Tag Archives: Reality checks

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 27, 2018 · 1:01 pm

Pay What You Want

There is a new kind of restaurant that’s opened here and it’s our topic this Foodie Friday. It’s called A Place at the Table and here is the concept as reported in the local newspaper:

A Place at the Table puts its mission at the counter, inviting patrons to pay what they can afford: the suggested donation, a little extra, pay for someone else’s meal or pay one’s way through volunteering. Volunteer jobs could include sweeping, wiping tables and bringing food to guests.

It’s not fancy and it’s only open for breakfast and lunch, which of course will have the effect of keeping the total bill down anyway. In my mind, that makes it less painful for those of us who can afford it to in essence overpay. It’s an interesting business model, don’t you think? Apparently, they’re doing pretty well as well as doing a lot of good. They’re not the only ones doing this, of course.

As far back as 2014, there were many of these restaurants in business around the world. Now you might think that most people would try to eat for free but the opposite is really true. Most people tend to pay at least the prices listed on the menu and many pay more. In addition, these businesses are often supplemented by grants, donations, and free labor to offset their costs.

The restaurant business isn’t the only one where the pay what you can model is in place. Music has become another one, with several artists releasing albums and asking the public to pay them what they think it’s worth although some folks distinguish between pay what you can and pay what you want. In my mind, anyone who is willing to offer their product up for judgment and to allow the user to asses the value is operating under the same model.

We see it in software and video games. It’s even expanding to fashion and amusement parks. So here is my question for you today. How much would your typical user pay you if they were setting the price? Is it enough to cover the cost of the product? Enough for you to make a profit? Or do they find less value in what it is your offering than you’re currently charging them? If you think the last response is closer to the truth, you had better look around because it won’t be long before a competitor figures that out as well and undercuts you. If you’re already competing on price and you’re still answering with the last response, you had better spend some time on figuring out how to add value so customers will gladly pay what you’re asking.

Make sense?

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July 20, 2018 · 12:36 pm

Mageirocophobia

It’s Foodie Friday and today we’re going to address what for some people is a debilitating problem: mageirocophobia. I know – how can I think about something I can’t even pronounce? Well, hopefully, it’s not something you think about at all, but it might just get you thinking about something that goes on in your business life, so read on.

Mageirocophobia is the fear of cooking. Yes, such a thing exists. It can take many forms and even experienced cooks might have a little of it. For some folks, they’re fine cooking for themselves but the thought of cooking for a large group – a party, a large family gathering – can become a problem. Maybe that’s when they opt for a caterer, telling themselves that they’ll be busy preparing the house when in fact they’re afraid of failing. For some people, they’re afraid to cook for others or their children, worried that they’ll poison them by serving undercooked food. In other cases, it’s a simple fear that what they’ll serve will be inedible, or at least bad enough to cause ridicule. Some people are just afraid of the entire process – sharp knives and hot pans can cause cuts and burns (I know that from personal experience!).

As with most fears, a fear of cooking is really a reflection of other things going on such as a strong need for approval or a fear of failure. It can cause people to do odd things such as never serving chicken to guests or insisting on overcooking pork. Some people I know are terrified by sharp knives and the blades in their kitchens are always dull which, as any good cook knows, causes more accidents than sharp knives do.

Some of us do the same thing in business. A decade ago I wrote a post that asked each of us to consider if our fears in business are rational? Fear of failing is not irrational but it can be debilitating. We listen to the negative voice in our head that tells us we can’t do something and we’ll be a laughingstock when we fail. We play it safe. We take the safe route and don’t push to scale quickly, avoiding new markets or products. Ultimately, as with the fearful cook, we miss out on pleasure as we avoid pain.

I’ve made my share of mistakes in both the kitchen and the office. I try to learn from each one and move on. We all have a bit of fear in new and difficult situations – we’d not be human if we didn’t. We need, however, to push through our fears if we’re ever going to achieve our goals, don’t you agree?

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