Monday, September 19, 2011

NETFLIX AND THE CHANGE CURVE

Every few years we get the privilege and learning experience of observing corporate decision making first hand, in situ.  And now with social media so pervasive we are all "Players" in that process.

Netflix decided to change the way they do business.  For very real and sound reasons they need to change.  The world is changing and they need to adapt or die.  No one knows that better then Neflix.  A few years ago they profoundly altered the whole concept of acquiring home entertainment; burying a few rather large corporations in the process.  Netflix does not want to become a dinosaur.

As Netflix analyses it's future, it realizes that it's future is in streaming.  With lower costs and wider distribution (Think Mobile!) the choice is a "No Brainer".

How do you do that?  How do you continue to change without destroying yourself?  As Reed Hastings found out, easier said then done.  Now I commend Reed on his apology, although I am more amazed and thrilled by the responses of his once and future customers.  On two fronts,  first the transparency that social media has created in the corporate world and secondly the passion of the discourse.

And as Reed may or may not know, we are center stage viewers of that iconic play called "The Change Curve".  And that play, that fundamental process of every innovative company is not a linear progression upward.  Things get dicey.  They get touchy.  People get upset.  Things get worse before they get better.  It is how you manage that dip, that negative reaction to change, that matters most.

Reed's apology was good.  I would have come out with a more matter of fact explanation, talking about cost of production and skyrocketing content acquisition expenses.  "The Truth will set you free!"  The real beauty was in the feedback Reed got.  Yes they were pissed, but 8000 people cared enough about Netflix to say something.  More importantly to offer suggestions about what THEY want as subscribers!

I am a Netflix streaming customer and I do NOT want to get DVD's in the mail.  The new system doesn't appear to effect me that much.  It does effect A LOT of Netflix customers and they do not like the new "Qwikster" idea.  Isn't that great that Reed got that feedback in real time!

Whether Netflix/Qwikster will lose subscriptions and content and ultimately fail, I don't know.  To quote a movie "It'll be fun to watch!"

Sunday, September 11, 2011

WHAT STYLE IS BETTER?

My recent trip to Napa, although mainly business, did include a few trips to wineries.
Look, you could spend a week tasting wine and not see everything.

Start your tasting day with sparkling wine.  It sets up your palate and is a lite & refreshing quaff.

There is no better place to start then the strategically located @DomaineCarneros.  On a picture postcard day sitting out on the classic veranda...it doesn't get better then that!  Kelvin Pye gave fabulous customer service and the wines where stunning!  I was picking up the '05 Brut which is now out of stock, but the '07 was toasty and smooth.  The Rose' was ripe with hints of strawberry.  And the Reve was sublime, with pear and almond flavors.  Finally the Demi-Sec was rich and creamy with a dash of honey.

I had been wanting to visit @PlumpjackWinery for a long time.  Part of the Plumpjack Group who's founder was former SF Mayor Gavin Newsom, the tasting room has more of a rustic Sonoma feel.  Jared Clevenger was a consummate professional; friendly, informative and attentive.

And now for my question, Is there a fundamental change in what wines should taste like? 

There has been criticism of overripe huge Napa Cabs and Australian Reds driven by Robert Parker's taste buds.  Plumpjack has such a wine.  The '08 Estate Cab is jammy, rich, yummy, and filled with a couple of baskets of blackberries.  It is classic Napa Cab that was wonderful!

On the other side was Plunpjack's sister label Cade '07 Howell Mountain Cab,  This Cab was complex, with minerality, more cola and cocoa with strong herbal essence.  It was a fascinating and interesting wine!

After talking with some folks from Aurora, IL I asked another one of the staff, "Do you sense a perception difference from your customers when they taste these two wines?"  He looked at me with a mix of disbelief and contempt.  Trying to restate the question, I said, "You know the big Cab vs the earthy Cab"
He said, "It's not true!"  I said, "No difference??!!"  "None!!"  was his response.

The worst thing Napa can do is get too defensive about their ripe style.

If you want to sit by the fire and sip an exceptionally rich wine and thoroughly enjoy an iconic wine growing region grab the Estate and be ready to be wowed!

Now, if you are dining next spring on a leg of lamb, asparagus in lime butter and rosemary infused potatoes grab the Cade and let the wine open it's complex character before your very tongue.

In the end the question is mute.
Both wines were excellent; not better or worse, just different.

Saturday, September 10, 2011

WASHINGTON WINE SEPTEMBER 2011

After listening to the @KUOW broadcast of WINE WARS hosted by Marcie Stillman a couple of thoughts came to mind.

First the stellar panel:

Sean Sullivan of the @wawinereport
"Mr Washington Wine"
Who has catapulted himself to the higher echelons of the Washington Wine scene with informed and prolific commentary on all things #wawine.  I've had the pleasure of working along side Sean on many occasions and he is a true professional.

Richard Kinssies of the @grlakewine
 "The Library of Wine"
Has been pushing wine cases for years and there are few people more knowledgeable about all facets of the wine industry.  I've known and admired Richard since his days at the University Village Safeway where he was one of this state's top movers of wine.

Mike Veseth author of "Wine Wars"
"The Globalist"
Brings an educated and rational analysis of international market forces not just on wine.
More importantly he sheds light on the psyche of the consumer and their buying decisions.

They gave us a glimpse of the current Washington Wine Market.  And although they have "forgotten" more about wine than I know, I wanted to add some insight.

My direction is a continuation of what I was sensing from Marcie's comments and also my limited perspective on the US wine scene.

Marcie seemed almost exasperated by the inherent conflict of a loyal northwest consumer who desperately wants to think and BUY local but is forced to act GLOBAL.  See, there are tons of extremely high quality NW wines in the $25 to $45 that we do purchase, but can't afford to drink everyday.  And to find the $10 and under "Bottle a Day" brands we are forced to go to Chile, Argentina, Australia and even parts of France.

Why can't we get more Washington Wines at this price category and/or more value priced NW wine????

The explanations of market history, economies of scale and a world glut were all wonderfully articulated by the panel.  I wanted to add the notion that NW wineries DON"T WANT TO!

They don't want to risk tarnishing their brand to the level of 2 1/2 Buck Chuck.

They are afraid they will never recover their present price points.  No one can absolutely predict the future.  Maybe the NW wineries are short sighted and haven't smelled the coffee.  Maybe those price points, at those volumes will NEVER return.  Many NW wineries have tons of "Old" wine to sell and are cutting back on new vintage production.  So they sit as long as they can with globally inflated prices, hoping that the market will turn just enough for them to sell off their inventory and then more accurately assess production levels.

And when things get tough enough they hide behind "Flash" sales sites or one day only sales to generate cashflow.  Or like Trey Busch at Sleight of Hand they produce 2nd labels like Renegade to move more juice.

Bottom line:

NW wineries are trying to weather a huge global financial storm, move old inventory while trying to maintain a very well deserved image of quality at price points that make their wineries sustainable.

On the high end we are fine.  NW $50 to $150 wines are a steal compared to most other markets.  The local guys like Domanico can use all your help.  Spend a little more and drink LOCALLY!