Via Paul Kedrosky. Here is what the automotive sector spends in terms of advertising, I would just like to point out if the US automakers were to enter Chapter 7 and reorganize themselves, the European and Asian carmakers would just get more aggressive for market share, which means they’d advertise more and give better offers. Anyway, here are the figures:
When you combine these figures, however, with the impact of lessened financial sector advertising, you start to understand why advertising is having a rough short term period.
Digg this Blog
Share on Facebook
WatchMojo on Twitter
WatchMojo on YouTube
Add to Favorites
WatchMojo NewsletterIt’s Dubai’s time:
The seaside emirate of Dubai shifted into crisis mode this week as its breakneck building boom stalled, its lending bonanza evaporated and the government pondered wider steps to rescue banks.
Dubai — self-styled bling capital of the Middle East, nightclub hotspot for the teetotalling Gulf and home to the world’s tallest building and biggest mall — has gone pear-shaped.
“It’s gotten pretty ugly out there,” analysts at Nomura Investment Banking wrote in a note this week, describing Dubai’s property market as “a full-scale frenzy in which speculation went largely unchecked until it was very late.”
The result may be a new business model for the emirate, one based less on debt and speculation.
Dubai’s response is now being hammered out by a committee of business and government leaders charged with steering the emirate through the crisis and perhaps throwing its high-debt business model out the window.
Big developers have started firing staff and paring projects, banks like Emirates NBD ENBD.DU have blocked consumer credit to employees of companies at risk, and at least one major mortgage company has stopped lending altogether.
“Lenders blinded by rising oil prices and borrowers spellbound by easy returns have helped build a mountain of private sector debt in parts of the region that has generated an illusion of excess and abundance,” Nomura said.
Now, investors fear that individuals and corporations alike will have trouble paying back Dubai’s non-bank foreign currency debt estimated at just under $70 billion, according to estimates by ratings agency Fitch.
Shares in the region have lost around $1 trillion since the beginning of the year as investors fled. The UAE finance ministry said last month it would inject 70 billion dirhams ($19 billion) into the banking system, and is already looking at doing more to keep interbank liquidity flowing.
Many had hoped that the six countries of the Gulf Cooperation Council (GCC) would escape the crisis due to their massive current account surpluses from energy exports.
“Dubai is the most vulnerable, as it has little oil and has been booming on the oil surpluses from the GCC, Iran and Russia,” said analysts at Citibank this week.
Read more… and see what the city was like in rosier times here, below, in a WatchMojo.com travel video:
Don’t hold your breath, I know I won’t.
But after seeing projections for online video advertising slashed from $1.35B to a paltry $550M earlier this year by eMarketer, I think media companies and investors are getting the idea: UGC isn’t going to do the trick, marketers want professional content.
SONY acquired Grouper a few years ago for $65M, rebranded it Crackle is now putting in a big push behind it with the announcement of a bunch of new shows tomorrow. It will be interesting to see where SONY takes Crackle in the months and years to come. Check out WatchMojo.com’s channel on Crackle here… But you can bet one thing: this is one step in a clear trend in the video industry on the Web.
I won’t name names since we partner with some and have confidentiality agreements in place, but expect many more similar companies announcing their own plans where they bolster professionally produced content in an effort to move away from UGC…
From The Economist:
An important reason why the American economy has been so resilient and recessions so mild since 1982 is the energy of consumers. Their spending has been remarkably stable, not only because drops in employment and income have been less severe than of old, but also because they have been willing and able to borrow. The long rise in asset prices—first of stocks, then of houses—raised consumers’ net worth and made saving seem less necessary. And borrowing became easier, thanks to financial innovation and lenders’ relaxed underwriting, which was itself based on the supposedly reliable collateral of ever-more-valuable houses. On average, consumers from 1950 to 1985 saved 9% of their disposable income. That saving rate then steadily declined, to around zero earlier this year (see chart). At the same time, consumer and mortgage debts rose to 127% of disposable income, from 77% in 1990.
Those forces have now reversed. The stockmarket has fallen to the levels of a decade ago. House values have fallen 18% since their peak in 2006. Banks and other lenders have tightened lending standards on all types of consumer loans.
As a consequence, consumer spending fell at a 3.1% annual rate in the third quarter (in part because tax rebates boosted spending in the second), the steepest since the second quarter of 1980 when Jimmy Carter briefly imposed credit controls. More such declines are likely to follow. Richard Berner of Morgan Stanley projects that in the 12 months up to the second quarter of next year real consumer spending will fall by 1.6%—a post-war record. “The golden age of spending for the American consumer has ended and a new age of thrift likely has begun,” he says.
Read more. Now if we can only address the manufacturing/production problem facing the US, watch the following on savings and production being the combination we need, and not spending and debt, which is what got us into this mess:
Hoping that the financial maelstrom is about to end soon? Dream on:
Pacific Rim nations assured the world Sunday that the global financial crisis can be quelled in 18 months, but provided few details of how they expect that to happen — or how their governments can help.
The 21 economies, which represent more than half of the world’s productive power (…) voiced confidence that the crisis could be resolved by mid-2010, though they did not go much beyond the steps outlined in the Group of 20 summit in Washington.
“We are convinced that we can overcome this crisis in a period of 18 months,” the leaders said in a statement. “We have already taken urgent and extraordinary steps to stabilize our financial sectors and strengthen economic growth.”
The reassuring words were added early Sunday to a declaration the leaders had signed off on the previous day. Delegates from several countries said the changes were made overnight at the request of the summit’s host, Peruvian President Alan Garcia.
18 months? 2010? Reassuring words? Read more and lose your lunch here.
From NYTimes:
After college, Michael Eisner briefly sought the life of a playwright before settling on the corporate media world, working his way up through ABC and Paramount. He became chief executive of Disney in 1984.
Today, without shareholders to worry about, he is driven by his creative impulses and an almost messianic belief that movies and TV shows and videos are more valuable in the long run than the pipes over which they are delivered.
“It’s always the content that defines the platform,” he says. Now the platform owners are “being arrogant and saying, ‘we’re it,’” he adds. “But eventually exclusive content wins out.”
Then he gives an important caveat: The content must be professionally produced as well as exclusive. “How many skateboarding cats can there be?” he says.
After nearly 3 years, 700 hours of filmed material and over 4,000 videos, here are the two things I think are most important about a media company’s video content strategy:
- the cost of creation has to be kept in check;
- the content needs to be evergreen, or at least have a long shelf life.
Everything else is a detail that can be tweaked to make the content a winner… but if either one of those two is off, it won’t succeed. Then again, I don’t have $333M to finance my content company (what Eisner had when he left Disney), but I digress.
Regarding the following:
Like his counterpart, Mr. Diller, Mr. Eisner is at pains to offer a unifying vision for the different companies he has in his portfolio.
“There is a method to my madness, but it’s hard to define,” says Mr. Eisner, who explained that eventually the assets would fit together as one media company.
I don’t think it needs to come together in a grand unifying theory. What matters is some kind of synergy where some of the parts help others. Within our company, the core focus is on WatchMojo.com, for sure. So using Mojo Supreme as an example, we use every other unit to reinforce WatchMojo.com’s leadership position in the marketplace.
- The number of media professionals that got to know about WatchMojo.com via this blog or other blogs in our blog network BloggerMojo.com for example is considerable. It also helps us in other ways, like aggregating or linking to content that we want to cover, promote, mention or reference without actually spending the resources to create a video for. Other blogs, be it SoundMojo.com, ArcadeMojo.com or FlickMojo.com also helps us establish ties with record labels, movie studios and gamemakers respectively that in turn help make WatchMojo.com’s music, film and video game videos of much better quality.
- We can better serve marketers who promote contests via StreetMojo.com, and in turn cross promote pertinent videos alongside those contents…
- Search was a bit of a different story. I’ve covered that quite a bit on this blog back in the day. Click on the MetaMojo.com tag if you care to learn the method to the madness there.
The point being: I don’t mind sharing all of these “trade secrets” because, well, they’re not really secrets, and to quote Vince Lombardi (alright, I am not sure he ever said this, but it sure does sound like something he would say), knowing something isn’t what counts, it’s actually doing it.
Connecting the dots, when it comes to doing it, I don’t necessarily agree with everything that Mr. Eisner is doing - I don’t understand most of it - but I do commend him for being one of the few - along with ourselves - who is producing video content instead of relying on skateboarding cats. As I said all along: we’ve seen an underinvestment in video content and this probably explains why online video advertising estimates were reduced this year (before the subprime/housing/financial meltdown went into turbo).
Back to Mr. Eisner: one thing is for sure, he’s having a helluvatime funner time than his peers who stayed on in traditional media, considering the meltdown there.
Fred Wilson and Howard Lindzon - both investors - have some interesting points to make about the fact that the major stock indices are now where they were ten years ago. From a macro perspective, indeed, if you would have invested $1 ten years ago, you’d have $1 today. Adjusted for inflation and the time value of money, you’d be worst off. Truth is, this is an overly simplified macro perspective. At the micro level, I’d argue that a lot of the people who had $1 in the market ten years ago were shellshocked by the Nasdaq crash of 2000 and lost a lot of money. Those who are in the market as of now probably got in at the higher 2003-2007 levels and are now in a panic mode.
I began investing in 2003 and got fully out in May 2008 after selling my last shares of Yahoo! at $29. When Yahoo! management violated its fiduciary duty, I remembered why I started a company: to be in control of my own destiny.
When you invest in a company’s stock, you invest in the management. Warren Buffett - whom I suspect is actually being bloodied by the market’s gyrations (rememebr, Berkshire Hathaway is largely a diversified financial holding company with some consumer plays) - looks for candor in management.
Buffett referred to the stock market as the great wealth equalizer, giving the “average citizen” the opportunity to invest in companies and create wealth for themselves, eventually becoming as wealthy as well-paid executives and other successful investors.
This is - in principle - the most democratic thing about capitalistic societies. However, due to a very near-sighted fiscal policy and a disastrous foreign policy, the stock market won’t go down as having leveled the playing field between citizens in creating wealth, but perhaps, in having leveled the playing field by destroying wealth.
From a recent article by economist Joseph Stiglitz in Vanity Fair:
Our tax policies need to be changed. There is something deeply peculiar about having rich individuals who make their money speculating on real estate or stocks paying lower taxes than middle-class Americans, whose income is derived from wages and salaries; something peculiar and indeed offensive about having those whose income is derived from inherited stocks paying lower taxes than those who put in a 50-hour workweek. Skewing the tax rates in the other direction would provide better incentives where they count and would more effectively stimulate the economy, with more revenues and lower deficits.
Indeed. We screwed over the dream of the average investor and killed the wealth creation process in the process. As a result, we’re now in a period of wealth destruction like none we have ever seen. I am thirty years old, I surely haven’t seen anything like this: no confidence in security prices, no confidence in the people who draft the laws and regulations that create the mechanisms of the system.
Worst, we’ve eliminated the ability for the Average citizen to even buy stocks. I really wonder, outside of 401Ks and RRSP in Canada, how many regular folks can afford stocks. That’s right: by skewing fiscal policy to favor the rich, we’ve eliminated the purchasing power of average people not just to buy goods, but stocks as well. Maybe this explains why there are no buyers in sight: we killed an entire class of them.
