Wednesday, February 24, 2010

Plausible Deniability Is One Thing....

...but sometimes you run into Implausible Deniability.

Today's New York Times carries an article by Brooks Barnes on the debate in Hollywood over so-called "red band trailers" -- essentially, R-rated trailers for R-rated movies. Most trailers are "green band": even for a blood-and-guts R-rated movie, the trailer will be edited to show less violence, no skin, and little offensive language.

Red-band trailers -- so-called because the reels in which they are delivered to movie theaters carry a red band, to warn projectionists that they should not be spliced onto a "G", "PG", or "PG-13" film -- are in fact rarely seen in theaters. In a multiplex, it's too easy for mix-ups to be made, and many theaters simply refuse to run them.

The problem, of course, is the Internet. Nearly all trailers can be found online quickly, but, as Barnes notes, "the red-band ones speed across the Internet with an added velocity because of their 'can you believe what they just said' nature."

The current brouhaha is about an upcoming Lionsgate picture called "Kick-Ass". The green-band trailer can be seen here; the red-band is here (you will be asked to enter your name, partial address, and birthdate; but, not to encourage unethical behavior, if you lie, you can get in....). Or you can go to the website of corporate behemoth Time Warner's Entertainment Weekly, and not bother with the "registration": click here.

The trailers focus primarily on the adventures of a teenage boy who wants to be a superhero (the eponymous Kick Ass) and the 11-year-old Hit Girl. In the green-band version, you get snark and some violence. In the red-band version, Hit Girl's language is way beyond the kind of vulgarity I'd be able to post here (note that the actress playing Hit Girl is now 13); and the violence is way past what I'd want to see (I know: I'm hardly the target audience).

The Motion Picture Association of America (MPAA), which issues the G/PG/PG-13/R/NC-17 ratings and which governs movie advertising, requires that access to red-bands be protected by age requirements. So Lionsgate is doing the "right" thing.

Note that Warner Bros (also a Time Warner company, like Entertainment Weekly, referenced above) is an official member of the MPAA.

Barnes quotes this pious statement from the MPAA's senior vp for advertising: "We devote enormous resources to making certain that kids don't encounter these trailers. That said, we can't scrub the entire Internet."

The MPAA has demanded that sites that provide "unrestricted" access to red-band trailers remove them, and most comply. But it's still absurdly easy to get past the "requirements," and fans then distribute the trailers widely on blogs (like this one!!) and other social media.

Meanwhile, Lionsgate is reaping publicity benefits right and left.

Sounds to me like having one's cake and eating it too.

Friday, February 19, 2010

Sometimes, It's Not Just About the Money

Imagine this situation: You're the owner (with three partners) of a successful company, built up over more than 30 years, and now worth, say, $80 million. You have more than 200 employees, some of whom have been with you for all that time.

Now imagine that you've just turned 81, and two of your partners are in their 60s and 70s. What would you do?

Well, if you're Bob Moore (alas, no relation!) of Bob's Red Mill of Milwaukie OR, which manufactures some 400 whole grains, flours, and other products, here's what you do: you make a gift. Of the whole company. To your employees.

As Mr. Moore told Marketplace's Kai Ryssdal, "You reach a certain point in your life.... And you've got to decide what you're going to do. You can sell the company. We've had lots and lots of opportunities. There's just too many bad stories about what happens when going entities like our company are sold. The new owners don't always do what you think they should do, and they're not always kind to the employees. I just absolutely felt I had to come up with something that would work." (click here for the whole interview, available as transcript or audio)

Moore and his partners have set up an Employee Stock Ownership Plan (ESOP) that essentially turns over the whole company to the employees.

In an interview with ABC News' Christine Brozyna, Moore said, "There's a lot of negative stuff going into business today.... It's a good old basic Bible lesson -- love of money is the root of all evil. And unfortunately, our entire philosophy today is get all the money you can and whatever way you can. It's caused many corporations to bite off more than they can chew. And it causes people to do a lot of things just for money that they feel in their hearts is not the right thing to do."

Thanks, Bob, and many many happy returns of the day.

Saturday, February 13, 2010

When in Doubt, Ask

Google is, as many of you know by now, getting significant negative press about "Buzz", its new effort in social networking.

Google often launches products that are not 100% ready-for-prime-time, which if often tags as "Beta" products, and then tweaks them regularly as time goes on. For this reason, some of the problems with "Buzz" are as one would expect. For example, the "Buzz" privacy controls are difficult to find -- as one commenter said, "Note to Google: If filling out IRS form 54321 in triplicate is easier than following your directions on using Buzz (and canceling it the right way) then you are doing something wrong."

But far more seriously, this time Google has run into the brick wall of privacy.

(Which is interesting, considering how much positive press Google received over its threats to leave China over allegedly government-sponsored hacking of human rights activists' Gmail accounts.)

"Buzz" was automatically provided to Gmail accounts last week, and account holders found that they had a ready-made network of "friends" selected by Google from the people with whom they had communicated regularly by email -- much simpler, really, than Facebook's careful "So-and-so has added you as a friend on Facebook. We need to confirm that you know So-and-so in order for you to be friends on Facebook."

No doubt their motives were excellent. But what Google did is akin to what a colleague of mine used to do. As he said, "It's easier to ask for forgiveness after than for permission before."

It is easier. It's also wrong.

In an article in today's New York Times, reporter Miguel Helft quotes the executive director of Washington-based Electronic Privacy Information Center: "People thought what they had [with Gmail] was an address book for an email program, and Google decided to turn that into a friends list for a new social network... E-mail is one of the few things that people understand to be private."

It's not just an invasion of privacy; it has the potential to be dangerous. One blogger who has been widely cited around the Net (her post can be found here on Gizmodo; her actual blog is now protected by a Wordpress login) was horrified to discover that the list of "friends" included her third-most frequent Gmail correspondent, who happens to be ... her abusive ex-husband.

So much for "Do no evil", eh?

What Google's inventive genuises need to remember is that there are sins of omission as well as sins of commission.

When in doubt, ask first.

Tuesday, February 9, 2010

Time to Jump on the Beat-Up-On-Toyota Bandwagon?

Not exactly. There's still much to admire about the company, but I've been thinking a lot about its recall woes, as have many people (and not just the Toyota owners out there).

The sections on "crisis management" in the PR manuals have all been updated.

"Managing a public-relations disaster isn't what it used to be. Back in 1982, even as people in Chicago were dying of cyanide poisoning from tampered Tylenol bottles, the drugmaker's parent company, Johnson & Johnson, didn't have to worry about Internet message boards inciting panic or fueling rumors and fear-mongering. The strategy of corporate crisis management hasn't necessarily changed, but in the Google, Twitter, and Facebook era, the execution has," notes Newsweek writer Matthew Phillips in an online-only article.

Managing a crisis, unfortunately, takes time, and in the Internet world, it's a lot easier to yell, "End of the world!" than it is to analyze.

If Toyota had ordered a recall when the first complaints about unintended acceleration arose (in 2004, according to a Reuters timeline), the company might well have been savaged for encouraging panic -- especially if the problem had, on thorough investigation, proven to be simple to fix and rare in occurrence.

The recall(s) will certainly affect Toyota negatively for a time, both because the recalls involve really scary stuff (My car is going to run away with me? My car won't stop when I need it to?!?), and because Toyota Loyalty has been built on the brand's near-mythic reputation for quality and reliability.

Will the negative effect be permanent?

I suspect not, in part because we humans have short memories for a lot of stuff. But a lot will depend on Toyota's actions in the next weeks and months.

This is a great opportunity for transparency within the Toyota organization and in the way Toyota deals with the world at large -- whether customers, dealers, or regulators.

In a piece published in today's Washington Post, Toyota CEO Akio Toyoda (grandson of the company's founder) apologized directly to consumers, and outlined three steps that he and his company will be taking: (1) "I have launched a top-to-bottom review of our global operations to ensure that problems of this magnitude do not happen again and that we not only meet but exceed the high safety standards that have defined our long history." (2) "...[We] will ask a blue-ribbon safety advisory group composed of respected outside experts in quality management to independently review our operations and make sure that we have eliminated any deficiencies in our processes. The findings of these experts will be made available to the public, as will Toyota's responses to these findings." (3) "...[We] fully understand that we need to more aggressively investigate complaints we hear directly from consumers and move more quickly to address any safety issues we identify. That is what we are doing by addressing customer concerns about the Prius and Lexus HS250h anti-lock brake systems."

Relatedly, Mr. Toyoda wrote, the company will be "putting in place steps to do a better job within Toyota of sharing important quality and safety information across our global operations. This shortcoming contributed to the current situation. With respect to sticking accelerator pedals, we failed to connect the dots between problems in Europe and problems in the United States..."

All of these are good plans. The proof will be in the execution.

Wednesday, February 3, 2010

Two "Persons" Act the Same, But Only One is Unethical?

For many months now, I've been reading articles about "underwater" homeowners who are choosing to walk away from their mortgages.

We're not talking here about genuine foreclosures -- people who have lost jobs or assets and can no longer afford to pay their mortgages -- but the so-called "jingle mail" types, the ones who do the math, figure that it's just not worth it, and mail the keys in to the bank, setting off a foreclosure.

There are general articles about the phenomenon (such as Roger Lowenstein's piece in early January in the New York Times); there are instructional articles (like "How to Walk Away from Your Mortgage" online at; there are even cheerful websites (like

The tone ranges from the strongly censorious to the happily matter-of-fact.

Lowenstein, in the Times, quotes John Courson, president of the Mortgage Bankers Association, as saying that those thinking about walking away should also think about, "What about the message they will send to their family and their kids and their friends?"

Lowenstein also quotes -- widely reported elsewhere also -- Former Treasury Secretary Henry Paulson Jr. as saying "any homeowner who can afford his mortgage payment but chooses to walk away from an underwater property is simply a speculator -- and one who is not honoring his obligation."

In contrast, in an article in today's Times, David Streitfeld quotes a mortgage broker in Scottsdale, who says, "Since the beginning of December, I've advised 60 people to walk away....Everyone has lost hope. They don't qualify for modifications, and being on the hamster wheel of paying for a property that is not worth it gets so old."

"Walking away" will ruin your credit score; should it ruin your character as well?

I don't want to encourage people not to honor their obligations. But what's so special about home mortgages? Or rather, what's so special about a mortgage held by a single individual or couple, compared to one that's held by a corporation (a "person", of sorts, under law)?

When Tishman Speyer and BlackRock Realty walked away from their $5.4 billion Stuyvesant Town deal in New York a week ago (see Times piece by Charles Bagli and Christine Haughney, here), there were complaints, but no accusations of immorality. I'm sure that "walking away" made sense to the principals. After all, as my cost-accounting professor told us years ago in class, the only lesson that he really wanted to pound into our skulls was that "sunk costs are ... sunk."

Other investors in the Stuyvesant Town / Peter Cooper Village included pensions funds, countries, and banks. Why aren't they heaping scorn on the Tishman Speyer principals for their weak morals?

And if Mr. Paulson is right, and those homeowners who walk away are "simply speculators", well, what were the banks who approved those mortgages, chopped them up, and immediately resold them?