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    Published on: September 14, 2018

    by Kevin Coupe

    The New York Post reports that AT&T’s president/CEO Randall Stephenson, in an analysts presentation this week, described HBO as being like Tiffany and rival Netflix as being like Walmart.

    AT&T got HBO as part of its recent acquisition of Time Warner, and Stephenson said that “AT&T and Time Warner are forming a ‘modern media company’ by combining four elements - premium content, direct-to-consumer capability, advertising technology and high-speed delivery networks.”

    A few things about these statements struck me as Eye-Openers.

    First, I’m not so sure I’d be willing to dismiss Netflix so easily. Sure, they may be more populist in nature than HBO, but it also is responsible for a lot of quality product - original programs like “Ozark,” “Luke Cage,” “The Crown,” “Stranger Things,” “House of Cards,” and the list goes on and on.

    Shows like “Real Sex,” “Cathouse,” and “Taxicab Confessions”? Those are HBO late-night “adult” series. (Though, to be fair, HBO has stopped making them and is getting out of this segment of the business.)

    I just think it is better to focus on making your own business better, rather than, in this case, bad-mouthing a business model that has more than 100 million streaming customers globally.

    Second … just for the record, Tiffany has about $4 billion in annual sales. Walmart has around $500 billion. Money isn’t everything, but I’m just sayin’…

    Third … I happen to be an AT&T cellular customer … and they’re going to have to do a lot to convince me that it is even close to becoming a modern media company. If I had to rate it on customer satisfaction compared to companies like Netflix and Amazon, it would be a lot further down the scale.

    I like and watch HBO a lot. But the only thing its recent moves have convinced me of is that it wants to get bigger … not necessarily better.

    And to me, “better” is always the best prescription for success, relevance and resonance.
    KC's View:

    Published on: September 14, 2018

    Engadget reports that Walmart is relaunching Jet, two years after it purchased the e-commerce business, and repositioning it as focused on urban consumers.

    Here’s how the story frames the move:

    “Going forward, will now cater more towards city dwellers, and the site's images and offered products will be tailored based on the customer's location. This localization is kicking off with New York City, but TechCrunch reports that it will roll out to more cities as well. Boston, Philadelphia and Washington, DC are up next.

    “In NYC, is also offering three-hour same-day and next-day grocery delivery for a $6 fee. Deliveries will be managed by another Walmart acquisition, Parcel, and the company says it will consider expanding the service to additional cities in the future. Additionally, will also offer personalized recommendations, different shopping experiences for each product category and the ability to build shopping lists with Siri. Next month, will also begin offering Nike and Converse products.”
    KC's View:
    To me, this is very smart. (Not that Doug McMillon and Marc Lore need or want my approbation.) But as Americans become more urban in nature, getting married and having kids later, living in smaller homes and maybe not even owning cars, companies that traditionally have built their businesses on big stores in suburbs that depend on families with lots of kids riding around in minivans, are going to have to make some adjustments.

    Jet is a perfect vehicle for this. I keep waiting for what I think is inevitable - small format Jet bricks-and-mortar stores strategically placed in urban neighborhoods and with an approach highly distinct from Walmart’s.

    Published on: September 14, 2018

    Amazon founder-CEO Jeff Bezos yesterday pledged to spend $2 billion of his personal fortune to create what is being called the Bezos Day 1 Fund, which will address early childhood education issues and the problem of homelessness in America.

    Bezos wrote on Twitter that “the Day 1 Families Fund will issue annual leadership awards to organizations and civic groups doing compassionate, needle-moving work to provide shelter and hunger support to address the immediate needs of young families. The vision statement comes from the inspiring Mary's Place in Seattle: no child sleeps outside.

    “The Day 1 Academies Fund will launch and operate a network of high-quality, full-scholarship, Montessori-inspired preschools in underserved communities. We will build an organization to directly operate these preschools. I'm excited about that because it will give us the opportunity to learn, invent, and improve. We'll use the same set of principles that have driven Amazon. Most important among those will be genuine, intense customer obsession. The child will be the customer. ‘Education is not the filling of a pail, but the lighting of a fire.’ And lighting the fire early is a giant leg up for any child.”

    According to Quartz, “Mary’s Place is the local nonprofit that Amazon partnered with last year to build a 200-bed homeless shelter, slated to open in 2020, using 47,000 square feet of space in its next office. The plan was revealed in dramatic fashion, with an Amazon official delivering Mary’s Place a large golden key in an Amazon box. The year before that, Amazon donated one of its unused buildings, an old Travelodge hotel, as a temporary shelter. Seattle’s homelessness crisis is one of the worst in the country, thanks in part to a booming tech sector and soaring rents.

    Yet Amazon hasn’t always been so willing to help the homeless. Earlier this year, for example, Seattle City Council proposed a ‘head tax’ on large employers that would be used to fund homelessness and affordable housing programs,” and Amazon was one of several big local companies that lobbied furiously - and, ultimately, successfully - against it.
    KC's View:
    There are some folks - and they have a legitimate argument - who are saying that this is just a public relations move by Bezos, that he wants to quiet the critics.

    Even if that is a little true, I’m happy to take him at his word on this. Bezos is a change-the-world kind of guy, and these are two major issues that, if they’re going to addressed, require both a nuanced public policy approach and a concerted effort by the likes of Bezos.

    If Bezos can brings the ingenuity that drives Amazon to both homelessness and education, I’m certainly willing to give him a shot.

    Published on: September 14, 2018

    The Washington Post this morning reports on a new poll from the Pew Research Center concluding that “in several countries around the world, large majorities of people believe it is most likely that robots will be doing much of the work done by humans within 50 years.”

    Greece sits atop the list - 91 percent of survey respondents there think that robots and computers “definitely” or “likely” will do much of the work done by people. In the US, the number is lower but still a majority - 65 percent.

    “The effects of this technological leap are not viewed optimistically by most,” the Post notes, and “people largely say they think humans will struggle to find meaningful work and inequality will rise, the research found.”

    The story says that “respondents were also asked about how automation would affect their countries. In each case, a large majority said it would make it difficult for ordinary people to find jobs, while a majority in most countries said jobs lost to automation would not be replaced by “new, better paying jobs.”

    “There were only three countries in which a majority thought automation would make the countries' economies more efficient — Japan (74 percent), Poland (52 percent) and Hungary (52 percent). In every country surveyed, a significant majority believed automation would worsen the existing inequality between the rich and the poor.”
    KC's View:
    I don’t think you can stop the robot revolution, but we certainly need to be conscious of the cultural and economic implications … and develop public policy approaches that embrace the opportunities, not deny them.

    Published on: September 14, 2018

    Eater Chicago reports that Starbucks will open a new Princi Bakery there, the second one it has opened in the US; the first was opened in Seattle this past summer, and a third is slated to open in New York this fall.

    The Princi Bakery format in the US is the result of a deal with Milan-based baker Rocco Princi, who operates bakeries in his hometown, as well as in places like London and Shanghai.

    According to Eater, “Princi will offer table service in addition to the normal Starbucks experiences. It’ll also have wine and beer at Bar Mixato.”
    KC's View:
    Think of this as a stalking horse for when Starbucks opens a giant Roastery in the old Crate & Barrel space on Michigan Avenue. But I’m still interested to see how this all develops.

    Published on: September 14, 2018

    The New York Times has a story about a reporter’s visit to Standard Market, the San Francisco grocery store that - like Amazon Go, but using different technology - offers a checkout-free shopping experience.

    It is not a glitch-free experience, though it does seem to have a lot of potential, relying “exclusively on the ceiling cameras and artificial intelligence software to figure out what you are buying. The cameras document shoppers’ movements, speed, stride length and gaze. The store knows when I glance at a poster and for how long. It knows if I slowed down, grabbed a chocolate bar and put it back. It knows if my body is facing the dried mangoes but my face is set on the popcorn.”

    And, “unlike Amazon’s Go stores, which have a subway turnstile-like gate for entry and exit, Standard Market has an open door, and the path is clear.”

    You can read the entire story here.
    KC's View:
    This is all about data … one of the advantages of systems like these is that they are tracking everything, creating an enormous treasure trove of data that can be applied to all sorts of things and sold/rented to a lot of companies.

    Published on: September 14, 2018

    Volkswagen said yesterday that next year will be the last that it will make the iconic Beetle, and it puts a greater emphasis on SUVs and still-to-be manufactured electric cars that it thinks are more in synch with consumer tastes.

    According to USA Today, “The Beetle had fallen out of favor among American consumers despite its iconic body style. The last version will be offered in two special models: the Final Edition SE and Final Edition SEL.”

    The current Beetle reportedly is only made in one factory, in Mexico.

    The Volkswagen decision should be seen within the context of the announcement recently by Ford that it essentially is getting out of the passenger vehicle business (except for the Mustang) and concentrating on trucks and SUVs.
    KC's View:
    If I’m not mistaken, this actually is just the latest iteration of the Beetle; it went away for awhile (at least here in the US), and then came back in its current form. While sales may have been down, it remains both iconic and instantly recognizable … and I’m not surprised that the Volkswagen folks have been careful to suggest that it could make a comeback at some point in the future.

    After all, the almost-as-iconic Volkswagen bus apparently has made a comeback … though I don’t think I’ve seen one on the road.

    Always leave your options open, because almost everything is circular.

    Published on: September 14, 2018

    CNet reports that Amazon founder/CEO Jeff Bezos said yesterday that the company remains on schedule to announce a decision by the end of the year about the location of its much-discussed second headquarters city - HQ2, in which the company has pledged to invest $5 billion and hire as many as 50,000 employees.

    The story notes that “Bezos reiterated the company's timetable for announcing the winning city during a talk Thursday evening at the Economic Club of Washington, DC, but he didn't hint at which city he's leaning toward. DC, along with neighboring Northern Virginia and Montgomery County, Maryland, are widely viewed as the top potential picks.”
    KC's View:

    Published on: September 14, 2018

    • The Wall Street Journal reports that Walmart has struck a deal to acquire Cornershop - described as a “three-year-old startup that runs marketplaces, through an app, for on-demand delivery from supermarkets, pharmacies and other food retailers in Mexico and Chile” - for $225 million.

    The move, the Journal writes, extends “an overhaul of its international retail strategy to focus on digital commerce … The acquisition follows an investment Walmart recently took in Chinese online grocer Dada-JD Daojia and a working agreement the company struck this year with Japanese grocery-delivery service Rakuten Kobo Inc., actions that come as the retailer is scaling back bricks-and-mortar operations in the U.K. and Brazil.”
    KC's View:

    Published on: September 14, 2018

    …with brief, occasional, italicized and sometimes gratuitous commentary…

    • The Wall Street Journal has a story about how United Parcel Service (UPS) plans to address the problem of “lower-margin packages it carries for large shippers like Amazon.”

    It is going to cater more to small business, and the health care segment.

    “When such customers ship packages,” the Journal writes, “UPS says it earns revenue and profit multiple times higher than large shippers, which make up a big chunk of the company’s delivery volume. That’s because small and midsize businesses may not have the bargaining power in achieving lower rates that large shippers get, while companies shipping medicine and health products have more time-sensitive commitments that cost more.”

    The story goes on: “UPS also said it is looking to expand in international markets, as well as participate in the continuing growth of the U.S. e-commerce market, to improve the bottom line. On the latter point, it will focus on improving the revenue per piece it receives across the board and implement higher surcharges on large packages.

    “Additionally, UPS is cutting costs and operating more efficiently to help offset the huge investments it is making to transform its network with more capacity to process shipments automatically.”

    CNBC reports that Sears yesterday “reported the smallest decline in quarterly same-store sales in more than three years, but its losses widened, as the embattled department store chain continues to trim its fleet of stores and aims to get back to profitability … Sales at Sears and Kmart stores open for at least 12 months were down 3.9 percent during the second quarter, compared with a decline of 11.9 percent in the prior period. The 3.9 percent drop included a same-store sales decline of 3.7 percent at Kmart stores and a 4 percent decline at Sears stores.”

    CEO Edward Lambert continues to say that he can make the company great again, but I continue to believe that Sears is a company that is way, way beyond its expiration date.
    KC's View:

    Published on: September 14, 2018

    …will return.
    KC's View:

    Published on: September 14, 2018

    • In Thursday Night Football action, the Cincinnati Bengals defeated the Baltimore Ravens 34-23.

    • This may not matter much to anyone who is not a New York Mets fan, but it was announced yesterday that David Wright - one of the best everyday players ever to be on the Mets’ roster, but who has been on the disabled list since 2016 - will be reactivated and placed on the team’s major league roster. Wright will play just one more game - on September 29 - and then will virtually retire, ending his years-long and ultimately frustrated efforts to get his body back into playing shape. (Whether it will be an official retirement will depend on whatever deal the Mets can reach with the insurance company, which has been paying his salary during the long convalescence.)

    As the New York Times writes, “Wright’s return to the field will no doubt be a rousing and poignant moment, especially in a lost season for the Mets (67-78). He was drafted by the team in 2001, played in 13 major league seasons for them, signed two substantial contract extensions to stay, made seven All-Star games, won two Gold Glove awards and sits atop many franchise leaderboards.”

    As he leaves the game, Wright will be remembered not just as one of the most talented players ever to occupy the home dugout at Shea Stadium and then Citi Field. He’s also been an outstanding citizen and even a role model for sportsmanship … which is no small thing these days.
    KC's View:

    Published on: September 14, 2018

    Reed Farrel Coleman is out with a new Jesse Stone novel, “Colorblind,” as he continues the series that was started by the great Robbert B. Parker, and it is a yet again a strong entry that advances the characters in new and mostly interesting ways.

    One of the things that Coleman has done since taking over the Jesse Stone books is bring his own particular sensibility to the subject. Parker prided himself on being a novelistic minimalist, but that’s not where Coleman lives. He likes to dig into characters’ pain, the deeper the better, and he always has explored Stone’s alcoholism to a greater degree than Parker ever did. Parker liked to write Stone as a functional alcoholic, but Coleman harbors greater doubts about his functionality.

    As “Colorblind” begins, Stone has returned from rehab, which is where he landed after falling apart after a personal tragedy. The novel explores Stone’s ability to balance his own healing process with the need to do his work, and in this case, the work is tough. A white nationalist group has begun operating in his town of Paradise, Massachusetts, and is getting increasingly aggressive about targeting African-Americans in town.

    Coleman brings both nuance and reasonable moral outrage to the scenario; Stone, for all his failings, remains very much in the mold of a western sheriff charged with not just protecting his town but standing for moral clarity.

    As with all of Coleman’s work, “Colorblind” is compelling, textured and a page-turner, especially for those of us who are longtime fans of the series (and the Tom Selleck movies based on the character, but that increasingly occupied as different universe as time wore on).

    Except … for the first time in any book that Coleman has written, I have one enormous problem with a narrative choice that leads to a twist that I cannot and will not describe here because it would be a spoiler. I can’t tell whether his choice is deliberate, or whether it just doesn’t work … except that it ends up with the reader (at least this one) knowing something a lot sooner than Jesse, which doesn’t make sense, because he should be smarter about this stuff than I am.

    Maybe someday I’l have the chance to ask Coleman. But I will say that despite this one misgiving, I’m happy to recommend “Colorblind,” and I look forward to his next contribution to the series.

    MNB readers know that I am an enormous fan of Albariños, a terrific white wine that mostly comes from the Galicia region of Spain. Just had the opportunity to taste a new one with which I was not familiar - the 2016 Fulget Albariño, which is crisp and fresh and terrific with pretty much any spicy seafood dish.

    That’s it for this week. Have a great weekend, and I’ll see you Monday.

    KC's View: