Tuesday, April 19, 2022

Sinking the Sunk Cost

 Axios reported today that fledgling CNN+ is "doomed".  The parent company has suspended all marketing spend and began firing people, this, just a month or so after launch. Eliminating so much sunk cost is something a lot are loathe to do. Things have to be super-bad for these changes to be made. 

The thing is, CNN+ did this right (and still could succeed, as the piece alludes) because they built out a 4 year plan for success. Four years is about what normal new business allows for such investment. 

Flipping to racing, we seem to try things that we have sunk cost (hope) for a longer period of time, if it's minor, or an inside idea. We can hammer racing roulette messaging for instance, because it takes such little investment, even though it won't work.  

Meanwhile, on the important things? It's not like that. It's the opposite. 

Canterbury Park tried a lower takeout menu, and as Crunk showed on his blog, the results were - all other things equal, with his usual astute analysis - fairly good. Lower takeout is a CNN+ strategy: a 4 year one. It was scrapped almost immediately, of course. This despite being unlike CNN, it actually showed promise. 

3% cash back is used as a novelty, not a strategy by racetracks. If the business doesn't get more than the 3% they offered in like a week, it's doomed as a long term strategy, despite it showing logical and empirical might. 

CNN+ sunk a ton of money in something, got terrible results and they're pivoting. That's good and the way things should be done when investing in something new. Racing never seems to invest in something new, but on the off-chance they do, even if it shows promise, they scrap it almost immediately if the Brinks Truck doesn't roll right in. It really is, in my view, a pox on our house. 

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