Orica, the worlds biggest explosive company took an offer from private equity companies the other day. Shares leapt five dollars to 33 dollars Australian The company rejected the offer. Not enough.

Private equity gets slammed. But boy, is it relentlessly starting to clean up business and make it efficient. Orica has a conservative balance sheet, born out of almost failing a few years ago and a share price of four dollars in the early two thousands.

Private equity focused attention. Orica will have to buy another company, return capital, initiate a buyback or do something with the equity that have built up. Anything but sit on it.

Private equity has forced Coles to sell it self. Supermarkets in Australia will reap the rewards as prices come down from new competition. Myer was sold and is already doing much better.Coles management failed and private equity exposed this.

Private equity will have incredible excesses before this wave finishes; and there will be disaster; but overall consumers, the markets and companies will be better for what is now happening day in and day out.

Phil was at Costco in Culver City yesterday. Shopping for a big screen TV. "We got a 52" already but I think I'll take that out, and put it into the bedroom and install a 60" on the wall." Plasma probably. That's several K. But Costco have a $499 deal for a 32"LCD on the website.

Big screens prices are plummeting and the demand is explosive. Phil isn't alone. American consumers want the big screens. Price drops get them drooling. There's big growth building here. And some previously no names; Olevia  and Sceptre; could be big winners.

But after you get the screen what next? HDTV. Internet hookups. All coming as the hardware mandates more content.

Very interesting story from the BBC about iPod music downloading/ripping/purchasing habits.

It probably isn't a surprise to Steve Jobs but it appears that people who buy iPods don't tend to start purchasing music from iTunes.

Here are some of the salient points:

On average, only 20 of the tracks on a iPod will be from the iTunes shop

During 2006 Europeans will spend more than 385m euros (£260m) on digital music - mostly with iTunes

83% of iPod owners do not buy digital music regularly

5% of the music on an iPod is from online music store

In light of the recent announcement about movie downloads, one has to wonder whether this will change anything in the domestic movie business...

According to data just released by Deloitte e-commerce spending is up and is a direct result of the increased price of fuel at the pump.

The Holiday Mood Survey indicates that 33% of shoppers say that higher petrol prices are the reason for shopping on line. We already have seen data (from Pew Research) that shows that the biggest growth in Internet users is +40 year old women. And we know that the baby boomers have a lot more money available to spend than younger demos.

Is it possible that consumerism is so deeply entrenched in our Western culture that we will find a way to consume come hell or high water! And the Internet continues to be the next great frontier for doing so.

On line shopping, according to the research, provides us with a much easier way to comparison shop. The bust may look like it is round the corner, but the corner is in a virtual mall in cyberspace in a galaxy far away....

Small screens aren't a problem to people with good eyes. Would that predominately be kids, teenagers and younger adults? Sure. So why have screens been getting larger in executive offices (ie 19 inches is common now), in home theaters, and on common or garden variety TV's. Well, generally they are slightly older people's purchases. Another example of consumer segmentation unnoticed but driven by age. 

There's been an 8% rise in consumer electronic purchase in 2005 says the NPD group. Winners were the big TVs, plasma and LCD; MP3 players (iPod); digital cameras still sell well and although computers keep selling well, particularly laptops, the plunge in desktop price means that the value of the sale for this item is declining. (ie volume up, price down) That means desktop computer power is commoditizing at the lower end.

Today is Cyber Monday. If Black Friday was the mall and the bricks and mortar shopping explosion, today, as people sit at their workdesks with high speed internet connection is when they start online shopping for Christmas in earnest. The Washington Post notes that Visa does 20% of its yearly volume between Thanksgiving and year end, ie almost 160% of normal monthly sales. Exclusive Concepts reports 43% of retailers will offer discounts today.

Its makes sense. People are sick of battling traffic and crowds for a few bucks. That's not a great fun shopping experience. On line offers discounts and convenience. Today people are thinking towards Christmas, and "the holidays". It's also strong evidence that online has become a comfortable option for the main stream.

Sony includes an automatic, and virtually instant, personal video editor and producer software with its video cameras. The soft wear is called Muvee.

Take the clip of video. Pick a piece of music. Click the effects you want. Boom. You have art. Pictures, music, effects, all coordinated. As the Muvee guy said. Better than the boring video most people shoot.....(and left unsaid, never watched because its so dull) Problem is. No one knows that Muvee is is included with the camera as well as available generally. OK, maybe one in a hundred know. But do they use it? Which is why Muvee were at the trade show. To bang the drum. To build awareness.

Consumer created content is rising fast but quality will always be an issue. There still remains a role for professionals. Especially if amateurs don't use all the cool, new, available tools like Muvee which transforms their work.

 

Customized drugs are here. A pharmacy in Illinois makes drugs that the majors don't. They point the way forward for the tailoring of medicine to consumer needs and wants. Today, major drug company business models pursue the most lucrative new find. Especially something that can enjoy the protection of a patent, ie has high price protection.. That means inevitably sales are about mass; market, marketing, returns. Costs have been high to tool up, and then selling new formulations to the mass. So drug companies want new blockbusters to supercharge profits. New drugs  cost a lot. Worse, the number of formulations on sale are  restricted given the size of the market to funnel consumers to the mass approach.

OK so now they're starting to segment and trial. Pocket size throat sprays. Thin strips that melt in your mouth.Suppress. Theraflu. All efforts to reach consumers differently. To sell  more product. 

But what major drug companies haven't done is release commercially unused research to the general market, even though it may be an effective treatment for a small target market of consumers. Then, periodically, companies just pull  drugs off the market, despite effectiveness. Too little profit. Some drug ingredients and drugs just work better for some people than others. But they may not be available. And for whatever reason,  drugs may be available here, (the US) but not there (Canada). Or vice versa. Drugs are not a consumer focused business, despite what the companies say.

Now new business models are on the verge of overcoming the entrenched value of the distribution networks and big capital backing of the majors. A new business model for drugs links widely distributed and peer reviewed information, blogs;  internet distribution;  and groups of compounding pharmacists or small production run drug companies.  It's a new network that battles bigness and major's entrenchment. So each distribution and production element is necessary. And each was previously unavailable. Together they redress the balance towards consumers.

And, bring the shakeout value of competition into a now closed and sclerotic industry always erecting barriers to serve institutional profit over individual health.

Nike have always been a radical company, out on the edge. Their business model created cheap shoes for the US. By running "sweatshops", detractors claimed. Supporters; that globalized factories contributed wealth to developing countries. Take your pick. But they can market. They do know trends.

Now, Nike have turned the basketball game, NBA2K6, into a fantastic, marketing billboard for their shoes. And, bigger picture, internet ordering tool. In the game, winning brings new levels to master, and new Nike shoes to design. There's tight integration to Nike ID. Real world, Nike ID is a design your own shoe tool. You design colors, logos, a look on a 3D shoe site. Then these shoes get delivered.

Nike thinks big. When Nike ID relaunched, cell phone users could design a shoe and see it on the Reuters billboard on Times Square, New York  But Nike has also placed its products into  games such as NBA Live, FIFA Street, NCAA Football; Gran Turismo 4 featured an unlockable car with Nike brand.

So do Nike now think games will drive change in consumer buying? ie Comfortable playing shoe maker in a videogame? Then, hey, buy the shoes online in the real cyber world. We know games are bigger annual revenue earners than the movies. Will games now also displace TV as key movers of taste amongst players; predominantly young adults?  Perhaps, this coming basketball season will tell.