Category Archives: Thinking Aloud

July 30, 2018 · 11:35 am

What, Me Worry?

If you follow the TV business at all you’ve probably noticed a bunch of recent articles about the acceleration of the cord-cutting phenomenon. This article from Business Insider is typical, as are the results:

In a recent Business Insider survey of 104 teens nationwide, only 2% of Gen Zs said that cable is their most-used choice for video content. Nearly a third said YouTube is their most-used source for video content, and 62% say streaming excluding YouTube, including Netflix or Hulu, is their most-used.

What’s happening is that many younger folks who once purchased a cable TV subscription are no longer doing so, and the pace at which that’s happening is rising quickly. As one piece noted,  “roughly 5.4 million Americans are expected to cut the TV cord this year, thanks largely to the rise in cheaper, more flexible streaming TV alternatives.” Is that significant? Oh yes:

According to eMarketer’s latest figures, the number of cord-cutters—adults who have ever canceled pay-TV service and continue without it—will climb 32.8% this year to 33.0 million. That’s higher than the 22.0% growth rate (27.1 million) projected in July 2017.

That’s a lot of money leaving the building, and yet there doesn’t seem to be widespread panic among the cable providers. Why not? Because they people who are cutting the cable cord are locking themselves into the broadband cord, and that, dead readers, is an even better deal for the cable guys. Why? Well, think about your own situation. I’ve got two options for TV service here – one cable, one satellite. Neither is appreciably different. The satellite is a bit less expensive but service craps out in bad weather so although it has some unique content and 4K, it’s not perfect. If I decide to cut the cord and take some TV over the air and stream the rest, I have only ONE option to get true broadband service, and that’s how most US markets are as well.

How this came to be is laid out in this Techdirt piece and I won’t repeat what they have to say. The short answer is that natural monopolies have developed and they’re not going to go away. Even if some company tries to enter the market (as Google Fiber did), the time to build the service is lengthy. Laws have been passed to prevent municipalities from entering the market and providing competition as well.

Given my druthers, I’d rather be a broadband provider than a cable TV provider. Your programming costs are almost non-existent, you know a lot more about how your customer is using the service (your ISP knows all, your cable TV guy is just figuring out how to track you accurately), your margins are great, and you probably won’t have any competition despite lousy customer service and usage caps. Who are the big broadband providers? Yep, the same cable guys who are “suffering” from cord cutting. You think they’re worried?

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July 25, 2018 · 12:24 pm

Finding The Black Swan

Many centuries ago, people were convinced that there were no such things as black swans. That thinking is so old, in fact, that there are references to it in Roman literature. That thinking was disproven around 1700 when a group of explorers sighted some black swans in Australia.

Since then, the term “black swan” is used to refer to something that, as Wikipedia states:

comes as a surprise, has a major effect, and is often inappropriately rationalized after the fact with the benefit of hindsight.

If you’re in business, I’m sure you’re familiar with black swans even if you’ve never called them by that name. My team often used the Monty Python quote that “NO-body expects the Spanish Inquisition!” when something surprising would happen.

I don’t think of Black Swans as negatives, necessarily. In fact, it’s exactly the sort of rare bird we should be seeking in business on many levels. For example, you’ve read many times in this space about the need to understand your customer. If you’re approaching them with an open mind, what you might find can be surprising. You might find, say, that your ad that’s aspirational in nature might have the exact opposite effect on your audience – it reminds them of what they don’t have and makes them mad.

Where I find Black Swans particularly useful is in negotiating. It’s critical to understand the needs and wants of the person with whom you’re negotiating and to get on the same side of the desk as they are, meaning you’re not in an adversarial position. In the process of doing that discovery, you often find a Black Swan – something you didn’t know about them or about something that’s part of their bottom line for the negotiation. Every party in a negotiation has a bottom line – things they can’t or won’t give up – while other things are far more fungible. Unless and until you can understand what those things are, you’re wasting time. If you find a Black Swan in the process, it’s important that you incorporate it unless it crosses your bottom line.

Part of finding the Black Swan is keeping an open mind, whether it’s in negotiating or in reading data or even in a brainstorming session. Be open to possibilities even if they don’t match your current understanding of the world. The Black Seans are out there – find them!

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July 23, 2018 · 12:38 pm

Conducting

Did you play in your school’s band or orchestra? Maybe you sang in the chorus? I did all of those as well as in the school’s jazz band. If you did, you came face to face with a conductor. For those of you unfamiliar with how a conductor operates, I’ll spend a few words on the topic. For those of you already familiar, please keep reading because those hours spent under their baton can tell you a lot about business.

Whether you played in an ensemble or just listened, you’ve seen a conductor at work. Their right hand, usually the one holding the baton, keeps time. Their left hand, the far more expressive one, serves many purposes; among them cueing various instruments, helping the musicians understand the dynamic you want to project or the phrasing you’re after.

One of my childhood memories is of seeing Leonard Bernstein conducting the NY Philharmonic. He conducted the orchestra in a way that was a cross between dancing as a listener and working hard as a musician. There is no doubt, if you watch old videos of him, what he is trying the get from his musicians. That’s not true of all conductors.

What you probably never thought of is how anticipatory conducting really is. It begins in rehearsal, where the conductor will often stop and explain what he or she is after. The musicians are learning what each gesture means and they get a sense of the speed and phrasing the conductor wants. It’s assumed the musicians already know the notes and heaven help the musician who causes the conductor to stop and demand the musician play a phrase the conductor heard as wrong. It also means the conductor is a few beats ahead of his musicians so he can cue them, hopefully in a way that also tells them how he wants the upcoming music played.

What does this have to do with business? A lot. I always looked at my role as being similar to an orchestra leader. My job was to bring coherence to a large, diverse group of executives who played very different roles. I kept time with one hand, meaning that I set goals for the entire group and established how we’d get there. With the other hand, I let individual elements within the group know when to speak up. Most importantly, we rehearsed. No, I didn’t have my group do things just for the sake of doing them. I did, however, ask them a lot of questions to make sure they knew the music and that when it came time for them to be front and center they would shine. I was careful to be clear about what I wanted and about what I meant when I asked for something. I was also a few beats ahead at all times.

Watch some of the great conductors. Bernstein, Loren Maazel, Seiji Ozawa, and others. There are some great business lessons there, don’t you think?

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