In recent months, I have put up several posts that covered the upcoming “Streaming Wars” in the video world. There will, I assure you, be more to come. In one of the posts, I talked about how a major threat to Netflix would be if Disney and Apple formed some kind of alliance. Perhaps, they would produce content on a joint venture basis. Or, Apple, with their deep $200 billion + in cash at certain times, would take a minority position in Disney (5-15%) which could backstop the Mouse House if the launch of Disney + was rocky for a few years. Well, on Friday, the 13th of September (sic), Disney CEO Bob Iger, resigned from the Apple board of directors. The business press cited conflict of interest as Disney + would be competing directly with Apple TV +.
If I were Reed Hastings at Netflix or players at Comcast, Amazon or Hulu, I would be breathing a large sign of relief. An Apple/ Disney alliance of any kind would be beyond formidable.
So, where does leave us? As mentioned above, I will put up some posts on this topic in the weeks and months to come. As it looks now, I would say that Apple could be the short term loser in this scenario. They are getting lots of press regarding their new series with Jennifer Aniston, Renee Zellweger and Steve Carell and Steven Spielberg’s commitment to Apple TV +. Yet, developing a wide array of fresh content will take some time (they have the money!). So, by not joining forces with Disney, Apple is passing on the leader in video content globally. Disney has several platforms and franchises that cannot be replicated or developed overnight.
So, as I write, I would say that Apple TV+ will have pretty tough sledding for a while. If they are committed for several years, they may get it right and there is no question that they have the financial resources to ride out early losses. Also, their $4.99 per month subscription fee undercuts both Disney and Netflix nicely which should generate some early trial. The danger is that if there is not enough good content at launch some people may walk away saying that it is not worth $4.99.
The games are about to begin before Thanksgiving. We will be in for very interesting times in the media world.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Monday, September 23, 2019
Friday, September 13, 2019
Accentuate The Positive
Today, I was. surprised to receive a phone call from someone whom I have not heard from in years. It was great to catch up. He is a broadcaster in a medium sized market, said he had been reading MR for several years and had some questions. When I agreed, he plunged right in to the issue. In recent years, as is true of many in TV and Radio, his property had been struggling. The beancounters at headquarters pressured him constantly for more money. Despite some what he described as “herculean efforts” by station personnel, the billing for his property would probably only be up 1-2% this year. His ownership wanted seven and were very difficult when monthly conference calls took place.
His main issue was how to keep from getting discouraged in front of his hard working team and how to motivate them. Also, he said he and senior staff all were in great fear of the next recession. I quote: “Even a modest downturn, nothing like 2008, will hit us very hard. I will be gone for sure as will some senior sales and on air people.”
Well. Part of it is the sign of the times. We have all seen the shift away from advertiser supported broadcast. What to do?
How about taking a deep breath and expressing a bit of gratitude? Theresa Glomb is a professor at the Carlton School of Management at The University of Minnesota. She is a leading expert on work environments and organizations. Reading some of her research, I came across a wonderfully insightful observation. She wrote: “Good things are about three to five times more frequent than bad things at work, but bad events have about five to 10 times the impact as good things.”
My long time acquaintance grumbled for a moment and then laughed saying, “that is oh so true!”
He then went on to tell me that he had lasted in the business for nearly four decades and it had been one hell of a ride for a kid from a rural area who hated school but had the gift of gab. Life had worked out well for him and his family.
I gave him this advice. There have to be good things that happen every day. Stop to savor them and share them with your team. The long haul picture for your station is not positive. Yet, daily some good things happen. Yes, your team will never have the career that you did in terms of fun, longevity, or probably financial reward. You can still, however, give everyone constant encouragement. If people learn how to sell, be good marketers or broadcasters, they can surely transfer those skills in to other avenues when the ax falls.
Finally, I suggested that he take a day every now and then away from social media and business news. It can be discouraging if you see a 29 year old with a backwards baseball cap selling his tech startup for $2 billion while you are fighting for a nice share of this month’s local Ford dealer’s billing.
I am not encouraging false optimism. The die is cast and we are not going to return to broadcast’s golden age. Yet civility, a sense of humor and savoring small victories can make the waning years palatable.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
His main issue was how to keep from getting discouraged in front of his hard working team and how to motivate them. Also, he said he and senior staff all were in great fear of the next recession. I quote: “Even a modest downturn, nothing like 2008, will hit us very hard. I will be gone for sure as will some senior sales and on air people.”
Well. Part of it is the sign of the times. We have all seen the shift away from advertiser supported broadcast. What to do?
How about taking a deep breath and expressing a bit of gratitude? Theresa Glomb is a professor at the Carlton School of Management at The University of Minnesota. She is a leading expert on work environments and organizations. Reading some of her research, I came across a wonderfully insightful observation. She wrote: “Good things are about three to five times more frequent than bad things at work, but bad events have about five to 10 times the impact as good things.”
My long time acquaintance grumbled for a moment and then laughed saying, “that is oh so true!”
He then went on to tell me that he had lasted in the business for nearly four decades and it had been one hell of a ride for a kid from a rural area who hated school but had the gift of gab. Life had worked out well for him and his family.
I gave him this advice. There have to be good things that happen every day. Stop to savor them and share them with your team. The long haul picture for your station is not positive. Yet, daily some good things happen. Yes, your team will never have the career that you did in terms of fun, longevity, or probably financial reward. You can still, however, give everyone constant encouragement. If people learn how to sell, be good marketers or broadcasters, they can surely transfer those skills in to other avenues when the ax falls.
Finally, I suggested that he take a day every now and then away from social media and business news. It can be discouraging if you see a 29 year old with a backwards baseball cap selling his tech startup for $2 billion while you are fighting for a nice share of this month’s local Ford dealer’s billing.
I am not encouraging false optimism. The die is cast and we are not going to return to broadcast’s golden age. Yet civility, a sense of humor and savoring small victories can make the waning years palatable.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Tuesday, September 3, 2019
Dreams and Skills
Ludwig von Mises was one of the most prominent economists of the first half of the 20th century. He was the leader of the Austrian School of Economics (strong free market orientation). Mises escaped Vienna before Hitler marched in and spent the last few decades of his life teaching a seminar at NYU.
Legend has it that one day after class an earnest young student approached and complimented him on that evening's lecture. Mises was gracious in response and the young man asked if he could recommend any books so that he could explore the topic more closely. The great man said of course and wrote down a few titles on a piece of paper and handed it to the young man.
After glancing at it, the student said, "but professor, one book is in French and the other is in German". Mises allegedly asked, "Do you wish to be a scholar, young man?" "Oh yes, professor." "Then learn them", said Mises and he left the room.
Did it really happen? Not sure. However, it makes the entire point of this post. Over the years, I have met a number of people in the media business whose dreams far exceed their skills. They want to be the man or woman in charge but they lack the skills to get there AND do not want to make the sacrifice required be a leader.
I vividly recall a young sales rep who would always be pestering me about certain aspects of different media types. It was flattering but he never seemed to read the material that I sent or handed to him. Once, I offered to meet with him on a Saturday to review a topic that he was struggling with before a major client presentation. He was aghast. "Meet on Saturday, Don? I don't work on weekends." I held my breath and said that I was willing to give up a few hours of my free time to assist him. He said no way and I did not see much of him after that. The guy left the business a couple of years later and was a very bitter young man.
He missed something very big that Mises was trying to get across to his budding economist. It is fine to have dreams that are far greater than your skills BUT if you want to reach your dreams you have to change and upgrade your skills. Successful and ambitious people seem to understand this intuitively and never stop learning or improving no matter what their age.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com or leave a message on the blog.
Legend has it that one day after class an earnest young student approached and complimented him on that evening's lecture. Mises was gracious in response and the young man asked if he could recommend any books so that he could explore the topic more closely. The great man said of course and wrote down a few titles on a piece of paper and handed it to the young man.
After glancing at it, the student said, "but professor, one book is in French and the other is in German". Mises allegedly asked, "Do you wish to be a scholar, young man?" "Oh yes, professor." "Then learn them", said Mises and he left the room.
Did it really happen? Not sure. However, it makes the entire point of this post. Over the years, I have met a number of people in the media business whose dreams far exceed their skills. They want to be the man or woman in charge but they lack the skills to get there AND do not want to make the sacrifice required be a leader.
I vividly recall a young sales rep who would always be pestering me about certain aspects of different media types. It was flattering but he never seemed to read the material that I sent or handed to him. Once, I offered to meet with him on a Saturday to review a topic that he was struggling with before a major client presentation. He was aghast. "Meet on Saturday, Don? I don't work on weekends." I held my breath and said that I was willing to give up a few hours of my free time to assist him. He said no way and I did not see much of him after that. The guy left the business a couple of years later and was a very bitter young man.
He missed something very big that Mises was trying to get across to his budding economist. It is fine to have dreams that are far greater than your skills BUT if you want to reach your dreams you have to change and upgrade your skills. Successful and ambitious people seem to understand this intuitively and never stop learning or improving no matter what their age.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com or leave a message on the blog.
Saturday, August 31, 2019
Traits of the Wildly Successful
A few days ago, I was talking to a young person about to set out in the world with his first "real" job. He asked me what traits I saw in people that were really, really successful. I told him that I did not want to answer off the cuff but would get back shortly. I just finished meeting with him and thought that it might be interesting to share my thoughts in this post.
I dismissed many of the obvious things such as hard worker, brilliant, lucky, or imaginative. They are largely true but have taken on virtual cliché status.
To me, there are essentially two traits that stand out among those who tend to have great success. They are:
1) Willingness to ask for help
2) Curiosity
Let us take them one by one:
1) The few business giants (largely media moguls) that I have met may be brash in interviews but none are know-it-alls in private. Each man and woman reach out to staff, others in their field, sometimes competitors, academics or retired executives when they face a thorny problem or a big decision. They realized a long time ago that they can not do it all themselves. Successful entrepreneurs, even small ones, realize this and are not afraid to reach out to some eminence grise in their field when they are floundering. Many of these people are secure enough to realize that you cannot be a one person band in today's world. It serves them VERY well.
2) As a general rule, the more successful someone is, the more curious they are about the world around them. They want to know how things work and they are anything but superficial. A few times it has been annoying when someone plays 20 questions about what I do, but the bigger people are, the smoother they tend to be and usually I am flattered that Mr. or Ms. Big is giving me so much time.
Also, they get to the heart of issues. Over the years, I have had people ask "can you get me smart about this in 10 minutes?" At times, I had to brief people quickly to get them through a client meeting or sales presentation that I could not attend. Ideally, if I had a day I talked to them and then added a tightly written memo that covered the bases.
The truly successful never asked for a quick answer. I remember meeting someone who was undergoing medical treatment at the same time that I did. We talked a bit and he invited me to a ball game at Turner Field. I was startled when I googled him and found out who he was. Sitting in his brother's skysuite, we talked baseball history for a while and then he asked me if I knew anything about a particular topic (it was not media). I said yes, that I had been involved with it since 1973. He asked lots of questions over the next few hours interrupted by comments on the live game and likely Hall of Fame candidates. As we parted and I thanked him for the evening at the game, he thanked me and asked if I could e-mail him the names of several books or advisory services covering the topic he asked me about. I said of course and a week later he e-mailed back and said that he digested two of the books already.
I am sure that this was standard behavior for this gentlemen. He was intensely curious and knew that his learning on many topics was not complete.
I challenge you to think of the most successful people that you have encountered. It would surprise me if those men and women did not have high levels of curiosity and reach out for help regularly.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com or leave a message on the blog
I dismissed many of the obvious things such as hard worker, brilliant, lucky, or imaginative. They are largely true but have taken on virtual cliché status.
To me, there are essentially two traits that stand out among those who tend to have great success. They are:
1) Willingness to ask for help
2) Curiosity
Let us take them one by one:
1) The few business giants (largely media moguls) that I have met may be brash in interviews but none are know-it-alls in private. Each man and woman reach out to staff, others in their field, sometimes competitors, academics or retired executives when they face a thorny problem or a big decision. They realized a long time ago that they can not do it all themselves. Successful entrepreneurs, even small ones, realize this and are not afraid to reach out to some eminence grise in their field when they are floundering. Many of these people are secure enough to realize that you cannot be a one person band in today's world. It serves them VERY well.
2) As a general rule, the more successful someone is, the more curious they are about the world around them. They want to know how things work and they are anything but superficial. A few times it has been annoying when someone plays 20 questions about what I do, but the bigger people are, the smoother they tend to be and usually I am flattered that Mr. or Ms. Big is giving me so much time.
Also, they get to the heart of issues. Over the years, I have had people ask "can you get me smart about this in 10 minutes?" At times, I had to brief people quickly to get them through a client meeting or sales presentation that I could not attend. Ideally, if I had a day I talked to them and then added a tightly written memo that covered the bases.
The truly successful never asked for a quick answer. I remember meeting someone who was undergoing medical treatment at the same time that I did. We talked a bit and he invited me to a ball game at Turner Field. I was startled when I googled him and found out who he was. Sitting in his brother's skysuite, we talked baseball history for a while and then he asked me if I knew anything about a particular topic (it was not media). I said yes, that I had been involved with it since 1973. He asked lots of questions over the next few hours interrupted by comments on the live game and likely Hall of Fame candidates. As we parted and I thanked him for the evening at the game, he thanked me and asked if I could e-mail him the names of several books or advisory services covering the topic he asked me about. I said of course and a week later he e-mailed back and said that he digested two of the books already.
I am sure that this was standard behavior for this gentlemen. He was intensely curious and knew that his learning on many topics was not complete.
I challenge you to think of the most successful people that you have encountered. It would surprise me if those men and women did not have high levels of curiosity and reach out for help regularly.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com or leave a message on the blog
Tuesday, August 27, 2019
Long Term Planning
The late Zig Ziglar was a popular speaker in the 1970's-1990's. He conducted a great deal of sales training seminars, spoke at conventions to fire up sales teams or franchisees and did his share of inspirational speaking. Also, he published a number of books. Some people dissed him due to his down home accent ( he was from Coffee County, Alabama) but he helped and inspired hundreds of thousands of people.
One very early morning, I woke up jet lagged (3:30 am) in California after a long cross country flight. Rare for me, I could not get back to sleep and so I channel hopped in my hotel room. I came across Zig Ziglar speaking. Essentially, he was giving a TED Talk before there was such a thing. He said one thing in his presentation that I will never forget. It was--"If you aim at nothing, you will hit it every time." His talk was about setting goals and doing long term planning.
For decades, I and many of you were or have been involved in marketing or media planning. As I matured in the industry, I would often try to talk to clients about long term goals AFTER we had sold in the next quarter or year's recommendation. I was always surprised and disappointed about how few people looked ahead despite the accelerating pace of change that they are or were experiencing.
People would often dismiss me saying such things as "I am focusing on keeping my job" or "I am focused on this year's bonus" or "I don't have time for that long term crap."
Well. That long term crap has hit many of these people like a freight train and a number of them are no longer in the business world. They clearly ignored the warning that Warren Buffett gives to every MBA class that he addresses: "Don't go sleepwalking through life."
It is human nature, I suppose, to focus on the immediate. And, sometimes you simply have no choice if you are an entrepreneur fighting for survival as many are or the brand that you are responsible for is getting clobbered by competitors. Yet, far too few people look ahead and try to plan for the future as they should.
I have spent my entire career always trying to look forward 10 years. Some people flattered me from time to time and dubbed me a "futurist" but I realized that they were simply being kind. No one can forecast the future with great precision but all of us need to keep thinking about it and monitoring trends. Some companies have very long term goals--it has been reported that Exxon/Mobil has a 50 year outlook on planning. If so, they are probably planning for a post fossil fuel world and are taking small steps now to be part of it.
Recently, someone asked what stocks that I was researching. I always hesitate to answer that question as, if something goes down, you may lose a friend. So, I dodged specifics but said that I spent a fair bit of time looking for things that would be good for my grandchildren to own decades from now. He told me that I was stupid.
Stupid? Perhaps. My long term plan that is constantly being updated is to aim at something and try not to miss!
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com or leave a message on the blog
One very early morning, I woke up jet lagged (3:30 am) in California after a long cross country flight. Rare for me, I could not get back to sleep and so I channel hopped in my hotel room. I came across Zig Ziglar speaking. Essentially, he was giving a TED Talk before there was such a thing. He said one thing in his presentation that I will never forget. It was--"If you aim at nothing, you will hit it every time." His talk was about setting goals and doing long term planning.
For decades, I and many of you were or have been involved in marketing or media planning. As I matured in the industry, I would often try to talk to clients about long term goals AFTER we had sold in the next quarter or year's recommendation. I was always surprised and disappointed about how few people looked ahead despite the accelerating pace of change that they are or were experiencing.
People would often dismiss me saying such things as "I am focusing on keeping my job" or "I am focused on this year's bonus" or "I don't have time for that long term crap."
Well. That long term crap has hit many of these people like a freight train and a number of them are no longer in the business world. They clearly ignored the warning that Warren Buffett gives to every MBA class that he addresses: "Don't go sleepwalking through life."
It is human nature, I suppose, to focus on the immediate. And, sometimes you simply have no choice if you are an entrepreneur fighting for survival as many are or the brand that you are responsible for is getting clobbered by competitors. Yet, far too few people look ahead and try to plan for the future as they should.
I have spent my entire career always trying to look forward 10 years. Some people flattered me from time to time and dubbed me a "futurist" but I realized that they were simply being kind. No one can forecast the future with great precision but all of us need to keep thinking about it and monitoring trends. Some companies have very long term goals--it has been reported that Exxon/Mobil has a 50 year outlook on planning. If so, they are probably planning for a post fossil fuel world and are taking small steps now to be part of it.
Recently, someone asked what stocks that I was researching. I always hesitate to answer that question as, if something goes down, you may lose a friend. So, I dodged specifics but said that I spent a fair bit of time looking for things that would be good for my grandchildren to own decades from now. He told me that I was stupid.
Stupid? Perhaps. My long term plan that is constantly being updated is to aim at something and try not to miss!
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com or leave a message on the blog
Wednesday, July 31, 2019
Dornbusch's Law and Media
The late Rudiger Dornbusch was a long time economics professor at MIT. He was generally considered a global expect on monetary theory and, to economic theory junkies such as I, he was something of a rockstar. He became well known outside of the arcane world of academic economics during the Tequila Crisis of 1994-95 when the Mexican peso collapsed and it impacted markets for quite a while. The good professor articulated what became known as Dornbusch’s Law. It goes like this—“Crises take a much longer time coming than you think, and then it happens much faster than you would have thought.”
He died in 2002 just as the media world was finally seeing sweeping and long anticipated changes. I kept thinking of Dornbusch’s Law as I saw things evolve and double back to it even to this day. A few examples:
1) Newspaper—as the internet grew, many people began forecasting the death of daily newspapers. Yet, newspaper ad spending stubbornly hung on a decade longer than many of us thought possible. Suddenly, with the Great Recession hitting hard in 2008, newspaper billing collapsed by double digits in back to back years and has never recovered. The industry was way too slow to move to digital and did not know how to monetize it. Millennials have no interest in waiting for a hard copy of a newspaper today as they want news instantly. Sadly, many depend on Facebook for much of their information.
2) Radio—the argument for radio’s durability has often been “it will always be there.” True so far but time spent listening especially among upwardly mobile young adults is in sharp decline. Tech improvements have propped up stations nicely in terms of staffing and sales expense but there are too many musical options giving listeners total control which should block any strong comeback in the medium.
3) Cable TV—back in the 80’s, many would say that all cable had to offer was HBO, some Gomer Pyle reruns, and Braves Baseball games. Over the air networks did not react fast enough and suddenly saw their audience shrink significantly. Later, the big players purchased cable networks and that hedged their revenue picture nicely. Now cable and the major over the air networks are reeling from streaming services such as Netflix, Amazon Prime Video, Hulu, and the upcoming Disney +. Yet, as late as 2011, people were telling me that Hulu would be gone in a year and never get traction.
4) Magazine—very few titles are thriving these days and survivors seem struggling. Today, I subscribe to a few publications and I am amused how after a subscription lapses, they often add another six months to a year. It appears that they are protecting their advertising rate base.
5) Ad Agencies—as retail shifted via Amazon et al, agencies often talked about doing better commercials. Some pivoted in time, embraced the digital world, and became more focused on consulting, forecasting, new video options and analysis.
The next recession, whenever it hits, will take down a number of properties and, similar to Dornbusch’ Law, they will fall quickly in my opinion.
What about now? Well, think about it. Big Data is the rage right now and certainly helps marketers. Yet, if the Blockchain catches on with consumers quickly, will Big Data dry up to a certain degree as more transactions become private thanks to the new technology? Perhaps 10 years from now, the Cloud will be a relatively minor player.
It always has surprised me how people do not act on the obvious. The Internet was not a “flash in the pan” as some forecast but after the dot.com crash of early 2000’s many marketers did not embrace it for a few years. Streaming services spread like a prairie fire, people saw the danger in other video disciplines, but did not do much of anything to evade the herd of charging buffalo coming right at them.
As an aside, this ignoring the obvious is not limited to media. As I type, Congress is raising the debt ceiling and guaranteeing trillion dollars deficits for years to come. Despite snarky comments about politicians, I am confident that most can do simple arithmetic. Yet, talk to people about the dangers of the huge national debt and their eyes glaze or they tell you that you are way too gloomy. How about the global water crisis? Capetown is in trouble again as is Mexico City. Parts of Africa are no longer viable for agriculture and millions have no choice but to move. How will countries handle this? Our infrastructure is in terrible shape. Bridges and roads are unsafe and our airports are antiquated. People and politicians shrug and kick the can down the road knowing that it will bite and bite hard and expensively some day. Finally, the big one—climate change. The world gets hotter and hotter, air gets dirtier, the oceans keep rising. If not now, when?
Dornbusch’s Law is alive and well. As a young adult, I followed closely a small northern New England town and their need for a new water system. They issued bonds and established a “sinking fund” to redeem the bonds in 25 years. Money was added to the sinking fund each year and earned market interest. At the end of the term, the bonds could be redeemed in full with no increase in taxes to cover the large bill. A few newcomers at the town meeting suggested not creating the sinking fund. The flinty old Yankee running the meeting was having none of it and neither were the long standing residents. They were not Wharton MBA’s but saw a clear problem down the road and dealt with it immediately accepting minor pain but avoided a larger problem years in to the future.
Yes, it is human nature to procrastinate. Yet, hurricanes of all kinds are coming. We need to board up the doors even if it is a few years early.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
He died in 2002 just as the media world was finally seeing sweeping and long anticipated changes. I kept thinking of Dornbusch’s Law as I saw things evolve and double back to it even to this day. A few examples:
1) Newspaper—as the internet grew, many people began forecasting the death of daily newspapers. Yet, newspaper ad spending stubbornly hung on a decade longer than many of us thought possible. Suddenly, with the Great Recession hitting hard in 2008, newspaper billing collapsed by double digits in back to back years and has never recovered. The industry was way too slow to move to digital and did not know how to monetize it. Millennials have no interest in waiting for a hard copy of a newspaper today as they want news instantly. Sadly, many depend on Facebook for much of their information.
2) Radio—the argument for radio’s durability has often been “it will always be there.” True so far but time spent listening especially among upwardly mobile young adults is in sharp decline. Tech improvements have propped up stations nicely in terms of staffing and sales expense but there are too many musical options giving listeners total control which should block any strong comeback in the medium.
3) Cable TV—back in the 80’s, many would say that all cable had to offer was HBO, some Gomer Pyle reruns, and Braves Baseball games. Over the air networks did not react fast enough and suddenly saw their audience shrink significantly. Later, the big players purchased cable networks and that hedged their revenue picture nicely. Now cable and the major over the air networks are reeling from streaming services such as Netflix, Amazon Prime Video, Hulu, and the upcoming Disney +. Yet, as late as 2011, people were telling me that Hulu would be gone in a year and never get traction.
4) Magazine—very few titles are thriving these days and survivors seem struggling. Today, I subscribe to a few publications and I am amused how after a subscription lapses, they often add another six months to a year. It appears that they are protecting their advertising rate base.
5) Ad Agencies—as retail shifted via Amazon et al, agencies often talked about doing better commercials. Some pivoted in time, embraced the digital world, and became more focused on consulting, forecasting, new video options and analysis.
The next recession, whenever it hits, will take down a number of properties and, similar to Dornbusch’ Law, they will fall quickly in my opinion.
What about now? Well, think about it. Big Data is the rage right now and certainly helps marketers. Yet, if the Blockchain catches on with consumers quickly, will Big Data dry up to a certain degree as more transactions become private thanks to the new technology? Perhaps 10 years from now, the Cloud will be a relatively minor player.
It always has surprised me how people do not act on the obvious. The Internet was not a “flash in the pan” as some forecast but after the dot.com crash of early 2000’s many marketers did not embrace it for a few years. Streaming services spread like a prairie fire, people saw the danger in other video disciplines, but did not do much of anything to evade the herd of charging buffalo coming right at them.
As an aside, this ignoring the obvious is not limited to media. As I type, Congress is raising the debt ceiling and guaranteeing trillion dollars deficits for years to come. Despite snarky comments about politicians, I am confident that most can do simple arithmetic. Yet, talk to people about the dangers of the huge national debt and their eyes glaze or they tell you that you are way too gloomy. How about the global water crisis? Capetown is in trouble again as is Mexico City. Parts of Africa are no longer viable for agriculture and millions have no choice but to move. How will countries handle this? Our infrastructure is in terrible shape. Bridges and roads are unsafe and our airports are antiquated. People and politicians shrug and kick the can down the road knowing that it will bite and bite hard and expensively some day. Finally, the big one—climate change. The world gets hotter and hotter, air gets dirtier, the oceans keep rising. If not now, when?
Dornbusch’s Law is alive and well. As a young adult, I followed closely a small northern New England town and their need for a new water system. They issued bonds and established a “sinking fund” to redeem the bonds in 25 years. Money was added to the sinking fund each year and earned market interest. At the end of the term, the bonds could be redeemed in full with no increase in taxes to cover the large bill. A few newcomers at the town meeting suggested not creating the sinking fund. The flinty old Yankee running the meeting was having none of it and neither were the long standing residents. They were not Wharton MBA’s but saw a clear problem down the road and dealt with it immediately accepting minor pain but avoided a larger problem years in to the future.
Yes, it is human nature to procrastinate. Yet, hurricanes of all kinds are coming. We need to board up the doors even if it is a few years early.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Tuesday, July 23, 2019
Immigration and Demographics
You hear a great deal about immigration these days. Most of the discussion is heated and there appears to be great polarization on the issue. If you look at American history, there has never been a rational process for immigration in perhaps the last 150 years. I will not get on a soapbox and discuss the current political debate other than to say that, as both a father and a grandfather, separating families, especially little children from their relatives, disturbs me more than anything in my lifetime. The media focus on the current controversy but mostly ignore the big issue to come.
Okay, let’s get in to my wheelhouse—demographics. We need immigrants in the United States now and, in the future, the need will become even more acute. It does not have to do with politics. The issue has to do with two wonky terms—The Age/Dependency Ratio and Zero Population Growth (ZPG). In 1980, there were 19 people 65+ for every 100 aged 18-64 in the U.S. Now, there are 25 persons 65+ for every 100 who are 18-64. By 2030, census projections are that there will be 35 persons 65+ for every 100 of traditional working age 18-64. Already, this is putting a strain on Social Security and Medicare as those systems are basically “pay as you go” meaning that taxpayers pay in but the outflow goes largely to the rapidly growing 65+ demographic.
Coupled with the Age/Dependency ratio is Zero Population Growth also known as ZPG. In order for a population to remain stable, the fertility rate need to be 2.1 children per couple. During my youth as an early baby boomer, it was 3.7 children on average. In late 2017, it fell to 1.76 meaning that America will face a decline in population along with workers paying in to Social Security, Medicare and the IRS in the years to come. Bring this up even with erudite people and they agree but say that we are in much better shape than Italy and Spain which now have a fertility rate well below ZPG at around 1.0. That is true and will let us observe what will happen to Western countries along with Japan that are below ZPG. Yet, our problem gets worse even though intelligent people see it coming and do nothing.
In 15 years or so, America will be faced with some tough choices:
1) Cut benefits in Social Security or Medicare (or means test Social Security and tax much of it away from the affluent, raise the age for eligibility, or raise Social Security taxes). These would all work in some combination but are they politically viable?
2) Raise taxes sharply across the board and not just on the top 1-5%.
3) Allow more immigration.
Throughout our history, immigrants have been a driver of growth in America. Today, they tend to be eager, hard workers and many are entrepreneurial. They are coming from places that were struggling or dangerous and buy into the American Dream big time. We need them now more than ever as demographics are an unstoppable trend or, as I have often said, “Demographics are destiny.”
For me, America has always been an idea even more than a place. You have the freedom to fail or to make something of yourself. My tough minded Irish catholic mother once said to me—“Foreigners often are taught to know their place—in America, you make your place.” I was 22 when she said that and it has stuck with me. Perhaps that is why people who are American immigrants tend to be so aspirational.
Years ago, I finished a client meeting and some clients and I were at an airport. The senior client bought us all a drink. He asked us all our ancestry. When my turn came, I said that I was largely Irish and a bit English. He then asked when did our families come to America. I was a bit uncomfortable but told the truth. James Cole came to Plymouth, MA in 1631 ( a few ships after the Mayflower). One of the clients, not the boss, said: “Wow, you are more of an American than the rest of us.” I replied carefully that no, we are all Americans and someone who took the oath of allegiance that morning was every bit as much of an American as I. They called their flight and the clients scattered. As I picked up my roller board and headed for my gate, a man stopped me. “I heard what you said (I was at the next table), and wanted to shake your hand. I became a citizen two years ago and am very proud but people sometimes tell me that I am not really an American.” I said, “they do not know what an American really is, I suppose.”
We need immigrants. Demographics do not lie. They can save us from a lot of pain.
If you would like to contact Don Cole directly, you may reach him at doncolemedia.com or leave a message on the blog.
Okay, let’s get in to my wheelhouse—demographics. We need immigrants in the United States now and, in the future, the need will become even more acute. It does not have to do with politics. The issue has to do with two wonky terms—The Age/Dependency Ratio and Zero Population Growth (ZPG). In 1980, there were 19 people 65+ for every 100 aged 18-64 in the U.S. Now, there are 25 persons 65+ for every 100 who are 18-64. By 2030, census projections are that there will be 35 persons 65+ for every 100 of traditional working age 18-64. Already, this is putting a strain on Social Security and Medicare as those systems are basically “pay as you go” meaning that taxpayers pay in but the outflow goes largely to the rapidly growing 65+ demographic.
Coupled with the Age/Dependency ratio is Zero Population Growth also known as ZPG. In order for a population to remain stable, the fertility rate need to be 2.1 children per couple. During my youth as an early baby boomer, it was 3.7 children on average. In late 2017, it fell to 1.76 meaning that America will face a decline in population along with workers paying in to Social Security, Medicare and the IRS in the years to come. Bring this up even with erudite people and they agree but say that we are in much better shape than Italy and Spain which now have a fertility rate well below ZPG at around 1.0. That is true and will let us observe what will happen to Western countries along with Japan that are below ZPG. Yet, our problem gets worse even though intelligent people see it coming and do nothing.
In 15 years or so, America will be faced with some tough choices:
1) Cut benefits in Social Security or Medicare (or means test Social Security and tax much of it away from the affluent, raise the age for eligibility, or raise Social Security taxes). These would all work in some combination but are they politically viable?
2) Raise taxes sharply across the board and not just on the top 1-5%.
3) Allow more immigration.
Throughout our history, immigrants have been a driver of growth in America. Today, they tend to be eager, hard workers and many are entrepreneurial. They are coming from places that were struggling or dangerous and buy into the American Dream big time. We need them now more than ever as demographics are an unstoppable trend or, as I have often said, “Demographics are destiny.”
For me, America has always been an idea even more than a place. You have the freedom to fail or to make something of yourself. My tough minded Irish catholic mother once said to me—“Foreigners often are taught to know their place—in America, you make your place.” I was 22 when she said that and it has stuck with me. Perhaps that is why people who are American immigrants tend to be so aspirational.
Years ago, I finished a client meeting and some clients and I were at an airport. The senior client bought us all a drink. He asked us all our ancestry. When my turn came, I said that I was largely Irish and a bit English. He then asked when did our families come to America. I was a bit uncomfortable but told the truth. James Cole came to Plymouth, MA in 1631 ( a few ships after the Mayflower). One of the clients, not the boss, said: “Wow, you are more of an American than the rest of us.” I replied carefully that no, we are all Americans and someone who took the oath of allegiance that morning was every bit as much of an American as I. They called their flight and the clients scattered. As I picked up my roller board and headed for my gate, a man stopped me. “I heard what you said (I was at the next table), and wanted to shake your hand. I became a citizen two years ago and am very proud but people sometimes tell me that I am not really an American.” I said, “they do not know what an American really is, I suppose.”
We need immigrants. Demographics do not lie. They can save us from a lot of pain.
If you would like to contact Don Cole directly, you may reach him at doncolemedia.com or leave a message on the blog.
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