Keurig is buying Dr Pepper Snapple Company

Home coffee pod device maker Keurig Green Mountain has announced it has agreed to buy the soda company Dr Pepper, whose official corporate name is Dr Pepper Snapple Group, in an $18.7 billion deal.

This is of interest to me because I’m a stock holder in DrPepperSnapple and saw my shares jump 20something percent this morning – 42% from when I first bought them.

Only problem is I only own 2 shares… lol. I bought them for that-one-girl-who-fans-know-about-and-everyone-else-doesn’t-need-to cuz it’s her favorite drug so I figured we might as well own a piece of it (for the record, my “don’t get high off your own supply” plan did not work).

Keurig stated today that Dr Pepper Snapple shareholders will receive $103.75 per share in a special cash dividend and keep 13 percent of the combined company. Dr Pepper Snapple shareholders like me still must approve the deal, so maybe I’ll go against it and ruin it for everyone with my 2 votes.

Keurig Dr Pepper will trade publicly after the deal closes, which is expected to happen in the second quarter. A new ticker symbol hasn’t been announced yet, the company said. Keurig will stay in its Waterbury, Vermont, headquarters, and Dr Pepper Snapple will remain in Plano, Texas.

Back when I bought the shares, I didn’t know Dr Pepper was its own company. I’d have guessed it’s a Pepsi property but no.
-It’s big brands besides Dr Pepper and Snapple are Motts, Shweppes, & Bai teas.
-Smaller brands like Squirt, Calamato (ew), Cactus Cooler, RealLemon, & Crush…
-But also big name 2nd tier companies like A&W, Yoo-hoo, Hawaiian Punch.
– and then has weird distribution rights I don’t fully understand where it owns 7Up in the united states (but Pepsi owns it in Europe) and it owns the Canada Dry drinks in North America only and the Coca Cola company owns it in the UK.

This is my 2nd win for my 2 measly shares, as right after I bought them in November 2016, Dr Pepper Snapple announced they would make a cash purchase of Bai Brands for $1.7 billion, sending the stock rising. It had previously purchased a minority stake in the company for $15 million in 2015.

Keurig is owned by a European holding company that owns Krispy Kreme, they just bought Panera bread a few months ago, Peets coffee, and some tea store brand called Mighty Leaf. so they’re gonna synergize their products in each others brand storefronts.

Everyones merging these days because power companies are becoming titans that gobble up so much marketshare, a team-up and then combination is the only way to compete. Hulu for example is owned by “everyone who isn’t Netflix” (21st Century Fox, Disney, Comcast [parent owner of NBC], & TimeWarner) and still has half the subscribers as it. That might change as late last year The Walt Disney Company announced it would buy 21st Century Fox and thus it’s stake in Hulu, making Disney a majority owner of that brand. What it will do with it exactly hasn’t been announced but we do know that Disney is making it’s own Netflix competitor in some form. Disney owns ESPN, so whether there is a Disney streaming service, Hulu, & ESPN stream as 3 separate services or one or 2 is unknown at this time.

Viacom (cable company that owns brands like MTV, Nickelodeon, Comedy Central, Logo) and The CBS Corporation are going to probably merge in response to Disney and Fox’s marriage. The first 2 have always essentially been one company anyway since both corporations are majority owned by billionaire Sumner Redstone.

Merging is the future. Now who’s ready to buy some Dr Pepper single-serve soda pods?

The family that revived The Chipmunks into a billion dollar brand

NPR has a great show called How I Built This where host Guy Raz talks to people who created successful multi-million dollar brands as they tell the story of how they did it. Most of the episodes are very good. This one about The Chipmunks characters was of particular interest to me since I always wondered what was going on with that brand as early as 8 years old when I was trying to figure out the corporate structure and mechanics of how to build my own empire of cartoon characters – back in an age with no world-wide-web with any helpful information on it, I had to fill in a lot of the gaps on my own. Some of the things I would try to figure out along these lines were:
-What’s up with the Padding Bear stop motion animation shorts? They don’t appear to be American-made. How old are the books and how old are these little stop motion movies?
-Dr Seuss cartoons – The Grinch, The Lorax, The Sneeches – these arent episodes in a series, they’re all – what? – specials that aired on tv whenever a deal could be made? So Dr Seuss would just have a successful book and then be offered to make a tv special half hour animation of it? or how did that work?
-Peanuts – “You’re A Good Man, Charlie Brown” and “Snoopy Come Home” were staples in my childhood but these too were specials just made from the newspaper comic strip? How does that work exactly?
-The Chipmunks – I was familiar with The Chipmunks Witch Doctor song and their Christmas song (“I still want a hoola-hoop”) as a kid and I knew both were old 50s era classics by the context they were presented on tv and radio so I knew their 1980s Saturday Morning Show and related media (an animated Christmas Special that preceded the series and an animated Chipmunks Movie that was a longer version of the Saturday morning show) were revivals of a sort. But how did these characters resurrect after having no public presence for 30 years? Then when all Chipmunk media died in the early 90s – why? Where’d they go?

The Chipmunks have made 2 comebacks experienced in my lifetime. The first obvious one I just detailed and their confusing fizzle from the public until 2007’s live action Chipmunk movie and its sequels – including the much derided “Sequeakual” – which have spawned new cartoons and more movies and made the characters Billion dollar money makers. The episode’s description summarizes: 

Years after his father created a hit singing group of anthropomorphic rodents called The Chipmunks, Ross Bagdasarian Jr. made it his mission to revive his dad’s beloved characters. Over the last 40 years, Ross Jr. and his wife Janice have built The Chipmunks into a billion dollar media franchise – run out of their home in Santa Barbara, California.

Knowing that the Chipmunk revival was a son juicing up a creation of his father and working hard to build it into something was the draw of the tale for me. Kids of mine reading this in the future: please revive my stuff! Run with it. Work hard at it. Go be Bagdasarian Jr’s with my shiz.
Hearing them tell their story also makes the Saturday morning cartoon more touching. It always excited me and was one of the first themes I downloaded to my 2nd generation iPod in the early 00’s but hearing the tale of how a husband and wife were shopping the Chipmunks wherever they could and working day and night to make them what they became brings new energy to the lines of the theme song hailing their comeback. “Watch. Out…. CUZ HERE WE COME… it’s been awhile but, we’re back with style”… Go get em, Alvin.

It’s also especially rewarding to hear Dave Seville himself tell all these stories – as not only is Bagdasarian Jr the voice of Dave in those 90s cartoons, but his Dave voice is his natural speaking voice without change to the good-hearted-overworked-slightly-neurotic-but-optimistic cadence I felt in every line of David Seville on the show and now from the real-life Chipmonks manager, Ross Bagdasarian.

The podcast fills in these blanks and more and I learned the corporate treachery and screwovers the couple went through who own and have dedicated their lives to the Chipmunk characters, and that they evidently went to court over The Squeakual being such a piece of garbage (since the court case was settled with terms that they not talk about it, you don’t get any juicy details in the podcast or anywhere else online except for that it seems that there was an issue over not paying royalties or profit shares of some kind that the Bagdasarian’s were entitled to, and that the family was unhappy with the writing quality over their characters and sued for future control over how they’re treated. I think that’s what I gleaned from the vaguely worded articles I read on the subject, anyway).

Listen to the How I Built this episode with Ross Bagdasarian Jr. and Janice Karman through your podcast app (if you listen to podcasts at 2x the speed like I do) or play it below:

Bonus romper clip: At the end of every episode they have a postscript titled “How You Built That,” featuring a shorter version of the main show that focuses on a new or recent Startup instead of an iconic brand or long standing successful business as is the normal spotlight of the show. The postcript for the Chipmunks episode above is how Daniel Clark-Webster and his three friends came up with RompHim – a company specializing in male rompers.

Why you probably shouldn’t crowdsource the naming of something

Alternate headline: Why you definitely should…

If you’re open to having the public potentially knee you in the groin over it, then fine, but if it’s something you actually care about, a public vote may not be the best idea.

“A British government agency” (vague and ominous, because “Natural Environment Research Council” sounds too boring), decided to let the prestigious Internet suggest a name for a $300 million polar research ship and, God bless this beautiful planet – the winning name was Boaty McBoatface.

In 2014 Mountain Dew asked the internet to name a new flavor via a “Dub The Dew” campaign and the leading candidate was “Hitler did nothing wrong”. Others in the top 10 included “Moist Nugget”, “Diabeetus” and 4 different spellings of the phrase “Gushing Granny”.

Now, an Austin Texas elementary school, caving to pressure to change its name from Robert E. Lee Elementary falls into the same trap. Among the glorious suggestions? Schoolie McSchoolface.

Unfortunately though, unlike Boatie – the board members of the school districts governing body will have the last say, so it will probably be named something stupid.

UPDATE: The new name is Pacific View Leadership Elementary School.

Uber is trying too hard with its weird new logo

Uber has changed their logo in an ongoing tweak of their their brand identity and while the latter makes sense, the logo thing is kindov weird. As it was just put to me by someone else commenting on the issue: It’s like Coca Cola changing the formula because “eh… it’s been awhile”.

Why would Uber change their thin and elegant “U” on a black background to a bloated backwards “C” with a square in the middle resting in a bunch of turquoise loops.

Joshua Topolsky points out: the old logo was “very bad but useful” while the new logo is “very bad and useless”.

Looking for actual answers on what this is about doesn’t come up with much:

“This updated design reflects where we’ve been, and where we’re headed. The Uber you know isn’t changing, our brand is just catching up to who we already were,” explains Uber, referring to the company’s expansion into logistics through its UberRush service.

The company will also move from having one brand to serve its global enterprise, to an individual look for each of its 65 countries, with tailored colors and patterns, illustrations, and photos, Uber told Wired. The idea is to create more flexibility in the brand.

And the complexity goes even deeper from there…

The worst part of it all? No Uber condoms… or anything “bedroom”-related (including boxers). Not associating a logo with sex is less silly of a policy than phrasing it by specifying just condoms – but even Disney makes underwear.

The lengths of the terms of logo usage show deeper insight into the aspects of perhaps trying too hard that the company is going to in this rebranding effort. Their terms stipulate that you can’t put the logo on anything that will be stepped on (no Uber floormats) put in the trash (no Uber cups), or eaten (no Uber cookies or cakes). That last one is the dopiest. No Uber cakes because cakes get sliced up (and that could damage their brand integrity or something) and cakes get eaten and Ubers new image can’t withstand the thought of it’s logo being turned into poo.

Disney issues curious promotional art for upcoming Star Wars Land

As if you haven’t heard: The Walt Disney Company is adding a Star Wars Land to Disneyland. They’re doing so by clearing out some super outdated “old west” style attractions that no one has given a crap about since 1969 and replacing them with the space-themed goodness that modern minds crave.

A long-overdue updating of a long since stagnant portion of significant land area of the Disneyland park + utilization of the Star Wars intellectual property recently acquired by the Walt Disney Corporation isn’t anything strange.

What’s odd is the promotional art for it… Who would have guessed that it would look anything like this?:

The promotional art Disney has released for Star Wars Land is curiouser and curiouser, lacking any of the Death Star or Corusant style metal-tech seen in Tomorowland (where the Star Wars themed ride Star Tours still resides) and going instead for organic earthy representations of tall treehouse style towers (the likes of which we’ve never seen in any Star Wars films) bordering open courtyards with aliens milling about.

A zoomed out version of the same location shows the area to be a city among cliffs with termite hive style spires protruding from a decidedly singularly themed location – again – with style and architecture not present in any of the mainstream Star Wars media.

With all the planning that goes into such a major and permanent design, it makes one wonder what the thinking was in creating this specific look. Disney Chairman Bob Iger said of the unveiling, “We are creating a jaw-dropping new world that represents our largest single themed land expansion ever. These new lands at Disneyland and Walt Disney World will transport guests to a whole new Star Wars planet, including an epic Star Wars adventure that puts you in the middle of a climactic battle between the First Order and the Resistance.”

Star Wars Land will appear to mostly manifest its 14-acre footprint in currently non-attraction utilized land on the theme park property and only replace Big Thunder Ranch, Big Thunder Ranch Barbecue, Big Thunder Ranch petting zoo and Big Thunder Ranch Jamboree. Since 10 out of 10 people reading that didn’t even know any of those things were things in Disneyland, I’d say it was the right choice, even though it’s interesting to see Disney pull a corporate version of the plot of Toy Story (Read: “Strange Things are Happenin” to Fronteirland).


All-Day McBreakfast doesn’t include the most McBreakfastiest item on the menu!

McDonalds is going through some tough times and for some reason all day breakfast is a part of the turn-around strategy, which I don’t understand at either end. I don’t get how serving breakfast menu items is both something that hasn’t been done already given how seemingly easy it is, yet also is fixated to be a profit boosting turnaround tactic. I get that the more menu items that have to be out and either prepared or ready to be prepared means the possibility of more food product waste as ready-made items go unbought in their freshness window while having them made to order (mostly heating pre-cooked items) creates its own problems but neither seem like problems all that hard for a corporation like McDonalds to tackle and solve.

But finally after much public discussion about the possibility, McDonalds has decided to serve breakfast all day. Or at least some of it.

I went to McDonalds today for some breakfast at not-breakfast-time to feel like a baller and jump on this 2015 magic so advanced that Back to the Future (a movie that thought we would have flying cars and hover boards in 2015) didn’t even predict and I ordered a McGriddle. The Spanish accented woman at the counter replied “AH?” so I repeated the word “Mic-Griddle” and she paused with confusion… Which is more than a little odd because – to give away the ending to this story: McGriddles aren’t on the all-day-breakfast menu – but certainly this woman knows what a friggin McGriddle *is*, right? You’ve heard this word before, have you not, madam? I get that it’s not available right now but why are you not immediately telling me *that* instead of acting like this Milk-Greedle thing I speak of is a foreign product? I didn’t order a Grand Slam or a Whopper – I asked for the only breakfast item that has the surname of the establishment in its actual name, and you don’t know what I’m talking about?…

Eventually she put it together and told me “no. we only do thees” and pointed to a placemat menu on the counter with breakfast items that does not include the MC-gridz.

This is insane… Every fast food place that does breakfast has a breakfast sandwich with a biscuit on its menu and McDonalds does too. But the McGriddle is a breakfast sandwich that only McDonalds offers (hence the Mc) and in their big push to remind customers that they are a different and unique place to go – they’ve axed their one proprietary product from the list of options. Madness.

You can get a stack of pancakes and sausage all day, but you can’t get a breakfast sandwich with syrup flavored pancake buns all day.

Wtf are you doing, McDonalds? I don’t even know who you are anymore.

Tip: Buy Disney

I’ve never written a stock tip post before but I feel like I’m observing what seems to be obvious to me and yet Googling all the main points in the article yielded zero results. So, while I have to warn you that I could not find Forbes, MarketWatch, the Wall Street Journal, the New York times – or anyone else to make these recommendations and then cite them as the source – I will reveal why me as my own source is making these claims…

From September 2015 (the time of this writing) for at least a year, Walt Disney Company stock is going to be a good bet, says I.

1- FRANCHISING BOOM (alternative title: FRANCH & MERCH)

The studio excels at 2 things that they’re doing more and more of: Franchise Building and merchandising. Since the 1950s, Disney has been Boss at extending their intellectual property as far as it will stretch and plastering it all over any physical products that could possibly be conceived of.

Especially recently, the company has been franchising in a way I am seeking to emulate in my own productions. No one does franchising better than Disney. They milk characters and storylines into movie, television, sequel, and product gold on a level akin to printing their own currency. This makes the company a great long term play for its existing properties but a quintuple or more of a good bet for the following reasons –


The previous 5 years especially has shown huge growth and while that doesn’t necessarily mean future growth (as shown above) for most entertainment companies, I will explain why I think Disney is a major exception



Disney bought Marvel a few years ago and it has been pumping out movies that have been fan and critic hits with no sign of stopping as they keep increasing their cinematic universe with more films. An excellent example of the Marvel longevity is that this years Ant-Man movie – hardly one that is even on the radar of most movie goers – is set to earn almost half a billion worldwide. Upcoming in the franchise is a super fan-favorite storyline to be covered in “Captain America, Civil War” (the 3rd Cap movie), and a 2-parter Avengers 3 & 4. They will be huge hits at the box office and spawn tons of profitable merchandise and media offshoots.



Disney bought Star Wars several years ago as well for a few billion and they will certainly earn that back probably with just their first movie. There is no possible way that the new Star Wars movie, “The Force Awakens” will not be record-breakingly huge. It has even more curiosity among the hundreds of millions of people familiar with the franchise than the previous set of movies had and far more good will from the fans and is going to make box office billions worldwide. It is released in December but again, it’s all about the franchise: Star Wars merchandise, themepark attractions (With a new “star wars land” being added to Disneyland & Disneyworld Themeparks) and a planned new Star Wars movie to be released almost every year after this one – the franchise is going to rocket beyond it’s already firm position in its field.

If you are skeptical of this, then you need to go back and re-read what I said about Ant-Man… *ANT-MAN* for Christ sake. Star Wars is going to slay. Watch…



The Shanghai Disneyland park opens in 2016 and will include full theme park, hotel and resort attractions that Disney excels at. It will not be a failure.


DIS stock is down over 16% in the past 2 months evidently because of problems with it’s ESPN property and concern over cord cutters but that nonsense is a short term problem and ESPN is in no long term danger of losing its dominance in the field of live sports or sports television in general. That aspect will soon correct itself and the stock price will at minimum return to highs seen earlier in the year and as I explained above, much more according to my forecasting.

At the time of this writing, I am buying stock in Disney at $100 a share. The companys high-point of this year was $120. So you tell me… Do you think, given the stuff I listed above, that Disney will under any circumstances possibly NOT reach that high point again in the coming year?…

I think it will far surpass it, given the above, so I’m betting big on Disney and urging others to do the same for these reasons.

Apple should have bought Nest Labs. Google bought it instead

I’ve been a long time admirer of the Nest thermostat that I first got for my mother a couple years ago and then one for myself last year. It’s a pretty metallic ring with a nice circular screen that dials temperature up and down and/or connects with its own app on your other devices or your account on to have actions performed from wherever you are.

Then the company came out with this smoke detector, which is cool, but needs to do more than it does (which is just allow silencing by motion and monitoring levels by phone). I want to see surveillance models of all their products (same version but with cameras inside to view your rooms), too.

Anyway: It was formed by an ex Apple employee, reeks of Apple design (which is a pleasant smell) and just has Apple written all over it. I’ve been waiting for Apple to make a damn offer and open up a whole series of house products that connect with the forever-upcoming Apple Television Set and others. For some reason, Apple wasn’t interested and Google stepped in instead. $3.2 Billion later, Nest becomes a Google company.

While Apple, Google, and Microsoft dominate PCs, mobile devices, and car consoles, no company has taken control of the house yet. The connected home has long been tech giants’ white whale of every tech giant; nearly every Silicon Valley player, from HP to Dell to Intel, has detailed its vision for the future of the connected home. But the fantastical future vision videos created over the years have amounted to nothing more than impressive displays of CGI–Nest, on the other hand, has actually started to execute on the promise of the connected home by creating a standard protocol for the house. If Nest is able to get there first, it’ll force other future players to build on its platform–if anyone wants to make some connected smart refrigerator or TV or toilet, the devices will have to speak Nest’s language. That’s the kind of leverage that could make Nest (and now Google) a major player in the industry.

“From the beginning, our vision was to create a conscious home. A home that is more thoughtful, intuitive–and nice to look at. No one had cracked the code and we were confident we could do it with the right product, the right team, and focus,” Fadellwrote today in a blog post. “Google will help us fully realize our vision of the conscious home and allow us to change the world faster than we ever could if we continued to go it alone.”

Perhaps the more compelling part of the deal is acquiring Fadell‘s talent. One of the most prominent characters in the Valley, Fadell helped usher in the mobile era at Apple before leaving to start Nest. Arguably more than any other Apple veteran, Fadell has built his startup with an Apple-like DNA, infusing Nest’s products with a strong sense of design, brand, and purpose. It’s certainly a huge coup for Google, one of Apple’s fiercest rivals. (Apple was reportedly not a potential bidder, whereas Google Ventures, the company’s investment arm, has long been an investor in Nest.)

As part of deal, according to Google’s statement, Nest will continue to “operate under the leadership of Tony Fadell and with its own distinct brand identity.”

UPDATE: Walter Isaacson, Steve Jobs’ biographer says on CNBC that Tim Cook is vulnerable and his deal with China takes a back seat as far as big-deals go to Google’s gobble of Nest:

Meanwhile, Apple’s marketing chief Phil Schiller unfollowed Nest CEO and the Nest company on Twitter. At first glance it may sound like petty high school popularity politicking, but it actually shows the reality that Nest is an Apple enemy now. I don’t get why Apple didn’t want to buy this company and why they didn’t. It makes no sense to me.

As the protector of Apple’s brand, Schiller’s unfollowing of Fadell and Nest is perhaps unsurprising. With the Nest deal, a source says that Google will gain approximately 200 former Apple employees. The majority of Nest employees worked at Apple over the course of their careers, with many being involved in high-profile projects like the iPod, iPad, and iPhone. The design of the Nest Thermostat and Nest Protect have also been compared to the designs of Apple products, so the fact that Nest’s products are now under the umbrella of Apple’s fiercest competitor may not be a pleasing sight for Apple’s marketing head.

This is not the first time that Schiller has publicly taken the stand against Google products. The Apple veteran has blasted Google and its partners on Twitter for issues ranging from hardware benchmark claims to mobile operating system security. Schiller’s practice of taking small jabs at competitors also goes beyond Google. For a couple of years, the then-exclusive-to-iOS Instagram app was heavily promoted both on the App Store and by Phil Schiller. After Instagram expanded its business to the Android platform, Schiller closed his Instagram account.

E-mails shed light on Steve Jobs winning e-book negotiations

The emails have mostly been viewed in the context of the lawsuit, but they also provide an extraordinary view of high-stakes negotiation between the leaders of two powerful firms, Apple and News Corp. They start far apart, but over the course of five days, Apple’s then-CEO Steve Jobs successfully pulls the son of News Corp. CEO Rupert Murdoch over to his side.

Via the Atlantic (who illustrates the thread with talking head icons that are pretty helpful to follow a mental visual of what’s going on) ~ Here’s how it went down:

Newscorp starts…


Thanks for coming in again this morning. We’ve talked over the proposal and I want to make sure that you have a summary of the deal that HarperCollins would be willing to do in your timeframe.

1. Pricing: We need flexibility to price on a title by title basis outside the prescribed tiers in the contract. We will use our best efforts to meet the tiers we discussed.

2. MFN [“most favored nation” status]: In the event that HarperCollins and Apple disagree on a consumer price for a title, HarperCollins needs the ability to make that title available through other agents who support the higher price.

3. Commissions: We need a lower commission on new releases for the economics to work for us and our authors. We believe a 30% commission will lead to more authors asking for ebooks to be delayed a result that will not work for Apple or HarperCollins.

4. The new release window: We need to have flexibility on the agency window. We believe this window should be 6 months rather than 12 months in the event that one or more large retailers do not move to an agency model.

Leslie will be sending Kevin a contract that reflects these points in the event you wish to move forward on these terms.


Next, the publishers opening bid in the negotiation happening with just 5 days until the iPad debuted.


Thanks for your call earlier today, and for the time last week.

I spoke to Brian Murray and Jon Miller [then the head of digital media at News Corp.]–and Brian is sending a note to Eddy today. I thin I have a handle on this now. In short–we we would like to be able to get something done with Apple–but there are legitimate concerns.

The economics are simple enough. [Amazon] Kindle pays us a wholesale price of $13 and sells it for 9.99. An author gets $4.20 on the sale of a hardcover and $3.30 on the sale of the e-book on the Kindle.

[A portion of this email was redacted by the court.]

Basically–the entire hypothetical benefit of a book without raw materials and distribution cost accrues to Apple, not to the publisher or to the creator of the work.

The other big issue is one of holdbacks. If we can’t agree on the fair price for a book, your team’s proposal restricts us from making that book available elsewhere, even at a higher price. This is just a bridge too far for us.

Also, we are worried about setting prices to high–lots of ebooks are $9.99. A new release window with a lower commission (say 10[%]) for the first six months would enable us to proce much more kenly for Apple customers. We’d like to da that.

More on this below in Brian’s note to Eddy. We outline a deal we can do.

Feel free to call or write anytime over the weekend to discuss if you like.

I am in the UK (so eight hours ahead of CA). My home number is [redacted]. I check the email regularly.

Steve, make no mistake that across the board (TV, Studios, Books, and Newspapers) we would much rather be working with apple than not. But we, and our partners who produce, write, edit, and otherwise make all this with us, have views on fair pricing, and care a lot about our future flexibility. I hope we can figure out a way, if not now and in time for this launch of yours, then maybe in the future.


Jobs replies…


A few thoughts to consider (I’d appreciate it if we can keep this between you and me):

1. The current business model of companies like Amazon distributing ebooks below cost or without making a reasonable profit isn’t sustainable for long. As ebooks become a larger business, distributors will need to make at least a small profit, and you will want this too so that they invest in the future of the business with infrastructure, marketing, etc.

2. All the major publishers tell us that Amazon’s $9.99 price for new releases is eroding the value perception of their products in customer’s minds, and they do not want this practice to continue for new releases.

3. Apple is proposing to give the cost benefits of a book without raw materials, distribution, remaindering, cost of capital, bad debt, etc., to the customer, not Apple. This is why a new release would be priced at $12.99, say, instead of $16.99 or even higher. Apple doesn’t want to make more than the slim profit margin it makes distributing music, movies, etc.

4. $9 per new release should represent a gross margin neutral business model for the publishers. We are not asking them to make any less money. As for the artists, giving them the same amount of royalty as they make today, leaving the publisher with the same profits, is as easy as sending them all a letter telling them that you are paying them a higher percentage for ebooks. They won’t be sad.

5. Analysts estimate that Amazon has sold more than one million Kindles in 18+ months (Amazon has never said). We will sell more of our new devices than all of the Kindles ever sold during the first few weeks they are on sale. If you stick with just Amazon, Sony, etc., you will likely be sitting on the sidelines of the mainstream ebook revolution.

6. Customers will demand an end-to-end solution, meaning an online bookstore that carries the books, handles the transactions with their credit cards, and delivers the books seamlessly to their device. So far, there are only two companies who have demonstrated online stores with significant transaction volume–Apple and Amazon. Apple’s iTunes Store and App Store have over 120 million customers with credit cards on file and have downloaded over 12 billion products. This is the type of online assets that will be required to scale the ebook business into something that matters to the publishers.

So, yes, getting around $9 per new release is less than the $12.50 or so that Amazon is currently paying. But the current situation is not sustainable and not a strong foundation upon which to build an ebook business.

[A portion of this email was redacted by the court.]

Apple is the only other company currently capable of making a serious impact, and we have 4 of the 6 big publishers signed up already. Once we open things up for the second tier of publishers, we will have plenty of books to offer. We’d love to have HC among them.

Thanks for listening.


“Murdoch starts to bend”


I think the crux of this is our flexibility to offer product elsewhere at price-points you don’t like.

If we could offer to you that a certain percentage of releases (>50%) would be available within your pricing structure (< or = 14.99), does that give you enough comfort?

I think we are worried more about the absolute holdback of product elsewhere, and our ceding of pricing to Apple, than we are about the actual haggle over what the price will be.

I haven’t shared this with HC directly–so this is only hypothetical. But if you were willing to accept that a supplier can exploit other avenues (at prices not disadvantageous to you), with a guarantee of substantial volume through Apple–maybe I could work with HC to get to some common ground.

Please let me know.

A different question: we have four areas of discussion (related to our product) between our teams right now: Books, US Video, Int’l Video, and newspapers. All at different stages of maturity, these discussions are all centered, for us, around the desire to make our product widely available, and to make yours and our products more attractive for our customers. It seems though that we in each one we largely encounter a “take it or leave it” set of terms, and predictably we’ve so far failed to really strike the kind of partnerships that could move things forward.

Is it worth considering in the round, over the next few months or weeks, whether or not some of these loose ends can be tidied up? It’s clear that Apple is already becoming an attractive platform for so many of our customers–all over the world. As a creative company at our core, NWS [News Corp.] should be more engaged with Apple, and I think Apple could be more engaged with NWS, globally, than either of us are today.


Jobs goes in for the kill:


Our proposal does set the upper limit for ebook retail pricing based on the hardcover price of each book. The reason we are doing this is that, with our experience selling a lot of content online, we simply don’t think the ebook market can be successful with pricing higher than $12.99 or $14.99. Heck, Amazon is selling these books at $9.99, and who knows, maybe they are right and we will fail even at $12.99. But we’re willing to try at the prices we’ve proposed. We are not willing to try at higher prices because we are pretty sure we’ll all fail.

As I see it, HC has the following choices:

1. Throw in with Apple and see if we can all make a go of this to create a real mainstream ebooks market at $12.99 and $14.99.

2. Keep going with Amazon at $9.99. You will make a bit more money in the short term, but in the medium term Amazon will tell you they will be paying you 70% of $9.99. They have shareholders too.

3. Hold back your books from Amazon. Without a way for customers to buy your ebooks, they will steal them. This will be the start of piracy and once started there will be no stopping it. Trust me, I’ve seen this happen with my own eyes.

Maybe I’m missing something, but I don’t see any other alternatives. Do you?




5 Features that can make the “iWatch” an Awesome must-have

So, just like I told you, Apple is turning its iPod Nano into a new wearable device coming soon. Given Apples history with these things, I predict it will be cool but fall way way short of its potential.

It’s unlikely any of this will actually be in version 1, but my 100% technologically and business-wise possible wish list is as follows. From my mouth to Jobs ears… Here’s what Apple could do to make this product tha bomb dot com:

1- Make it WATERPROOF.
Not water “Resistant” to where it can get splashed – iPhones are already that. They don’t advertise as such, but I’ve taken mine on enough boats and in enough oceans, lakes, pools, hot tubs and bath tubs to know that it can handle some spritz and even moisture (minimal, obvs) in the headphone jack and Lightning-butthole. The only iPhone I killed with water was Brenda1 – my first generation iPher in 2008 when my group stayed out on an offshore Hawaiian island too long and the tide came in and was rough so the swim back was equally rough, causing our waterproof bags to — whatever. The point is that a smart watch that doesn’t need to be removed in water is how to make watches a thing again. I used to love my old waterproof Fossil a girlfriend bought me back in the day to keep track of how many hours I was out in the waves and whatnot. Phones should be waterproof but I get why the care and expense isn’t taken to make them so. Theres no excuse for watches. Especially a smart watch. We already have an electronic thingy that we have to remove from our person before we go wake boarding. We don’t need another. A waterproof iWatch is how Apple can truly keep us connected with something actually useful: Get Facebook, Twitter and other notifications with you while in the pool. Don’t cut your surf session short waiting for a call – just check your wrist for important texts and incoming calls to tell you when you need to hustle back ashore. This is the #1 need for this device. All it would mean is wireless charging for the device – which is not a big deal but for some reason Apple doesn’t use that technology anywhere. The iWatch might be the first wireless charging device Apple finally releases though since there really is no sensible way to add power to a wearable device conveniently and in keeping with the minimalist Apple esthetic. And I’m not even talking about the electricity wifi that I invented and was laughed at for claiming was possible in 2001 – I just mean a charging dock with no plug-in. My tooth brush uses it. Why can’t apple? Their wireless mice should at least use it (with double-A recharbales inside that can be replaced with regulars if you choose) but doesn’t. Make the watch waterproof and that alone will get me to buy it.


2- Make it talk to other Apple products.
This is your chance to make being in the Apple cult really pay off, Apple. Wtf is wrong with you for letting Samsung punk you on that cool “bump phones to share a picture” feature? How was that not an Apple thing, you dummies? Especially when this iTV monster finally comes out after 4 years of developing – you’re gonna have to blend your shiz better. I want my iWatch to pause and play my iTV so I essentially have a remote with me at all times and I want it to know when I’m in the vicinity of my other Apple children so it can do things like log me into my computer without making me type in my password every time.


3- Make it loud AND make it silent.
Up until now, watches just beep and chirp at you. Apple has a chance to re-invent this product that’s been stuck in the 1980s for 20 years and give people a Walkman on their wrist and instead of calling it the iWatch – call it the iBand and make use of the play on words since you’ll have a music band within a wrist band. Put a speaker in this thing. Let me listen to a podcast or music playlist with the sound coming from my arm instead of a device in my pocket. That combined with its waterproof feature would make the watch fantastically unique.

For alerts, alarms and other messages: Morse code them to me with vibrations. You put your phone on vibrate and it still makes a loud “JZZZ JZZZ” sound. Put your iBand on silent and it subtly notifies you that you have something you might want to give attention to and finding out what it is not a cumbersome hassle of digging for your phone or retrieving it across the room just to see what has popped up on the screen – it’s as simple as glancing at your time telling device (which is perfectly socially acceptable in almost any instance outside of Presidential debate and other moments where you might be considered inapropes for waiting for whatever is going on to be over).


4- Make it a wallet.
Apple is inching towards this with it’s built in Passbook app that stores boarding passes, coupons, movie tickets, gift cards and more. Put it on the wrist. Eventually, I’d like to pay for my milkshake with money on my credit card by booping my wrist on a device in front of a register and getting an electronic receipt logging my purchase right away – but until then, I’ll just settle for paying for that milkshake with a gift card stored in my iBand the same way I can do now with Passbook on my iPhone. Put it on the wrist and give people one less thing they have to hold in their hand and dig in their pockets for. It’s the way of the future.


5- OBVIOUSLY open it up to the App Store
It’s really dumb that the Apple TV has existed for so many years and STILL doesn’t (and may never) allow 3rd parties to make apps for it outside of special deals made with Apple itself. Slowly, new features have been introduced to the device like Hulu Plus and a bunch of sports bullshit (baseball and basketball video streaming or something? Idk. I’ve never explored the icons) but it needs so much more. I assume this is Apple just holding back until their actual TV comes out in a million years to give it a bigger bang, make sure it works exactly how they want it to and that there aren’t conflicts of interest with their other products but it’s still lame. The iBand needs apps right away. I love the idea of having a hand-watch (which I’ve lost the ability to read) and a digital watch in the same device that is a tap away from switching back and forth in full-screen and I love the idea of being able to swipe left and right to see the local time vs time @ my destination I might be traveling to vs time in Kandahar – but that shiz is just the beginning. Make your watch a Mickey Mouse watch – put some screen savers on it that could be conversation starters – turn the screen stark-white to make it a makeshift flashlight – let me run the far superior (and free) Run Tracker exercise app on it instead of Nike’s super lame built-in iOs app that requires an external $30 device on your shoe – OPEN this thing up and it. can. Be. Awesommmmme.

These features are necessary, awesome and most of all: useful by being not redundant (ie: they achieve better ways to do things than currently exist even in other Apple products like the iPhone or any version of the iPod).


I rarely ask these closer questions (cuz it’s almost always just a cheap gimmick by authors to get viewers interactive) but I really wanna know: What do you want in the upcoming Apple-wrist-product?