Keurig, the coffee maker company, recently introduced version 2 of their coffee maker.<\/p>\n
Among the various “upgrades” was the introduction of digital rights management systems that prevented the use of 3rd<\/sup> party cups and refillable cups.<\/p>\n Sales have cratered, and now have backtracked on their policies<\/a>: It\u2019s been called the \u201crazor blade business model.\u201d<\/a> A company sells a product like a battery-operated razor blade handle at a relatively low price in order to sell a complementary consumable product later, like the astoundingly costly Gillette Power Fusion Proglide cartridge, $18 for four blades, which then get thrown away.<\/span> I am kind of surprised that they didn’t stick to their guns, and file DMCA<\/abbr> cease and desist actions against their competitors.<\/p>\n That does seem to be the normal way of doing business in America: Piss off your customers, and boost your profits through rent seeking behavior<\/abbr>.<\/p>\n It’s a lot easier than making a better\/cheaper product. Just look at how your local phone and cable companies treat you.<\/p>\n","protected":false},"excerpt":{"rendered":" Keurig, the coffee maker company, recently introduced version 2 of their coffee maker. Among the various “upgrades” was the introduction of digital rights management systems that prevented the use of 3rd party cups and refillable cups. Sales have cratered, and now have backtracked on their policies: It\u2019s been called the \u201crazor blade business model.\u201d A …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1012,1109,985,989,1025],"tags":[],"class_list":["post-182782","post","type-post","status-publish","format-standard","hentry","category-food","category-ip","category-regulation","category-software","category-technology"],"_links":{"self":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/182782"}],"collection":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/comments?post=182782"}],"version-history":[{"count":0,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/182782\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/media?parent=182782"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/categories?post=182782"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/tags?post=182782"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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But it could also be called the Keurig \u201cK-Cup\u201d business model. Once a consumer buys the coffee machine, the coffee drinker may spend as much <\/a>as $50 to $60 per pound on the coffee contained in the K-Cups, considerably more than the cost of even Starbucks\u2019s breakfast blend, which goes for about $11.95 per pound.<\/span>
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Some years back, thousands of Keurig single-serve machine fans found a cheaper alternative, however \u2014 refillable, non-disposable K-cups, little plastic coffee grounds holders, which the company graciously sold under the brand of \u201cMy K-Cup.\u201d<\/span>
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Not only was it cheaper, but the coffee drinker had more choice, as \u201cMy K-Cup\u201d could be filled with any brand of coffee off the shelf.<\/span>
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But in August 2014, when Keurig introduced its \u201c2.0\u201d line of coffeemakers, it stopped making \u201cMy K-Cup\u201d for it and made the machine incompatible with any K-cups already in existence, as well as with any unlicensed disposable K-cups made by other companies.<\/span>
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It was $50 a pound and a trail of waste \u2014 or nothing.<\/span>
<\/span>
That was two provocations, but two too much. The reaction was fast and furious, on sites such as Amazon, as well as on Keurig\u2019s own social media sites.<\/span>
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\u2026\u2026\u2026<\/span>
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Keurig\u2019s explanation was a model of what not to tell angry consumers. The company said the change was for the consumer\u2019s own good.<\/span>
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\u2026\u2026\u2026<\/span>
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Clever competitors moved quickly to fill the void, with ways to, in effect, hack into the Keurig technology. The Rogers Family Company\u2019s \u201cFreedom Clip<\/a>\u201d was sold patriotically as \u201cOur Gift To You and Everyone \u2026. Freedom Of Choice!\u201d<\/span>
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\u2026\u2026\u2026<\/span>
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Worse for Keurig, as executives acknowledged Wednesday during its quarterly earnings briefing, sales of Keurig machines tanked and they began to accumulate on the shelves across the country. Sales of brewers and accessories declined by 23 percent, the company reported.<\/a> Its stock price fell 10 percent <\/a>in after hours trading. <\/span>
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With that, Keurig\u2019s CEO did what he had to do. He capitulated Wednesday in a call with market analysts. <\/span>
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\u201cWe heard loud and clear from consumers,\u201d said Brian Kelley,<\/a> \u201cwho really wanted the My K-Cup back. We want consumers to be able to bring any brand and bringing the My Cup back allows that.<\/span><\/p><\/blockquote>\n