Wired writes about a new company, Citizenrē Corporation, that “will loan you a complete rooftop solar power system, install it for free and sell you back the power it generates at a fixed rate below what your utility charges.”

Much of the article is devoted to a discussion of whether the company is a scam or not, and there are worrisome signs that it might be, starting with its multi-level marketing scheme. This is a model that requires a lot of upfront capital and many competitors in the alternative energy industry have pointed out that Citizenrē’s source of capital is secret and therefore can’t be verified.

What interests me, however, is not the credibility of this particular company, but the potential for a disruptive business model innovation to hit this industry. It’s not clear yet that this model works in the solar power business, but it certainly works in other industries. From the article:

Nor is the model entirely unproven. Corporate facilities have long benefited from the type of lease-financing scheme Citizenrē offers. Ryan Wiser, a scientist with the Lawrence Berkeley National Laboratory, says bringing that financing to the residential market is completely viable, provided the investor money is there. He calls Citizenrē ‘a breakthrough.’

‘There’s an increasing number of companies that are doing this kind of financing’ for commercial customers, says Wiser. ‘There’s certainly a market on the residential side; the difference is how do you make a profit. They will have to bear huge transaction costs to get started.’

One concern, of course, is obsolescence. The alternative energy industry is constantly innovating and it’s reasonable to expect that over the length of a ten year contract (five years are also offered) a new and more efficient technology will be available. Nonetheless, one obstacle for any homeowner considering solar power is the initial investment required to install the equipment. This model removes that obstacle.

This business model is not new, but its application to this business is. it shows the potential of looking outside one’s own industry for new ideas. Competitors always complain that new and threatening ideas and technologies are scams or unworkable. These complaints may be true about Citizenrē, but for many watching from the sidelines, there is a deep-down desire that the model works.

‘The vision is a beautiful thing,’ says John Coequyt, director of climate issues for Greenpeace. ‘But there’s no way they can deliver on the promise at this point. Whether they can in the future is clearly uncertain.’

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Scott Karp has a nice summary of the creator vs. aggregator split going on in the media industry right now.

The real divide now emerging is between companies that create original content and companies that create platforms for aggregating and distributing that content. Newspapers embody the old media world where content creation, aggregation, and distribution were inextricably linked. But the digital media revolution has made it possible to separate these functions.

He goes on to discuss how content creation is no longer easily scalable, while aggregation and distribution is.

Content creation is asymptotically approaching commodity status, while platforms that can effectively aggregate content and allocate scarce consumer attention can unlock immense value in the new media marketplace.

While I don’t think things are quite so dire for content creators, clearly all of the attention is on the platforms. Thinking about the immense value waiting to be unlocked, I am left to wonder exactly what it is that I want from an aggregator.

I want information in at least three areas – on my specific interests (e.g. a hobby or sport), on my general interests (e.g. current events), and on interests I don’t really know I have (e.g. an interesting story on chemistry). And, I also want to be able to separate the wheat from the chaff (of course!). I can find information on specific interests because I’m willing to put in the time searching, there probably aren’t that many sources available, and I’m able to recognize quality and expertise well on my own. For my general and new interests, however, I need some help.

There are a lot of aggregation platforms available, but I need to know what I want to aggregate. I don’t have the time to search through thousands (millions?) of information sources to discover the best ones. Platforms like Digg are interesting, but haven’t shown themselves to be particularly useful outside of the Digg white male tech geek demographic. What I need are information curators. Someone whose judgment I trust to help me know what’s important each day and where the quality content is on that news. What! I can’t choose for myself what’s important? Heresy, you say? Well, of course I can choose, but first I need to know what is happening – what my choices are. For this reason I usually subscribe to an AP feed on my home page. It’s not that I trust the AP so much, but they work well as a proxy until I find just the right curator.

Note also that the AP content is created by professionals, those guys who are supposed to be dinosaurs (unless, of course, they are covering local news). Yes, we still need professionals because amateurs don’t have the time or the means to break news. I define a professional, by the way, as anyone who makes a living from generating content, not just someone who works for a traditional media organization.

As for content becoming a commodity (well, not quite, Scott did say “asymptotically approaching”), I think that overstates the case. Well written (or produced), informed work will always be in demand. Again, I just need a way to distinguish the wheat from the chaff without reading through each source myself. I don’t have the time to do that.

It’s the curator function that I think will unlock real value on the aggregator side. Newspapers would argue that they provide that, but really they just signal a certain level of quality. By opening up their pages to more comments and reader blogs and stories, they aren’t necessarily curating, they’re just distributing. I think that the traditional media company to solve this problem will have found the successful model.

It’s also interesting to view industries other than publishing through the lense of the content/aggregation split. Cable operators have actually been moving in the opposite direction, trying to bring content creation together with aggregation and distribution. Although they began as pure distributors, they now own channels and produce their own content (e.g. Comcast SportsNet). Is there some reason to believe the cable/video industry is different than publishing? I’m not sure there is. The split is no doubt occurring more slowly because producing a video is still more technically difficult, and expensive, than writing, but those barriers are falling. Cable operators would do well to watch the progress of the publishing industry to avoid making similar mistakes.

I wonder what other industries can also learn from the content split?

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Today’s Wall Street Journal had an article about Disney’s move into wedding dresses:

Disney has teamed up with couture bridal designer Kirstie Kelly to transform blushing brides into their favorite princesses, complete with billowing gowns and crystal tiaras. At a cost of $1,100 to $3,000 for each gown, brides will be able to walk down the aisle in dresses inspired by Cinderella, Snow White, Belle, Sleeping Beauty, Jasmine or Ariel.

There’s no other time in their life when a couple feels more like they’re living a fairy tale than on their wedding day. Disney recognized that and knew that every fairy tale needs a princess, and who better to create a princess out of a nervous bride than the company that brought to life Cinderella, Snow White, and Sleeping Beauty? (And, now that we know that the NYT article proclaiming 51% of all women to be unmarried is a load of hooey, they can feel confident that there’s still a market out there!) Some may balk at the thought of wearing a wedding dress from Disney (are you sure it’s not just for “dress-up?”), but a little nostalgia can go a long way. In some ways these dresses will be like “new vintage,” evoking the past but made with today’s styling and materials.

In fact, Disney is already in the wedding business:

The company has a popular wedding service at its theme parks. Thousands of couples have been married to such tunes as “Someday My Prince Will Come,” with their wedding rings offered up in a glass slipper before being whisked away in Cinderella’s coach. Yesterday, the company unveiled a new wedding-planning service from celebrity party planner David Tutera, starting at around $75,000 for 50 guests.

I think this is a great use of brand equity, the brand being not Disney, but each princess. It could create some tough decisions, though: What if you’ve always thought of yourself as a Snow White, but find that you like the Sleeping Beauty dress better? Personally, I can’t wait to see a bride walk down the aisle in the Ariel dress!

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Earlier this month, as Gap’s problems came back into the news, the gang at Influx posted a list of 21 possible solutions. While not the raw output from a brainstorming session, it’s still first stage output and, as you would expect, is “a wild mix of the predictable, the impractical and the crazy.”

While the folks at Gap ought to read this list, its value for me isn’t so much in the solutions, as in the opportunity to see a snapshot of an early stage in the innovation process. Some of these ideas are contradictory while others are downright silly, but Influx laid them all out for us to see. In a lot of companies I know, some of these ideas wouldn’t even make it out of a brainstorming session much less onto a public Web site. They would be self-selected out because they are “obviously” not workable. Each of us can see the ideas that are silly, right? Right, but which ones? Show this list to twenty people and I’ll bet that not one idea is unanimously declared to be not worth following up.

Influx does us all a great service by posting this list because we get to see that while many of the ideas are ones we might have come up with, others are more insightful than what we could think of, and others we might have thought of but never said for fear of looking silly. But you never know how the really innovative solution will emerge and it usually comes from a combination of ideas, some of which intially seemed great, and others that seemed pretty bad. If your company knocks out ideas at brainstorming sessions for being dumb, unrealistic, or retreads (or just about any other reason, for that matter), you have to wonder if you’re allowed to have any new ideas at all.

Now, if Influx would only show us how to implement…

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I find it interesting how many people think of the internet as a product. For many, the internet is simply the World Wide Web and the sites that are found on it. This is why, for example, people spend so much time worrying about the battle of internet video vs TV, and why Wal-Mart’s video download service is declared a failure because DVDs are easier. Well, I find it hard to imagine a future in which TVs cannot access the internet and DVDs are the dominant form of video distribution. Maybe that future isn’t real close, but it’s there. It seems silly to mock early (if not pioneering) efforts at new forms of content distribution simply because those efforts are not yet ready to dominate.

The internet is a distribution and communication channel that is often confused with the device that currently dominates human interaction with that channel – the PC. Remember how silly the idea of an internet accessible oven seemed? That’s because we thought of the internet as a product. It didn’t seem like there would be a large market for people who want to read internet recipes on their oven. Well, there isn’t, but if we think of the internet as a communication channel, we begin to think that there might be a larger market for people who want to control and monitor their ovens remotely. If we think of the internet as Web sites, we have trouble moving beyond the PC. If we think of it as a channel, all sorts of opportunities open up.

One day, our TVs will connect seamlessly to the internet. Because the TV can’t do it today, if you’re a hardware company that seems to be a pretty profitable area to work on. If, on the other hand, you’re a video or movie producer, it sure seems like you should be preparing for that converged future while spending as little time as possible on today’s methods of distribution. Make sure you have a plan for the day when viewers aren’t bound to network schedules and have a broad choice of content distributors. Beyond TVs and PCs, though, are many other devices that can benefit from connecting to the internet. Mobile phones are an obvious one (since that process is well underway), as are cars.

In reality, if such connectivity were cheap enough, just about anything could benefit. Sensors on your furnace relay performance information to the manufacturer’s diagnostic application which returns the results to you. Your dog’s gps collar tracks him for you when he runs away. The list is endless but the point is that the internet (or whatever it evolves into), as a channel, will become ubiquitous. This means that information will become ubiquitous as well. It will always be at our fingertips. Content producers need to understand that and then make some judgements about how long that future will take and what intermediate steps will be needed to reach it.

we make money not art has an interesting interview with Takashi Matsumoto who is a Ph.D. student of Keio University, Media Design Program and belongs to Okude Lab. Okude Lab is working on a research project called “Ubiquitous Content.” One of Matsumoto’s projects is Pileus: The Internet Umbrella. “This is an internet browser of an umbrella to entertain people in a rain.” Yeah, I’d say the internet on an umbrella is making it ubiquitous. If you look at pictures of this device, it looks unwieldy, unsaleable, and in many ways just silly. If I were a Wal-Mart movie download critic I’d call it a failure. If I were someone else I’d think of it as interesting and wonder where it might lead.

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Today’s New York Times has an article about small houses, and I mean small – like 300 square feet small.

A wave of interest in such small dwellings — some to serve… as temporary housing, others to become space-saving dwellings of a more permanent nature — has prompted designers and manufacturers to offer building plans, kits and factory-built houses to the growing number of small-thinking second-home shoppers. Seldom measuring much more than 500 square feet, the buildings offer sharp contrasts to the rambling houses that are commonplace as second homes.

[...]

Hardly the slapped-together hunting camp that belonged to your uncle, these buildings even offer instant curb appeal. They are often equipped with airplane-size bathrooms and tiny kitchenettes. Styles include romantic, rustic and designer modern. Jeanette Andersen, an agent at Sotheby’s International Realty/Santa Monica, said that in theory this could contribute to an increase in sales of undeveloped land. “When the design is appealing,” she said, “buyers are more willing to buy one and spend the money they saved on land.”

The growing popularity of these small houses are supported by several trends – the green movement, simplicity, and, in some cases, luxury. This kind of small dwelling has a small ecologocal footprint, making it appealing to those who are actually willing to change their lifestyle for their environmental beliefs. Related to the green movement is simplicity, and it seems pretty obvious why life in a 300 or 500 square foot house needs to be pretty simple. Luxury, on the other hand, doesn’t quite seem to fit here but the article points out that some models can cost “more than $200 a square foot for designer models built with specialized or luxury materials.” This is a trend we’ve seen before of saving money in one area to free up money for luxury spending in another. I’ll admit, this is pretty extreme, and I’d question how luxurious it can be in a house this small, but if it were a hunting cabin, $200 per square foot makes a pretty nice cabin.

These houses are the product of some innovative thinking and they point out the effectiveness of at least one technique for brainstorming – imagine your big product small and your small product big.

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In early January, the Wall Street Journal published an article discussing some of Tom Ford’s key themes in fashion (re-printed here in the Pittsburgh Post-Gazette). His themes included some macro-trends that have been seen in other consumer markets for some time:

• Personalization of Luxury Goods

Personalization and customization have been strong in consumer goods for some time now, although perhaps not as much in fashion luxury goods. Seeing it here is more of a confirmation than a new discovery.

• Cheap Chic Will Stay Chic

Commonly referred to as the democratization of luxury, or in this case fashion, retailers like H&M and Target have been leading this charge as they team with designers to produce low-priced clothes, accessories, furnishings, and even appliances. This is also a macro-trend that has been around for some time.

• Logos Lose Their Luster

It’s interesting that the article notes that Ford used logos on everything when he was at Gucci, but quotes him as saying, “I never thought logos were the way to sell products.” Logos are a way to sell products, of course, just not the only one or necessarily the best one. While we may be tired of big logos and logos on everything, most of us still like to wear and use goods with a logo. If a BMW dealer sold cars with and without logos, which do you think would sell better? Subtle logos for superior products will never lose their luster, but big, ubiquitous logos for superior products may. In luxury, scarcity, even if it’s visual scarcity, still works.

• Celebrity Marketing Is Here to Stay

I’ll take Ford’s word on this one. It doesn’t seem like this has ever slowed down.

• Sensual Is the New Sexy

“The reality is that while beauty standards come and go, people ‘want to look beautiful and want to look attractive in clothing.’” Can’t argue with that. This seems to fit with logos losing their luster. More subtle logos and more subtle sexiness.

We usually think of fashion as a trend leader, so it’s odd to see personalization and cheap chic listed as future trends for fashion. Both have been evident in other consumer goods for some time. In any case, this is a nice little list of trends which are applicable beyond the fashion industry.

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Edmund Phelps, the 2006 Nobel Laureate in economics, wrote a fascinating piece on OpinionJournal.com Monday, in which he discussed reasons for the disparate economic performance of certain Continental European nations vs. the United States. As I read this, two questions kept running through my mind – what might this mean for a company’s European expansion plans, and is my own company more like the Continent or the US?

Phelps posits that the relative economic underperformance of the big three Continentals (France, Germany, and Italy) stem from their different economic model. In Phelps’s words:

There are two dimensions to a country’s economic model. One part consists of its economic institutions. These institutions on the Continent do not look to be good for dynamism. They typically exhibit a Balkanized/segmented financial sector favoring insiders, myriad impediments and penalties placed before outsider entrepreneurs, a consumer sector not venturesome about new products or short of the needed education, union voting (not just advice) in management decisions, and state interventionism. Some studies of mine on what attributes determine which of the advanced economies are the least vibrant–or the least responsive to the stimulus of a technological revolution–pointed to the strength in the less vibrant economies of inhibiting institutions such as employment protection legislation and red tape, and to the weakness of enabling institutions, such as a well-functioning stock market and ample liberal-arts education.

The other part of the economic model consists of various elements of the country’s economic culture. Some cultural attributes in a country may have direct effects on performance–on top of their indirect effects through the institutions they foster. Values and attitudes are analogous to institutions–some impede, others enable. They are as much a part of the “economy,” and possibly as important for how well it functions, as the institutions are. Clearly, any study of the sources of poor performance on the Continent that omits that part of the system can yield results only of unknown reliability.

Phelps also explores attitudes and values of people in the Continentals toward work, decisionmaking, and responsibility, and finds them quite different from those in the US and Canada.

The weakness of these values on the Continent is not the only impediment to a revival of dynamism there. There is the solidarist aim of protecting the “social partners”–communities and regions, business owners, organized labor and the professions–from disruptive market forces. There is also the consensualist aim of blocking business initiatives that lack the consent of the “stakeholders”–those, such as employees, customers and rival companies, thought to have a stake besides the owners. There is an intellectual current elevating community and society over individual engagement and personal growth, which springs from antimaterialist and egalitarian strains in Western culture. There is also the “scientism” that holds that state-directed research is the key to higher productivity. Equally, there is the tradition of hierarchical organization in Continental countries. Lastly, there a strain of anti-commercialism. “A German would rather say he had inherited his fortune than say he made it himself,” the economist Hans-Werner Sinn once remarked to me.

Much of this seems to come down to a country’s ability and willingness to innovate and implement that innovation. We’re so fond of complaining here in the US about all of our jobs being outsourced and wondering what can be left as our comparative advantage, when the answer is staring us in the face – us! We, and our society, and our attitudes are our advantage. Policymakers had better understand this and start working to get government out of the way of innovation and entrepreneurialism. Notice, I didn’t say government should spur innovation and entrepreneurialism; government should get out of the way. The more we try to close down our economy’s freedom to innovate, whether by imposing restrictive regulation or cutting off the flow of immigrants, the more we squander our competitive advantage. The same holds true for companies. Companies with stifling cultures of controls and risk avoidance mechanisms kill the advantage they have over foreign competition. Whether in societies or economies or companies, rewards come to those with more (responsible) freedom, not less.

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Just a few years ago scrapbooking was the hottest new business to hit the craft industry. Scrapbooking took over the Craft and Hobby Association shows and the growth was meteoric. Scrapbooking companies sold for prices that seemed outrageous by past industry standards. In the midst of the boom, however, retailers and vendors asked themselves how long scrappers could continue to buy paper, albums, stickers, tools, and embellishments. How much could actually fit under the bed? Well, while the market didn’t exactly crash, it has plateaued and a shakeout has begun among retailers which is expected to spread to vendors.

To many in the business, scrapbooking, by virtue of it’s visual and tactile appeal, seemed impervious to electronic attack. The whole point was sharing memories and photos in three-dimensional albums, right? Well, it turns out that whole point was sharing memories and photos. The mega-trends of time compression and digital ubiquity caight up to scrapbooking and digital competitors emerged. I think it’s going to far to suggest that these digital competitors alone caused the business to slow down, but they certainly helped.

Into this market comes the upcoming launch of the new version of Scrapblog. TechCrunch has a nice review of the new version and it sounds like quite a slick application. When it comes right down to it, Scrapblog is a way for users to share photos and videos and some text and some narration. Aren’t there a lot of sites that let you do that (Flickr, et al.)? Well, yes and no. While those other sites are about sharing, tagging, and otherwise getting your pictures out into the Web 2.0 world, Scrapblog is about all that and presentation too. Scrappers are all about presentation and photo sharing sites just aren’t that great at it. Beyond scrappers, TechCrunch suggests the site is powerful enough to make it useful for ” things like artist portfolios and online graphic presentations.”

The larger point here, however, is how quickly the scrapbooking market went from a physical, tactile business to a digital business. Of course, physical scrapping still provides the majority of revenue, but the digital growth is remarkable because it comes in a market built on physical objects. What else that today seems unassailable by digital products, really isn’t?

I’ll reiterate that the scrapbooking business is about sharing memories and photos and expressing feelings and emotions. If I think about what other physical businesses fit into that mold, greeting cards comes to mind. Instead of printing out that letter to enclose in my Christmas cards this year, why not create a big layout at Scrapblog and just send everyone the link? That way I can show everyone even more pictures of the kids and it all looks professionally finished. Who needs a card anyway? E-cards have languished for years (although some companies still make some decent revenue from them) but we’re not talking about e-cards here. This is more like sending a mini photo album that has been customized for the occasion.

Once again we are shown that the competitive sphere is always much larger than we think. I wonder if Flickr, Scrapblog, One True Media, American Greetings, and Hallmark all view each other as competitors?

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Steve Rubel at Micro Persuasion has an interesting post on “The Future of Cable TV in an Open World.” He posits three scenarios:

1) The Cablecos Embrace Change and Re-address the Economics
Right now cable and satellite TV are very inefficient. If you hate sports, you’re out of luck. You still need to pay for it since it sits on your deck. The smart cable/satellite companies will begin to experiment with a-la-carte pricing. Further, they will make sure their set top boxes can connect to the Internet, allowing you to choose what goes on your set from a virtually limitless choices.

2) The Cablecos Simply Become Plumbing
Cable and satellite companies are not exactly known for their speed. The tech players mentioned above and others, such as Google and Yahoo, could rush in to provide subsidized boxes for your TV if you were to subscribe to their so far non-existent IPTV services. They will deal directly with the networks and reduce the value that your cable company offers to just pipes. This will turn their services into plumbing – commodity bandwidth.

3) A Hybrid Scenario
Under a third scenario, both IPTV and cable co-exist together in your living room. They are used for different purposes. Cable recognizes that they offer the greatest value in serving up live and local and leave the canned national content to go the way of IPTV carried by others.

While I agree these are likely scenarios, I look at the issue a little differently. I think much of the future hinges upon how the content creators get paid. As a principle, that’s obvious, but the answer, I think, drives the cablecos’ future.

As a consumer, I want as much programming as possible, from wherever it comes, and I want it on my TV screen. The cable operator’s goal must be to become the consumer’s gateway to all video programming. If this is accomplished, the operator has at least secured a role as plumbing. Next, the operator must seek to provide that video to the consumer. The degree to which this is accomplished determines if the future is the hybrid scenario or a re-addressing of the economics.

The role of video provider also depends, however, on how the content creator gets paid. If the creator is paid in advertising dollars, cable begins sliding back toward plumbing because it has little to offer the content creators. One possibility is that the cablecos develop strong ad sales operations, gurantee revenue to content creators and then try to sell enough ads to cover the guarantee plus a profit. Or, perhaps a licensing model, which would be similar.

If networks (content creators) get paid as they do today – a combination of ads and carriage fees – the future may look much like it does today. NBC may have its videos on the Web, but only a viewer using a Comcast (or other “partner” cable operator) cable modem/set-top box can see them. YouTube will become another network earning carriage fees from the cablecos. Cable and its competitors will all scramble to make sure they have at least the same content as each other, while trying to get one more network, online network, or user generated network that the rest don’t have. The model for new networks would be flipped on its head. They would no longer have to beg cablecos for carriage, they would just start out as free networks with carriage everywhere. As they became more popular they could choose to join with cablecos for carriage fees. Pricing models for this type of arrangement abound, although none is obviously superior. There’s all-you-can-eat (one subscription price gets you everything), tiers, (as the cable companies currently offer), a-la-carte, the New York Times model (some content free, some premium, charge for archives), etc. The key point here is that the cablecos pay the content creators.

Another possibility is that consumers pay the content creators themselves by subscribing to individual networks or Web sites. This seems the messiest and least consumer friendly, but it’s a possibility.

If I were a cable operator today, I would be thinking about how I can make the most money for content creators. If I can make them money, I’ll get access to their content (maybe exclusive access), and I’ll remain relevant to consumers. If I don’t make them money, they don’t need me and I become plumbing.

One other thing – cablecos ignore wireless (whether by satellite, wifi, cellular, or otherwise) at their peril. The world naturally moves from less freedom to more freedom (though it’s always a bumpy road) and there’s no way we’ll continue to be happy tethered to a cable.

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Just a couple of weeks ago I wrote about grafitti’s (not recent) move into the mainstream. As if on cue, I see this January article from the Telegraph, discussing the high prices of graffiti art. From the article:

The die-hards will say it’s a sell-out, but it’s a sign of the times. Graffiti art has shifted: from back alleys and railway carriages to high-street galleries; from vandal status to cultural worship; from the unsaleable to the hip consumer product.

With works selling for thousands, and tens of thousands, of pounds, this art style is ready to influence the design of mass market products.

From Artnet News comes word of the launch of Slart, a magazine covering Second Life art. Slart is

designed to bring ‘real world art issues’ into the virtual sphere, and to make sense of an imaginary art scene that already involves some 100 online galleries. Among the articles on tap for the premiere issue are ‘Will virtual artworks appreciate in value?’ and ‘Is all virtual art illustration?’

Many believe that Second Life’s influence on our First Life is overblown, and I don’t want to join the hype, but clearly some people are taking Second Life virtual art pretty seriously. If you create and sell graphic centric products, you definitely want to keep an eye on what is happening there. Below you can see a video of Second Life’s Aho Museum opening. To my eyes, the objects range from pretty basic to pretty interesting. I’ll leave it to others to debate if it’s “art” or “illustration.”

(Both articles via artkrush)

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Wal-Mart’s announcement yesterday that it is entering the video download market was met by a fair amount of skepticism as well as some gleeful remembrances of how the retail giant left the DVD rental business. We read that “delusionary behavior [is] making a strong comeback,” “There are too many me-too download services out there,” and “None of these companies [already in the market] are going to lie down in the face of competition from Walmart, and they know that Walmart will bail out of markets that they can’t dominate.” Jeez, makes you glad you’re not Wal-Mart, doesn’t it?

Let’s slow down here. Wal-Mart isn’t trying to create a high-flying tech business primed for sale to some sucker like… well, Wal-Mart. It’s simply trying to add a product to its virtual shelves. Yes, a product. Downloadable videos, to Wal-Mart, are a product, not a separate “business.” Does Wal-Mart dominate every product category it’s in upon entry? Does it have to dominate video downloads to be successful? I don’t think so.

Let’s look at DVD rentals a minute. Why is there concern about Netflix’s prospects right now? Because downloadable videos have the potential to eat their lunch. What market is Netflix entering? The video download market. And Wal-Mart abandoned the rental business to move into downloadable videos, right? Hmm, but Wal-Mart is the loser here? Sure, selling video downloads is different than selling DVDs in a store, it’s got that scary technology component. On the other hand, apparently they have some tech guys on staff given that they run an e-commerce operation. DRM, studio cooperation, player compatibility – all waiting to ambush Wal-Mart? True, perhaps, but they lay in wait for everyone else too, so we can’t count those issues in the analysis of WM vs. the tech guys.

If you expect Wal-Mart to be running an e-commerce operation in the foreseeable future, you have to expect them to offer video downloads. Videos are part of their product mix and as online sales become larger, they’ll need to have that product online. Wal-Mart can wait for this market to grow while the leaders bleed their way to technology and DRM standards. Wal-Mart doesn’t need to lead, but it can look pretty good as a close follower. While not exactly a glorious moment for Wal-Mart, it was easier to get out of DVD rentals because downloads are the ultimate game. Meanwhile, when the day arrives when consumers can easily transfer videos from an online store to their TV screens, Wal-mart, with years of experience in the download market, will be sitting pretty.

Now, the fact that the site doesn’t work with Firefox is a whole other issue!

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A few weeks ago I noted Don Norman’s article on consumers’ desire for more complex products. Yesterday’s New York Times pointed out the corollary to that rule – consumers like higher prices. Well, not really, but when you’re trying to sell a product with more features than an alternative, consumers tend to suspect its quality if it’s sold for the same price. The New York Times article, which cites a study done on all-in-one (i.e. more features) products, says:

‘If you combine different products, you must give people a reason why they should not discount the performance of each individual function,’ said Alexander Chernev, the paper’s author and an associate professor of marketing at Northwestern University. ‘The moment they think it’s more expensive, they find a way to account for this discrepancy’

At first blush, this may not seem like new news, but let’s stop and think for a minute. We’ve now learned that consumers prefer complex products to simple ones, and they like those complex products to cost more because the price serves as confirmation of the product’s value. This doesn’t tell us how to expand the market for high-priced, complex products, but it does tell us how to go about capturing as much of the intrinsic market as possible.

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It’s the day after the Super Bowl so I suppose it’s de rigueur to comment on the ads and the New York Times does its part with this piece. Here’s how it begins:

No commercial that appeared last night during Super Bowl XLI directly addressed Iraq, unlike a patriotic spot for Budweiser beer that ran during the game two years ago. But the ongoing war seemed to linger just below the surface of many of this year’s commercials.

We then learn that the violent commercials were influenced by the war (”It was as if Madison Avenue were channeling Doc in ‘West Side Story…’”), the sweet, happy commercials were influenced by the war (”…welcome counterpoint to the martial tone of the evening.”), and the dream commercials were influenced by the war (”Those who wish the last four years of history had never happened could find solace in several commercials that used the device of ending an awful tale by revealing it was only a dream.”). Oh, and those sweet, sappy, Coke commercials? Guess what else they drew on for inspiration? You got it, the”Peace” Coke commercials from the Vietnam war.

This is all so silly it’s hard to believe it made it into the pages of any newspaper, much less the NYT. Perhaps the article’s author, a baby boomerish looking Stuart Elliott, got tired of hearing how to baby boomers everything’s about Vietnam and decided to make everything about Iraq (and a little about Vietnam). I don’t know about “Best” and “Worst,” but I do know I didn’t see any ads about Iraq.

Uh, wait a minute, maybe they were too subtle for me; they were working on a subconscious level. Maybe I just needed the New York Times to tell me what was going on. Yeah, that’s it. Now I understand; those ad guys sure are crafty devils, pushing all those ads at me with the subtext of the Iraq war. Jeez, and me not even catching on!

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There is much talk lately to suggest that momentum for the Green movement is building. Unfortunately, the only momentum I see building is for talk about momentum building. If you are selling a product which has as its only advantage over alternatives its “greenness,” you are selling a niche product. There are consumers who will pay more or sacrifice some utility for a green product, but they are not a large group. Take a look at this article on MarketWatch lamenting the fact that newspapers are buying Chinese paper that comes from wood in forests that are allegedly being cut without regard to sustainability. Why? Because it’s cheaper, obviously. The article also wonders, “Why don’t newspaper owners invest more in recycling newsprint rather than importing more from other countries around the world that will only further deplete one of our greatest natural resources — trees?” Again, we can guess the answer – with the availability of cheap Chinese paper, a recycled pulp mill can’t be justified.

Green, at this stage, is mostly a heavily used marketing ploy. A green product or company can get some good press, maybe hob-nob with some green celebs, and is then left to wonder why its market share seems to have a ceiling. If we’re really serious about creating green products for the mass market, let’s stop pontificating about how everyone should buy green, and start creating products that are green and superior to alternative products. Think about successful recycled paper greeting card companies. Yeah, you feel good buying them because they’re made out of recycled paper, but you want them because of their design. The sooner we stop creating products that are green, and start creating products that are superior and green, the sooner we’ll actually be helping the environment.

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