Category Archives: Reality checks

August 22, 2013 · 10:51 am

Fading To Black?

Over the last couple of years I’ve written about cord-cutting and today I have another update of sorts.  As you know, this refers to people disconnecting from a “traditional” video provider such as a cable or satellite service and using only content delivered to the via “over-the-top” services – things that sit on top of a broadband connection.  These are services such as Netflix, Hulu, Amazon Video, and others.

Here is what caught my eye:

Thirteen of largest multichannel video providers in the U.S. — about 94% of the market (94.6 million subscribers) — lost about 345,000 net additional video subscribers in 2Q 2013 — down 0.4%, according to the Durham, N.H.-based Leichtman Research Group…The top nine cable companies lost about 555,000 video subscribers in second-quarter 2013, compared to a loss of about 540,000 subscribers in the second quarter of 2012…Bruce Leichtman, president and principal analyst for Leichtman Research Group, stated: “The multichannel video industry has leveled off, with major providers losing about 0.1% of all subscribers over the past year.”

OK, so not exactly a massive disconnect.  On the other hand, the trend is accelerating by most accounts, especially among younger people.  Now let’s think about the ongoing battle between Time Warner Cable and CBS.  No matter which side you’re on, it gives people the opportunity to seek alternatives, at least with respect to CBS and Showtime programming.  Once they figure out that much of the content is available elsewhere, cutting the cord becomes more viable.

Another anecdote.  This past weekend, I wanted to watch the Solheim Cup golf matches.  The place in which we were staying didn’t get the network carrying the matches and the live streaming via YouTube was not available in the US.  Solution?  I watched on a proxy server in Europe.  Not some sort of illegal torrent – simply a proxy server so they thought I was in France.  For those of us who are a bit more technically minded (and I think anyone under 30 fits the bill), this is a form of cord cutting behavior and negates the need for anything more that a high-speed connection to watch what I want on my own schedule.

Finally, some more research from STRATA shows that none of this is going unnoticed by the marketing community:

Focus on television advertising has hit a three-year low as the gap between TV and digital narrowed to its closest point ever, according to the most recent quarterly survey compiled by STRATA…TV advertising still remains the top advertising medium with 44% of survey respondents saying they are more interested in advertising on TV (spot TV/cable) than any other medium. While TV is still number one, this represents the lowest level of broadcast advertising interest seen in the STRATA quarterly survey in nearly three years. Gaining steadily on TV, digital is the second most popular medium at 35%…28% feel they will have a greater spend in Digital than Traditional in 1-3 years. 27% say they don’t ever anticipate a greater spend in Digital (down 45% and the lowest percentage ever).

Ad spending is a big part of the fuel that drives these businesses (and the Time Warner/CBS dispute points out the relatively new other piece – transmission fees).  If that piece shrinks, along with viewers and subscribers, the industry is in big trouble.  As the Chinese say, “interesting times”.

Your take?

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August 21, 2013 · 8:34 am

Kids And Cards

Once in a while I spot something that elicits an “Aw come ON” from me as I read it. Let’s see if you agree. Bowl-BlackBackgroundThe piece was in yesterday’s USAToday and was a front page article in the sports section on the topic of high school football all-stars.  You can click-through the previous link to read it if you care to.  In a nutshell, participants in the U.S. Army All-American Bowl are asked to sign a couple of hundred trading cards each.  The kids aren’t told what the cards are for nor are they made to participate.  It’s “an opportunity, not a requirement.”  The cards are sold and in some cases they become quite valuable.  No money goes to the kids.

While I have some qualms about that, what caused the aforementioned response is the attitudes displayed by the adults involved:

“The answer is, ‘Well, you don’t have to.’ But for many of these players, this will be the only time in their athletic careers they are on a trading card. To be singled out at that point in time for their athletic achievement is not a bad thing.”  Leaf CEO Brian Gray says there is no pressure put on the high school players and they have the option to decline. “But really,” he says, “If you don’t want to be on the card, there’s something wrong with you.”

Seriously?  Anyone care to name an athlete who knowingly permits their name, likeness, and autograph to be used for purely commercial purposes without any compensation?  I’ll wait.  Didn’t think so.   Most of the kids think the cards are being used for non-commercial purposes – donations to soldiers, for example.  They are never told, and when they find out they don’t really understand how much some of them are worth.  Indianapolis Colts QB Andrew Luck (a Stanford grad and by all accounts a smart man) objected to the card being issued, saying he had never approved it.  The company’s response:

Leaf responded by suing him, saying it had a First Amendment right to do so, claiming that the game operators had granted Leaf the license to player likenesses. The 2008 game was before Leaf began issuing sets of trading cards from the game, but it has issued alumni cards – such as the 2008 Luck card.

Now, I’m in my third decade working in sports and I’ve NEVER heard anyone claim they can issue merchandise as part of the First Amendment.  There’s a multi-billion dollar business called licensing that would disappear if that’s the truth.  Rationalization aside, why not just tell the kids clearly upfront what’s going on?  Hiding something?

One of my favorite Saturday Night Live characters is Dan Aykroyd playing a smarmy guy named Irwin Mainway who, among other things, sells “Bag O’Glass” and caters a school breakfast program with coffee and cigarettes.  His take is that “it’s a bottomless cup of coffee” makes it all just fine.  No, it really doesn’t and the trading card company’s isn’t OK either.  You agree?

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August 5, 2013 · 9:32 am

You HAVE To Read It – It’s My Birthday!

I realize that might be the most ridiculous post title ever but it happens to be true.

A picture of a birthday cake

(Photo credit: Wikipedia)

OK, not that this is a must-read, but it is, in fact, my birthday.  Maybe there’s an attention whore living deep inside me although I suppose any of us who dump our thinking on to the World Wide Web have some of that.  In any event, birthdays are one of those occasions that prompt introspection.  My favorite author, Mark Twain, said that when he was a younger man he could remember anything whether it happened or not.  Much of what you read here is exactly that – what I remember or have figured out along the way.

I turned 58 today.  I’m not much of a numerology guy, but since today is 8/5 and it’s the 58th anniversary of my birth, I thought I’d look up what meaning is associated with 5 and 8.  Apparently 5 is associated with freedom. “5” people seek change and adventure.  What stood out to me was that 5’s are naturally curious and are  constantly trying to find the answers to life’s questions (maybe there IS a reason I’m writing!).   5’s are very persuasive and excel at motivating people which makes them ideal candidates to become salesmen.  Given the early part of my professional life, that fits.

8’s are born with natural leadership skills. We’re very ambitious and goal oriented, with strong organizational skills and broad vision.  I don’t know how they figure this stuff out but I like the thought.  It also applies to what I’ve been doing for the last 5 years as a consultant.  Of course, one can add the 5 and 8 together and get 13, a lucky number in numerology.  For me, that applies as well: I’m fortunate to have my health, a great family, many friends and more close friends than to what one ought to be entitled in one lifetime.

I don’t have any big business thoughts today – I’m giving those a rest so I can enjoy the important stuff.  Yes, I’m working but I’m doing so with a smile on my face as I get Happy Birthday calls.  The hard part is holding this feeling for the other 364 days and the realities of business show themselves.  Hey – maybe there IS a business point today.  Thanks for reading – that’s a gift any day.

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