The True Cost of Good Content

Jesse Weaver: “We want our web and we want it for free. However, the inconvenient truth is that there is a cost to doing business and at some point companies have to make money …. And so we sacrifice the magic. We devalue content and products by refusing to pay for the work it takes to create and maintain them. We are satisfied wading through poorly designed, ad-based experiences. And we allow our most precious resource, our time, to become a commodity to be traded, sold and manipulated. Our data is mined, our privacy discarded and our actions tracked all in the name of more targeted advertising.”

“And it’s not even the best scenario for companies either. In Q4 of 2015 Facebook brought in $5.9 billion in revenue with 1.59 billion active users/month. That’s roughly $1.23 of revenue/user/month. If, in the same quarter, Facebook moved away from ads and instead charged each active user just $1.50 a month for the service, their Q4 2015 revenue would have increased by $1.2 billion dollars, from $5.9 billion to $7.1 billion.”

“Now, what if Facebook started using that extra $1.2 billion to pay content creators for posting quality content on the platform? … Suddenly the revenue sources for content creators starts to diversify. The reliance on advertisers wanes. Feeds … are designed to promote connection and shine a light on creators. Bloated, ad-filled UIs start to disappear … Creators develop more immersive content experiences focused on the people using them. The balance of power flips back to the user … we stop being the commodity and we start being the driver. And when users are the driver, companies will focus on adding value, not just grabbing our attention.”

Facebooktwittergoogle_plusredditpinterestlinkedinmail

Readers vs. Users: A Cure for the Common Algorithm

Quartz: “To be sure, there’s a sick kind of symbiosis involved in so-called metrics-driven journalism. Content farms produce what the metrics say users want, and users give their attention, against which content creators can sell ads … And so it’s no surprise that when publications treat readers as users, they find what they expect to see: vapid, venal, flaky masses who constitute a collective problem to be solved by the data wizards of Silicon Valley.”

“But readers aren’t the problem. Readers are the solution. If publications can reclaim the reciprocal relationship between themselves and the people for whom they tell stories, then they can nurture a different kind of growth. It would not be the fast, social media-driven pageview growth that we see from venture capital-backed media upstarts. It would not be wide growth. Rather, it would be deep growth: fewer users but more loyalty and impact.”

Facebooktwittergoogle_plusredditpinterestlinkedinmail

Shakespeare & Co: Amazon Isn’t Its Problem

Wall Street Journal: “Soon after Dane Neller bought Manhattan bookseller Shakespeare & Co. last May, he shut the doors and built the bookstore where he wanted to shop … After Mr. Neller got done tinkering … the store, on Manhattan’s Upper East Side, had a distinctly different look. Space inside the store dedicated to books has been cut by nearly 40% to 1,200 square feet.”

“Mr. Neller … is also chief executive of a company that makes a desk-sized device called the Espresso Book Machine, which prints new paperbacks in five minutes or less. An $85,000 unit is featured prominently at Shakespeare & Co. ‘It’s the secret sauce,’ says Mr. Neller. ‘The machine enables a bookstore to have a much smaller footprint’.”

He “says book sales from September through the end of March are up 10% compared with the same period when the store was under different ownership” and “attributes the gains to better-chosen titles, increased store traffic attracted by the store’s new cafe and the Espresso machine … ‘Amazon isn’t my problem,’ he says. ‘My customer is here because they care about more than price. They want to be greeted, they want a sense of community, and they have a craving for culture’.”

Facebooktwittergoogle_plusredditpinterestlinkedinmail

Tractor Supply: It Has What Amazon Does Not

Forbes: “The typical Tractor Supply customer owns land, keeps pets, raises chickens and drives a pickup … Tractor Supply has approached retail’s cardinal rule of ‘Know Your Customer’ as both mission statement and math problem, and in the process has become an (albeit unlikely) lifestyle brand, famed for an in-store experience so satisfying that its rustic-chic brick-and-mortar operations are well fortified against the onslaught of consumers who want to buy everything on their smartphones.”

“Tractor Supply has 1,500 locations spread across 49 states; the company plans to open around 115 stores in 2016 and about 120 stores per year after that until 2,500 are in operation, mostly in rural or exurban areas … Roughly 15% of store merchandise is tailored to each ‘hyperlocalized’ market: One Kentucky store may cater to equestrians while another mere miles away carries products for life in coal country … the average 16,000-square-foot Tractor Supply store is manned by a team of 12 to 15 local ‘lifestylers’–the type of people who would shop at Tractor Supply even if they didn’t work there.”

The store’s “exclusive lines ensure that customers can’t find an item cheaper on Amazon … Not that Amazon is a big concern. Less than 1% of Tractor Supply’s revenue comes from e-commerce, and increasing that number isn’t a top priority. Physical stores and a deep connection to the countryside remain at the company’s core.”

Facebooktwittergoogle_plusredditpinterestlinkedinmail

Upgrade Downgrade: Bad News for Apple’s iPhone

The Wall Street Journal: “The death of the two-year cellphone contract has broken many Americans from a habit of routinely upgrading their smartphones … Citigroup estimates the phone-replacement cycle will stretch to 29 months for the first half of 2016, up from 28 months in the fourth quarter of 2015 and the typical range of 24 to 26 months seen during the two prior years.”

“Since the early days of Apple Inc.’s iPhone, most customers have avoided paying for the full price for the latest model. But the success of AT&T Inc. and Verizon Communications Inc. since 2013 in shifting customers into plans that force them to pay the full price for devices—and separate that cost from monthly service fees—has consumers holding on to their devices longer.”

“Analysts see the longer device life as positive for the carriers because it could lead to fewer service cancellations or defections in the competitive industry … The longer upgrade cycle lowers equipment revenue for the telecom companies, but Verizon’s Chief Financial Officer Fran Shammo argued last month that the top-line shift is painless … The shift isn’t as benign for Apple. BTIG analyst Walter Piecyk recently cut 10 million units out of his fiscal 2016 and 2017 iPhone estimates because of shifting upgrade rates in the U.S.”

Facebooktwittergoogle_plusredditpinterestlinkedinmail

Cutting The Cord: Not Just for the Poor Anymore

The Washington Post: “Low-income Americans are still one of the biggest demographics to rely solely on their phones to go online.” However, “even people with higher incomes are ditching their wired Internet access at similar or even faster rates compared with people who don’t earn as much.”

“In 2013, 8 percent of households making $50,000 to $75,000 a year were mobile-only. Fast-forward a couple of years, and that figure now stands at 18 percent. Seventeen percent of households making $75,000 to $100,000 are mobile-only now, compared with 8 percent two years ago. And 15 percent of households earning more than $100,000 are mobile-only, vs. 6 percent in 2013. Stepping back a bit, as many as 1 in 5 U.S. households are now mobile-only, compared with 1 in 10 in 2013. That’s a doubling in just two years.”

“This suggests that having only one form of Internet access instead of two may no longer be explained simply as the result of financial hardship — as might be the case for lower-income Americans — but could be the product of a conscious choice, at least for wealthier people, who are deciding that having both is unnecessary.”

Facebooktwittergoogle_plusredditpinterestlinkedinmail

App-arel: The Internet of Evrythng Wearable

Quartz: “Avery Dennison will attach special labels, sometimes including sensors, to clothes when they’re manufactured. The firm counts Nike, Under Armor, Hugo Boss, and others among its clients. These labels function as unique identifiers for each piece of clothing, and the data is stored in a platform developed by Evrythng … a London internet of things startup.”

“Unique identities pave the way for brands to write apps that can account for a specific item of clothing, so a pair of sneakers might advise you how best to recycle it when it’s worn out; or you might be able to verify that those yoga pants are indeed made of organic cotton. You might also track down whether your shoe size is available in a particular store. ‘The internet of things is still at the margins in the way it hits consumers’ lives; now you have billions of everyday objects with identities in the cloud,’ says Andy Hobsbawm, a co-founder of Evrythng.”

“Evrythng says its platform is different because of its granularity–giving an identity to each product, and not classes of products, as is common with QR codes–and because it formats the data so it can be manipulated with popular programming languages … Evrythng stresses data privacy and security. It says brands will control what data gets accessed by whom, and that it has safeguards in place to ensure data is adequately protected.”

Facebooktwittergoogle_plusredditpinterestlinkedinmail

Conversational Commerce: Meet The Chatbots

The Washington Post: “While a Web browser might once have been our front door to the Internet and apps often play that role today, experts say that bots could soon become our primary digital gateway … The case for a bot-centric future goes like this: Smartphone users have proved they are only willing to download and spend time in a limited number of apps. So companies might be better off trying to connect with consumers in the apps where they are already spending plenty of time. And proponents say that a bot can potentially provide greater convenience than apps and Web searches because it can understand natural speech patterns.”

“Because bots are designed for one-to-one conversation, they may ultimately find their most logical home in messaging apps, which are seeing explosive growth in users and are the digital-communication channel of choice for Generation Z … It is against that backdrop that big retailers and Silicon Valley are racing to develop ways to use bots within messaging apps to deliver customer service or to enable browsing and buying … In retail industry jargon, this is coming to be known as “conversational commerce,” and brands are betting on it because of some distinct advantages it could provide in connecting with shoppers.”

Facebooktwittergoogle_plusredditpinterestlinkedinmail

Fake Farms Fool Tesco Shoppers

The Wall Street Journal: UK grocery chain Tesco is launching “76 new food lines,” branded with the names of “seven fictitious farms. Critics say the British-sounding monikers obscure the fact that the products come from a variety of farms, including ones overseas. Blueberries under the Rosedene Farms brand come from Spain, for example, while apples under the same brand hail from South Africa.”

“The British efforts are part of a global trend among supermarket chains and food makers as customers increasingly seek food that appears fresh, lacks artificial ingredients and is locally sourced.” Says Tesco CEO Dave Lewis: “We’ve been very open about the fact that this is creation—we’re creating and launching these brands.”

“Not all of British retail’s farms are fictional. High-end supermarket chain Waitrose on Friday began streaming live footage in train stations across the country from a farm it owns in Hampshire. Passersby will be greeted with footage of beehives, rapeseed and more from dawn to dusk.” Waitrose “said it aimed to let customers see firsthand where their food comes from. ‘Rather than telling customers what we do, we’ve decided to show them in an open and honest way,’ said Rupert Thomas, Waitrose’s marketing director.”

Facebooktwittergoogle_plusredditpinterestlinkedinmail