Only innovation can really save the car business, and Apple has the juice to do it.

Generations X and Y grew up chauffeured in boring minivans and SUVs. The midsize cars in which these kids munched goldfish and raisins were virtual clones and brands were indistinguishable.  And now we wonder why those same kids aren’t buying cars? They weren’t inspired by Corvettes, Camaros, GTOs, Firebirds, Mustangs, Barracudas and the like. The 1990s and the 21^st century have produced a lot of snoring wheels.

It’s not surprising car guys are predicting that sometime in the next twenty years or so, we may actually see demand for autos decline in the United States. When boomers hang up their keys, you can expect car sales to plummet. Unless, of course, wheels become cool again to their kids and grandkids.

How does Detroit reverse the declining trend? I think the answer is for GM or another carmaker to team up with Apple. The Silicon Valley super-brand has a knack for getting people of all ages to pour money into their products, and dump perfectly good gadgets for newer generations of the same technology. And with its stock value at about $650 per share, the tech giant has the bucks to invest an automotive line of products.

Perhaps an exclusively electric power plant, unlike the Volt, with automated highway capability, active-passive integrated safety technologies to make crashes virtually impossible. Of course, any Apple vehicle would be an icon for design and a real head-turner.

There’s a profound irony here. Steve Job’s adoptive dad, Paul Jobs, was a machinist who Steve described as “a genius with his hands.” The senior Jobs loved to tinker with autos. He’d buy used cars, fix them up and sell them for a profit, frequently schooling young Steve on Detroit style and industrial design.  Deep down, Apple has wheels in its DNA.

I’m only half kidding about Apple marrying an auto manufacturer. There was a time when GM and Ford produced home appliances in addition to cars. Remember the Frigidaire and Philco brands? All that is old is new again. I predict Apple is going to hook up with some other consumer products company. They could probably make anything that works, work better.

Innovative darling, Tesla Motors, is a thriving car company that has designed very hot-looking and expensive electric chariots. The S Model starts at about $50, 000. The carmaker recently announced plans to expand its network of proprietary charging stations to blanket the U.S. in the next two years.  They currently have six power plug-in devices across California that can fully charge a Tesla in one hour. That delivers 300 miles of driving. A half-hour provides 150 miles of Tesla juice. The technology is getting better and electric is going to change the way we think about commuting, especially with gas reaching five bucks a gallon this week in the Golden State.

And Tesla models look nothing like gas-powered clones mainstream carmakers churn out. They’re sexy.

My suggestion is that GM plug into Apple before Tesla or someone else does. I’ll bet Ford wishes they had put Macs in their cars instead of the Microsoft Sync.

Today’s kids pay a bundle for smartphones, tablets and monthly fees for continuous connectivity. If you want them to fall in love with your ride, it has to take them places the information highway can’t. Remember the way the rumble of a 327 V8 engine could send electricity up your spine? America is ready for another jolt of excitement and liberty from mediocre design and paralyzing prices at the pump.

It’s time for Detroit to plug in to what America loves best. It's the power of I, as in innovation and  iPod, iTunes, iPhone and iPad. Now imagine iDrive. 

The worm turns

I love apples. Both the kind you eat and those you click.

In the spirit of full disclosure, I’m keyboarding this blog on a MacBook Pro. And we own five other Apple products including an iPad my wife, Ellen, rarely puts down. We also have an AppleCare contract and have received prompt, friendly and consistently excellent service from technical support.

Although I enjoy these devices and how they work, I’m not crazy these days about the way the technology company is behaving. And I’m not just talking about the exploitation of workers in foreign countries.

The most valuable company in the world is also allegedly continuing to set new standards for greed right here at home.

This week, the U.S. Department of Justice launched a lawsuit against the Cupertino, California company alleging collusion with five book publishers. Apparently, Apple set prices for e-books at its iTunes store and required the publishing companies to pay a 30% commission on every virtual volume sold there. Plus, they demanded the book business not sell e-books at lower prices through other Web retailers.

In fairness to Apple, the alleged price-setting efforts were in response to Amazon’s parasitic relationship with the publishing business. Amazon has been slashing book prices. According to a Bloomberg News interview, Amazon is allegedly selling books at a loss in hopes of driving bookstores, competitors and eventually publishers out of business. If book prices get low enough, publishing print versions won’t be a viable business model. Authors will be forced to deal directly with the likes of Amazon and sell only e-books.

Publishers allegedly crafted the Apple arrangement to fight back against price deflation. The Feds and 15 state attorneys general say consumers have paid millions of extra dollars for popular books. Three of the five publishers settled and two agreed to pay $51 million in restitution to book lovers.

All of these twisted tactics spell trouble for the creative minds that generate the content for books, newspapers, magazines, movies and other media.  As the value is artificially deflated and middlemen divert profits to their pockets, there’s less revenue for those who actually invest in media. The media companies and their creatives are being bled.

Apple’s 30% commission is based on an agency model. In other words, rather than buying the books wholesale like other retailers, or even selling them on consignment, they insist on nearly one-third of the price paid at the Apple store. And they’ve extended this to all sales generated at their App store, including subscriptions, as well and all sales made from within a company’s App bought at the App store.

In that sense, they’re setting prices by imposing a mandatory 30% premium rather than allowing the market to decide the value and price of a product. On the other hand, a bookstore would typically buy merchandise at the wholesale price and then sell them for whatever the market would bear. That way, a great book would bring the top asking price and a bore might sell at rock bottom.  The market rules. But at Apple, in every case, they get 30 pounds of flesh.

You can’t really blame Apple though. They saw the gap in the thinking of media companies and are simply exploiting it.

Consider this. In most cases we pay extra for convenience. Whether it’s the high-priced groceries at the gas station; the surcharge on carryout food orders; handling fees for sports and theater tickets or the shipping costs for mail order or Web purchases. Shopping the easy way has a price and it’s often steep.

Why is it that so many media companies gave away online access to newspapers and magazines for free? Think about it. In most cases, the new media version of a publication or creative asset is more robust and valuable than the old school version. For example, newspapers offer video and galleries of photos online. You can also easily search and e-mail articles and assets to friends and family. Yet, many publishers allow you to enjoy online media with all its extra perks for free. Makes no business sense.

Now, after giving away first-class journalism online, publishers like the New York Times are trying to train readers to pay for it. As they should. And advertising is more measurable online than in any other medium. It’s worth more.

In the 20^th century, radio and television began under free access business models. But advertisers paid top dollar in the golden age of radio and TV to buy share of mind of consumers who invested in radios and TV sets. However, over time, both have evolved into pay models, with satellite radio offering broad programming and excellent reception wherever we go. And cable TV provides hundreds of channels plus on-demand access to first run movies that cost less than theater tickets. But you pay at least the $29.99 monthly teaser rate for satellite or cable TV. And those current box office offerings are extra.

Simply put, you get what you pay for and if it’s convenient, you typically pay more. Getting your favorite journal or show delivered to your desktop no mater where you are in the world, anytime day or night is the ultimate convenience. And it should not be free. Giving away journalism and entertainment is costing jobs and may eventually destroy the media industry as we know it.

All the recent legal haggling with Apple and others couldn’t have come at a better time.

In early April, a consortium of leading magazine publishers announced they would batch 32 major titles for online subscriptions. You get all the monthly magazines at the all-you-can-read price of $9.99 per month. For $14.99 you receive both weekly and monthly titles. An unbelievable deal.

The consortium, called Next Issue Media, includes publishers like Condé Nast, Hearst, Meredith, Time Inc. and News Corporation. Some of the popular titles in the bundle are The New Yorker, Time, Vanity Fair, Better Homes and Gardens, Elle, Esquire, Wired, Fortune, People, Real Simple and Sports Illustrated.

You might say magazines are going cable, except this subscription model requires no extra fees for the premium content. It would be like getting HBO and Showtime thrown in with your local channels, ESPN, AMC and The Big Ten Network.

The Next Issue Media magazine App will reportedly work with the iPad, Android tablets, Kindle Fire and Nook. It will take about 12 months before the publishers officially make the offer.

Will they have to pay Apple 30% of every subscription they sell through the iTunes store? How will that impact their operations and business plan?

Imagine what would have happened to radio and TV if broadcasters had to pay RCA Victor, Motorola and Philco a 30% fee so the technology tuned into their programming. Even credit cards charge just a few percentage points commission for financing retail sales. The late Steve Jobs must have consulted the ghost of Hammurabi when developing his 30% taste of the business that passes his processors. I’m not talking about a commission on Apps, I’m criticizing the commission on subscriptions.

Apple and Google have created a double tax on the toll roads of the information highway. Consumers already pay fat fees through monthly charges for Internet access. Without the content that media companies create, iPads and other tablets are roads to nowhere, sleek looking launching pads with limited destinations.

My suggestion is that publishers prevent the technology giant, Apple, and others like Amazon or Google from worming in on their valuable content. How? Some technology writers are encouraging media companies to invest in developing Web-based Apps instead of those designed to run on Macs.

That way, they can advertise their amazing offer on the Web and have consumers connect there. Consequently, publishers would then be able to take a bigger bite of the apple for themselves — and the talented people who develop the content for their award winning media. 

Brand Madness.

On Sunday mornings we treat ourselves to a real newspaper. The New York Times in print.  Despite all the extras that come with electronic media, there’s nothing like the scale and flexibility of reading a real pub like the Times.

Jumping from section to section. Full-page, large images you can’t duplicate on an iPad or laptop.

And there she was this morning, on page 5. A gorgeous blonde touching up her ruby red lipstick and holding a vintage makeup mirror as she peered seductively out of the corners of her eyes.

Immediately, I thought of MAD MEN. Was this a promo for the show’s two-hour season premier tonight on AMC at 9 p.m.? She looks a lot like January Jones. 

I studied her beauty. Her long neck and the crisp print dress with an angular neckline descending from her shoulders to her bosom. Circa 1960’s.

Finally, I bothered to read the text. It was indeed an Estée Lauder ad for a new MADMEN collection of lipstick and creme rouge.

Wow! The way that woman looks tonight. This morning. Anytime. It  says we can make you feel like MAD MEN does. Now that’s branding. Simply put, it’s about style.

Without a word. Or a single note of a jingle. Not a glimpse of the logo. And the image told women it’s time to live like you're part of your favorite TV show.

Some marketers get so uptight they insist on following formulas for logo locations and taglines. They don’t realize that’s not what makes branding successful. It’s the aroma, the aura, the hum, the sixth sensation that defines brand character.

The old Apple logo was multicolored and lacked design just like their early products. When Steve Jobs reconnected with his company he brought a sense of flare to products and services that were just as sublime as the handsome silhouette of the current bitten Macintosh.

Now everybody’s trying to copy Apple. The same thing happens in television. ABC’s PAN AM attempted to fly in MAD MEN’s airspace but is struggling to gain altitude amid rumors it will be permanently grounded this May.

Lincoln is trying to draft behind MAD MEN’s high-octane leadership with TV ads starring John Slattery. Slattery plays the slimy advertising exec, Roger Sterling, on the hit show. But they couldn’t capture the iconic MAD MEN look like Estée Lauder did, and had to yack too much about Lincoln’s style and technology instead of suggesting it.

What if they had used vintage Lincoln cars and had “Roger” buying one at his New York City dealership, recreated to look like the 60’s?

Now that would say Lincoln luxury is an American icon like great advertising. But instead, the Dearborn ad men chose to emphasize their logo and features. They missed the point.

The carmaker could buy a ton of spots on tonight’s special AMC show, maybe even provide classic Lincolns for the driving scenes and still not bag the brand power they hoped. Because their cars haven’t been cool for a long time.

Lincoln should start with a vehicle design makeover before they try to rub shoulders with a leader. That’s what Apple did.

Gotta go. MAD MEN is on. And “Roger” just mentioned Oldsmobile.

"A Bite of the Apple" - Season One

Have you ever watched an episode of your favorite TV series and wished you didn’t have to wait a week or even a day to see the next one? Of course you have.

And in the future, you may get your wish.

Netflix, the Web-based subscription service for viewing movies and TV shows has become a content developer. In fact, they have two original series, and viewers can access an entire season all at once via the Internet. That’s right. No waiting until next week. Watch every episode of a brand new show on the day it debuts.

“Lilyhammer” is the Netflix hit that is now Norway’s most popular TV series. In fact, it’s already the most watched show in Norwegian television history.

It features Steven Van Zandt of Bruce Springsteen’s E Street Band. Van Zandt also played the mobster “Silvio” in HBO’s blockbuster hit series “The Sopranos”. A million Norwegians watched the first episode of his new show, in which he plays a New York mob boss in witness protection, hiding out in Lillehammer, Norway. His character, Frank Tagliano, chose the snowy destination based on watching the 1994 Winter Olympics broadcast from there. Now he’s an unemployed, immigrant gangster far from his territory in the big apple. If you’re a “Soprano’s” fan, you can imagine the fun.

Although a Norwegian production company produced the show for the Norwegian Broadcasting Company, Netflix helped finance it. And Americans will only see it via the Web, not over the air or on cable. But with Netflix, you can stream it to you big screen.

Hulu, another Internet-based TV entertainment source recently announced its own original series. And YouTube has paid Jay-Z and Madonna to develop YouTube video channels with fresh, unique content.

It only makes sense. If you can deliver entertainment via the Web or some other method, then why pay tolls to cable companies and satellite services. That’s obviously why Comcast bought NBC. They’re only hope for long-term survival is to create their own, exclusive content that people want to watch.

Now here’s an exciting twist to consider. Apple made news this week talking about plans to build on its Apple TV product. It’s an affordable ($200) device that allows you to stream video content from the Internet to your television. Or for that matter, it will mirror you iPad, iPod or iPhone and connect those devises to you big screen, too. So a movie you have on your phone can be viewed wirelessly on the flat screen in your living room or wherever. Apple TV can also connect you to all the content you’ve stored on the iCloud, so you have access to all the assets you own.

Up until now, Apple has made a bundle selling other people’s creative properties via iTunes, where people buy movies, music, TV shows and other entertainment to play on their various pods and pads. But, it’s only a matter of time until we’ll buy  electronic art directly from the artists or their producers.

I wonder if Apple’s next step is to begin generating its own original entertainment to sell with Apple TV. Imagine they hire Ken Burns to produce a documentary series on Steve Jobs and the evolution of his company. Maybe Ron Howard directs a movie based on Jobs’ life. If Mark Zuckerberg gets “The Social Network”, a movie celebrating the launch of Facebook, Jobs deserves an epic drama on the scale of the “Star Wars” trilogy.

At $500 a share for its stock, Apple certainly has the cash to go into the entertainment business. If they’re as good at it as they have been at re-inventing computing and communications, we’ll soon forget about traditional TV.

And if “Jobs” becomes a series, I’ll bet we watch every episode on the first weekend.