November 20, 2008
05:18 pm | 2 recommendations | Be the first to comment
Blizzard Entertainment’s release last week of Wrath of the Lich King, the second expansion pack to popular PC game World of Warcraft, might make one ask “What financial crisis?”
The markets look ugly, but Blizzard still broke the one-day sales record for a PC game by selling more than 2.8 million copies of new WoW expansion, according to a release by Blizzard. The game retails for $40, which multiplied by copies sold equals about $112 million.
The previous record holder was The Burning Crusade, the first expansion pack for WoW, which was released in January 2007. Users wanting to play as a Death Knight, level their characters up to 80, or explore the new continent of Northrend--all features in Wrath--will have had to purchase Crusade first.
So how much has someone who has purchased every WoW expansion paid for the privilege of slaying monsters and hanging with elves, dwarves, and goblins online?
Here’s my tally:
World of Warcraft, November 2004, $50
The Burning Crusade, January 2007, $40
Wrath of the Lich King, November 2008, $40
Online fee of $15 per month for 48 months, minus first free month: $705
The total? $835.
With numbers like that combined with the fact that WoW generated $271 million for Blizzard in the last quarter, it's not hard to imagine the 11 million monthly users making the game a steady $1-billion-a-year business. WoW indeed.
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November 19, 2008
01:26 pm | 2 recommendations | Be the first to comment
You’d think that Family Guy creator and burgeoning media mogul Seth MacFarlane would be able to go anywhere and do anything. After all, as we explained in our November cover story, he recently inked a record $100 million production deal with Fox and a groundbreaking deal with Google.
But apparently it can be tough to be the face (and voice) behind the animation.
Last Wednesday, a doorman at the Crown Bar in Hollywood rejected MacFarlane in a scene that you can watch at TMZ. To his credit, MacFarlane doesn’t get mad and instead decides to talk to the paparazzi. Only when he starts voicing a Family Guy character does the tiny bouncer change his tune.
Be sure to watch the video until the end when MacFarlane turns the tables on the guy by talking to the ‘razzi more--and making him wait. What it looks like is that even after growing a $2 billion comedy empire, MacFarlane is still a pretty friendly, easy-going guy. As one of the paparazzi yells, “If $400 million ain’t changed him by now…”
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November 13, 2008
12:36 pm | 4 recommendations | 1 comment
Yesterday morning, notorious liberal pranksters The Yes Men took spoofing to new heights by distributing 1.2 million fake issues of the New York Times dated July 4, 2009. Papers with the large bold headline “Iraq War Ends” were distributed at major New York gathering places like Union Square and Penn Station.
The paper and its well-designed spoof Web site highlight news stories that show the political left’s agenda realized. In this alternate universe, a universal health care bill is being passed by Congress, the Iraq War is coming to a close, and public universities are now free. The Web site also features spoof ads, including one for GM touting its electric car with the tagline “Because we have to.”
The most impressive thing about the spoof is that it took six months of planning to make it happen, according to a blog post by the real New York Times. A full Web site had to be made, editorial content was written and edited in the Times’ style, people had to be recruited to hand out papers and money had to be raised to fund the printing.
What they did mimics the guerilla-marketing tactics we discussed in our November issue. But if the point of guerilla marketing is to use a small amount of resources to get lots of free exposure for their product, did this prank, with its minimal national press, really do anything to push their cause forward?
There are arguably two ways to look at it. One take is to call this act an unrealistic, unfunny farce that is too similar to what The Onion and humor magazines strive for to be effective. People have seen similar satire before and this could just be used as ammunition for the political right to say the left is crazily out-of-touch with reality.
On the opposite end, people could view this as an innovative inspirational technique that shows the public a composite picture of a utopia that could be formed if only they willed themselves to do it. Try to think of the last time you were reading fake news stories from a paper in your hands that essentially called you to action. Nothing comes, does it?
Sure, the utopia fits President-Elect Obama’s speeches and policies much more than Senator John McCain’s, but you certainly don’t see former McCain supporters working so hard to show America what a McCain-led utopia would have looked like.
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October 30, 2008
11:20 am | 2 recommendations | Be the first to comment
MTV is on a roll. Just days after announcing a fresh new music video web site comes news that MTV Networks will license songs from the Beatles for an upcoming video game from Harmonix, the makers of Rock Band.
In our November issue, we talked about the importance of MTV’s new digital strategy, where a property like Rock Band has the potential to be a billion-dollar business. Van Toffler, the president of MTV Networks, has a stated goal to be a major player in the digital music realm, so this move makes sense.
The Beatles are the Holy Grail when it comes to licensed music. The band has the best-selling catalog of all time, they are an incredibly familiar brand, and playable digital iterations of their songs are sure to sell well. Who wouldn’t want to play plastic guitars and drums along with their favorite Beatles tracks?
Other big companies have unsuccessfully tried to convert the Beatles catalog to a digital format, but have been thwarted by Apple Corps., which strictly controls the property. Beatles songs aren’t even available on iTunes. So how did MTV do it? “Apple Corps. representatives said that it was the fact that they (Harmonix) originated the music band genre,” according to Kotaku.
For those Beatles purists who are worried the project could disgrace the act’s legacy, Giles Martin (son of George Martin, the famed fifth Beatle) will be the music producer on the project. Paul McCartney, Ringo Starr, and Yoko Ono Lennon apparently also put their creative input into the project.
Other noteworthy details, such as price, platform(s) it will be on, and specific release date of the game, haven’t been announced yet. But because the deal is exclusive, don’t look for Beatles songs to go Guitar Hero-ing any time soon.
Joystiq says the game should be out around the holidays in 2009. More notes from the conference call can be found here.
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October 28, 2008
03:52 pm | 7 recommendations | 1 comment
Yesterday MTV launched MTVmusic.com, its first serious iteration of a full-fledged music-video site. It’s been a long time coming. For years, former MTV fans have complained about modern MTV’s glaring lack of music videos. This new venture falls under the same strategy that we discussed in our November issue, in which MTV is throwing a lot of ideas at the Web wall and keeping whatever sticks.
MTVmusic.com boasts 21,997 videos from 4,708 artists. It’s nowhere near comprehensive, but it’s a good start. Videos are shown in Hulu-like high quality, which is a step up from YouTube, and videos can be embedded in blog posts and other social media such as Facebook, MySpace and Tumblr.
Included in the artist mix aren’t just the big pop acts of today like Britney Spears, Kanye West and the Jonas Brothers. There are also vintage videos such as the famed “Video Killed the Radio Star” by The Buggles and the bizarre “Another Brick in the Wall” by Pink Floyd. The archive also includes live performances from classic acts like the Rolling Stones, staples like Nirvana and indie artists like The Knife.
The new site might not be enough to re-establish MTV as the top destination for music fanatics, but there’s no question that its brand will be helped by more innovative digital content. Our fingers are crossed that the property expands to include a lot more videos. One feature we’d love to see: the ability to create, save and share playlists.
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October 10, 2008
05:11 pm | 2 recommendations | 1 comment
Let’s face it: in these violently turbulent times, we all want to know what’s next. Kaihan Krippendorff, who currently consults for Microsoft, Johnson & Johnson, and Wal-Mart, says service innovation will be an important factor in turning around burned businesses.
The author of The Way of Innovation, The Art of the Advantage and Hide a Dagger Behind a Smile, Krippendorff mixes ancient and modern principles, from Sun Tzu and Niccolo Machiavelli to Steve Jobs to shape business strategies. I spoke with Krippendorff about his thoughts on where Wall Street will go after the current crisis subsides.
Fast Company: What is the biggest problem you see in the financial services sector when it comes to service innovation?
Kaihan Krippendorff: The focus on product innovation—on generating new financial instruments and financial products—when something is essentially a service. When we look at AIG, they were a conservative, relatively stable, well-run company and it was just in this one area of insuring derivatives and other financial items that exposed them to a lot more risk than they thought. They took a product perspective and came up with a new product, tested it out, and then pumped out as many as the market could bear.
FC: Could you argue that the financial services companies were being innovative when they created these disastrous financial instruments? Could they have been innovative in the wrong way?
KK: Yes, those were product innovations. But if we look at companies that have really been some of the great financial innovators in the past, their innovations have come from services. Like Capital One coming up with the No Hassle Card. They found a way to slice and dice people’s credit histories so they could give more customized services. Hudson National Savings never went to the public markets to get capital. They only lend the capital of their depositors. When they make a loan they don’t really look at credit history; they look at other factors, like are you likely to flip the loan and are you planning on living on it. So both Hudson and Capital One produce enough services to better assess credit risk. These innovations often have little to do with the product, and they can be lower risk and extremely powerful as distinguishers.
FC: Will service innovation be a necessity for financial services companies as they try to recover from their current problems?
KK: Absolutely. 75% of our U.S. GDP comes from services. We should have shifted our efforts a long time ago to service innovation. Since service innovation is more likely to lead to ideas that distinguish you and give you an advantage and also don’t cost a lot of money, that’s the kind of innovation that in tight environment companies can get their biggest bang for the buck.
FC: Your focus in consulting has often been on growth strategies. What would you specifically recommend to get these financial players growing again?
KK: I was in Orlando last week, and I took AirTran back up to White Plains. It was great service and a good flight. But then my wife and I were talking and said, ‘Wasn’t this the airline that crashed in Florida?’ They ended up changing their name and they came back from this. My sense is that this crisis will not have a long-term impact on the financial powerhouses. They play such a central, critical role in the system that they are needed. They will come back. If you were looking for how Morgan Stanley or Goldman Sachs were going to make it out alive, the big corporate-wide priorities are not it. It’s going to be thousands and thousands of little strategies, little priorities that are executed by the front line every day, allowing the front line to innovate and predict customer needs, serve those needs and wow them.
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September 22, 2008
03:33 pm | 3 recommendations | Be the first to comment
Four years ago, a nasty virus infected my hard drive. Windows essentially just froze and never thawed. After a few days of trying to fix it with no success, I realized I would have to reformat my computer. I had no backups, and I lost 20 gigs of music and a year’s worth of documents. These were the days before cloud computing, where you can easily store all of your documents on someone else’s server.
Now comes a new concept in cloud computing: A company called Cucku is peddling the idea of “social backup,” in which you use their free software to automatically backup your data securely on a friend or family member’s computer. To use it, all you have to do is install the software on your computer and the receiving computer and Cucku will help you send the encrypted data between the two places.
The service of backing up your information on the cloud isn’t new, of course, but Cucku’s offering is just different enough that it makes sense. People who don’t trust their data to be on say, Amazon’s cloud, can feel safe in having a co-worker or family member with a backup. Also, less tech-savvy users who don’t quite understand cloud offerings might be attracted to Cucku’s simple software and easy interface.
And in these jittery economic times, there's nothing wrong with a new Web service that's entirely free.
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September 19, 2008
11:04 am | 3 recommendations | Be the first to comment
Green building is booming even more than expected, indicates a report released today by McGraw-Hill Construction. In our July/August issue, senior writer Linda Tischler reported that 10% of all U.S. housing starts will include some eco-friendly features by 2010. The overall trend looks even more encouraging.
Most firms expect more than 60% of their projects to be green by 2013, according to a study co-penned with the World Green Building Council that targeted early adopters in 45 countries. That’s up from 30% today.
McGraw-Hill found that solar power is the most commonly used renewable energy and it will continue to hold that title as the world develops more green housing. More than half of world firms surveyed currently use solar power in their projects and 76% expect to use solar power by 2013.
Asia, according to the report, is the fastest growing region for green housing, as firms there expect to increase green building from 36% today to 73% in 2013.
With these new expectations, it seems like the whole world wants to go to green housing. So how long will it take for the U.S. to catch up?
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September 16, 2008
03:44 pm | 2 recommendations | Be the first to comment
Sam Wyly’s path from start-up entrepreneur to billionaire business and green-energy guru has been a long and winding one. He started University Computing Co. in 1963 after working for IBM and Honeywell, and went on to develop Bonanza Steakhouse and Michaels, the Arts & Crafts Store. Green Mountain Energy, his latest venture, founded in 1997, is now the nation’s leading retailer in carbon offset technologies and cleaner energy. In his book 1,000 Dollars and an Idea, out this month, Wyly talks about his life, politics and business ambitions—mixing plenty of history into the mix. I spoke with him by phone.
Fast Company: Green Mountain Energy has become more successful each year since it was founded. (As of March 2008, the company had $300 million in total sales and has been growing revenues at about 40 percent per year compounded over the past three years.) Do you think interest in clean energy retailing will continue to grow?
Sam Wyly: People will get more interested in energy retailing. We lost money for the first few years at Green Mountain and we were lucky to have deep-pocketed investors. Now we are growing 20% a year and we are the most profitable pure green company in America.
FC: T. Boone Pickens has made quite a stir with his goal to get America off foreign oil. What are your thoughts on Pickens’ energy plans?
SW: I’m all for it, but I want to do more than that. We were once both oil guys. I owned an oil refinery in Memphis and later another oil refinery in Fairbanks, Alaska. Every president since Nixon has promised to get us off foreign oil. But instead, we’ve gone from 20% dependence to nearly 80%. We have a wind-belt that could provide a quarter of our electricity. There’s also a sunbelt too. Windmills are 48 stories tall and cost on average about $3 million a piece. Boone’s going to build a lot in West Texas. I like what he’s doing, but I like my plan more.
FC: What are the details of your plan?
SW: I want to get China’s and Russia’s goods on a tariff applied to their carbon footprint. And an internal tax that slowly makes goods that use carbon more expensive, over at least 10 years. All of this would not send one penny to Washington. It would all go back to the consumer in the form of reduced payroll and social security taxes, so they are not losing anything on the deal, but are trying to get off carbon products.
FC: Wouldn’t this damage America’s free trade agreements?
SW: Some might argue this is not free trade. But I’ve been a free trader my whole life and I think it’s the right thing to do.
FC: You’ve given around $10 million to Republican candidates since the ‘70s and donated money to the Swift Boat Veterans for Truth, which disrupted John Kerry’s campaign in 2004. Who are you supporting for president?
SW: I have no horse in this race. I’m not supporting anyone for president or Congress. I will support whoever wants to do something like my plan. Either candidate, whoever wins, will be motivated to do more for clean air and alternative energies than any president before him, so we will have to watch closely.
FC: Do you foresee the American auto manufacturers getting in line to be eco-friendly and profitable?
SW: I think they’ll survive, but it will be hard. I’m interested in the Chevy Volt. It’s going to be a real car, not a golf cart. It’s a real leap forward. That car should be an energizer for the company’s employees. But it’s going to take a lot of electricity to get to that point, and we’d like it to be clean electricity powering electric cars.
FC: BeGreenNow.com, which allows you to calculate your carbon footprint and buy services from Green Mountain Energy to reduce your footprint, seems like it wouldn’t do anything for the average consumer in terms of helping his or her pocketbook. What’s the incentive to use their services?
SW: It’s not in one’s economic self-interest to buy products from BeGreenNow. There are people who still do it because they know it the right thing to do. It’s a case of doing the right thing for the environment.
FC: In your book, you frequently combine your story with historical anecdotes. Why the interest in history?
SW: They have allowed me to see different perspectives. My work has been as an entrepreneur, so I never had the stakes of an empire to worry about.
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