Filed under: Products and services, Launches, Marketing and advertising, Entrepreneurs

To an inordinate degree of fuss, British rock group Radiohead self-released its seventh album, In Rainbows, on its website back in October, employing a pass-the-hat pay model whereby downloaders could pony up what they wished for the album, from as much as 100 pounds (about $200) to as tiny as virtual pocket lint.

The band has kept mum on the actual download figures, as well as their take, but a comScore study on In Rainbows‘ early success estimated that just 38% — less than two in five downloaders — bothered to put up anything at all. comScore’s findings — which Radiohead has disputed — recommend the band gave out some 744,000 duplicates of the record for free, not to mention all those unrestricted downloads that bewilderingly saturated the file-sharing piracy sites, despite their free availability.

If the comScore numbers are to be believed, then discarding Radiohead’s freeloading fans, an average of $6 was paid for downloading In Rainbows, for an overall average contribution of around $2.25, some 77% cheaper than an iTunes album download, and about 84% less than the disc’s list price of $13.98.

However, using the royalties formula found at A&R firm TAXI’s website, we find that Radiohead, given “superstar status,” would clear in royalties only about $2.10 per compact disc, and closer to $2 for a $9.99 iTunes download (or 20 cents per 99 cent song)!

So according to comScore’s figures, Radiohead actually comes out 15 cents ahead per download rather than a CD sale, and a quarter to the superior over an iTunes album download.

Of course, In Rainbow will be released on CD in the next week or so, varying with locale. How deeply will In Rainbow’s online release dent CD sales?

Be sure to check out other Money Losers of 2007.

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Filed under: Other issues, Products and services, Management, Southwest Airlines (LUV), JetBlue Airways (JBLU), Oil

When JetBlue Airways Corp. (NASDAQ: JBLU) shoved founder David Neeleman out from his CEO position in May, he described it as a “natural evolution of our leadership structure.” Wow, that’s more spin than you see at a dreidel at Hanukkah.

To say that things haven’t gone JetBlue’s way in 2007 may be an understatement. in February, thousands of fliers were left stranded in jam-packed aircraft that never took off because of inclement weather. To Neeleman’s credit, he swiftly owned up to the blunder and enacted a “bill of rights for customers” and apologized until he was blue in the face — no pun intended.

Since his departure, Neeleman tried his hand at blogging, though his “flight log” hasn’t had a new entry since November. Maybe he’s busy counting his money. InsiderScore estimates that he’s sold more than $30 million worth of stock over the past 18 months. That should help heal his wounded pride. Too bad that investors aren’t so lucky.

Shares of the Forrest Hills, NY-based company have slumped more than 51% amid concerns about high oil prices and shaky consumer confidence. Though JetBlue does have its admirers, many of whom responded to my previous posts on the company, the company’s future as a stand-alone company remains in doubt. It is a small fish in a big pond, which is getting more treacherous by the day amid competition from Richard Branson’s Virgin America and Southwest Airlines Co. (NYSE: LUV), Neelman’s former employer.

Last week, CEO Dave Barger somehow convinced Lufthansa to buy a 19% stake in JetBlue, a move that left some analysts in Germany scratching their heads. “The cash infusion will address JetBlue’s near-term, growing liquidity challenges, but does nothing to address mounting cost and revenue pressures,” William Greene, a New York-based analyst for Morgan Stanley, wrote in a note quoted by Bloomberg News.

Nonetheless, I am rooting for JetBlue to succeed. It made its mark by actually being nice to customers, something that other airlines forgot about years ago.

Be sure to check out other Money Losers of 2007.

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Filed under: Products and services, Marketing and advertising

I’ve seen too many high-flying fashion stocks crater back to earth to take bullishness with companies like Deckers Outdoor (NASDAQ: DECK), the maker of Uggs, too seriously. Remember L.A. Gear?

But Deckers has had an incredible run this year, hitting a new 52-week high on Friday, making it a solid triple for the year.

According to Fortune, “Now, analysts are predicting even more upside for Deckers’ stock. The reason? While other brands have been heavily discounted this holiday season, Ugg boots, which can cost upward of $200 a pair, are selling at full-price in most major department and specialty stores. More full-price sales mean fatter profits for the all-important fourth quarter.”

It’s all very exciting but I think investors need to be very careful. Uggs account for nearly 90% of Deckers’ revenue, far outshining their Easy and Teva brands.

A bet on Deckers is a bet on the continued success of a pretty bizarre fashion trend — at 50 times earnings and more than 5 times sales.

It’s easy to be bullish when everything is going well, but traders will be dumping this one like they dumped Crocs (NASDAQ: CROX) at the first sign of slowing growth. And at some point, won’t people have all the Uggs they need?

With about 19% of the float short, it looks like more than a few investors are lining up to bet signs of weakness are near.

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Filed under: Personal finance, Housing

It might be too early to put a final price tag on the amount of money American homeowners will lose because of the mortgage meltdown. Lots of different people have tried to do just that. I’ve decided to use the numbers from the Congressional Joint Economic Committee report, “The Subprime Lending Crisis,” because it draws from the best of many of the economic analysis reports available.

The conclusion of this report is that American homeowners will lose $103,041,748,445 in value due to the mortgage meltdown between Q3 2007 and Q4 2009. About $70.8 billion dollars of those losses will be in direct losses of homes (foreclosures) and $32.2 billion will be in loses of property values of the homes in the hard hit neighborhoods. State governments will lose about $917 million dollars in property taxes during this period. While the losses won’t all be fully realized in 2007, the root of these losses will all have begun in 2007 when the mortgage crisis was fully recognized.

The five hardest hit says are California ($23.8 billion in losses), Florida (total losses $12.2 billion in losses), New York ($9.5 billion in losses), New Jersey ($6.4 billion in losses), and Illinois ($5.4 billion). These totals include the direct loses from foreclosures, the direct loses in property values to foreclosures, indirect loses to neighborhoods and losses in say property taxes.

People who own homes in the hardest hit areas will be facing these loses for years to come. Right now no one knows for certain when the glut of homes on the market will start to clear, but many believe we really won’t see a turnaround until sometime in 2009.

Lita Epstein has written more than 20 books including the Complete Idiot’s Guide to the Federal Reserve and The 250 Questions You Should Ask to Avoid Foreclosure.

Be sure to check out other Money Losers of 2007.

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