Monday, January 24, 2011

Making Money Marketing

Jon Gosselin has returned to the workforce as a rep in sales and marketing. His ex-wife, Kate Gosselin is making $250,000 per episode of ‘Kate Plus 8′ – she uses those children as her meal ticket as surely as if they were livestock.

Jon can’t seem to get the courts to agree to stop Kate and TLC from filming the children who he claims are exhibiting all sorts of behavioural problems as a result of being filmed all of the time and enduring the tension of constant work.

The question that immediately comes to mind is whether Jon’s primary concern is for his children or is he simply overwhelmingly jealous. When he had a say in things those kids were on camera just as much as now.

In any case magazine ‘Life & Style’ has the following press release:

Reality star Jon Gosselin is swapping TV stardom for your typical 9-to-5 gig. “Jon’s working for Global Green Property Services,” which helps properties become more environmentally friendly, an insider tells Life & Style. “He’s doing sales marketing, which means he goes out to companies or cold-calls them and tries to get them to use Global Green. It’s a modest job – he doesn’t get a huge salary.” While Jon, 33, is making the rounds in Pennsylvania to help earn cash for his eight kids, his ex-wife, Kate Gosselin, is earning money through her reality show with the kids. “Jon doesn’t long for fame at all,” says the insider to Life & Style. “He’s much more content blending in and being able to live his life without the world watching.”

To us it all sounds more like a big case of sour grapes – Kate’s getting the money.

Case Study: How To Have Fun Connecting With Fans Like A Superstar DJ

from the take-that,-management dept

deadmau5 (pronounced 'dead mouse') is a great example for artists that want to make it in the music business. He is famed for his great production and unique style, which helped get him noticed and separated from the crowd. That's a good thing, because then it's worth talking about. What's remarkable about deadmau5 stretches further than his unique production style and performances (he wears this huge mouse-mask on his head). His level of engagement with his ecosystem (or fanbase, if you will) is exemplary.

Minecraft has been talked about before on Techdirt. Back in November, deadmau5 set up his own server for this sandbox-game in which players can craft their own world. His fans love it, and deadmau5 regularly pops in to hang out with them in 'mau5ville.' In a way, both deadmau5 and his fans emerge themselves in fan art. There are tons of videos of mau5ville online, so you can take a tour. One user even used the game's tools to make a cover of a song by deadmau5, which deadmau5 then shared with over 2 million of his fans. Other artists sometimes prefer to go the way of a takedown notice when a fan puts his energy into making fan art -- but deadmau5 prefers to promote it. You can see both videos below:

However, deadmau5 is not like other artists, and recently he showed this by buying about 20 Minecraft accounts and posting the gift codes on his Facebook page. He understands that having fun with your fanbase and spending a little money on it can be much more important than telling them to buy your music. He listens to his fans, and he informs them when they can buy new music, because that's what his fans want. But it's about more than just pushing what you have to buy.

In the beginning of December, deadmau5' marketing team decided they should get involved in communicating to his fans.

Apparently deadmau5 didn't like the fact that his management was disturbing the trust and rapport he had built up with the ecosystem, because those status updates were followed by deadmau5's:

Then he checked the backend of his Facebook page…

Excellent choice, in my opinion. This is the best thing he could do to earn back the trust of the ecosystem, because you really don't want to get on the bad side of the ecosystem. The ecosystem can reject you, the ecosystem can move on, the ecosystem doesn't need YOU in order to survive.

And the cool thing is, he wasn't thinking about marketing or self-preservation or strategy in the process of making his choices. It's just him, genuinely. And I guess the status update he posted 1 minute later shows just that:

It looks like deadmau5 recognizes his fans have more value than just a few purchases. Instead of complaining that his fans should buy his album for 15 euros, he is actually buying them Minecraft accounts for 15 euros a piece. This might be hard to understand for his management and a lot of other people in the industry, because if fans are free, how can they have value?

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Tuesday, January 18, 2011

Making Money Program

By Lindsay Beyerstein, Media Consortium blogger

Meet the new global elite. They're pretty much the same as the old global elite, only richer and more smug.

Laura Flanders of GritTV interviews business reporter Chrystia Freeland about her cover story in the latest issue of the Atlantic Monthly on the new ruling class. She says that today's ultra-rich are more likely to have earned their fortunes in Silicon Valley or on Wall Street than previous generations of plutocrats, who were more likely to have inherited money or established companies.

As a result, she argues, today's global aristocracy believes itself to be the product of a meritocracy. The old sense of noblesse oblige among the ultra-rich is giving way to the attitude that if the ultra-rich could do it, everyone else should pull themselves up by their bootstraps.

Ironically, Freeland points out that many of the new elite got rich from government bailouts of their failed banks. It's unclear why this counts as earning one's fortune, or what kind of meritocracy reserves its most lavish rewards for its most spectacular failures.

Class warfare on public sector pensions

In The Nation, Eric Alterman assails the Republican-controlled Congress's decision to scrap the popular and effective Build America Bonds program as an act of little-noticed class warfare:

These bonds, which make up roughly 20 percent of all new debt sold by states and local governments because of a federal subsidy equivalent to some 35 percent of interest costs, ended on December 31, as Republicans proved unwilling even to consider renewing them. The death of the program could prove devastating to states' future borrowing.

Alterman notes that the states could face up to $130 billion shortfall next year. States can't deficit spend like the federal government, which made the Build America Bonds program a lifeline to the states.

According to Alterman, Republicans want the states to run out of money so that they will be unable to pay the pensions of public sector workers. He notes that Reps. Devin Nunes (R-CA), Darrell Issa (R-CA) and Paul Ryan (R-WI) are also co-sponsoring a bill to force state and local governments to "recalculate" their pension obligations to public sector workers.

Divide and conquer

Kari Lydersen of Working In These Times explains how conservatives use misleading statistics to pit private sector workers against their brothers and sisters in the public sector. If the public believes that teachers, firefighters, meter readers and snowplow drivers are parasites, they'll feel more comfortable yanking their pensions out from under them.

Hence the misleading statistic that public sector workers earn $11.90 more per hour than "comparable" private sector workers. However, when you take education and work experience into account, employees of state and local governments typically earn 11% to 12% less than private sector workers with comparable qualifications.

Public sector workers have better benefits plans, but only for as long as governments can afford to keep their contractual obligations.

Who's screwing whom?

Former Secretary of Labor Robert Reich is calling for a sense of perspective on public sector wages and benefits. In AlterNet he argues that the people who are really making a killing in this economy are the ultra-rich, not school teachers and garbage collectors:

Public servants are convenient scapegoats. Republicans would rather deflect attention from corporate executive pay that continues to rise as corporate profits soar, even as corporations refuse to hire more workers. They don't want stories about Wall Street bonuses, now higher than before taxpayers bailed out the Street. And they'd like to avoid a spotlight on the billions raked in by hedge-fund and private-equity managers whose income is treated as capital gains and subject to only a 15 percent tax, due to a loophole in the tax laws designed specifically for them.

Signs of hope?

The economic future looks pretty bleak these days. Yes, the unemployment rate dropped to 9.4% from 9.8% in December, but the economy added only 103,000, a far cry from the 300,000 jobs economists say the economy really needs to add to pull the country out its economic doldrums.

Andy Kroll points out in Mother Jones that it will take 20 years to replace the jobs lost in this recession, if current trends continue.

Worse yet, what looks like job growth could actually be chronic unemployment in disguise. The unemployment rate is calculated based on the number of people who are actively looking for work. Kroll worries that the apparent drop in the unemployment rate could simply reflect more people giving up their job searches.

For an counterweight to the doom and gloom, check out Tim Fernholtz's new piece in The American Prospect. He argues that the new unemployment numbers are among several hopeful signs for economic recovery in 2011. However, he stresses that his self-proclaimed rosy forecast is contingent upon avoiding several huge pitfalls, including drastic cuts in public spending.

With the GOP in Congress seemingly determined to starve the states for cash, the future might not be so rosy after all.

This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

Products of the past…doomed…

Chinese President Hu Jintao: the US dollar-based monetary system is a “product of the past.”

He is right about that. And last week two major US credit agencies – Moody’s and Standard and Poor’s – underlined the point. They said America’s triple A credit rating would be lost if the nation continues to borrow so much money.

Amen to that, brother…

But how can the US borrow less?

Ben Bernanke says the US economy will probably grow between 3% and 4% this year.

Pretty good, huh? We can stop worrying, huh?

Wait a minute. We don’t know if the US economy will grow this year…and neither does Ben Bernanke. But even if it were to grow at 3% to 4%…would that mean we were enjoying a genuine recovery? Could the US dollar-based monetary system hold up after all? Could it surprise the Chinese and be a product of the future as well as of the past?

Let’s see how the present economic model works. You spend $10 trillion on bailouts and stimulus. This puts the whole country on course for bankruptcy…where the Chinese are telling you that your money is history…and the rating agencies are threatening to take you down a notch or two. But for your trouble you get, say, 4% growth.

Hmmmm…4% growth is equal to about $560 billion more GDP. But don’t look too closely. Much of this extra GDP is debt-fueled government boondoggling which adds nothing real to the nation’s wealth.

But in order to keep this “growth” going, you have to continue to run deficits – of about a trillion dollars a year. Hold on…what kind of business is Ben Bernanke running?

It costs more in deficit spending than you get in positive GDP growth.

Well, maybe you lose money every year…but you can make it up in the long run!

Hold on… The deficits are expected to run 5% to 10% of GDP for years. Maybe forever. If the growth rate is only in the 3%-4% range, it will mean that debt always outgrows growth. In fact, that is exactly what almost every economist projects.

Then, what’s the point? Well, maybe deficits can be cut…and the growth rate will pick up? Hey, anything is possible. And since we’re starting out in 2011 with a positive attitude…we’re ready to believe anything.

And maybe that’s what gold speculators were thinking on Friday. They sold gold – taking the price down $26 an ounce. Gold rises as confidence in the financial system falls. If gold is falling, it must mean the confidence in the Bernanke, Geithner team is increasing.

Based on the evidence so far, we’d have to take the other side of that bet. If Bernanke & Co. have any idea what they are doing it is not apparent from the public record. Even now, in the 5th year of the Great Correction, they still seem unable to see what is going on.

Bernanke:

“We got in trouble in the first place by making too many bad loans, right. So you’ve got to make good loans. We’ve got to have credit worthy borrowers.”

It may be that, in private, Bernanke has a clearer view of things. But we cannot tap his phone or channel his dreams. All we have to go on is what he says…and does. So far, he has said or done nothing that gives us confidence in the man.

He’s right: we got into trouble by making too many bad loans. But why did “we” do that? Because the Fed lent money too cheaply! It encouraged speculation and risk taking – especially by the banks, who must have known that they would be bailed out if they got into trouble.

And how could the Fed remedy the situation? Easy. It could raise rates – just as Paul Volcker did. It could put the squeeze on speculators. It could raise reserve requirements. It could allow the banks to go bust…send them a message they wouldn’t forget.

But what has Bernanke done? Just the opposite. He has rewarded the reckless speculators by buying up their bad bets (adding $1.7 trillion in trashy mortgage backed securities to the Fed’s core holdings). He has cut rates even more…bringing the effective rate down to zero for privileged borrowers. And he has created the illusion of “recovery” – by goosing up prices of stocks and commodities.

Bad policies. Bad in the short run. Worse in the long run.

Bill Bonner

for The Daily Reckoning

The US Deficit Recovery Program and Other Fallacies originally appeared in the Daily Reckoning. The Daily Reckoning, offers a uniquely refreshing, perspective on the global economy, investing, gold, stocks and today's markets. Its been called "the most entertaining read of the day."

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Friday, January 14, 2011

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It has always been the case that anyone who has the benefit of Legal Aid would go running to their solicitor at the first sign of any problem. They did this on the basis that they weren't paying for any legal advice so they would have as much as possible! Sometimes however this shot them in the foot.

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Very often, funding is not a free lunch. If, (in a divorce for example) the parties are arguing over money or a house then some of the value of their house or their money may be at risk. There is an exemption which (the last time I looked) was £5000 but other than that any monies or property in dispute were at risk. In a nutshell, if the fund paid for someone to fight over the old matrimonial home then in the event that the matrimonial home was awarded to the person with the benefit of Legal Aid then the Board would want the costs they had paid, repaying from the value of the home.

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Talk with your local branch banks. Credit unions are another great route to take and you should explore membership with a credit union to have more options open to you. The small, local branches are often more inclined to work with someone who has credit challenges. There is something special about the small-town effect when it comes to your relationship with the bankers.

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Thursday, January 13, 2011

Making Money Online Forum

Politico said he wasn’t, now Fox News (and Frum Forum) say he is. To help you process this news, read Ed’s post from this morning about Obama potentially spending a cool billion on the 2012 campaign and then have a look at Jay Cost’s graph of Republican fundraising over the last four cycles. Said Cost, believing that Steele was set to bow out, “In the end, this is what did Michael Steele in. He could not raise the money, and that just will not do moving forward.”

Or will it?

Ending weeks of rumors that he would not seek a second term, Steele plans to throw his hat into the ring during a conference call with RNC members at 7:30 p.m. ET, the sources said. Steele is said to be amused by false reports of his retirement and intentionally kept his plans secret for the last month in order to flush out competitors for the post, Fox has learned.

During Steele’s tenure, Republicans picked up 63 House seats in last month’s elections, the biggest gain in more than seven decades. But Steele has been dogged by criticism from some Republicans who see him as prone to missteps.

Criticism of Steele has helped lead to a crowded field of challengers seeking to head the RNC. Among those who have officially announced they are in the race are Saul Anuzis, a committee member from Michigan who ran and lost to Steele in 2009, and Reince Priebus of Wisconsin, a former member of Steele’s inner circle, along with former Luxembourg Ambassador Anne Wagner.

So that explains why he didn’t show up at the RNC chair debate: He was lying low, cagily making it look like he wouldn’t run again so that, er … more contenders would jump into the race. Frum Forum’s whip count puts him at around 45-60 votes in the first round of balloting, with 85 needed to win; several of his former aides and allies (Reince Priebus, Gentry Collins, etc) are in the race as challengers, so a key question will be what happens to their supporters if/when they’re eliminated in the first few rounds. Are those supporters so disgruntled with Steele that they’ll gravitate to a consensus alternative, like Saul Anuzis? Or are they actually clubby RNC insiders who prefer Priebus and Collins to Steele but will resort to the chairman as a next best option if their preference is eliminated? Or will some outsider with fundraising appeal, like Norm Coleman, sweep in to provide yet another alternative?

There are only two reasons to conceivably back Steele, as I see it. One: The GOP did, after all, win 63 seats on his watch, and he’s been lying low enough over the last few months that at least it looks like the gaffe-o-rama phase of his chairmanship is finally over. All of which is well and good, but in that case I urge you to follow the link up top and eyeball Cost’s graph again. The question isn’t whether the GOP did well this year, it’s whether it could have done better if the RNC had been flush with cash. Gentry Collins argued that poor fundraising might have cost Republicans an extra two dozen House seats, but given that he’s now challenging Steele for the chairman’s position, take that estimate for what it’s worth. Two: If you believe that, in an age of online donations and targeted giving to campaigns, the RNC will never again be relevant the way it once was, then maybe it’s better to keep Steele in place. It’ll avoid a nasty public squabble between pro-Steele factions, led by Palin, and anti-Steele factions like the “Bush establishment,” and it’ll spare us the spectacle of Steele doing interviews to dump on the GOP after he loses. Plus, if Steele’s reelected, Republican outside groups are bound to start planning way ahead to pick up the slack in case the RNC can’t get its act together to fulfill its traditional fundraising and GOTV roles. No one cares about the RNC as an organization, only that its functions are being done and done well by some conservative outfit. If Steele’s reelected, it means that some other outfit or outfits will be pressured to step up. Inconvenient, but not fatal. I think.

Every startup needs to understand that the customer paradigm has dramatically shifted over the past two years with pervasive social networks and smartphones. The customer base is no longer a mass audience that can be driven by mass media, but a dynamic network of individual customers who interact with each other, and expect to interact with you as a business.

If your business doesn’t connect with your customers, individually and as a community, demanding customers will not only ignore you, but will actively keep other customers away. According to the 2009 Tribalization of Business Study by Deloitte Development, one third of all online communities now launched by businesses fail to engage even a hundred participants.

A new book by David L. Rogers, titled The Network is Your Customer, elaborates on this paradigm shift, and outlines the following five key strategies to thrive in this digital age, prioritized from the most basic to the most complex in value to the customer:

Access to your business from the relevant network of customers. Every organization today faces the expectations of an always-on world. To compete, startups must find ways to provide customers an easier, faster, more pervasive connection to digital networks, via mobile as well as the Internet.
Engage customers with relevant and valuable content. In an environment of media overload and rampant ad-skipping, startups that want to engage customer networks need to create content that customers actually want to consume. Funny videos and worthless give-aways won’t make your website go “viral” these days.
Customize your interactions to meet unique customer needs. You need to give customers the tools to customize products, services, and content to suit their needs and interests, to engage them more deeply, add value, and differentiate your offering from competitors.
Connect to the customer in your communication. Join in conversations with customers who are already shaping brand perception and sharing their ideas and opinions on the Web. Conversations may be on existing social media, or on your own brand forum established specifically for this purpose.
Collaborate with customers on shared goals. One of the most powerful ways to engage customer networks is to invite them to collaborate with your startup on shared goals and projects. This requires the right balance of motivators (love, glory, and money), and the right balance of bottoms-up versus top-down control.

Many businesses that seem to understand the new paradigm still fall for some common mistakes, like the following, that can blunt the effectiveness of their efforts:

Infatuation with technology. Founders too often see a list of the latest hot tools, and go after them, without first making the proper analysis and connect to relevant customers. The best tools, if not relevant or used incorrectly, can’t save you.
Lack of customer insight. Startups launch plans without taking the time to understand the networked behavior of their customers, or the drivers for that behavior.
Lack of clear objectives. Without a clear scope and vision, efforts become unfocused, lack impact, and are impossible to measure. Everyone on the team has to be involved and on board, or the efforts will be fragmented.

This book outlines a good process for planning and implementing a customer network strategy to match your customers, your business, and your objectives – whether you need to drive sales, reduce costs, gain customer insight, or build breakthrough products and services.

The bottom line is that today, whatever your goals and whatever your business, the network is your customer. Connect to it and win customers.

Marty Zwilling

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Bruno Mars Continues Hot 100 No. 1 Rotation with 'Grenade ...

Bruno Mars circles back to the top of the Billboard Hot 100, as Grenade once again replaces Katy Perry's Firework at No. 1 (1-2).

Bad News, About Virgin Mi-Fi and Verizon Upgrades - NYTimes.com

Two announcements this week. Two big bummers. Two good things gone.

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Bruno Mars Continues Hot 100 No. 1 Rotation with 'Grenade ...

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Bad News, About Virgin Mi-Fi and Verizon Upgrades - NYTimes.com

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Dallas Cowboys Tidbits: Snacking On Cowboys News - Blogging The Boys

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Bruno Mars Continues Hot 100 No. 1 Rotation with 'Grenade ...

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Dallas Cowboys Tidbits: Snacking On Cowboys News - Blogging The Boys

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Bruno Mars Continues Hot 100 No. 1 Rotation with 'Grenade ...

Bruno Mars circles back to the top of the Billboard Hot 100, as Grenade once again replaces Katy Perry's Firework at No. 1 (1-2).

Bad News, About Virgin Mi-Fi and Verizon Upgrades - NYTimes.com

Two announcements this week. Two big bummers. Two good things gone.

Dallas Cowboys Tidbits: Snacking On Cowboys News - Blogging The Boys

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Bruno Mars Continues Hot 100 No. 1 Rotation with 'Grenade ...

Bruno Mars circles back to the top of the Billboard Hot 100, as Grenade once again replaces Katy Perry's Firework at No. 1 (1-2).

Bad News, About Virgin Mi-Fi and Verizon Upgrades - NYTimes.com

Two announcements this week. Two big bummers. Two good things gone.

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Get the latest roundup of Cowboys in the news. Dallas Cowboys Tidbits are for those that like to eat and run!

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Bruno Mars Continues Hot 100 No. 1 Rotation with 'Grenade ...

Bruno Mars circles back to the top of the Billboard Hot 100, as Grenade once again replaces Katy Perry's Firework at No. 1 (1-2).

Bad News, About Virgin Mi-Fi and Verizon Upgrades - NYTimes.com

Two announcements this week. Two big bummers. Two good things gone.

Dallas Cowboys Tidbits: Snacking On Cowboys News - Blogging The Boys

Get the latest roundup of Cowboys in the news. Dallas Cowboys Tidbits are for those that like to eat and run!

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Bruno Mars Continues Hot 100 No. 1 Rotation with 'Grenade ...

Bruno Mars circles back to the top of the Billboard Hot 100, as Grenade once again replaces Katy Perry's Firework at No. 1 (1-2).

Bad News, About Virgin Mi-Fi and Verizon Upgrades - NYTimes.com

Two announcements this week. Two big bummers. Two good things gone.

Dallas Cowboys Tidbits: Snacking On Cowboys News - Blogging The Boys

Get the latest roundup of Cowboys in the news. Dallas Cowboys Tidbits are for those that like to eat and run!

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Bruno Mars Continues Hot 100 No. 1 Rotation with 'Grenade ...

Bruno Mars circles back to the top of the Billboard Hot 100, as Grenade once again replaces Katy Perry's Firework at No. 1 (1-2).

Bad News, About Virgin Mi-Fi and Verizon Upgrades - NYTimes.com

Two announcements this week. Two big bummers. Two good things gone.

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Bruno Mars Continues Hot 100 No. 1 Rotation with 'Grenade ...

Bruno Mars circles back to the top of the Billboard Hot 100, as Grenade once again replaces Katy Perry's Firework at No. 1 (1-2).

Bad News, About Virgin Mi-Fi and Verizon Upgrades - NYTimes.com

Two announcements this week. Two big bummers. Two good things gone.

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Get the latest roundup of Cowboys in the news. Dallas Cowboys Tidbits are for those that like to eat and run!

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Bruno Mars Continues Hot 100 No. 1 Rotation with 'Grenade ...

Bruno Mars circles back to the top of the Billboard Hot 100, as Grenade once again replaces Katy Perry's Firework at No. 1 (1-2).

Bad News, About Virgin Mi-Fi and Verizon Upgrades - NYTimes.com

Two announcements this week. Two big bummers. Two good things gone.

Dallas Cowboys Tidbits: Snacking On Cowboys News - Blogging The Boys

Get the latest roundup of Cowboys in the news. Dallas Cowboys Tidbits are for those that like to eat and run!

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Bruno Mars Continues Hot 100 No. 1 Rotation with 'Grenade ...

Bruno Mars circles back to the top of the Billboard Hot 100, as Grenade once again replaces Katy Perry's Firework at No. 1 (1-2).

Bad News, About Virgin Mi-Fi and Verizon Upgrades - NYTimes.com

Two announcements this week. Two big bummers. Two good things gone.

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Get the latest roundup of Cowboys in the news. Dallas Cowboys Tidbits are for those that like to eat and run!

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Bruno Mars Continues Hot 100 No. 1 Rotation with 'Grenade ...

Bruno Mars circles back to the top of the Billboard Hot 100, as Grenade once again replaces Katy Perry's Firework at No. 1 (1-2).

Bad News, About Virgin Mi-Fi and Verizon Upgrades - NYTimes.com

Two announcements this week. Two big bummers. Two good things gone.

Dallas Cowboys Tidbits: Snacking On Cowboys News - Blogging The Boys

Get the latest roundup of Cowboys in the news. Dallas Cowboys Tidbits are for those that like to eat and run!

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Bruno Mars Continues Hot 100 No. 1 Rotation with 'Grenade ...

Bruno Mars circles back to the top of the Billboard Hot 100, as Grenade once again replaces Katy Perry's Firework at No. 1 (1-2).

Bad News, About Virgin Mi-Fi and Verizon Upgrades - NYTimes.com

Two announcements this week. Two big bummers. Two good things gone.

Dallas Cowboys Tidbits: Snacking On Cowboys News - Blogging The Boys

Get the latest roundup of Cowboys in the news. Dallas Cowboys Tidbits are for those that like to eat and run!

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Bruno Mars Continues Hot 100 No. 1 Rotation with 'Grenade ...

Bruno Mars circles back to the top of the Billboard Hot 100, as Grenade once again replaces Katy Perry's Firework at No. 1 (1-2).

Bad News, About Virgin Mi-Fi and Verizon Upgrades - NYTimes.com

Two announcements this week. Two big bummers. Two good things gone.

Dallas Cowboys Tidbits: Snacking On Cowboys News - Blogging The Boys

Get the latest roundup of Cowboys in the news. Dallas Cowboys Tidbits are for those that like to eat and run!

Monday, January 10, 2011

Making Money Ideas

Ok Go Explains There Are Lots Of Ways To Make Money If You Can Get Fans

from the everything's-possible dept

Over the last few years, we've covered many of the moves by the band Ok Go -- to build up a fanbase often with the help of amazingly viral videos, ditch their major record label (EMI), and explore new business model opportunities. In the last few days, two different members of Ok Go explained a bit more of the band's thinking in two separate places, and both are worth reading. First up, we have Tim Nordwind, who did an interview with Hypebot, where he explained the band's general view on file sharing:

Obviously we'd love for anyone who has our music to buy a copy. But again, we're realistic enough to know that most music can be found online for free. And trying to block people's access to it isn't good for bands or music. If music is going to be free, then musicians will simply have to find alternative methods to make a living in the music business. People are spending money on music, but it's on the technology to play it. They spend hundreds of dollars on Ipods, but then fill it with 80 gigs of free music. That's ok, but it's just a different world now, and bands must learn to adjust.

Elsewhere in the interview, he talks about the importance of making fans happy and how the band realizes that there are lots of different ways to make money, rather than just selling music directly:

Our videos have opened up many more opportunities for us to make the things we want to make, and to chase our best and wildest ideas. Yes, we need to figure out how to make a living in a world where people don't buy music anymore. But really, we've been doing that for the last ten years. Things like licensing, touring, merch, and also now making videos through corporate sponsorship have all allowed us to keep the lights on and continue making music.

Separately, last Friday, Damian Kulash wrote a nice writeup in the Wall Street Journal all about how bands can, should and will make money going forward. In many ways the piece reminds me a bit of my future of music business models post from earlier this year -- and Kulash even uses many of the same examples in his article (Corey Smith, Amanda Palmer, Josh Freese, etc.). It's a really worthwhile read as well. He starts by pointing out that for a little over half a century, the record labels had the world convinced that the "music" industry really was just the "recorded music" industry:

For a decade, analysts have been hyperventilating about the demise of the music industry. But music isn't going away. We're just moving out of the brief period--a flash in history's pan--when an artist could expect to make a living selling records alone. Music is as old as humanity itself, and just as difficult to define. It's an ephemeral, temporal and subjective experience.

For several decades, though, from about World War II until sometime in the last 10 years, the recording industry managed to successfully and profitably pin it down to a stable, if circular, definition: Music was recordings of music. Records not only made it possible for musicians to connect with listeners anywhere, at any time, but offered a discrete package for commoditization. It was the perfect bottling of lightning: A powerful experience could be packaged in plastic and then bought and sold like any other commercial product.

But, he notes, that time is now gone, thanks in large part to the internet. But that doesn't mean the music business is in trouble. Just the business of selling recorded music. But there's lots of things musicians can sell. He highlights Corey Smith and Smith's ability to make millions by giving away his music for free, and then touring. But he also points out that touring isn't for everyone. He covers how corporate licensing has become a bigger and bigger opportunity for bands that are getting popular. While he doesn't highlight the specific economics of it, what he's really talking about is that if your band is big, you can sell your fan's attention -- which is something Ok Go has done successfully by getting corporate sponsorship of their videos. As he notes, the sponsors provide more money than the record labels with many fewer strings:

These days, money coming from a record label often comes with more embedded creative restrictions than the marketing dollars of other industries. A record label typically measures success in number of records sold. Outside sponsors, by contrast, tend to take a broader view of success. The measuring stick could be mentions in the press, traffic to a website, email addresses collected or views of online videos. Artists have meaningful, direct, and emotional access to our fans, and at a time when capturing the public's attention is increasingly difficult for the army of competing marketers, that access is a big asset.

...

Now when we need funding for a large project, we look for a sponsor. A couple weeks ago, my band held an eight-mile musical street parade through Los Angeles, courtesy of Range Rover. They brought no cars, signage or branding; they just asked that we credit them in the documentation of it. A few weeks earlier, we released a music video made in partnership with Samsung, and in February, one was underwritten by State Farm.

We had complete creative control in the productions. At the end of each clip we thanked the company involved, and genuinely, because we truly are thankful. We got the money we needed to make what we want, our fans enjoyed our videos for free, and our corporate Medicis got what their marketing departments were after: millions of eyes and goodwill from our fans. While most bands struggle to wrestle modest video budgets from labels that see videos as loss leaders, ours wind up making us a profit.

Of course, that only works if you have a big enough fanbase, but that doesn't mean there aren't things that less well known bands can use to make money as well. He talks about an up-and-coming band in LA that doesn't even have a manager that was able make money:

The unsigned and unmanaged Los Angeles band Killola toured last summer and offered deluxe USB packages that included full albums, live recordings and access to two future private online concerts for $40 per piece. Killola grossed $18,000 and wound up in the black for their tour. Mr. Donnelly says, "I can't imagine they'll be ordering their yacht anytime soon, but traditionally bands at that point in their careers aren't even breaking even on tour."

The point, Kulash, notes, is that there's a lot of things a band can sell, focusing on "selling themselves." And, the thing he doesn't mention is that, when you're focusing on selling the overall experience that is "you" as a musician or a band, it's something that can't be freely copied. People can copy the music all they want, but they can't copy you. "You" are a scarce good that can't be "pirated." That's exactly what more and more musicians are figuring out these days, and it's helping to make many more artists profitable. And, no, it doesn't mean that any artist can make money. But it certainly looks like any artist that understands this can do a hell of a lot better than they would have otherwise, if they just relied on the old way of making money in the music business.

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So Christmas has been and gone. Are you now facing the New Year and wondering how you can keep up the Christmas spirit and goodwill for the coming year? Well, it certainly helps when you know how to do so for free from your own home.

There are so many simple ways to volunteer or donate to charity by giving up a small amount of your time or re-purposing some money you would normally have spent. So here’s a list of five of the best quick and easy ways to volunteer or donate to charity. Bookmark the list of charities and use it to do the rounds weekly!

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Skip1.org

This is a great concept — it’s a site which makes you think about how much money you waste on frivolous things. You nominate something which you will give up, say a lunch or newspapers for a month. Then you donate that same amount of money to feeding a hungry child.

Yes, you’re handing over money to charity, but it’s money you would have spent anyway. It’s also easy to share news of your donation with your friends via social networks, and hopefully convince a few of them to skip something for charity too.

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Free Rice

Free Rice has been around a while, but it’s so good it’s worth making sure it’s on this list. Play a simple, addictive trivia quiz and Free Rice will donate rice for each of your correct answers. This is a free and simple way to give whenever you have a free moment. Read more on FreeRice here.

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Causes

There are a number of things you can do using Causes, including raising awareness for your chosen charity and helping to raise funds for them. By far the easiest way to donate money with Causes is to set up a birthday or holiday fund. This way, instead of receiving presents from friends and family, you simply ask them to donate the money on your behalf. It takes about two minutes to set up, since you can log in with Facebook Connect – just choose the charity and you’re set!

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Charity Gifts

Here’s another easy way to spend your money on charity instead of something you were already going to pay for. Instead of giving gifts to your friends, give them the knowledge that you have donated to charity on their behalf. The Donation4Charity website searches all the big charity gifting sites (such as UNICEF, WWF and Oxfam) and lets you search the gifts according to how much money you have available to spend. Buy a goat for charity for about the same price as a modest gift!

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Sparked

Spend 5-10 minutes donating your expertise to charity: Give website feedback, brainstorm fundraising ideas or help design an awareness campaign. This is what they need help with – if you can spend a few minutes working on it then you’ve made a difference to a real charity with just a moment of your time. Read more on Sparked here & get going!

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And many, many more!

There are so many great ways to donate your time to charity — the sites listed above are just a few. Here’s some more great articles which introduce many more you might like to try.

Introducing Jumo – The Social Network for Social Good
How To Easily Coordinate Volunteers Using Volunteer Spot
5 Crowd Funding Websites To Support Your Favourite Charities, Bands & Projects
Find Volunteering Opportunities Near You with VolunteerMatch
10 Search Engines To Help The Environment
5 Cool Edutainment Games You Can Play and Also Donate To Charitable Causes
5 Websites To Lend A Hand & Make A Difference To The World

What are your favourite sites for donating your time to charity? Do you appreciate charity gifts given on your behalf? Let us know in the comments!

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Grading the Spring 2011 Campaigns, Part 1 – Fashionista: Fashion ...

Fashion Industry News, Designers, Runway Shows, Style Advice. Send Tips � Advertise � About Us � Network � Above the Law � AltTransport � Breaking Media � Fashionista. Search for: Home � Fashion Shows ... Posted in: News ...

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Friday, January 7, 2011

foreclosure

PIMCO, which was one of the firms spearheading the putback push against BofA, has put together a useful and rather objective analysis though Executive Vice President, Global Structured Finance Specialist, Rod Dubitsky, titled "Foreclosure Flaws Trigger New Round of Uncertainty." While not surprisingly the baseline case presented by PIMCO is a moderate one, as the asset manager claims the most likely impact is "moderate" it does acknowledge that there is a possibility for substantial complications (although Fannie's recent bail out of BofA pretty much takes cares of that). The two main adverse consequences are "corrupted title" - a topic beaten to death previously, and, more importantly, "Tax issues relating to RMBS issuance entities" on which PIMCO says "Some have argued that assigning the note for the
mortgage loan so long after closing would run afoul of REMIC rules,
which could subject RMBS deals to adverse tax consequences." Of course, as an escalation of these developments would bring the entire $8 trillion RMBS structured finance industry to a halt, we are fairly confident that as more and more settlements are instituted, that the whole fraudclosure issue will be very soon completely forgotten.

Foreclosure Flaws Trigger New Round of Uncertainty

Rod S. Dubitsky

In early October a contested foreclosure action on a tiny house in
rural Maine lit the fuse of a blast that has reverberated throughout
the markets, spreading renewed fear of a second downturn in the housing
market and potential gridlock in the mortgage market. Specifically, the
contested foreclosure action led to a deposition of an employee of GMAC
Mortgage (a subsidiary of Ally Bank, fka GMAC Bank), which appeared to
reveal that GMAC was cutting corners while executing the foreclosure
process. The deposition led GMAC to freeze the foreclosure process, and
other servicers quickly followed GMAC into the servicer confessional
and likewise froze foreclosures. Further, the 50 state attorneys
general launched an investigation.

Though many servicers are in the
process of fixing the flawed procedures, and the long-term market
impact of these revelations is uncertain, in our base case scenario we
see moderate risks to housing prices and to residential mortgage-backed
securities (RMBS) investments. Though the story is months old and
several issues have been clarified since the story initially emerged,
much uncertainty remains and many additional challenges have been
raised with the foreclosure process as well as with the securitization
process in general.

A Brief History of “Robogate”

Though there are several complicated threads to
the story, the primary flawed processes employed by mortgage servicers
can be easily summarized: 1) employees of the servicers were attesting
to facts in affidavits that in fact they often didn’t have explicit
knowledge of and 2) contrary to requirements, the affidavits in many
cases weren’t signed in front of a notary. (We note that this should
not imply there are no other broken servicer processes.) As an
affidavit is a sworn statement of fact that needs to be witnessed,
these two shortcuts rendered the affidavits defective. No witness and
no real knowledge of the facts being attested means an affidavit is not
acceptable to the foreclosure court. The media dubbed this trend of
rapid, automated signing of affidavits “robo-signing” and the ensuing
uproar “robogate.”

The secondary thread of the story that seems to
be growing in importance is potential flaws associated with the
mortgage documents and the process of transferring the documents during
the securitization process. The upshot of the latest stories is that
flaws in the transfer of mortgage documents associated with the
securitization could increase the complexity of the foreclosure process
and, in the extreme scenario, jeopardize the economic interest of the
trust in the associated mortgage. Though the document flaws (as
distinct from the affidavit flaws) currently appear to be limited, we
are watching this thread closely to see if the issues are more
pervasive.

Though some of the earlier moratoria have been
lifted, it’s not entirely clear that the servicers’ processes have
improved enough to satisfy the attorneys general and foreclosure
judges. Further, for some servicers who have not imposed a moratorium
and have indicated that their procedures were correct, in some cases
evidence has emerged that calls into question the procedures of even
these “compliant” servicers.

The attorneys general, who have yet to conclude
their review, are rightly concerned over the possibility that
streamlined foreclosure processes either 1) resulted in some
foreclosures that shouldn’t have occurred (though we expect this is
rare) or 2) didn’t give borrowers an adequate chance to resolve their
mortgage payment difficulties (e.g., via a loan modification or other
resolution). However, we don’t believe the attorneys general want to
see permanent gridlock in the
REO (Real Estate Owned – i.e., foreclosed homes) housing market; after
all, many voters buy foreclosed homes and most voters don’t like seeing
empty homes blighting their neighborhoods and failing to contribute
property taxes.

Most Likely Overall Impact Is Moderate

At this point it doesn’t appear the legal right
to foreclose will be severely impaired across a large number of
mortgages, nor will the ability to foreclose likely be subject to
massive or terminal delays. Rather, thus far it appears that servicers
will ultimately be able to execute foreclosures on the overwhelming
majority of mortgages. Most of the problems and flawed procedures, in
short, appear to be fixable, and in our base case scenario we see the
long-term impact on housing prices and RMBS as likely to be moderate.

That said, robogate and its fallout do have
several implications for investors. First, the servicers will be
affected by 1) higher costs (in both the short term, as the backlog is
cleared, and the long term, as staffing needs to be stepped up) and 2)
potential legal liability, as the various infractions may result in
legal action on the part of borrowers or the attorneys general. Second,
potential gridlock in the housing market and further delays in
resolving the housing overhang do pose the risk of an adverse impact on
home prices in the longer term, though the short-term effect could be
positive as distressed supply is pulled from and kept off the market.
Third, RMBS investors will likely be affected as delayed liquidations
result in longer duration and higher losses (due to greater costs,
resulting from the longer timelines). On the other hand, credit IO RMBS
will likely benefit, as the IO (interest only) period will last longer,
thereby increasing the value of the interest component of their cash
flows (a credit IO is a bond that is impaired to the degree that no
principal is expected to be received and the only value is remaining
interest payments). Fourth, we note the foreclosure delay’s impact will
depend on the bond structure, since structural nuances vary across and
within deals.

The final implication for investors is very
difficult to quantify: If borrowers know they have a reasonable basis
to legally contest the foreclosure, the recent revelations may embolden
many more borrowers to do so. Even borrowers who know they can’t afford
the home may choose to contest foreclosure if it increases the free
rent period or if they have hope of improving their financial situation
during the prolonged delay. Borrowers may cite an array of reasons to
contest foreclosure: affidavit irregularities, lost notes, improper
standing to foreclose, misapplied payments, incorrect ARM calculations,
excessive delinquency-related expenses (late fees, inspections, force
placed insurance), failure to offer a loan modification (which is
required in some jurisdictions), or problems associated with the
origination of the loan. In most cases, we believe delay will be the
worst outcome from an investor’s perspective. We believe most
title/note mortgage assignment issues appear to be fixable (at some
time and expense), and more to the point, while some borrowers will
challenge and successfully avoid foreclosure, most borrowers who
challenge are likely only delaying the inevitable (as most such
borrowers simply can’t afford the home). Nevertheless, it’s another
area of uncertainty.

And on a positive note, we have no doubt that
some borrowers were rushed to foreclosure when in fact they may have
had a legitimate ability to pay, and to the extent the foreclosure
timeout can save additional borrowers, that is clearly a good thing.

In PIMCO Advisory, we’re accounting for the
impact of foreclosure freezes on RMBS prices by running delays ranging
from three to 12 months across base case and stress scenarios; the
values of the bonds generally don’t change more than a few points in
the more extreme scenarios. In addition to longer foreclosure
timelines, we are assuming higher loss severity because servicers will
need to advance more delinquent interest while the foreclosure is
pending. One element that is difficult to quantify is whether servicers
will incur substantially more fees that may in turn be passed along to
RMBS investors, thereby adding to loss severity. Though some expenses
will likely be borne by investors, at this point we’re not assuming
much additional loss severity other than that strictly from the
extended timelines.

Further, it’s not clear at this point whether the
delay should only be applied to current foreclosures or whether
foreclosure timelines will become permanently longer as servicers and
courthouses now take longer to process each foreclosure. We are
currently applying our lags to the existing foreclosure and REO
pipeline, while leaving our process for current loans unchanged.
Assuming servicers increase staff to clear the backlog and adequately
fix their procedures, we believe it’s reasonable to assume that
foreclosure timelines will revert to pre-robogate levels (which already
reflected lengthened timelines).

Less Likely but More Dire Consequences Are Possible

Following the foreclosure moratorium, market
participants raised two issues that would theoretically have far more
dire consequences for RMBS investors in particular and the mortgage
market in general. Thus far, the likelihood of either of these
worst-case scenarios appears remote, but they are worth considering.

Corrupted title:
Some have speculated that the legal transfer of the mortgages to the
trust has been so flawed that investors in RMBS face the risk that they
don’t even have good title (i.e., ownership) of the mortgages. As a
result, servicers potentially would have no legal standing to
foreclose. A mortgage that doesn’t allow the holder to foreclose and
take title to the property and doesn’t permit the lender to enforce the
borrower’s obligation to pay is worth no more than kindlin’ wood, as
the saying goes. Thus far – despite a couple of sensational stories –
we don’t believe “kindlin’ wood” mortgages are widespread. Yes, there
was the story of the eight-year foreclosure and the foreclosure on the
homeowner who didn’t have a mortgage, but stories don’t equal
statistics. Not that we should dismiss all these stories just yet,
either; after all, mortgage origination horror stories turned out to be
the rule rather than the exception. If new information reveals far more
severe impairment in the note (obligation to pay) or the mortgage (the
lien on the property), things could get a whole lot worse for RMBS
investors (as well as other mortgage holders and guarantors, such as
Fannie and Freddie), but at this point the more extreme outcomes don’t
appear to be in the cards. However, the situation is fluid and we
continue to consult with attorneys and are actively evaluating the risk
of material impairment in the ownership of mortgages.

Relatedly,
some have questioned the role of MERS (Mortgage Electronic Registration
Systems), an electronic registry in whose name more than half of all
mortgages are registered. MERS was established to streamline the
process of mortgage assignments by having the mortgage assigned in
MERS’ name so that any time an ownership interest was transferred,
sellers could avoid the costly county recording process. Some are
arguing that MERS doesn’t have standing to foreclose (and indeed some
states have ruled thusly) and therefore foreclosures in its name are
invalid. Though this may pose a risk, our understanding is that the
cure for the MERS problem is simply to assign the mortgage to an entity
that does have legal standing to foreclose (e.g., the RMBS trustee).
Therefore, we believe that the MERS issue may result in further delays
to the foreclosure process, but not permanent foreclosure freezes or
impairments.
Tax issues relating to RMBS issuance entities:
RMBS are generally issued by an entity called a Real Estate Mortgage
Investment Conduit (REMIC) that is exempt from federal taxes at the
entity level provided it satisfies certain requirements. Broadly
speaking, REMIC rules provide that a REMIC has three months to acquire
its initial assets and two years to substitute a new mortgage loan for
a defective one. Some have argued that assigning the note for the
mortgage loan so long after closing would run afoul of REMIC rules,
which could subject RMBS deals to adverse tax consequences. However,
nothing that we have seen so far would validate this concern, and
opinions published by securitization attorneys recently give very
little credence to the REMIC tax risks. (For example, see SNR Denton’s
“Commentary on Transfers of Mortgage Loans to RMBS Securitization
Trusts,” October 18, 2010, www.snrdenton.com.)

A press release from LPS' Mortgage Monitor Report shows Foreclosure Inventory Rising for 5th Straight Month

The November Mortgage Monitor report released by Lender Processing Services, Inc. (LPS) shows that the volume of loans moving to REO continued to drop as moratoria further delayed foreclosure sales. While the 90+ delinquency category has steadily declined, the number of loans moving to seriously delinquent status beyond 90 days far outpaced the number of foreclosure starts. Nearly 2.2 million loans are 90 days or more delinquent but not yet in foreclosure.

Foreclosure inventories also continued to rise for the fifth straight month as delinquent accounts are referred for foreclosure, but the sale of foreclosure properties continued to decline. When compared to January 2008 levels, the foreclosure inventory of Jumbo Prime loans is nearly seven times higher; the inventory of Agency Prime loans is nearly six times higher; and the foreclosure inventory of Option ARM loans is approaching five times the inventory in January 2008.

The report also shows that one-third of loans that are 90 days or more delinquent have not made a payment in a year; however, the number of new problem loans declined nearly 5.4 percent from October, which is opposite of the seasonality trend that typically impacts new delinquencies this time of year. Self-cures for loans one to two months delinquent increased in November to a six-month high.

In the month of November, 261,153 loans were referred to foreclosure, which represents a 0.7% month-over-month decline. The total number of delinquent loans is nearly 2.1 times historical averages - and foreclosure inventory is currently at 7.7 times historical averages.

As reported in LPS' First Look release, other key results from LPS' latest Mortgage Monitor report include:

Total U.S. loan delinquency rate: 9.02 percent
Total U.S. foreclosure inventory rate: 4.08 percent
Total U.S. non-current* loan rate: 13.10 percent
States with most non-current* loans: Florida, Nevada, Mississippi, Georgia, New Jersey
States with fewest non-current* loans: North Dakota, South Dakota, Alaska, Wyoming, Montana

Charts From The Report

The report is 34 pages long. Inquiring minds may wish to give it a closer look. Here are a few select charts.

click on any chart for sharper image

Delinquent and Foreclosure Rates by Month

Total Delinquency Percent Excluding Foreclosures

Total Foreclosure Percent By Product

Foreclosure Increase Compared to January 2008

Loan Cures

Serious Delinquencies

Foreclosure Starts vs. Serious Delinquencies

While there are some welcome trends in direction, actual foreclosures are lagging. The pent-up need to foreclose is huge.

Moreover, mortgage rates have rising nearly a full percentage point in the last 45 days. This will put a damper on already depressed home sales, making it harder to unload inventory.

Look for months of inventory to soar in the upcoming months with continued declines in home prices. Contrary to what most think, falling prices are a good thing. Home prices need to fall to a point low enough where genuine demand kicks in.

Foreclosure moratoriums are counterproductive and exacerbate existing problems.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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