Fix/Friday — January 8
The first Fix of the new year. Pleased to see the back of 2020 but 2021 hasn’t started that well. Still, we believe it’s a great time for business to grow and the digital world gives smart businesses huge advantages — if they get it right.
Fix is designed to help readers understand what is really going on and how to profit from GAFA and the rest of the modern marketing ecology. When I started Fix 10 years ago much of what we covered was seen as niche, but now it is mainstream. The biggest companies in the world are Ad businesses.
Lots of people though (maybe your competitors?) still underestimate the scale and the opportunity of this change, and have been slow to embrace.
So Fix can help give you a real competitive advantage.
Lots to catch up on so today we will look at the key themes and big news — and get back into more opinion and advice next week. Happy New Year.
As we prepare for our newTV events next week, there is lots happening in this space. The jury is out on whether the Wonder Woman 1984 release strategy actually worked. We know the film took $16.7m at the US Box Office — versus c $100m for the first Wonder Woman. But with only around a third of US cinemas open, this is felt to be a decent performance. And it was lifted by lots of Private Watch Parties, where people hire a screening room. Streaming performance also looks good — with AT&T claiming;
nearly half of HBO Max’s retail subscribers viewed the film on Friday alone, along with millions of wholesale subscribers who have access to HBO Max via cable, wireless or other platforms.
The Antenna data above shows it was very good at driving new subscriptions for HBO Max — beating Hamilton for Disney+. But retaining new subscribers, lured by one title, is hard; a quarter of those who subscribed for Hamilton left after 1 month — and after 3 months just 59% remained.
One fascinating twist in this space is hearing that Roku is negotiating to buy Qubi content. I think Roku is a great business (with over 50m active accounts) as its position as a (hardware) gatekeeper makes them a powerful player in newTV ad sales. And despite a booming share price i think it must be an acquisition target for someone. But spending some of their diminishing cash on content that Quibi could not build an audience for?
Doesn’t seem smart. Original content is an expensive business, with many rich competitors. The sale of the MGM studio (and library) looks like being the next big content contest — with a price tag of $5bn — but that does get all the Bond films.
Another gatekeeper is AppleTV — and their data on the top 100 films watched in 2020 is really interesting — even without actual numbers on viewers. It’s clear that HBO Max is a player with a great library and the non linking of Netflix and Apple means their showing is probably under represented. Also interesting to see pricing average out at $5 for rental and $11 for purchase.
The latest US launch is Discovery+ (which launched in the UK last year in a collaboration with Sky). They are banking on sports — and the Olympics — to drive growth.
Amazon announced they have 50m active users on FireTV — neck and neck with Roku
We will go deep on all this next Tuesday in our free Zoom webinar in partnership with FTI Consulting. We have great panelists and lots of smart people attending from Google, Snap, BBC, Warner Brothers and many more. Make sure you have a ticket for both events.
The imminent changes to the Apple IDFA continues to focus the minds of much of the industry. The FT has a look at some of the more desperate measures people are trying and a bunch of smart people have shared their advice;
So does Nick Shackelfird with this Thread — and a link to a very comprehensive document summarising the issues and solutions
Analysts MKM think Facebook and Snap have most to lose from the IDFA changes — and forecast a 3% ‘revenue headwind” — which is a lot of money but it’s not that big of an impact. The real losers are the app firms who rely on mobile ads to find new customers (Aysimco says the value of appstore downloads grew to $1.8bn last year) and those that monetise through ads.
The attention of regulators will be a major issue in 2021 and the WSJ found an unredacted copy of the US lawsuit — which is worth a read, as is this thread from an adtech exec pulling out the key issues from this suit.
What do you think? Share your thoughts in our Guild community.
As Grocery delivery goes mainstream, the idea of outsourcing to someone like Instacart is being questioned. But others are dropping their own delivery service to use third parties
I think this is part of a bigger issue around the last mile. It is crucial for ecommerce and for food delivery and success or failure largely depends on utilisation; do you have enough deliveries to amortise across your labour costs? I think we will see consolidation, but a sector that depends on minimum wage employees on zero hours contracts may worry some customers.
So does that leave the door open for someone to vertically integrate the store (or restaurant) with the delivery — accepting the loss on delivery as a (sort of) customer acquisition cost?
A Fix friend touches on these issues in a brilliant essay on the evolution of the meal, which goes into the continuum from a grocery store trip to a take out delivery
Many of the categories used to pigeon hole Merchants are dissolving — Walmart is becoming an essential partner for many DTC brands. Can exclusive access to niche DTC brands play out like exclusive podcast content does for Spotify? Does brand discovery become part of a retailers repertoire, leading to their ad business becoming a significant revenue stream — like Amazon have achieved? This report looks at the potential of retailer ad platforms.
The discovery model used to be fulfilled by catalogues — older readers may remember flicking through hundred of pages of choices, then buying through a postal form. The smarter firms involved in this business have evolved to be leaders in home shopping — and innovations like Klarna are inspired by their business models.
But now Instagram TikTok and Pinterest are racing to reimagine and redefine catalogues — what they are, what they do and what they enable
The Economist looks at how Chinese apps are to 21st-century shopping what American malls were to last century’s; The great mall of China — The next big thing in retail comes with Chinese characteristics
The Amazon purchase of Wondery happened and their podcasts will now be in Amazon Music. It’s another way to compete with Spotify etc, hoping exclusive podcasts will drive subscription growth. But the Amazon expertise in advertising is a factor here too — Wondery sell ads in their content, but layering on Amazon data and tech will supercharge this.
Prospering in the pandemic: The FT on 2020’s top 100 companies. Note the number of Chinese firms
The Year in Tech News & Trends, Explained… In 16 Short Podcasts — good A16Z content