Johnny Blogger

Real Not Fake Good News

A positive story ran in today's Wall Street Journal about Chinese consumers desiring real products, not fakes. Retailers who had previously hesitated to open shop in China for fear of being ripped off are now expanding aggressively. One survey cited found that 95% of 28 to 35 year old women would be embarrassed to carry counterfeit handbags. This rings true to me, having been struck on a trip to China last summer that there were so many high end brand name stores, including Prada, Gucci, Coach - - even though they do get ripped off, the amount of legitimate business justifies a lot of retail space.

Having had untold amounts of Wild Apple artwork ripped off over the years, this is welcome news. Cultural shifts like this will take time, and it would be naive to think that the counterfeiting problem is under control. And we'll embrace any step in the right direction.

Vegas Pays Off Big

Best show in a dozen years. That's our summary of the West Coast Art & Frame Show held last week at the Mirage hotel in Las Vegas. Strong attendance from around the country and around the world. A great new venue for the show. Positive energy from buyers. Best of all, a feverish hunger for artwork!

I believe I qualified for Nerd of Show Award: with a series of early morning meetings involving public speaking, late night carousing was not an option. A small price to pay in exchange for days that were so full of action.

Now it's time to follow up on the mile-long to-do lists. Viva Las Vegas!

Showtime!

Tomorrow we head to Las Vegas for the West Coast Art & Frame Show. I predict a very strong and frenetic show. I have a feeling it's going to be one of those where you never even get a chance to eat lunch. It seems that everyone is coming - from all over the world. This has been a great show for the last decade, and promises to be even better now that they upgraded the location to the Mirage. Bring it on!

SOPA Controversy

Hey! Remember the artists!

The frenzy attacking legislation known as the Stop Online Piracy Act (SOPA) and the Protect Intellectual Property Act (PIPA) has Wikipedia closed down today and Google's homepage showing a censored logo. Right now the overwhelmingly dominant voices in the media oppose the acts.

I am 100% in favor of protecting intellectual property rights of artists, authors, musicians and adding teeth to copyright enforcement. In all the current anti-censorship fury, I don't want the copyright concept to be drowned out. The art publishing and licensing industries continue to be plagued by illegal rip-offs, meaning we are not being paid and our artists are not being paid.

Do SOPA and PIPA go too far? Probably. They put too much authority in government to declare who is or isn't legit, and expose websites to excess liability even when they act in good faith to remove infringing material.

Watching, reading and hearing the news, I think that SOPA and PIPA are DOA for now. But I hope that efforts to beef up copyright protection continue and we raise consciousness of artists' rights.

Goin' to Goa

It's great being part of a widespread eccentric family, especially when you get to go to your cousin's wedding in Goa, India. And not just because you get to play Indian dress-up.

This was a personal trip, but I couldn't help setting up a business meeting along the way. While Wild Apple has done business all over the world for the last 20+ years, India has always been something of blank spot. We'd love to play with over 1/7 of the world's population! I think we can develop a niche business in India; our cultures and imagery are so different from each other it will be a long time before we could ever go mainstream.

Among the impressions I bring back are the sights - rich varied colors, textures, bling, especially on women's sarees, decorated buildings, bright advertising, and lots and lots of litter; the sounds - it's loud! Car horns in constant use, blaring music; the movement - Indian traffic is crazy (for entertainment we sat and watched the endless stream of motorcles, cars, bikes, camel carts, rickshaws, pedestrians, and wandering cows - crossing the street was an adrenaline rush); the spirit - I was struck how integral religion is to daily life, not an abstraction; our different lenses on life - I see utter confusion, crowds and disorder, whereas they might see our life as sterile and lonely.

"Incredible India" for sure.

Occupy Wall Space

Have you ever tried coming up with a perfect company mission statement? It's really important, and it's a quick route to the funny farm.

Playing off of current events, "Occupy Wall Space" doesn't do the trick, since it ignores the half of our business licensing art for home products that aren't on the wall. We used to state our mission as "To discover and develop innovative, on-trend artwork to create products that people want and can afford." Too clunky. So we edited it to "We find and develop on-trend artwork and bring beauty to the mainstream market."

We thought we had it nailed and were a little proud of ourselves. But at a planning retreat our outside facilitator described it as "just over the Sucky line." Still a little clunky and corporate sounding. So we went back to the drawing board, where we remain with about a million (I exaggerate) versions.

We know what we want to say, we just don't have the exact right words to make it short, compelling, aspirational, and full of pride. The heart of our mission is picking art that is right for the market, and making it accessible. There are infinite choices out there - see Getty or Corbis, for example - so selecting from the art universe is key. Making great art available and affordable has been central to us since day one. In current political lingo, we want the 99% to be able to have beautiful art, not just the 1%.

Discussing our mission statement publicly like this may be a corporate no-no, but I feel like it's OK since we're just trying to craft the right words. Here's a sampling:

• We find great art and make beauty accessible to everybody.
• We bring art to Main Street.
• We make great art accessible.
• We bring great art home.
• We make it easy to get great art.
• We bring art to life

Not sure yet, but after all this, we may end up sticking with clunky!

The Price of Art

Art World News had the questionable judgment to publish a guest article from me in their current issue, as follows:

I’m a capitalist, which means I believe in the free market, which means I (have to) believe in competition. My economics courses taught that competition forces prices down, an easy theoretic concept to digest. During my 21 years (so far) in the art business, Reality corroborates Theory beyond any shadow of a doubt. To overstate the obvious, price does matter, yet the actions of our industry suggest we forget to compute the enormous cost of “competitive” pricing, in other words, reducing prices.

For years industry guru Jay Goltz has been pounding on custom framers to maintain their prices and in turn profitability. The inconvenient truth is that math is math whether you are a retailer, a framer or a publisher and that skipping the step to calculate the cost and effect of pricing decisions can be disastrous. Each level in the food chain buys into the idea that the lower the price, the more units you’ll sell. Everybody knows this but do they really know the effect of lower prices on profitability? Something to keep in mind is that you have to sell a lot more units to make up for the lower price. If your business runs on a 40% gross margin, and you lower your price 10%, do you realize you have to sell 33% more units to make the same gross profit?

If your gross margin is lower, the effect gets worse. This example assumes that your Cost of Sales per unit is entirely fixed, but even if it is partially variable, the percentage increase in unit sales required will be greater than the percentage decrease in price to make the same gross profit. The calculations are shown below.

Again, I emphasize that the same analysis applies to retailers and framers, not just whiny art publishers. And even though I know the math, there’s nothing like competition to keep me and my prices competitive.

Your price		10% Discount
$1.00	Price/Unit	$0.90
-$0.60	Cost of Sales/Unit	-$0.60
$0.40	Gross Profit/Unit	$0.30
x 100	Units sold	x 133, a 33.3% unit increase
$40.00	Total Gross Profit	$39.90

Powerful Tool to Fight Illegal Copies

Google has made it very easy to find uses (legal and illegal) of a specific image on the web. On Google's main site, click Images at the top of the page, then click the camera icon in the search box. You can paste a URL or browse to the image you want to search. (Detailed instructions here.)

This will make it a lot easier to police illegal artwork out there. The more artists, publishers, and retailers who know about it the better; transparency will help keep people honest. So spread the word.

Special thanks to Cedric H. who wrote about this on LinkedIn's Art of Licensing group.

Resilience

After the flooding in Vermont two weeks ago, our town is recovering. Wild Apple was unscathed (except for a torn up parking lot and a few days of no power), but for some families and a few local businesses it is very slow progress. Woodstock has pulled together just the way one would hope and imagine a small town can.

Yesterday's 9/11 coverage reminded me how much the man-made incident a decade ago dwarfed our recent natural disaster. Yet many of the emotions are similar - anxiety, loss, fear, frustration, and the need to reach out to give and receive comfort.

I remember the need to get home right after 9/11. Four of us from Wild Apple were stranded in Chicago where we were attending a printing technology trade show. We couldn't fly, couldn't get a rental car, no trains, so we ended up buying a used minivan and driving all night. Certainly not the most dramatic story, but all of us have our personal memories of that day.

The traumas experienced by our national and local communities demonstrate human resilience, and serve as a reminder not to sweat the small stuff.

A Flood of Relief

Yesterday (Sunday) morning as Hurricane Irene approached Vermont, I thought I'd go over to Wild Apple and take advantage of the rainy day to catch up on paperwork. I had to wade through a small ankle-high overflow from the brook, but no big deal.

Karen was also there, and she showed a little more concern - and sense - about the storm. So we used a ton of cardboard to "sandbag" the most vulnerable door. I checked the water level every half hour or so, and every time the water was higher and closer to the building. Eventually Dianne called to say she and her husband were concerned I'd get stuck in the building and they made me leave (rightly so). My last check revealed a tiny leak, not under the cardboard-sandbagged door, but coming in at the base of one of the walls. The brook overflow was up to my knees on the way out. The entire parking lot was a river.

I was 100% certain we would have flooding in the building, and I spent the afternoon watching endless TV coverage of blown out roads, flooded homes, and destroyed businesses around Vermont and right in our town of Woodstock. Meanwhile, it rained and rained. There was no way the water wouldn't penetrate the warehouse.

Sleep was scarce - I think I saw every 15 minute interval on my clock. Finally dawn arrived, dry and sunny, and the flooding had clearly receded. I headed over to Wild Apple, with a couple of detours due to bad roads. As I approached the office, I saw the overflow from the brook had completely disappeared, and 2/3 of the parking lot was clear, if a bit muddy and messy. Entering the building, I was relieved that the water hadn't come all the way into the offices, and progressing further, that the water had not touched the printing presses, my worst fear.

Taking a deep breath I continued into the warehouse braced for...an inch of water? a foot? a nightmare? But all I saw was dry concrete floor. Hopes rising along with the fear of jinxing it, right up to the wall where there had been that little leak when I left - totally moisture free! No one was there to high five or fist pump but this was one extremely happy camper.

There's nothing like the relief of being wrong when you know something is going to go badly. It's as good as waking up from a bad dream to safety and a beautiful day. I couldn't be more grateful.