Weekend Media Threads, June 29, 2019

Facebook is getting into banking and crypto currency, what could go wrong? Roku continues to dominate the streaming device race.

I can’t believe it’s the last weekend of June already. Between a new job, travel, vacation, and trying to balance the new reality of my personal and professional worlds, it’s been a lightning-fast couple of weeks. On the bright side, despite how quickly the weeks have gone, it’s been a great month. I’ve had a lot of new experiences and have met some fantastic people along the way.

But it was quick.

How quick?

So quick that my arch nemesis, Facebook, announced plans to launch a crypto currency, Libra, and I’ve yet to mention it anywhere. Not even a tweet about it with some snarky comment. Facebook is planning to destroy our banking industry and here I am trying to balance life. I dropped the ball on this one.

But yes, Facebook is in fact planning to launch its own digital currency sometime in quarter 1 of 2020. The idea that Facebook will launch its own digital currency isn’t really new news. This is something that has been discussed and speculated on for at least a year. However, the company detailed its plans in an announcement on June 18, 2019.

In addition to the currently, the announcement detailed plans for Calibra, a new Facebook subsidiary. Calibra will provide financial services that will allow people access and participate in the Libra network. The offerings will include a digital wallet for Libra, available in Messenger, WhatsApp, as well as a standalone app.

As the BBC points out, this is not the first time Facebook has attempted a digital currency. Facebook launched Credits in 2009, and subsequently abandoned the project in 2012. Credits seemed to have failed because it was confusing, restrictive, and well ahead of its time.

Libra is much less restrictive. Facebook’s intention is for Libra to be a global currency in the same vein as Bitcoin, and not restricted to its own platform, as was Credits. Libra is also backed by 28 founding partners including Visa and Mastercard.

If you judge this at face-value, Libra appears to have a lot going for it. A non-profit subsidiary to administer the currency and business partners in banking, tech and other sectors.

So what’s the problem?

The problem is that this bus is being driven by Facebook. No matter what shade of lipstick you put on it, what non-profit has oversight, and how many business partners are backing it, not one person in the world should trust Facebook. And if you still trust Facebook, you haven’t been paying attention.

Facebook has had a hand in decimating journalism, the proliferation of fake news, election fraud, and multiple privacy issues that they’ve either ignored or addressed with the maturity of a 12-year-old. Actually I take that back. My son is 12 and I think he would at least be more empathetic than Facebook has been.

The company has proven time after time that it cannot be trusted with your privacy, why in the world should we trust them to create and run a digital currency and international banking system?

The answer is we shouldn’t, but the reality is that we will. And it will be successful – at least until its first major scandal or hack and the European Union steps in (you don’t actually think the U.S. will crack down on any of the Silicon Valley darlings, do you?). The odd thing is that I don’t think it will be the Facebook platform or Messenger that makes it successful. Facebook’s core users are less likely to use a crypto. They skew older and were raised by a fiscally conservative generation (at least from a banking standpoint). Most of them will smartly steer clear of the risk.

It will be What’s App and Instagram that will drive the success of Libra. Both have significantly younger user bases that are accustomed to purchasing digital currency to buy digital goods. As an example, an entire generation has been raised on Xbox, PlayStation, and Steam where it’s commonplace to buy platform-specific digital currently in order buy games and in-game items. Wouldn’t it be great if you could buy a platform agnostic digital currency instead of having your funds locked within a single platform?

Seems like a relatively mundane pain point to solve, right? Why not create a little convince for folks in order to build a user base and attach millions of banking accounts to Facebook’s flawed privacy system?

What will this convince get us? With Facebook’s culture and business practice of moving fast and breaking things, they do just that. Given how that has played in journalism and elections, and the lack of accountability Facebook has shown, we could be in for a very bumpy ride.

I’m sure the banking system will be just fine though.

Roku Continues to Dominate

FierceVideo reported this week that according to Strategy Analytics Roku accounted for 30% of all U.S. sales of streaming devices in quarter 1 of 2019. Amazon was number two during the quarter, accounting for 12%. This now gives Roku 41 million streaming devices that are in use in the U.S., good for more than 15% of the market and a 36% lead over number two Sony.

It’s amazing that despite Roku being one of the first movers in the OTT market – and with massive competitors Amazon, Apple, Samsung, and Sony – that they continue to be the leaders in the streaming TV space. It’s not as though they are sitting on a lead and playing defense either. They continue to grow at an astounding pace, faster than any competitor.

Weekend Media Threads June 23, 2019

No media this week, just a fun time in LA.

Due to a much longer than planned travel day on Saturday, this is going to be a shortened version of my weekend media threads, and won’t have much in regards to media. The reason being, my family and I were on vacation this is week in Los Angeles visiting my brother, John. He relocated from Pittsburgh to LA a few ago and this was the first time we’ve had a chance to visit him in his new home.

It was also the first time that I’ve been on the west coast. I’ve been in the western time zone, Las Vegas to be specific. But never all the way to the coast. As was the case, we decided to fit as many tourist-type visits as possible. Combine that with an unexpected stop in Chicago due to an electrical failure on the flight home, and it was a very long week – but not in a bad way.

Needless to say, I’ve had very little time to think or read about media this week. No, most of my reading this week was fiction. Just something to kick back and enjoy my time with family. So instead of talking media, I thought I would share some images of our time in LA.

Enjoy!

It is no exaggeration to say these scooters are everywhere. I walked three quarters of a mile and counted 95 that were in some state of non-usage. Also, that’s my brother, John.

I do love street art.

La Brea Tar Pits

Universal Studios Hollywood.

Culver City.

Griffith Observatory.

Venice Beach and Santa Monica Pier.

And finally, The Getty Center. I’m still in awe of the views from here. Stunning.

Weekend Media Threads, June 15, 2019

Digging into Mary Meeker’s 2019 Internet Trends Report.

As any media nerd can tell you the best report of the year is Mary Meeker’s Internet Trends report, which was released this week at Recode Media’s annual Code Conference. After last year’s report I wrote about print media’s continued revenue decline as tied to its loss in time spent (as many others did and continue to do). Here is this year’s slide, which includes a nice comparison to 2010:

Media Time vs. Advertising Spending. Slide 22 from Mary Meeker’s 2019 Internet Trends Report.

And here is last year’s slide as a reminder:

Media Time vs. Advertising Spending. Slide 96 from Mary Meeker’s 2018 Internet Trends Report.

It’s difficult to gauge the true loss year-over-year because we don’t know the true percentages. This is particularly true with print because the numbers are small. For example, if last year’s time spent was 4.4% (rounded to 4%) and this year’s is 2.5% (rounded to 3%), the YoY loss is 43%. But if last year was 3.5% and this year is 3.4% it’s just a 3% loss.

For arguments sake let’s use the round numbers in the report.

From the 2018 to 2019 report print saw a loss of 25% in advertising revenue share and a 22% loss in time spent. Which would make sense. If true, and it continues to track this way, the loss in time is likely to fall another 43% before it matches today’s print advertising revenue output.

Which means print advertising revenue will likely fall another 40-50% to somewhere between one and two percent of the ad revenue market. It’s difficult to imagine how legacy publishers survive this kind of loss.

Another interesting item from this year’s slide is that three of the five categories – TV, desktop, and mobile – all have the same percentage advertising spend as they do time spent. TV is at 35%, desktop 18% and mobile 33%. However, there is movement within each category.

In TV this is the second year in a row where the two columns were equal. Last year they were at 36%, now they are at 33%. A loss of 6% from each column.

On desktop time spent remained the same, but advertising spend fell from 20% to 18% to match the time being spent.

The big mover was mobile. Time spent increased from 29% to 33%, a 14% gain. While revenue increased from 26% to 33%, a 27% gain.

This leaves us with radio. Similar to print, radio if off kilter. Except in the opposite columns, which is likely not awful news. Time spent with radio has a 12% share, down from 13% last year. Advertising spend has an 8% share, down from 9%.

The question now is, will advertising spend continue to align with time spent, or will marketers move more dollars into mobile until it has a disproportionate spend?

This chart has been moving towards this equilibrium since it has existed, so my best guess is that the shares will move in sync with each other. The exceptions being print and radio.

Print’s revenue will continue to fall, maybe at a faster rate that it has been. To keep profits steady, print will slash more content, which will suppress time even more. Eventually both will settle in at 1 – 2%, but what will be left?

And radio? I haven’t followed as closely as print, but if I’m correct in saying that time spent and advertising spend are finding an equilibrium, I could see revenues stabilize as time continues to fall.

And time will continue to fall in traditional media.

Why?

Adults are constantly online …

… or ‘almost constantly,’ as this slide illustrates:

Percentage of adults online almost constantly. Slide 162 from Mary Meeker’s 2019 Internet Trends Report.

Overall adults spend 26% of their time online. Up 24% from 2015. More than a quarter of time spent online is a big number, but look at the groups 18-29 and 30-49. They spend 39% and 36% of their time respectively online.

The biggest jump from 2015 to 2018 are those folks in the 30-49 age range. They jumped from 28% in 2015 to 36% in 2018. That’s an almost 30% increase in just three years. I’m sure a lot of this is driven by folks in the 18-29 range aging into their 30’s, but it also speaks to how connected we’ve become to our technology.

To help combat the amount of time spent with our technology, technology companies (Apple, Google, Facebook, YouTube) are now offering wellness and time tracking tools.

Which is the definition of irony. Especially in the case of Facebook and YouTube. They’ve built technology and algorithms specifically designed to get you to spend more time on their platforms, not less.

But maybe it’s starting to work.

Percentage of adults online almost constantly. Slide 164 from Mary Meeker’s 2019 Internet Trends Report.

Time spent on social media is starting to decelerate. It’s still growing, just not as fast as it was. I’m sure after Facebook and Alphabet shareholders get a look at this slide those time watching tools will get tweaked to match market expectations, not user health.

And there is so much more

Seriously, this report has so much in it.

I know it’s 333 slides, but if you have any interest in the internet I highly recommend you take some time and page through it. It’s not just about media either. It gets into how the internet amplifies our own interests as well as bad actors, privacy concerns and regulation around the world, content moderation, the economy and on-demand jobs …

I could go on, but you need to look for yourself. Here’s the link, go …

Weekend Media Threads, June 8, 2019

Hot take: change is hard, behavioral ad targeting is worth squat, ESPN is so lit, Uncle Sam starting to chip away at unfettered growth

I was chatting with someone this week about change within an organization. Change is never easy or simple, but it does seem to take hold in some areas quicker than others. Some people have a knack for it while others expel more energy avoiding change than they would have if they just changed in the first place.

If I knew why this was the case I would probably be well on my way to retirement thanks to a lucrative book deal. But my colleague did bring up an interesting point that hadn’t occurred to me previously. Many jobs, careers, college majors, etc. require that you learn a specific skill, and while the tools around that skill may change over the course of your career, the basic skill never changes.

Thus, most of us are never required to go through change so that ways of doing things become habits and become ingrained in us to the point that it feels impossible to change. To most people it’s not about the energy needed to make the change, it’s about the fear of the change.

We’ve done the same thing for three, five, 10, 20 or even 30 years, why would we change now?

We can’t.

And if we do, what happens?

What if it doesn’t work?

Will we have to change back?

Or change to another new way?

It’s been working this long.

Someone else tried this and it failed.

These are all just straw man arguments. Not that those making the arguments don’t have valid concerns, or shouldn’t be heard. I would argue that each of these reasons should be considered and discussed. But none of these is a reason not to make necessary change.

And this is where it’s up to leadership to articulate to those around them a a clear vision of how the forest will look rather than focusing on a single tree. It’s hard to see when change is needed because it can be frightening for many reasons. Change isn’t easy, and it’s rarely simple. But death by a thousand cuts is deadly.

This sounds very familiar …

I’m sharing this opinion piece from Ad Age because it reads like something I would (try to) write. The title, “Oh, great, old-media people are supposed to fix digital media (again),” reminds me of the question I’ve asked at newspaper companies for years – when will newspapers stop allowing the people who drove us into the ditch get us out?

The answer is always something along the line of, sure they were at the wheel when it drove into the ditch, but it’s not really their fault.

And the fact that they can’t get us out? Well, the ditch is deeper than we thought.

The real answer is that there is a lot of risk turning over vast amounts of revenue to executives who don’t have the experience managing it. Which is a reasonable way to manage an organization. But at some point – and soon – publishers will need to figure out how to take some risks. Otherwise all of the dire projections on the death of newspapers will become a reality.

How much is behavioral ad targeting worth?

Turns out the answer to the above question – at least for publishers – is not much. According to a report, conducted between University of Minnesota, University of California, Irvine and Carnegie Mellon University, publishers receive a 4% increase in revenue from ads served with cookies enabled versus those that aren’t.

Remember, that 4% increase would be off of a small base for most publishers. Somehow that doesn’t seem worth it.

ESPN is trying too hard

I didn’t watch, and neither did my basketball-loving 15-year-old or his friends, but ESPN decided it would simulcast game two of the NBA Finals on it’s owned app and make it lit for the kids. When I asked my son whether he and his friends watch ESPN at all, he just laughed.

ESPN has been trying too hard for years, and this is just the most recent example. It feels like a bunch of execs sat in a room and had this conversation:

Exec 1: My grandson is doing something calls the Twitch. What’s the Twitch?

Exec 2: Not sure, I’ll have my assistant Google that.

Assistant streams Twitch to corporate TV screen

Exec 1: I don’t get it.

Exec 2: Yeah, but I hear gen-z kids like it.

Exec 1: Oh, and our research shows the kids like the NBA, too. Wouldn’t it be cool if we did that with the NBA Finals? The kids like

Execs 3: Yes, the kids would think that is lit.

Execs 4 – 7: Ha! Ha! Ha!

I like that they are trying to change and that they are attempting to do something different, but this just stinks of being out of touch. I get that there can be a fine line between innovation and being out of touch, but whoever thought this was right thing to do crossed that line.

Uncle Sam Investigating Google’s Ad Dominance Online

The U.S. government has largely allowed big online media companies (Facebook, Google, Amazon, Apple) to grow – whether organically or through acquisition the competition – unfettered. As concerns grow over privacy and potential monopolies, it looks like this era of online media may be coming to an end.

According to this Reuters report:

The U.S. government is gearing up to investigate the massive market power of Amazon.com Inc, Apple, Facebook and Google, sources told Reuters on Monday, setting up what could be an unprecedented wide-ranging probe of some of the world’s largest companies.

What this means for the market and whether it will change anything is a long way from being settled, but it will be worth watching.

Weekend Media Threads, June 1, 2019

My new adventure begins, what’s a media company to do?, and some of my favorite links from the week.

Despite this being a holiday week it’s been a whirlwind week for me. I ended one job, and left an industry, on Tuesday and started a new job on Thursday with a travel/paperwork day in between.

For the first time in my career I started my workday working for an organization not involved in newspaper publishing. No need to worry about web breaks and missed deliveries.

via GIPHY

Thursday did feel a little surreal at first. Suddenly I’m working in radio and TV. How would a newspaper guy fit in?

Turns out – as deep down we all know – no one really cares where you come from. Sure people are interested, but the current destination is more important than the journey that preceded it.

Also, once I started to meet people and got to listening, I realized that no matter the legacy distribution channel, news is still news and digital media presents the same challenges. Most of us in the media industry are asking – and struggling with – the same questions. Even fewer of us have the right answers.

Some of us look internally, opting for mass consolidation, ‘efficiency’, extreme pricing actions, and the like. Mostly ignoring external data signals from audience.

I know that no media organization would admit to the above, but if you work for one of these organizations, you know it’s true. Every conversation starts with some variation of, “how do we do this without disrupting ourselves? Oh, we can’t? Okay, let’s just do it the same way we always have then.”

Fewer of us, it seems, are starting with audience and building out from there. It doesn’t mean we ignore real efficiency and revenue streams, but it is a fundamentally different way to look at our challenges, and leads to a different culture.

Discussions around whether Amazon is a monopoly and what they’ve done to circumvent competition aside, at its core, Amazon a customer-focused organization. As much as many like to hate on the company, it’s hard to break away from them.

Why?

Because they make it simple to do business with them. And they do that by addressing the customer’s pain points. They are relentless with data and test every part of the funnel from discovery to your porch (or couch in the case of OTT). They make it easy for you to do business with them, then they address internal pain points without disrupting the customer experience.

Think about it, Amazon makes changes daily, when was the last time these changes negatively impacted your experience with them? I can think of a few poor delivery experiences, but each time their customer service will do whatever it takes to make it right.

As a result over the past five years Amazon’s stock has increased over 450%. For comparison the Dow is up 48% over that same period. They’ve outpaced the index by 402 points!

Compare this to how many media companies do business.

  • They start with internal structures and legacy business systems;
  • Then they figure out what fits into their workflow;
  • Then they distribute to the platform that is easiest for them;
  • Then they wonder why the audience didn’t show up.

This isn’t brain surgery.

If media wants to survive they need to stop thinking about internal pain points and begin addressing customer pain points.

Links from this week

Speaking of audience first, Pico launched what is basically a CRM for media companies. According to this TechCrunch article, it’s “an identity layer for media — offering a way to implement paywalls, checkouts and analytics while actually knowing who your customers are.”

Did you say audience data? This article from Publishing Executive discusses how B2B Media is leading the way in first-party data, and opening up new revenue streams.

And then there is this. If you’re in media you’ve seen this by now, but it looks like Gannett is in talks with GateHouse, McClatchy and Tribune on a possible merger. This will be good for the shareholders, I just hope they start looking to audience.

As reported on Nieman Journalism Lab, After four years of handing out money for European news projects, Google is expanding its funding to North America. You can see the post from Google here.

Also from Nieman, Why local foundations are putting their money behind a rural journalism collaborative.