Nobody watches TV!
What about the ad men? Also, the ISS, AirBnB in Barcelona, and space capitalism
I don’t know anyone my age or younger who watches broadcast television. If we’re watching anything it’s on-demand and even there Netflix was quoted saying that Fortnite is their competitor in a Q42018 Investor Newsletter
We compete with (and lose to) Fortnite more than HBO. There are thousands of competitors in this highly fragmented market vying to entertain consumers... Our growth is based on how good our experience is, compared to all the other screen time experiences from which consumers choose.
On the topic of Fortnite, they’re averaging 220 million active monthly users and have made so many billions of dollars they’re a contender for the highest-grossing video game of all time depending on whether you account for inflation or not (accounting for inflation it’s Space Invaders! source)
Video games are crushing it as an industry, despite the layoffs at major studios and a slight contraction in recent years relative to the COVID surge.
If you didn’t know, the video game industry globally is larger than the film and music industries combined (source) thanks in large part to mobile gaming.
And VR, though still a minor niche is rapidly growing. Meta’s recent revenue and numbers are looking pretty decent and they continue to pour billions into Reality Lab’s R&D, also I’d never count Apple out on a new computing and gaming platform.
What does this mean?
First, we’re heading into a new era for consumer leisure time.
Second, consumer brands will need to rethink their advertising and marketing strategies.
For decades advertisers have relied on TV and print ads to get their message in front of consumers, but no one’s watching broadcast TV and no one reads the newspaper or magazines anymore. Newspapers are just in a sad decline (source). Magazines are somewhat stable, but trending at about half their 2007 peak (source), and probably 99% of the magazine revenue has to be coming from aging boomers… so that might just be gone in a decade.
Most of the decline has been attributed to the internet, so is it digital ads that are going to save the day for advertisers?
I doubt it. Between ad blockers and ad-blindness users are literally not seeing ads. What is eye-blindness? It’s the researched phenomenon through eye tracking studies that users completely ignore ads or even anything remotely perceived to be an ad
For more on ad blindness, check this out (source).
Despite the ineffectiveness of online ads, advertisers have poured increasing billions into online advertising in hopes of getting their message in front of consumers one way or another.
I think they’re making a mistake.
Young people these days want experiences, not messages.
VR and video games are untapped mediums for creating engaging, interactive brand experiences that will actually reach Millenials, Gen Z, and especially Gen Alpha.
Nike nailed this so hard with NikeLand on Roblox, drawing 30 million players into their branded world.
How much did they spend on NikeLand? Maybe a few hundred thousand?
They spend millions to produce and air a commercial during prime time in major markets… which one do you think is more effective?
These experiences are not the ad. The ad is everyone talking about the experience, and YouTubers recording themselves in the experience; that’s the ad.
Really the shift here is in meeting the consumer where they’re at.
For decades television was the king of leisure time and millions of teenagers sat in their rooms and looked at magazines while talking on the phone, those days are gone.
Now it’s streaming, video games, and Tik Tok and it’s those last two where brands will get their success in 2024 and beyond. Make interactive experiences, do tie ins with existing gaming like Fortnite, and embrace influencer marketing on social.
The times, they are a changin’.
ISS to crash into the ocean, bringing a capitalist version of space exploration next
An era is coming to an end and the ISS is set to be decommissioned and crashed into the ocean via a SpaceX made deorbit vehicle.
The ISS is one of humanities greatest shared achievements so far and it’s a little sad that it’s coming to a close, but we’re moving into another era of space travel and one that’s likely to be dominated by private companies… for better or for worse.
Personally, I’m exciting about this next era of space travel and exploration. While I think it’s very important for us to fix the planet we already have, it’s also important for humanity to progress into a civilization that controls it’s own solar system. The scientific advancements we will make and the knowledge we obtain in this next era will be nothing short of amazing.
For some fun, not so light sci-fi on the topic check out The Expanse, the book series is better than the show, though the show is pretty bad ass.
Barcelona, AirBnB and capitalism
If you haven’t heard, Barcelona is one of the first cities to ban short term rentals from sites like AirBnB. They’re giving owners a few years to unload the apartments or switch to long-term rental (like normal rentals). Source BBC
I think this trend is probably for the best as this was a great example of where capitalism goes wrong. It’s in the externalities, that’s when regulation is needed. In this case, no one is paying for the negative externalities that something like AirBnB does to a city and it’s residents, it’s not sufficiently priced-in to an AirBnB stay. We can’t fault the owners either, in some studies renting out an apartment on AirBnB can net double or more income for landlords over long-term rentals. They’re making the prudent business decision to rent out on AirBnB that makes sense for them, but again their returns are not accounting for the negative externalities and often are part of the cause in a recirprical feedback loop where more and more owner put properties up on AirBnB reducing supply for long-term renters.
My best guess is that we will see a lot of cities begin to heavily curtail AirBnB and similar sites.
Capitalism itself is still the way forward till the robots can run everything, but we have to keep in mind when it goes off the rails and smartly regulate it. For more on that, one of my favorite authors on Substack wrote an amazing article recently:
If you’re not already, you should subscribe to Uncharted Territories, his work is excellent.
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