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Walmart An Environmentalist? March 19, 2007

Posted by Elaine in Business-Society Issues, Consumers, environment, monopoly, Public Interest.

This is actually dated two months back, but it’s relatively new news to me. Apparently Walmart is trying to clean their image up as a unmitigated, corporate evil into.. an environmentalist leader. In the works are the plans to become the largest user of solar energy. More than a year ago, Mr. Scott, the company’s chief executive, began reaching out to some of environmental groups, telling them that Wal-Mart, long regarded as an environmental offender,

Wanted to become a leader on issues like fuel efficiency and greenhouse gas emissions.

Walmart is trying to put energy efficient light bulbs into 100 million homes. These bulbs use 75 percent less electricity, lasts 10 times longer, produces 450 pounds fewer greenhouse gases from power plants, and saves consumers $30 over the life of each bulb. The only problem is that these bulbs are eight times as expensive as a regular light bulb, and it also gives off a harsher light. As of today, only six percent of American households use these energy efficient bulbs.

Walmart is such a powerful company that it has a lot of say in what it wants to happen. General Electric expressed their concern regarding these light bulbs and told Walmart to take this revolution slowly. Walmart’s buyer responded, “We are going there. You decide if you are coming with us.” Not a lot of companies can get away with being so snippy to General Electric, the second largest company, but Walmart got its way and are now a strong advocate of these energy efficient bulbs. It is even working with Yahoo and Google to see how they can help promote these bulbs.

How do you feel about this situation? Is this an effort to improve Wal-Mart’s appeal to the more affluent consumers the chain must win over to keep growing in the United States or is this a genuine attempt to help our environment?

I believe Walmart is trying to promote its image, but at the same time helping out our ecosystem. They cannot possibly be making much profit off these energy efficient bulbs, but they are pushing for its success anyways. It is their first step in taking a positive direction.


Can YouTube resist organizational change? March 19, 2007

Posted by Lady in brand, Consumers, Internet, monopoly, Organizational Environment, sustainable development.

I recently read an article entitled, “YouTube struggles despite dominance” which discussed how YouTube is struggling to compete for the business of media companies even after the fact that they were recently acquired by Google.  YouTube’s inability to prevent unauthorized uploads has caused them to lose potential deals with prominent media companies such as Viacom. In addition, some media companies such as Viacom were not pleased with the way YouTube attempted to seal a deal because they felt as though YouTube did not display “respect for their content.”

Analysts have different opinions of what this problem would do for the future of YouTube. Some analysts believe that YouTube needs to make a change in order to build long-lasting relationships with some of these media companies. They believe that they need to adopt new technology to prevent unauthorized uploads and also establish trust with these media companies by protecting the media companies’ copyright terms. Without making some necessary changes, these analysts believe that YouTube will eventually lose out to its’ competitors such as iFilm and Revver. Other analysts believe that YouTube can easily obtain deals with media companies just because of their brand name. These analysts do not believe that competition is a big threat to YouTube.

I chose this article because it shows the existence of some forces of organizational change within YouTube. They may need to do some things differently in order to continue to compete for business with these media companies. What are the forces of change? Well the obvious one is competitive forces since media companies can seek service from competitors such as iFilm and Revver. Might there be social forces working against YouTube because of the increased demand for established trust with these media companies and demand for software that would protect the media company’s content? I believe so.

Does YouTube need to give in to these forces of changes? Or does YouTube have enough bargaining power to resist these forces? Might their strategy of being the most dominant and popular free video sharing website allow them to resist making the changes that these media companies prefer? I believe that this may be the case in the short run. However, I believe that it will not be sustainable once YouTube’s competitors become more popular and trusted by these media companies.

CBS Cashing In March 6, 2007

Posted by collage9 in advertising, allances, Internet, media, monopoly.

We all know about the excitement that March Madness brings every year, especially with the recent success of our basketball team in the tournament.  I know I’ll be watching intently as I do every year.  But perhaps this biggest winner in all of the excitement is CBS, which has the exclusive rights to televise every game in the tournament.  This year TV ad spending is expected to surpass $500 million, which would be a record high.  Everyone knows how big of a deal advertising is during major sporting events, and CBS is definitely cashing in. They also aired this years Super Bowl, which as we all know probably has the most sought after advertising spots on television.

Not only is CBS making money on the television advertising, but they are also beginning to air games on the internet.  Starting last year CBS decided to make available all games over the internet for free and the idea was a hit.  Previously, they had charged $19.95 for the service, but after deciding to air them for free the number of users watching sky rocketed.  The important thing is that the internet broadcasted games will feature different commercials than the television broadcasts.  Not only will companies be vying for the rights to television spots, but now also on the internet as well.  In addition to the internet broadcasts, CBS has also made a deal with DirectTV to create a Mega March Madness Package for $69 that will air every tournament game.  Basically, the company is making a killing off of the yearly tournament and are really the ones driving their competitors mad.

Merger Would End Satellite Radio’s Rivalry – New York Times February 20, 2007

Posted by Jordi in media, monopoly, Technology.

Satellite radio is an interesting example of new technology. Is this a good merger for the companies? For consumers?

Merger Would End Satellite Radio’s Rivalry – New York Times
The nation’s two satellite radio services, Sirius and XM, announced plans yesterday to merge, a move that would end their costly competition for radio personalities and subscribers but that is also sure to raise antitrust issues.

In general, companies would like monopoly positions even if it is’t in society’s or even their own long-term interests (monopolies tend to get sluggish. Think of the British Naval study by Parkinson (page 122) where ships decreased by 2/3rds while dockyard officials increased 40% and central staff increased 79%). The article points out that this is likely to spark review by federal antitrust regulators. According to economic policy, the concern of regulators is pricing. Your electric company is regulated because you have no substitute for electricity (would widespread power distribution capacity, like solar on every house, change this policy formula?). So, would a combined XM-Sirius company be a legitimate natural monopoly? Or is it a non-issue due to other disruptive technologies? In other words, if they try and raise prices, would consumer simply opt out for broadcast radio, Internet radio, or other media? The contestability of the marketplace will be the main argument of the two radio media companies.

A wrinkle here is the economic struggle being fought through the proxy of community standards. The National Association of Broadcasters issued a statement immediately :

“In coming weeks, policy makers will have to weigh whether an industry that makes Howard Stern its poster child should be rewarded with a monopoly,” it said.

Howard Stern was signed by Sirius for a deal worth $725 million in cash and stock. Since then, Sirius’ subscriber base has been growing much faster than XM’s.

Another possibility is that federal regulators will allow the monopoly to go forward, but only if the Sirius-XM lovechild allows others to play ball. In other words, they still have a monopoly on content provision even if they do not price as monopolists. This was the solution applied to AT&T and Microsoft- that their monopoly control over platform technology required they be open to third party providers. Personally, I wouldn’t mind this outcome as it would to a broader diversity of programming.

As it turns out, the SMIF class has purchased Sirius stock. I am going to ask their analyst, John Kimball, what he thinks and see if he will post in the comments here.


Here is their channel line up.XM Channel line up