2017-06-07

Voice Technology Is Killing Brands, TV Viewership Declining (video)

Scott Galloway: This Technology Kills Brands

Video published June 1, 2017, by L2inc.com: Scott Galloway on digital winners & losers:
  • Winner: Voice technology--Amazon Alexa, Apple Siri, Google Voice Search--all of which are accelerating the decline of brand
  • Loser: Brands as Amazon.com and Walmart.com compete to lower prices
  • Loser: TV networks, which are getting desperate as viewers keep declining
Slides:


(0:26) “The Rise of Voice Platforms - Comparing Voice Related API’s,” Christian Rebernik, February 2017. http://bit.ly/2ruUmLI
(1:01) L2 Analysis of Keyword Tool IO Data.
(2:13) Amazon.com and Alexa.
(3:54) “‘Roseanne’ Revival in the Works,” The Hollywood Reporter, April 2017. http://bit.ly/2oGEtlm
(4:00) Nielsen. http://on.wsj.com/2rgaoZh
(4:09) “NBC Wins 2016-17 Season In Ratings Demo; CBS Takes Total Viewers,” Deadline Hollywood, May 2017. http://bit.ly/2rJDjq1

YouTube transcript:
0:02  Here at L2, we're not afraid to talk about technologies that we think have been overhyped and are more fluff than substance,
0:08  whether it's VR, the Internet of Things or 3D printing.
0:10  The technology that is probably in our view the most revolutionary
0:14  and is going to shake brands to their core?
0:16  Voice.
0:17  Voice technology is getting tremendous traction.
0:20  Alexa is in 4% of US households, Siri handles over 2 billion commands a week
0:25  and 20% of Google searches on Android handsets are input by voice.
0:30  Who loses? Brands.
0:33  Voice-based ordering eliminates the need for packaging, design and end caps -
0:38  all the things brands have poured billions and decades into perfecting.
0:43  The decline of brand began with the advent of Google
0:46  and every day fewer people put a prefix of a brand name in a Google search.
0:51  And the same is going to happen with voice commands.
0:53  Our research reveals that over the past year, non-branded product searches have increased in every CPG category.
1:00  Prediction: the decline is going to accelerate.
1:04  The death of brand is here and it has a voice,
1:07  specifically Alexa.
1:10  Buy batteries.
1:11   Amazon's choice for batteries is Amazon Basics AA batteries 48-pack. It's 13 dollars and 60 cents total including tax.
1:20  Would you like to buy it?
1:23  No.
1:23  I also found a 20-pack of Amazon Basics AAA performance alkaline batteries. It's seven dollars and 61 cents total, including tax.
1:31  Would you like to buy it?
1:33  No.
1:34  That's all I can find for batteries right now.
1:37  All right.
1:38  Check your Alexa app for more options.
1:40  So there's nothing that unusual about a retailer taking advantage of their custody of the consumer
1:46  to trade them off to a private label brand -
1:48  which is what Amazon is doing here
1:50  because when you go on the site in fact you do find that Alexa has more options.
1:54  There are several branded batteries.
1:55  It's just Alexa, without having to bother with the consumer seeing a brand or packaging,
2:00  has decided to omit or let other brands disappear from your selection.
2:05  Also, the pricing is different on Alexa to voice commands than it is on the main platform.
2:11  It seems as if they're taking advantage of this lack of transparency to charge more.
2:16  We'll see.
2:17  I feel insignificant sitting in front of this.
2:24  So just as the media was fascinated with the fight between Muhammad Ali and Antonio Inoki, the famous wrestler 40-plus years ago,
2:40  the media is missing the point today
2:43  and focused on the fight between Walmart and Amazon, who compete against each other, but not really directly
2:48  as Walmart owns the rural customer and Amazon is clearly going after the urban wealthy.
2:52  The real victims here? The people hurt by Amazon? Likely brands -
2:57  specifically CPG brands.
2:58  Amazon's algorithm finds the lowest unit price for a given product and then applies it.
3:04  If Costco sells a 10-pack of toilet paper for $10, Amazon notes the price per roll is $1,
3:11  forcing Walmart, which aims to have the lowest price on 80% of its products, to do the same
3:16  which in turn, Amazon and Walmart force their manufacturers to lower their price,
3:22  telling them to stop marketing and start cutting prices
3:25  which is the equivalent of a payday loan in the world of marketing:
3:28  it works in the short run,
3:31  but over the long term you end up broke.
3:32  If you don't play ball,
3:34  Walmart will limit your distribution and create its own rival products
3:37  and the Amazon algorithm will literally kick you off the platform in a nanosecond.
3:42  A continued loser: TV networks.
3:44  What best captures the vibe at the recent upfronts?
3:47  A stunned and silent audience
3:49  based on, no joke, the announcement that ABC was bringing back Roseanne.
3:53  Desperation has a name. It's TV.
3:56  Fox registered a 2% gain in viewers this season - if you include sports.
4:00  If you don't, viewership fell 19%.
4:03  ABC viewership declined 8%.
4:06  The network boasts five of the top ten shows in the adult 18-to-49 category
4:10  but only one of them is new.
4:12  The rest are aging franchises, including Grey's Anatomy and Modern Family.
4:15  When ABC launches Modern Family they own it and it's a point of differentiation.
4:19  However the only thing keeping these guys from death's door right now are assets they don't own
4:24  that go to the highest bidder - specifically the Super Bowl, March Madness and the Olympics.
4:29  What happens when, and it will, one of the Big Four -
4:33  Apple, Amazon, Facebook and Google -
4:35  begin bidding on these assets because they can monetize it elsewhere with their infinitely cheap capital?
4:40  You're going to see an incredible decline in television.
4:44  It's surprising how long things take, then shocking how fast they can happen.
4:49  TV is about to enter the shocking phase.
4:52  The only people left watching broadcast ad-supported TV are going to be the poor and the technologically illiterate.
4:59  A few weeks ago we referenced a wonderful nonprofit, Lifeline Syria, that is helping resettle Syrian families in Canada.
5:06  Unfortunately there are now more donors than there are families,
5:10  as Canada has suspended the exemption that allowed these families to immigrate.
5:14  We have instead decided to focus some efforts and raise some money on a wonderful charity called Gather for Goats,
5:20  a worldwide benefit for Syrian refugees living in the desert in Jordan to provide a sustainable source of nutrition and hydration for children in the area.
5:30  Specifically we're going to raise some money and buy some goats for some good people.
5:35  It's strange, it's innovative and we'd like to think it's generous.
5:39  Not bad things to have on your tombstone.

Gather for Goats: https://gatherforgoats.com

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