Hits & Misses
(Business 2.0) – [MISS] SPONSORED BY ... SOMETHINGADE. The ever-growing popularity of Nascar has advertisers clamoring to get in. But it's also creating a clamor of conflicting marketing messages. Take Nascar's "victory lane," where a big blue bottle of PowerAde is placed atop the winner's car in honor of Nascar's official sports drink, made by Coca-Cola. Trouble is, the guys doing all the winning these days—Jeff Gordon and Jimmie Johnson, who at press time were running first and second in the standings—are sponsored by Pepsi, corporate parent of Gatorade. After winning the Brickyard 400 in August, Gordon simply blew off the victory lane. Johnson, meanwhile, drew a $10,000 fine for covering the PowerAde bottle with one of his sponsors' signs—not what Coke was expecting for its estimated $6 million-a-year sponsorship package.
[HIT] GIVE IT AWAY NOW. Seattle-based indie record label Sub Pop hadn't made much noise since the days of Nirvana's Bleach—until it started doling out songs for free. Despite almost no radio play, Give Up, the debut record from a band called the Postal Service, spent more than a month atop Billboard's top electronic albums chart and has sold more than 300,000 copies. Sub Pop A&R director Tony Kiewel credits the success directly to the label's decision to make the hit singles "Such Great Heights" and "The District Sleeps Alone Tonight" available for free on its website, subpop.com. To date the songs have been downloaded more than 1.5 million times.
[HIT] DIRECROI. A year after News Corp. took control of DirecTV, the satellite-television provider blew past Wall Street expectations by adding 455,000 subscribers, topping analysts' estimates by more than 50 percent. The gains came on the back of a beefed-up marketing budget, but despite the outlay, DirecTV is already seeing a big payoff: Monthly revenue per subscriber rose 7 percent, thanks largely to a push to get existing customers to install additional DirecTV receivers throughout their homes.
[HIT] PARTS WITHOUT PARCELS. When the assembly lines at Ford's newly refurbished Chicago factory began rolling this summer, the plant became the first in North America to adopt Ford's "supplier park configuration." Half a mile from the factory, 12 parts companies share a 1.5-million-square-foot campus. The companies supply 60 percent of the parts that go into the three models being produced at the plant, saving Ford about $50 per car in shipping costs, or $15 million a year. Ford plans to spread the concept to other North American plants within the next two years.
[MISS] SACKED FOR A LOSS. Despite intense lobbying by the National Football League and Hollywood, the FCC rebuffed attempts to block a new TiVo digital video recorder with file-sharing capabilities. The lobbyists faced a tough audience, given that FCC chairman Michael Powell once called his TiVo "God's machine." Though the defeat may have greater long-term implications for Hollywood and its antipiracy campaign, in the short run it might have a larger impact on the NFL, since file sharing could help users evade blackout rules designed to herd local fans into stadiums instead of letting them watch on TV.
[HIT] HOT WHEELS. When Schwinn introduced the Sting-Ray in 1963, it was a company riding high. It has since tumbled over the handlebars, declaring bankruptcy in 1993 and again in 2001, but now it's back in the saddle with a major hit—the Sting-Ray. The new Sting-Ray, a child-size model that sells for $180, has been a smash with parents nostalgic for their old sissy-bar-equipped ride, who are buying them in droves from mass merchants like Wal-Mart and Target. (If they can get there before local bike-shop owners, who've been buying the unassembled bikes and then turning around ready-to-ride versions for twice the price.) Schwinn spent the summer ramping up production and expects to sell 350,000 Sting-Rays by year's end. An adult version is due out in October.