Could Toys R Us reopen as an Amazon brand?

"I don't wanna grow up, I'm a Toys R Us Kid."
You're singing the song, aren't you?

News of Toys R Us going out of business is everywhere. It's getting more press than some much more deserving world affairs stories. Why? Because Toys R Us has meant so much to so many of us that watching it die feels like losing an old friend.

But that's the thing. Something that loved doesn't just die that easily. Or at least not for long.

The Toys R Us we all know and love is dead. But I expect to see a new, reinvented incarnation of Toys R Us make a Hostess-style comeback within the next few years. And it just might be as an Amazon brand. How could this happen, and why? Let's think it through...


Why Is Toys R Us Dying?

The first assumption most people have is that Toys R Us just couldn't compete. With Amazon dominating online sales, Target and Walmart taking over a large part of the brick and mortar toy business, and video games and apps lowering the demand for toys in general, Toys R us was doomed. Right? Well, no. They still controlled about 15% of the toy market, and had an extremely well loved brand. They very easily could have restructured their business a bit and had a strong business for decades to come.

No, what killed them was corporate takeover shenanigans. In 2005, Toys R Us was a publicly traded company, until Bain Capital, KKR & Co., and Vornado Realty Trust combined their efforts to buy out the company and take it private. They bought the company for $6.6 billion, but only put in $1.3 billion of their own money. The remaining $5.3 billion they borrowed. Which meant the newly private Toys R Us now had $5.3B in debt forced onto their books. And to add insult to injury, they spun off a new company called Toys R Us Property Company, which then owned all of the real estate, which it leased back to the main company.

Now, in addition to having to make enough profit to keep their business running, Toys R Us had to pay $400 million dollars every year, just on payments and interest on that insane $5.3B debt. Even in good times, that would have been an extremely hard burden to manage. Add in the competition and weakening demand for toys, and it's a recipe for disaster.


What Happens Next?

So here we are. Bankruptcy couldn't save them, so Toys R Us is closing their doors for good, laying off 30,000 employees, and liquidating their assets. But that's where things get interesting. Yes, they're liquidating their inventory, too. But the one asset they have to liquidate that could be a game changer is their brand name and intellectual property.

We've seen this before. In 2009, after 79 years, Hostess went out of business, taking their beloved cupcakes and Twinkies off the market "for good." But then, in 2013, the Hostess brand and IP were sold to another company, who restarted the business and brought those beloved snack cakes back to the shelves. And now people barely remember that Hostess was ever gone at all.

So who's going to buy the Toys R Us brand and IP? My money is on Amazon. They're the kings of retail, they're innovative enough to be able to reimagine the business model for the 21st century, and they already understand Toys R Us's business pretty well, after being the online presence for Toys R Us for a few years, back at the turn of the century.

Who else might be interested? Walmart? Target? Some random holding company none of us have heard of? Maybe. Hasbro, after they acquire Mattel and secure a near monopoly on toy manufacturing? Also plausible. Though I'm not sure any of them have both the retail expertise and the innovative spirit needed to really pull off a Toys R Us reinvention.

But rest assured, someone is going to buy the Toys R Us brand and IP, and they won be buying it just for the fun of it.


What Would Amazon's Toys R Us Look Like?

If Amazon buys the Toys R Us brand, they're not going to reopen the stores as they were. Those locations will have been sold off, leased to other retailers, or (like many old Mervyn's lots) turned into condos by then. And Amazon doesn't want to run an exact copy of the old Toys R Us any more than they want to own an exact copy of Barnes & Noble. They'll go back to the basics, dig in to the first principles of the toy business, and reimagine it from scratch.

What do you remember about Toys R Us? I mean, what memories do you have that really resonate and make you feel like a kid again? For me, it's the Star Wars aisle. Or the Transformers aisle. For you it might be Barbie, G.I. Joe, My Little Pony, Elmo, bikes, board games, or some other aisle that was overflowing with That One Thing you just couldn't get enough of. And they had more than enough of it. More than you had any idea even existed.

Toys R Us, at its best, was the purest form of showcase merchandising. Take any kid, find out what they love, and chances are there was an aisle that they could spend all day. Even if we couldn't afford to buy anything, just seeing everything that existed, dreaming about what we wanted, and silently writing up that xmas or birthday list in our head could keep us entertained for hours.

Target and Walmart do their best to replicate that on a smaller scale, but it's just not the same. And online retail has always excelled in search-based shopping and sucked at browsing. There's a huge opportunity for someone to crack that nut and build a destination site where any kid who loves That One Thing can go to see every toy, book, poster, and toothbrush that exists with That Thing on it. Give kids the awe-inspiring browsing experience online they had at Toys R Us, and you'll have a great business. Give parents and others who want to buy gifts for those kids a way to tap into that kid's ultimate wishlist (with proper parental grooming), and feed their "wouldn't it be cool if" ideas back to the toy makers and entertainment companies, and you’ll have something truly special on your hands.

Anyone who buys the Toys R Us brand could build something like this. But just as Best Buy is learning, their business would be hampered by shoppers using their stores for showcasing, to decide what they want to buy, then going online to get it cheaper off Amazon. For Amazon, of course, that wouldn't be an issue.

And as we're seeing with Amazon's experiments in brick and mortar book stores, there's a very good chance they'd eventually start to open brick and mortar Toys R Us locations as well. They wouldn't look like the old Toys R Us. But they'd serve the same ultimate purpose of giving kids all over a place that they'll beg their folks to bring them on the weekend, so they can revel in the bliss that "I want ALL THE THINGS!!" feeling.


Mark my words. A few years from now, we'll see a new incarnation of Toys R Us launch, from the new owner of the brand. They'll keep the giraffe and the vibrant colors, but re-imagine it for how toy sales should be in the 21st century. And more likely than not, the new Toys R us will be an Amazon brand.

(If anyone has Jeff Bezos on speed dial, please let him know that I would LOVE to help him reinvent this new business. Let's Mary Ellen Carter the shit out of this!!)

Half.com Shutting Down (Again) – Farewell Old Friend

On 31 August 2017, eBay's fixed-price marketplace site Half.com will be closing its doors for good. This makes me a little sad, and a lot nostalgic. This site did so much for me over the years, and I tried to do so much for it. It's sad to see it go.

So why am I so emotionally attached to a website? Let me tell you a story.

Once upon a time, when a cable TV subscription was still way out of my budget and before I had heard of Netflix (circa 2000), I used to watch all my TV shows and movies on DVD. I'd wait a year for my shows to come out on DVD, buy them used, and then sell them used. Half.com made the buying and selling insanely easy and I loved the crap out of the site as a user.

A few years later, as the first dot-com bust left me unemployed and a bit desperate for a while, I was able to use Half.com to sell every DVD, book, and CD I owned in order to pay rent for a month or two. With the huge difference is listing speed, this would have been completely uneconomical to do on eBay. I probably would have had to move back to Sacramento with my tail between my legs and would never have found the wonderful career I enjoy today. This was just the first time Half.com saved my career.

In 2003, eBay announced that it was going to close down Half.com some time in the next year. They apparently saw it as a duplicate of existing eBay functionality. I thought they were completely nuts. After a few weeks of going through the Five Stages of Grief over the news, I finally arrived at Stage 6: Defiance. I could accept that it was going away. But that didn't mean its heart had to die with it.

Ok, sure. eBay didn't realize what a gold mine they were sitting on with Half.com. They didn't recognize the power that a catalog-based marketplace could bring. But I did. And I was unemployed, scrappy, and passionate. So why shouldn't I start working on a business plan to build a new solution that took the best lessons from Half.com and built upon them to create something that could bring to life the unrealized potential of a catalog based marketplace.

That obsession of endless research and brainstorming lasted until spring of 2004, when my unemployment was interrupted by a wonderful new job. At eBay. Having been a eBay user since 1999, this was a dream come true (thanks Mike!). And that dream got even better later that year, when eBay decided not to close Half.com after all and I got assigned as one of the lead front end developers on the project to rebuild the entire Half.com site from scratch on eBay's platform.

Apparently, despite eBay's best efforts to duplicate Half.com functionality on eBay and drive users over to the main marketplace, the revenue from textbook sales and intensely loyal Half.com users was enough to justify keeping the site alive. That conversion project was the biggest project I had taken on as a web developer, and was some of the most fulfilling work I've ever done. It was my own personal Mary Ellen Carter.

This was also the project that first got me interested in becoming a product manager, and where I got to write my very first PRD (Product Requirements Document) for the content management system that runs Half's merchandising pages. Without my manager Rashid supporting my interest in switching sides, and Valerie's endless patience in mentoring me in the ways of Product, I'm not sure I would have known how to make the transition from dev to product.

As a self-taught developer who hadn't even had an email address until I was 23, I was never going to be the best coder in the room, next to kids who had been immersed in the internet since high school or college. But understanding the frustrations that normal non-technical people have with technology and finding ways to make that less painful while building a sustainable business? That I could build a career on. Which makes this the second time Half.com saved my career.

Unfortunately, the cost/benefit analysis that made Half worth keeping alive to eBay's management didn't translate to an appreciation of the potential of a catalog-based marketplace. I pitched the idea again and again while I was there and got only lukewarm reception from the Powers That Be. But I never really stopped thinking about that dusty old business plan I had started when they first threatened to close down Half.com.

Thirteen years later, eBay still hasn't done anything significant in the catalog-based marketplace space. They've created catalogs that they use on the back end to make the listing process easier. But the user experience is still all about finding items, not products, which eliminates most of the potential benefits of catalogs. And so, third party marketplaces like BrickLink (Lego bricks and sets), TCGPlayer (Magic and other collectible card games), and others are dominating their niche categories, while eBay continues to concentrate only on the horizontal “you can sell anything pretty well” model, rather than diving into the vertical “you can sell this one kind of thing extremely well” model. And the collectibles market really doesn't look that much different than it did in 2000.

eBay's investment in Half.com, in the past decade, has been effectively close to zero. CSS positioning wasn't quite reliable enough for production when we did that initial rebuild project, so we temporarily used an insane mess of nested tables for the layout, with plans to replace it with CSS later. The "temporary" code I wrote in 2004 will still be 99% the same when the doors close for good next week. Including my lucky charm <!--Keep Flying--> HTML comment at the bottom of the source code.

Now here we are. eBay has announced that it is closing Half.com. Again. This time I'm sad, but not upset. If they haven't taken Half.com seriously in the past decade, maybe it's time to let it go. And hopefully there's someone else out there, just as passionate about catalog-based marketplaces as I am, who will take the opportunity to finally do something about it.

And, if no one has done so by the time my kids are a bit older and my adventures in Fintech have reached their peak, perhaps I'll dust off that old business plan and give it a go myself.

Why Nintendo discontinuing the NES Classic might be a good thing

Nintendo has announced that they are discontinuing the NES Classic, the $60 miniature game system with 30 of Nintendo's best 80s era games, which has been going for $200+ on eBay (much higher when it first came out). This has a lot of would-be buyers pretty pissed off. I'm here to tell you why this might actually be a good thing.

TL;DR: NES Classic proved demand for classic games, and could be the catalyst for finally getting them as digital downloads for the Nintendo Switch, and possibly Apple TV.


Why The NES Classic Exists

The fact that the NES Classic exists at all is either a market test or (I think much more likely) an accident of timing. Either way, the fact that the demand was so much higher than the supply (ie, their expecte demand) that it will likely lead to bigger and better things in the near future. Follow my logic on this...

Last year, Nintendo was hard at work trying to put the finishing touches on their new flagship gaming system, the Nintendo Switch. By summer, it was becoming increasingly clear that they were not going to be able to meet the obvious "on shelves by Black Friday" launch target. I do not envy the product manager who had to break it to the Nintendo execs that the Switch wouldn't be ready to launch until March!

That left Nintendo with a whole holiday season of nothing on the shelves, nothing to talk about in the media, and a whole lot of tech journalists speculating on what ever happened to the new Nintendo flagship system that had been rumored. At that point, the best thing they could hope for would be some other Nintendo product that would take very little time to get to market, but would keep the fans and media busy, while they devoted all their resources to getting the Switch out the door.

Game systems that put a bunch of old-school games onto a nostalgic piece of miniature hardware are nothing new. Atari released a series of Atari 2600 style controllers with classic games built into them in 2003, followed by a series of "Atari Flashback" retro consoles over the next 8 years. I haven't been able to find sales numbers for these, but they don't appear to have been a major cash cow. When they were initially released, I remember a few weeks of "oh, that's cool!" reactions from folks, but no big rush to buy them. They were just another nifty thing to see on ThinkGeek, and something you currently see stacks of in the discount aisle at Staples.

You can bet that there have been no shortage of manufacturers pitching Nintendo on making a similar product with their games. But whether due to the poor sales of the Atari versions or Nintendo's infamous protectiveness over their classic games, no Nintendo version of this had yet been approved.

So there they are, in the summer of 2016. They just found out Switch won't be ready in time for the holidays. And their execs are probably fuming mad about it. Then some enterprising product manager pipes up. "What about that miniature NES system they were pitching to us years ago? Sure, it won't sell a lot of systems. But it will give the fans and the press something fun to chew on while we concentrate on the Switch. We already have the prototype the manufacturer used to pitch it to us. Give me what we expected to spend on marketing the Switch in Q4, and I can get 50,000 of these on the shelf for the holidays. PR problem solved." If this happened the way I imagine it did, I hope that person got one hell of a bonus.


Proving Demand For Classic Game Titles

Of course, Atari isn't Nintendo. People still love Atari games out of nostalgia. But most of their games just don't retain their value over the decades. But Nintendo games do. Even the games from the first generatio NES system are still incredibly fun to play today. And the characters franchises they launched are still popular in today's games, so there's the added pull of kids who grew up on Mari Cart and the much fancier Zelda games to want to go back and see where they started.

If they set their production numbers low because they expected Atari-level sales, you can imagine how pleased they would have been from the actual demand. They sold 196,000 units in the first month, and 1.5 million by the end of 2016. But all of their resources were dedicated to getting their new flagship Nintendo Switch ready for the March 2017 launch date. Any product managers or supply chain managers who might have been able to address the NES Classic supply problem were too busy with the Switch to do anything about it. If anything, they now had even more incentive to make sure the supply for the Switch would meet their now-inflated demand estimates. It just wouldn't have made any sense to spend any more time than necessary on the stop-gap stunt, no matter how high the demand.


Discontinuing the NES Classic

The the Switch launched. They sold 2 million units in the first month, making it the fastest selling system they've ever made. And, more relevant to our speculation here, a lot of product management resources are now free to start thinking about something other than Switch. With an Apple partnership on the table, a new flagship game system on the market, and newfound appreciation for how high the demand for the classic Nintendo games are, what comes next?

Continuing to sell the NES Classic beside the Nintendo Switch would make no sense. They would be competing for shelf space and supply chain resources, it would be confusing to consumers, and they'd be limited to only monetizing those ~30 games that are burnt into the hardware of the Classic. Nope. Anyone with half a bit of sense can see pretty quickly that the NES Classic, as it exists now, absolutely needs to be retired, and take its place as a fun footnote in Nintendo's history.


Paving The Way for Digital Downloads

BUT the thing most people love about the NES Classic isn't its hardware. It's the fact that they have a sleek, easy, (and legal) way to play their favorite classic games. And the fact that the NES Classic was as popular as it was will mostly likely give us far more of that than the NES Classic itself possibly could have.

People are currently willing to pau $200 for 30 NES games on the open market. Nintendo only sees $60 of that. That's before taking out the cost of manufacturing, distribution, etc. And that's limited to 30 games from their archive. Clearly, there's a lot of money being left on the table.

The day the new Apple TV was released, with its wireless game controller, I said that I'd kill to be able to buy individual classic Nintendo games (and a NES style controller) from the Apple App Store. Price the headline titles at $5 and the less popular ones at $2 and they'd fly off the virtual shelves. And with Nintendo's new partnership with Apple, this is undoubtedly what Apple is hoping for. But, of course, that would mean Nintendo giving Apple 30% of the revenue that gold rush would generate. So it's a great solution for consumers, but not so much for Nintendo.

Ahh, but now they have their own brand new flagship console. Forget the Apple TV. Now there really isn't any reason not to build their own version of the app store, sell the classic games directly to the Switch owners, and not only keep the whole revenue gold rush from the games, but use it as an additional feature to push sales of the Switch itself.

This isn't a feature you'd want to include at launch. If you know there's already going to be a high enough demand that you'll be struggling to meet supply, you hold off on this. Let the hardcore gamers hankering for their new Zelda game get the first batch. The following holiday season, when supply has caught up, demand is tapering off, and you've had time to QA the living hell out of your new app store, that's when you make every 80s era gamer's dreams come true and release the back catalog for digital download (slowly, over time, so there’s always something new to pick up).

Then you wait about six months. By then, the majority of people who would be willing to buy a new game system just for access to the classic games have had a chance to buy a Switch, fill their library with their favorite games, and get locked into your higher-margin platform. That's when you put them up in the Apple App Store as well, to extend the reach to the wider audience of people who aren't willing to buy a separate game system, but would be more than happy to buy the games for their existing Apple TV.


This is what I expect is going through Nintendo product managers' minds. I really, really hope I'm right. The time is ripe for Nintendo to open up their back catalog and kick of a resurgence of Nintendo fanaticism.

Comparing iPhone Purchase Plan Options

With the roll-out of the iPhone 6S and Apple's introduction of their iPhone Upgrade Program, there has been some confusion about what the iPhone Upgrade Program really means, and what the best way to buy an iPhone really is. Here, I attempt to clarify the former, and crunch the numbers on the latter.


iPhone Upgrade Program

Apple's iPhone Upgrade Program is for people who want to get the newest iPhone every year, at a predictable cost. You pay $32/month ($384/year) for the latest iPhone base model (or $37-45/month for upgraded models), which includes AppleCare+, and every year you can upgrade to the latest, greatest iPhone.

The thing that is confusing a lot of people is that this is technically a 24 month contract. But it has a "give back the phone and start over" option that kicks in at 12 months. After paying on your phone for a year, you have the choice of keeping your old phone, completing the 2 year contract, and then owning it, or giving back the phone, getting a brand new one, and starting over with a new phone and a new 24 month contact.

So if you buy an iPhone 6S today, you'd pay $384 over the next 12 months. Then, if you're not impressed with anything in the iPhone 7, you could keep your 6S, pay another $384 over the next 12 months, and then own your 6S outright by the time the 7S comes out. Or, after that first 12 months, you can give your iPhone 6S back, get an iPhone 7, and start a new 24 month contact, leaving you with the same "keep it or trade it in" decision when the 7S comes out.

This is very similar to how many of the carrier payment plans (like AT&T Next) work, except that carrier plans can be spread out over 20, 24, or 30 months, with varying upgrade timelines. The main value difference between Apple's plan and the carrier plans is that Apple's comes with AppleCare+ included in the price.


Total Cost / Benefit Of Different Buying Options

When we consider what the "best" way to buy a phone is, we're really looking at the total cost of ownership of the phone, balanced against the total benefit we get from the phone. The benefit we each get from always having the latest phone versus a slightly older phone is hard to quantify, and will likely change year to year based on what new features are introduced. But it's pretty easy to quantify the cost of ownership, so we'll start there. And once we know the cost of ownership difference, it should make the yearly decision of whether or not to upgrade much simpler.

Total cost of ownership of an iPhone (or anything else) includes the total amount you've paid to own it, minus the amount you can sell it for when you're done owning it. The table below shows the total yearly cost of ownership, averaged over a 4 year period, for each of the different buying options, three trade-in frequencies, and for each type of iPhone (entry-level 16GB, mid-level 64GB, and upper-level 128GB). Note that there are two versions of "Buy Cash," the first assuming you sell the phone for full market value, the second assuming you sell it to Gazelle or another convenient buy-back option for less than full market value.


Scroll to the end of the post if you want to see how I did the math.


TLDR Summary

  • If you plan to upgrade every year OR plan to get AppleCare+, Apple's iPhone Upgrade Program is the best way to go.
     

  • If you plan to upgrade every other year, and aren't interested in AppleCare+, you save about $60/year over Apple's plan by going with a 2-year payment plan from AT&T or Verizon (or ~$30/year savings if you upgrade every 4 years). This is probably where most people fall.
     

  • Buying cash only makes sense if you plan to upgrade every year, or plan to always stay a model or two behind. But even then, it's the highest-hassle option, and any savings can quickly disappear if you don't get a good price when selling your used phones.
     

  • Subsidized plans are a horrible idea. Almost no one should use them.


Which iPhone Should You Purchase?

Obviously, most of the decision on which specific model you want to buy will be dependent upon how you use your phone, what size screen you like, and which colors you prefer. But looking at the data here should give you a much better idea of how much extra per year you'd actually be paying for different memory options. Even though the purchase price of the phone is a $100 difference between each memory level, after accounting for resale value and how often you upgrade, the per-year average is actually much smaller.

Upgrading from 16GB to 64GB is a pretty consistent ~$50/year cost if you upgrade every year, ~$38 if you upgrade every other year, or ~$19 if you upgrade every 4 years. Upgrading from 64GB to 128GB is a about the same price difference for a slightly larger data increase, but only useful to a smaller set of users. Considering the pain of running out of room and having to delete things if you take a lot of photos or use a lot of apps, the upgrade to 64GB will probably make a lot of sense for most people. The folks for whom the 128GB upgrade makes sense probably already know who they are.


Which iPhone Payment Plan Should You Use?

To help you make sense of all the numbers in the table, I'll summarize how each of the payment options works, and who which one is most likely to be the best option for which kinds of users.
 

  • Cash Upfront
    The most straight-forward way to buy an iPhone is to pay the full cost of the phone every time you buy one. No carrier subsidies, no payment plans, just plop the whole $650-850 on a credit card and it's yours to do with as you please. If you don't upgrade every year, this ends up costing the same as most of the carrier payment plans. It can also be the least expensive yearly cost of ownership option, with two significant caveats.

    Obviously, the first caveat is that you need to be financially well-off enough that you can devote that much money toward a phone purchase, not only when you initially buy the phone, but also every time you upgrade, as you'll need to buy your new phone and transfer your data before you can turn around and resell the old phone to recoup part of the cost.

    The second caveat is that the cost savings from this method is dependent upon getting a fair market value each time you resell your old phone to upgrade to the new one. If you're an ace at selling used phones on Craigslist or eBay, this option can save you quite a bit over most of the other options. But if you rely on buy-back programs like the ones provided by the carriers, or on sites like Gazelle.com, at far below market value, this actually becomes the most expensive option.

    Who should buy this way?
    If you plan to upgrade every year, you don't plan to get AppleCare+, you're good at reselling your old phones, don't mind that extra hassle, and you have enough of a financial cushion to afford the buy-in price, this can be the cheapest way to buy your iPhones. If any of the above don't apply to you, this option probably isn't worth the hassle.
     

  • Subsidized Carrier Plan
    While most people couldn't tell you what a "subsidized carrier plan" is, this is actually how most of us have bought our iPhones in the past. The carriers give us an unnaturally low price on the phone, lock us into a 2-year contract, and inflate our monthly bill enough to make back the difference over time. For AT&T, the difference between a subsidized and unsubsidized plan is $25/month. So your $200 subsidized iPhone actually costs you $800 over the two years of your contract, significantly higher than the $650 it would have cost you to buy it unsubsidized.

    Even worse, most carriers don't even drop your phone bill back to its normal level, even after your 2 year contact ends. So if you think you're saving money by keeping your $200 subsidized phone for 4 years, you may be woefully mistaken.

    Who should buy this way?
    This is the most expensive way to buy an iPhone. It is also the least flexible, as you're stuck in a 2-year contract without the option to upgrade if a really amazing new phone hits the market while you're in the middle of a contact. Almost no one should buy their phone this way.

    Fortunately, most of the major carriers are starting to phase out subsidized phone plans, in favor of payment plans. (More on those next.) What I haven't been able to determine yet is why carriers don't seem to like the confusing subsidized plans that appear to be cheaper to those not in the know, but end up making them more money in the long run. If anyone knows, I'd love to understand their thinking better.
     

  • Carrier Payment Plan
    Carriers are moving away from subsidized plans, but they still want to provide a low cost way for people to buy in to a new iPhone. So most of them are offering payment plans, where you don't pay anything up front to purchase the phone, but instead pay the full purchase price in installments over 20-30 months. This gets you most of the benefits of the buy-it-cash method, but with lower up-front cost. But there are catches.

    Verizon's plan breaks the cost of the phone into 24 equal payments. This makes it very similar to the Apple plan, but without the AppleCare+. However, Verizon does not offer the ability to upgrade mid-contract (yet), so there is no option for upgrading every year. (Note: I left the calculation for a 12-month upgrade in the chart just as a benchmark against Apple's plan, should Verizon eventually add this feature.)

    The AT&T Next payment plan gets a little trickier. It does offer a 12 month upgrade option, but it breaks the cost of the phone into 20 payments rather than 24. This means you're paying 60% of the cost of the phone in the first year and the remaining 40% the second year. That doesn't make a difference if you're upgrading every other year, but it means you're paying an extra 10% of the purchase price of the phone every year if you're upgrading ever year. This eliminates most of the savings yearly upgraders would otherwise get over the Apple plan.

    If you rely on lower-than-market-value buy-back options for selling your old phones, you do run the risk of carrier plans being a bit more expensive than what is shown in the table (which assumes selling it for market value). If you upgrade every year, you never have a phone to sell, so it's really only every other year (or longer) upgraders that this would be an issue for. This usually comes down to a difference of about $100 in sale price if you're upgrading every other year, or $50 if it's every 4 years (or an annual average difference of $50 or $12). So, seller beware.

    Who should buy this way?
    If you plan to upgrade every year, Verizon won't let you and AT&T's plan is only ~$20 less per year than Apple's plan, without the $130/year added value of AppleCare+. If you plan to upgrade every other year (or less often), and you don't plan to buy AppleCare+, a payment plan from AT&T or Verizon will save you ~$60/year over Apple's plan.

    Note 1: Sprint & T-Mobile: I wasn't able to find reliable data on Sprint or T-Mobile's payment plans. If you get decent service form them in your area, you may want to crunch those numbers for yourself and see how they stack up. You can download my spreadsheet at the bottom of the post, to get you started.

    Note 2: AT&T Unlimited: If you have an AT&T account that is grandfathered into unlimited data, and you use your phone even moderately, it's a really, really bad idea to sign up for ANY plan that will move you off of unlimited. If you have one of these plans, always buy your phone from an AT&T-owned AT&T store, NEVER from an AT&T Authorized Reseller. I've known WAY too many people who were straight up lied to by them, and they will often boot your off of Unlimited even if there was a way you could have stayed on it. Go to a real AT&T store and make double and triple sure that whatever payment plan you choose will not interfere with your unlimited account.

    Note 3: For Bargain Shoppers: A few people pointed out that they do like to upgrade every year, but not to the newest model. Instead, they buy a 1-year old iPhone used every year, and sell their 2-year old used one to offset the cost. If you're good at selling used phones for fair market value, this comes out to about $200/year, definitely lower than any other option. If you rely on below-market-value trade-in options, it climbs to ~$300/year, more expensive than the carrier contracts that give you a brand new one every other year.
     

  • Apple Payment Plan
    Apple's new iPhone Upgrade Plan is very similar to the payment plans provided by the carriers, but without the hidden tricks. The main differences are the simplicity of Apple's plan, and that AppleCare+ is included in the price.

    AppleCare+ normally costs an additional $130 each time you buy a new phone, so this can be a pretty significant savings if you upgrade every year, or a modest savings if you upgrade less often. Apple's plan is also much simpler than the carrier plans, which is a plus all on its own.

    Who should buy this way?
    If you plan to upgrade every year, or if you plan to buy AppleCare+ for your phone, Apple's iPhone Upgrade Plan is currently the best way to go. It gives you the best value for your dollar, as well as the simplest plan.
     

I hope this helps clarify things and give you a better idea of which option might be best for you.

For those who want to see how I did my math, and potentially help me spot any errors I might have made, feel free to keep reading...

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RIP WebTV – The Internet For The Rest of Us

Today, we mourn the passing of a truly amazing product. After 17 years of faithful service, WebTV (later known as MSNTV) has officially shut down for good. WebTV had a huge impact on my life, both personally and professionally, so I thought I'd take a moment to talk about what I loved about WebTV, what I'll miss, and what I'll never forget.


I also recommend reading Brad Hill's farewell to WebTV article. He experienced a different side of the company's story than I did, and his article is a great read.
An Inside View of the WebTV Revolution That Didn't Happen
- By Brad Hill (no relation)


My Introduction to WebTV

I first discovered WebTV in 1997. I had just gotten my AA, couldn't afford to go on to a four-year university, and wasn't really sure where my career was headed. So when I met a cute redhead who told me about this great customer service gig in the bay area, I called in a favor to couch-surf with a friend for a while, moved down from Sacramento, and took the plunge.

[Aimee and Tash, I will never be able to properly repay you. Thank you!]

I joined the company a few weeks before it was acquired by Microsoft, but the negative impact from that didn't really start to manifest until a year later. That first year, WebTV was the quintessential startup environment. The CS team was housed in the same ratty garage on Alma St in Palo Alto that the company had been founded in. The building was crammed with young, idealistic 20-somethings who had their eyes set on changing the world, one user at a time.

It was a magical time for me. I was surrounded by great people, most fresh out of college and aching to make a dent in the world. We started out answering phones and responding to support emails from extremely passionate users. Within a year, we had outsourced the first-level calls and everyone on the team has chosen a new area of expertise to sink their teeth into. Some began running the Previews beta testing program, some went into data analysis to spot trends and feed the data back to the product side of the business, and some transferred to other teams like Usability or Engineering.

Me? I went into training and documentation. Shortly after starting there, I had camped out in front of my TV for a week and — with just a WebTV, a Laura Lemay book, and a Geocities account — taught myself HTML. So as we began to outsource front-line CS, I built a CS Agents intranet that would let anyone from any of the three call centers get to any of a few hundred support issues (the bulk of which I helped write) within three clicks. I took Andy MacFadden's incredible "Greater Scroll of Dialing Wisdom" document (still the best developer-written documentation I've ever read) and distilled it down to a Lesser Scroll for advanced connections agents, wrote a IRC chat FAQ and a scad of internal documentation, and flew to call centers in Florida, Kentucky and Salt Lake City to train the next wave of customer service agents, who would be the first point of contact with our wonderful users.

I even recreated a vitrual version of the WebTV Classic, Plus and DishPlayer services, using service screenshots tied together via imagemaps, so the CS agents who didn't have a WebTV box at their desk, or had to share one, could still follow along with users while explaining how to get connected. Now that the service itself is going dark, I have posted an archival version of this for posterity.

Those were the days. We would get calls from 70 year old users who were literally crying because they were so frustrated at not understanding how email worked, or how to get into a scrapbooking chat room. With patience and a healthy supply of metaphor, we'd explain it in a way they could grok, and send them on their way. And a few months later we'd get a call from the same user, complaining that the HTML in the website they were hand-coding on Angelfire wasn't working the way the expected it to. If we ever doubted for a moment the potential for a simple user experience to empower normal people to do truly mazing things, WebTV users would quickly set us straight.


WebTV's Original Mission

The original idea behind WebTV was simple. Provide an inexpensive, easy-to-use option for normal, non-technical people to get online. "The Internet for the rest of us" wasn't just a tagline, but a mission statement. If $2,000 for a PC seemed absurd, you could drop as little as $99 on a small device that plugged into your TV and gave you access to email, bulletin boards, IRC chat, and a rudimentary web browser, with as little pain as possible, for just $20/month. Add another $70 to replace the remote control with a wireless keyboard and you were off to the races.

While younger users (like me) might quickly outgrow the system and move on to PCs, the core WebTV users turned out to be the older or less technologically inclined half of the population, who didn't want to over-complicate their lives with too much tech, but still wanted to keep in touch with their out-of-town children, share baby photos through email, and connect through bulletin boards and chat with others who loved the same things they loved. Rarely have I ever met users who were so passionate about a product as WebTV users. To many of them, WebTV was the internet. And the fact that the WebTV service has stayed alive as long as it has is a testament to their devotion.


WebTV Plus, DishPlayer and TiVo

But getting the web to run on a TV was just the start. The bigger long-term bet was on integrating the web with TV, to create a seamless hybrid of the two. WebTV Plus took the integration one step further, allowing you to plug your cable signal into the box, and providing an extremely easy to use interface for searching TV listings, keeping track of your favorites, and even tying the shows you watched to related websites.

WebTV Plus was ahead of its time. Many of the innovations it pioneered (including the ability to click through to purchase or get more info on an item directly from a TV commercial) are things that today's technologists still strive to include in the next generation of set-top boxes.

And with the DishPlayer box (essentially a WebTV Plus built into a DishNetwork satellite box), they took it one step further and included one of the first-ever digital video recorders. DishPlayer and TiVo were in development at the same time, with offices just a few blocks from one another, and launched within a few months of one another. It still kills me that the DVR race played out the way it did.

At launch, DishPlayer had all the same functionality as TiVo, a much more intuitive user interface (most people forget the initial learning curve TiVo users faced), the ability to play games like Doom and You Don't Know Jack (hey, it was the 90s, these games were pretty cool back then), and the entire internet to boot, for essentially the same price. Sadly, Microsoft really didn't understand what they had on their hands, and put almost no money into marketing DishPlayer. Meanwhile, their pluckier startup competitor with a clunkier UI, far less features, and a cute animated mascot marketed the crap out of their product, and now TiVo is a verb and hardly anyone remembers DishPlayer.

Would TiVo be a verb today if WebTV's founders had said no to Microsoft's $425 million offer and run full steam ahead the way TiVo did? And would it have taken another 10 years for set top boxes to start infiltrating the living room like they're finally starting to do now? The world will never know. But I'll always have my suspicions.


How WebTV Fell, but Refused to Die

For the first year after the acquisition, Microsoft mostly left WebTV alone. They knew they had something amazing on their hands, but didn't really understand it, so they let us continue working our way. Besides the obvious flaw of not believing in DishPlayer enough to properly fund its marketing, Microsoft started to dig its teeth into daily operations.

Emily, the CS manager we all loved and adored, left the company and was replaced by a devious, soulless shell of a human being Whose Name Shall Not Be Mentioned. My own manager, Steve Kroll (who I would have gone to hell and back for) finally left the company in frustration, and was replaced by an old-industry manager who literally couldn't even type, much less grok the technology industry. And the two of them proceeded to replace all the passionate, knowledgable startup staff with business types who didn't know the product and didn't care about the users. I was lucky enough to find a new startup gig and left the company the day before our group moved into Microsoft's new Silicon Valley campus. By the time Soulless and Clueless had been fired (a few months after I left), they had already cost the company at least a dozen of its best CS employees and laid waste the the team's morale.

Some of the other organizations might not have ben hit as badly as CS. And indeed, there were a few of the old WebTV crew who spent the next decade of their career quite happily at Microsoft, both moving to the Xbox and Hotmail teams (or to the Seattle mothership) and doing their best to keep the WebTV service alive and kicking for as long as possible.

After the move to the Microsoft campus, the product remained on the shelves and in active development for several more years. They rebranded it MSNTV, upgraded the browser, migrated the email to run on Hotmail servers on the back end, and even came out with a box that supported broadband. Eventually, despite continued demand for the WebTV/MSNTV service, demand for new hardware decreased to the point where they stopped selling it. Despite the lack of new hardware, the service continued to live on for many years beyond.

The fact that today's shut-down is happening 17 years after the acquisition, and 16 years after the Dark Days should stand as a testament, not only to the herculean efforts of Andrew Levin and his team, but of the incredible staying power that was built into WebTV's business right from the start.

Today, we live in a world where most "products" on the web are subsidized by the advertising companies who use them to harvest ad targeting data from their users. No matter how beloved a product is, if it ceases to be sexy or cool, or provide enough ad-targeting intel, it gets the axe. (Google Reader users, you may now rant.) But WebTV was an old-school business. They made a product that served a need, and charged a fair price for the service. This gave them product a much sturdier foundation upon which to stand.

If I recall correctly, WebTV had a base of close to a million users at its peek. This number doubtlessly dropped steadily over the years. But with the majority of the service already up and running, the service could likely be run on a skeleton crew of maybe a dozen people plus server costs. I don't have access to any internal numbers, but by napkin math, at $20 per month per user, you would only need about 10K users to cover costs. Beyond that, you'd be looking at another $2.4 million in revenue for every additional 10K users. So even at only 10% of its peek user base, you'd still be looking at a business unit that generated around $22 million per year in profit.

It's hard to kill a product that refuses to stop generating income. I sincerely wish every entrepreneur today would take this lesson to heart. (Someday I'll write a post on the history of Half.com. It's a very different product from WebTV, but the lesson is identical.)


WebScissors and the Legacy of Jos

I made a lot of friend in my time at WebTV. Easily the friendliest and most prolifically talented of them was Jos Claerbout. He was one of those guys who just radiated friendliness. You couldn't meet him and not instantly adore him. And his brain simply wouldn't stop producing. He thought objecting oriented programming should be easier to learn, so he wrote the funniest, most useful object oriented programming tutorial I've ever seen: Don't Fear the OOP: Why coding Java is just like writing a trashy Western novel. He saw users having trouble making their own websites? He built his own tool, WebScissors, to make it easy for them to import images to their WebTV scrapbooks.

Sadly, he shared so much of his heart with the rest of the world that it gave out on him far too soon. Jos's death had a huge impact on everyone who knew him. His father, Jon, put together a beautiful site on The Life of Jos Claerbout that crystalizes many of our thoughts and memories of him.

Before he died, I had been talking to Jos about working with him to upgrade the user interface for WebScissors, and add the ability to view HTML source code. So I was deeply honored when Jon and Andrew Levin (who was maintaining the site on Jon's behalf) invited me to help maintain WebScissors for posterity, and add the features Jos and I wanted to bring to our users. To this day, WebScissors 2.0 is alive and well, and we have no intention of letting it go any time soon. It will outlive the WebTV service itself, as a testament to Jos's creativity and dedication to his users.

And it may even continue to be useful, as today's tablet users often face similar browser limitations to those that WebScissors necessary in the first place, all those years ago. Time will tell...


The Legacy of WebTV

WebTV was an amazing product that was far ahead of its time. It taught me the importance of usability, and how a simple interface and a few visual/textual metaphors could bridge the gap to make complex technology accessible to the masses. It taught me the importance of community, and how deeply users will love your product if you fight like hell to make it serve their passions. And it gave me the curiosity, inspiration and opportunity to start a career that still gets me excited to this day.

But the true legacy of WebTV is its people. WebTV alumni have gone on to play key roles in creating some of the most ubiquitous technology on the market today. I've lost count of the number of WebTV alumni who have worked behind the scenes at Apple to continue the mission to bring the internet to the rest of us. Andy Rubin, Andy MacFadden and their team are behind the Android smartphones that appeal so well to the masses. And quite a few of alumni have remained with Microsoft, contributing to the Xbox platform and other products within the company.

And let's not forget the users. Never, ever forget the users.


As WebTV fades to #191919,* I will always cherish the people it introduced me to, and the lessons it taught me.


* WebTV Trivia:
It can be really hard on the eyes to read contrasting text on a true-black background. Especially on a low-resolution TV screen.
So all of the "black" screens in the WebTV service actually used the shade #191919 instead of true black for the background color.

How to Fix the Live-Tweet / Spoiler Problem

For those who want to experience a media event from a particular person's perspective, live-tweeting can be great. A fan of a TV show might enjoy reading along with the reactions of an actor from the show, a media personality they like, or even one of their friends. But unless steps are taken to manage one's message, live-tweeting can also be one of the worst violations of Wheaton's Law in social media, pissing off all of your followers who don't like spoilers. The good news is that this is a fairly easy problem to fix, simply by using a parallel feed for live-tweeting events.


Why is live-tweeting such a bad idea?

Quite simply, unless your Twitter feed is specifically set up for live-tweeting, the odds are quite high that the majority of people who follow you do not want to read your live tweets. For anyone who is interested in the event you're covering but hasn't had a chance to watch it yet (either because it hasn't aired yet in their time zone, country, or online distribution platform, or because they simply don't have the time to schedule their life around live events), your need to live-tweet contradicts their desire to experience it fresh and spoiler-free when they do watch it. And for those who aren't interested in the event at all, your live-tweets essentially hijack your followers' feeds with irrelevant noise, which again translates to a bad experience for them.

As an example, let's look at Syfy's live-tweets of Warehouse 13. As part of the marketing for the new season, Syfy had the characters from the show live-tweeting several episodes. Given that the network has dozens of shows and even more movies on their channel (and many of their followers are drawn to their Twitter feed for Craig Engler's great "how the business really works" tweets), we can safely assume that it is a relatively small subset of their total followers that are fans of any given show. Let's be generous and call it 25%.

Let's further assume that, with an international following, a relatively small percentage will have the opportunity (much less have the time) to watch the show when it airs live in the same time zone as the live-tweet. Some will watch a few hours later when it airs in their time zone, some will watch the next day when it airs online, and some will watch a week or more later when their personal schedule allows. Let's again be very generous and assume that 20% of the fans watch live. Thus, 5% of the total users would be both fans of a given show and watching it live.

That would mean that 75% of the Syfy Twitter feed's followers will be annoyed at the flood of tweets that are irrelevant to them, 20% will be seriously pissed off at having the show they love spoiled for them before they've had a chance to watch it, and only 5% will be happy to have been able to properly enjoy the live-tweet experience. It doesn't take a genius to figure out that providing a negative experience for 95% of your followers in order to provide a positive experience for only 5% is a bad move.


But what if I give advanced notice to mute/unfollow me before I start?

Typically, when the recently-spoiled masses chew out the live-tweeter for spoiling things for them, the live-tweeter's response is to point out that they did make a warning tweet before they started. Something like "we're going to be live-tweeting for the next hour, so if you don't want to be spoiled stay off Twitter or un-follow us for a while." Setting aside the inherent presumptuousness of saying, essentially "I'm going to do something I know is bad, so it's your responsibility to avoid it," this kind of warning tweet simply doesn't work.

Twitter is, after all, reverse-linear. Unless they spend the whole day constantly refreshing Twitter (yes, I know some do, but they're the minority, particularly outside desk job hours), people experience your Twitter feed in reverse order. So if you spend an hour live-tweeting a show they love, they won't see your warning tweet until after they've had to wade through an hour's worth of crap, and already had the joy sucked out of their viewing experience. And they can't simply skip your tweets, as they have to sift through them in order to see all the other tweets in their timeline that are interspersed with yours.

Live-tweeting on a non-dedicated Twitter feed is simply a bad thing to do. Please, please don't do it.


Ok, but some people LOVE live-tweeting. How do we make it work for them?

It is absolutely true that some people love live-tweeting. Some tweeters love doing it, and some followers love reading it. That's great! If everyone involved is enjoying it, more power to them. The trick is simply making your live-tweets opt-in rather than opt-out by doing them on a separate Twitter feed.

Let's return to the Syfy example. Instead of using the main @syfy feed to host live-tweet events, Syfy could create a separate @syfy_live feed. Whenever they want to host a live-tweet event, they could then use the main feed to let people know that they can follow the secondary feed to play along with the event. That way, anyone who wants to see the live-tweet content can easily follow the live feed and bask in the instant gratification, while anyone who doesn't want to be spoiled (or simply doesn't care to have their feed flooded) doesn't have to be inconvenienced.

This setup also has the benefit of allowing Syfy to better judge how many people are actively engaged with the live-tweet events, as they can watch the follower count for the live feed go up and down with each event, rather than having to guess what portion of the main feed's changes (positive or negative) are related to the live-tweeting. Using separate feeds for live events really is better for everyone involved.

Craig, on the off chance that you're reading this, please let me know when you decide to implement something like this. I love almost everything you do with the Syfy account, particularly the "how the industry works" educational tweets. I was very sad to have to unfollow to avoid the flood of spoilers, and I would really love to be able to follow again.


But can't people still be spoiled when the live-tweet feed gets re-tweeted?

Yes, of course. But if that happens, the sin that is committed is by the retweeter, not by you, and unless they retweeting you en masse, it's going to be a far, far smaller problem than live-tweeting on your main feed. We can't solve the problem universally without Twitter building filtering tools into their product (which, as an advertising company, they have little incentive to do). But we can at least minimize the problem as much as possible by putting some thought into how we use our primary Twitter feeds and when we move special content to secondary feeds.



Hmm. Wouldn't this work for other high-volume live events, too, like sporting events?

If we could convince sports fans to have separate feeds for their game-day tweets, that would be utterly fantastic! Seriously, I might cry from the pure joy of it. But there the number of sports fans who annoy their followers with this undecipherable (to the rest of us) gibrish is far larger than the number of people who live-tweet TV shows and other live media events, so I figure it's best to start with an easily solvable problem, and work our way up to the more daunting problems.

Besides, when was the last time you tried to get a sports fan to listen to logic regarding how they consume their sports? Especially while they're watching the game? Up. Hill. Battle. :-)

My Thoughts on the Netflix / Qwikster Controversy

I wrote this in 2011 when Netflix announced that they would be renaming their DVD service to "Qwikster" and separating it completely from the existing Netflix site. I wasn't actively blogging at the time, but I ran across this again and liked what I had written, so I've back-posted it here.


Core Focus – What problem are we trying to solve?

It has been said that if Union Pacific realized they were in the transportation business rather than just the railroad business, we would today be flying on Union Pacific Airlines. Rather than maintaining a strategic vision of the problem their company existed to solve (getting people and goods from point A to point B), they focused too closely on one particular solution to that problem (railroads) and were thus unprepared to respond when changing business climate made their chosen solution less and less relevant.

More recently, we saw Blockbuster repeat the same mistake. They incorrectly believed that their success was based on running an efficient DVD rental business, when in fact it was based on solving the problem of convenient access to high quality video entertainment. As improving technology made new methods of content distribution possible, they clung to their existing brick-and-mortar solution for far too long. And by the time they did try to explore other options, their years of inaction had given their competitors too much of a head start for them to stand a chance of catching up.

In order to understand the path forward for Netflix, we must first understand their core competence. As a consumer brand, the best way to do that is to ask not what products or services Netflix provides, but what problem they solve for their users. What need does Netflix fulfill that makes people love them as much as they do?

I would argue that Netflix's value to their customers is the same one that they wrestled away from Blockbuster: delivering convenient access to high quality video entertainment. If we keep this fundamental goal in mind, and focus our tactical decisions on achieving this goal, the rest of the questions become much simpler.


Brand Integrity – What's in a name?

Naming a company or product is easy. Building a brand is very difficult. Yes, you have to give your company/product/service a name. But more than that, you have to make that name mean something. Not a literal meaning, but an emotional meaning.

A brand name with a literal meaning can be useful in explaining the potential value to the first wave of customers. But as a brand evolves over time, the literal meaning is quickly replaced by what the brand means to its customers. And that meaning is defined almost entirely on how the brand makes people feel, based on their (and their community's) interaction with it.

When you consistently solve users' problems and make their lives easier, your brand will come to mean something special to them. "Netflix means entertaining the whole family without spending a fortune." "Netflix means dinner and a movie without having to go brave the weather." "Netflix means independence from an oppressive $50-80/month cable bill." "Netflix means never running out of new movies to keep my kids entertained and happy." These are the kinds of meanings Netflix users have blessed the brand with over the years.

When you have a brand this strong, introducing a new brand can be very risky. If the new product or service solves a different problem (like eBay vs PayPal, or the myriad of P&G brands), multiple brands that are expected to mean different things to different people certainly make sense. But if the new product or service simply solves a slightly different subset of the same problem (like Google's many search-related sub-brands), it usually makes more sense to keep the existing brand (and all the good will that comes with it) and differentiate the new functionality in context.

This risk only increases when the new brand is being applied to the product or service with which the users originally fell in love. Changing the name implies that the company no longer has faith in the re-named portion, and that it may no longer retain the qualities that defined its brand to begin with. It introduces friction, confusion and fear. It makes people worry. "Do they dislike this product enough that they want to take their name off the label?" "Are they just planning to sell it off to someone who's going to ruin it?" "Does the brand name even mean what I thought it did anymore?" Obviously, not questions one would ever want people to ask about a brand.

To determine whether a new brand or a sub-brand makes more sense, we must return to the original question of what problem you are solving for the users. If Netflix means convenient access to high quality video entertainment, instant vs mail order, movies vs TV vs games, and physical media formats are all just variations on that original problem and should therefore be represented as sub-brands.

Netflix Instant means instant access to (a somewhat limited selection of) great content in an instant.
Netflix [_____] means access to an endless library of content, delivered to your door in just a few days.
Netflix Games * means being able to play any game you want, for as long as you want.

Netflix still means everything it has ever meant. The sub-brands just help you tell a more tailored story to different types of users.

* Though Netflix does not currently deal in games, I include it here both in anticipation of that someday happening and to help illustrate these suggestions more abstractly than just to the two current services.


Convenience Is King - Streamlining User Experience by Platform and Preference

While the Qwikster re-branding has gotten a lot of press, the more passionate complaints across the blogosphere have been of a much more practical nature. Yes, the essence of what Netflix means has a great emotional impact. But the loss of convenience from having to go to multiple websites to do what they can now do in just one place has a much more pragmatic impact on people's lives.

To determine the best course of action, we must again return to the question of what problem Netflix is there to solve. If the goal is to delivering convenient access to high quality video entertainment, convenience is a vital part of the equation. This means getting them from interest to immersion as quickly and effortlessly as possible.

If you look at the path people take to get to the Play button, a few distinct experiences emerge. Users who don't yet know what they want to watch need a way to browse what's available, seeing recommendations and details about different titles that may increase their interest. Once they find something they like, they need a way to express interest in the title – this could be clicking a Play button, adding it to a queue, rating it, or marking it as something they already own. When they decide they're ready to start watching, they need a way to select a title – either from a browse page, queue or other entry point. Finally, when they have finished watching a title, they need a way to choose what's next.

How they navigate between these stages – and what content/functionality they are presented with – can be customized based on what we know about them. First, we know what platform they are on: are they accessing Netflix through a desktop browser, smartphone, tablet, set-top box, or gaming console? Second, we know which services they are currently subscribed to. Finally, we might know a bit about their personal preferences from past behavior.

Given this, it comes relatively straight forward to extrapolate how to guide the user through the process.

  • One entry point per platform
    For those accessing Netflix on a web browser, there should only be one website. For those accessing Netflix on their smartphone, tablet, set-top box or gaming console, there should only be one app per platform (and be as similar between apps for the same platform type as possible).

  • Browsing vs Selection
    Once in the system, users should be given the option of either browsing (and/or searching) the total collection of what is available to them or seeing a list of the titles that they have previously expressed interest in.

  • Streamlined Browsing (Requires BU Collaboration)
    When the user doesn't know yet what they want to watch or play, they also won't know which format it's available in. So browsing can easily be separated between TV/movies and games, but within each top-level category should allow browsing by intuitive filters such as genre, recommendations and past behavior, as most of Netflix's browse interfaces currently do. This is the portion that will require the most collaboration between business units, as the Instant and DVD groups must agree on that format in which the basic title info is presented, and then provide separate call-to-action hooks for each of the services that title is available for (Instant, DVD, Blu-Ray, teaser to look at the tie-in game, etc). But any extra coordination between business units will inherently pay off with a much more streamlined user experience.

  • Streamlined Selection (Allows BU Experimentation)
    Within the selection branch, it will likely make sense to have separate selection screens based on the specific services that a given user subscribes to. This can allow the various business units to have a fairly wide berth of innovation around how best to display their own content. The Instant team may choose to go with a tiled box art view with category links for narrowing large queues by mood (or who marked it, for family accounts, eventually). The DVD team may choose to reuse the mood/user filtering sidebar, but present the results in a priority-ordered text view. And the Games team may choose to use the same priority-order view as DVDs, but use a sidebar that allows filtering by platform, genre and game rating. Further customizations can be made based on platform (browser, tablet, console) and interface (mouse, touch, remote), to make it as easy as possible for a user on any given platform to quickly and easily find something great to watch/play.


Summary

People love Netflix. If they didn't, they wouldn't be reacting this passionately to recent changes.

Netflix means convenient access to high quality video entertainment. As long as a new service still addresses this core mission, it should retain the core brand (or a sub-brand thereof).

Convenience is king. While there are certainly logistical changes that can be made to both the user interface and back end processes, convenience to the user should always take precedence over the convenience of various business units.

2006 Browncoat Ball – Postmortem

I originally posted this on the browncoatball.com site. That domain is being passed on to the folks who run each year's ball, so I've backed it up here for posterity.

When the Chicagoland Browncoats accepted our pitch to host the 2006 Browncoat Ball in San Francisco, we knew we had our work cut out for us if we wanted to put on an event that would live up the 2004 Browncoat Ball in Chicago. This postmortem is meant to be a pragmatic analysis of the choices we faced, the decisions we made, what worked and what didn't, so the cities that are submitting pitches for hosting the 2007 and 2008 balls can maximize the effectiveness of their own planning processes.


GUIDING   PHILOSOPHIES

In planning the second Browncoat Ball, the first question we had to face was "what is the essence of the Browncoat Ball?" What aspects of the 2004 event did we definitely need to echo in our event, which could evolve into something better, and which might be better replaced with something completely different. Below is a general outline of the philosophical decisions we made that guided our planning process.

  • The Browncoat Ball is Primarily a Fan Mixer
    There are many types of conventions and get-togethers. Some revolve primarily around meeting celebrities, attending themed panels, getting early glimpses at industry projects, or browsing a dealer floor full geek-related products. At many of these conventions, meeting and getting to know your fellow fans is a side note that occurs in small doses between events or while waiting in long lines. However, it is these interactions with our fellow fans that truly make these conventions memorable. The Browncoat Ball is the opposite of these conventions. Getting to know your fellow fans is the primary objective of the Browncoat Ball, and all other aspects of the ball should be arranged to further that goal.

  • Keep it Inexpensive
    The Firefly/Serenity fandom is incredibly diverse. Browncoats come in all shapes, sizes and tax brackets. This makes it possible for high-priced, exclusive conventions to be successful by targeting a small number of well-off fans. But as a fan mixer, the Browncoat Ball should be accessible to as many fans as possible. Ticket prices should be kept low, and the expected additional budget for each attendee (for food, shopping, etc) should be kept as reasonable as possible.

  • Everyone is a Fan
    Conventions that center around celebrity panels and signings create a separation between the fans and the celebrities, in addition to turning the event into a work day for the celebrities. This violates the fans-meeting-fans nature of the Browncoat Ball. Therefore, if any of the cast/crew wish to attend the ball, they should do so as fellow guests and not as hired celebrities. There should be no signings, no audience panels and as little pre-ball publicity regarding their presence as possible. If someone is coming to the Browncoat Ball specifically to meet a celebrity, their expectations will not match the theme of the event, so we'd rather they attend a celeb-centric event instead to achieve their goals. Any celebrity who attends the Browncoat Ball should be able to look back at it as a great party, not a day at work.

  • No Dealers Floor
    We all love shopping on the dealer's floor of mainstream conventions. But running a dealer's booth requires a great deal of time for the vendors, which means they will have less of an opportunity to participate in the social aspects of the event. Thus, having a dealer's floor would violate the spirit of the first two rules. We also want to make the event as financially accessible as possible to a large number of fans, and knowing that there will not be a dealers floor allows people with a lower budget to attend without feeling like they're missing out on something.

  • No Charity Drives
    Browncoats have a wonderful habit of turning just about every event into an opportunity to raise funds for worthy charities. As one of the first groups to organize one of these mind-boggling fundraisers, we get that. And we're incredibly proud of all of our fellow browncoats and their inherent drive to make the world a better place. But fundraisers take a lot of time and resources to run, which would again detract from people's ability to enjoy the social aspects of the event. And again, we want to keep the expected cost for the average attendee as low as possible, so it's best if we save our fundraising energies for events with a larger audience of potential donors. This is our weekend off. We can save the world next week.

  • There Will Be Dancing!
    The Browncoat Ball is a ball - the social event of the season. There has to be dancing, and it should be as elegant and fancy as possible, while still being accessible to the majority of fans. Those who want to dress up, show off their frippery and immerse themselves in an environment similar to that to the Firefly episode Shindig should be able to do just that. But those who don't feel comfortable dressing up or dancing should still feel comfortable attending and socializing.

  • History doesn't repeat itself, but it rhymes
    As the second in a series of annual events, the Browncoat Ball needs to retain the essence of the previous event(s), while still adding its own flair. It doesn't have to (and, really, shouldn't) be identical to the previous event, but people who attend both events should have their expectations met and be able to recognize it as an extension of the previous events, rather than a deviation from them.


WEEKEND   OUTLINE

Keeping these guiding philosophies in mind, we then tackled the event planning for the weekend, based on the outline of the 2004 ball.

Friday Night - Shuttle Service

In 2004, the Chicagoland Browncoats organized a shuttle service, where attendees could send in their arrival times and there would be a friendly Browncoat volunteer waiting for them at the airport to greet them and whisk them off to the hotel. We loved the idea of the shuttle service, but several factors conspired against us on that front.

Most of our local volunteers live in San Francisco proper, and therefore don't have cars. And the shuttle service was one of the things that we forgot to delegate ownership of until the last minute, so there just wasn't time to get all our ducks in a row. I would highly suggest adding this to future events, if possible, since it really makes out of town guests feel welcome and breaks down the shyness barrier (you at least know one person, once you get there). But you definitely need to have someone who is responsible for organizing this as their primary task, and not make it one of the minor tasks of a main organizer.


Friday Night - Meet And Greet Dinner

In 2004, the Friday night dinner was a Tea Party themed affair, help in an open-air patio at the top of the hotel. This was an opportunity for everyone to meet one another in an informal setting, so they could mingle and get to know everyone. We had intended for our Friday night dinner to be similarly informal, and chose the "dinner at Fanty & Mingo's" theme for the occasion. However, when the Empress of China showed us their amazing ballroom (which came free as long as we had something like a 50 person minimum), we couldn't resist.

This ended up adding a lot to the event (TWO full dinner/dance balls in one weekend? Sweet!!), but was also a bit of a drawback in some respects. While most people seem to have had a great time Friday night, some of the more shy people felt a little uncomfortable being in such a fancy environment with so many people they didn't know. Given this, I would suggest that if the Friday night dinner is as fancy as ours was this year, there should be some sort of get-to-know-you mechanism built in. Maybe it's as simple as having locals assigned as greeters, to seek out the shy folks and introduce them to a few people, or low-key meet-and-greet introductions at each table.


Saturday Afternoon - Boat Tour

In 2004, the Chicagoland Browncoats rented out an L train for a "train job." They had local guides lead a long line of people a few blocks away to the L station, loaded everyone onto the pre-decorated train for a rail tour of Chicago. Initially, we considered having the 2006 ball in Sacramento, so we could keep with the train job theme at the uber-cool Railroad Museum they have there. But it really isn't as enticing a city as San Francisco, and was too much of a commute for most of our locals.

In the end, we decided that what made the train job great was giving everyone a chance to see the city in which the event was being hosted, so we replaced the train with a boat tour of the San Francisco Bay. This gave us an even more extravagant way to see the city, and solved one of the main complaints we had heard about the 2004 train job. The sightseeing aspect of the train job was great, but the physical layout of a train car makes it very difficult to get to know more than just the few people sitting around you. The ship gave everyone a much more social atmosphere, where they could move around and meet a variety of people. Plus - bonus - cash bar!


Saturday Afternoon - Scavenger Hunt

We also chose to continue the tradition the Chicagoland folks started by having a photo scavenger hunt, as well as a physical scavenger hunt, to give people incentive to keep a lookout for local landmarks. We didn't have very many submissions for the contest portion of the scavenger hunts, however, so I'm not sure whether or not they are worth implementing again at future events. They're fun for those who participate, but they add to the logistical complexity to collect/collate everyone's submissions, and if you do a good enough job getting people to socialize with one another during the day, that's ultimately going to take precedence for most people.


Saturday Afternoon - Dance Lessons

One new addition we made to the Saturday afternoon schedule was dance lessons. At the 2004 ball, most of the scheduled dancing was of the modern variety, since not many of the Chicagoland browncoats were ballroom dancers. But the attendees from San Francisco (two of whom later became the organizers for the 2006 ball) spent an hour or so giving everyone some impromptu lessons on how to waltz and do a very simple group bonfire dance, and everyone loved it. And since we knew that there were a lot of closet browncoats among the San Francisco ballroom dance community, we knew we had to turn it up a notch and make ballroom dancing a central aspect of this year's ball.

With our Browncoat Ball organizers having decades-long roots in the local ballroom dance community, we were uniquely positioned to be able to add a ballroom flair to our ball. But we were lucky enough to have one of the most popular ballroom instructors in the area among our fanbase, so we were thrilled when Joan offered to give dance lessons and create her own Shindig-inspired Sir Warrick Harold dance for us. And we had far more men-who-can-dance than your average sci-fi gathering would have had. This was a smashing success, and I would highly suggest that future host cities get at least a few of their volunteers up to teaching speed in at least waltz and one "if you can walk you can do this dance" dance, since that really does separate the Browncoat Ball from every other club and high school gym dance that people are used to attending.

You can also take advantage of the precedent set by the 2006 ball in inspiring your attendees to learn to dance before they even arrive. We had planned to have a video podcast of in-character Companion Waltz Lessons, but we couldn't find volunteers to take ownership of that project. And our attempts to get global browncoat groups to take local ballroom lessons before the ball didn't meet with much success. But now that there are so many photos (and videos, once our 2006 Browncoat Ball Souvenir DVD is finished) available of people dancing and enjoying themselves at the previous balls, it should be much easier to capture the imagination of prospective attendees and inspire them to embrace the dancing aspect of the ball. Particularly the men. Just explain to them that learning to waltz is easier than it sounds, and show them the photos of all those gorgeous browncoat ladies who were wishing they had someone to dance with, and presto!  :-)


Saturday Night - Browncoat Ball

Saturday night is the main event. The Browncoat Ball itself. In 2004, the ball was held in a traditional hotel conference room, with maybe a 12' ceiling and a small dance floor. They had a few musical acts (like The Great LukeSki) to entertain us while we ate, and then a CD mix of mostly modern music to dance to. As previously mentioned, the organizers of the 2006 ball are regular participants of the San Francisco ballroom dance community, and have been so terribly spoiled by the semi-monthly Gaskells balls, monthly PEERS balls and bi-monthly Friday Night Waltz events that we simply couldn't settle for anything less. We fell in love with the dance floor at Empress of China, and seriously considered having the Saturday night ball there, but ultimately decided that it was important to have the main event within the same building as the hotel, since no one wanted to walk several blocks in their frippery, or worry about sending the kids back to the hotel without them if they got tired.

We looked at several hotel options before finding the Marines Memorial and their gorgeous Commandant's Ballroom. Most of them had adequate facilities, but were either way out of our price range or had already been booked in advance. This is one of the main reasons that we will be accepting pitched for both 2007 and 2008 this year, since the more advanced planning a ball committee has, the more hotel options will be available to them.

Ultimately, our Hotel choice had its plusses and minuses. The hotel itself was perfectly situated right next to Chinatown, had a gorgeous ballroom, beautiful rooms, a great hospitality suite, and was very reasonably priced. However, we did run into a lot of last-minute problems that we probably could have foreseen if we had asked them for more details before signing our contract. For any future ball committee, I would strongly suggest that you follow these guidelines before choosing your hotel.

  • Make sure you thoroughly understand the contract. Even before signing, ask them for a sample bill, assuming that you have the minimum attendance you would expect in a worst-case scenario. The biggest problem we faced with the 2006 ball was a vaguely worded clause in the hotel's contract that meant we had to pay about $2500 more for the hotel than we had expected. (The $9000 minimum only included the food, while we thought it included the food, bar, tax and gratuity - woops!).

  • Make sure they give you a sample floor plan of the ball space, as it will be arranged the night of the ball. The Marines Memorial told us that we could have as big a dance floor as we wanted when we toured the facilities. So when we gave them our final numbers, we asked for as large a dance floor as possible while still searing all of our guests. When we arrived that afternoon to set up for dance lessons, they had a postage stamp sized dance floor set up, and tried to charge us an additional fee to even expand it to the still-tiny dance floor that we ended up with. Ultimately, we did convince them that they could not charge us extra as they were actually giving us less than what they had promised, and most of the non-dancer attendees didn't seem to notice the difference all that much. But if you look at the difference in dance floor between the Friday (semi-formal) and Saturday (fancy-main-event) venues, you can understand how disappointed we were with what we got versus what the hotel promised verbally.

  • Make sure you get to visit the hospitality suite ahead of time. We discovered many things about the hospitality suite at the very last minute, and had to work around them. For instance, we did not know ahead of time that you needed a hotel card key to get to the floor the hospitality suite was on, which was quite inconvenient for local guests and guests who were staying in other hotels. It wasn't until we put on our first DVD that we discovered that the hotel TVs were rigged to only go up to 20 on volume, so the room full of people who were expecting to watch Firefly could see - but only just barely hear - what was going on. And I think the fact that there was no door between the bedroom and living room areas explains why our professional onsite masseuse got so few clients - that was a bit of a shocker.

We also learned a very important lesson about how hotels and restaurant differ. Our general requirements for the Friday and Saturday night events were basically the same (dinner and dancing for 150 people), but the expectations and behavior of the venues were very different. The restaurant's motivation was to sell 150 dinners, and everything else was just to add to the ambiance. Their prices were very reasonable, their staff was amazing, and they were eager to help in every respect. The hotel, on the other hand, was very much used to handling weddings, and didn't seem to know what to do with us. That said, we still think it is very important for the Saturday night event to be in the same building, or within a very short walk (maybe 1 block) of the hotel, for the aforementioned reasons.


Saturday Night - After Party

Invariably, the ball itself will end far too early in the evening. People will still want to party. Having a hospitality suite where people can retire to for a casual continuation of the festivities is essential. Having a variety of room parties for them to choose from is even better (the Fillionaires' Bordello room party in 2004 was legendary). And an organized outing can be great too, if it's close enough and has enough room for everyone.

Sadly, most of the Fillionaires were missing from this years ball, and none of the groups held their own room parties. But the mellow hanging out and pseudo-TV watching (again with the volume problems) was a lovely way to wind down after the ball. I heard great reviews from those who attended the after hours soirée at Swig, but it sounds like the room we had reserved there was too small to hold everyone who showed up, so it got hot/crowded/loud, and a lot of people ended up filing back to the hospitality suite, bit by bit.

Arguments could be made one way or the other on what types of events should be available after the ball (rowdy vs mellow, full-group vs smaller split-off groups, etc). The important thing is that there be somewhere for people to retire after the ball, so they can spend more time getting to know all the new friends they made at the ball. And the more accessible the alcohol, the better.


Sunday

In 2004, Sunday was reserved for a general Chicago sight seeing day, and most people ended up using it as a travel day instead. This year we knew that most of our attendees were either locals or within a short plane ride, and we really wanted to extend the opportunity for everyone to spend more time to further build the friendships they had started at the Saturday ball, so we intentionally planned something that was enticing enough that it would get most people to attend, but still casual enough that the long-distance travelers wouldn't feel gypped for having to miss it as they flew home.

The Chinatown tour was the perfect compromise. We were a little surprised to learn that our little tour was the same weekend as the Moon Festival and the Folsom Street Faire (both of our main organizers live in San Jose, 45 minutes south of San Francisco, and were not aware of the dates for these hugely popular annual events), and given the opportunity to do it over, we might have scheduled the start time for the Sunday event a little bit later in the morning to give people time to recover from the previous nights festivities (noon is still a reasonable hour to start one's day, right?), but the reports we heard from most folks for Sunday's casual romp about town were positive.


FINANCIAL   REPORT

The lack of a dealers floor and celebrity photo ops is part of what makes the Browncoat Ball unique, since it is purely a by-the-fans-for-the-fans event. However, that also makes it a little trickier to fund the event, since you can't rely on revenue from those sources. This section will concentrate specifically on the financials for the 2006 ball, to give future host cities an idea of how we funded our ball, and what might be considered to make next year's ball run more smoothly.

For the 2006 Browncoat Ball, we relied on ticket price as our sole revenue stream, and cut the budget as thin as possible to keep the ticket prices as low as we could. This would have worked fairly well if we hadn't misinterpreted that hotel contract. Below if a full breakdown of the income and expenses that went into funding the 2006 ball.

INCOME:
Ticket Sales $19441.38
Merchandise Profits $348.00
Cash Donations $80.00
Souvenir DVD Profits pending
TOTAL $19869.38
 
CURRENT BALANCE - $867.52
     
EXPENSES:
Saturday Night Hotel Event $11719.12
Friday Night Dinner $3550.00
Boat Rental $2962.75
Saturday Night Band $850.00
Blue Sun Room Rental $681.72
Bus to Boat $520.38
Promo Postcards $242.93
Gft Bags $210.00
TOTAL $20736.90

Accounts

Once we had our event planned out and it was time to book our resources, we started by setting up a separate bank account and PayPal account specifically for the event. This is the same method we used for the Equality Now charity fundraiser we had run at ComicCon 2005 and it seemed to work fairly well there, so we went the same route for the 2006 Browncoat Ball. This worked well for us since we had a small organizational committee, but it also left our treasurer personally responsible for any deficit that might result.

Future committees might consider setting up a non-profit entity under which to manage the funds. However, you must make sure that you can pay for the venue fees using a credit card, as debit cards have a daily limit that will likely be too low to pay for your venue fees.


Security Deposits

Our first financial hurdle was to pay the $1000 deposits that were required by the hotel, restaurant and boat in order to reserve them for our chosen date ($3000 total). We did not have any seed money when we began our planning, so we solved this problem by putting the deposits on our treasurer's personal credit card and then reimbursing that amount from of the first of the ticket sales. At $150 per ticket, we only had to sell 20 tickets to cover this amount. This was accomplished within the first three hours of tickets going on sale (57 tickets were sold within the first 24 hours), so this was an acceptable way for us to fund the deposits.


Ticket Sales

For ticket sales, we created an online form which would collect the registration information for those who wished to purchase a ticket, save that information to a database, and then send the ticket holder a confirmation email with instructions on how to submit their payment. This worked very well for us, and could easily be repurposed to serve future balls (with a few small PHP/MySQL tweaks).

Since some people are not comfortable with online payments, we allowed payment by PayPal or by Check. For PayPal transactions, we asked that people pitch in a few extra dollars to cover the PayPal fees if they could afford to, since we were cutting our budget so thin, and nearly everyone did so. For check payments, the only problem we encountered were a few people who made their checks out to Browncoat Ball instead of to our treasurer, but ticket sales were far enough in advance that there was plenty of time to send these back and have them resend corrected checks.

While we were still in the planning stages, we set up a pre-registration form to see how many people would be interested in attending a San Francisco Browncoat Ball at a $150 ticket price. We didn't put very much effort into publicizing it, but we received 287 positive responses, so we figured hitting our 150 person break-even target would be easy. But as the event grew nearer, ticket sales hovered right around 100 without signs of an increase. Since the fixed price of the boat and hotel relied on a 150 person attendance to break even, that discrepancy would have left us several thousand dollars in the red, so we added single-day tickets to the mix to encourage more local attendance and offered a number of discount tickets on eBay to bring in more national attendees.

By scrambling at the last minute like this, we were able to drive the attendance up to 151 people, but due to the discount tickets and disproportionately low profit from the single-day tickets, that still left us a close to a thousand dollars in the red. This crisis could have been easily avoided by making ticket sales available earlier (tickets were not available until 6 June - only three months before the event), by increasing advertising on the web, through podcasts and at additional conventions, by developing additional revenue streams, and by allowing for a more conservative estimate when calculating the break-even attendance level.


Expenses Outline

The Friday night dinner was a per-person charged based on menu choices, with a very low minimum (50 people, I think) in order to get use of the ballroom for free. We had initially planned to go with the Flaming Baby Quail entrée, but were forced to downgrade to the still-delicious, but less flaming secondary option when the fiasco with the hotel contract put our budget in the red. Had we not had that problem, the Empress of China would have been a steal even at the slightly higher price point. You'll find that restaurants are much more willing to work with you than hotels, as they expect to get most of their money from the food they normally serve, whereas hotels are used to conventions and weddings, where catering and additional services are much more pricey. Ultimately, we had about 120 people in attendance Friday night, and paid $3500 total ($1000 deposit up front when we made the reservation, the rest paid via credit card at the end of the evening).

Chartering a private boat tour was a flat fee, with a maximum occupancy of 250 people. We paid a couple hundred dollars extra in order to have a cash bar on board (which was definitely worth it, considering how friendly browncoats are when they drink), which brought the total to $2962.75 ($1000 deposit up front when we made the reservation, the rest paid via credit card two weeks prior to the event).

We also decided that it would simply be far too chaotic to have everyone find their own way to the pier, 20 blocks from the hotel, so we chartered a bus to make two trips from the hotel to the pier in the morning, and one trip back to the hotel after the boat tour. This cost an additional $520.38. If attendance had been higher, adding a second bus for additional trips would have brought that amount up by an additional $300 or so.

The Saturday night ball was where we ran into budget issues. The way we read the contract, we got use of the ballroom for free as long as our total bill was at least $9000. However, what the fine print boiled down to was that we had to spend at least $9000 just on food, and the price for the cash bar, tax and mandatory 18% gratuity was taked on in addition to that $9K minimum. This meant that we would be paying for at least 151 people, even if attendance was only 100, which prompted us to add a lot of last-minute ticket options, offer far too many tickets at below cost, just to get something for those unused seats, and slim down our budget everywhere we could find room, to avoid getting stuck with a huge amount of unused-but-paid-for food. Ultimately, we ended up getting exactly 151 people in attendance (including 10 comped guests and about 30 at discount prices), for a total bill of about $11719.12. ($1000 deposit up front when we made the reservation, the rest paid via credit card at the end of the evening. We made the grim discovery that a debit card has a $3K/day limit, which lead to a fair bit of stress the night of the ball, and a few more overdraft fees than I'd like to admit to.) Renting the hospitality quite as a registration location and focal point for social activities was essential. We paid $681.72 for two nights, which brought our total amount due to the hotel to $12400.84.

Additional costs included $850 for Bangers & Mash (the band that played Saturday night), $242.93 for 2000 VistaPrint advertising postcards (distributed at ComicCon, DragonCon, and locally), and another $210 for gift bags, prizes, decorations, and the like.

The total cost of the Browncoat Ball was $20736.90 and the total income from ticket sales, merchandise profits and cash donations came to $19869.38, which left us with a deficit of $867.52. This deficit was due partially to our misinterpretation of the hotel's contract (which was roughly a $3000 difference, which would have left us with a healthy surplus) and lower than expected registration. By following the suggestions below, this should be a very simple thing for future host cities to avoid repeating.


Post-Ball Fundraising and the Carry-Forward Fund

The 2004 Browncoat Ball's budget resulted in a surplus of $948.72, which can be applied as a carry-forward to cover the deficit of the 2006 Browncoat, if necessary. However, we would very much like to make the 2006 ball self-funding, so that the carry-forward fund can be applied to future events. So we are planning one last potential revenue source to eliminate the deficit before we make the final decision on whether or not to rely on the carry-forward fund.

There are two aspects to the post-ball fundraising plan. The first is the ability for people to donate money directly through PayPal, which is something that several attendees requested. The other is to sell Souvenir DVDs, which will include everyone's video footage and high-resolution photos from the ball. We are still working on acquiring everyone's photos and videos for the DVD and working out the budget for how much they will cost to create. But our hope is that we will be able to create the DVDs for no more than $5 each and sell them for $15 each, for a $10 profit per DVD. If we are able to achieve this target, we would need to sell DVDs to 2/3 of the attendees to break even, but even if only 1/3 of the attendees purchased a DVD we will have cut our deficit in half.

If we still have a deficit after the DVD sales and PayPal donations are complete, we will use the carry-forward fund to make up the difference and the remaining amount will remain in the carry-forward fund for future events. If DVD sales and donations are positive enough to turn our deficit into a surplus, any amount that is raised above the deficit amount will be added to the carry-forward fund.


KEY   LEARNINGS

While the majority of the 2006 Browncoat Ball went of with amazing success, there were several things that we learned about how a future ball might be able to avoid some of the turbulence that we experienced. The following is an outline of the most important of these lessons.

  • Delegation of Responsibility
    The biggest mistake we made in planning the 2006 Browncoat Ball was relying too heavily on two main organizers, and not sufficiently delegating responsibilities for individual tasks to a wider group of volunteers. When we submitted our pitch to host the ball, we assumed we would have more than enough volunteers to act as lieutenants for various tasks, considering the past experience our group had in running fan tables and other events. What we failed to consider was that the group would still be active in planning other events during the same time that the Browncoat Ball was being planned, so our group's resources were spread too thin. The earlier you can get a large group of local volunteers organized, and the more you can run your committee like a small business, with responsibilities and ownership of various aspects clearly defined, the better your chances of success (not to mention avoiding burnout).

  • Additional Revenue Streams
    While we don't want the Browncoat Ball to lose what makes it special by adding a dealers floor and celebrity photo ops, there are still a few additional sources of revenue that can be pursued to help balance the budget and take some of the risk out of relying purely on ticket sales. Merchandising is one avenue that should be explored. The tshirts and posters that Adam created for us contributed $348 to our bottom line, and that was with them not becoming available for sale until shortly before the event (with barely enough time for some items to be shipped in time for the ball) and not having any on-site stock. Sponsorships are another avenue that we considered but did not have the resources to explore since the idea occurred to us so late in the process. Getting a small chunk of change from each of several geek-friendly sponsors (like QMX, Dark Horse, Margaret Weis Productions, Jason Palmer, or other Firefly/Serenity licensees) in exchange for promoting them on your website and/or printed material might be a nice way to supplement the budget without detracting from the quality of the event.

  • Advertising
    We had a lot of good ideas on how to advertise the event this year, but most of them either came too late to implement, or got lost in the shuffle when the main organizers became backlogged and were never executed. Postcards are a great way to advertise an event, but you have to be careful about deciding where/how you distribute them. At venues where there a lot of geeks who might not yet know about the ball (such as comic book stores and conventions) you can get a lot of publicity this way, but if the event occurs too close to the ball for people to make travel arrangements, if most of the people at the event will already know about the ball, or if the postcards are displayed on a table with millions of other fliers where they won't get noticed, this money could be wasted. Downloadable marketing assets (like fliers, web banners or LiveJournal icons) can also be useful, since they allow your potential attendees to spread the word for you among their own online communities and at their local comic book shops. Creative audio spots that can be played on geek-centric podcasts are another great way to get new attendees attention. The 2004 crew had several video "waves" on their website that they used communicate the flavor of the event, which were very enticing. You could even create your own podcast to keep prospective attendees in the loop on recent developments and get them excited about the event. We had considered producing a weekly video podcast of Companion Waltz Lessons to make it easier for attendees to learn some basic dance steps prior to the ball and add to the buzz around the event, but this too ended up falling through the cracks.

  • Be Financially Conservative
    Avoid being too optimistic about your attendance level. If you hold pre-registration to gauge interest before an event, you should consider requiring at least a nominal deposit to eliminate wishful thinkers from skewing your numbers. When planning various aspects of the event, identify items that can be cut or reduced should your budget be tighter than you expected (for example, having the option to downgrade for a premium menu to a mid-range menu). Hope for the best, but plan for the worst. And triple check your math.

  • Negotiating With Venues
    Be very specific when negotiating with vendors and service providers. Ask them for sample bills based on your agreed assumptions before giving a deposit, to make sure there are no unexpected gotchas in the contract. Ask them for a floor plan of the space you're reserving, including dance floor size and what costs extra (they tried to charge us $10/table at the last minute for centerpieces), to make sure that your expectations and theirs are in sync. Make sure you tour the facilities in person and pay attention to as many details as you can so there are no surprises. The same goes for any other relationships you may set up with third parties, be they sponsors, service providers or partners.

  • Ticket Sale Strategy
    Make tickets available for sale as early as possible - at least six months prior to the event date. This will allow people to better fit the ball into their vacation schedule and budget and give you more flexibility should you run into problems along the way. Single-day tickets are also very important if you anticipate there being a lot of locals who won't be able to make it to the entire weekend but would still like to take part int he event. Price them high enough that people have incentive to buy the weekend pass, but try to make them available as an option.

  • Well-Defined Schedule
    Several aspects of the weekend suffered a bit because we did not have a clear schedule printed up in advance. There should have been a welcome package that every attendee got when they signed in which contained times, locations and maps for all of the weekend's events. Instead, people had to rely too much on word-of-mouth and some last minute planning, and the Sunday Chinatown tour particularly suffered as a result.

  • Social Mixer Dances
    We can't recommend enough having a few social mixer dances that people can learn on-site before dancing. Saturday on the boat, lots of people asked if we were going to do the Haymaker's Jig again that night, since they loved it so much the first time. And Joan's Sir Warrick Harrow dance got an even better response. Ammy has volunteered to teach and call the dances at the next ball, if you would like.

  • Happy Hour
    Happy Hour at the hotel bar was a huge hit. Games of chinese checkers came out, and it was a nice social hour on the first night. Even if it isn't free in the future, we would recommend holding something similar again.

  • Love
    You can do all the math in the 'verse, but you take a boat in the air you don't love, she'll shake you off sure as the turnin' of worlds. Love keeps her in the air when she oughta fall down. Tells you she's hurtin' 'fore she keens. Makes her a home.

    In other words, if you're not having fun, you're not doing it right!

 

True Appreciation

As most of you know, I've spent the lion's share of my free time for the past few months organizing the charity fundraiser for the Serenity fan table at ComicCon, to benefit Equality Now. My journal-silence since the event is definitely not due to a lack of things to say. No, I'm still hard at work, tracking down all the prize winners, mailing out tons of packages, updating the website, and trying to make my living room look less like a shipping/receiving dock before Sarah gets here this weekend.

I can honestly say that I have not worked this hard on any personal project, ever before. It has been a hell of a ride, getting to know so many generous browncoats and fans, as well as a few of the Big Damn Heroes, and working my ass off to make sure we could raise as much as possible for Equality Now. It was a uniquely exhausting experience, but also one that was more personally fulfilling than anything I've done in the past ten years (except maybe Noelle & Lewis' wedding). Every day I go to work and slave away at the code mines, working on projects that I have varying degrees of faith in. But it really felt good to go back to my roots and get my hands dirty with some grass roots charity work, like my mother used to do. It was truly a labor of love.

I had a real sense of accomplishment on the drive back from ComicCon. And when I called Mandy at Equality Now to tell her that we had raised over $12,000 for them, the stunned silence was heart-warming. It wasn't just a drop in the bucket like the $2000 we raised for Red Cross at WonderCon - these folks were blown away by what we accomplished on their behalf, and were grateful beyond words. So regardless of any bits of drama that might have taken place at the con, or the bags under my eyes from so much hard work, I'm really glad that I volunteered to run this fundraiser!

But wait, it gets better! Now that I have the website (mostly) updated, including the amount we raised, someone posted a link to it on Whedonesque (a community blog for all-things-Joss). And who should respond but the Big Damn Hero himself!

Joss Whedon's comment on our Equality Now fundraiser!

There's no way I'm not weighing in on this one.

I am SO proud and grateful that this is where the energy of the Browncoats is going. Buffy and Angel fans have always distinguished themselves through their altruism, but this hits close to home in a way probably none of you know.

My mother started what I believe was the first high school chapter of Amnesty International. She was a history teacher, and started a feminism course as well (she also directed plays -- not so much the slacker). Probably her favorite student (and she had many that she loved) was Jessica Neuwirth. Jessica went on to work as a lawyer for Amnesty International and then started Equality Now, which used the Amnesty model to combat gender-based offenses. Jessica is as kind, intelligent and dedicated as anyone I've ever known (and would probably cringe to read any of this.) The idea that my work is on a wavelength with Equality Now's agenda is as gratifying as anything I could wish for. But for the fans to take an active role in helping out this under-recognized cause, and on such a grand scale... it means more than I can say. I have said, in point of fact, much more than I usually would in this forum, but I can't contain my appreciation. My mother would have been so pleased.

There are two ways to fight a battle like ours. One is to whisper in the ear of the masses, try subtly and gradually to change the gender expectations and mythic structures of our culture. That's me. The other is to step up and confront the thousands of atrocities that are taking place around the world on an immediate, one-by-one basis. That's a great deal harder, and that's Equality Now. It's not about politics; it's about basic human decency. And it's more important than... well, than that movie I keep telling everyone to see.

Thank you to the tireless Browncoats and everyone who donated, bid or lifted a finger to raise this money, for making my work mean more than it ever did, even to me.

-joss.

As you can imagine, reading this totally made my day! (And got me a little misty-eyed, I must admit.) But like Joss, I have to give credit where credit is due. Without one very important person, volunteering to run a charity fundraiser never would have occurred to me, and I wouldn't have had any idea how to do it in the first place. That person is my mother: Shirl Markus.

When I was in Junior High, I told my mom that my friend Katy Surritt (my first crush, actually) was no longer at school, because she had been diagnosed with Leukemia. Several years before, my older brother's best friend had died of Leukemia, so this really caught my mom's attention. Immediately, she got in touch with Katy's mom Patty and began organizing a surprise party for Katy. A few weeks later, Katy was picked up in a limo and brought to a Lion's Hall packed with all her school friends that she hadn't seen in months.

But that was just the beginning. My mom has always been big on organizing charity drives. When my brother was in the military during the first Gulf War, she organized a mass-baking circle, and had at least one dozen cookies sent to every single sailor on my brother's ship. So she switched into high gear and started hitting up all sorts of local merchants and businesses for prize donations, and then blanketed the town with fliers and went door-to-door to every business in town, getting people to buy raffle tickets. Not long after, she had a nice fat check (in the neighborhood of $4,000, I think) for Katy and her family, to help defray the medical expenses, as well as a second, smaller-but-still-sizable check that was strictly to be used for going out and doing something fun.

I've learned a lot from my mom over the years. Chief among them is that when you see someone in need, you need to step up and do your part to help. She taught me everything I know about evangelizing Good Works, convincing people to part with their money for a worthy cause, and how the small sacrifices of many can add up to an amazingly beneficial outcome in the end. One of my favorite things about this whole experience is that it has reminded me just how proud I am (and have always been) of my mother, and how grateful I am to have her as a role model.

I love you, mom.


[By the way, Katy has been in 100% remission for close to two decades now, and is the proud mother of a beautiful, healthy baby girl. I'm convinced that she was just too damned stubborn to die. But I think it's safe to say that the love and support she got from my mom and the rest of the community as a result probably didn't hurt, either.]

Drawing from the Hoard

In Neil Gaiman's American Gods, there is a leprechaun who teaches the main character how to pull gold coins out of the air. He explains that there exists a Hoard, from which you can merely pluck what you need. And when you are done with it, it vanishes, returning to the hoard from which it came.

When I made the decision last year to sell off most of my physical belongings to fund my job search, I kept this metaphor close to my chest. Yes, I was getting rid of every movie I owned, almost all of the collectibles I had gathered over the years, and even a good deal of the books that I had had for so long. But I was merely returning them to the Hoard, and would be able to retrieve them again when the time came. And now, as I get back on my feet financially and start to rebuild my collections, I do so knowing that anything I buy is merely snatched from the Hoard, and will eventually vanish back to its origin.

The other day, I was poking through CraigsList at work, and ran across a listing that caught my eye. It was a list of about 100 DVDs, priced at $8 each. The titles were largely high quality, and it was apparent that this was someone's personal collection. But the note at the bottom that read "will sell all for $300" confirmed my hunch that the man who posted it was doing the same thing I had done - returning his prized collection to the hoard, to cover his short term needs and retrieve it again later, when fortune permitted. I felt obliged to help him in his quest, as so many of you helped me by buying bits from my own collection when the need was great.

After doing the math, I determined that I could even turn enough of a profit to snatch back a few of my own lost items from the hoard while I'm at it. I stopped by his place after work, let him haggle me up to $360, and felt good when I saw the same sense of "oh good, that covers this month's rent" relief in his eyes that I experienced when my own collection was liquidated. I pulled out the 20 titles that I wanted for my own collection, and the result is a list of 80 DVDs that are ready to return to the Hoard.

On the practical side, I'll leave the list as is for the next few days so my friends can take dibs on whatever they want. Then I'll push the lot to half.com (the Hoard incarnate, you could say) and let the free market redistribute this gentleman's collection to appreciative hands.

On the philosophical side, I think that many of us can learn a lesson from the Hoard. Which of your possessions are truly valuable to you, and could never be replaced? Which could you easily return to the Hoard for a few years and retrieve again later (or not at all) without really losing anything. How much would you even notice if it were to suddenly vanish from your bookshelf or closet?

And now that I think of it, I suppose the metaphor goes beyond physical goods as well. How much money can you afford to return to the Hoard, so those who have lost everything at the hands of nature's wrath can snatch it back in their time of need? How much time and thought can you spare to bring a smile to the face of someone who is in need of one? How much of your riches are really your own, and not just borrowed from the greater Hoard? And how much more valuable would that collective wealth be if everyone recognized its sacred status as a shared, liquid resource?

So, in the name of putting my money where my mouth is, I make this pledge. Any proceeds I get from selling this gentleman's collection (after recouping my initial investment) will be donated to the Red Cross. At the prices I have listed currently, that would come to a little over $150 (in addition to the $50 I had already ear-marked for the purpose).

What do you own that you wouldn't miss if you auctioned it off and put the proceeds to a worthy cause? It's an interesting question to ponder.