Thanks for subscribing to Media Trends. Tell friends to follow along by signing up here.
Axios coast to coast: I'll be interviewing Edelman CEO Richard Edelman and Google SVP and General Counsel Kent Walker tonight in San Fransisco (RSVP). Mike Allen will host a lunch conversation Wednesday in D.C. with VP Mike Pence and Sen. Amy Klobuchar (RSVP).
1. Media industry heads west
Two of the biggest media conferences of the year are kicking off this week in California: The Interactive Advertising Bureau's Annual Leadership Meeting in Desert Springs and Recode's Code Media event in Huntington Beach.
- Why you should care: Industry leaders break news and set the tone for the year about the biggest topics in media, marketing and advertising.
- Why you should be skeptical: Some of the big proclamations made on stage are PR stunts and don't always play out as promised.
The highlights so far from IAB:
- Unilever is threatening to stop advertising on digital platforms like Facebook and Google because of fake news and divisive content. (Proctor & Gamble made a similar threat last year, but the platforms keep reporting record earnings).
- IAB president Randall Rothenberg says brands are in trouble unless they go direct-to-consumer.
The highlights so far from Recode:
- Facebook says it's creating a news section within "Watch" to guide readers to accurate sources.
- 21st Century Fox President Peter Rice seems to support a Disney merger more than a Comcast merger.
- Money quote: YouTube CEO Susan Wojcicki on what its competitors, like Facebook, should be doing: "They should get back to baby pictures."
One fun thing: CollegeHumor pulled together video footage for #CodeMedia of media animals battling it out in their natural habitat. Watch.
2. Megatrend: Direct-to-consumer brands explode
A new Interactive Advertising Bureau study finds that companies like Warby Parker, Blue Apron and Casper are growing in response to an “enduring shift" toward personalized, custom brands.
Why it matters: Major brands are being cannibalized by the rise of direct-to-consumer newcomers. And while many of these direct brands are small, the effect on incumbents has been "pronounced and severe," says IAB President Randall Rothenberg, who presented data about this at the IAB's annual conference in California Monday.
By the numbers:
- Men’s grooming: Gillette’s share of the U.S. men’s-razors business fell to 54% in 2016, from 70% in 2010 and most of the market share has shifted to Dollar Shave Club, Harry’s, etc.
- Mattresses: Dozens of mattress companies selling direct-to-consumers online (many through social media) garnered more than 5% of the market in 2016 – and on their way to doubling market share in 2017.
- Grocery store revenue growth is projected to be about 1% annually through 2022. But over that same period, the market for meal kits is expected to grow by a factor of 10x.
We've got more about what it means for the media industry in the Axios stream.
3. Big Tech red flags continually ignored
Researcher and technologist Aviv Ovadya, one of the first to identify the fake news catastrophe in early 2016, tells Buzzfeed he is worried about an “Information Apocalypse,” which could lead to “reality apathy,” or people just giving up on finding the truth because it is too indistinguishable from misinformation.
Why it matters: Red flags are being waved by engineers, academics, lawmakers and technologists about the dangers of big tech, yet very little is being done to actually stop the crisis:
- Marketers continue to spend more and more advertising dollars on these platforms, which led them to record earnings last quarter.
- Lawmakers are talking about the power of these companies, but no piece of legislation is likely to pass any time soon.
- Tech companies are trying to do damage control, but the bad content still sweeping their platforms shows they can’t get ahead of the problem.
Our thought bubble: The information economy doesn’t incentivize marketers, web platforms, investors, etc. to prioritize consumer health and safety over innovation and prosperity. But some, like Facebook, are starting to see consumer safety and perception as a long-term way of sustaining its business.
4. Consumers give up on slow content
Consumers are abandoning content that takes too long to load or is too long, according to a new Adobe Consumer Content Survey.
Why it matters: Consumption habits are being shaped by web platforms with expert engineering that are designed to maintain consumer attention and eyeballs. Less sophisticated consumer experiences, like slow websites or crappy apps, are being abandoned or intentionally avoided by consumers.
5. Tech hits record earnings
Facing saturation in the U.S., American social media companies are starting to focus on making more money abroad. Facebook, Twitter and Snapchat all hit record earnings last quarter and made more money outside of the U.S. than ever before.
Why it matters: The U.S. is by far the most lucrative digital media market in the world, so even if these companies must find paths for growth abroad, it won't be as easy to make money off of users there due to stricter data regulations (Europe), higher rates of mobile ad-blocking (southeast Asia) and less sophisticated ad infrastructure globally.
6. Exclusive: Californians say Big Tech under-regulated
Most California residents think the tech industry is under-regulated, according to The 2018 Edelman Trust Barometer California Supplemental Survey.
Why it matters: The survey results show a trust gap between Bay Area and California residents and the companies that are driving innovation in their backyards.
Go deeper: More numbers in the Axios stream.
7. Scoop: WaPo product guru exits to lead Blockchain startup
The Washington Post's Head of Innovation Jarrod Dicker is leaving the legacy brand to become the CEO of Po.et, a media blockchain company.
Why it matters: Dicker is considered one of the top engineers and product whizzes in the digital media industry. If he's making this bet right now, we should all be paying attention.
- Dicker led product at Time Inc., started the native and social product unit at HuffPost, and was one of the top executives at RebelMouse, the content management system that has housed websites ranging from The Dodo to Axios. He founded RED, the research, experimentation and development group at the Washington Post.
- Po.et is the first and most-evolved open source publisher on the blockchain in the market today. Its technology records all actions, changes, locations of origination for any type of intellectual property.
8. What Blockchain means for publishing
Blockchain is the technology that transparently tracks how entities flow through a supply chain. (For example, Blockchain is the tech that powers bitcoin).
- The media and marketing industries are interested in Blockchain because it can transparently track content and intellectual property. And after decades of minimal regulation, leading to ad fraud and fake traffic, the digital ecosystem needs that transparency.
- Using blockchain to track IP will make all transactions transparent through an open-source, universal tracking system that traces ownership, attribution and the marketplace flow of the world’s creative assets.
- Bottom line: Brands, publishers, marketers and individuals can know the true value of their intellectual property because they can trace exactly how it's moving through the web.
Reality check: The idea is right, but execution will be difficult, especially for legacy media companies that can't afford to take short-term revenue hits in an effort to experiment, even if it's better for their businesses in the long term.
9. Fox in global deal limbo
21st Century Fox president Peter Rice seems partial to a Disney merger than a Comcast merger, per his interview yesterday at Recode's Code Media event.
Why it matters: Fox could be entertaining a higher bid for a merger from Comcast, according to The Wall Street Journal. But it's unclear whether Fox would seriously consider the bid, given the regulatory hurdles it would face trying to get "vertical" merger approved versus a "horizontal" merger approved between two like-minded companies.
Across the pond, 21st Century Fox says it will create a fully independent board for Sky News to ensure its independence, should its $15 billion bid to take a majority stake in the Pay-TV company be approved, per Reuters.
- Why it matters: The U.K.'s Competition and Markets Authority (CMA) said last week that although Fox has cleared its broadcasting standards, the deal wasn't in the public's best interest due to concerns that the Murdoch's control too much British media.
Threading the needle: Upon completion, the Fox/Sky deal could give Disney majority ownership of major international broadcast and streaming audiences. Authorities have previously said that the merger would be taken into consideration as a part of the deal approval process.
10. 1 fun thing: The Skimm's new podcast tops charts
The Skimm's first podcast, "'Skimm'd from The Couch,' reached #1 in the Apple App Store within just a few hours of launch last week and has remained in the top five for the past week.
- Why it matters: With more than 6.5 million newsletter subscribers (and a 30% open rate), The Skimm has proven that there is a success story for digital media outlets that build their audiences directly.
- Delta is the launch sponsor and is sponsoring the first six episodes of a multi-platform campaign including podcast, radio, and social elements.
- Episodes will roll out on Wednesdays and will include guests like Tina Brown and Joanna Coles.
#MeToo reminder: The Skimm is one of the only female (and millennial) founded and led digital media companies in its competitive set — Refinery 29, Bustle, etc.