indecision | No Smoke and Mirrors

FOX and Warner Bros delaying new movie releases to Red Box and other kiosk vendors is like watching a new release of Dumb and Dumber.

In the Wall Street Journal article: Warner Bros. aims to lift DVD sales, will delay arrival at rental kiosks. They discuss how they plan to delay new releases to DVD rental kiosks.

The movie studios are concerned about their DVD revenues.

The market is not only speaking, but screaming how they are raving fans of DVD rentals Kiosks like Red Box.

The current big customers like Blockbuster and others are posting over 22% losses in revenues when kiosks like Red Box are showing consistent and impressive gains. Call me crazy… but your market is speaking guys…can you hear me now? Red Box Kiosks are described as; “The hottest thing in movie rentals is as old as the Coke machine — and just as red.”Their CEO Gregg Kaplan said “We are incredibly proud to achieve 200 million rentals and 10,000 locations nationwide.”

The studios have a choice, they can try to “control” the market, the buyers, or they need to intimately understand the market, buyers and needs and not only embrace the new ways consumers wish to consume content but enable it.

Thirteen years of my work experience was serving the movie distribution, rental and mass retail. How Warner and Fox are behaving is no different than how they all were behaving worried that this new thing called “movie rental stores “would erode their box office revenues in the mid 1980”s.

Market losers try to control the market and they protected their current cash cows while ignoring the consumer’s voice. They ignore the bright lights of growth and change trying to tightly hold on to past business models their markets no longer value.

Market leaders spend time getting to know their market and they quickly understand consumers who rent movies also go to movie theaters and some even buy movies and collect them.

When we rent content it is about wanting entertainment in a convenient and cost effective way for me as a consumer. You can try to control us, however when you do we find other ways to solve our needs and often they are much more severe to your bottom line. Besides, how long will it be before one of your competing studios blinks? Didn’t we live this same scenario “back in the day” And what happened…aggressive smaller studios emerged understanding the needs of consumers and and one of you big guys blinked. Some of you held your ground (more stubborn and stupid, driven by your own needs and egos instead of being strategic marketers) and how did that work for you back then? I remember, do you?

I can remember the 28,000 independent video stores and large movie distributors placing pressure on the studios to not ship new video releases directly to this 14 store chain in Texas called Blockbuster. At the time they were buying through distributors like Big State, Commtron, Ingram, and others. Well that little chain of 14 video rental stores quickly became a market leader.

I am a huge fan of Red Box.

They solve problems for me;

· I want to rent a DVD fast, I like the experience

· I want to rent a DVD and do my grocery shopping in one trip, in one location, one stop ( I am already late for dinner)

· I do not want to pay what Blockbuster charges , no late fees …but still a lot more than $1.00

· I only want the movie for one night

· I don’t want to have to join Net flicks or others and pre plan my month of movie viewing

· At a $1.00 rental, I feel like I receive a value , if I like it I go to Wal Mart and buy it

· I do not want to have to “shop” at a movie rental store only to find out they have all the new releases checked out

· I do not want to pay more for a new release than an older movie

· I do not want to buy movies through my cable provider as they are already raping me with what they charge

· The box office theaters are increasing their prices ( again, feels like they are thinking about their own needs and not mine)

So what are you going to do Dumb and Dumber? Are you going to repeat the past and focus on your needs or are you going to understand the market, it’s consumers and our changing needs and not only enable us to enjoy movie entertainment, but who knows you may even find new products and serves that solve our unresolved problems that Red Box fails to solve?

When I wrote my post : Attention leaders: Don’t look now but your lack of market knowledge is showing… I was talking about companies like you that have lost touch with their markets and they guess , assume, and use their gut and intuitions as their way of hitting their goals. They make inside-out versus market -in decisions and their shareholder values decline rapidly.

Your choice…focus on your internal needs and try to control the market… Or gain an intimate knowledge of your market today and it’s consumers like me and build products and service delivery systems that serve me and solve my unresolved problems.

Oh I can hear the movie exec’s now…”easy for you to say, we have billions at stake here.” Well you are right, you do. But you will eventually supply the kiosk companies with new releases at the same time as others. While you figure it out, Red Box will go to a mass retail store on the day of the new release and buy them. While you figure this out you will remove profit from your movie distributors.

So the question is how long do you want to be a “buggy whip” manufacturer saying this horseless carriage is a fad? Or, do you embrace your market, its changes and evolve into a new company that meets our needs today and into the future?

Maybe you develop a “imovies” since my kids seem to download their favorite DVD’s onto Apple laptops? The only hassle is the download from the disc. Not a big deal, but maybe you take the time to understand why they are doing this, the problem it solves for them and solve it brillantly?

We are all watching…

How about your company….

Are you trying to control your market? How’s that working for you?

Are you trying to control your vendors trying to slow down a new service model in your industry?

Are you the buggy whip manufacturer saying this new horseless carriage is a fad and will never last?

Or are you studying your market, your consumers and intimately understanding what and why they do what they do?

All is not lost by the way as some forward thinking buggy whip manufactures found as they learned to make leather seating for these horseless carriages.

Trying to control a market is foolish and expensive. Understand and embrace your market and become a market leader, not a market loser.

Technorati Tags: FOX,Warner Bros.,Red Box,Market leadership,Market leader,market loser,Blockbuster Video,Marketing,market change

Is your leadership in a holding pattern while your team runs out of gas?

5 Comments

At one point in my career I traveled a great deal spending four nights per week away from home. I lived in North Canton, Ohio so a number of my flights were small commuter airplanes to major hub cities. You learn to accept the slow baggage claim, fueling delays, and needing to run through the hub airport to make your connection. However one aggravation I never seemed to get used to was the plane going into a holding pattern as we approached the Akron Canton airport. If you fly a great deal as I did you know how long it should take to fly from Cincinnati or Charlotte, it was predictable. You know that a flight from Cincinnati should take just under an hour and when you notice you have been in the air for 80 minutes you become anxious. You look out the window and you can often see the runway lights, and then the moon, and the moon again, and again. Why? When will we land? I have flown this flight plan for years and now I do not know what to expect and I am getting frustrated. Eventually the pilot announces “we are cleared for landing, please put your tray tables up and your seats in an upright position…” and we land.

I had a phone conversation with a midlevel executive this week who was very frustrated and his emotion reminded me of the feelings I experienced when planes I was on went into holding patterns. He said that deals that the executives have historically signed are no longer being signed. His competitors are making a run at his key accounts, and management seems to be in a “holding pattern” not knowing what to do, so we are doing nothing.

When I wrote Attention leaders: Don’t look now but your lack of market knowledge is showing… I discussed how employees are more fearful now than ever before. They want to follow leaders they believe will lead their team out of this current situation and come out on the other side positioned to be a market leader. However I am hearing executive doubt in their leadership teams who have their business in a holding pattern. Employees, like me on my flight into the Akron airport are frustrated. They want to make decisions that add value however their leadership teams are stuck in a state of indecision. These mid level leaders just want to know the plan. (Or that there is a plan)

The Strategic Sourceror blog they discuss: Indecision is not an acceptable decision. The author points out “In every business decision situation, whether organizational, tactical, or strategic, there are two acceptable answers; Yes and No. Indecision is the cornerstone of faulty, short-sighted, C.Y.A. management philosophy. It’s the prized virtue of the mediocre and a tattered safety blanket for the incompetent.” Yet some large and small businesses are choosing to be in holding patterns today and their teams are growing more frustrated each day.

Why do you find leaders chose to be in a holding pattern? The above blog sites two main reasons;

There’s Not Enough Information

Happy Enough with the Status Quo

Next I went to the Bible, I was curious what advice it had regarding a lack of leadership and what could occur if a holding pattern lasts for too long…

“In the days with no King of Israel; everyone did what was right in their own eyes”

Judges 17:6

“When everyone does what is right in his own eyes, before long moral conditions sink”

Judges 19:25

If leaders choose not to lead, their teams will do what they feel is right. If left unchecked, employees doing what they feel is right will erode the core values of what’s left of your culture.

Indecision is a tool of the incompetent leader. Determine what you know. Do you know what you don’t know? Admit what you don’t know and put a plan in place to gain the knowledge you require. Your team is counting on you to take them out of this holding pattern and have a flight plan that leads to a future landing as a market leader.

Does your senior leadership team have your team in a holding pattern, a let’s wait and see, plan?

Have you experienced your company’s indecision hurting your relationship with loyal customers?

Do you find senior leaders or mid level managers with more indecision today? Why?

Is a holding pattern ever a safe strategy?

Is a bad decision worst than indecision?