Tag Archives: Business and Economy

August 4, 2015 · 11:53 am

39 Percent

There are days when I’m really glad that I no longer work in the traditional TV business. I mean, what business (perhaps other than music) has been so thoroughly disrupted? A statistic I came across reinforced that notion:

photo by autowitch on Flickr

photo by autowitch

“Watch a show live when it is first broadcast” placed at #1 among favorite ways to watch TV; and viewing “live when broadcast” accounts for 39% of all time spent using TV content.

That is from a study from GfK MRI called TV Share Of Clock. You can get more information about it here. I came away with one thought: I sure as heck would not want to be a programming chief these days. After all, their mission is to generate large numbers of viewers to their programming. That programming used to have a few major competitors and now there are many more. Even when we exclude niche websites that deliver video, Netflix, YouTube, Amazon, Hulu, and others comprise stiff competition.  The study reveals that 41% of TV viewers are “Digital Enthusiasts,” who subscribe to at least three digital TV services online, as well as maintain a traditional pay TV subscription.

Think about that 39%.  I wonder what the number would be if you excluded live sports and local news?  Probably quite a bit lower.  When a quarter (28%) of all TV viewing is now done via digital streaming, it’s impossible to think of the TV business in traditional terms.  This quote from a GfK MRI executive sums it up:

We live in a new type of video ecosystem, where online video and live TV co-exist amongst traditional cable offerings, apps, and digital streaming of live TV. These platforms are creating added demand for one another; viewers are checking out more – and different — content, and ultimately watching more. Even digitally savvy viewers still value time-honored TV experiences, like social viewing and second-screen experiences, thus keeping linear viewing strong in today’s digital world.

Read between the lines.  A business model built on selling advertising and charging distributors for the privilege of carrying widely viewed programming is in serious trouble.  Even ESPN is losing subscribers – almost unheard of until you begin allowing people who don’t care about sports the freedom of choice.  If you’re reading this and smirking, don’t.  This will happen to your business as well.  The world’s largest hospitality company doesn’t own a single room; the world’s biggest taxi service doesn’t own a vehicle; and the world’s largest retailer has no stores.

How are you making plans for when 39% of your users are what’s left?

Leave a comment

Filed under Reality checks, Thinking Aloud, What's Going On

Tagged as , , , ,

July 10, 2015 · 11:42 am

Gout, Seriously

It’s Foodie Friday, and this week’s topic is the very serious business of the very serious food magazines. I was reminded of this by something Eater.com does every so often, which is to publish the cover of a mock foodie rag called Gout. You can see the covers here and here. While it may look like a legit food magazine, with article titles such as “Summer! It literally comprises 1/4 of every year but we’re going to explain all the food as if you’ve never previously considered grilling burgers before!” it clearly isn’t.

One of the articles – “Vodka – it’s cool again!!! (unrelatedly, Grey Goose bought the back cover ad)” points to the problem we’ve talked about numerous times here on the screed.  It’s reinforced with the “An editor we’re trying really hard to turn into a celebrity writes about his trip to Uruguay as if it weren’t fully comped”.  When ad and edit become indistinguishable and readers begin to wonder if what they’re reading is a version of the truth someone is paying for you to see, we have a problem.  As an aside, this isn’t just an issue with food magazines – I’ve never much believed equipment reviews in golf magazines since I’ve never seen a bad review of anything.  Funny how that works when 90% of your revenue is from equipment companies…

But that rant isn’t my point today.  What Eater has done here is something we all need to do a lot more often: poke fun at ourselves.  After all, unless we really are brain surgeons, EMT’s, firefighters or a few other professions, it’s not as if what most of us do is life or death.  In fact, I’ve often said that the best part of my job is that if I screw up, nobody dies.

Business is hard.  It can be horrible sometimes.  It is very serious most of the time. Because of that, every so often we all need to do what Eater has done – recognize the silly stuff inherent in our industry, and laugh.  Honestly, while a great meal may leave you happy and satisfied, a good laugh is better for your health.

Leave a comment

Filed under food, Helpful Hints

Tagged as , , , , ,

July 6, 2015 · 11:26 am

All Wrong Is Right

There is a truism in gambling that you don’t need an indicator that’s right all the time to help you predict winners.  You do just as well betting using an indicator that is wrong all the time as long as you remember to bet the opposite of what the indicator predicts will happen.  Consistency and accuracy are what you’re after, and something that is wrong all the time is very accurate, albeit in the wrong direction.

12 pack of Crystal Pepsi cans

(Photo credit: Wikipedia)

I thought of that when I read about a study to be published in the Journal of Marketing Research.  It dubs certain consumers “harbingers of failure,” because they are people whose tastes lead them to buy new products that are doomed to failure on a very regular basis.  In other words, if one of these folks buys your new to the market product, kiss it goodbye:

A study of retail purchases from about 130,000 consumers at a national convenience store chain found that 13 percent of them had purchasing habits that predicted failure of a new product, defined as surviving less than three years. Specifically, half or more of the products they bought flopped.

So, customers who bought Diet Crystal Pepsi are more likely to have bought Frito Lay Lemonade. Both failed. Further, not only is their early adoption of a new product a strong signal that the product will fail, but “the more they buy, the less likely the product will succeed,” the researchers wrote.

That’s from the Chicago Tribune report on the study.  So what does this have to do with your business?  We often get way too focused on what’s a straight line; the indicators that confirm a positive relationship between what we’re doing or marketing and a growth in revenues.  What this study points out is that we need, instead, to focus on ANY indicator that has a demonstrable correlation to our success or failure no matter what form it takes.  Finding 15,000 consumers who always seem to purchase products that fail is fantastic.  While it puts you in the unenviable position of rooting for certain people NOT to buy your new product, it also allows you to take action.  In this case, the recommended course is to ask people not only whether they would buy the new product but what other products they buy — to judge whether they have mainstream tastes.

And that should help you make more winning bets!

 

Leave a comment

Filed under Consulting

Tagged as , , , ,