| Two of the least admirable cities in the U.S.—Washington, D.C., and Las Vegas— will be a study in contrasts this week. The nation's capital is the epitome of dysfunction, a perversion of democracy where a huckster reigns but struggles to achieve his goals. The country's capital of vice is a soulless, supersized alternate reality where hucksterism is the coin of the realm. In Washington, meaningless bills wither and die. In Vegas, especially this week, technology companies will offer visions of a bright shiny future, most of which will never find markets with real customers. Ah, the splendor of CES, the consumer electronics industry trade show that has outgrown its own name. Once primarily a meeting place for gadget makers to pitch merchants their wares for the coming year, now the gaudy event is a meeting place for the who's who in technology, media, entertainment, and the like. They're all pushing a plan for the future while nervously looking around to make sure someone else's future isn't cleverer, more lucrative, or technologically superior to their own. And you have to walk through smoke-filled casinos to get to the hotel elevator. Other than that, CES is a grand time. The hottest topics aren't new: self-driving cars, artificial intelligence, 5G cellular networks, to name a few. Monday night Fortune hosts its annual CES dinner. This year features a fireside chat with AMD's Lisa Su. The chip company worth $19 billion has lost half its value since September, but is still worth 65% more than a year ago. It's a one-company case study in the volatility the market has been suffering. We'll also have a panel on "mobility," which ex-auto executive Karen Francis, who'll appear on the program, told me is the industry formerly known as "automotive." (I've been trying to figure out the meaning of this word for some time now , so I'm genuinely appreciative.) Appearing with her will be Allstate's Tom Wilson, whose automotive insurance business must surf the "mobility" wave, and Scott Corwin of Deloitte, the consultancy advising clients on how all this affects their business. *** Netflix had negative cash flow of $3 billion in 2018, The Wall Street Journal noted recently. There is a method to Netflix's madness as it invests aggressively for future payouts. Still, the company's current torrid growth phase has come entirely during a global economic expansion, particularly in the United States. One wonders what a recession would do to this world beater with massive forward commitments to create content and a dodgy balance sheet. *** Thinking out loud about Apple: If it really wants to shift to being a services company, wouldn't it be imperative to offer multiple price points for iPhones so more people would use said services? *** My vacation read, William Boyd's novel Love Is Blind, had a delightful commercial sub-plot. The story is about a piano tuner in fin de siècle Europe. He has the smart idea of paying popular pianists to use an instrument furnished by his employer. I wondered if this description of what today we would call celebrity endorsements was grounded in historical fact and if this is where the practiced started, and so I wrote to Boyd, the acclaimed British writer, to ask him. He made some of it up and doesn't necessarily know if piano makers invented the concept. But Boyd responds that indeed "there was intense competition among piano manufacturers in the second half of the nineteenth century—the era of the piano we know today." A piano manufacturer called Pleyel supplied pianos for Chopin wherever he went, for example. And New York-based Henry Steinway Jr., maverick marketer, solicited testimonials from famous pianists. It also signed Antron Rubinstein for a series of concerts in the 1870s. The pianist agreed to play 200 concerts for $200 each and demanded to be paid in gold because he didn't trust U.S. currency. Says Boyd: "Clearly, if you were a star there was a ton of money to be made." Boyd's source for this material, by the way, is the 2002 book Steinway by Ronald Ratcliffe. This book is about far more than business, and it's an enjoyable, sophisticated, and provocative read. But I was intrigued by how much stays the same in our era of automation, instant communication, and mass media. Hustling to make a buck is nothing new. |
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