When market research misses the mark

A colleague told me about a call he recently received. It was from a research company doing some radio research (ironically, he used to work in radio). Unfortunately, he couldn't give them any input -- his age placed him outside the 12-35-year-old demographic they were surveying (but not by much).

Whichever radio station is paying for the research, I'm not sure they're going to get any useful information from it. Why? The group they're trying to reach is self-filtering in two significant ways.

1) Telephone surveys only poll those with land lines. Currently, 30% of 18-24 year-olds and 40% of 25-29 year-olds live in households with only cell phones. Which means a significant part of the demographic will never be reached by the researchers.

2) According to Arbitron, 22% of 12-17 year-olds and 17% of 18-24 year-olds have decreased their radio listening over the past year. Portable players, especially the iPod and iPhone, are primary content providers for this age group.

So this research group will be sampling from the fraction of the demographic that's been left behind by two major trends. What will happen to the station that tries to target this group based on that information?

They should have talked to my friend.

- Ralph

Day 53 of the WJMA Podwatch

Joan Woodbury - Gangs, Inc.

Gangs, Inc." (1941) provides a wonderful showcase for the queen of "B" pictures, Joan Woodbury. I've written about Woodbury before, but this is the first film I've run across where she really carries the picture.

Make no mistake: like the majority of files cranked out in the 1930's and 1940's, "Gangs, Inc." was never meant to be great art. It was just another commonplace entertainment that the studio hoped would turn a profit -- and to ensure success, the budget was kept as low as possible.

That's not to detract from the film. Producer, Maurice King does such a good job telling his story that one hardly notices the limited number of sets, sparing use of extras, and the supplemental use (but not overuse) of stock footage.

I have to admit when the film started, I thought I knew where it was going, but it played against expectations enough to keep me engaged to the end. Ten-year-old Rita Adams witnesses her criminal father's death after he turns states' evidence. Is the movie about a child running from the murderers who want to silence her? Nope.

Rita ends up in an orphanage, where she becomes friends with Bob Elliot, who builds model airplanes, and Mickey Roman who wants to make dough the easy way. Fast forward 10 years, and the adult Rita Adams (played by Joan Woodbury) is working in a factory; Bob Elliot's in aviation, and Mickey Roman's a gangster (of course). So is the story about Bob and Mickey fighting over Rita? Nope.

Rita's roommate, Donna Andrews (Linda Ware) is an aspiring singer, who Mickey thinks is swell. So is there a romance between the singer and the mobster? Nope, just friends.

But all of those story elements are important to the plot.

Rita is involved with an alcoholic playboy. While they're on a date, he drives while drunk and runs down a pedestrian. His family's lawyer (through the playboy) convinces Rita to take the blame to avoid scandal. Despite assurances that she'll only get probation, she's sentenced to a year in jail -- during which time, the playboy, who was never serious about the relationship, dumps her.

It's a hardened Rita that comes out of the slammer. Especially after Mickey produces evidence he stole from the lawyer's office that Rita was intended to take the fall all along. Rita sets off on a secret life of crime, and when Mickey moves to the big city, Rita and Donna relocate as well -- Donna, because Mickey's found her a job as a nightclub singer, and Rita, because the father of her ex-boyfriend (who died in a car wreck), is heading the Reform Party against the city's racketeers.

Rita takes charge. She makes a deal with the racketeers, and through blackmail pulls DeWitt into the newly-formed crime syndicate that runs the city through politics (the original title for the film, "Paper Bullets," refers to the use of ballots as weapons). In the meantime, Bob Elliot renews their relationship (unaware of her double life), and eventually Bob and Rita marry.

But all is not well. While Donna doesn't fall in love with Mickey, she does with his associate, Jimmy Kelly (Alan Ladd) who is actually an undercover cop. When the lid blows off, Rita's once again standing before a judge, along with the rest of the syndicate.

The film gives Joan Woodbury an opportunity to show a lot of range. Here she is early in story portraying a typical working girl.

After a stint in the big house, Rita turns to crime. She disguises herself for her robberies, posing as a different kind of working girl. Woodbury gets to play two different characters here.

The now hard-as-nails Rita meets with the racketeers....

...then after forging a deal, visits the man who ruined her life.

But there's another side to Rita, and Woodbury does an admirable job portraying it. In this scene, she reconnects with childhood sweetheart Bob Elliot.

The two are married right when trouble hits. Watch the domestic Rita take the blow, and then the hard-boiled Rita take over to end scene.

"Gangs, Inc." isn't a great film, but one that was definitely better than it had to be for the market. And one that I enjoyed watching. Now playing at (for free) at Archiv.org!

- Ralph

Day 52 of the WJMA Podwatch

Plasticville Profiteering - Market Unreality

We went on a tour of our local antique stores over the long weekend, which prompted me to follow up on a previous post. There are several things that affect the value of a collectible item (any kind of "collectible" item, from postage stamps to Beanie Babys). Some elements are the inherent in the item itself:

1. Condition
2. Rarity
3. Desirability
4. Historical Importance
5. Materials

Some depend on the market forces

1. Growth or shrinkage of core market
2. Change in availability 
3. Increase or decrease in overall popularity
4. Introduction of competing products

And after our little tour, I'd like to add another -- context. As I looked over items whose value I was familiar with, all I could think of was MisterKitty's excellent essay about buying comics in flea markets and antique shops, "The Crazy Grandma Price Guide."   

You hand her a stack of beat up Charltons [comic books] from the 70s; next to worthless in anybody's estimation. However, the little old lady manning the antique booth has other plans. "These book for eight dollars each," she says apologetically. And what book would that be, you wonder? Why, the CRAZY GRANDMA COMIC BOOK PRICE GUIDE, of course!

Ever since those freaking baby boomers flashed on their own mortality and started turning every bit of their childhood into age-defying fetish objects, newspapers and Sunday supplements have been running inane little filler pieces all about how those old comic books rotting away in your attic are worth thousands of dollars. And maybe some of them are. But ALL of them are NOT. Beat-up Jughead comics will not put your grandchildren through college, lady.

Amen to that. But most people shopping in these stores don't know that. So context matters. Take an item out of its normal market, and the price goes Crazy Grandma. 

Case in point: at the recent York Train Show I purchased an old Plasticville Super Market. The item's fairly commonplace. My cost? Eight dollars. Plasticville structures, in addition to the conditions listed above, have four basic things that affect their value.

1. Complete - while very simple plastic structures, many Plasticville buildings have pop-in doors, chimneys, stair railings, and other small pieces that are easy to loose or break.
2. Original box - many Plasticville structures ended up permanently installed on train tables or Christmas displays so often the boxes were tossed.
3. Loose - again, many structures were placed on train layouts, and often glued together. Obviously, unglued buildings are closer to the original condition and therefore more desirable.
4. Rarity - some models are rarer than others, and some color combinations of the popular items are less common. All affect value.

My Plasticville Super Market is a common model in common colors. It is not glued, and all the original parts are there, but there's no box (that's OK -- it's going on my layout). So all told, eight dollars was a fair price.

I saw it this weekend at a shop for $35. Same color, all original, but glued together and missing the box. The average antique/flea market shopper probably wouldn't know much about the Plasticville market, and so would have no idea whether the price was high or low. If it was worth it to them, they might buy it. 

But at a train show, in the midst of hundreds of like items, that kind of pricing wouldn't fly. Sure, there's plenty of bargains to had at flea markets, but watch out -- there's plenty of Crazy Grandma pricing, too.

 - Ralph

Day 51 of the WJMA Podwatch

Market Reality Followup

Yesterday I talked about how changing markets impact collectibles and showed how a fragmenting customer base can erode value (because at the end of the day, a collectible item, like a stock certificate, is only worth what people agree it's worth).

Waiting for in the mail this afternoon was a littler from AmbroseBauer Trains, "the nation's foremost marketplace of toy trains and toy train auctions." In this rather lengthy solicitation letter* Drew Bauer presented another take on what affects market value. He writes:

...Toy Trains do share with Financial Instruments [read: stocks] the fact that values of different Toy Trains do rise and fall depending on current market and demand conditions.

Because of changing demographics, an incredible amount of Toy Trains will come to market over the next several years. This large supply will have a negative effect on prices... since demand will not rise as quickly as supply.

Which makes sense. Even with the same field, the highly desirable items of one generation may not be the top collecting priority of the next. Going back to my post yesterday about Ken's Lionel 752E, the demand (and value) has dropped with the arrival of a quality reproduction that satisfies a certain market segment. As older collectors retire (or pass on), more 752Es are likely to resurface, driving down the price even more.

The lesson's still the same. Invest in a collection for enjoyment. Invest in stocks for profit.

- Ralph

*Note to Mr. Bauer: four-page single-spaced letters need bullet points. Really.

Day 45 of the WJMA Podwatch.

Lionel 752E and the Market Reality

Doesn't matter what you collect -- you should do it because you're interested in the subject, not because it's a good investment. Even in the current market, you're better off buying stocks.

Case in point: Ken's Lionel 752E streamliner set. As you may recall, his wife inherited this 1934 Lionel set in its original boxes. When we looked at the train a couple of months ago, the value was appraised at $2,500.

As with any collectible object, that value is a function of condition, availability, and desirability. Last month I attended the semiannual York Meet, one of the largest toy train show and marketplace in the world.

I saw a fair number of Lionel 752E's on the dealer tables in comparable condition to Ken's train -- at an average price of $1,500 (and that was negotiable). What happened?

Lionel and Mike's Train House are working together to reproduce some of Lionel's classical trains with the same quality and materials as the original. One of the first offerings is the M100000, otherwise known as the 752E (and its later incarnations).

(click on image to enlarge)

Now the toy train market consists of two basic and sometimes overlapping groups; operators and collectors. The latter want to display their acquisitions, the former want to run them. The rerelease of the 752E set (with some nice upgrades) basically split the market for the original 1934 train. The reproduction, though, only costs $800. That's about a third the original's market value -- which makes it a better choice for operators.

So let's say I had offered Ken $2,000 for his train when he showed it to me, and he accepted. If I had purchased the 752E because I really wanted it, I'd still be happy.

If I had hoped to score a $500 profit by reselling it at York, I would have been sorely disappointed and probably have taken a $300-$500 loss. And chances are that the value won't significantly increase over time, but the reproduction might go up in value once it's no longer available on the market -- depends on demand.

In our hypothetical case, if I make the purchase because I want the train, then I'm still happy after it loses value. If I'm in it for the money, then I'm not. But either way, Ken's happy with his (hypothetical) two grand.

- Ralph

Day 44 of the WJMA Podwatch.