"I love that dirty watah...oh BOSTON YOU'RE MY HOME!"

After spending the past four years in Ithaca, there is one thing I have come to appreciate more than ever:  The Boston Red Sox.  To some this may sound silly; however, when put in perspective it makes perfect sense, at least to me and fellow baseball fanatics.  I am a displaced Sox fan who lives and dies with every pitch of the season from the beginning of April until the middle of October.  Although the Sox have many games nationally broadcast, there is a majority of the season I am unable to watch on television because I am in an out of market city.  I am stuck to reading the box score and watching Sports Center every morning to keep up with my boys of summer.

            Although I complain, there is another option aside from counting the days until the Sox are featured on ESPN Sunday night baseball or play the Yankees (I cringe to write that word).  Major League Baseball has created a phenomenal site in general that offers many services for fans to keep up with their favorite teams and players.  I can follow live box scores, listen to the game on the radio, or even watch the game on my computer.  I can get all the latest news and updates though my RSS Feeds and then shop for the coolest gear.  They have created a great site that allows fans of any degree to easily find what they want and meet their needs.

            There are a multitude of services offered; however, I would like to key in on two services offered that are extremely similar, which are the MLB TV and Game Day Audio.  MLB TV is section of the MLB website that allows fans to sign-up for access to stream any game straight to their personal computer.  It also features archived games and highlights.  MLB Game Day Audio is a service offered that allows fans to stream radio broadcasts of their favorite teams straight to their computer.  Although these are both great services offered by the MLB, they do not give them away and charge customers fees.  They have found a way to put a price tag on dedication to a particular team.

            MLB TV uses a fixed pricing strategy to charge customers and earn revenues.  A fixed pricing strategy is one where the producer, MLB in this case, determines a steady price that every customer is charged.  This price is enough to cover expenses plus turning a profit, better known as a markup price, which is a traditional form of pricing for many companies.  MLB TV offers two levels of services, a regular and a premium.  Both can be purchased on a monthly or a yearly basis for $14.95/79.95 or $19.995/109.95 respectively.  Considering there are 162 games in a season, which breaks down to less than a dollar a game.  Not a bad deal for the diehard fan!

            Regular and premium servicing is fairly similar; however, there are marked differences for the two services.  Both give a user access to all 2,430 regular season games plus post season play and is compatible on a Mac or PC.  They offer TV quality picture and archived games as well as condensed games.  The advantage of MLB TV is that they also use a bundling strategy by including Game day Audio with MLB TV.  Premium service offers high quality streams, the ability to digitally record games, multi-game viewing capability, picture in picture and player tracker.  It also has the advantage of allowing a user to select the broadcast they want (home or away) so that they may listen to their favorite or hometown announcers.

            MLB Game Day Audio is a flat fee of $14.95 a year and provides streaming radio broadcasts of all regular season games in either English of Spanish.  They have currently paired with Sports Illustrated to offer a free three month subscription to the magazine as part of a promotional pricing strategy as an incentive for fans to purchase.  This is a great inexpensive alternative to MLB TV.

 

           Promotional pricing and bundling pricing are two strategies heavily used by Major League Baseball to both sell and up sell users to turn a larger profit.  Promotional pricing is what was described with the partnership between Sports Illustrated and MLB where the producer offers s discount or incentive to sign up for services.  Bundling is used by the MLB through the offering of Game Day Audio with the subscription of MLB TV.  MLB TV also offers the option of bundling your MLB TV subscription with either ESPN.COM Insider or the NHL Game center for $129.95 or $139.95 respectively.  For an extra ten or twenty bucks you gain access to content at great discount.  By bundling ESPN.com Insider with MLB TV a user saves ten dollars on the Insider stand alone price.  Users save thirty dollars by signing up for NHL Game Center.

            Judging the effectiveness of these pricing strategies is a bit difficult given the fact that financial measures and user statistics are not readily available as Major League Baseball is a private entity.  According to their website, they have 8.2 million opt-in users, users who choose to access content that is not free.  That number, although it may seem low given the number of fans worldwide and site visitors, is still very high and profitable.  Running MLB TV and Game Day Audio is not an expensive process for the MLB because it uses a person’s home computer and their available bandwidth and hardware to make the streaming possible.  Overhead costs are minimal as there is most likely a small to midsized web development staff with offices that are not independent of league offices.  This all adds up to a high profit margin for the MLB.

            The average user of MLB.com is between 19 and 45 years old, 73% of which are male.  Seventy eight percent of all their users also have an income of over $40,000 a year, which is an important stat.  These stats allow the MLB to set their price ranges and decide which strategies to implement.  Given the service they offer, it is fair to use a fixed price strategy with the bundling and promotional options.  Although the price points may seem high, the per game breakdown is very reasonable, especially for their target market who makes over $40,000 a year.  Overall it is a great product and service offering that has been successful as it has been up and running for many years now and has a loyal following.

Many of my posts have been about alternative vehicles, and yet another article has jumped out at me. This weeks article comes from the Boston Globe: Cab fleet wary of 2015 hybrid law

Boston Mayor Tom Menino recently announced the passing of a bill that will require all licensed taxi cabs in the city to be hybrid vehicles by 2015. The passing of this bill has spurred many lawsuits by city cab companies as they argue that it is unrealistic to expect companies to shell out thousands of dollars for new vehicles as opposed to buying up used police cruisers. They also argue that it is unconstitutional because there are not the same standard for other state fleet vehicles.

Although I agree with the bill that was passed, the cab companies have a legitimate point. They have pointed out a significant double standard. The state government is imposing a regulation that they themselves have no intentions of following. There is a rigid 2015 deadline for private business; however, for the public sector, there is no concrete deadline to switch fleets to hybrids. This state bill only helps to aid what little progress has been made be revamped CAFE standards.

The Great Depression take 2

The New York Times published an interesting article about the rise of tent cities throughout the United States as poverty rates continue to rise: Cities Deal with a Surge in Shantytowns

The article describes the desolate situation is that a growing concern as the economy sinks further into the recession, which is shantytowns. These towns spring up on the sides of highways and under bridges, and has even prompted local governments to move them onto fairgrounds. These towns area direct result of the growing rate of homelessness and foreclosures which have left families with simply no other option but to move to the streets. Poverello House, a non-profit, has taken to building 8x10 storage sheds for homeless families to use as shelter. Although they are not luxurious, they provide a roof, light, sleeping bags, and cots in the Village of Hope efforts.

The problem with these Shantytowns is the vast array of problems they cause the city in terms of infrastructure and the correlation to drug and crime rates. They also pose a problem as there are severe health concerns that go unnoticed and unaddressed. As we discuss social entrepreneurship, this article made me think about the void that is present in the market. There is no one catering to the needs of these people and not many people willing to reach out like the Poverello House organization. Why should these people, many of whom used to have well paying jobs and lives, be completely forgotten? Our flawed system has led them to this state of poverty so it is the job of the system and social entrepreneurs to pick up the pieces and fight.

One man's trash is another man's treasure...

Since finding The Business of Green video section on Fortune.com, I have
fallen in love with it! It combines my love of sustainability with my love
of business. This particular video investigates SC Johnson practices of
using methane gas to power one of their Windex plants.The company
utilizes a local landfill to capture and sequester the methane gas that is
produced from the decomposing trash. Sitting approximately 100 feet
underground, the methane is captured,treated, and then sent to the plant
for use as energy. This has reduced their energy consumption of coal by
half. The infrastructure will pay for itself in about 7 years while reducing
CO2 emissions by 52,000 tons a year.

The potential to implement alternative energy in big business is huge, but is
still an untapped market for the most part. The obvious environmental
impact is that it reduces our dependence on coal and works towards reducing
green house gas emissions, which makes our world a cleaner one. Aside
from the environmental impact, there is huge savings potential as companies can
reduce overhead costs and widen the margins. Clean and alternative energies
are definitely the future and the future is now!

The battle of the books!

            

When the internet was originally created in 1969 by the National Science Foundation, it was strictly for academic and military purposes with a strict ban on the use of it for commercial purposes.  Although the internet is still a widely used academic resource, in the mid 1990's it became very commercialized and has been extremely profitable for many industries and companies.  That was of course until the "dot com burst" in the late 90's.  Since that bubble burst the internet has undergone a transformation and has entered into the web 2.0 generation and commercial endeavors have taken off again with more knowledge of what it takes to be successful and with a wide array of new business models.

            One particular business model that has been very popular recently is the idea of the e-business pure play model.  A pure play business is simply one that is characterized by a full commitment to the internet, meaning that they are only found on the internet.  Many familiar pure play companies include Amazon, EBay, iTunes, and Netflix.  One company which implements the pure play strategy is iChapters.  iChapters is intriguing because of the service they offer.  They are a strictly online retailer of textbooks, etextbooks, echapters, and audio books.  Although this may seem similar to Amazon and other online book retailers, there are some significant differences.  One is in the use of business models.

            iChapters uses two separate business models as a source of revenue: merchant and manufacturer model.  Within the merchant model there are four different variations of a merchant, which are virtual, catalog, click and mortar, and a bit vendor.  A virtual merchant is an online retailer like iChapters.  A catalog merchant is one that is strictly catalog order while a click and mortar is a combination of traditional retail operations and online retailing as well.  Lastly, a bit vendor sells things downloadable products like software or music.

            A manufacturer model is similar to a merchant model in that they are still selling a product; however, they have cut out the middle man and distribution partners.  There are three different purchase options that help to characterize a manufacturer model.  A customer can either purchase directly, lease, or license products from the company.  The combination of these two models allows iChapters to turn revenue as a pure play e-business and provide customers with exceptional service and product selection.

 

Properly implementing the correct business model is crucial to ensuring success and longevity, regardless of what industry a company functions in or what manner they function in.  The textbook industry has become what some argue to be a monopoly as prices are extremely expensive, and until recently, the school bookstore was the only option to purchase textbooks.  Publishers set the price, the bookstore marks it up to make a profit, and in turn, my wallet suffers.  iChapters is one company offering an alternative to traditional textbook buying.  The company is able to do this by providing four textbook buying options, which also have the potential to save customers money.  How often, as a student, do you purchase an entire textbook, only to find out your professor is only using half of the book?  Why not buy half the chapters?  With iChapters you now have the ability to do this.

            iChapters utilizes a merchant model through traditional sales of textbooks and products.  Customers can order a traditional textbook at an advertised “up to 15% off”.  This would be just as if you were ordering a book from a more traditional online retailer such as Amazon or half.com.  Simply search for the textbook and proceed with the transaction, and then wait for it to ship to your doorstep.  Similar to purchasing a traditional textbook, they offer the etextbook which is a great alternative.  The etextbook is a downloadable version of the traditional textbook which can be purchased at half the cover price.  Customers must first download a digital rights manager to their computer which ensures that all copyright laws are being followed and that the content is used for its intended purposes.  Included in that download is also the unsealer which allows you to view the content, which comes to you as a PDF file.  It allo

ws for portability and the ability to print the content; however, only three copies of any given book may be printed to provide copyright protections.

Textbooks

up to 15% off

eTextbooks

always 50% off

          Similar to the etextbook, is the echapter.  The echapter is a product offered by iChapters that allows a customer to purchase a book one chapter at a time.  It is a similar one that iTunes implements where a user can buy one song or an entire album.  iChapters recognized the fact that if they did not offer the ability to digitally purchase single chapters, more users would turn toward traditional forms of media and simply buy a textbook.  These echapters range in price from $1.99 to $4.99 per chapter.  If a student is aware that their professor is using only select chapters, there is the potential to save hundreds of dollars.  The same technology is in place for downloading echapters as with the etextbook.  Both the etextbook and echapter can be easily accessed online or downloaded and printed from your own computer once it has been purchased.

       

   Audiobooks as low as $1.99     

Lastly, iChapters also functions as a bit vendor as they now offer audiobooks that can be downloaded and listened to right from your computer.  Audio books can be purchased for as little as $1.99.  iChapters appears to be the first company to break into the digital age of textbook downloads and individual chapter sales and there is a huge potential to capitalize off of.  There is of course competition from Amazon with their introduction of the latest Kindle; however, the focus of the Kindle is pleasure reading as opposed to academic reading.  There is the ability to offer textbooks through the Kindle though that poses a threat to iChapters.

            As the company continues to grow it is important that they be able to measure their success so that they may continue to grow and improve their product offerings as well as innovate.  The most obvious performance measure they need to use is sales, but they should break their sales down into each category of product to track exactly how well each medium performs.  A similar performance measure to keep in mind is the amount of repeat business and traffic to the site.  This will help the company analyze their strengths and weaknesses in terms of customer satisfaction.

            Another performance measure that they must be aware of is their download speeds and ease of use.  It is a major pitfall of many companies when a user tries to download something and three days later it is done or if a user simply cannot figure out how to download the content.  If iChapters can take into account their competition and create a system of performance measures, their unique offerings will continue to allow them to be successful and grow.The product is so successful because it caters to many different tastes and needs.  The financially strapped college kid can save a few bucks, the person who likes an old fashioned book is happy, and the environmentally conscious are happy as well.

 

 

Powering up the green way...

As technology increases, so does demand as more and more people want the latest and the greatest when it comes to gadgets. Many iPhone users, for example, will trade in a perfectly good working one for the latest model. Why? So it is unnoticeably faster than their old one? Either way, this practice and innovation creates a great deal of e-waste, as seen in the video The Digital Dump.

One of the major problems with consumer electronics is the lack of re usability and the ability to recycle different parts of the product. One part in particular is extremely difficult to reuse and recycle, the battery. Most batteries for every day use are either your typical disposable batteries or rechargeable lithium ion batteries. The first ends up in a landfill at the end of its life cycle and the second will most likely do the same as very little of it can be recycled.

A new company, Z Power, is bursting onto the market and hopes to make a serious splash for the model year 2010 with the introduction of the Z battery. This battery is made of silver and zinc and is composed of 95% recycled materials. Past attempts have failed greatly because there was simply no good alternative to traditional batteries. They could not meet the needs of the consumer. Battery life and portability were obstacles no one has overcome as of yet, but that is something that Z Power is hoping to change.

As the technology advances, hopefully the sustainability of it will as well. It is the responsibility of the consumer, producer, and retailer to put pressures on each other to create an ideal market for products such as the Z battery. Not only does a product like this suffice the bottom line, but it satisfies the triple bottom line as well.


This weeks feature is brought to us by Fortune Magazine:

You could buy what?!

As President Obama signs off on the $787 BILLION dollar stimulus package, it got me thinking about exactly how much that is. It is an enormous amount of money which the Boston Globe was nice enough to translate into other areas. Lets just say I would be extremely happy if it were rewritten to include item number one on the list: pay off all student debt!

Check out the complete list and see for yourself

http://boston.com/business/gallery/whatcan787bbuy/