Execs clueless about HD-DVD forecasts

One of the real joys of the information age is that there is so much data coming at you, from so many different sources, that if you are good at winnowing information out of the noise, it's possible to see behind the spin. I love it when two news feeds feature contradictory stories. I love it even more when those contradictory stories come from the same news feed:

TWICE: HD DVD Players Roll Up Sales
Backers of the HD DVD format reported Monday that recent pricing promotions on Toshiba’s three HD DVD players and continued releases of HD DVD titles have pushed HD DVD sales “significantly ahead in the dedicated consumer electronics player market with 60 percent of all dedicated high-definition set-top players sold.”
...
“Toshiba’s latest promotional efforts are clearly resonating with consumers and showing that price is king when it comes to hardware,” stated Craig Kornblau, North American HD DVD Promotional Group chairman. “Behind the increase in sales for hardware and movies, you’re seeing fundamentally lower manufacturing costs and ease of authoring for HD DVD. That’s the type of model that can scale.”

But wait! There's more!

TWICE: Toshiba Cuts HD DVD Forecasts

A high-ranking Toshiba executive revealed to reporters here that disappointing sales in the United States have reduced the company’s sales projections for HD DVD players and recorders, according to a Reuters’ report.
Yoshihide Fujii, head of Toshiba's digital consumer business, said Toshiba’s electronics group now expects to sell 1 million HD DVD players in North America by the end of calendar 2007, down 44 percent from its previous estimate of 1.8 million unit sales, Reuters reported.

...

Previously, Fujii predicted Toshiba would sell 3 million HD DVD players and recorders worldwide by the end of the business year to March 2008, led by the United States.

Oh dear. Rule number two of spin marketing is to keep your story straight (rule number one is that if you tell a big enough fib, people will believe it).

None of this changes my opinion on the whole Blu-ray vs HD-DVD fracas, which is basically:

*slang for "whatever," for those of you who didn't know.

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Harry Potter loses boatloads of money

I get especially incensced when I see companies throwing away good money by commodotizing a hot property that doesn't need to be sold on price. Really, when you have something that everybody wants, why cut your own throat to make a sale? That's why I'm mystified by the Standard Operating Procedures of the bookselling trade:

Yahoo!: Harry Potter magic spells losses for booksellers

NEW YORK (Reuters) - Harry Potter has no spell for bookstore profits.
Millions of people will descend on stores for a copy of "Harry Potter and the Deathly Hallows" in July, but deep discounts mean many will struggle to turn a profit from the jamboree.
"Everywhere you go there is huge, ridiculous discounting by the chains," said Graham Marks, children's editor at the British-based trade magazine Publishing News.
"They are literally not going to make one penny out of the book. It is stupid -- just throwing money away ... The world has gone mad."
Online retailer Amazon.com and Wal-Mart Stores Inc. have slashed nearly 50 percent off the book's $34.99 list price, forcing many independent booksellers to follow suit to stay competitive.

...

Amazon.com boasted more than 1 million advance orders for the book, easily besting advance orders for Rowling's 2005 release, "Harry Potter and the Half-Blood Prince."
In April, Barnes & Noble said advance orders for "Deathly Hallows" topped 500,000 copies, breaking the bookseller chain's record for advance sales.
But with widespread discounting biting a gigantic chunk out of any potential profits, many booksellers are not enthused about its release. And for smaller, independent book stores, the discounting makes for a hard calculation.

If "staying competitive" means "losing your ass" then what's the point? "Market share" is a bogus, emphemeral number, and the top line on your P&L doesn't mean jack unless you've got a nice fat number on the net, or "bottom line." Am I the only person who thinks that turning a profit is a good idea?

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More bad news in Microsoft/Best Buy anti-trust case

Or good news, depending on your point of view.

Channel Register: Lawyer admits tampering in MSN, Best Buy case
A Best Buy lawyer has admitted to falsifying court documents in the longstanding racketeering case against Microsoft and Best Buy, which recently reached a Superior Court in Seattle.
A nationwide class-action suit, filed in 2003, accuses the two companies of conspiring to secretly register thousands of Best Buy customers for Microsoft’s MSN online service.
As reported by the Associated Press, a lawyer with the Minneapolis firm representing Best Buy admitted to altering emails and a paper memo before turning them over to the suit's plaintiffs - though he claims to have acted alone, without the knowledge of either Best Buy or his firm.

Of course, Best Buy has never been caught doing anything underhanded before, so the notion that their attorney was acting on his own is entirely plausible (that was sarcasm, right there).

There's really nothing I can add to this that would spin it any worse for Best Buy, so I'll just leave it alone for now.

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Pennsylvania wants to be Wall Street West

From the "Truth is stranger than fiction" Department:

Dealbreaker: Wall Street, PA
What’s more conceivable: that there’ll be another terrorist attack on par with 9/11 or that Pennsylvania could be a stand-in for Wall Street in the event of the former coming to blows? If you’re one of the officials from the Keystone State trying to “capitalize on fears of the chaos another terrorist attack might cause in New York’s financial industry,” and hocking your product, “Wall Street West,” you’re probably crossing your fingers and hoping for both.Catherine A. Bolton, project director of the Wall Street West consortium, maintains that PA—the Poconos specifically—is ideal because , at 100 miles west of Manhattan, it is out of the “theoretical blast zone” (to beat the terrorists, you must think like the terrorists) but still close enough to link directly to the machines running the banking and trading systems.

I think that the Wall Street West consortium needs to hire The Beach Boys to record a version of "Kokomo" to promote their hare-brained forward thinking vision of a new finance center.

Baby we'll build a bank in Poconos

We'll get big fees, and the rates are low

We'll set up trading shops, and sell credit default swaps

That's where we wanna go

Way down in Poconos

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How big is the Real Estate bandwagon?

Just got this in my email from my friend Doug:

Hey Lee,

I know you have at least a passing interest in watching the going-on's in real estate. I thought you might find this story somewhat amusing (especially since real estate has excelled at providing entertainment in recent months).

I was talking to a couple I know, about three, four weeks ago. Since I work in the area of real estate investing, I have more than my share of real estate and\or investing conversations. They were excitedly telling me about how they were getting into flipping properties. A friend of theirs had successfully flipped a few properties in SoCal, two, three years ago (back when "any idiot" could make money doing it) and had quit her job (read: lost) to commit to it full-time. This friend has been "living off of her profits" for the last couple years (read: moved back home with mom and dad) and has been scouring the nation since, for the next area of opportunity.

She finally found the land of opportunity, a place where one can buy properties for a tenth of what you would pay in SoCal. A place known to many; Detroit. [sidebar: now you and I have a pretty good picture of the story with Detroit, what with so many of the posters on a particular weight-training board being residents of the area. But even without knowing anyone in the area, the news\internet offers quite a bit of information. The problems of the auto industry has burden the economy there and houses are staying on the market so long, some are just being abandoned.]. I recently recall seeing an article about RE in Detroit. One of the comments about the incredibly low price of a recent transaction was "...You can't buy a used car for that."

They offered to let me invest along side of them and their friend. I begrudgingly explained I was already tied up in a number of RE deals.

So do I think that all of the good RE deals are gone? No, I think there are still good deals out there, one just has to understand where to look. For instance, this couple tells me they're taking their remaining equity out of their place to invest. Their original loan was subprime, due to her working on commission only and he not having a job at the time. So they've decided to pile on top of that, hoping their Detroit investments can help them cover the loans on their place. I'll be keeping an eye on their place, in case it comes on the market.

Doug's friend is either an idiot or a visionary. Time will tell.

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Bud Light, the Swear Jar, Unintended Consequences, and brilliant marketing

I love it!

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China promises to revise Food and Drug regulation, execute boatloads of shady entrepreneurs

NYT: China to Revise Rules on Food and Drug Safety

Responding to growing international concerns about tainted food and counterfeit drugs, China said late Tuesday that it was overhauling its food and drug safety regulations and would introduce nationwide inspections.
The announcement, from the State Council, the nation’s highest administrative body, is the strongest signal yet that Beijing is moving to crack down on the sale of dangerous food and medicine and trying to calm fears that some of its exports pose health problems.
But the challenges facing China are enormous because its regulatory system is weak and enforcement is difficult.
The announcement follows a series of embarrassing episodes this year involving China’s export of tainted pet food ingredients and toothpaste. The shipments of pet food ingredients, contaminated by the chemical melamine, set off one of the largest pet food recalls in United States history.

China’s State Council understands all too well that their economic and industrial clout is entirely dependent upon the West buying all their shit, and lots of it. As many pundits have exclaimed, statistically you’re more likely to be in an automobile accident than killed by a Chinese consumer product, but the cloud, fanned by the panic-prone media casts a shadow on all of China’s exports. Anything that curtails the flow of consumer goods out of the country is a bad, bad thing, and I don’t doubt that the Chinese authorities will severely punish any firms whose short-sighted greed imperil China’s export trade.

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Knowledge may not be power, but knowledge OF power is pretty important

When friends ask me what being a CEDIA Certified Professional Designer means, I flippantly say that it means you can trust me with a quarter million dollars worth of electronics and I probably won't accidentally burn your house down.

If you don't retain a CEDIA-certified firm to do your integration work, you might end up with this guy:



I'm guessing he can't explain Ohm's Law to you, either.


Hat tip: CE Pro.com

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HBC falls victim to shoddy chinese goods

I have tried to patronize the HBC family of stores. I try. Oh my god, do I try. I try all the time. But they just don't make it easy for me.

I have commented more than once that from an outsider's viewpoint, they seem to be adrift. Their flyers and ROP all look great this year (albeit that their Zellers flyers owe a debt to Target for their layout), but the Zellers stores in my market all look terrible. The Bay stores are still maintaining their visual display standards, but I've heard rumblings that their inventory situation is getting dicey. If my experience this weekend is any indicator, their returns are probably getting completely out of control.

Here's the story: on Saturday, my wife went to the Bay in West Edmonton Mall, and bought a new duvet. It was their Mantles in-house brand, but that's neither here nor there. The bag it came in said it was a queen size. The tag on the duvet also said queen size. Back home when we laid it out on the bed prior to putting the duvet cover on, there was no mistaking that it was a twin size.

I have railed before about the consequences that shoddy goods have for both manufacturers and retailers. In this case, there was no life-threatening danger, but it was a complete waste of our time, and HBC's already fading brand image has recieved yet another layer of tarnish. This was my family's first purchase at HBC in at least six months (not for lack of trying), and I guarantee it will be my last.

*Update!* Today's refund of that duvet was possibly the single most painless and easy interaction I've had with HBC personnel in the past year. Lucky me, I actually had a trained cashier wait on me!

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Owner of Ottawa Senators pays fine to Ontario Securities Commission

But bear in mind that he has not admitted to any wrongdoing through his settlement.

Yahoo!: Ottawa Senators owner pays $1 million to settle with securities regulator
By Laura Bobak
TORONTO (CP) - An Ontario Securities Commission panel has formally reprimanded Ottawa Senators owner Eugene Melnyk, who will pay $1 million and be barred from being a director of the drug company that he founded for one year.
Melnyk, who founded Biovail Corp. (TSX:BVF) and helped it grow into one of Canada's biggest drug manufacturers, was accused last July of failing to file trading reports and other required disclosures in connection with offshore accounts in the Cayman Islands.

What's notable about this is neither the penalty, nor the lack of an admission of guilt. Both of those are par for the course. What's notable is that he was prosecuted for unreported offshore transactions. Offshore "tax haven" investments are often touted alongside High Yield Investment Programs (HYIPs in the parlance) by investment scammers looking to fleece unwary investors. It's a common pitch that banks and High Net Worth individuals conduct tax free offshore transactions all the time, and because of some clever loopholes in Canada's tax code, it's all perfectly legal.

Guess what, it's not.

Exhibit A is this High Net Worth individual who was prosecuted for doing just that. Of course, if some slippery joker starts pissing on your leg and telling you it's raining, and rationalizing why this won't happen to you if you give him your money, walk away.

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