Industries are making a killing off recent nostalgia and tried-and-true business plans while new releases suffer.
NEW YORK (MainStreet) -- If loyal customers don't want a new version of your product, it doesn't mean they've fallen out of love with the item that lured them in in the first place.
Coca-Cola learned this the hard way after introducing New Coke in the 1980s. Pro sports teams and their apparel sponsors practically invented the term "throwback" by padding merchandise revenue with high-priced remakes of old-school jerseys. Even car makers such as Ford(:F), GM(:GM) and Chrysler managed to keep muscle cars brawny during recent panics at the pump with vintage-style versions of the Mustang, Chevy Camaro and Dodge Charger.
Just as Hasbro(:HAS) still mines its Generation X fan base with anniversary edition releases of classic Transformers, G.I. Joe and My Little Pony toys, other industries are making a killing off recent nostalgia and tried-and-true business plans. We took a quick tour around the pop culture landscape and found four examples of original-recipe offerings that are either more popular with the new generation or outpacing its growth. They're not all as pricey or rare as fine wine, but they've all gotten better with age:
Current: Nintendo Wii
Classic: Nintendo anything else
It's been a tough couple of years for Nintendo after standing atop the video game industry for much of the late 2000s. Sales of its Nintendo Wii were hurt by price wars with Microsoft's(:MSFT) Xbox 360 and Sony's(:SNE) PlayStation 3, wounded when those systems mimicked or improved upon its trademark motion controls and nearly wiped out when Nintendo announced plans for its new Wii U console last year.
Those flagging sales helped Nintendo post its first ever annual loss in April and put the company roughly $500 million in the red for fiscal 2011. Mario and company continued getting stomped in July, when Nintendo reported a $220 million quarterly loss that was preferable only to the $326.5 million loss it took during the same time last year.
While Nintendo seems all too willing to bid farewell to the console once considered a wonder in dorm rooms and assisted-living facilities alike, the generations that grew up on Nintendo's older systems aren't willing to let them go so easily. Despite a virtual arcade that allowed Wii users to download games from its classic systems for less than $5 a pop, gamers who'd already shelled out for those titles in their youth weren't all so willing to do so again. Sites such as ThinkGeek began selling $50 third-party consoles that could play Nintendo Entertainment System and Super Nintendo games. Independent sellers such as J.J. Hendricks, owner of Englewood, Colo.-based JJGames, still make a living refurbishing old NES, SNES, Nintendo 64 and Gamecube games and consoles and sell forgotten favorites such as Konami's Zombies Ate My Neighbors and Taito's Bubble Bobble 2 for well over their original value.
Hendricks is aware of just how lucrative the vintage Nintendo market can be for sellers, but also how costly it can get for a gamer with a taste for rare titles. Back in 2009, he paid $17,500 for a rare, gold Nintendo World Championships 1990 cartridge used at Nintendo live events more than 20 years ago. While the cartridge is still great for playing mini versions of Super Mario Brothers, Rad Racer and Tetris, it's also one of only 26 ever produced and one of about 13 still in existence. That same year, he sold the only copy of Nintendo Campus Challenge for $20,100.
Five-figure cartridge are only getting more common as supplies dwindle and demand increases. In July, Hendricks paid $12,000 for a copy of Nintendo PowerFest '94, a game that asked players on Nintendo's live tour to get the highest combined score on Super Mario Bros: The Lost Levels, Super Mario Kart and Ken Griffey Jr. Presents Major League Baseball. Though there were 100 made, only two are still in existence. That's a bargain compared with the price of a sealed copy of Bandai's Stadium Events fitness game. Nintendo bought the rights to this game and re-released it in the U.S. as World Class Track Meet, but 200 survived and a sealed copy sold on eBay(:EBAY) two years ago for $41,300.
It's a bit of a stretch to call CDs "current" when roughly 60% of all album sales are digital downloads, but if you're looking for a hard copy it's still the format of choice.
They're also dying a well-documented death. Slacking CD sales fueled a 13% dip in album sales from 2009 to 2010, according to Nielsen Soundscan. More recently, CD sales dropped 5.7% in 2011 and tanked by 11.8% in the first half of 2012. That's down from 101.3 million CDs sold in the first half of last year to just 91 million in the early months of 2012.
But you can't blame CDs for a consumer base that would rather spend the $5 to $10 Amazon(:AMZN) and Apple(:AAPL) charge to download an album than the $16 to $19 a big box store charges for a new CD, right? Overall album sales grew a sluggish 1.4% in 2011, but Nielsen Soundscan notes that sales of vinyl LPs grew a staggering 28% during that same period.
Granted, it's an extremely niche market that makes up less than 4% of all album sales, but it's the only physical product gaining any ground in an increasingly online industry. Vinyl sales jumped from 2.8 million albums sold in 2010 to 3.9 million last year. That doesn't seem like a whole lot when you consider Adele's 21 sold 5.82 million copies in the U.S. alone last year (including just 16,500 on vinyl) while the top-selling vinyl record of 2011, The Beatles' Abbey Road sold only 41,000 copies and was originally released 43 years ago.
It's a big deal, however, when you realize that even buyers on discount-happy Amazon are shelling out a minium $16 a pop for the wax version of a Beatles album they could buy for $13 on iTunes or for $7 if they wanted a new CD version. Once relegated to thrift stores and esoteric collectors' shops, consumer vinyl is in the middle of a full-priced comeback that makes big, grooved versions of Jack White's Blunderbuss (which sold an industry-leading 18,000 copies in the first six months of 2002), The Black Keys' El Camino and Fiona Apple's The Idler Wheel ... coveted commodities. Record fans will still buy hard copies of full albums -- they just decreasingly want to buy a version with a sound they can download for less.
Classic: Indie theaters
Let's just say for the record that, in the aggregate, the multiplexes are winning in decisive fashion.
The number of indoor cinema sites -- actual movie theaters -- in America has declined steadily from 7,151 in 1995 to just 5,331 last year. During that same span, the number of indoor screens showing movies in the U.S. ballooned to 38,974 from 26,995. Multiplexes are getting bigger and small timers who can't pay the tens of thousands of dollars to switch to all-digital equipment are closing shop.
So how, exactly, are the indies winning? On average. With overall movie revenues declining in four of the past eight years, including two straight slumps in 2010 and 2011, value matters. The average cost to see a movie during those years has risen from $6.21 in 2004 to $8.02 this year, while the number of tickets bought has plummeted from 1.51 billion to 1.28 billion.
Does that make people less inclined to pay a premium for 3-D or Imax versions of films or to sit in an environment where distracting chatter and screens full of vacuous text messages are tacitly considered part of the experience? There's no need for conjecture when the box office numbers bear it out. Last weekend, Sylvester Stallone's testosterone-laden blow-'em-up blockbuster The Expendables 2 topped the box office with a $28.6 million take. That's wonderful, but it's a disappointing $8,622 per screen for Lionsgate(:LGF). Compared with the $24,100-per-screen that David Cronenberg's Cosmopolis took in on just three screens, the $17,700-per-room that the Frank Langella-led Robot & Frank took in on just two screens and the $16,427 that the deeply disturbing drama Compliance brought in on just one screen, Expendables 2 looked like Stop Or My Mom Will Shoot.
Think the latest installment in the Bourne series did any better the week before? Its $10,185 per screen was brawnier, but still couldn't outdo the indie sequel 2 Days In New York ($11,971 a screen on two screens) or the re-release of the 1971 French feature Max et les Ferralieurs (Max and the Junkmen) ($11,264 on one screen). To the theaters that play them, these films are equivalent to summer blockbusters and pad the receipts just as easily. On the moviegoer's end, they get to watch a film in a place that's more likely to be a cheaper ticket than the average multiplex, is more likely to offer them better food or a beer to enhance revenues even more and is more likely to be populated by people there to see the movie rather than to tweet about it while taking screen caps in full view of the ushers.
Since the summer blockbuster season opened in early May, only two major films have held the per-screen title: The Avengers and The Dark Knight Rises, for a combined five weeks. Any other week, you had to go check out a Wes Anderson camp comedy (Moonrise Kingdom), a multi-story Woody Allen travel narrative (To Rome With Love), a Hurricane Katrina-based fantasy (Beasts Of The Southern Wild) or a right-leaning election-year documentary (Obama's America: 2016) to find the toughest ticket in town. Surprisingly enough, Americans still want to see movies not advertised on soda cans. That should come as a big relief to small, struggling theaters.
Current: Yellow beer on tap
Classic: Old-school beers in casks and barrels
Don't listen to your beer snob friends: Fizzy light lager still reigns supreme here in the states.
Anheuser-Busch InBev(:BUD) and MolsonCoors(:TAP) alone still account for three out of every four beers sold in this country. Throw some Pabst into that equation and you're looking at roughly 80% of the U.S. beer market. That's formidable, but it's also dwindling away like a pitcher of foam from a shaken keg.
The two megabrewers each lost 3% of their market share apiece last year as craft, regional and imported beers all gained ground. Craft beer grabbed 5.7% of all beer production last year and 9.1% of all revenue, according to the Brewers Association industry group. Imported beer sales also jumped 1% last year after a 5% leap in 2010.
That combined growth means a lot more Corona(:STZ), Yuengling and Samuel Adams in local coolers, but it also means a whole lot of growth for beer styles and brewing and delivery methods once considered marginal among U.S. brewers. Samuel Adams maker Boston Beer(:SAM), for example, recently put some of its increased revenue into expanding its barrel rooms and small-batch brewing facilities in Boston. That's made it easier to brew wine bottle-sized servings of oak-aged, Belgian-style brews that ordinarily wouldn't find a home on the bottling line and to match the efforts of smaller brewers that have made wine-, whiskey- and bourbon-barrel aging key features in their beer portfolios.
As for the casks, these hydraulically pumped, smooth-pouring old-world beer vessels may have once been the provenance of Euro pubs or beer-geek bars but are starting to catch on with larger crowds. Forget that they're in just about every brewpub in America: The fact that they're a fixture in CraftWorks restaurants such as Old Chicago, Gordon Biersch and Rock Bottom mean they're giving the onion blossom crowd their first taste of still, slightly less frosty beer. Casks aren't going to be a sensation and there's a reason they've been largely replaced by steel kegs and CO2, but they're becoming a part of the American beer drinker's education and have become a expected amenity in any respectable beer bar.
-- Written by Jason Notte in Boston.
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