Tuesday, 20 February 2018

Next Industry in Decline - Calling It

Is the need to achieve continuous short term results a leading cause of eventual business failure?

Any allocation of capital and resources to plan the next “new thing” or method of distribution may detract from the next financial reporting cycle so long term planning is discouraged. If a business invests, there is an expectation from markets and analysts of a virtually immediate increase in revenue, profit, dividends and share price

Arguably, this will ensure a future corporate crisis as they are too late to change when markets and needs change.

When a product or service  sales are in decline, there is usually a point when the downward spiral gains such momentum it cannot be reversed.

Avon cosmetics is a brand associated (for my generation at least) with the catch phrase “Avon Calling”.

Avon product is distributed by a network of face to face distributors. After more than 50 years, Avon is withdrawing from Australia and New Zealand leaving 22000 distributors out of work.

Avon commenced in New York in 1886 and has maintained the same distribution model for 132 years. Did they fail to realise the retail world has changed?  What started as a simple drop in sales gained momentum worldwide to what today is described as “Plummeting Sales”.

We have already seen major disruption via the likes of Uber and AirBnB.

Newspapers around the world identified a need for an on-line presence many years ago but were largely so clumsy in doing something meaningful, many have disappeared or merged while others lose money while struggling to create a foot hold in the new media world.

It is too late for them? Probably.
What industries are next?
Former President Barack Obama likes his music and for Valentine’s Day, he received a gift of music from wife Michele.

It wasn’t a CD or online music gift voucher. It was a specially selected Spotify Playlist.
Certainly the distribution of music product is unrecognisable from even 10 years ago.

Is music radio at the cross roads?

FM music radio listener numbers must be in decline.

Music is a product traditionally promoted by the medium of commercial radio. I am but a sample of one but I no longer listen to music via the radio. I also don't listen to the on-line versions of traditional FM stations.
 All my consumption is through on-line mediums including my recent discovery of Double J. If Baby Boomers (me) are abandoning radio, generations X, Y and Millennial must be deserting in droves.

Music Radio may well be replicating the path of hard copy newspapers.

While I may congratulate ABC on the launch and subsequent re-branding of Double J, it is with the knowledge  they are not subject to the pressures of true commerciality that I do so.

Consider this:

Chances are the person has been born who will never experience a newspaper and will never listen to music on a radio – ever.

And in Australia, they will never know what it means to have Avon calling.

No comments: