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NYC "Worst City" for Online Fraud

Nyc_1New York City, Miami and Los Angeles are the "highest risk" cities for eCommerce fraud, according to a CyberSource press release.

  1. New York City: 18% (down from 26% last year)
  2. Miami: 7%
  3. Los Angeles: 7%
  4. Chicago: 2%
  5. Detroit: 2%
  6. Nigeria: 31%
  7. China: 7%
  8. Indonesia: 5%
  9. Afghanistan, Mexico, Russia, U.K, Vietnam: 4% (each)

To combat fraud, the report indicates most retailers seeking to adopt Card association payer authentication services (e.g. Verified by Visa, MasterCard SecureCode) and automated order screening.

To assist in this process, MasterCard is promoting a free network vulnerability scan for retailers that act before June 30, 2006, from one of five different providers: AmbironTrustwave, Cybertrust, One-Sec, Qualys, and SecurityMetrics, Inc.

Link: CyberSource Fraud Report (free, registration and Adobe Acrobat required)

Luxury Knockoffs Create New Ways For Landlords to Differentiate

Jennifer_lopezOne downside to globalization is the ever-escalating sophistication of knockoff manufacturers. Today's Wall Street Journal (subscription required, oddly enough, also reprinted in the Pittsburgh Post Gazette for free) describes the growing sophistication:

"...this month, a Hong Kong market was selling copies of Louis Vuitton handbags that had been unveiled in Paris but weren't yet in stores, says Nathalie Moulle-Berteaux, intellectual-property director of LVMH Moet Hennessy Louis Vuitton SA's fashion group...one 2001 Hong Kong shipment nabbed by finance police contained a kit for the forgery of Officine Panerai watches...(including) metal plates and diagrams showing how to attach them to watch faces and how to forge the Panerai logo."

While the Worlds Customs Organization "only" estimates the annual sale of counterfeit luxury goods to be about $27 billion, if you're a city or a mall, the bigger harm comes from damage to the value of retailer rents and leases.  As I've blogged in the past -- if you're a landlord, it's not going to be "just enough" to collect your rents -- if you want the luxury leases, you just may want to show how you work with the local city government to protect the increasingly complex intellectual property interests of your customers.

Link: Anti-Counterfeiting Resources provided by the National Association of Manufacturers

Inside the WB/UPN Merger: The Increasing Importance of Affiliates

CwThe WB and UPN television broadcast networks, having failed to improve their audience ratings, will merge to form the CW Television Network to lure younger viewers, to be owned 50-50 by UPN parent CBS and WB co-owner Time Warner. 16 stations owned by the Tribune Co. will become affiliates, but will lose the Philadelphia, Atlanta, and Seattle markets to CBS.

With the fragmentation of media, it is harder than ever to create a successful television series. Even Monday Night Football ceased to be as profitable as it used to. The NFL/ESPN deal provided a powerful way for ABC to sustain the franchise without losing the property to any of their competitors.

CBS has long struggled with developing additional networks beyond its flagship. ABC in particular zoomed off to a fast start with ESPN, and improved its position after Disney purchased it. Even NBC flourished after GE acquired it, building networks like Arts and Entertainment, Court TV, American Movie Classics, Bravo, Sports Channel America, and the History Channel. More importantly than economies of scale, these mini-networks provided a hedge against the biggest risk: the ability of any network to develop compelling programing. Both the WB and UPN were created at a time when the studios began realizing the value of so-called weblets.

But with affiliate agreements expiring, cost-cutting and pink slips rampant at the WB, emerging video distribution platforms hungry for content, and a newly energized CBS management willing to rethink how it ran its business -- there was an opportunity to make a change. Programming will be a merged effort, taking the best of WB and UPN, including "Smallville," "Gilmore Girls," "Everybody Hates Chris," "Girlfriends, "Veronica Mars" and "Smackdown."

This kind of combination may have gotten its start from long-standing discussions on combining the newsgathering operations of CNN and CBS News, which as I've noted before, is torn by the economics of maintaining local news bureaus around the world, that are actually staffed by people that know the local lay of the land.

Bottom line: the financial contribution made by ancillary video distribution platforms - whether cable, satellite, IPTV or iPod - is only going to increase in years to come. And, like it or not, this is going to create more tension between the networks and affiliates.

Amazon vs Toys R Us: A Train Wreck Waiting To Happen

ToysrusToday's Wall Street Journal (subscription required) and Pittsburgh Post Gazette features a story on Amazon and Toys "R" Us, the high hopes they once had, and where they are now.

John Eyler, then CEO of Toys "R" Us, testified, "We are at a point in the relationship with Amazon where we have no trust whatsoever in dealing with this organization." If it sounds familiar, it should: it's a variation on the same refrain you used to hear from companies dealing with Microsoft, and more recently, Google. These companies have had, at different times in their maturation, a sense of "manifest destiny".

This is all well when you're only playing with yourself; but when you get others involved, it is important to understand how early naivete can lead to disillusionment. Versioning is a discipline well-understood in the technical world but particularly useful in cases like Toys "R" Us. Amazon, in my view, could have done a better job of illustrating the roadmap for its business partners, particularly in highlighting potential hurdles in years to come.

While candid discussions like that might have torpedoed some relationships they were attempting to build, I think those relationships would have been doomed in any case. Now, much of what Amazon has build into their retail services platform may have been based on the business logic of a partner profile that may never quite fit.

Versioning is something Microsoft does quite well. They spend a disproportionate amount of resources working with their partners, and while much of this effort gets pooh-poohed today, it was of tremendous use to companies like Starz when I worked with them in the mid-90s to contemplate their own future. Starz' early involvement with Microsoft gave it the insight to negotiate VOD and IPTV rights to films released by Sony Picture Entertainment and Disney, and perhaps more importantly, making it impossible for latecomers like Netflix to get the same access to content.

In Memoriam: James Dungy, 1987 - 2005

James_dungySports Illustrated writer Peter King wrote a moving account of Tony Dungy's eulogy for his son James Dungy.

"My daughter Tiara (Dungy) said it best the other day,'' Dungy said. "She said, 'I just wish he could have made it 'til he was 20. If James could have only made it to 20, he'd have been all right. Because when you're 17 or 18 years old, you don't think everything your parents say is right. But by the time you're 20 or 21, you start thinking they were right on most things.' But he just couldn't make it to 20."

Dungy, in his polite but firm way, talked about how James struggled to keep grounded in the face of a culture that said young black men should dress, speak and conduct themselves opposite of the way Tony and his wife had taught James. He was trying to grow up, on his own, away from his mother and father, in the town in which he had spent his formative years.

Then Dungy told his team, in his first remarks to them since James' death, how proud he was of them. "You are the best role models this society could have,'' he said.

After the funeral, Dungy told the press, "The Lord's giving me an opportunity to show what my life is about,'' he said. "If I can only show my best foot forward in the good times, then I'm not a very good man.''

There are so many of us that have won the genetic lottery, a chance to make more with our lives than our forefathers ever dreamed. When the moment of decision comes -- as it must in everyone's lives -- we will learn what we are made of.

Link: Dungy Family Guest Book (via Legacy.com)

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