Randomly Noted

Scrabble may be a simple game to learn to play, but it sure gets complicated as a business. For a start, Hasbro owns the rights in the USA and Canada and its arch-rival Mattel owns them for the rest of the world.

Now, adding further to the confusion are reports (for example here and here) that the rules are being changed to allow proper nouns. If you’re stuck with hard-to-play tiles you’ve now got Jay-Z and New Boyz to help you out.

The change, as many commentators have pointed out, is proof that the world is becoming a dumber place, where youngsters know the names of rappers instead of words such as adze (a woodworking tool)  or calx (the residue from burning a metal), which previous generations used to great effect to clear troublesome tiles out of the racks or get a high-scoring tile onto a triple-scoring space on the board.

Except that it’s not true. The rules of Scrabble aren’t being changed.

What’s happening instead is a smart piece of brand extension by Mattel. Scrabble may be a great and loved brand, but the core game hasn’t changed for decades so most people who want to play have a set.

So Mattel UK spokesman Philip Nelkon told Randomly Noted that Mattel in the UK is planning to launch Scrabble Trickster, a souped up version of Scrabble in which players in some circumstances will be able to play proper nouns, steal tiles from rivals and even spell words backwards.

Standard Scrabble will continue to be sold, Nelkon says. “The rules of that are sacrosanct,” he stated. Scrabble Trickster is aimed at a new audience.

It’s not a new idea. Over recent years the Scrabble brand has been stretched and applied to games that aren’t standard Scrabble or even anything like it. Going by amazon.com sales rankings, the best-selling Scrabble game in the U.S. at present is Scrabble Slam, a $5.99 card game with no plastic tiles, no double word scores and indeed no board. However the Scrabble brand name gives it instant shelf space in retailers and credibility with buyers. The original Scrabble board game doesn’t feature in amazon.com’s top 100 games. However neither Hasbro or Mattel will be pleased to see that Bananagram, a US-designed wordmaking game that uses tiles but no gameboard, is selling far faster than any Scrabble spin-off. It shows that word games may have been around a long time but Scrabble can’t rest just on its brand.

Based on this writer’s own recent visits to Toys R Us, to see brand extension turned into a fine art it’s necessary to find the shelves selling Hasboro’s Monopoly. Our local toy superstore on the last visit had seven varieties of Monopoly, including Simpsons and Star Wars themes, upmarket versions with lots of electronics, a version where property values have been adjusted for inflation so you’re trying to keep track of huge-denomination bills, and another one with different rules where you don’t need to own all of a color set to start building. Yet Hasbro still makes the traditional version available – although they’ve included an optional twist in the rules using an extra die that can make the game quicker to play.

Of course the real money in all these classic games is going electronic. The success of Scrabble-alike Lexulous online shows that Scrabble has a real edge over many other games in that it’s easy to dip in and out of playing, making it ideal for mobile phones or playing in a 10-minute coffee break in the office. One question yet to be answered is whether spin-offs and electronic versions can survive if the original is deemed to have lost relevance or be played only by the non-digital generation. Mattel is obviously not keen to find out.

The U.K.’s biggest mortgage lender is wanting its money back.

Certainly that’s one possible message of the ads that appeared in the U.K. papers this morning from Lloyds TSB, a unit of Lloyds banking Group PLC, which has about a quarter of the U.K. mortgages on its books.

Lloyds is advertising that “Now’s a great time to reduce how much you owe on your mortgage” because of low interest rates. To help nudge homebuyers along it’s doubling the size of mortgage overpayments that can be made without incurring penalties on variable rate mortgages.

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One of last week’s more significant corporate news developments was the departure of MySpace’s boss, Owen Van Natta, just nine or so months after he joined News Corp. (our employer) and set about trying to turn a profit. The specifics of Van Natta’s exit aren’t entirely clear; the Los Angeles Times says he clashed with his colleagues and their boss, Jon Miller. I’m less interested in the corporate intrigue than with the social networking conundrum. Even mighty Facebook still struggles to make money, as does Twitter. Advertisers are in fact paying a lot of attention to social networking sites, but Facebook et al still have little pricing leverage, as a “Seeking Alpha” piece by Andy Beal shows. This is because social network users are apathetic about online ads. An earlier Beal post, citing Forrester Research, says only 2% of purchases are driven by ads on social networking sites. It’s an extraordinary phenomenon given how many hours consumers spend Tweeting and onFacebook and MySpace. In essence, these sites are simply not conducive to whetting buyers’ appetites. At MySpace, Van Natta has been replaced by a co-presidential duo of insiders, Mike Jones and Jason Hirschorn. It will be interesting to see where they take MySpace from here, including managing its pact with Google and continuing to firm up its identity as a music and entertainment destination. “It’s not yet where we want it,” News Corp. CEO Rupert Murdoch said of the division in a recent earnings conference call.

I’m mesmerized by a commercial I’ve seen several times this week on Fox Business. It’s an ad for Barclays PLC, meant to illuminate the British bank’s slogan, “Bank on Substance.” I see it as a depiction of the financial crisis that hit the world’s banks in late 2008, coupled with Barclay’s boast that it didn’t need a government  bailout, and it works brilliantly in that regard. You can see it here.

A man in a suit leaves a noisy Wall Street bar. As he opens the door, he glances back and sees that the other patrons are…mannequins dressed in suits. He leaves the bar and strides across the street, to see more mannequins on the sidewalk. In confusion, he runs to a newspaper hawker and grabs the top copy to see where he is, what day it is – only it isn’t a newspaper, it’s a fake foam stack of newspapers.

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Call it the triple whammy for newspapers. When the recession hit last year, advertising dollars began to dry up. Papers raised their newsstand prices to counter some of the lost ad revenue. The higher newsstand prices in part are responsible for 11% circulation decline reported by 379 papers for the six months ended September 2009. And of course, lower circulation means that if advertising makes any kind of a comeback, it will be at a lower billing rate because you charge for ads in part based on your circulation.

The big loser among papers was USA Today, which dropped to number two behind the Wall Street Journal (the Randomly Noted blog gang works for Newswires, a sister publication). The WSJ was the only newspaper among the top 25 to show a gain, according to the Audit Bureau of Circulation. Other big losers in the daily newspaper average circulation game: the San Francisco Chronicle lost one out of every four readers (25.82%); the Newark Star-Ledger lost 22.22% and the Dallas Morning News lost 22.16%, according to Editor & Publisher.

Here’s a Chigago Tribune blog item on the circulation figures.

My mother’s house is lined with newspapers; she’s an old-school news junkie who still takes scissors to paper to clip out articles of interest to her grandchildren, daughters and sons-in laws – not to mention friends and acquaintances across the globe. But we all know Mom’s kind is rapidly dwindling. Even those of us in the newspaper business find ourselves migrating to paperless news-surfing. Which makes Gannett’s optimistic third-quarter earnings forecast rather interesting. Are revenues of disciplined companies such as Gannett, which have slashed costs to survive the economic and media-industry downturn, about to turn the corner and take off? Or are these firms fated to barely bumble along on the back of continued cost cuts, helped as a few advertisers tiptoe back to print media amid a slow-motion economic recovery? Gannett’s shares soared nearly 20% after it said third-quarter earnings, excluding restructuring charges, would come in above analysts’ estimates. Gannett’s quarterly revenue forecast was disappointing, but investors seemed to focus on the earnings outlook. DJN colleague Nat Worden cited John Miller, an Ariel Investments portfolio manager, as saying the profit forecast signals print and broadcast media are broadly recovering from the recession’s low point. “We think there is more upside here as advertisers return to the market,” Miller said. Personally, I’m skeptical (but always hopeful – it’s my beloved industry, after all!) Yes, advertisers will “return” to print media – but they’ll do so at the weak levels seen 12 to 18 months ago, when the broad-based advertising migration away from print media was getting worse irrespective of the economic climate. People like my mother have been print media’s best friends; unfortunately, folks like Mom are rare.

General Mills delivered some pretty strong earnings today and with it, a little bit of good news for companies whose raison d’etre is tied to the advertising business.

General Mills said net sales increased to $3.52 billion for the quarter, with a 6% increase in the U.S. It also said that it had decided to increase its advertising spend by 16%. The media business, not to mention the ad business, have been hard hit by a recession thatled many companies to significantly cut back on their advertising budgets. There’s no doubt that the ad business has changed permanently and that companies have sought non-traditional ways of getting their names and brands in front of consumers. But some of the traditional channels remain and news like this is good.

My colleagues are infinitely knowledgeable about the Microsoft-Yahoo search deal. So, I asked them about Steve Ballmer’s vocal defense of Carol Bartz today in comments to analysts. The Yahoo CEO has been criticized – her company’s share price battered- for not demanding more from Microsoft. Ballmer, Microsoft’s CEO, argues investors have failed to appreciate the value the deal will provide to Yahoo. “People haven’t figured it out,” DJN quotes Ballmer as saying. “Yahoo gets 88% of the search revenue they have today. They have 0% cost of goods sold against 88% revenue and they have no [research and development] expense and no ongoing [capital expenditure].”

Gabby: What’s in it for Ballmer to help out Bartz, under fire for the deal?”

Colleague A: It promotes good feelings between the management of both companies. Given the tortured history of the deal, it’s probably good for Microsoft to show its softer side. Plus, the deal’s success is dependent on the two companies working well together on search. No need for Ballmer to disrupt that with hubris.

Colleague B: A is right, I think the bottom line is that the two companies have to work together very closely now and he wants to draw a line under the bad blood of the Jerry Yang era. I think it also has to be seen in the context of his general sense of glee at having  pulled the deal off…Also, as the general consensus is that Yahoo was stiffed he’s been magnanimous. Speaking of the need for good feelings between management – which is definitely important – this applies even more to people at lower levels in the two companies, particularly engineers and people working at the coalface on search and advertising technology, who are the people who are really going to have to live with the consequences of the deal.

Colleague C: I would imagine it’s intended to give clients confidence that the deal will go well. If potential clients are worried that there is a conflict developing between the partners because the financial proceeds haven’t been shared appropriately, it’s reasonable to assume that they might think twice about using Microhoo. That wouldn’t be in Microsoft’s interest (and obviously not in Yahoo’s either).

Photo credit: foxnews.com

The decision to double the number of U.S. films nominated for the Best Picture Oscar is a bad one. It manages to dilute the brand of the Academy Awards. I am not sure of  the marketing value of the banner  Academy Award Nominee for Best Picture plastered on a printed advertisement. Whatever it was, it’s worth less now that 10 U.S. movies can boast that designation rather than the previous five.

Sid Ganis, the prsident of the Academy of Motion Picture Arts and Sciences, is quoted in today’s Wall Street Journal saying, “This wasn’t a knee-jerk decision.” In fact it had been considered for a couple of years and there was “no pressure” from the film studios. “We just felt we needed to expand the possibilities to allow more genres,” he told the Journal.

Cynics will think it’s tied to ratings declines for the annual awards broadcast. Cynics will think it’s another example of a we-are-all-winners culture that winds up diluting real achievement.

Being named Best Picture has never meant the film was really the Best Picture, which ultimately is a subjective judgment. 

The phrase that all the nominees use, whether sincere or not, is that win or lose it was an honor just to be nominated. Now, for Best Picture, it’s a little less so.

Advertising as part of sporting events is a big business. Companies pay big bucks to not only have their names put on the outside of professional playing fields but inside the parks as well. And not to mention TV ads during games etc. Traditional big advertisers at the ballpark have been banks and auto companies. But with all of their financial problems over the past year, many have pulled back on the advertising budget. That means prices to advertise inside the parks has come down significantly – so much so that Stanley Works, which has been thinking about doing this for years but felt it was too pricey – has jumped in not at but one Major League baseball ballpark but at EIGHT. You can see the banner like the one above if you follow home games of: the Boston Red Sox, California Angels, Tamba Bay Rays, Houston Astros, Texas Rangers, Minnesota Twins, Florida Marlins and the Chicago White Sox. Continue reading…