Sunday, April 18, 2010

Thanks alot, for nothing.

Once upon a time, there was a peaceful, prosperous little tribe that was being attacked from both it's smaller and bigger neighbors.

The leaders of the tribe appealed to the powers that be to be given the weapons to defend themselves, but they were ignored.

Meanwhile, their neighbors got bigger and badder guns.

Eventually, the powers that be decided to visit the once peaceful, prosperous little tribe, and found a clearing of burned huts and dead bodies.

"We've decided you're right," said the P-T-B, over the sound of buzzing flies. "We are going to give you an air pistol."

Panini, which owns the basketball card license and does football cards, and is one of only two major card companies left in America (Topps is the other.) (I don't count Upper Deck, since they have lost F.B., BSK., and B.B. licenses) has offered us an air pistol.

Now, normally, I'd throw out the old bromide, "Better late than never." And, well, I suppose that's true. Except it's going to take a very, very long time, if ever, for the village to repopulate. That is, if they want to trust in the powers that be.

I'm going the CAPITALIZE some of the comments in the following press release, to highlight the ironies.

But first, let me say a couple of things:

1.) I've been saying this needed to be done for 20 years now.

2.) They once again have left out the problem of the mass market, which was already killing the card market long before the internet became a factor. (My favorite example is when Fleer was putting "Rookie Sensations" in the mass market cards, and "Foreign Players" in the hobby shop cards -- so you literally had a choice of buying Kobe Bryant or Detlef Shrempf. It was like handing WalMart a bozooka and us a pea shooter.)

Without addressing this problem, the solution won't work.

Interestingly, there is a story in today's Bulletin about record stores, that has the following passage:

"'Record Store Days' is also a story of corporate captitalism's perks and perils, documenting the rise and fall of mega-chain retailers such as Tower and their major label partners, whose neglect of independent stores cut off a major artery of word-of-mouth fan support.""

If you don't mind, I'm going to repeat that, in a shout: "...WHOSE NEGLECT OF INDEPENDENT STORES CUT OFF A MAJOR ARTERY OF WORD-OF-MOUTH FAN SUPPORT."

And it could be said that the same thing has happened or is happening in just about every other industry I'm involved in: Comics, Books, Games, Cards, Toys, etc. etc. etc.

3.) These solutions are obvious. But what's even more important, they are the RIGHT THING TO DO! It makes the playing field fair! It shouldn't take 20 years to do the ethical thing, and only then because you realize this new industry you bought into ( An Italian sticker company, Panini bought the Donruss and Playoff brands) is on it's last legs.

4.) Mass market sales of sports cards dropped 35% last year. 35% IN ONE YEAR!

Sorry, I keep shouting, but damn, how stupid are these corporate suits?

Simply put, you can't kill your base of support and expect the business to grow -- internet or no internet, Walmart or no Walmart. They still need the likes of us little guys, who actually read, listen or play the product, who enjoy talking to the customers, who provide a gathering spot.

And if you are going to support us, REALLY support us, don't just throw us a bone every couple of years, always too little too late!

Without further ado, Panini's Wake Up Moment:

From The Cardboard Connection:

Panini’s Plan Might Just Save the Sports Card Industry

On Monday, Panini headlined the first day of the Sports Collectibles Industry Summit and promised to help heal the industries relationship with America's hobby shops.

Panini America executives stunned more than 100 hobby retailers at The Industry Summit by announcing sweeping, comprehensive changes to the company’s distribution network.

THESE ARE THINGS WE'VE WANTED TO DO FOR 10 YEARS,” Panini VP Mike Anderson told a room that included more than 100 hobby shop owners. “We are no longer turning a blind eye to the problem that has been killing margins for hobby stores.”

Panini outlined it's plans that addressed the most pressing concern of the hobby shop: Online sellers’ negative impact on brick-and-mortar profit margins and key buyer relationships.

Panini's plan was enthusiastically embraced by Retailers who have largely been ignored by the card companies OVER THE LAST 20 YEARS. Among Panini's pledges to a wildly enthusiastic retailer audience at the summit:

  • Re-authorizing all brick-and-mortar hobby shops. Only authorized stores and potentially a handful of authorized show retailers will be able to purchase and sell Panini product directly.
  • A dramatically reduced Wholesale Distribution network. Anderson noted that, currently, as many as 50 entities operate as quasi-wholesalers, through online services such as DealernetB2B, eBay, individual websites or through a sub-distribution sales force. Going forward, Panini will appoint and promote a very select number of Authorized Distributors –perhaps as few as four nationally, Alsup said.
  • A no-tolerance policy for distributors who sell to non-authorized retailers. Said Alsup: “If people do not abide by the policy, we’re done with them. No warnings.’’
  • A no-tolerance policy for retailers who attempt to wholesale product, rather than selling directly to collectors. “Again, no warnings,’’ Alsup said. “They will be black-listed.’’
  • A clear distinction between wholesale and retail businesses. “You are one, or you are the other,” Anderson said. “And never the twain shall meet.”

The Panini executives credited CEO Mark Warsop for the company’s unprecedented COMMITMENT TO INTEGRITY in distribution – and admitted that, prior to Panini’s purchase of the former Donruss/Playoff LP business in early 2009, the company made distribution choices that were NOT IN IT'S OR THE INDUSTRY'S BEST LONG-TERM INTEREST. Included: Selling significant volume of new issues and closeouts to online retailers, and allowing certain wholesale distributors to develop and operate online retail businesses.

“We turned a blind eye toward those things, because, honestly, we had to. Our ownership needed the money, and WE PERPETUATED THE INDUSTRY'S PROBLEM," Anderson said. “But under Panini ownership, we work for a CEO who is allowing us to do what should’ve been done 10 years ago. We are well structured, well financed and committed to doing what is best for the brick-and-mortar stores who are the lifeblood of this hobby.”

An enthusiastic Industry Summit crowd of 114 brick-and-mortar store operators applauded repeatedly during the Panini presentation. Jeff DeGraw, an Illinois-based retailer, said Panini’s presentation addressed his concerns so thoroughly “it was like they were listening in on our Retailer welcome meeting last night. This was clearly our No. 1 issue, and they’re taking a stand in support of us. I can’t tell you how glad I am to be here, at the Summit, to see this announced.’’ Said Mike Fruitman, a Colorado-based retailer: “I have just two words: ‘Thank you.’ “

Among some of the other initiatives Panini discussed with retailers:

  • The company continues to destroy any returned NBA trading card product to protect collectibility.
  • The company is willing to implement a MAP (minimum advertised price) program, but believes its authorized distributor and retailer qualifications may address the new-release pricing issue without a formal MAP initiative.
  • Anderson and Alsupsaid more details regarding the distribution initiative will be announced this summer, including the formation of a brick-and-mortar standards committee.
  • Panini is initiating an upgrade of its hobby ordering systems and schedules.
  • The NBA Adrenalyn XL trading card game launch has been an unquestioned success, thanks to strong marketing support including a mobile tour. The company plans to extend the Adrenalyn brand to football and hockey as part of its investment in re-developing a youth collecting segment.
  • The company will launch a new product tentatively called “The Vault,” which will feature compelling autographs and memorabilia swatches from sports, history and pop culture. Alsup indicated the initial release may be available as early as December 2010.

“Salvation is not going to come in the form of some new whiz-bang,wow, big-hit product,” Anderson said. “It’s just good honest blocking and tackling, and that’s what we’re doing here.”

If Panini is able to do what they say they can, this news may very well save an industry that has been PLAGUED BY BAD BUSINESS PRACTICES FOR DECADES. As someone who has worked at a Hobby Store, I can honestly say that the card store is the countries least protected small business. The HOBBY IS ONLY AS STRONG AS THE HOBBY STORE and it's refreshing to see a card company that truly cares about the health of the industries most treasured asset.

Panini might just be the CONSCIENCE the card industry has lacked for decades, in the process they might save the industry from itself. One things certain, Panini sees what's hurting the industry and appears to truley care about fixing it.

"Hey, I think that body twitched. Give him the air gun, quick!"

1 comment:

RDC said...

The more interesting question is will this survive a court challenge. It seems that other times this kind of policy has been established to control pricing the courts have tended to rule against the company.