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What is happening to Jones Soda and Netflix?

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Katie Laird and Esther Steinfeld are back with business brain candy, the small and not-so-small news that you need to know. In the news this week: Jones Soda is not in a happy place. Why is the U.S. Postal Service torturing Netflix? The Air Force is looking for innovation from small businesses—have you responded yet? (“This will be bad for people who want their movies NOW!”)

Full Interview text

Esther: Welcome to the BusinessMakers Overtime Show heard here and online at theBusinessMakers.com. We are your hosts Esther Steinfeld -

Katie: And Katie Laird.

Esther: And this week's show is packed full with small and not to small business brain candy without the glossy sugar coating. We keep it real, you know. So actually, speaking of sugar coating, hope you had a great Easter.

Katie: I did actually! I still feel like full to the brim of those marshmallowee peep goodness.

Esther: Mmm!

Katie: But um, you know, once you roll me out of here I'm gonna be just fine. (Laughter)

Esther: Okay.

Katie: So I'm excited about today's show because we're actually going to be covering some - what sometimes can be kind of tough ground. We're gonna be looking at how to deal with some of those negative, malaise, some of the dudes and dudettes in your office that may be just a little bit abrasive. So we're gonna cover that ground. "How to Handle the Negative Malaise Complainers and Naysayers" we are so going there.

Esther: Oh yeah we are.

Katie: Ha-ha-ha

Esther: Then in Chapter 2 we've got a very special interview feature with Vinny Lingham. He's the founder and CEO of Yola. Yola's a very interesting company, you're not gonna wanna miss this one.

Katie: It is, yeah.

Esther: So first of course we're gonna kick it off with style with our business week in review.

Katie: So let's just take a moment to be very, very sad for me because this piece of news make me very unhappy.

Esther: Yeah, I know. This is a sad one for you. I have actually never even had this product before -

Katie: Oh my gosh! (Laughter)

Esther: - which is - I know. Like you would think that this would be something I would be all over, but you know, I don't know. Never had it.

Katie: So that something is Jones Soda. It is one of the most amazing - oh, and our producer John's ears perked up like a puppy dog. That was kind of weird. (Laughter)

Esther: (Laughter)

Katie: Jones Soda is one of the funkiest, coolest, little niche premium so companies out there. They're the guys that do everything from blue bubble gum soda, which I personally call "Magical Windex" because it's not colored and it's amazing magical window. Too, there the guys that when you go into Target during Christmas and Thanksgiving time, they sell these gift packs full of sodas that are flavored like holiday foods. And when I say holiday foods I don't mean cookies and cake. I mean like turkey and mashed potatoes, and like roasted asparagus. So I mean as you can tell, they are a funky, crazy, cool company started by a bunch of guys that were crazy about surfing. They built their business by going to extreme sports games. They're all about Indy Rockers and Skateboarders, and basically I'm in love with him. And the news besides the fact that I'm in love with them, is that man, they're kind of going down.

Esther: Awe gosh.

Katie: Business Week has reported that the company last year, they've posted their updated quarterly results for the fourth quarter, 2009 and they actually had a fall in their revenue 30 percent to $4.3 million from $6.1 million.

Esther: Wow.

Katie: And it's tough stuff because they are up for sale right now. Reeds Soda, which is another kind of more natural, crunchy granolaee type soda company were actually interested in purchasing them. They'd actually signed the beginnings of the contracts. They're going through, investing time, investing money. Jones Soda decides that it wants to start looking for other people, other buyers, and now it's just this amazing company is just sort of in limbo.

Esther: That's so sad!

Katie: Yeah, so

Esther: But you know, I'm wondering if maybe the economy and recession, just the soda in general is -

Katie: It's the soda?

Esther: - a luxury, but also the product itself is a lot more expensive than you know, a$1.50 diet coke at the gas station.

Katie: It's definitely due to the decline in just soft drink sales period. But I think of lot of their business problems started a couple years ago when they were trying to be really, really aggressive expanding their company. It just did not work out. You know, they made some big decisions, they took some big chances.

Esther: Yeah.

Katie: Terrible news a couple years back. They had to cut like 40 percent of their workforce -

Esther: Oh wow.

Katie: - most of whom - I mean this is a 22-year-old brand -

Esther: Oh gosh.

Katie: - and I mean it's just - yeah. So that's my depressing piece of news. Like somebody get me a soda, seriously. (Laughter)

Esther: Yeah, awe. And put a little rum in there.

Katie: Yeah seriously. (Laughter) Get me some Vodka. (Laughter)

Esther: So another kind of interesting news, I find this very interesting actually because Netflix as you know is kind of this premier brand. They're almost like a Zappos.

Katie: Yes.

Esther: They're all online. They have, you know, the techy aspect, the kind of quirky environment. They have the kind of same "do no evil" policy as Google and they're very, very particular about why they hire. I mean they're in the news a lot for their service and they're -

Katie: Yeah.

Esther: - you know, for a lot of things, not just the fact that you get movies delivered to your house. But as we I think how we talked about on the show already, the postal service is planning on stopping Saturday delivery.

Katie: Yes!

Esther: So what does this mean for Netflix? Very interesting what's gonna happen. So, in 2005, this company Netflix, this little tiny company Netflix, they actually had 4.2 million subscribers and took in $41.9 million dollars. Last year the company brought in $115.9 million.

Katie: Wow!

Esther: I mean that is a huge, huge amount of gross.

Katie: Seriously.

Esther: Okay, so if they stop delivering on Saturdays, this is gonna be very very bad for the people when really now.

Katie: Yes.

Esther: I mean, they could go with the more expensive service, but more expensive and slower and just if there is no really better alternative to the postal service, because usually people, they expect to get that movie like the next day -

Katie: They do. Like I know people -

Esther: - or two days later.

Katie: That like they time it to - you know, like they know exactly when their mail carrier will come in a day and they know what days to send it back so they get the release that's on Tuesday.

Esther: Exactly.

Katie: I mean people are intense about their Netflix, you know the community build around it.

Esther: They are.

Katie: I mean this -

Esther: The queue, moving up in the queue, moving down in the queue. I mean just all kinds of stuff.

Katie: But you I know I've and I know I've talked about this a lot on the show, I am a crazy Nintendo junkie, and recently, Netflix and Nintendo have worked out a new arrangement where just like some police stations and the game cubes and the X-Boxes, you're able to stream Netflix videos. You can do this Nintendo Wee now -

Esther: Ooo-wee!

Katie: Which is very exciting to me, pun intended.

Esther: And you can do this; however, this service is cheap but it's the licensing of the products, especially movies.

Katie: Yes.

Esther: That gets very expensive, there's a lot that goes into it because think about what happens when you start steaming a movie and hackers come in and decode it and -

Katie: Exactly.

Esther: - oh steal it! There's a lot of licensing roles , so that's the expensive part. The rentals themselves would be very expensive to just get the copyright, or whatever it is.

Katie: Yeah, yeah, and I mean, Netflix only gives a very selected portion of their movies available for either streaming to their laptop or to a gaming devise. I mean maybe this is why they have been moving quickly in the online alternate views platforms -

Esther: Yeah.

Katie: You know? So I mean who knows. Who knows, maybe Netflix, iPhones, Google Android's, like maybe this is just the kick in the butt that they need.

Esther: Oh I think there's no question that we're going to be primarily viewing moving on iPhones and Android's and all kinds of technology that we can put in our pocket and bring on an airplane.

Katie: Yeah.

Esther: No question. Once we have Wi-Fi in the airplane, you can just download whatever movie you want. It's gonna put that stupid - you won't have to watch Maid in Manhattan or you know, The Pacifier when you were on your three hour flight.

Katie: (Laughter) Maid in Manhattan. (Laughter)

Esther: I actually kind of liked Maid in Manhattan. I don't know why I said that movie. (Laughter) Actually I would have preferred that to The Pacifier which I did watch.

Katie: I've never seen

The Pacifier

. (Laughter)

Esther: Yeah, actually I had to like put my little eye patches on so I couldn't see it.

Katie: Oh my gosh!

Esther: I just like did not wanna see it at all.

Katie: Really?

Esther: I was like anti - I do not like Vin Diesel -

Katie: Oh!

Esther: - and anything he stands for.

Katie: Okay, well that explains it.

Esther: All of his little children getting into trouble, Arnold Schwarzeneggeree type stuff, it's just "Ewwwth".

Katie: Lame.

Esther: Lame, yeah. Can I read a book?

Katie: So, awkward transition. Enter awkward transition here. Speaking of planes, let's talk about the Air Force.

Esther: Oh dear God.

Katie: Ah man. Waa waa. (Laughter) We picked up on an interesting article from the Dayton Daily News, Dayton, Ohio's on one of their daily newspapers. It's talking about an interesting two-day conference that was held at the Wright-Patterson Air Force Base in Dayton that was basically connecting the Air Force and local small businesses trying to help match up the Air Force's needs to a lot of the small business innovation that's out there in the marketplace right now. And it was pretty cool because apparently the electronic systems unit alone of the United States Air Force awarded almost $800 million in contracts specifically to small businesses last year in 2009 and they're looking to keep growing on that number. They love the way that these smaller businesses are able to think more quickly. You know, they have these passionate people that are really just wrapping their arms around the things that they need. And of course - I mean this is a very specific kind of business to be in, so if you are into tracking moving targets on the ground and detecting and countering like suicide bombers -

Esther: Oh goodness.

Katie: - then this is very exciting news for you. (Laughter)

Esther: Yes. You know I think it's interesting that so many government sectors are tapping into the business world. Remember President Obama has these roundtables with some of the world's most prominent and well known CEOs. I mean it would be nice if he spoke to some small business owners too -

Katie: That's what I believe.

Esther: - as we've said that before of course.

Katie: Yep.

Esther: But it is cool how different government sectors are recognizing the innovation, not just, "Oh that's cool, that's cool," but actually utilizing it for their own businesses and kind of trying to revamp with that innovation.

Katie: Exactly. So if your small business or your small business idea has anything to do with blasting whatever magical laser beams that the Air Force wants, check out a website selltoairforce.org.

Esther: Maybe safety vision should check 'em out.

Katie: Seriously, exactly. So the U.S. Air Force Small Business Unit is selltoairforce.org and I mean who knows. You could have the next exciting contract for laser beam robots. Man, I know nothing about that. (Laughter)

Esther: Oh!

Katie: But let us know at our Facebook page. It'll be awesome. (Laughter)

Esther: Yeah! So I guess that wraps up our business week in review.

Katie: It does. Sodas to laser beam robots.

Esther: Easter bunnies and peeps. And you know, it's always funny when we look back on the business week in review after it's completed and think about the things we talked about.

Katie: Yeah. (Laughter)

Esther: Last week we talked about hitting golf balls off of a giant building in Dubai or off an island in Dubai or something.

Katie: Yes, at The Palms, right.

Esther: Yeah, yeah.

Katie: Yeah.

Esther: Interesting. (Laughter) So I guess again, that wraps up our business in review. You're listening to the BusinessMakers Overtime Show heard here and online at theBusinessMakers.com. I'm Esther Steinfeld -

Katie: And I'm Katie Laird.

Esther: And we're gonna be back in Segment 2 with a great interview with Vinny Lingham, the CEO of Yola.

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