Under the Influence with Terry O'Reilly - S2E17 - Brand Envy 2013

Episode Date: April 27, 2013

This is my annual look at the brands I envy.They may not be the hippest, or the latest, or even the coolest brands. They could be a product, a service or even a person - but I envy them for a reason. Like a famous toy that was discovered when its inventor was installing a light fixture, a television network that leads the Emmy race every year, a knife that can be identified from 30 feet away, and a person who has built an empire by breaking all the rules.All extraordinary brands, all I envy as a marketer. Hosted on Acast. See acast.com/privacy for more information.

Hi, it's Terry O'Reilly. As you may know, we've been producing a lot of bonus episodes while under the influences on hiatus. They're called the Beatleology Interviews, where I talk to people who knew the Beatles, work with them, love them, and the authors who write about them. Well, the Beatleology Interviews have become a hit, so we are spinning it out to be a standalone podcast series. You've already heard conversations with people like actors Mark Hamill, Malcolm McDowell, and Beatles confidant Astrid Kershaw. But coming up, I talk to May Pang, who dated John Lennon in the mid-70s. I talk to double fantasy guitarist Earl Slick, Apple Records creative director John Kosh. I'll be talking to Jan Hayworth,

who designed the Sgt. Pepper album cover. Very cool. And I'll talk to singer Dion, who is one of only five people still alive who were on the Sgt. Pepper cover. And two of those people were Beatles. The stories they tell are amazing. So thank you for making this series such a success. And please do me a favor, follow the Beatleology interviews on your podcast app. You don't even have to be a huge Beatles fan. You just have to love storytelling. Subscribe now and don't miss a single beat. In case nobody's told you, weight loss goes beyond the old just eat less and move more narrative. And that's where Felix comes in. Felix is redefining weight loss for Canadians with a smarter, more personalized approach to help you crush your health goals this year.

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this episode is from Season 2, 2013. You're soaking in it. Scores of it in an instant. Your teeth look whiter than noon, noon, noon. You're not you when you're hungry. You're in good hands with us. You're under the influence with Terry O'Reilly. This past January,

Andre Cassin died in Paris at the age of 86. He invented a toy that I loved in my childhood and is still sold today. The iconic Etch-A-Sketch. Cassam became an electrician in his early 20s and worked for a company that specialized in products that used aluminum powder in the manufacturing process. One day at work, he was installing a light switch plate that was covered with a translucent decal.

He peeled the decal from the plate and made some pencil marks on the plate's face. Then, he noticed something extraordinary. The image transferred to the opposite face. In other words, the images he drew with his pencil on one side caused the statically charged aluminum powder to form a corresponding drawing on the other side of the switch plate. That accidental discovery formed the basis for a toy he called the Magic Screen.

Simply put, it was a plastic box filled with aluminum powder that is etched away from the screen by an internal, movable stylus. Then, when turned upside down and shaken, polystyrene beads recoat the screen with powder and the image is magically erased. The stylus was controlled by two knobs on either side of the screen and you could make curved lines by turning the two opposite knobs at the same time one going vertical the other horizontal Cassand took his invention to a toy fair in 1959 an American corporation named the Ohio Art Company hemmed and

hawed, then eventually bought the rights to it for $25,000. Boy, were they glad they did. They renamed the toy Etch-A-Sketch and launched it in 1960, just in time for Boomer kids to ask for it for Christmas.

In no time at all, Etch-A-Sketch became the biggest selling toy that season. It didn't hurt that it looked like a TV set, with a big gray screen, red frame, and two white knobs. The boomers were to be the first generation raised in front of television sets, and the Etch-a-Sketch seemed as wondrous as the box in the living room. Fittingly, the game was launched with a TV commercial. Etch-a-Sketch draws and writes like magic.

Turn the knobs and the lines go up and down and all around. No crayons, no chalks, never any mess. Turn Etch-a-Sketch upside down and shake and everything disappears. More than 100 million have been sold since 1960. But in 1999, the Ohio Art Company almost declared bankruptcy. Through a series of setbacks on other products resulting from cancelled orders, the company didn't know if it could remain in business. Then, Pixar threw it an unlikely lifeline.

Say yes. Draw. Then, Pixar threw it an unlikely lifeline. Hey, Etch! Draw! Oh! Got me again! Etch, you've been working on that draw. Fastest knobs in the West. It was only 30 seconds of total screen time, but the Etch-a-Sketch appearance in Toy Story 2 introduced the classic toy to a whole new digital generation and boosted sales by 20%.

It saved the company. The Etch-A-Sketch is now in its sixth decade and still going strong. It was inducted into the Toy Hall of Fame in 1998 and is cited as one of the 100 most memorable toys of the 20th century. It is an amazing brand. This is my annual look at brands that I admire. They could be on my list because of their unique design, or because they revolutionized our lives, or maybe just because they've survived.

They aren't necessarily hip, or current, or even number one in their category. A brand, by my definition, doesn't have to be a product you can hold in your hand. It could be a company, a city, or even a person. I only have one real criterion. Whatever it is, it has to give me brand envy. You're under the influence. Brand Envy When I look to the world of entertainment, one brand consistently stands out. And that brand is HBO. Believe it or not, HBO had its seeds planted all the way back in 1965.

Back then, Charles Dolan was awarded the very first cable franchise, which was to be built in lower New York City. He had developed the idea of running TV wires underground instead of relying on above-ground microwave antennas. That way, tall buildings wouldn't interfere with the signals. He called his company Sterling Manhattan Cable, and soon, Time Warner bought a 20% interest. Together, they launched a new station named the Green Channel.

But later, in November of 1972, the channel was rechristened Home Box Office. The very first thing aired on Home Box Office was a Paul Newman movie called Sometimes a Great Notion, which, in hindsight, was a title that would perfectly sum up Charles Dolan's idea of a cable TV network. The second program that aired on Home Box Office was

an NHL hockey game between the New York Rangers and the Vancouver Canucks. Both of those programs were watched by 325 people, the sum total of HBO's customers at that time. Eventually, Time Warner purchased an 80% stake in the company and began transmitting HBO via a new technology called satellite. Then, on October 1st, 1975,

HBO got very, very lucky. It landed a very inexpensive contract to broadcast the thriller in Manila, the third famous bout between Muhammad Ali and Joe Frazier. We're trying to get in here to talk to Ali, who has retained his title,

and I think he needs a little air, because this has to have been one of the most bruising heavyweight championships of all time. Ranked as one of the greatest fights of the 20th century, it was the first time a TV network broadcasted continuously via satellite, and it turned out to be a ratings knockout. Satellite now allowed HBO to reach metropolitan and suburban markets, and by the end of 1977, it had more than 1.6 million subscribers. Five years later, it aired what was to be its first original made-for-TV movie,

The Terry Fox Story. That shift into original programming would change its fortunes forever. HBO's Canadian connection would continue that same year when it aired its first children's show called Fraggle Rock. Dance your cares away Worries for another day Let the music play Down in Fraggle Rock The program was a co-production between a British television company called TVS, the CBC, HBO, and of course, the Jim Henson Company.

Filmed for most of its run in Toronto, Fraggle Rock was seen around the world. And it was only the start. In 1992, the highly original Larry Sanders Show premiered, which was one of HBO's first critical hits. In 1997, the controversial prison series Oz began. Then, in 1998, HBO hit it out of the park. Sex and the City would be HBO's biggest success to date and would run for six years. Then in 1999, HBO would premiere

what would become its most watched series in its history about a New Jersey mob boss who suffers from panic attacks. In its time, The Sopranos was the most financially successful series in cable television history. It was also the first series on a cable network to ever win an Emmy. Many critics consider The Sopranos to be the greatest and most groundbreaking television series of all time. And with that monster success, HBO had cemented itself as a major player in Hollywood. Along with Curb Your Enthusiasm and Band of Brothers, HBO also produced another one of my all-time favorite shows,

Six Feet Under. It was a remarkable series about a family who ran a funeral home in Los Angeles. The writing and acting were superb, and it had, in my opinion, maybe the greatest series finale episode in television history. And if that weren't enough, HBO would also go on to produce The Wire,

True Blood, Entourage, Game of Thrones, and Girls. Today, the HBO family of networks earns 25% of Time Warner's annual profit and has over 30 million subscribers. It is also an inventive marketer.

In 2011, it partnered with the New York subway system to run an actual 1920s subway train to promote its Prohibition series, Boardwalk Empire. The vintage train was taken out of storage and ran on one of Manhattan's subway lines over four weekends. It let subway riders experience what it was like to ride the trains back in the 20s, complete with rattan seats, ceiling fans, and drop-sash windows,

all decorated, of course, with Boardwalk Empire artwork. All great brands stand for something and stand against something. HBO stands for exceptional quality and stands against compromising its integrity just for ratings. While it's subscriber-based and doesn't have to cater to advertisers, it still refuses to focus group its programs, preferring instead to trust the instincts of its producers. That's good enough for me and any new series from HBO gets my immediate attention.

Last year's TV awards said it all. HBO won 23 primetime Emmys, the most of any network for the 11th year in a row. And we'll be right back. of classes built to push you. We know how life goes. New father, new routines, new locations. What matters is that you have something there to adapt with you, whether you need a challenge or rest. And Peloton has everything you need, whenever you need it.

Find your push. Find your power. Peloton. Visit Peloton at onepeloton.ca. If you're enjoying this episode, why not dip into our archives, available wherever you download your pods. Go to TerryOReilly.ca for a master episode list. Question. If I pulled a pocket knife out of my jacket, and you saw that it was red in color, would you know what brand it is?

You sure would. It's a Swiss Army knife. Once upon a time in the late 19th century, the Swiss Army issued guns to its soldiers that required a special screwdriver to dismantle and clean them. Around the same time, tinned food was becoming an army staple, and soldiers needed a way to open the cans. So, the Swiss generals decided to issue each soldier a knife. Just prior to that, in 1884,

Karl Elsner had opened a small knife manufacturing business. He had been making cutlery for farmers, but when he heard the Swiss army needed knives, he seized the opportunity. Knowing the army had several requirements, he designed a knife to meet them all. The first one he designed had a big blade,

a screwdriver, and a tin opener. He called it the Schweizer Offensiers Messer, or Swiss officer's knife. Later, he renamed the company Victorinox, after his mother Victoria, and the abbreviation for the French word for rust-resistant steel, inoxydable. He also patented the famous cross and shield emblem. He updated his knife, too, by adding scissors and a corkscrew. But the Swiss Army refused to purchase that model, stating the corkscrew was not, quote, essential for survival. Clearly, they've never been around the O'Reilly household.

But it was this design design with the corkscrew and its new red color so it could be seen in the snow that made the Schweizer Offensiers Messer world famous. After the Second World War, there were thousands of American soldiers in Europe. They loved the knife and brought huge quantities of them back to America.

But American G.I.s had trouble pronouncing Schweizer Offensiers Messer, so they just called it the Swiss Army Knife. From that point on, the knife enjoyed worldwide success, but the company's biggest market, by far, was the U.S. Then, in 2001, the Swiss Army knife hit the first major business hurdle in its 117-year history. This just in, you are looking at, obviously, a very disturbing live shot there. That is the World Trade Center, and we have unconfirmed reports this morning that a plane has crashed into one of the towers of the World Trade Center. The tragedy of 9-11 changed many aspects of everyday life. Among them, how we travel was altered from that day on.

Because several of the terrorists had used simple box cutters to hijack the planes, sweeping changes were instituted to what passengers could carry on board flights. Knives were immediately forbidden. That new regulation resulted in an overnight decline

of more than 30% in Swiss Army knife sales. Prior to 9-11, the knives were sold in airport duty-free stores around the world and were even sold on board flights. That loss of distribution was catastrophic.

Even business-to-business sales decreased sharply as pocket knives were suddenly seen as an inappropriate gift in the U.S. The Torinox had to figure out how to survive. It froze its hiring, canceled overtime, and while their production virtually ground to a halt, they did something most other companies wouldn't dream of doing. Instead of firing employees, it lent dozens of their highly skilled workers to other companies temporarily and continued to pay their wages.

As the great-grandson of the founder proudly states, they have never let a worker go for financial reasons. The company had started to diversify its product range prior to 9-11. So when knife sales plunged, they were kept afloat with sales from Victorinox timepieces and luggage. The company not only survived the disaster, but turned crisis into opportunity.

It expanded into fashion and fragrances, opened flagship stores in London, Geneva, and New York, and began doing business in Russia, China, and India to lessen its dependence on the U.S. These new product lines now account for 60% of the company's revenues. But to me, it is the iconic Swiss Army knife that is the brand I envy. How many times have you heard something described as being so useful, it's like a Swiss Army knife those red utility products with the iconic white Swiss cross have become synonymous with quality resourcefulness and utter dependability

they have survived for close to 130 years a feat for any product Swiss Army knives have helped people with millions of small tasks around the world and have even saved lives. And for a relatively small company with only 1,800 employees, it has made a lasting mark. Because when you see that famous red utility tool come out of a pocket,

even at a great distance, you know instantly what it is. And that is the sign of a pocket, even at a great distance, you know instantly what it is. And that is the sign of a great brand. As I mentioned at the beginning of our show, a brand can be a company, a product, or even a person. And a brand I very much admire is Richard Branson. Today, his Virgin Group holds more than 200 companies and is one of the most well-known corporations in the world.

While I could tell the story of his many successes, I'm most impressed by his beginnings. A school dropout at the age of 16, Branson started a youth culture magazine for students called Student. In its first year in 1966, he sold $8,000 worth of advertising. That covered his costs and allowed him to distribute 50,000 issues of the magazine to students for free. Four years later, at the age of 20, Branson decided to start a mail-order record company. He considered calling the new enterprise Slipped Disc, but one of his fellow students said,

Let's call it Virgin, because we're virgins at business. Branson loved it. He wanted to give students a cheap way to buy records, and his virgin mail-order record business took off. But in less than a year, it was crushed by a paralyzing postal strike. Branson then decided to start an actual record shop. He found a shoe store with an empty first floor

and struck an incredible deal with the owner. He negotiated to pay no rent and only occupy the space until the landlord could find a proper tenant. But in return, Branson promised to attract all sorts of customers to the shoe store via his record shop. Remember, he's only 21 years of age at this point.

The day before the shop opens, he hands out hundreds of leaflets along Oxford Street. And when the doors open the next day, hundreds of people have lined up to get in. The Virgin record shop didn't look like other record stores. It had couches, beanbag chairs, and free coffee. Customers loved it. While he does well financially,

Branson begins to realize that the real money is in the recording business. Flipping through a country real estate magazine, he spots a beautiful 17th century home for sale. He goes to the bank, shows them his record shop revenues, and secures a mortgage for 20,000 pounds. He is still only 21 years old. Branson converts the Stonehouse into a recording studio and begins to attract some of the top recording artists,

including Paul McCartney. He takes that success, opens a virgin record shop in most of the major cities in England, then he sets his sights on becoming a record label. He and a partner set up Virgin Music and give a session musician they like unlimited studio time to record an album. Branson rents him all the instruments he needs,

including some tubular bells. That's when Mike Oldfield wrote this song. Branson then decides to buck the trend and not license the song Tubular Bells to a larger record label. He and his partner Simon Draper do all the marketing, promotion, and selling themselves. The gamble pays off, and the song sells over a million copies.

Branson then secures a $1 million deal with massive royalties to sell the single in the U.S. It becomes the biggest album of 1973 and the soundtrack to The Exorcist. On the back of the success of Tubular Bells, Branson begins to sign other artists. He is only 23. Virgin hits a dry spell as none of these subsequent signings render hits. But he sees a new revolution in music on the horizon and signs a scandal-ridden band called

The Sex Pistols. Never Mind the Bullocks, Here's the Sex Pistols is a huge success. Soon, he's signing acts like XTC, The Human League, and Simple Minds. Next came Phil Collins' first solo album, Face Value,

then Culture Club. In 1982, 32-year-old Branson makes £2 million profit. The next year, Virgin makes £11 million in profit. And Branson uses the money and his new influence to begin planning for Virgin Atlantic Airways. It's a remarkable story. Branson is the Virgin brand. He is bold, adventurous, brave, and a rule breaker. Virgin's mission statement is one of the best I've ever read.

I've featured it on the show before, but I never get tired of hearing it. It says, Everybody wants the next great thing, even us. So, we are a music store who became an airline, who became a soft drink company, who became over 200 different businesses all over the

planet, united by one simple common thought. We want to do what's never been done before. We want to create stuff that's valuable and honest and is worth making in the first place. We want to have fun while we're doing it. And we want our competitors to find us really, completely irritating. And that sums up why I envy not only Richard Branson,

but all the brands I've talked about today. Not all products and brands survive the long haul. That's why the list of brands I admire is usually anchored by longevity. When Mitt Romney's advisor was asked on TV how his boss was going to recalibrate his campaign to run for president, he said Romney's platforms were like an Etch-A-Sketch, just turn it upside down and start all over again. It was disastrous for Romney because it framed him as a flip-flopper, but it was a testament

to Etch-a-Sketch. Here it was being talked about during the 2012 presidential election, yet it all began 50 years ago when Andre Cassin took a chance and pitched a toy based on aluminum powder.

When HBO took a chance on a boxing match in 1973, it put the fledgling cable station on the map and set the course for a very profitable future. When Carl Elsner seized an opportunity and developed an all-purpose knife for the Swiss Army, little did he know he was creating a global icon. And when Richard Branson took a chance and launched a student magazine, a record store, and a record label all before he was 23, little did he know he was starting an empire.

The one thing that all these brands have in common is that they were started by someone who took a risk. Not everyone is a risk taker, but I believe we should honor the ones that are. They change our worlds, they show us what is possible, and by doing so, they create brands that are envied for decades when you're under the influence. I'm Terry O'Reilly.

Hello, Mr. O'Reilly. I have another product for you to consider for your next show on Brand Andy. It's called the Sneave. Yeah, it's a cotton sleeve that you slip over your existing sleeve when you have to sneeze. Sleeve, sneeze, sneeze. Get it? You just pop the Sneave over your sleeve, Gesundheit right into that puppy, and then take the Sneave off until you need it the next time. It's attractive and it comes in several colors.

I'll email you. We'll chat. Under the Influence was produced at Pirate Toronto. Sound engineer, Keith Ullman. Theme music by Ari Posner and Ian Lefevre. Series coordinator, Debbie O'Reilly.

Research, Lama Balagi. By the way, I know you've been dreaming of wearing an Under the Influence t-shirt. Or maybe I was dreaming that. But anyway, we have them for sale on our shop page. And if you listen to the show while sipping a tea or a coffee, have we got the mug for you. Go to terryoreilly.ca slash shop. See you next week.