Posts Tagged ‘content’

How fast can one company lose customers?

Wednesday, May 13th, 2009

According to Shelly Palmer at imediabytes, Sirius/Xm Radio lost $36 million in Q1. And that’s nothing. It lost 400,000 customers — which I’m thinking is more customers than Johnson & Johnson lost back in the 1980s when someone started putting cyanide in its Tylenol products. siriusxm_siriusI mean, 400,000 is a mid-size city. It’s a lot of customers. I’m not sure you could get rid of customers that fast if you paid telemarketers to call them up at dinner time and swear at them.

And if you’re the folks at Sirius/XM, it’s the kind of number that puts you into a full-blown panic attack. When you lose 400,00 customers in 3 months, you start asking questions like, “Are we doing the right thing here?” and “WTF?”

My personal experience is that I had been a subscriber for 2 years when I got a note from Sirius/XM in February siriusxm_xmwarning me that I would no longer be able to access programming for free on my computer unless I paid for the full year in advance right away.

It annoyed me, and I immediately assumed it was a cash-grab. But I bought the 12-month subscription because I thought it was important to me. Two weeks later I lost my job, and a week after that, in an effort to cut all unnecessary costs — and because I was irritated at being leveraged in the first palce, I called to cancel my subscription.

Their response? The nice lady with a Punjabi accent asked if they could keep me as a customer if they reduced the annual subscription rate by 50%. Now I was really mad, realizing that all along I’d been paying twice what they were willing to take. I told her no.

A month later, I got a direct-mail piece asking me to come back at 4.99 a month for six months — 38% of the original price. I suppose this was supposed to entice me. But it made me feel even more stupid for having paid $12.99 in the first place.

There’s one other thing: All along, Sirius/XM has advertised that it’s commercial-free radio, which should be worth paying for. But it’s not true. If you listen to any syndicated programming that’s re-broadcast via satellite, you’ll get the same amount of commercial time as you would on commercial radio.

And if you listen to their original programming — some of which is really pretty good — you still get advertising. And it’s the most irritating kind: low-budget stuff for whole-body cleanses and businesses that you can run from home without any skills or experience required.

I originally bought my XM subscription because I didn’t want to be my own DJ; I’d rather have someone else do it for me. But these are hard times, you know. Worst times since the Great Depression. So now, when I get in my car, I plug in my i-pod or put in an old CD. I still don’t want to be my own DJ. But I’m guessing that 399,999 other people agree with me that it’s not all that bad a job.

Quote of the day

Wednesday, May 13th, 2009

From Richard Mitchele, who just won a contest from Sailing Anarchy (without a doubt the best blog, forum and e-newsletter on earth devoted to racing sailboats). His prize was a ride-along on the Puma entrant in the Volvo Ocean Race during the closed-course races sailed in Boston as part of the round-the-world race’s only North American stopover.sailing-anarchy-swag

“You could have knocked me over with a feather when I found out that I’d won the contest on SA. I was kind of thinking maybe I’d score a T-shirt or some other Puma swag. It was as if Jessica Alba called to say that the restraining order had been lifted, that she and Uma Thurman had talked it over and wanted to give my idea a try.”

Are magazines really that important?

Friday, May 8th, 2009

Folio:, a trade magazine for the publishing industry, reports that Entrepreneur magazine is being sued for $178 million by a group of 87 investors who claim the magazine promoted a business that turned out to be a giant Ponzi scheme. (Here’s the article.)

ent-mag-cover-may-08In the suit, they claim the magazine “deliberately, willfully and recklessly failed to exercise due diligence in publishing information” about Agape World, according to the Folio: article. That information was contained in a May 2008 ranking of the “Hot 100” fast-growth businesses. Agape World was ranked 73rd, but early this year its owner was arrested and charged with mail fraud to the tune of $375 million+. The company has  been retroactively removed from the Hot 100 list.

This sounds to me like a bunch of crybaby investors looking for someone to blame because they didn’t do their due diligence. And I have little sympathy for them. The investors, according to the article, are also going to sue Dunn & Bradstreet, which apparently provided some of the information Entrepreneur used.

But it also peels back the blanket on one of publishing’s most worrisome and quietly kept problems. Magazine people claim that, despite the advertising/revenue crisis they currently face, they will remain viable over the long-run because their content is so important to readers.

For instance, here’s what Gordon Hughes, president of American Business Media (trade magazine association) said just a few weeks ago, in another Folio: article about the 26% declinein ad sales in 2009’s Q1: “What our industry does, and has always done, is provide information that makes business better and stronger. We will come through this period as a stronger industry, a more creative industry, and maybe even a more dedicated industry.”

He should have included the word “smaller.” Because the great good that he claims the industry performs is more exception than rule.

Take Entrepreneur’s example. Its Hot 100 list is repurposed information from public databases. OK, somebody has to crunch the data. And I’m not saying there isn’t any original reporting; but even the magazine’s CEO says there isn’t a lot.

Here’s what Entrepreneur’s COE Peter Shea told Folio: “Given the limited information provided about each company, it was certainly not Entrepreneur’s intention to evaluate or predict a specific company’s investment potential nor expectation that anyone would rely on such information to make investment decisions.”

What a terrible position: In order to defend his product against this lawsuit, he has to make the case that the content is really just trivia.

I don’t mean to condemn all magazines. Many do fine work, which I read and admire. But most of what passes for such is a little bit of data and a lot of promotion. For every magazine that is earning its way by producing content that readers really won’t live without, there are probably dozens that face a real comeuppance.

Advertisers are dropping out of magazines to create their own content, and magazines must finally (they’ve been talking about it for years) get readers to pay a larger share of the actual cost to produce the information they provide. As they do, many will face a truth they probably already know: Their content isn’t all that important.