Category Archives: What’s Going On

April 14, 2015 · 9:12 am

Time Shifting

The New York area was not built for cars.  Putting aside the crumbling infrastructure, the number of cars on the road has far outgrowth the roads’ capacity.  Fortunately, most people living in the city proper choose not to own a car and use the excellent public transportation to get around.  That’s not so true about many of my neighbors here in the suburbs as they commute to their jobs.  They deal with the crappy roads, bad weather, and interminable traffic jams for one reason: convenience.  They’re not tied to a train or bus schedule.  

There is a lesson for all of us in that which is manifesting itself in media.  People would much rather have control.  While the old model of media was audiences sitting down to watch content at the same time (at least within the same time zone), there is research that shows that model is long gone.  The folks at Hub Entertainment Research found that the growth of VOD, DVR’s and OTT services continue to erode consumers’ association of TV shows with a particular day-and-time, linear schedule.

  • Viewers time-shift more TV than they watch live. According to consumers’ own estimates, the average viewer watches 47% of their TV shows live and 53% time-shifted.
  • Among Millennials, time shifting is even more common. Viewers 16-34 say that only 39% of the TV they watch in a typical week is live.
  • A plus for traditional TV providers: most time-shifted viewing still happens through a set top box. DVRs (34%) and VOD (19%) account for more than half of all time-shifted viewing.

There is good news and bad news in this for content creators and their distribution partners.  Obviously where people can skip ads, they generally do:

  • 81% of VOD users say that when fast-forwarding is enabled, they fast-forward through most or all of the commercials during a show. In fact, almost half (49%) say they fast-forward through every ad.
  • The results aren’t much different among DVR users: 89% say they fast forward through most or all ads, and more than half (56%) say they use fast-forward at every commercial break.

The good news is that the library of content most providers/distributors have has become completely accessible.  Think about it – years ago, if yu missed an episode and failed to tape it (and it was tape!), you were screwed.  Not even remotely true today, and every one of those additional views is an opportunity for monetization.  That might be through ads or it might be through encouraging a subscription via the availability of the content.

Don’t assume that consumers taking control is unique to either commuting or to media.  Look at your own business and I’m willing to bet there are examples of how consumers are doing just that.  Like media, there are opportunities that come out of the disruption.  Are you ready to jump on them?

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March 30, 2015 · 11:15 am

Loyalty Isn’t Stupidity

We’ve been customers of a particular heating oil company almost since we’ve moved into this house. That was in 1985. Sure, on occasion we’ve asked around to see if we’re getting hosed on heating oil prices (not usually) and we’ve found them to be pretty reliable when there is an issue. The service techs show up quickly and are generally pleasant. Given the cost of fuel and the amount we use along with the annual inspections and tune-ups, the last 30 years of our business has probably been worth at least $100,000 to them. We won’t be renewing our contract in a couple of months. Here is why and it’s instructive for any business.

A few weeks ago we noticed some water on the basement floor near the water heater.  Our water heater is just a tank – the furnace actually heats it – so we called the oil company to come take a look.  Admittedly we told them we suspected a leaky water tank which they replaced.  The next day, water on the floor.  Repair comes back – it was a faulty circulator which they replaced.  Of course, that inexpensive part might have been the problem all along but no one actually ever checked it before pulling the tank.  New tank, new circulator and a dry floor.

That stopped after another couple of days.  More water in the same area.  We had the annual boiler inspection scheduled for three days later so we waited to see what it might be – hopefully not a furnace issue.  The inspector came and found the leak – it was a relief pipe and the leak was probably caused by an old or faulty valve.  The water tank?  The circulator?  No, they were fine.  The furnace was fine too.  Phew!

When we woke up the next day the house reeked of oil.  I thought it was just the residual smell from the burner cleaning.  The Mrs. went to look and found oil all over the floor.  Our fourth visit in a week from the fuel company to fix the problem (the cleaner had forgotten to shut something) resulted in a floor now covered in oil-absorbing kitty liter which they just called to come clean up in a few days.

In a sentence – the customer reported a problem which you misdiagnosed twice, selling them thousands of dollars of stuff they might not have needed.  You also screwed up a routine cleaning and now the customer is once again inconvenienced (the smell, having to be home for more service calls, etc).  This customer’s patience and loyalty are at an end.

That’s the lesson for all of us.  No matter how loyal a long-time customer has been, every interaction is an opportunity to win their business again.  When we take that loyalty for granted and are sloppy (a nicer word than dishonest), we make withdrawals from our loyalty bank account.  This company overdrew – we’re closing the account.  Our intention is to explain exactly why to them as we don’t renew.  Who knows – maybe I’ll just send them this link.

Lesson learned?

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March 23, 2015 · 10:08 am

Willie Sutton And TV

Let’s start this week with a little history lesson. You probably haven’t heard of Willie Sutton. According to Wikipedia, William Francis “Willie” Sutton, Jr. (June 30, 1901 – November 2, 1980) was a prolific American bank robber. During his forty-year criminal career he stole an estimated $2 million, and eventually spent more than half of his adult life in prison.

English: Willie Sutton (1901-1980) Source http...

(Photo credit: Wikipedia)

There is a famous quote attributed to Sutton (he swore he never said it) who reputedly replied to a reporter’s inquiry as to why he robbed banks by saying “because that’s where the money is.” I’ve always remembered that because it’s a great way to stay focused when shiny new business options emerge.

One shiny new option these days is the plethora of Over The Top video services. You have probably heard about the one forthcoming from Apple, and HBO, CBS, Sony and others are already in the marketplace. The short version of why these things exist is so one can cut the cable cord, freeing oneself from the “bundle” of unwanted but paid for TV networks. If I’m a cable TV provider – most of whom are also internet service providers – I’d welcome these services with open arms and some of them are. Cablevision, for one, is offering the new HBO Now online service to its internet customers, even though the service could persuade more people to drop their cable TV packages.

Keeping the Sutton Rule in mind, where the money lies is in providing high-speed bandwidth at a reasonable price.  It costs the ISP pennies per gigabyte.  Charging a customer $50 a month for something that costs you maybe a tenth of that is a pretty good business.  Compare it with providing cable TV where you’re charging a little more but your margins are much smaller due to having to pay most of the networks you provide a monthly fee per customer.  You still pay ESPN $8 a month for each of those grandmas with cable who never tune it in.

I’m assuming for a moment that the customer service and install/repair costs are a wash.  You’re going to have those techs and phone banks no matter which service you support.  The real question in my mind is when will some cable company get out of the TV business and go ISP only.  Will that kill the content providers?  Nope.  One could argue they will come out ahead too since many of them receive far less on a per user basis from the cable guys than they might charge direct to the consumer albeit to a smaller but more engaged base.

The interesting times keep coming, don’t they?

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