Savory Tidbits: Restaurant News and Views for NYC, San Francisco, Chicago and LA

Zagat Restaurant Videos

It's said that imitation is the sincerest form of flattery. If that's the case then we are extremely flattered to help introduce zagat.com's new video feature. The videos, available for the "hottest restaurants and chefs" in NYC and LA, are produced by LX.TV which was recently sold to NBC for a reported $10 million after being incubated at Apax Partners for nearly two years. Most of the Zagat videos are recycled LX content hosted by LX standbys like the pulchritudinous Sara Gore and the ebullient Cecile Raubenheimer, but the new videos (notably Bobo) pay a striking resemblance to the Savory style, with the focus set squarely on the chef or restaurateur rather than on a host or guest expert.

LX.TV host Sara Gore and a pre-NYDN Restaurant Girl get down to business with Picholine's Terrance Brennan.

The LX deal doesn't come as a surprise, especially given that former Zagat president, Ted Zagat, is pals with with fellow Harvard alum and LX co-founder Joe Varet, who presumably approached the family about a tie up some time ago. More recently, LX.TV featured a Five Minutes with Mo Rocca segment starring Tim and Nina and using a handful of their favorite hangouts around the city as the backdrop (watch the original here or more revealing and humorous uncut version here). Also of note is Zagat's partnership with NBC's The Today Show on its recent Fast Food Chains Survey.

The addition of video is the latest in a flurry of new features added to the site to compel more people to become loyal users of zagat.com. Around two years ago the company started directing significant resources toward the development of its web site. Notable additions include maps, menus, photos, supplemental yellow page listings and "virtual tours."

An apparent lack of growth and mounting pressure on Zagat's subscription-based business model from the myriad of web sites offering free restaurant information, ranging from Google Maps to the thousands of restaurant-oriented blogs and everything in between (like Yelp, Citysearch, Metromix, Boorah, Urbanspoon, little old us, etc.), must have made the Zagats more than a little nervous about the prospects for successfully transitioning their business from print to digital. In that regard the news of the Zagats putting the company up for sale didn't come as much of a surprise either.

Given the success of its founders up to this point in turning their last name into a household word, enjoying A-list celebrity treatment in top restaurants around the world and building a modestly profitable enterprise (the company reportedly generates $8-$10 million in EBITDA on revenues estimated at $25-$50 million) in the world's greatest city it only makes sense to hear that Tim and Nina want to cash out for a well earned retirement after 28 years of hard work.

It remains to be seen whether they'll be able to get their lofty asking price of $200 million. Recent reports indicate that might end up being tricky. In the mean time we'll keep our eyes out for more entertaining restaurant videos featuring lively hosts and charming guest experts.

Thoughts on Zagat

Eater recently pointed out that the "Vote For Me in the Zagat" season is upon us again. Not coincidentally we received an email from zagat.com this week encouraging us to vote and promising a free 2009 New York City Zagat guide for our troubles. Each year Zagat is faced with a number of criticisms of its guides and in keeping with this grand tradition I thought I'd share two issues that put into question Zagat's claim of being a "trusted source to help consumers make informed decisions about restaurants."

The first is the Zagat custom of rewarding voters with a free printed guide for submitting votes. This incentive seems unnecessary in NYC given that Zagat claims to have a local voter base of nearly 35,000 diners. While the incentive might be needed to help jump start smaller markets like Seattle, where only 3,165 local surveyors contributed to the 2008 guide, it seems logical that this incentive would diminish the overall quality of vote submissions. Why not take five minutes to register for zagat.com and quickly vote for a handful of restaurants that you may or may not have been to recently in exchange for a free $16 guide book, after all?

The fact is that Zagat has no way of knowing if a person has actually been to a particular restaurant. In a post about how OpenTable is now collecting reviews from diners after their meals, Dan Entin, a former Zagat product manager, recently stated in his personal blog, "OpenTable is in an incredibly unique and desirable position when it comes to restaurant reviews: they actually know where and when you ate. When I was at Zagat this was information that we wanted badly so we could do exactly this kind of outreach to spur review-writing." This issue isn't limited to Zagat, of course, but given the use of an incentive that likely taints the voter pool with low quality and potentially specious votes, it's hard to put a tremendous amount of faith in the results.

The second issue relates to the commercial impact of a positive Zagat rating, its affect on industry behavior and the difficulty of filtering out bad votes. It's apparently a common practice for restaurants to reward chefs based on their Zagat food rating. In a 2007 interview Tim Zagat stated, "A lot of restaurants actually give bonuses to their chefs based on the ratings. They judge themselves because this is the only way they can really have a systematic rating of themselves." This is a direct incentive for a "get out the vote" campaign if I've ever heard one.

Not surprisingly the Zagats claim to employ costly filters to help eliminate biases such as these. In the same interview Zagat said, "We don't want just anybody going in and throwing their comments on the wall, and therefore we have about 30 filters between coming in and voting and actually being counted as a vote. We don't want restaurants to be able to get in and influence the vote on the restaurants, obviously. So we have spent millions of dollars protecting the process by developing a whole series of filters, including having our local editor and our editors in New York checking the results to make sure that nothing extraordinary and unusual is happening."

Anecdotal evidence, including my own experience of quickly submitting a few lame restaurant reviews last year and subsequently getting my free book, leads me to believe that getting around these multi-million dollar filters isn't so tough after all.

A New Twist on Southern "Hospitality"

Hot on the heals of the recent Caesar salad-related intellectual property tussle here in NYC comes a lawsuit filed in Federal District Court in Marshall, Texas by recently christened Texas-based company Online Reservations LLC. They claim that OpenTable, Zagat and others are infringing on their patent for an "Internet Based Computer Reservation Booking System" and are seeking to prevent the Open Table, et al, from continuing to book online reservations. Not surprisingly, they're also looking for major league damages.

The suit was filed on behalf of James W. Rose and Theodore Chen, two California-based patent attorneys. Given rumors of OpenTable's interest in taking their business public this can't be welcome news. Add this one to the list of interesting law suits to follow in the coming months.