Principles of new product marketing - business-to-business style

I was inspired by reading this post by David Olson from the Product Development and Management Association blog. David lists fifteen principles for successful new consumer product marketing. I've worked exclusively in business products and services in my career, so David's post caused me to consider what a complementary list for business products would look like.

I only had enough energy for five principles. I'm sure there are others... weigh in, please!

1. Talk about the benefits--not the technology. The job of marketing is to decrease the emotional distance between the prospect and the product, to bring the prospect near enough that sales can close the deal. Jabbering on about technology at the expense of concrete business benefits increases that distance.
   
   
2. Realize that all products have faults--you're just more aware of your own. I recall a sleepless night before a big trade show, with the glow from my demo monitor creeping under the door to the adjacent room, where I went over and over the many faults with my product and how poorly it would demo compared to the competition, which of course was perfect. I was wrong on both counts. The demo went fine, and, lo and behold, the competition had problems too--which we learned in time how to capitalize on.
   
   
3. The sale is only the beginning. Most business products require extensive after-sales support, and almost always form a platform for add-on sales. Be ready for both. In particular, make sure you have a good business model for making money on after-sales support, the revenue from which often far exceeds the initial purchase price. (Harvard Business Review--subscription required--had a really good article on this topic recently.) Do this job right, and your product can make a ton of money over its life-cycle, and last longer than you ever anticipated in your business plan. Screw up (I speak from experience), and you can find that sales are something you dread, not welcome.
   
   
4. References are the coin of the realm. Most business purchases, rather than being positive, uplifting experiences, are filled with dread and risk on the part of the buyer. (See a prior post on this topic.) The best way to make a buyer feel comfortable with your product is to have an array of stories of how it has helped companies like his/hers--preferably delivered and endorsed by the customer directly.
   
   
5. Make the product easy to sell. Don't skimp on training. Develop high-quality marketing materials. Invest in high-quality sales support staff. Do your homework on pricing, competition, etc. Eliminate complexity whenever possible. Solicit input from key salespeople for product packaging, positioning, etc. And, if you want to use indirect channels, an easier-to-sell product will capture more of the channel's mindshare and incent them to promote it to their customer base.
   

marketing, product development, innovation

What's in a product name?

This story about restaurant names from National Public Radio this past Sunday got me to thinking about product names. Specifically, the following question:

Are they important?

And, why are good product names good? (Let's agree that there are innumerable reasons why bad product names are bad.)

Let's start with some good names. iPod, Swiffer, 787 Dreamliner, salesforce.com, Google, Yahoo, Kleenex, Tivo, eBay, Skype (a great name), MySpace, SawzAll, Walkman.

These names add value by making it easier for customers to remember the product, and to have those memories and associations be positive ones. Which improves the effectiveness of advertising and public relations, facilitates word of mouth, attracts retailers, etc. Which means more sales. That's important.

Want a good product name? Make it:

1. Easy to say. Try saying "iPod." Easy. "iPod. iPod. iPod." Still easy. Ditto Google, Yahoo and eBay. A related observation: brevity works. I'm no linguist, but easy to say helps make it...
   
   
2. Easy to remember. But consider this: it doesn't have to mean anything to be memorable. If you think too hard about what Walkman or Gameboy means, your head may explode.
   
   
3. Indicate something about the product or its function. (Not a requirement, of course.) Sawzall is the best example of this I know. It does what it says it does.
   
   
4. Indicate a heritage, if applicable, without being trapped by it. 787 Dreamliner nicely echoes Boeing's proud jet heritage, but adding the descriptor signifies the airplane as a significant break--just as Boeing intends. Beautiful.
   
   
5. Avoid numbers. Numbers are the cop-out of every product marketer. "Just call it Model 75. That will sound cool." Please note: numbers rarely have any product-related meaning, and they are used in such variety that they're just noise. As an example, note that you can do a Sudoku puzzle a couple of weeks after already completing it without remembering a single answer. Only BMW, with its consistent naming approach (tiny 1-Class, small 3-Class, medium 5-class, etc.), and Boeing--equally consistent--have very distinctive number-based names.
   
   
6. Finally, though a name is important, a great name can't do much for a lousy product. If Microsoft had blamed the failure of Windows versions 1 and 2 on the name, we'd all be using Macs today.

marketing, product development, innovation, naming, branding

Vacation interlude

Sorry, everyone, for the break in posting. I lost two computers last week and am about to head off on a much-needed vacation. Please stop back on 28 August for fresh posts (and, hopefully, a fresh perspective).

Either that or the sea air will rust out my brain. We'll see.

See ya in a week or so.

Regards, John

Successful innovation takes PIEER

Seven or eight years ago, I attended a lecture at Atlanta's High Museum of Art. The speaker (whose name I long ago forgot) was a professor of cognitive science at MIT. In many ways, his talk was standard--he showed slides of artworks and had us look at them, then he discussed the paintings and asked us questions. But instead of critiquing the art, he talked about how the audience should look at art. How could we use our mind to get more out of our trip to the museum? In his talk, he laid out five requirements for truly appreciating art.

And while I thought of his lecture whenever I went into a museum after that, I also found the five requirements useful at work. To me, they mapped as well to the disciplines of innovation and product development as they did to art appreciation.

(If any reader recognizes these or, especially, the professor who did the talk--I've searched Google unsuccessfully to date--please let me know. I'd love to cite him by name.)

Here they are, with my paraphrases of the professor's comments:

1. Persistence - you cannot appreciate art by "wall crawling." You must stand and look at a picture for a long period of time. As you do, more details will become visible and your understanding will grow.
   
   
2. Imagination - you must bring your creative mind to the work of art. What's happening outside the frame of the above painting? How would it look if you viewed the scene from behind? If you were in the painting, where would you be?
   
   
3. Explanation - you must build hypotheses to explain what the picture is trying to say. For example: "This painting is a celebration of community."
   
   &
   
   
4. Evidence - you must be able to cite examples that support your hypotheses. It's not enough only to say, "This painting is a celebration of community." You must be able to add, "because it has lots of people working together at different tasks."
   
   
5. Resourcefulness - you must use all resources at your disposal to understand a work of art. If you grew up in a farming village, compare this view to a similar view of your village. If you grew up in a city and never saw a scene like this, how does it compare to what you imagined a farm village would look like?

Think about the five requirements. Do they apply to your work? Would a greater application of persistence, imagination, explanation & evidence, and resourcefulness serve you well?

marketing, innovation, product development, art

(painting "Cotton Ginning Time" by Mattie Lou O'Kelley, via the Carl Vinson Institute of Government at the University of Georgia)

News flash: you have to observe and listen to customers to create great products

Yesterday's New York Times business section featured an article describing a hedge fund, a design firm and a software maker who found success by carefully watching and listening to customers, interpreting their input, and using that information to guide their investment decisions/design choices/marketing decisions.

It seemed very insightful when I read it. Yet, after reflecting on it overnight, it seems, well...

obvious?

So let's leave the article, which is well worth reading in its entirety, for the moment and discuss this: why is it so rare that companies observe customers closely and, even rarer, use that information to improve what they do?

Basically, it comes down to an issue of trust. Designers, executives, etc., trust their judgment more than they trust their customers'. Psychologist Daniel Gilbert, in his New York Times essays, has touched on this more than once. People overvalue their own opinions and undervalue those of others (especially those who lack comparable expertise).

The QuickBase example referenced in the Times article is interesting. The product, a software-as-a-service offering, was created for individuals and small businesses. After rolling it out, Quicken found that the target customer base was not interested in the product. Instead, small workgroups at midsize and large corporations were using it. (A neat thing about SaaS, from a marketer's perspective, is that who's using a product, and which features they're using, is easily tracked.)

Here would be the typical marketing response to that information. "Something's wrong. Let's work HARDER to convince the target market to buy the product. Let's add some more features and perhaps they'll grow to love it." Rather, Quicken did something sensible but rare--they revised their marketing approach to target the customers who found value in the product.

The smartest thing the marketers did was to rethink their views when faced with contrary evidence. Perhaps we can all enhance this skill. It's called humility.

marketing, innovation, strategy

The best approach to fighting air terrorism may be the simplest

The New York Times today printed an editorial that asks a provocative question: is standardizing the near-ban on carryon items used by British airports in the wake of the foiled liquid-bomb plot the cheapest, most effective solution to improve air security?

For the past fifteen years, I've traveled up to 75,000 miles per year on airlines, including a fair amount of international travel. I usually carry on at least a backback briefcase stuffed with a laptop, PDA, music player, books, crosswords, documents, snacks, etc. It's almost inconceivable that I could survive a trip with merely a Ziploc bag of personal items.

Yet I know I could survive. We all could. And the airlines could go a long way toward making it tolerable on board without all your own stuff--bring back onboard meals, a selection of magazines, sophisticated video and audio entertainment a la JetBlue Airlines, even decks of cards (remember when those were offered on every flight?).

And investing additional billions in more complex detection equipment, which the next terrorist innovation will evade, is almost too depressing to consider.

How about it? A no-carryon policy to combat air terror. We could live with it.

(Photo from AP/Wide World Photo)

New York Times, innovation, terrorism

How will musicians get paid in the 21st century?

Listening to music is one of my favorite hobbies. Today, though, I find myself wondering how all the bands I like can possibly make a living in the post-CD music world, where entertainment choices abound, mainstream radio is a graveyard and paying for music seems passe to some.

The changes remind me of a famous prediction Esther Dyson made twelve years ago, in an article that originally appeared in "Wired" magazine. Said Dyson:

In the new communities of the Net, the intrinsic value of content generally will remain high, but most individual items will have a short commercial half-life. Creators will have to fight to attract attention and get paid. Creativity will proliferate, but quality will be scarce and hard to recognize. The problem for providers of intellectual property in the future is this: although under law they will be able to control the pricing of their own products, they will operate in an increasingly competitive marketplace where much of the intellectual property is distributed free and suppliers explode in number.

Sounds like a pretty accurate description of today's music environment, doesn't it?

Thinking about it this way, there's very little that major labels can do for the vast majority of musicians. The main value they had in the past--paying for expensive studio time, maintaining relationships with retailers, influencing radio airplay--have much less value today given technology advances and the homogenization of mainstream radio.

What can be done? How can musicians survive in this scary new business? This Wall Street Journal article describes how bands can develop a following online. Yet they're still not sure how people can make a living.

There is a way, for those bands enterprising enough to create a business around the fan base they build. Independent bands like Clap Your Hands Say Yeah, Dr. Dog and Brookville have had success (meaning making a living, not becoming rich) through taking control of their own careers. Aimee Mann, Michael Penn and Ani DiFranco have also done well outside the music mainstream. It's a lot of work, but you can make a living. You just can't leave the business side to someone else.

Here are some suggestions at how to make a living making music:

• use the internet to build a fan base (the WSJ article, here via the Pittsburgh Post-Gazette is a great primer on this)
  
• record and produce your own material
  
• own your master recordings
  
• hire a label, if you need to, to distribute your record
  
• tour a lot and make sure you make money off your touring
  
• license your songs for films/TV/whatever
  

It's almost a bigger challenge for listeners. How will you find the best music if the major labels can't or won't bring it to your attention? Here are your keys:

• subscribe to satellite radio
• seek out tastemakers for the kinds of music you like (for me, the main ones are Nic Harcourt of KCRW in Santa Monica and John Richards of KEXP in Seattle) and subscribe to their podcasts
• invest in bands you like. Buy their CDs or pay to download tracks
• go see bands live
• when you hear something you like, tell your friends

It will be fascinating to look at the music business ten years from now. I'll bet it looks completely different.

marketing, innovation, music, strategy

Is revenue sharing the way to improve 3G mobile handsets?

In this article from RCR Wireless News, one of the United States' leading wireless industry publications, author Colin Gibbs takes up the question of "how can mobile carriers increase usage of wireless data" and discusses a unique proposition--share data revenues with handset manufacturers.

The article references a report from Strand Consult, a Danish market research firm. The thesis of the report is that carriers could increase wireless data usage if only there were better 3G handsets. (And handsets do have a long way to go. Reference this review of LG's Chocolate 3G phone from the Wall Street Journal's Walt Mossberg.) Yet the manufacturers are selling tens of millions of sleek design statements with basic features, like the Motorola RAZR, while smartphones remain a niche product.

Would a revenue share spur manufacturers to develop better handsets, which in turn would spur more usage of 3G, creating a virtuous cycle in which everyone makes more money? It certainly is a very different business model than exists today, in which the handset manufacturers sell their products to the carriers, who then resell them to end users, frequently (in the US postpaid market, anyhow) with a subsidy to reduce the initial price of the phone.

Alas, we may never get a chance to find out. According to Colin Gibbs at RCR, the carriers have little if any interest in another revenue-sharing partner for their mobile content offerings. So we'll just have to wait until one of the manufacturers develops the killer 3G phone--the RAZR, if you will, of the smartphone era.

(Apple, where are you?)

marketing, innovation, alliances, strategy

IBM makes purchase to energize outsourcing offerings

The news on Friday that IBM had bought MRO Software carried within it a message that may have escaped many readers. Says this article in the New York Times:

IBM is pursuing a strategy of trying to apply more scientific and technology to its $47 billion-a-year global services group.

What does that mean? Think about plain-vanilla data center outsourcing. IBM (or EDS or CSC) takes over a company's data center, their staff, etc., and runs the company's existing applications on its behalf. Perhaps there's a cost savings, perhaps the service levels improve. But there's a limited amount of added value that the outsourcer can bring simply by deploying their processes and their data center space with a client's applications and infrastructure. As a result, large outsourcing deals (making up the lion's share of that $47 billion) often have EBIT margins in the single digits.

Now imagine that IBM could bring some proprietary technology, say the MRO software, to bear. By re-engineering a customer's business processes, then applying their software technology, IBM could dramatically improve the cost/service level equation. They could share some savings with the clients, giving them a cost advantage versus their competitors, and improve their margins as well. And by tying the solution to software that they own and know intimately, they add to their offering's stickiness with clients. Says the Times:

Success in these new businesses requires not only having skilled experts to design new service offerings, but also being able to automate as much work as possible. “You assemble these service solutions with pieces that can be put together, and pieces that embed knowledge — that’s software,” [IBM Strategy and Technology VP Kristof] Kloeckner explained.

That's what's behind the acquisition from a Global Services perspective. It was also part of the rationale of the PriceWaterhouseCoopers Consulting acquisition several years ago. IBM wants to "energize" their outsourcing offerings, an ambitious goal that holds the promise of improving their profits and, not coincidentally, providing a defense against low-cost outsourcers from India.

EDS took a stab at this several years ago with their acquisition of AT Kearney, and that didn't work. But PWC was stronger than AT Kearney, and EDS was never the software powerhouse that IBM is. So IBM is much better-equipped to make "energized outsourcing" a reality.

innovation, outsourcing, acquisitions, strategy

Corporate blogging part 4 - blog review

Some general observations. With few exceptions, the CEO blogs (I'm using that term loosely... a few of the blogs were by CTOs or division Presidents, but they were close enough to CEOs in my view to be included in the assessment) lacked a couple of key blogging requirements:

1. Post frequency. Most of the blogs had fewer than 10 posts per month. Many had fewer than five. And a number that I checked had ONE post in total. Just my theory: a blog with one post isn't a blog.
2. Humor. This was in exceedingly short supply in the CEO blogs, even the best ones. Other emotions showed themselves: a great deal of earnestness, a surprising amount of whining/complaining about others (competitors, unreliable suppliers, etc.), a tad of ego--not unexpected. But folks--lighten up a bit, will you?
   

With that said, here are the awards:

Gold Medal:
Matt Blumberg, CEO Return Path. Blog: Only Once. This blog has a theme, an interesting one, that makes you want to engage ("You're only a first time CEO once"). And he keeps to the theme--what he's reading; challenges with hiring; people he meets through his role. It's fascinating. There are plenty of posts. More humor than any other blog, and a good amount of sharing who Matt Blumberg is beyond the office. There's not much sales pitch, and what is there is not unwelcome because the rest of the blog is so winning. Great job, Matt!

Silver Medal:
Craig Newmark, CEO Craigslist. Blog: Craigblog. Lots of posts--nearly one every working day. No sales pitches. A view inside Craigslist, interesting ideas on politics and the law. His pet items (citizen's media, net neutrality) are right out there. A brief but good list of external links. And enough of a view into Craig as a person.

Honorable Mention:
Mark Cuban, Dallas Mavericks, HDNet, et. al. Blog: Blog Maverick. Read a few posts on his blog, and you know him completely. There is absolutely no distance or artifice in his blog. It's all Mark. And he's a nut for sure, but a nut who'd be fun to hang around with.

Worst Corporate Blog:
Randy Baseler, VP Marketing Boeing Commercial Airplanes. Blog: Randy's Journal. I was suspicious from the very outset. When a company's most prominent corporate blog is by the marketing guy rather than the CEO or someone like him... watch out. Sales pitch is coming. And does it come: post after post about the 787 Dreamliner, 777, Next-Generation 737. They're unbelievably great airplanes. Why would you fly anything else? Boeing rules! It's endless. And completely predictable.

In one post, you get surprised. He's praising the competitor, Airbus, on their new A350 concept. But wait--here comes a zinger: "One might question whether they can do all those things and also produce an efficient airplane, given that they have not incorporated all the breakthrough technologies of the 787 Dreamliner."

Grace and class are qualities that apparently elude the commercial aircraft industry.

Incompletes (inadequate numbers of posts):
John Mackey (Whole Foods Markets), Diane Greene (VMware), Mena Trott (Six Apart). Folks, time to add some posts or take down the blogs. You're wasting disk space.

marketing, weblogs, corporate blogs

Corporate blogging part 3 - blog review preview

It's time to take a look at some high-profile corporate blogs and discuss them--are they worth reading? Do they provide any unique insight? Are they, God forbid, frequently-updated sales pitches?

The New York Times on Saturday took CEOs to task for not writing enough blogs. Says the Times:

Capital markets function as they should when the flow of information is strong and unimpeded. ...For the chief executive sincerely interested in increasing information flow to the fullest range of stakeholders, a blog is a hydraulic wonder.

This post from David Utter at webpronews states that fear of running afoul of Sarbanes-Oxley and securities laws may severely limit blogging from public-company CEOs. And with one current CEO blogger (Jonathan Schwartz of Sun) from a Fortune 500 company, according to the Times, so far Mr. Utter looks like a prophet.

Methodology: I searched Google for "ceo blogs" and selected all the blogs I could find on the first few results pages AND the blogs listed on Mario Sundar's list of top 10 CEO blogs AND some blogs from the NewPR Wiki list of CEO blogs (from that list I used companies I had heard of).

And tomorrow we'll put it all out there: the good, the bad and the ugly from CEO blogs.

marketing, blogs, corporate blogs, strategy

Satellite phones make a comeback in "Miami Vice"

OK, OK, I just can't let "Miami Vice" go. But of the movies I've seen in recent years, it stands alone in its celebration of the nobility of work and how technology is interwoven into law enforcement (never mind lawbreaking). Surveillance video shot from AWACS, lipstick-camera video... and satellite phones.

Oh, yes. Crockett and Tubbs are never far from their Iridium phones. Identifiable by their cigar-shaped antennas, they are the personal communicator of choice for our favorite undercover cops and their drug-trafficker targets as they jet/powerboat around North and South America and the Caribbean.

I was peripherally involved with the satellite phone industry (both Iridium--a Motorola brainchild--and its main competitor Globalstar) back in the mid-90's, when they were predicted to gain a large market with intercontinental travelers and in remote areas where cellular had not yet been built out. The concept was brilliant--a single phone that could call from any point on the globe to any other phone. Of course, the cellular networks spread before all the satellites could be launched, then they interconnected those networks, and the satellite companies never gained critical mass. This interesting site has a collection of information and links on Iridium and other satellite phone companies.

At least the phones have found a niche (globetrotting undercover cops and their criminal prey). And Iridium was happy to tie their product into the PR surrounding the film's release. They even sponsored a contest for law enforcement to win a trip to the movie's premiere.

It's not known whether they had a similar contest for their drug-trafficking clients. I'd guess not. Those folks seem to prefer a lower profile.

marketing, innovation, product development

Involving sales during the fuzzy front end: priceless

Last week I wrote about the fuzzy front end of innovation--that time in which a company senses opportunities, generates ideas, and creates concepts which may be developed into new products. It's fuzzy because it doesn't follow a prescribed process, iterates on itself and contains lots of dead ends.

For consumer goods companies, market research and test marketing are kings of the fuzzy front end. For example, P&G sends its marketers out to interview housewives about their cleaning problems to identify ideas for new products. Focus groups try out prototype products while company psychologists analyze their reactions through one-way mirrors.

For companies targeting business customers, by contrast, sales makes a large contribution as a generator of ideas and tester of concepts. The sales team is out at customer sites, hearing their complaints. They have access to the customer to dialogue about solutions the company could provide. They can have the difficult dialogue to assess willingness to pay for something new. In short, they are a vital contributor, along with marketing, to the fuzzy front end.

It takes a special salesperson to work in the fuzzy front end. Since the rewards are out in the future (since there's no product yet and may never be), the salesperson needs to rein in his short-term instincts and be content to make long-term investments in his clients. There's nothing in the fuzzy front end that will close this quarter.

A salesperson involved in the fuzzy front end must also spend a lot of time with company colleagues--marketing, development and operations. There's no sales kit or standard pricing at this stage. Learning happens in parallel with the product team. Sales must be able to articulate the customer's wishes and agree to the compromises that must be made to create a marketable product.

Finally, the salesperson must be able to make the first sale. A business product is nearly impossible to sell without existing references, never mind without a finished product to demo--yet a first sale must occur to enable any others. Early adopters typically have issues--the product will have bugs, the support processes won't yet be standardized. The salesperson who can bring the first customer through that as a positive reference is valuable indeed.

The benefits to salespeople in becoming contributors to this process are immense--salespeople who consult with their clients, take their problems seriously and look for solutions typically gain a trusted status that makes selling much easier. Plus salespeople who master new products first get out in front of the curve and are paid off when the product becomes successful and they are fully prepared to sell it.

innovation, product development, fuzzy front end, sales

Building business alliances - lessons from "Miami Vice"

My wife and I went to the movies on Saturday night, and I'll bet I was the only one in the theater thinking about how the configuration and practices of the drug business that is central to the plot provide good instruction for legitimate businesses.

The script also used some funny business jargon, including "skillset" and "outsource." And, of course, "mojito."

Some lessons (it will help to have seen the movie, which is a very well-done entertainment):

1. Deals need to be sealed in person. Only by traveling to Montoya's territory in South America did Crockett and Tubbs establish their bona fides, as well as understand the structure of Montoya's organization (especially the roles of Jose Yero and Isabella).
   
   
2. Test the waters with a small deal before moving onto bigger things. Montoya's group committed to work with Crockett and Tubbs on a relatively small deal, with straightforward terms, to test their ability to deliver.
   
   
3. Relationships matter. Crockett struck the revenue-sharing arrangement for the second deal after developing a very strong relationship with Isabella.
   
   
4. Be aware of power struggles and shifts in the structure. Crockett set the wheels in motion for the alliance falling apart by walking brazenly into Jose Yero's club with Isabella on his arm. Not realizing that there was a power struggle between Yero and Isabella, Crockett gave Yero the ammunition to undermine Isabella with Montoya and get approval for the ambush.
   
   
5. Have a contingency plan in case things go wrong. Which of course they do in "Miami Vice." Hey, if things didn't go wrong, you wouldn't have a movie.
   

movies, alliances, strategy

The perils of profit sharing

Today, let's talk about complexities involved in profit sharing (or revenue sharing) as a way to compensate partners involved in a venture. For the principal partners, such sharing is a way to reduce upfront risk. For other participants, it's a way to make more if the venture turns out to be a success.

In the US film industry, compensating people based on "points" of the "back end" (in other words, a percentage of profit) is standard practice. Almost as standard are disputes related to the calculation of that profit. The current dispute between the director, screenwriter and stars of the Academy Award-winning best picture "Crash" and the producer of the film offers a stark example of profit-sharing dysfunction. The Times had a recent article on the dispute, and its lead paragraphs would send chills through anyone contemplating a profit-sharing deal:

When a movie costs $7.5 million to make and takes in $180 million around the world, it seems logical to think that the people who created the film would have become very rich.

With “Crash,” this year’s Oscar winner for best picture and last year’s sleeper hit at the box office, that has not been the case.

Despite the film's well-documented revenues, the profit picture is much muddier, and what is owed the participants even less so. Paul Haggis, the director; the screenwriter; several line producers; and the stars (Don Cheadle, Matt Dillon, etc.) are all awaiting their due compensation, despite the film concluding its theatrical run and DVD release months ago. Several of the participants recently received checks for $19,000, according to the Times.

Bob Yari, the producer, blames Lionsgate, the distributor, for not being up to date with payments to him. Foreign revenues have also been slow to arrive, in his view. Lionsgate insists a pay-television deal with Showtime will bring in revenues to fund payments to all.

Making money for certain are the attorneys and accountants everyone has hired to negotiate payments and audit the books.

In short, this case illustrates everyone's worst fears about Hollywood accounting--no film ever makes a profit, yet somehow the studios and financiers keep operating.

By comparison, web site operators who host Google ads on their sites can check moment to moment on their traffic, click-throughs and earnings. The terms are standard for everyone. Payment is remitted monthly.

The lesson: in revenue and profit sharing, transparency is everything. And: when big money is at stake, there's lots of incentive to fudge the numbers, impede the process or use similar tactics to take more than your share.

Can a company gain competitive advantage by offering Google-like transparency and timeliness on big-money revenue-sharing deals? The optimist in me thinks so. The pessimist isn't so sure.

movies, revenue sharing, alliances, strategy, innovation