About 30 years ago now I worked summer vacation in a meat plant. My Saturday job was, generally, to be a garbage man - clean up the plant and and make trip after trip, dumping whatever I was cleaning into the incinerator. The plant was not 24/7, and on weekends I was all alone. To make the time pass, and since I had no one to talk to all day, I - under the hard hat and parka - had my ear buds in and I'd listen to music.
One day, the union rep came in for something and flagged me down. He saw the ear buds. He shook his head and said, "kids today."
Fast-forwarding 30 years, I was out last week on the lawn tractor cutting the neighbor's lawn. He was in an accident at work and hurt his ribs, so I figured it'd be a nice thing to do. Dutifully I grabbed my blackberry (hey, don't judge) and ear buds and while mowing streamed music.
An older person in his 70's walked by and saw me. He told me later, "You kids today. Electronics on a lawn mower ....."
In a piece that I recommend, Matthew Ball analyzes the changing media landscape in terms of consumption. While old media businesses like the nets, or pay TV cling to old models, the new ones are being embraced more and more. The nets have scrambled to "become digital", but they will not embrace the new models - they are married to ad minutes, and changing would cannibalize their business model.
Mr. Ball does a great job explaining why this strategy is unsustainable, and in the end will not work.
"Today’s giants have the potential to thrive, but they’re not yet
positioning for it. They all reach millions of Americans each and every
day – often entertaining for hours at a time through the best content
the media industry has ever created. But they continue to allow this market leadership to erode. Rather than try to own the content feeds of the future, Hollywood is focused on wringing every dollar out of its legacy model. As Barry Diller told Bloomberg late last year,
“[They] don’t want to trade dollars in a closed system for pennies in
the open one. That’s lovely until you don’t get the dollar anymore. And
I'd argue they know it's inevitable; they're smart and have fancy degrees and read all the important books and newspapers; they attend the proper conferences. I'd submit they completely see the writing on the wall. But because they are of another generation and it's all they know, it just doesn't seem real. Tweaks feel like the right policy, because watching video on a mobile phone on demand is something that they don't do; Netflix was a fad that would die out; Youtube is a place to watch cat videos.
Market leadership is coming from those in a completely different generation; those who have grown up in the present, and are moving with the present, not against it. To them Youtube is the next subscription TV network, twitter is a medium for live sports; Netflix and cord cutting is all you need.
In horse racing I see very similar in my travels. We speak a lot about the industry's marriage to the status quo and it's a common complaint, but I think it runs much deeper. It's about not being able to see the change that is coming because the concepts are so foreign.
It's hard to see that the core pari-mutuel model is a thing of the past; not "will be", but "is". For example, if horse racing does not offer fixed odds wagering starting like yesterday, it's a relic, because no person born today will ever be a part of such an archaic model. In ten years, telling an 18 year old kid who is playing a skill game that he doesn't get to see the price he will receive for a wager is like telling him to dial up Susie's dad and asking his permission to take his daughter to the sock hop.
It's hard to see that TVG will not exist at some point - hopefully just because it won't exist as is, not because "racing is dead." But make no mistake, that kind of delivery system is well past it's future date at the present moment. Racing just doesn't know it yet.
It's hard to see that data is free flowing, and API's and all that funny stuff you read about Mark Zuckerberg doing is the present, not the future, and if you're not doing it now, you're years behind. It's hard to see everything will be living in the cloud, where we, as consumers will not own anything in the not-too-distant future, we will rent everything. When we want to use it we'll use it; when we don't we won't.
It's hard to see that - like in content distribution as Mr. Ball explains above - pennies in an open system instead of dollars in a closed one is the system. Racing can't embrace the fact that it is a high volume low margin business. It will have to be exactly that soon; not because I say so, because the generation behind me does.
In my view (and it's not mine, it's from smart people and it's widely held) all of the above will will have to happen if any industry or business in this age wants to function and thrive. But to racing, these concepts are so different than the concepts they live with each and every day (and have for generations) they are completely alien. They're so unfamiliar, that even opening their mind a crack to see them is difficult.
In twenty years 25 year olds will be gambling in a completely different way. We'll be walking by them, shaking our heads saying "kids today". Unless racing opens its mind they'll be gambling on e-sports, or Wimbledon, not the third at Belmont. And that will be a shame.
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