Tuesday, December 30, 2014

Self-Gifting Delusion

In late 2011 television news outlets signaled that paid newspaper circulation (total weekday and Sunday) was close to slipping below 40 million, a decline of 32% over two decades.

But less than 24 months later, those same outlets gave little notice when cable TV, now known as “legacy television subscription” slipped below that same threshold, having dropped more than 10% in less than three years alone.

When we cut the cord entirely in our house in 2010, television executives were arguing that the phenomenon was economic in nature, not the result of disruptive technology.

But by the end of 2011, 11% were considering doing so and a study in 2012 showed that 25% of legacy television subscribers planned to drop that service over the next five years.  Taking cord-shavers into account, the drop is becoming more precipitous than what hit newspapers.

Newspaper executives were astonished at the speed with which their business model was undercut by the Internet in the 1990s but not nearly in as much denial as landline telephone services were when the smartphone did the same to that technology less than a decade later.

It took less than a year after Netflix began streaming in 2007 for cord-cutting to move from fad to an accelerating trend.

Having good data is not an antidote for being delusional, nor is television the only industry in such gross denial.

In my former profession of community marketing, there are still far too many obsessed with visitor segments that have long been in decline such as conventions, pushing or enabling cities to build mega-facilities and then spending huge subsides on out of town groups that typically displace more tourism than they could ever create.

Evidence that this is a form of insanity has been available since the 1980s.  Similarly, community marketers and television executives often collude to subsidize huge sports events which also displace more economic impact than they create.

Corruption is rarely involved, unless it is lobbying, a form of legal corruption.  Just denial.

New media is at its worst when covering news media.  Listen in the build up to the Super Bowl as an example.  No it isn’t more popular than ever.

No the ads aren’t a turn on.  They turn off 1.2 viewers for every one viewer motivated to search for more info or buy something or feels made more aware.

The hugely expensive ads have a negative return.  So who is in denial?  Denial is a cooperative enabler and in this case, it includes the news media, advertising agencies, advertisers and about half of viewers.

One of the above is being ripped off,  But television may be the one being ripped off by convoluted data regarding the huge disruption now underway.  Instead of forewarning executives and stockholders to take significant action, it is full of mixed signals, in part, to desperately cling to the status quo.

All of this came to mind recently as I watched a presentation by arborists working for one of the nation’s largest utilities.  The presentation was quick to assign the costs of outages to trees but not to the fact that the utility lines should have been undergrounded decades ago.

The presentation was also clear that the lower lines running from pole to pole desecrating neighborhoods, home values and community scenic stature did not belong to the utility.

They belong to cable and land-line telephone companies and other utilities that are as obsolete as running the lines above ground.

It is the free market at its most irresponsible, unless you also factor in the obsolete use of coal to generate the power.

Free or freeloading?

These businesses are trapped in antiquated and unsustainable business models.  But waiting for them to adopt full-cost accounting or to write off stranded infrastructure is about as feasible as expecting lawmakers to see past the obfuscation created by billboard lobbyists, on behalf of another dead business model.

A new study indicates that nearly 6-in-10 shoppers in the US are self-gifters.  Maybe our only hope is to gift our communities the infrastructure to put these obsolete technologies underground.

We’re paying through the nose anyway.

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