(The Big Disrupt) Netflix: The Fall of Netflix? by captainmidnight

(The Big Disrupt) Facebook: The Impossible Job – Why the boycott of facebook won’t be the last

The last two years has been (rightly) unforgiving for Facebook and with the recent ad boycott over the Menlo Park based company decision to keep president Donald Trump’s controversial post on its platform which heavily implied the use of force against protesters. The misery just keeps piling on. 

However, don’t feel sorry for the $665 billion juggernaut as this has been coming for a company that’s no stranger to controversy particularly over its policies regarding content moderation, privacy and hate speech. Mark Zuckerberg isn’t breaking a sweat as he knows as well as we do that the boycott will blow over once July breezes by because while advertisers theoretically hold the power of the purse, Facebook offer to much in scale and targeting for advertiser to ignore and more importantly.  

However, there’s a sneaking suspicion that Facebook maybe providing cover for its customers who were planning to cut ad spend anyway in lieu of the pandemic but one customer that won’t be cutting down their spending is one Donald Trump as he seeks to earn a second term.  

In any case, a month without a portion of their customers spending money on ads on their platform won’t hurt Facebook financially with the loss of income will likely be a rounding error on Facebook financial statement the next time they report their earnings. However, in their defense, Facebook have the unenviable task of moderating the comments, postings, musings of 2 billion people so expect mistakes to be made.  

Despite Facebook’s sizeable investment in AI research, the tools Facebook use to clean up its platform aren’t ready for prime time and with the pandemic pressuring companies into working remotely, Facebook’s AI tools to moderate content on its platform is going to suffer a baptism of fire.  

But much of this is Facebook’s fault. Facebook, like it or not, has for some time been a prominent marketplace of ideas and has for years fought off the responsibility that comes with it which has seen the platform fail spectacularly at addressing issues such as fake news and propaganda that publishers and newspapers have handled better at least in comparison to their technologically sophisticated counterparts. 

Much of the trouble Facebook finds itself in is because while it sees itself as a tech company simply serving personalized content to its users, its own users and wider public sees Facebook as what it increasingly is, a large but crowded marketplace where social progress or degradation is taking place in real time.  

However, its attempts to avoid acknowledging just how much power it has isn’t the real problem. For us, it’s easy argument that of all the members of FAANG, Facebook is the worst run of the bunch.  While the company is financially sound, recruits the best people, nurtures new talent and are more or less strong operationally, they’re extremely vulnerable in an area that can render these areas useless, morale.      

No matter how strong a company is at managing its finances, recruiting and developing talent, developing new products and features, acquiring and retaining customers or warding off competitors, if the company has low morale, every advantage in these areas will suffer and eventually wither away over time. 

Nothing kills a company faster than unhappy employees and Facebook over the last two years has waved to goodbye a number of key executives in amidst of damaging scandals, none more embarrassing than the Cambridge Analytica debacle. 

Even in Facebook’s own internal survey, employees were honest enough to report their discontent with approval for the direction of the company falling 19 points in a year. While other members in FAANG aren’t exactly hubs of worker bliss (they’re not), the difference between them and Facebook (with maybe the exception of Google) is that much of the discontent in their companies is among employees that are replaceable. 

There are a number of reasons why morale is ebbing at the company from the aforementioned scandals but the possibly the most striking is the leadership offered by founder, CEO and Chairman Zuckerberg. Founders are revered Silicon Valley but Zuckerberg’s entrenched power makes him and ultimately the company vulnerable to attacks that directly affects morale as the company looks less like a company chasing the noble goal to connect the world and more like an empire headed by a man who seems tone deaf by design.         

  

In sum, Facebook has many enemies this ad boycott most likely won’t be the last but as the public protestations of employees, lawsuits and former executives indicate, the problem that’s eating at facebook maybe closer to home.  

    

    

(TV) Pay TV: The Pay TV apocalypse continues

It's no secret that we're the golden age of television but its also no state secret that cable and satellite Pay TV providers have been taking a pounding for years which has culminated this week with the worst quarter in the history of the industry with Pay TV providers losing a whopping 762,00 subscribers. 

Why Pay TV providers are losing subscribers at a record rate isn't rocket science with the combination of skyrocketing price hikes, an increasingly unpopular business model, and better digital alternatives offering by SVOD services such as Netflix, Amazon and Hulu, it was only a matter of time before quarters like this become the new normal.

What's worse is that Pay TV providers are in no position to do much about it as they contend with soaring programming costs largely fuelled by the increasing value of sports content. Pay TV providers have for years passed  this cost onto customers without much to sweeten the deal which has seen an customer cut their cords at record rates for the best part of  a decade.  

It's always concerning when an industry can't keep its customers and even more so when can't attract new ones but the pay TV industry recent bloodletting has shown that can't do either which is why an already mature market is now showing signs of atrophy.

The decision to pay lengthy and expensive premiums for sports TV rights has cost Pay TV providers dearly but rationale behind pay TV's bet on live sport made sense as live sport events such as the Super Bowl or march madness have proved to be the most reliable content for getting bums on sofas across the land at the same time but as the last NFL regular season proved, sports content is showing signs of losing its lustre. The 7% dip in regular season viewing and a drop in Super Bowl viewership for the second year running saw many executives clamouring for answers to why NFL ratings dropped from a highly divisive presidential edition to Colin Kaepernick's stance (or lack thereof) during the national anthem. 

However, despite the complicated and varying factors that negatively affected NFL viewership during both regular and postseason games, the fact remains that pay TV's costly bet on sports programming is starting to unravel and it's unclear whether last year was a blip or a start of a very grave trend.  

Despite their recent struggles, Pay TV providers aren't sitting on their hands and idly watching their industry crumble before their eyes with  pay TV operators increasing their digital footprint with skinny bundles and even SVOD offerings that appeal to cord cutters and cord nevers who enjoy the power of watching TV where, how, and when they want to. 

However, Pay TV providers fight in keeping and attracting new customers is taking a turn for the worse with Amazon and Facebook picking up live sports content deals. This development should scare the life out of pay TV executives everywhere as While Amazon's deal in particular involves the ecommerce giant airing much maligned Thursday night games, should Amazon attract large audiences for Thursday night NFL matchups or at least larger viewership number than their cable counterparts. It could see live sport content providers hosting more of their content with online partners. 

This would be a disaster for Pay TV providers and networks as they'll have to outspend deep pocketed behemoths for live sports content when the cost for live sports TV rights are already high. Pay TV providers will be forced to pass even more costs onto a customer base already looking for a reason to jump ship.  

However, what should keep pay TV executives up at night is that whether Amazon or Facebook attract large audiences for NFL or MLS games or not is what they'll learn about sports viewers. The reason why both Facebook and Amazon have largely pulled away from their direct competitors and send shivers down the spine of executives everywhere when they so much as hint about entering their market is because both companies are become very good at using data from their users to provide a more personalized service to the point they know their customers better inside out, literally. 

It's why both companies have abnormally high customer retention rates and never have trouble attracting new users as their ability to implicitly meet the needs of their users through data keeps current users hooked with new features and services which in turn provides Amazon and Facebook new opportunities to learn even more about their users habits. 

What all this means is should Amazon and Facebook deliver impressive viewership numbers, Pay TV will have a hard time getting those customers back. This alone will put a steak through the hearts of Pay TV providers everywhere who will continue to lose customers, spend and lose millions trying to get them back and surrender their future customer base to SVOD services. 

In sum, there has been much talk about the future of Television but now the chatter should cease as the future is here and it's going to be brutal.