Finance Matters

Archive for March 26th, 2010

Because the Federal Reserve now owns over 10% (!) of all mortgage debt outstanding. (via Waverly Advisors)

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There’s a battle of wits and words raging over at The Lynch Blog about journalism school. Chris Lynch writes that, “in the coming years, I think most journalism schools will shrink or disappear.”

He bases this assertion on another theory: As the group of readers willing to pay for content shrinks, so will the pool of people who provide content.

That would be a plausible idea, if it weren’t for the fact that applications to Journalism schools have been on the rise for the last two years. Meanwhile, readers are more fragmented than ever before.

Lynch Blog: The foundations of that cathedral have been shaken to the core because there is less money to validate its existence and shield the inadequacies of some of the people in it. My advice to kids currently in journalism school is to, at the very least, find a niche and expertise that isn’t about content creation itself.

Certainly, simply training to be a “content creator” at J-schools isn’t the smartest economic decision.

Here’s a back-of-the-envelope glimpse at the economics of the choice to get a Master’s degree in journalism:

• NYU Master’s program Tuition and fees : ~$47,000
• Columbia Master’s program Tuition and fees: $51,063
• Northwestern’s Master’s program at Medill tuition: $44,656

So, if you want to get a Master’s in journalism at a top school, embrace debt. And don’t expect to make enough money pay back those student loans.

• Mean annual wage for “reporters and correspondents”: $44,030 (according to Bureau of Labor Statistics)

Yikes.

But, also, there’s this: Anyone who is choosing to shell out tens of thousands of dollars to gain entrance into an industry that does not promise big paychecks must be doing so for other reasons than money.

Why should we assume that the economics of the media industry, wanna-be journalists, and journalism schools will go hand-in-hand?

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See Also:

• Whatever You Do, Don’t Go To Graduate School
• Dear Recent Graduate: Jobs Are Out There, Find Them Here!
• Avoid The Grad School Trap

Location-based social networking apps like Foursquare are some of the hottest mobile trends of 2010. More than 500,000 people have joined Foursquare alone, and that number is growing fast.

But Foursquare is hoping the 1.4 million businesses it lists could end up the real winners.

How? Because apps like Foursquare are new opportunities to promote your business and build stronger relationships with your customers.

(Don’t know anything about Foursquare? Click here to learn more about what it’s all about.)

Rewarding returning customers is nothing new, but stamping that “frequent customer” card has never been all that fun.

Foursquare aims to take things to a new level. It not only lets you to offer promotions for new customers, frequent customers, and your best customer (the “Mayor”) — it encourages new business as your clients share their location and the sweet deals they’ve discovered there with their friends. And because it’s on a cellphone, it’s cool.

Not sure where to start? We’ve collected a list of ways to get in on this hot trend.

Click here to see how to use Foursquare to boost your business >

See Also:

• How To Use YouTube To Drive Business
• How To Make An Awesome Corporate Blog
• How One Small Business Does Social Media Right

Give your Mayor special perks

Probably the most common and simplest way to promote yourself on Foursquare is to offer something cool to whoever is the Mayor of your establishment; this is the person who “checks in” the most frequently.

You’ll only be treating one person, and you’ll make them love you even more than they already do.

And if you make the deal really sweet (“Foursquare Mayor Drinks for Free!”), you’ll spur some friendly competition amongst your customers to de-throne the current mayor and take their place.

Offer discounts

Another easy practice: offer a little discount for Foursquare users who check in and show you their phone.

Whether you make the offer valid every day or only on certain days, it’s a nice way to reward your frequent customers.

Let them earn points towards a reward for check-ins

In lieu of a “frequent customer” card, try the Foursquare equivalent.

The app tells you how many times someone’s checked into your business — let them know that on their 5th (or 10th, or 12th) check-in, their drink (or shot, or meal) is your treat.

Promote a special for the first “x” customers to check in

East Village cupcakery Butter Lane offers a free cupcake to the first ten people to check in each day, and they’ve seen their sales increase significantly since they started promoting themselves on Foursquare.

“We like the type of customer who uses Foursquare,” co-owner Maria Baugh tells us. “Generally they’re engaged and lively and they’re great ambassadors for Butter Lane.”

Treats for first-time check-ins

“Checking in for the first time? Hey, your first beer/soda/side of fries is on us.”

It’s a simple gesture that makes customers feel special and gives you a chance to make a new fan.

Attract new customers with “specials nearby”

One of the best opportunities on Foursquare to attract new customers is the “specials nearby” function. When a user checks in at a nearby establishment, they’re also notified if there are any deals being offered at places close by.

It’s a great opportunity to pull in new clients who may have never known you were there otherwise. This function is still being tested out, but as of now it’s free. You can sign up here.

Plan an event around Foursquare

Milwaukee burger joint AJ Bombers attempted to unlock the hard-to-achieve “swarm” badge earlier this month by getting 50 or more people to check in to the restaurant at once.

Earning badges is a big part of Foursquare. According to an interview with Steffan Antonas, the week before the event, co-owner Joe Sorge tweeted about it and publicized it through social media and traditional channels, encouraging people to come by playing on the “competition” spirit of the game.

Ultimately, he got over 150 people to show up, as you can see in the video above. That was definitely a good night for business.

The returns haven’t stopped there. Sorge estimates that sales of one featured item have gone up around 30% since the restaurant started promoting itself with Foursquare, and business in general has increased.

“We’ve seen a very noticeable uptick in business via our use of foursquare,” Sorge tells us. “Specifically, we’ve found that we can drive the sales of specific items via our venue page and our guest made recommendations there.”

Use their new tools to track your customers

In upcoming weeks, Foursquare will be launching some awesome tools that will give you tons more information about your customers.

The New York Times reports that the new capabilities will allow you to see important details such as who’s checking in, what times are the busiest at your business, and the ratio of male to female customers. You’ll also have the ability to offer instant promos — useful when a customer who hasn’t visited in a while suddenly stops by, for example.

Get more personal

Foursquare is perfect for getting up close and personal with your customers.

Of course, you’ll know who your best customer is by their Mayor status. But you can also reach out to your other frequent customers, and re-connect with those who haven’t visited in a while.

It’s a unique chance to put a face to your business and show your clientele that you like to have fun with them.

Check out what others are doing

There are literally hundreds of ways to implement Foursquare into a promotion for your business. You’re only limited by your imagination.

Butter Lane’s Baugh says, “We’re thrilled to work with Foursquare—they’re responsive, creative and easy to work with.” So if you dream up something crazy, get in touch with them and they’ll try to make it happen.

Or check out what others are doing at Foursquare’s official site for businesses.

Have fun

Foursquare is a game, and you should always look at it that way.

It obviously won’t blow your sales out of the water or completely replace your marketing department. But it certainly is a unique chance to connect with your customers on an individual level and build relationships with them.

And ultimately, it’s really all about having fun with your clients.

Working on your social media presence? Don’t miss…

How To Make An Awesome Corporate Blog >

and

How To Use YouTube To Drive Business >

Need to brush up on Foursquare some more?

Click here for our ultimate guide to Foursquare >

And then sign your business up for Foursquare here.

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Earlier, we wrote about the apparent conflict of interest with CME board member and MPAA Chairman Dan Glickman.

Sincle sentence: Glickman’s MPAA is attacking Cantor Fitzgerald’s movie futures’s — a potential CME competitor.

CME Group responded to a request for comment. Here’s their statement in full:

“CME Group has in place a conflict of interest policy that applies to its Board members (a copy is available on our Website).  Our board follows the policy and conflicts of interests are raised, discussed and directors recuse themselves from the vote as appropriate. 

We, however, do not specifically comment on the internal deliberations of our Board.”

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See Also:

• The Unstoppable Bulls: Indices Post Solid Gains, Gold Retreats
• Another Solid Day For Equities As Commodities Take A Beatdown
• Stocks Post Solid Gains After Fed Announcement, Commodities Follow Suit

Scott Rosenberg is cofounder of Salon and author of “Say Everything: How Blogging Began, What It’s Becoming, and Why It Matters,” available at Amazon. This post was originally published at Scott’s blog, Wordyard, and was reprinted with permission.

I’m having flashbacks these days, and they’re not from drugs, they’re from the rising chorus of media-industry froth about how Apple’s forthcoming iPad is going to save the business of selling content.

Let me be clear: I love what I’ve seen of the iPad and I’ll probably end up with one. It’s a likely game-changer for the device market, a rethinking of the lightweight mobile platform that makes sense in many ways. I think it will be a big hit. In the realm of hardware design, interface design and hardware -software integration, Apple remains unmatched today. (The company’s single-point-of-failure approach to content and application distribution is another story — and this problem that will only grow more acute the more successful the iPad becomes.)

But these flashbacks I’m getting as I read about the media business’s iPad excitement — man, they’re intense. Stories like this and this, about the magazine industry’s excitement over the iPad, or videos like these Wired iPad demos, take me back to the early ’90s — when media companies saw their future on a shiny aluminum disc.

If you weren’t following the tech news back then, let me offer you a quick recap. CD-ROMS were going to serve as the media industry’s digital lifeboat. A whole “multimedia industry” emerged around them, complete with high-end niche publishers and mass-market plays. In this world, “interactivity” meant the ability to click on hyperlinks and hybridize your information intake with text, images, sound and video. Yow!

There were, it’s true, a few problems. People weren’t actually that keen on buying CD-ROMs in any quantity. Partly this was because they didn’t work that well. But mostly it was because neither users nor producers ever had a solid handle on what the form was for. They plowed everything from encyclopedias to games to magazines onto the little discs, in a desperate effort to figure it out. They consoled themselves by reminding the world that every new medium goes through an infancy during which nobody really knows what they’re doing and everyone just reproduces the shape and style of existing media forms on the new platform.

You can hear exactly the same excuses in these iPad observations by Time editor Richard Stengel. Stengel says we’re still in the point-the-movie-camera-at-the-proscenium stage. We’re waiting for the new form’s Orson Welles. But we’re charging forward anyway! This future is too bright to be missed.

But it turned out the digital future didn’t need CD-ROM’s Orson Welles. It needed something else, something no disc could offer: an easy way for everyone to contribute their own voices. The moment the Web browser showed up on people’s desktops, something weird happened: people just stopped talking about CD-ROMs. An entire next-big-thing industry vanished with little trace. Today we recall the CD-ROM publishing era as at best a fascinating dead-end, a sandbox in which some talented people began to wrestle with digital change before moving on to the Internet.

It’s easy to see this today, but at the time it was very hard to accept. (My first personal Web project, in January 1995, was an online magazine to, er, review CD-ROMs.)

The Web triumphed over CD-ROM for a slew of reasons, not least its openness. But the central lesson of this most central media transition of our era, one whose implications we’re still digesting, is this: People like to interact with one another more than they like to engage with static information. Every step in the Web’s evolution demonstrates that connecting people with other people trumps giving them flashy, showy interfaces to flat data.

It’s no mystery why so many publishing companies are revved up about the iPad: they’re hoping the new gizmo will turn back the clock on their business model, allowing them to make consumers pay while delivering their eyeballs directly to advertisers via costly, eye-catching displays. Here’s consultant Ken Doctor, speaking on Marketplace yesterday:

DOCTOR: Essentially, it’s a do-over. With a new platform and a new way of thinking about it. Can you charge advertisers in a different way and can you say to readers, we’re going to need you to pay for it?

Many of the industry executives who are hyping iPad publishing are in the camp that views the decision publishers made in the early days of the Web not to charge for their publications as an original sin. The iPad, they imagine, will restore prelapsarian profit margins.

Good luck with that! The reason it’s tough to charge for content today is that there’s just too much of it. People are having a blast talking with each other online. And as long as the iPad has a good Web browser, it’s hard to imagine how gated content and costly content apps will beat that.

You ask, “What about the example of iPhone apps? Don’t they prove people will pay for convenience on a mobile device?” Maybe. To me they prove that the iPhone’s screen is still too small to really enjoy a standard browser experience. So users pay to avoid the navigation tax that browser use on the iPhone incurs. This is the chief value of the iPad: it brings the ease and power of the iPhone OS’s touch interface to a full-size Web-browser window.

I can’t wait to play around with this. But I don’t see myself rushing to pay for repurposed paper magazines and newspapers sprinkled with a few audio-visual doodads. That didn’t fly with CD-ROMs and it won’t fly on the iPad.

Apple’s new device may well prove an interesting market for a new generation of full-length creative works — books, movies, music, mashups of all of the above — works that people are likely to want to consume more than once. But for anything with a shelf-life half-life — news and information and commentary — the iPad is unlikely to serve as a savior. For anyone who thinks otherwise, can I interest you in a carton of unopened CD-ROM magazines?

Scott Rosenberg is cofounder of Salon and author of “Say Everything: How Blogging Began, What It’s Becoming, and Why It Matters,” available at Amazon. This post was originally published at Scott’s blog, Wordyard, and was reprinted with permission.

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See Also:

• Print Publications Still Hallucinating That The iPad Will Save Their Asses — Here’s Why It Won’t
• Conde Nast Magazines Plan ‘Experimental’ iPad Apps; Wait For Adobe And Apple To Make Friends
• Forget Apple’s iPad, Amazon’s Kindle Will Have A Great Year