retail news in context, analysis with attitude

by Kevin Coupe

Two stories yesterday, it seems to me, illustrated the inexorable power of change and the impact it has on businesses.

Rapid TV News had a story about a new report from Accenture saying that "television's popularity as the go-to entertainment device may be ending ... Compared with digital rivals, the television was the only product category to see uniform, double-digit usage declines across different types of media worldwide among viewers of nearly all ages. It is, said Accenture, rapidly being replaced as consumers turn to a combination of laptops, desktops, tablets and smartphones to view video content."

The story goes on:

"Accenture discovered that viewership for long-form video content, such as films and television on a TV screen, has declined by 13% globally over the past year and by 11% in the United States. Similarly, the report found sports viewership on TV screens declined by 10% globally and 9% in the United States.

"Surprisingly, and worryingly for the industry, nearly all age brackets reported double-digit declines in TV viewing globally, with 14-17-year-olds abandoning the TV screen at the rate of 33% for films and television shows and 26% for sporting events. This decline was also as apparent among 18-34-year-olds at 14% for movies and television shows and 12% for sporting events, and for 35-54-year-olds, at 11% and 9%, respectively. As one may imagine, the decline flattened among those aged 55 and older, at 9% and 1% respectively."

That's got to be worrying for companies that are what might be called the traditional television business ... which is why so many of those traditional companies are looking to develop new and expanded business models that will embrace all those other methods of content consumption.

That may be the lesson of all this technological and cultural change. Content is where the action is ... to a great extent, companies need to focus on creating innovative programming and being device-agnostic.

Think of it as the video version of omni-channel retailing. What will differentiate a retailer is what it sells ... the "how" has to be the means, not the end.

Which brings me to the other, related story that caught my attention.

It was in Variety, and reported that Netflix "blew past subscriber-growth expectations for the first quarter of 2015, packing on 4.9 million new streaming customers in the period — a record for the company."

CEO Reed Hastings believes that one of the things driving this growth has been the company's "ever-improving content," which has included critical and popular successes like "House of Cards," Orange Is The New Black," and "Bloodline." In recent weeks, the release of new programming has continued, with "The Unbreakable Kimmy Schmidt" and "Marvel's Daredevil," and there's no reason to think that the trend won't continue. (I'll talk about 'Daredevil" tomorrow in "OffBeat.")

The lesson of all this technological and cultural change - that content is where the action is, just as omni-channel may be the only sustainable approach to retailing - needs to be taken seriously.

It is the inexorable power of change. And it is an Eye-Opener.
KC's View: