Vertical Integration and Monopolization
The big news dominating the music business world over the last few months has been the proposed merger of entertainment-giant Live Nation Inc. and the largest ticket seller Ticketmaster Entertainment Inc., thereby creating Live Nation Entertainment, Inc. The merger is currently under review by the Federal Trade Commission for signs of monopolization of the entertainment industry. The biggest issue in the merger appears to be the size of each corporation.
Currently, Ticketmaster has a market share of 30% for all entertainment event ticket sales and 70% for all concerts. These ticket sales are completed through either the primary ticket sales company, Ticketmaster, or the secondary (resale) ticket sales division, TicketsNow. On the other hand, Live Nation estimates that it is three times the size of its nearest competitor in concert promoting, AEG.
Belmont Achievers
Congratulations to Dr. Jane Finley, Belmont University Deloitte and Touche Professor in Accounting, for being elected to the Publix Super Markets Board of Directors. “Dr. Finley has an impressive background in finance and information technology that will complement our current Board of Directors,” said Maria Brous, Publix director of media and community relations. “She also adds another geographic area of our company to the Board as a Nashville, Tenn., resident. We are proud to have Jane as part of the Publix family.” For more on this story, visit Belmont News.
We are also proud of our Delta Epsilon Chi Team for their performance at the International Delta Epsilon Chi competition last week in Anaheim. This is the second consecutive year that we took first place in Entrepreneurship Business Plan and first and second place in the Entrepreneurial Challenge! For a list of award winners, please visit Dr. Cornwall’s blog.
After winning the Regional Championship for the fourth consecutive year, Belmont’s Students in Free Enterprise (SIFE) team will participate in the SIFE National Exposition in Philadelphia on May 12-14. In addition to the Regional Championship, the Belmont team was selected as a finalist for the 2009 SIFE USA Topic Competition for six of their projects.
It’s good to be IT!
With all the media hype about the loss of IT-related jobs via off-shoring, it’s a good time to be in IT. In 2008, employment for IT-related jobs reached a new milestone of over four million. Over the next 8 years, IT majors will hold 3 of the top 8 growth jobs (Bureau of Labor Statistics) and will enter careers with strong salaries (Hot IT Jobs). So in a down economy the question remains, why would IT employment remain robust while unemployment is on the rise in many other job categories?
Happy Earth Day!
Happy Earth Day! The news this week is full of environmental statistics. On campus, we will discontinue the sale of bottled water at the end of the semester. This move is estimated to cost the campus $20,000 in revenue. But, other costs will incur, as well. Water stations will be installed. Water fountains will be upgraded, making it easier to fill reusable water bottles. Besides our “earth consciousness,” what strategic goals do we address with this move? How do we evaluate its success? How do we measure the tradeoffs made?
We manage what we measure. So, measurement matters. But, many of the measurement tools associated with ecological management are denominated in flow speeds or error rates or landfill tons. These measures are not meaningful to many of us. Here, we can learn from quality management. Reporting quality problems and progress received appropriate attention when we converted all the problems to a single, common and familiar denominator (dollars!) and added them up. Cost of quality reports revealed to company managers, regulators, legislators and the public reasonable estimates of the expense associated with poor quality. With this data in hand, managers justified expenditures necessary to fix, or even better prevent, quality problems.
Venture Capital Regrouping
I wrote a post this past weekend at my blog the Entrepreneurial Mind about the dramatic drop in venture capital funding, particularly for newer ventures.
The Wall Street Journal has an article on an innovative attempt to get money flowing back into start-up deals:
In the latest example of investors trying new approaches during the downturn, a venture-capital firm that was an early backer of Facebook Inc. is devising a plan to outsource early investing decisions to hand-picked entrepreneurs and technology executives.
The Silicon Valley firm Founders Fund plans to give at least 12 "fellows" $25,000 to invest in an early-stage company of their choosing. Founders Fund will invest $25,000 alongside those initial investments and request the right to invest an additional $250,000 when the companies raise their next round, according to Sean Parker, managing partner at Founders Fund, which announced it raised a $220 million fund in late 2007. The firm expects to devote roughly $3.6 million to the new program.
We have launched a similar program here at Belmont University called our Runway Loan fund. So far, we have given two loans to alumni ventures of $25,000 each. The terms are that these are set up as interest free loans. Once the principle is repaid, the student or alumnus agrees to begin paying an annual gift to our Center of Entrepreneurship that is equal to one percent of their revenues for the life of the business.
The first two ventures to receive Runway Loans are Cell Journalist and Just Kidding Productions.
Our hope is that we can gain permanent funding for this program so it can be expanded. It provides badly needed seed funding for our students and alumni and a means of creating a revenue stream for our Center that can help us expand what we do over the long-term.
Given our dependence on new businesses to pull us out the recession, we need try all the creative solutions we can think of to support these entrepreneurs.
AIG = 21st Century Insurance
This week I got an interesting letter from my car insurance company, letting me know that they are excited to announce the transition to a new brand name – 21st Century Insurance. According to the letter, “This new brand name is meant to reflect our commitment to being the kind of forward-thinking insurance company you need today, in the 21st century.” While I compared prices from various companies, I’m not a bargain hunter when it comes to my car insurance. I stick to the deal that my “dad’s guy” offers me. I have had the same car insurance since my 16th birthday and I like being able to pick up the phone and talk to someone who knows me when I’ve smashed up a car. I have always been happy to be insured by AIG; I’ve been a loyal customer. I still remember when the agent explained how AIG is the largest insurer around, bragging how the company is “a name you know you can count on.” That was all he ever had to say, it sounded great.
The rebranding letter insulted me, it really hurt my feelings. I’ve stuck with AIG through the years, despite tempting offers from cavemen and geckos. Marketing classes teach concepts about the importance of branding. I find it amazing that the company bailed on its good name across the board. CBS reported, “CEO Edward Liddy revealed that while the company’s healthy businesses would survive, its name probably wouldn’t. ‘I think the AIG name is so thoroughly wounded and disgraced that we're probably going to have to change it,’ he said.” (http://blogs.abcnews.com/moneybeat/2009/03/liddy-aig-name.html)
AIG has now changed their brands in an effort to trick their own customers. I believe that marketing gurus will study AIG’s branding strategy from now on. While I could argue both sides, I’m not convinced that this is a smart move. I do think if my insurance company is not willing to be loyal to their own good name, then I’m no longer willing to be a loyal customer. Changing the name might help retain some of their customers, but it convinced me that I should shop around.
Apparently AIG’s end-game is to sell the car insurance division. MSNBC is reporting that a deal is being worked out with Zurich Financial Services to sell 21st Century for $1.9 Billion (http://www.msnbc.msn.com/id/30249719/). The letter writer must have forgotten to mention that. The end of the letter reads, “At this point you are probably wondering what this means to you. It means that although our brand name will change, our service and commitment never will.” How is AIG’s commitment unchanged if they are currently trying to sell-off my relationship? While the terms and conditions of my current insurance policy may remain the same, our relationship is nearing the end.
“Accountable Marketing”
I just read the article “Achieving Accountable Marketing: Six Critical Value Levers Must Be Pulled” by Michael Dunn on brandchannel.com. The article outlines six basic marketing considerations that should be revisited on an ongoing basis— strategy, content, marketing vehicles, investment levels, in-market execution and fixed cost management. While these are certainly not new concepts, it is important to keep these factors in mind as situations change and new opportunities emerge.
Brandchannel.com is a good resource for anyone interested in marketing/branding. You might check out this month’s debate forum to read reactions to “How will Twitter affect Brands?” as you consider new ways of keeping customers engaged.
Electronic Tax Return Filing
Are you standing in line today at the Post Office to mail your tax return to the IRS? The Internal Revenue Service is expecting your completed individual tax return (or an automatic extension request) for 2008 and today is the deadline. But paper and Post Office lines are so ... last century! The IRS wants your tax return ... but digital only please!
The number of returns filed electronically has grown dramatically over the past few years. Electronic, or e-filing, started in 1990 with 4 million returns and reached 90 million last year. Big number? Maybe, but it only represents 58% of individual returns filed and far less than the 80% goal set early this decade by the IRS.
National Healthcare Decisions Day April 16, 2009
Many Americans are unaware of a National Day to promote the early development of plans for you and your loved ones during specific medical necessities and adverse situations. April 16, 2008 was the first day the US designed to promote awareness and the need for Americans to discuss (and hopefully execute) their advanced medical directives. What is an advance directive?
Academics and Practitioners Unite
[Authored by Dr. J. Patrick Raines] The problem of social organization is how to set up an arrangement under which greed will do the least harm; capitalism is that kind of a system. – Milton Friedman
Russ Kidder contends in his new book, The Ethics Recession, that there is a growing sentiment that our current economic crisis is not simply unethical but profoundly immoral. He states “There’s a sense that core decencies have been demolished, integrity dissolved, and common values trampled….” Kidder’s recommendation is to look beyond personalities and individuals to create cultures of integrity.