Above C-level

I always found it a bit cliché and condescending to use the term “only a New Yorker would understand”, but now that I no longer live in New York I suppose it’s acceptable. And in the case of the movie-going experience it’s true for a number of reasons, the biggest of which is the crowds. Any new or marginally popular movie shown on a Manhattan screen during somewhat peak hours is either nearly or completely sold out – often hours before the show.

Previous to Hoboken, I lived on the Upper West Side of Manhattan where my go-to cinema was the Loews Lincoln Square theatre at 68th and Broadway. And I’m not exaggerating when I say that it was borderline mandatory to purchase your tickets well before arriving at the theater, or else get left out in the cold. For Spiderman 2 on opening night this might seem obvious. But for the 6 PM showing of 13 Going on 30 in it’s third week of release, it’s not – and even that would sell out. Not that I know anything about that movie.

Given the predicament, the obvious choice for me was Fandango. At $1.50 extra per person on top of an already egregiously expensive $11 ticket, I felt robbed. But even worse was the feeling of being shut out, so the extra few bucks were worth my peace of mind.

Now that Fandango has purchased Movies.com, they are expanding their empire in the hopes of one day having all online U.S. movie ticket purchases roll into one company. For most, this is a monopoly that will go unnoticed, but in New York City, it’s a cartel. If Fandango is smart, they will gouge their customers for more in areas, such as NYC, where they are the only practical option. (Note: practical does not include a dedicated trip to the theatre hours before to buy tickets).

The best part of this deal is that the price for Movies.com was “minimal” according to the press release. Some M&A is smart, and I believe this deal falls into that bucket.

Luckily, it’s no longer my concern – I just get to write about it from Hoboken and then drive to the theatre.

A study was released this past week, and reported in the Wall Street Journal, that predicts a “six-fold jump in internet traffic between 2007 and 2012, as online video becomes the biggest driver of global data communications.”

Would it shock you to hear that Cisco, one of the world’s leading network equipment makers, was behind the study?

In this case it’s pretty obvious that internet traffic is going to continue its rapid pace of growth, so this study reveals nothing earth-shattering. However, let this be a reminder to always check your sources.

For all the (usually well-deserved) abuse the airlines take in the media, I’m going to take a break from all that for the next few minutes. Instead, I’d like to take some time to recognize the innovations this desperate industry has made over the past few weeks in the face of rapidly skyrocketing fuel costs.

Innovations, you say? What’s so innovative about rising ticket prices and baggage fees? Well, not much really. And for the sake of maintaining my loyal readership, I’m not going to write about why I agree that these companies should continue raising ticket prices. Nope – as an alternative, I’m going to spin this into a positive piece on corporate innovation in its various forms.

Usually when people think of innovation, they think of things that are cool, sexy and/or technology-related. A glaringly obvious example would be Apple’s iPod or just about anything Google-related. Bringing it back to airlines, JetBlue’s introduction of the seatback television was a groundbreaking innovation, or on a grander scale, the low-cost carrier segment as a whole.

Referring to Doblin’s Ten Types of Innovation, the ones I just mentioned likely fall into the most common buckets: products and services. In fact, because product and service innovation is the most tangible (not to mention cool and sexy), it probably won’t surprise you to hear that this is where companies spend a disproportionately large percentage of their time. However, what might shock you about Doblin’s findings is that innovations related to business model, process and customer experience add by far the most value – much more so than those related to products and services.

As a celebration of non-product and non-service-related innovation, I present to you the airlines:

Process Innovation

• Cathay Pacific scraped the paint off of its freighters, reducing the weight of their aircraft by up to 440 pounds
• Singapore Airlines is flying slower to increase gas mileage
• Delta is looking to eliminate duplicate flying manuals in the cockpit (which apparently are quite heavy)

Business Model Innovation

• In 2007, American Airlines sold 100 billion AAdvantage miles to other companies as an alternate revenue source to tickets

Brand Innovation

• JetBlue’s new “Jetting” ad campaign, trying to remind people that flying is fun
• Virgin America’s ads touting good food and even better looking people aboard their planes

Will all of these tactics work? Of course not, it’s the airline industry (c’mon, did you really think I was going to let you go without making fun of them at least once?). But more importantly, these companies are trying to find non-obvious ways to protect their bottom lines and grow their top.

Innovation: it isn’t just an iPhone.