Hits & Misses
(Business 2.0) – [HIT] Car talk. "What I gotta do to get that brand-new C outta you?" asked rapper Snoop Dogg in a voice-mail he left for Chrysler CEO Dieter Zetsche. A lot of auto buyers have been asking the same question, as the retro-styled Chrysler 300C has been flying off the lots. A distinctive grille and blocky body boosted the 300C's appeal, as did placement in hip-hop videos and the season finale of ER. Chrysler sold more than 35,000 units between the car's launch in late March and the end of June, outpacing rivals like the Lexus ES 330 and Acura TL.
[MISS] Subscribers are great--if they don't use the service. The results should have had the PR trumpets blaring: Online DVD rental service Netflix reported second-quarter revenue nearly double that of last year. Instead, investors were left wondering if they'd soon be hearing a dirge, as the company announced that profits had dropped by 13 percent as the result of increased marketing and fulfillment costs. Netflix blamed higher Internet ad prices, but a decision to raise subscription fees may also have come back to haunt the company. Subscribers pay a flat $21.99 per month to rent an unlimited number of DVDs, with Netflix picking up the postal charges. Prior to the move, analysts had warned that the rate hike could scare off Netflix's most profitable customers--infrequent users--and overweight its customer base with expensive-to-serve movie buffs.
[HIT] Have a Coke and a file. When Coca-Cola launched an online music store in Great Britain earlier this year, some observers scratched their heads. But the soda peddler has proven adept at selling songs--650,000 of them since January, at more than $1.50 a pop. While the $1 million in downloading revenue accounts for just 0.01 percent of the company's European sales, the real windfall lies in the audience it reached: The MyCokeMusic site attracted 2.5 million visitors, many of them under 30--younger than other music download sites, and exactly the demographic Coke had targeted.
[MISS] Don't call us, we'll call you. Last year AT&T scored a $3.5 million contract to set up the National Do Not Call Registry. Too bad the company didn't practice what it's being paid handsomely to preach. In July, AT&T agreed to pay $490,000 to settle FCC charges that it had repeatedly called consumers who had asked the company not to call them again. The fine was the largest ever assessed for telemarketing violations, though as part of the settlement, the FCC agreed to halt ongoing investigations that reportedly could have left Ma Bell on the hook for an additional $50 million in penalties.
[HIT] What is ... a ratings bonanza? Jeopardy may be the granddaddy of TV game shows, but in a world where even $1 million Survivor purses are quickly trumped by, well, Trump, the quaint quiz show and its $30,000 payouts had become an afterthought at best. To win back viewers, Jeopardy producers repealed the rule that sent its brainiac contestants packing after five episodes. The quiz show now allows its champions to stay as long as they keep winning--a rule change that led to the record-breaking $1,321,660 run of software developer Ken Jennings and sent ratings soaring by 62 percent.
[MISS] Taken for a ride. Strictly on its artistic merits, the first national ad campaign in seven years by amusement park operator Six Flags was a smash success, with groovy senior-citizen bus driver Mr. Six scoring off the charts in viewer surveys. But artistic merits don't pay the bills, and in dollars-and-cents terms, the estimated $15 million campaign isn't scoring well at all: Attendance at the company's 31 theme parks fell 4 percent for the first half of 2004. Instead of shelling out for ads, perhaps Six Flags should have taken a cue from rivals Walt Disney Co. and NBC Universal, which spent more money on new rides and were rewarded at the turnstiles.