“If you really want something in this life you have to work for it. Now quiet, they're about to announce the lottery numbers.”
– Homer Simpson
Lotto sales are way up across the country. In Massachusetts, the lottery hit a record high of $4.7 billion in sales. And in my home state -- New York -- lottery sales were up $177 million in the last 9 months of 2008. Scientific Games (SGMS), the largest purveyor of scratch tickets, reports that revenue is up in 25 of the 42 states that have lotteries.
None of this should be surprising. The less money people have, the more tempting the fantasy of hitting it big, quick.
I'll admit it - a few weeks ago, I bought a $1 scratch ticket. I thought, "Why not?" I ended up winning $7, and proudly announced the news to the Minyanville staff. Kevin Depew jokingly acknowledged that I had greatly outperformed the S&P with my little “investment.”
And then an idea was born. With the market in the shape that it’s in, which is the better investment? Scratch tickets or the S&P?
Over the next 4 weeks, I’ll spend $100 on scratch-tickets. At the end of each week, we’ll compare how I did relative to how that money would have performed in the S&P.
Let the games begin.
February 23: Day 1
Over at Minyanville, Terry Woo’s got his eye on JPMorgan Chase. Todd Harrison’s talking about Bank of America.
But I’ve got my eye on a little game called Lucky 7s. Here’s all you need to know: “Rub 9 spots. Get 3 7s in any row, column, or diagonal and win ‘Prize.’ Get 2 7s and a $$ in any row, column, or diagonal, and prize doubles.”
What’s at stake? The chance to win $2,700 instantly.
I’ll be seeing the newsstand guy a lot over the next month, so I introduce myself him. He tells me his name is Harry (Hari?). After a few pleasantries, he hands over my Lucky 7 ticket.
Back up in the office, I scratch away. And lose.
February 24: Day 2
A little perspective on odds.
According to the National Safety Council, the chances of dying from “contact with other and unspecified venomous animals or plants” is 1 in 635,191. That’s actually better than my chances of winning $2,700 from a Lucky 7 ticket (1 in 678,461).
So instead of Lucky 7s, I opt for Take 5, a game with slightly better odds. The chances of winning Take 5’s $5,555 grand prize are 1 in 529,200. That’s markedly better than my chances of perishing from “ignition or melting of nightwear” (1 in 635,191).
I scratch off the Take 5. And lose again. I’m beginning to wonder if this whole scratch-ticket experiment is a fool’s errand.
I’m also wondering how on Earth the odds of dying from an unspecified venomous animal or plant are exactly the same as dying from exploding underwear.
February 25: Day 3
Total change of strategy. I need a broker. Someone who knows which cards are hot and which are cold.
Obviously, Harry is my guy. He’s sold thousands -- maybe millions -- of cards. He’s even been there when a guy turned in a card that won him $1,000,000 a year for life. So I leave it up to Harry. “I’ll take a $2 ticket, any one you want,” I say. Harry gives me a ticket for a game called Pirate’s Gold.
I have 10 chances to win, the card says. And yet, I lose again. At least I don’t have to pay Harry a 10% broker’s fee.
February 26: Day 4
David Flanagan points out that in 2004 Americans “dropped $22 billion on scratch cards. That's more than we spent on movie tickets and video games combined.”
Sounds pretty pathological. But what Mr. Flanagan fails to point out is the sheer joy that accompanies winning a scratch ticket. Like the kind exhibited by this kid, who’s just won $25,000.
Today, Harry recommends I buy a $2 ticket called Green Machine. It’s a new game, he says. Just on the market.
I lose again.
February 27: Day 5
Okay, here we are. The end of week 1. So far, I’m down 6 bucks, which ain’t so bad. My strategy for the week has been, admittedly, all over the place. I started with $1 tickets, moved up to $2, commissioned Harry as my broker, and tried 4 different games. Like a frustrating game of Battle Ship, I’m firing all over the map, but have yet to land a single hit.
Statistically, however, I should walk away a winner today. The odds of winning the lowest prize for most games hover around 1 in 5. In other words, I’m due.
So, I do what any smart investor should do when he knows he’s on the precipice of a big return. I invest big.
“Good morning, Harry.” I say.
“Gimme a $5 dollar ticket, today. Gimme a winner.”
He hands over a ticket called “Triple Diamonds,” a large card illustrated with 3, sapphire blue diamonds sparkling in the center. The grand prize is $1,000,000.
And? Lost again. So far, the return on my investment is down 11%.
The S&P? Down 4.5% for the week. See you next time.
It all goes back to Moby. At least according to Raymond Roker, cofounder or Urb Magazine. If you recall, Moby licensed every track from his blockbuster album Play back in 1999, and since then Roker argues that there’s been a distinct shift in what it means for bands to “sell out.” In short – “selling out” just doesn’t seem to faze artists anymore, and, conversely, brands are more enthusiastic than ever to leverage artists to improve and amplify their creative campaigns.
The increasing integration of popular music into marketing campaigns was the focus of two panels during Internet Week -– “Borrowed Equity: The Trinity of Music, Brands, and Tastemakers” and “Signal to Noise: Interactive Music Strategies That Get Heard in a Crowded Space.”
Here are some key takeaways.
Selling Out Is Dead. Long-live Selling Out.
Before MP3s, the dream of any professional band was to get signed by a label. But file sharing, social media, and the crumbling of the traditional music business pretty much tossed that dream into the garbage. Plus – the Internet is here! We don’t need no stinkin’ suits at Sony to write checks! Right?
Well, wrong. While the Internet has made it possible for thousands of bands to reach new audiences and monetize their art, the dark side of the Internet – namely illegal file sharing – compromised what many people saw as the natural evolution of how artists would get paid. Outlets like Spotify, iTunes, and Rhapsody have emerged to offer bands a fair way to get paid – but still, they’ll never compete with the vast sums of money that the old labels could shower on artists.
Hence, a conundrum. Artists want to get paid for their work. But they also can’t rely on traditional labels or even these new, legal music-sharing outlets to pay them sufficiently.
Enter – the brand. Get your song on a commercial? MONEY! Get a brand to sponsor your tour? MONEY! Get your CD into Starbucks? MONEY AND THE BEST SOY LATTE YOU’VE EVER HAD!
In the past, the practice of a band licensing its music for commercial gains was called “selling out.” But given their limited options for monetization and a fundamental shift in how audiences today are just “okay” with licensing, bands want to team up with brands. And the good news is that brands want to team up with bands.
Here are a few reasons why this mutually-beneficial relationship works:
1. Artists get paid - often handsomely.
2. Brands look cool. (If Modest Mouse likes Nissan, I guess Nissan is alllllll-right in my book!)
3. Many bands have huge followings on Facebook. Aligning themselves with a brand offers an opportunity for those fans to become “fans” of the brand, and vice versa.
Consider the BS Detector
But not all is well in band-brand land. Dave Park, founder of PrefixMag.com, pointed out that that not every band-to-brand relationship works, and that even while audiences no longer crucify artists who “sell out,” they do have sophisticated BS detectors that go off when the relationship seems strange or an obvious money-grab. (Incidentally, if anyone can explain to me why Bob Dylan and Victoria Secret teamed up, let’s talk.)
Take the band Train. These guys partnered with Shazam and Brita to license their latest single for a Brita spot. The partnership, as described by Dan Kruchkow, Head of Digital Strategy at Crush Media, was authentic. The members of Train, he said, are committed to environmental protection. And so is Brita, I guess. Train got paid, Brita got a hit song on their commercial, tours were sponsored, and there you have it – a band-brand relationship that pays off for everyone while supporting a good cause – clean water.
[BEEP, BEEP, BEEP.]
Woopsies, it seems that my own BS detector is going off.
Don’t get me wrong – I believe that given the awful environment for bands to make money, any sponsorship opportunity is reasonable. But the panelists’ belief that a band’s values need to closely align with a brand’s seems a little hamfisted. Why do we need to justify a branding relationship by saying, “Well, they both believe that the environment is important?” I suppose it’s nice when that happens, but come on folks, audiences are smart and, by and large, we’re okay with bands taking the money, press, sponsorships, and hopefully free Brita filters for life and running for the hills.
In other words – we know that selling out is dead. Why pretend like it’s still on life-support by creating tenuous connections between band’s and brand’s values? Again: See Bob Dylan and Victoria Secret.
Amplify the Relationship by Involving Stakeholders
Okay, moving on to how to maximize the relationship.
One great point raised by Roker was the importance of involving key stakeholders and influencers in any band-brand partnership. That means teaming up with videographers, directors, and music bloggers to create authentic, trusted content around the campaign.
Think of it like this: you’re an indie band who’s been approached by Kraft to feature your new single on a commercial. Why not get a hot director to film the commercial? Why not get your favorite blogger to write about it?
By involving artistic stakeholders with their own followings, you can expect the campaign to resonate even more. Just imagine the press for a PT Anderson filmed Chips Ahoy commercial featuring Katy Perry!
A Word of Caution
I’ll admit – I’m a bit cynical about what we’re seeing. On the surface, the benefits for bands and brands teaming up seem great for all the reasons we’ve discussed. Still, I can’t help but feel a bit wary that artists – particularly emerging ones who don’t have fancy lawyers – could be at some risk.
Since the dawn of time, just about every music distribution partner has found some way to screw artists. For the big labels, that might have meant unfair contracts and overbearing influence on the final product (but, hey, at least they paid well). For digital distributors like iTunes and Spotify, it’s still not clear if artists will really be able to make a living through their services, especially since illegal downloading still happens all day, every day.
Why shouldn’t artists be wary of how brands will treat them?
Jedd Katrancha, senior vice president of Creative, Downtown Music Publishing, told me that he agreed it was a challenging question. He stressed, however, that artists need to be proactive about managing their relationship with brands, being careful to examine the nature of the relationship, and always look out for themselves. Still, Katrancha said that in his experience, brands aren’t out for blood – in fact, they often care deeply about the band because at the end of the day they just like the music.
You might expect a panel of veteran journalists to amount to an hour-long mope-fest bemoaning the good old days of bustling newsrooms. Not at Internet Week. Instead, the pixel-stained wretches at The Newstand 2.0: Connecting Publishers and Readers in the Digital Age panel mused excitedly about how traditional publishers and innovative aggregators have embraced tablet and mobile apps to reinvent the news industry.
For brands –- particularly those that understand the growing need to act like a publisher –- following how newspapers and magazines approach digital couldn’t be more important. Industry stalwarts like The New York Times, The New York Post, Time Magazine, and Newsweek have all launched tablet and mobile apps as readers flock to ever-smaller screens in ever-increasing numbers and, more importantly, engage for longer periods of time. Long story short: if you want an engaged consumer –- pay attention to how these guys do it. After all, the survival of their industry literally depends on their success.
The panel was moderated by Daniel Blackman from The Daily Beast, and featured Jesse Angelo of The Daily, Josh Quittner of Flipboard, Melissa Lafsky of Newsweek, and Andrew Madden of Google.
Here are six take-aways from what they discussed:
1. Tablets Are Ideal for Creating Immersive Environments
The tricks of the old media trade aren’t dead, according to Quittner, a veteran journalist who is now editorial director at Flipboard, a company that helps publishers migrate content to tablets. Proper pagination, the ability to turn pages (even digitally), and beautiful artwork are critical for keeping readers reading. Tablets are uniquely designed to support these “old world” charms.
Another relic is, of course, covers. Just last week, Time made headlines when the cover of its latest issue featured a middle-aged woman breastfeeding a 3-year-old boy. Compelling cover images are engrained in the annals of journalism, and again, tablet apps enable publishers to not only feature beautiful photography, but update covers whenever needed. Still, the Apple Store isn’t an ideal place to see those tiny covers –- more on that later.
But just copying and pasting content from your print publication to your tablet app isn’t enough, said Lafsky, who heads up Newsweek’s app. Instead, Lafsky stressed the importance of incorporating interactive functionality to apps to boost engagement. Video, audio, slideshows, quizzes, and games are all in play -– and the more interactive, the better.
2. Digital Distribution Affects Editorial
New platform, new editorial. Makes sense.
Over at News Corp’s The Daily, which happens to be the Number One news app in the market, Editor in Chief Jesse Angelo said that a single photo that might otherwise appear on one page of a magazine could look fantastic spread across three screens on a tablet. Beneath that photo you can slap on your headline, then perhaps an audio clip or any other media that makes sense. Again, the lesson here is that the content has got to fit the platform — anything less is lazy, and readers will respond accordingly.
Getting back to covers: during one entertaining exchange, Quittner shared his “fantasy” of tablets having a screen on the back that would show the cover of whatever publication a person was reading so that other people could see it. Of course, his fellow panelists were quick to point out that social sharing essentially replaces that public-facing functionality of traditional print. Perhaps Quittner could have pointed out that while social sharing keeps content moving, it doesn’t have the same air of anonymous discoverability that you experience when you see someone reading a book or magazine on the train and think to yourself, “perhaps I should read that,” or “I can’t believe she’s just getting around to reading Eat, Pray, Love.”
3. Monetization Is Easy! And by Easy I Mean No One’s Got a Clue
Fact is, traditional print still makes the money. And even as more and more publishers go digital, monetization remains a challenge. The panelists did, however, raise two interesting points.
- Ads on tablets can be interactive, boosting the amount of time a user spends with the ad and, ideally, increasing cost per impression. The downside is that it costs a lot more to develop interactive ads, so … yeah … there’s that.
- People are willing to pay for content that is either extremely relevant or essential, according to Quittner. He called out The New York Times and Wall Street Journal as two publications that have made themselves, by way of great editorial, “essential.” And yes, people will — and do — pay for subscriptions to essential media.
4. Did You Know That iPhones Are Important?
Of course you did! But here’s why it’s important for publishers (or brands):
For starters, research shows that people use their desktop computers in the morning and at night. In between, there’s a whole lot of daylight when people use their iPhones. Angelo said that The Daily had always planned to build an iPhone app, but the key driver of its development was that “users wanted it.”
However, Lafksy pointed out that the adoption of iPhone apps is essentially at the mercy of Apple, which, she complained, needs to do more to speed up download rates. After all, if a gorgeous and useful app takes too long to download, who cares? So a note to Apple: please, decrease download times — the future of digital publishing depends on it. Mmk? Thanks!
5. What’s Better – a Great Headline or an SEO-Optimized One?
Yours truly asked the panel that given the implicit reduced power of graphic covers to compel readership (again with those covers, I know…) what’s more important — an SEO optimized headline or a really clever one?
The answer wasn’t clear — but the overall sentiment was that a great picture is preferable (“a picture of a baby panda will always do better than a headline,” said Angelo), and that readers are sick of Huffington Post-esque click-bait headlines. Successful headlines fall somewhere in between.
No doubt, these folks understand just how important SEO is. And no doubt their editorial teams have had to brush up on their SEO headline-writing skills. However, the panelists are, after all, in the content business. And that means always stressing the importance of great editorial at the expense of nothing — seriously nothing — I mean, they’re all losing money doing this, right?
6. The future Is bright. Oh, and You Still Need a Website.
Is monetization a challenge for digital publishing? Yes. Still, every publisher knows and wants to build digital platforms because that’s where the world is headed. What was most encouraging from this panel was that four veteran journalists have found their way into digital publishing and aren’t bitter about it one bit. Nope — these guys are excited. Most encouragingly, it’s that veteran experience that keeps the “traditional” assets of publishing — from great headlines to great covers — relevant in the digital space. Great content, it turns out, is still job one.
One last thing — with all this talk of apps it’s easy to think “I don’t need to build a website!” Wrong. The panel agreed that websites are still a critical component of a publisher’s digital ecosystem — even if its primary platform is an app.
Angelo pointed out that the number one used app on iPhones is Safari. So of course people still surf the Web, and publishers still need to have a website to support their publications.
Recessions are a time to look inward to find what’s really important in life. For many men, that means looking really inward (and southward), to their sperm.
Applications for sperm donation are way up across the country. And why shouldn’t they be? Selling sperm for cash has long been considered a get-rich-quick scheme of sorts for men during recessions.
Ty Kaliski, Director of Operations at Cryos International in New York told me that he’s seen an increase of 50-100 applicants a week.
Scott Brown, Communications Manager at California Cryo -- one of the nation’s oldest and largest sperm banks – told me that he’s seen a 15-20% increase in potential donors.
When asked why the applicants were interested in donating sperm, “the majority list an economic incentive,” Brown said. “But the majority also lists an altruistic interest.”
While it’s refreshing to think that thousands of young men are lining up to donate their DNA because it makes them feel good, the financial benefits of sperm donation are a more likely motivator.
At Biogenetics in Mountainside, New Jersey, men get paid $100 per sample. Donations are limited to a one-year window, but if you can manage two visits a week you could theoretically earn $10,400 (not to mention experiencing the rare, paternal joy of having fathered 104 kids).
Donors at Biogenetics can earn as much as $500 per sample if they enroll in a new program called Open ID that allows sperm recipients to meet the donors face to face.
So far only two individuals have participated in the new program.
But the surge in sperm donor applicants doesn’t mean more men are actually profiting. In this business, only the best and the brightest sperm ever make it to market.
When I asked Scott Brown at California Cryo about the basic requirements of being a sperm donor, it started off pretty basic. You have to live near the facility (you’ll be going there a lot), you have to be between 19 and 39, and you have to be in good general health.
But you also have to be 5’10 or taller, go through a series of interviews, take numerous semen and blood tests, submit a family history that goes back at least 3 generations, and have graduated from or be enrolled in a 4-year university. Oh, and the competition is stiff. Most of the accepted donors have gone to places like Stanford, Princeton, Yale, and UCLA.
“It’s easier to get into Harvard than Cryo,” Brown joked. “We have a lot of initial window shoppers.”
By the end of the screening process, only 1% of applicants ever see their sperm on Cryo’s sales rack.
At Biogenetics, the screening process is equally rigorous. During the interview process, expect to be asked questions like: How many days a week do you exercise? What kind of books do you like to read? Do you like eggs?
All of these answers will be shared with potential recipients.
Albert Anouna, Director and CEO of Biogenetics, told me that only 2% to 8% of applicants are ever accepted as donors at his facility.
It may seem eugenically unfair (after all, some apples do fall far from the trees), but sperm banks are like any other business, and competition has only gotten tougher in recent years. For starters, advances in technology have made it easier for couples who are reproductively challenged to conceive without hitting up the banks.
“The biggest challenge for us is that the science is always improving,” says Brown. “People who would have been our clients 5 years ago aren’t anymore.”
The same holds true at Biogenetics.
“In 1985, I was sending out 11,000 vials a year. Today, we’re doing about 75% less than what we did in the 1980s,” says Anouna.
To compensate, sperm banks have upped their presence in other sectors of the sperm-preservation business. Men in high-risk jobs like the police, military, and at scary chemical plants often have their sperm frozen in the event of an accident that would disable their reproductive systems. Same goes for cancer patients who are about to undergo chemotherapy.
Also, sperm banks are seeing a spike in same-sex couples and single women looking for sperm. At California Cryo, Brown says that close to 60% of sperm recipients are same-sex couples, and he expects that number to increase. Sperm banks are also increasingly getting into the business of what’s called “directed donation,” wherein someone requests sperm from someone they already know.
So where does that leave our poor young man eager to make a quick buck in the economic storm? Not very far. Ultimately, if guys want to engage their entrepreneurial spirit, they’ll have to rely on their heads up north.