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March 17, 2017

Comments

Wayne Brady

That is rather shocking news for such a large global brand

Winter

This made the newspapers in the Netherlands. albeit on an inside page:
http://www.volkskrant.nl/economie/adidas-zoekt-jonge-doelgroep-op-sociale-media~a4475920/

Adapted Google Translate:
Adidas is looking for young audience on social media

Advertisers stop TV advertising

The young customers of the large German manufacturer of sports equipment do not watch much TV, so advertisers are looking for them on social media. It seems part of a trend with serious implications for traditional media.

Tomi T Ahonen

Hi Wayne and Winter

Yeah it is a logical step on a tech evolution path. If we look back, at some point the telegraph and fax for example went through this same type of evolution, where at one point major corporations had telegraph offices in their major office buildings and then at some point shifted away from even using a telegraph anymore; and faxes we can remember the time when a good office setup included a fax machine and gosh, for me the last time I sent a fax was in the previous decade when some I think law office needed some signature faxed to them haha...

I honestly do not foresee the end of TV as such (will not go the way of the Zeppelin or steam engines like in travel) but if TV starts to see such erosion where some brands not just shift their ad dollars to digital media and REDUCE their TV expenditure, and then some major brands STOP altogether TV ad spend, that is a huge shock to the TV industry and will mean -- cost savings, belt-tightening, lower ad rates to retain customers, cut staff, cut expenses, pay less for sports rights, fire more staff, pay less for TV programs, actors, directors, tech crew, it means even less local/own production, more purchased mass entertainment prodcuts like the major reality TV shows, and so forth...

It means the golden age of TV will have ended or is about to end. Assuming Adidas is not the only one who did this but is the 'Canary in the coal mine' who dies first. And if this now signals the start of even a modest trend away from TV, that would mean we had witnessed (or are just now witnessing) 'Peak TV' as a mass media transition moment.

It is interesting times and we have to see what else we hear from the 5th Mass Media haha..

Tomi Ahonen :-)

Wayne Brady

That's what I find shocking. Sports is the main "keep people paying for cable" anchors. And Adidas is a sports brand. I'd have been less shocked for a face cream or other general products category.

b

@wayne

> Sports is the main "keep people paying for cable" anchors

It is almost funny how you wrong you are! I guess that is your personal reason! See: "Sports are no savior to big cable bundles, survey says -- Sports are often seen as the linchpin keeping people in pricey cable packages, but a recent survey found most subscribers don't need games to keep paying for TV. Plus, many sports fans would pony up for streaming."

https://www.cnet.com/news/sports-arent-the-savior-of-big-cable-bundles-survey-says/

Wayne Brady

@B - That article doesn't dispute what I said. Live sports IS a major deterrent to cutting the cord. That there is a DEMAND for paid streaming, doesn't mean there is a SUPPLY for it. All the current paid streaming deals specifically exclude your local market's teams. We pay for MLB streaming so that our daughter can watch our local team while in college. My wife and I can't stream those games. We can watch ANY OTHER game, but the one we are most likely to want to watch.

And, of course, there are other reasons besides sports to stick with cable. As the article says and I've never said anything to the contrary.

Just go to any forum discussing how to cut the cord. The most difficult part is not being able to watch live sports.

By Adidas cutting out Tv advertising, you have a sports apparel brand not advertising where the overwhelming largest percentage of their viewers aught to be...when watching sports. That's shocking.

Tomi T Ahonen

Hi b and Wayne

b - welcome to the blog.

Both - yeah, its a bit of this and a bit of that. I agree with you Wayne that its shocking specifically for a sports brand but on the other hand, for me it is not shocking its a youth-oriented brand. Say a Pepsodent type of brand would perhaps be more shocking.

b - I understand what you mean and for many cable TV viewers that is indeed true, but I would side with Wayne on this. Even so, then the 'last vestige' of the reasons to subscribe to cable TV is for very many sports fans, the sports coverage. Obviously only part of TV viewers are of the type of sports fan who would even care (some people dont' watch any sports). For me personally it was Formula 1 racing which was the last bit that kept me on a cable TV subscription when all other reasons to bother to pay for cable TV had already ended for me. So in that way, while it will not 'save' cable and is not the 'universal' reason, it is probably the single biggest reason that actually drives premium cable TV payments - live sports. And that then will be of course regional depending on what are the local passionate sports from say US baseball to European football/soccer to say India and cricket or say Canada and ice hockey etc...

Tomi Ahonen :-)

grogxd

Well, just by sponsoring major teams like Real Madrid and Barcelona big brands like Nike and Adidas have worldwide exposure both on TV and the Internet. Maybe they will advertise on TV again if clubs start to ask for higher fees.

It'll be more evident when second and third-tier brands follow path.

Anyway this is indeed big as it would had been unthought of three years ago.

Tester

@Wayne Brady:

"That there is a DEMAND for paid streaming, doesn't mean there is a SUPPLY for it. All the current paid streaming deals specifically exclude your local market's teams. We pay for MLB streaming so that our daughter can watch our local team while in college. My wife and I can't stream those games. We can watch ANY OTHER game, but the one we are most likely to want to watch."

And for how long can they keep it up? That's a classic case of ignoring the customer's needs when designing a product. In the end it artificially extends the lifetime of an undesirable product and sooner or later the time will come that the tie is broken and someone floods the gap. And then it's goodbye to those who ignored realities.

As for TV advertisement, I cannot say it surprises me that it's the most affluent and most desirable customers that get lost. They get their entertainment through other channels that are most likely less ad infested. What's left are older people and children, and not surprisingly these are the groups that are most heavily targeted by TV ads here in Germany.
Of course I still watch TV, but I rarely watch classic TV stations, most of what I do is streaming or downloads, because it allows me to watch stuff when I want, not when some TV executive thinks is best.

Overall, though, I wouldn't blame mobile here. The TV developments are to a large part independent of that and the writing had been on the wall for years that classic TV is on its slow way out as it poorly syncs with today's technical capabilities of content delivery - it's just that mobile is the best alternative to reach the intended target.

Wayne Brady

@Tester - we agree on what the people want. The Tv industry has been reticent to change and customer unfriendly (if not outright customer-hostile) seemingly forever.

The music industry had pirating to contend with. They rebuffed Steve Jobs at first and here merely waited for piracy to continue taking it's toll before the music industry finally caved. And while iTunes practically saved the music sales industry, no one is thanking Apple for it. The music industry heavily resents the amount of money Apple is making from the music industry's products. All the other entertainment industries see the music industry as a cautionary tale.

The cable industry will drag this out as long as they possibly can. They are also changing the pricing mix of their bundled tv/internet services. The cost of internet is rising. People will cut the cord but they will still be paying the cable company for internet. Similar to how the telco's went to "unlimited texting" built into their pricing well before iMessage, WhatsApp and the like could disrupt them.

Tester

@Wayne:

It's strange that others are repeating the same mistakes as the music industry.
The best example is eBooks. The publishers are so scared of piracy that the copy protection they demand gave Amazon a quasi-monopoly on eBooks, because they were the only ones who had enough resources to create hardware that was tailored to their services.

And people happily continue to pirate eBooks, because most have no interest in paying almost print price for such heavily usage restricted items.

Winter

@Tester
"The publishers are so scared of piracy ..."

You see this in industries where the main intermediates are afraid of being disintermediated. It is not priacy that they are afraid of, it is self-publishing that they fear. Anti-piracy policies, e.g., DRM, are aimed at making self-publishing harder. In the end, the Amazons and iTunes take over anyway.

ch

@Tester

Ads are not target at the affluent but the young. They are the people who change brands.

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