from time to time.

    And let’s face it. (This is where I’m probably going to get myself in some trouble, but what the hell.)

    Michelle Obama is probably the hottest First Lady we’ve ever had, with the possible exception of Jackie Kennedy.

    So if she wants to have a burger and fries, she should go for it.
    KC's View:

    Published on: July 14, 2011

    In World Cup semifinal play, the US women’s soccer team defeated France 3-1, and will now go on to face Japan in the finals on Sunday.
    KC's View:
    I know almost nothing about soccer and less about women’s soccer.

    But that said, if I were having a child this week, I’d seriously consider naming her after Abby Wambach.

    This is just the coolest thing, it is fun to watch, and people are captivated by it.