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What Newspapers Can Learn from Video Games

Pong_1Just about a year ago, CEO Martin Nisenholtz of New York Times Digital talked about the "Pong of Journalism":

"Pong was one of those magical moments in computing when an entirely new way of creating was popularized. It was  the spark that lead to a multi-billion dollar industry that today earns more revenues than filmed entertainment. It happened because the elements of technology came together in a way that enabled the creative community – in this case computer programmers (there were no videogame specialists in those days) to make an experience that was just good enough to engage millions of people."

The point of Nisenholtz's vision of value was to provide skittish investors with the basis for understanding why newspapers might actually be on the verge of a financial renaissance. Investors need good news - all they can see is the costs of newsprint continue to go up, Craigslist continues to create havoc with classifieds, ShopLocal is no CareerBuilder, and what to do with all of those damn blogs!!

On the anniversary of his presentation to the SIIA, I'd like to bring up a different videogame metaphor.

I think young people get the Internet because we've internalized videogames as part of our rites of passage. We understand that when Pac-Man eats a power pill he becomes - for a little while, at least - a more fearsome competitor, faster, and strong enough to (temporarily) banish his enemies. We knew that the power pill wouldn't let us become a Galaga-style spaceship or a Donkey Kong-style plumber - no, the little yellow guy was stuck with being who he was.

But take it from me - it's not that bad being a little yellow guy  ;)

Newspapers don't have to become something different in order to realize Nisenholtz's dream of profitability. They don't have to become uber-blogger conglomerates or a worldwide provider of classifieds. However, I think it does mean that they need to take a look at their newsroom and what it might mean in this vague new world...and remember that their integrity, however cheap it may seem today in the face of bloggers that can seemingly make up "facts" with impunity, is an asset not to be trifled with.

It's been 10 years since Hearst took a long, hard look at their innards to find out what it took to create new products. It's time to revisit that, with fresh eyes.

The Real War at Cablevision: Voom vs Real Estate

Voom_01_2It looks like Voom might be saved after all.

Earlier I had speculated that dinner at the Dolan household might be a bit, er, strained after CEO James Dolan moved to sell the Voom assets, against his father Charles' wishes...and talked about the impact that sports programing might have.

Cablevision Systems Corp. announced late yesterday that it has signed a letter of intent to give Voom's 21 high-definition channels, its roughly 26,000 customers, a lease on satellite space owned by SES Americom and other assets to Voom HD LLC, the new private company being formed by Charles and Thomas Dolan and other shareholders. If this happens look to Charles to leave the company he built in order to avoid a conflict of interest.

I think it's interesting that while this is happening, Cablevision through its Madison Square Garden (MSG) unit today sent a letter to MTA Chairman Peter Kalikow outlining a proposal to develop the MTA's West Side Hudson Rail Yards for $600 million - six times the price offered by the New York Jets. In the letter, MSG outlined plans to develop a dynamic mixed-use community with residential, retail, hotel, and cultural components.

With the probable loss of NHL for the foreseeable future, the NFL flexing its muscles and a continuing debate over the merits of additional non-NBA basketball programing, sports television is already going through some tough times unimaginable a few years ago. Looking at the tea leaves, it appears that Cablevision is voting for real estate over HD, following the lead of other sports/real estate ventures like Denver-based Altitude Networks.

Link: Story in the Wall Street Journal (subscription required) 

NYC Retail Rents Clobber LA, Chicago, Honolulu ...

Premierretail_1After attending a real estate investment trust conference a few years back, I seem to remember that 40% of the real estate value in the United States is locked up in a mere half percent (0.5%) of the actual land mass. Looking at a page from a recent Grubb & Ellis presentation, I could see how this might be true.

The full slide (Adobe Acrobat required) ranks the ten most productive retail locations as follows:

1. Fifth Avenue (New York, NY)
2. Rodeo Drive (Los Angeles, CA)
3. Kalakaua Avenue (Honolulu, HI)
4. Newbury Street (Boston, MA)
5. Union Square (San Francisco, CA)
6. Connecticut/Pennsylvania Avenue (Washington, DC)
7. South Beach (Miami, FL)
8. Walnut Creek (Oakland, CA)
9. Olive to University (Seattle, WA)
10. Michigan Avenue (Chicago, IL)

Indeed a pretty penny.

Link: National Real Estate Investor web site

Sears/Kmart Love Child to Debut

SearsThose expecting Sears to play the role of traditional offline retailer might be surprised by the launch of Sears Essentials. The new concept will carry the Apostrophe, Craftsman and Kenmore lines, combining Kmart's strengths - pharmacy and HBC - with Sears' competencies in appliances, tools, and home.

Upon the purchase of 50 Kmart and six Wal-Mart stores last year, Sears could have simply rebranded the locations. Instead, Sears appears to be embarking on an aggressive growth strategy to create a family of store concepts. The new format will feature a one-level racetrack design, exit-cashiering and a centralized customer service center. Sears plans to open the first 25 Sears Essentials units this spring. The stores include three in San Diego and one in Louisville, Ky. This follows on the heels of last year's launch of Sears Grand.

In some ways, this is similar to what blogging companies like Corante have been doing - looking at what their consumers are doing every day, finding the areas that are both wildly popular and have a huge upside potential - and then launching vertically integrated concepts that serve that niche. Both Corante and Sears have an architecture that enables them to launch new concepts with a minimum investment.

Link: Sears Press Release

Saks Contemplates A Commitment to Luxury

OfffifthWomen's Wear Daily reports that Saks is exploring the disposition of its 238 middle-market department stores like Proffitts and Younkers, so it can focus on its 58 luxury stores and its 52 Off Fifth outlets.

Saks had previously explored this idea back in 2000, but abandoned it in 2001 when luxury brands weren't getting a premium valuation.
Saks management might have taken this to heart - like the investment community, they believed Americans would shun luxury goods in the wake of 9/11, and so failed to capitalize on the boom in luxury sales that has benefitted rivals like Neiman-Marcus and Nordstrom.

W Hotels Offers Satellite Radio as Amenity

W_sirius_1The HotelChatter blog has reported the W Hotels in Beverly Hills and Times Square have rolled out Sirius satellite radios, as shown to the right, in some of their suites. It provides consumers - who probably don't have a favorite local radio station - with a rich choice of high quality, commercial free music. It also reinforces luxury hotels as a great sampling medium for luxury services.

This idea is much easier on hotel RevPAR than trying to provide guests with iPods, although W Hotels seems to be a bit of a trendsetter in high end audio: years ago they were among the first to offer in-room CDs featuring tracks selected by a guest DJ, and I believe they were the first hotel chain to offer playlists on Apple's iTunes service.

Of course, with ad salesman extraordinaire Mel Karmazin at the helm of Sirus, how long until we hear local ads on the W Hotel Radio Network?

Link: HotelChatter

My Take: Google Maps is Critical to Success of Keyhole

GooglemapsGoogle Maps launched its beta. It's a fun service, one that I think a lot of people will use.

Here's my review of the service, complete with screen shots. In it, I describe how I think this service is going to evolve over time.

It's an important service too, given Google's investment in Keyhole. While Keyhole is an unbelievably cool service - I think leasing agents would love the ability to zoom in from the clouds to a specific building - it could benefit from a transitional service that gets the mass audience thinking about maps and directions as an everyday reason to search.

If you're wondering why someone would possibly be interested in working with maps every day, just visit Robert Scoble's weblog - I think he's on the right track with his traffic app. The desire to avoid traffic jams is probably the killer app that gets people using maps at least five days of the week.

Link: Review of Google Maps

Puny Chinese MP3 No Match For Apple Plan for World DRM Domination

TigerdirectBEIJING, CHINA - Not even the unlikely alliance of the mighty American Amazon.com with the heretofore unstoppable Chinese company TigerDirect (who is also a friend to small children) is a match for the fearsome Steve Jobs.

Their Perception Digital 1.5 gigabyte MP3 player is now available on Amazon for $100. It's a USB 2.0 mass-storage capable 1.5GB 1-inch drive player, with 13.5-hours playback. Their offering got turtlewaxed by the iPod Shuffle with the same ease that the mighty Godzilla dispatched the puny Gamera, even with the aid of what must be billions of Chinese downloads.

With the Chinese hero TigerDirect out of the way, is there any hope to stop Apple from converting the intellectual property it licensed from MPEG-LA into the world's largest and most pervasive digital rights management system? What surprise role will Dan Glickman, the new MPAA prexy play, and what can he do that Jack Valenti could not? And above all, where is Raymond Burr in all of this?

Stay tuned!

Hotel/Resort Hotspots #1

Magink_1WiFi directory publisher JiWire released its latest stats on where hotspots are located. The number of hotel/resort hotspots has surged 78% over the last six months from 9,000 in August 2004 to 16,674 today.

Hotspots per location type:
1. Hotels & Resorts (16,674)
2. Restaurants (9,718)
3. Cafes (8,842)
4. Stores/Shopping Malls (5,566)
5. Pubs (4,873)

The site goes on to mention there are 3,513 free hotspots and separately, there are 956 hotspots at airports.

Getting the Best Hotel Rates

Cornell_2If you're looking for the lowest rate on hotel rooms, a report published by The Center for Hospitality Research at Cornell reveals that travel websites, especially Travelocity, are currently tops but face strong competition from hotel chain web sites.

Corporate travel agencies are especially under fire given recent initiatives by Orbitz, Travelocity and others to specifically target this lucrative market. If the hotel market follows the same pattern as the airline industry, hotel chains will prefer to negotiate directly with corporate buyers in much the same way as Delta and American Airlines. Airlines might enjoy savings of $8 to $15 per transaction if tickets were booked differently.

The study also noted:

  • Hotel chains have made considerable progress in offering lowest-cost, last-room availability on their own websites, as compared with sites operated by third parties such as Expedia, Orbitz, and Travelocity.
  • Telephoning the hotel is the most accurate channel for determining room availability, but also has the highest cost room rates.
  • The chains' websites were reasonably good at ensuring availability, while travel websites, notably Expedia, often showed rooms as unavailable at a given rate, when in fact the room was available through other channels.

Link: Cornell Center for Hospitality Research (registration required)

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