TV Viewership and Ad Money Are Going the Way of Newspapers
About 26 percent of customers who call U.S. cable TV companies request “Internet only” service, according to a survey of those calls by mobile advertising technology company Marchex. Of those customers, at least 60 percent actually end up getting Internet-only service, Marchex says.
The survey results—which came from 500 random phone calls via Marchex’s Call Analytics customer phone call monitoring technology—show that people increasingly don’t want to pay for old-fashioned TV. (Name one other industry where one in four consumers calls up the company to ask not to have access to its main product?)
In place of TV, consumers want the Internet—through which they can get the video they want, which can also include TV programming—instead.
And numbers from BI Intelligence show that digital media—following a boom on the mobile Web—is about to replace TV as the top venue for both audience share and ad revenue.
Chen Zhao, director of analytics for the Marchex Institute, told Business Insider, “It’s clear that consumers want very specific things from their cable providers—and at the most fundamental level, they increasingly just want a reliable Internet connection to serve as a gateway to their own channels and choices.”
The Internet is literally slicing up TV’s old business, according to new data from PwC. Look at how Netflix has become a head-to-head competitor to all of cable TV in the US:
- Cable subscriptions among 18-to-24-year-olds dropped to 71 percent in 2014, down 6 percent from the year before.
71 percent of pay TV subscribers ages 25 to 34 also had Netflix in 2014, up from 51 percent.
- 58 percent of 50-to-59-year-old TV subscribers also had Netflix in 2014, up from just 19 percent in 2013, the Wall Street Journal reported.
Back in 2011, data first emerged that television-watching may not, in the future, be the dominant media we consume—especially not in the living room, watching scheduled TV every night as people did in the 1970s. At the time three years ago, Credit Suisse alerted investors that pay TV subscriptions in the U.S. were in decline.
In the short time since that Credit Suisse report, most indicators have shown that TV’s share of both audience and ad dollars is in a long, slow decline as viewers move their attention to their phones, tablets, and laptops. The death of TV might not be as swift as that of the hard-line phone, but it’s happening.
However, it’s not until you see the following charts—compiled by BI Intelligence—that you realize in terms of viewers’ eyeballs and ad dollars, TV is already “over.”
TV has been relegated to second-rung status by the arrival of mobile media, in just the same way that newspapers and radio were demoted by the Internet.
Like newspapers and radio, TV still has a massive audience and commands lots of ad revenues. But TV’s audience simply isn’t as big as the audience being corralled by Google, Facebook, Apple, and their competitors.
Most people don’t understand this yet: Because TV routinely gets huge global audiences for things like the World Cup and the Super Bowl, it “feels” as if TV still has the biggest media audiences.
It doesn’t. The Internet and mobile Web combined have the biggest audiences. In a couple of years, they’ll also have the biggest bucket of ad revenue, too. (Ad dollars are always a year or two behind audiences.) TV is now a secondary concern if you want to reach viewers with either ads or content, data from BI Intelligence shows.
At Business Insider’s Ignition conference in New York, BI Intelligence prepared a chart that shows how TV is losing share of the media audience to online and mobile channels. TV no longer commands the largest portion of audience time. More importantly, digital media, at a 49 percent share, is close to claiming a simple majority of viewers media consumption.
TV lost its top spot in 2012. It’s now at only 37 percent of the market for eyeballs:
One of the reasons TV seems so dominant, even when it’s not, is that digital audience time is often broken into separate “online” and “mobile” buckets. Those distinctions are meaningless to consumers, of course. But slicing that distinction is the only way TV still comes out on top with audiences.
Here’s the breakout. TV only comes top if you split Web and mobile viewing:
Note that in 2014, mobile on its own is the second-biggest audience.
This, again, is a huge turning point in the world of media. The impact of mobile—which really only came online after 2007 and the launch of the iPhone—has vastly extended the reach of digital media. Web media might one day have eclipsed TV on its own. But that would have taken a lot longer without phones. It was the arrival of mobile media and video on the smartphone screen that really tipped the balance away from TV.
You’ve probably had that experience yourself: sitting on the sofa “watching” TV when you’re really looking at your phone or tablet.
The ad spending on Web and mobile is approaching the point at which it will eclipse TV, probably in 2017:
Apple Is Forcing Some Developers to Remove Parts of Their Apps
Some app developers have just about had enough with what they say is Apple's meddling. The company has taken a tougher stance on developers since the launch of iOS 8, Apple's newest mobile operating system.
App developers have seen a wave of rejections from the App Store, and it's happening to more and more apps. It's not just outright rejections that have developers worried, though. Apple is also asking developers to remove parts of their apps. Apple has always rejected apps. The company wants to keep quality standards high in its app store. What's new is that established developers are starting to grumble more loudly about the rules Apple enforces.
One of the most prominent iOS developers, early Tumblr employee Marco Arment, called Apple's moves "disgusting." Apple did not respond to a request for comment.
This isn't just about a bunch of tech geeks complaining about Apple's technical standards. The iOS App Store is at the heart of a $10 billion industry. Apple is its sole gatekeeper, and its ability to say yes or no to apps is potentially life or death for development companies, especially the smaller ones that have only one product.
The latest app to be hit by Apple's restrictions is Transmit. The developers behind the file-sharing app published a blog post yesterday that explained why the ability to send files with the app has been removed. They said that Apple contacted them to let them know that their app can only download files from iCloud, Apple's online document storage service. This meant that the app had to remove its entire "Send" function, preventing it from sending files to be uploaded to Box and Dropbox, as well as iCloud.
Here's the part of the app that has been removed:
App developers rarely speak out against Apple for fear of tougher restrictions or outright bans. Instead, we usually see blog posts simply explaining why features disappear.
That's not the case with another app, Launcher, though. It was a well-received app that let you create shortcuts for tasks inside Notification Center.
Here's what it looked like:
Cromulent Labs, the company behind Launcher, published a lengthy blog post on Sunday that explains what happened. Without warning, the developer received a message from Apple informing him that his app had been removed from the App Store.
After its removal, Launcher's users were left feeling "shocked and confused." The app's developer accuses Apple of "confidence/arrogance" over the decision, which seems to come from Apple's tight control over its Notification Center menu.
Here's a section from Cromulent's blog post that shows the way Apple deals with app developers:
They basically said that Launcher was a trailblazer in uncharted territories and that they felt that they needed to make an example of it in order to get the word out to developers that its functionality is not acceptable without them having to publish new specific guidelines.
But it's not just Transmit and Launcher that have been hit with changes by Apple. As Mac Rumors reports, there have been other cases where Apple has asked developers to remove parts of their apps.
Neato was an app that allowed you to take quick notes in Notification Center using a miniature keyboard. The app's developer thought that Apple would love what it had made, saying on its website that "we were expecting Neato to be featured by Apple."
But instead, Apple didn't like the small keyboard, so it asked the app to remove it. (It's unclear how this was resolved: There's no sign that the app was ever removed, and the keyboard still exists.)
Apple also got in touch with the developer of PCalc, a calculator app that sits in Notification Center. It said that developers weren't allowed to create calculator apps within that slide-down tray, effectively removing the app's sole purpose. Amazingly, Apple had even helped promote the app in the past by featuring it in the App Store.
Apple later changed its mind, though, and allowed the app back onto the App Store, but only after a wave of angry media coverage.
Developers are getting fed up with Apple's policy of suddenly removing apps, or surprising them with requests to remove key features. Many developers create apps for a living, so knowing that Apple could decide to remove your work from its App Store is a terrifying prospect.
Here's one developer expressing his frustration with Apple's policies:
Last week’s rejection? Your Today widget does too much. This week’s? Your Today widget doesn’t do enough. Seriously.— Greg Pierce (@agiletortoise) December 9, 2014
Early Tumblr employee and Instapaper cofounder Marco Arment, one of the most prominent iOS app developers, offered this decisive take on the new tough new App Store restrictions:
This is a disgraceful, disrespectful, and cowardly way to create and enforce policies, and it’s burning a lot of developer motivation to work on iOS. You’re better than this, Apple. Just disgusting.
We reached out to Apple for comment on this story and will update if we hear back.
Nifty Things You Didn’t Know Your iPhone 6 Could Do
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Abercrombie & Fitch’s Problem Is Its Brand, Not Its CEO
Abercrombie & Fitch CEO Mike Jeffries is out after a controversial two decades with the brand. Jeffries retired after already being stripped of his chairman title. Activist investors felt his ideas about what it meant to be "cool"—which allegedly excluded large people and minorities—hurt the brand.
Now that Jeffries is out, Abercrombie & Fitch has some big problems to solve. Sales fell 12 percent in the third quarter, which ended Nov. 1, while the company cut its profit outlook for the year. Jeffries cited turmoil in the teen apparel market as reasons for the company's performance. "It is very clear that the young apparel sector in which we operate is going through a period of disruption and turmoil," he said. "We expect conditions to remain difficult" for the rest of the year.
Abercrombie & Fitch has said it plans to offset declining sales by phasing out visible logos on its clothing and offering trendier items. But Eric Beder, specialty apparel analyst at Wunderlich Securities, said he thought Abercrombie was running out of options. "What is going to turn the tide?" Beder asked in a note to clients. "Frankly, we have no idea." Beder notes that Abercrombie has already exhausted numerous turnaround strategies, to no avail. "Abercrombie has already aggressively closed domestic locations, cut back on inventories, shifted away from logo products, and cut costs," Beder writes.
The once-leading teen retailer has struggled to stay relevant since the surge in demand for fast-fashion brands like Forever 21 and H&M.
Abercrombie has also been criticized for excluding plus-size customers and minorities in its stores.
For several months, Abercrombie has been touting a rebrand that apparently includes scaling back on logos and spraying less of its Fierce cologne in its stores. But when Business Insider recently went shopping at the store, it was clear that little had changed since its heyday.
Beder says a fundamental shift in teen customers is hurting Abercrombie, as well as competitors Aeropostale and American Eagle. The mentality of teenage consumers is changing rapidly, according to Piper Jaffray's recent Taking Stock With Teens survey. Researchers found that teens were increasingly spending on technology and food over clothing. For the first time in history, teens are spending as much on food as they are on clothing, according to the analysts at Piper Jaffray. This is fueled by trendy coffee drinks at Starbucks, the top food-and-drink retailer among the demographic.
Pixelmator is Apple’s “Best iPad App of the Year”
Apple recently announced its best apps of the year, and the winner for best iPad app is Pixelmator, a powerful new image editor.
Pixelmator got a lot of buzz after its team was invited to demo the app onstage at Apple’s big iPad event in October, and after watching a photo get touched up and transformed in real-time, it's easy to see why.
Pixelmator is both incredibly powerful and user-friendly, a rare combination that will appeal to veteran photo editors, digital artists, and even the casual person who takes some pictures on her iPhone and wants to make them look special.
While Pixelmator also exists for Mac, the app feels truly at home on the iPad’s interface. The touch controls feel intuitive rather than tacked on, which is nice for those looking to sink some serious time into image editing.
If you’re looking to work with photos, Pixelmator offers a full suite of photo-editing tools that will let you choose a template, adjust colors, add effects, retouch, resize and crop, and insert text and shapes.
You can even remove undesirable objects from a photo quickly with Pixelmator’s Repair tool.
For those looking to give their photos an artistic look, Pixelmator offers some gorgeous filters such as Light Leak, Vintage, Black and White, and even a fun Miniaturize effect that makes your photo look like a toy model.
And that’s just what Pixelmator can do for photo editing.
Pixelmator is also a fully featured painting app for digital artists or those simply looking to add some paint to their photos.
You can start a painting from scratch, choosing one of Pixelmator’s 70 realistic or stylized brushes, or paint over an existing image. There are tools for adjusting the style and size of the brush stroke, and there's even full stylus support, allowing you to paint with a Wacom stylus if you prefer.
For those that work closely with Adobe Photoshop, you’ll be pleased to know that Pixelmator calls itself “Photoshop friendly,” meaning you can save your work as a Photoshop file, and many of the most popular Photoshop features are supported as well.
Pixelmator is exactly what you want from an iPad image editor. It’s easy to use for the novice, contains enough tools to keep the expert interested, and is both flexible and powerful enough to make a compelling case as a primary editing application for photographers in the field.
You can download Pixelmator for $9.99 over at the App Store, or you can see a video of the app in action below.
See also: The Future of Apple
Cisco Sues Arista, a Rival Run by Former Cisco Employees
Cisco filed the suit on Friday in the Federal District Court for the Northern District of California, claiming Arista is violating 14 Cisco patents and copying a lot of specific Cisco technology. It didn’t say how much money it is seeking in damages.
But this isn’t just another patent complaint where one company tries to shake down another. It’s more like a war between a parent and a child. Many of Arista’s leaders and engineers are former Cisco employees. The lawsuit documents almost make Cisco sound like a jilted ex:
Arista was founded by former Cisco employees, many of whom are named inventors on Cisco’s networking patents. Among others, Arista’s: 1) founders, 2) President and CEO, 3) Chief Development Officer, 4) Chief Technology Officer, 5) Senior Vice President for Customer Engineering, 6) Vice President of Business Alliances, 7) former Vice President for Global Operations and Marketing, 8) Vice President of Systems Engineering and Technology Marketing, 9) Vice President of Hardware Engineering, 10) Vice President of Software Engineering, and 11) Vice President of Manufacturing and Platform Engineering all were employed by Cisco prior to joining Arista. Moreover, four out of the seven members of Arista’s Board of Directors were previously employed by Cisco.
Cisco wants Arista to stop using the infringing technology, a spokesperson tells Business Insider. It wouldn’t mind if Arista is forced into re-doing big chunks of its technology.
Both companies make equipment used to build computer networks. Cisco claims that Arista is using technology invented when its founders, leaders, and employees worked at Cisco according a blog post by General Counsel Mark Chandler. Chandler writes:
The heart of our action regards Arista’s deliberate inclusion in its products of 12 discrete and important Cisco features covered by 14 different U.S. patents. All of these features are being used by Cisco currently and in products we ship to our customers. None of the implementations are incorporated in industry standards. They were patented by individuals who worked for Cisco and are now at Arista, or who at Cisco worked with executives who are now at Arista. These Cisco-created features and implementations are incorporated by Arista in their entirety into Arista’s products.
Chandler adds that such tactics by Cisco are extremely rare:
In the thirteen years I’ve been General Counsel of Cisco, I can count on one hand the number of times we’ve initiated suit against a competitor, supplier or customer.
Because so many of Arista’s leaders and engineers are former Cisco employees, Arista is treated as enemy No. 1 within Cisco—more so than Cisco’s traditional competitors, Juniper and HP.
Former Cisco employees include Arista’s famous billionaire co-founder Andy Bechtolsheim, who co-founded Sun Microsystems and later earned billions by angel investing in Google. He also founded and sold a couple of startups, including Granite Systems, a networking startup sold to Cisco in 1996. He stuck around at Cisco for seven years after that, leading a team that developed one of Cisco’s successful lines of network equipment, (the Catalyst 4500).
Then there’s Arista’s CEO, Jayshree Ullal, who prior to Arista was a 15-year Cisco alum. She famously led Cisco’s core switching and networking division, taking over the role after Cisco’s star engineer, Mario Mazzola, left to develop a new Cisco product.
In one of the funnier examples of the alleged infringement, Cisco’s lawyers contend that Arista didn’t just copy some of Cisco’s technology, it also copied the user manual that shows people how to use those features, right down to the typos.
Arista sent Business Insider this statement: “We just became aware of the lawsuit and have not had an opportunity to evaluate the claims in detail. We will certainly be doing so in the coming days. While we have respect for Cisco as a fierce competitor and the dominant player in the market, we are disappointed that they have to resort to litigation rather than simply compete with us in products.”
And Ullal had this to say, “I am disappointed at Cisco's tactics. Its not the Cisco I knew.”
Cisco is asking for a jury trial, but it may never go to court. Patent infringement cases almost always lead to a settlement of some kind.
This is another event in an endless sequence of drama for Arista. It’s the second incestuous litigation for the network equipment company. Its other famous billionaire co-founder, David Cheriton, quit Arista and filed a lawsuit last summer on behalf of his other startup, OptumSoft, a sister-company/partner with Arista. Arista had a wildly successful IPO this year, but was also outed for offering pre-IPO shares to journalists.
But Arista is doing really well despite the drama. That’s probably what got Cisco's goat. Founded a decade ago, Arista is profitable. It reported an excellent quarter last month, a huge beat. Quarterly revenue of $155.5 million was up over 50 percent from the year-ago quarter. Profits hit $28.1 million, or 40 cents per diluted share, when analysts were expecting 28 cents.
See Also: The CCP Cracks Down on Zhou Yongkang
People Don’t Want to “Dress Normal”
Sales at the Gap continued to drop in November, as its roundly-criticized “Dress Normal” fall campaign failed to drum up interest from consumers.
Gap’s comparable sales for November were down 4 percent versus a 2percent increase last year. Sales were down 7 percent year-on-year in October and declined 3 percent in September. Gap's other brands, Old Navy and Banana Republic, saw sales increase this last month—so this is a Gap-specific problem.
The retailer launched a global, celebrity-filled “Dress Normal” brand positioning, created by ad agency Wieden+Kennedy in August. The aim was to promote a more coherent brand globally and to claw back sales lost to rivals such as H&M and Uniqlo. The advertising campaign—which ran across TV, print, social, digital and in-store—featured celebrities including Elisabeth Moss, Michael K. Williams and Anjelica Huston “dressing normally” and encouraged viewers to make their “actions speak louder than clothes.”
"Dress Normal" was a big gamble. In general, fashion brands seek to be "aspirational," meaning they present their customers with a fantasy of what they could be like—if only they would buy the brand's clothes. "Dress Normal" seems to be the opposite of that, and its ineffectiveness on sales will reconfirm the "aspirational" rule for other fashion advertisers. Here is an example:
In a press release Gap described the campaign as a "rallying cry to be confident in who we are by dressing how we're most comfortable."
But the new positioning didn’t receive a warm reception. Janney Capital Markets analyst wrote in a note reported by BuzzFeed:
“The look and feel [of the Gap’s fall season] is minimalist and androgynous and supported by an ad campaign of ‘Dress Normal…While intended to be provocative and ironic, we believe the fall floor set may be, in a word, too ‘normal.’”
Jezebel described the campaign as “blah,” and quoted other analysts saying Gap had “missed the mark” by jumping on the “normcore” bandwagon.
Gap’s new CEO Art Peck was forced to defend the campaign earlier this month, telling BuzzFeed it was a “work in progress” and that it will still live on through 2015, despite the criticism.
The campaign will also continue despite the loss of two senior marketing executives responsible for the advertising push.
This week AdAge reported Gap’s global CMO Seth Farbman will be leaving the company early next year. The announcement of his departure came just two months after Apple hired Gap’s number two marketer Marcela Aguila, a move that was thought to be related to the launch of the Apple Watch wearable device.
The weak results of the Gap retail brand in November were, however, propped up by the other brands the Gap group owns. Old Navy reported an 18 percent increase in sales (versus a 3 percent uplift last year), while Banana Republic posted a 2 percent uplift (compared with a 1 percent increase in 2013.)
In Gap’s most recent quarter, Q3, the company reported a 0.1 percent drop in net sales to $3.97 billion.
See also: Don't Expect Discounts At Gap This Fall
Three Ways to Tie Your Scarf Properly
This article originally appeared in Business Insider.
The video above shows how to tie ascot, once-around, and loop knots. This is the most useful information you'll learn this winter, so pay attention.
Germany Is Screwing All of Europe Because It’s Too Big
“Poor old Germany. Too big for Europe, too small for the world.”
That’s what former U.S. Secretary of State Henry Kissinger famously once said about Germany. And the statement still holds some truth today.
Right now, Germany’s politicians and the Bundesbank (the country’s portion of the European Central Bank) are the two major things holding back more financial stimulus in Europe, which could, if approved, revitalize the continent’s flagging economies.
Germany has consistently opposed more monetary stimulus by objecting to interest rate cuts and quantitative easing (QE), a method that’s meant to push investors away from safe government bonds and into corporate bonds and stocks. German officials are also reliably opposed to less strict deficit targets, which could also boost the economy.
This conservative strategy may work for Germany—which does not necessarily need quantitative easing (Germany’s growth is slow, but unemployment is at a record low)—but it does not bode well for more troubled economies like Spain, Italy, and Greece.
The problem is, because all the eurozone countries are bound by a single currency, the euro, they all have to subscribe to the same policies.
Unfortunately for Spain, Italy, Greece, and others, the European Central Bank is built on German foundations and operates in a similarly cautious manner. Christian Odendahl of the Centre for European Reform explains:
The ECB was modelled on the German Bundesbank. As a result, it is one of the world’s most politically independent central banks; its mandate is focused narrowly on price stability; it does not take broader economic goals like unemployment into account in the way other central banks, such as the Fed, do; and it is de facto more restricted than other central banks, since controversial measures can lead to complex political and legal struggles, involving 18 (soon to be 19) countries. Its setup and philosophy are therefore "German," that is, conservative and cautious.
In short: The tension between Germany and the eurozone leaders who want more stimulus, like Italian Prime Minister Matteo Renzi, is partly what’s causing the the near-zero growth and inflation that the region is seeing today.
It’s hard not to feel bad for Germany, which didn’t even want the euro in the first place. Through most of the 1990s, before the euro was introduced, German opinion polls did not support the new currency. The euro was officially adopted in 1999, without the approval from European citizens through a referendum. Only Denmark and Sweden held votes. Both countries rejected it.
In the chart below, you can see that German support for the euro (gray line) remains below support from Europe as a whole (black line) between 1990 and 2011, with the exception of 2007.
There’s also some astonishing historical evidence that suggests then-West German Chancellor Helmut Kohl was pushed by French President Francois Mitterrand into accepting the euro.
Today, German politicians are stuck in a vicious cycle. Since most German voters don’t favor stimulus measures, the more support these politicians offer to Europe-wide stimulus, the more voters they are likely to lose to the country’s anti-euro party, Alternative fur Deutschland (AfD). In turn, the more support the AfD gain, the more they are able to influence the debate over Europe in German politics, and the more other German politicians have to try to claw votes back from the AfD.
Ultimately, Germany is is trapped in a pretty grim position: It’s the only country capable of pulling Europe out of its current funk, but most Germans never asked for—and don’t seem to want—that responsibility.
Taylor Swift Headlined Victoria’s Secret’s Fashion Show. That’s Good for Victoria’s Secret.
This year’s Victoria’s Secret Fashion Show featured 47 models, but the star of the show was Taylor Swift. The show, which airs December 9 at 10 p.m. on CBS, took place Tuesday in London.
Despite elaborate costumes from the models, many fans were gushing about Swift’s performance on social media. She performed two songs. The singer also opened and closed last year’s show, where she walked among the models.
Swift’s role in the show is outsized: Last year’s hour-long special featured a segment dedicated to the models like Karlie Kloss praising the singer’s talent. This kind of attention on a performer during the show was unprecedented. Past artists, like Fall Out Boy, merely served as background music.
But by putting Swift on a pedestal, Victoria’s Secret was wisely pandering to potential customers—her fans. Swift has what is possibly the most ardent fan base of any singer. She is adored by millions of teenage girls and young women across the United States and worldwide—exactly the type of shopper Victoria’s Secret is trying to attract. Weeks after its release, her album 1989 is already the top record of 2014.
Swift also has serious sway over her fan base. When Abercrombie & Fitch released a shirt that said "more boyfriends than t.s.”, fans protested until it was pulled from shelves. An independent shirt company designed a garment listing her love interests, and promptly received death threats.
Meanwhile, Victoria’s Secret is the first big clothing brand to harness Swift’s power for good. By hiring Swift to perform and treating her with utmost respect, the brand won the approval of the so-called Swifties. Victoria’s Secret will likely reap big benefits from once again making Swift the star of the show.