ESPN LAYOFFS (NYT)
As many already know, ESPN laid off 100 employees, many of which were high-profile personalities. After years of skyrocketing rights fees and people cutting ties with cable companies, ESPN has a cash flow problem. Noble of them to protect employees living paycheck to paycheck, but the impact on broadcast quality could hurt ratings.
ESPN needs to strongly consider alternate revenues streams and reduce its dependence on a declining cable market. In other words, provide direct access to customers outside traditional cable deals. As more customers continue to move away from expensive cable contracts, ESPN can still remain connected with them through a direct service similar to HBO. Currently, WatchESPN requires a cable subscription login.
What About The Fees?
The cost of broadcast rights fees is the cost of doing business at this point. Until the deals expire, ESPN has to honor the terms. Going forward it should take a stronger negotiating position, but now should focus on maximizing revenue to offset the cost. As a sports centric organization, ESPN cannot lose its connections to the content its built around.
Beyond the business aspect, ESPN needs to focus on its core content, setting aside the political commentary and puns. Stop incorporating political attacks and stop promoting stereotypes. Focus on being a true worldwide leader in SPORTS. Companies that forget why they are in business tend to go out of business.
The global automaker cannot seem to navigate past its defeat device scandal. After settling with US regulators, it now must deal with its domestic government that just raided its headquarters.
Many of the environmental regulations may be too stringent. But, the solution was not to cheat the system. Aside from the fines, Volkswagen is spending much more funds in buying back impacted vehicles. Not even considering the brand impact.
In spite of the illegality, the defeat device is clever. Such cleverness should be used to improve the customer experience, rather than erode trust from its customers. While leaders probably costed in the risks of such a program, the non-monetary costs probably outweigh the benefits gained.
MICROSOFT INVESTMENT (VERGE)
Interesting new addition to Microsoft’s portfolio.
Amazon Floating Distribution
New Amazon shows how the eRetailer aims to improve distribution in the future.
Sears Slow Death
The inevitable might be coming soon, which is unfortunate. Eddie Lambert might be a master of finance, but probably should have brought in people with retail experience and expertise. The iconic retailer is beyond life support.
A big issue with Sears is the in-store experience has not improved. Go into any location and there is a clear disconnect. For instance, Sears welcomes shoppers with greeter pushing home repair, vacations, and other services without any context to the intended purchase. Why would any one purchase any service from a company that may not survive the warranty period?
While the outlook is grim, Sears needs to focus its remaining resources on the customer experience. More efficient checkout lanes. Cleaner stores. Professional and pleasant store associates. Expanding the Shop Your Way points. Also, listen to customers and actually implement change.
Retail is not a desirable market space and its once iconic leader is far from its heyday. There might be time for a turnaround. Maybe not. But, Sears should give itself a chance, rather than simply aiming to starve off its pending death.
APPLE V. SAMSUNG
Samsung prevails against Apple in their long battle over patents. The US Supreme Court provided the possibility of getting back some of the funds paid to Apple.
After dealing with food safety concerns, now more bad news for is impacting the brand. Ideally, the personal lives of executives or other staff members should be separated from the product offering, as we mostly do not select products based on who works at a firm. But, when behaviors impact the product, service, or experience, these issues do matter.
There is a risk in overt social consciousness in marketing, if words do not align to behaviors. Building a brand around ethically sourced food inputs, only to have the significant food safety risks contradicts brand statement. Executive bad behavior further tarnishes their image.
I do like Chipotle, but hold the crack.
Despite the gap in online segment of retail, Walmart will be a dominant force, as detailed in the article. In offering 2 day shipping at half the cost of Amazon, Walmart should be able to make some inroads.
A big focus should also be in improving the store experience, while promoting its online channel. The store experience in high populated areas can be horrible. Despite the high demand, public policy does negatively impact the retailer from balancing it, but operations of those stores can be altered as well.
As stated in the article, Walmart is a giant among growing competitors. It can use its resources to ensure its continued leadership of the retail industry.
Interesting the opportunities that Microsoft once passed up. Once clear face of the computer world, now adapts in the face of competition.
Microsoft made many great strides to improve its brand and customer approach. More than any other industry, technology is in constant evolution. It appears tha Microsoft is more willing to acknowledge, adapt, and shape the constant evolution of innovation.
If Walmart’s investments and partnership succeed, the retailer will be able to leverage its network of locations and investments to remain relevant, as more people find little reason to leave their couches.