FS1 is making its pitch even if it’s hard to find

You’re not alone if you’ve been searching your TV guide looking for the baseball playoffs and becoming confused. The championship series for both the American League and National League are being played out far down your channel list on FS1.

FS1, short for Fox Sports 1, is Fox’s answer to ESPN and airing the championship series on it is Fox’s attempt to get more eyeballs on a channel that so far has been largely ignored by viewers.

You can find Cubs-Dodgers on FS1.

I have news for you frustrated sports fans. You’re going to see more of this and Fox is right to do it.

FS1 taking advantage of ESPN’s weakening brand.

FS1, launched about three years ago, has mostly been known for lower-level college sports and some mixed martial arts. But recent moves, including signing some ex-ESPN staffers such as Skip Bayless, demonstrate that Fox is serious about making FS1 a true contender to ESPN. Right now, ESPN still dominates in the ratings but Fox is betting that viewers catching playoff baseball on its sports channel will funnel their viewing habits to the Fox channel. Promos for FS1 programming litter the baseball broadcasts to combat its single biggest problem: Lack of awareness.

We’re at this point because networks saw an opening with the slow defraying of the ESPN brand. The sports network, which began with humble beginnings in the late 70s, dominated the sports conversation so much over the last 20 years that many sports, especially college football and basketball, adjust their schedules to ESPN’s whim.

What ESPN should be doing.

But ESPN, while still leading in the ratings, has seen viewership drop for its flagship show, SportsCenter, and a weaker loyalty to its brand. It has suffered a talent drain (Bayless to FS1, Dan Patrick to NBC, Bill Simmons to HBO and his own media site, The Ringer) and fewer contracts with sports leagues. (Fox, for example, will air the college football playoffs in January.)

Few of us understand what ESPN stands for anymore. It once stood for being immersed in the world of sports. Without the monopoly on league contracts, however, it can’t hold that spot. Even the sports leagues themselves now have their own networks. (The MLB Network aired some of the earlier baseball playoff rounds.)

FS1 isn’t the only network punching a hole into ESPN’s balloon. NBCSports and CBS Sports Network are also on air. ABC, the owner of ESPN, has responded by cutting costs at ESPN.

Downsizing is almost always the signifier that a brand is losing ground. Instead, ESPN should be searching for what brand meaning would regain its preference.

The damage is done. So when you lament the baseball playoffs being on channel 400 (FS1 here in Greensboro), you’d better wise up and greet in the new era. It’s here to stay.

NFL ratings dip and concern increases

Pundits are coming up with all sorts of reasons for the dip in NFL ratings, even though the league remains our nation’s popular sports league.

Many are pointing to the current presidential election as the reason for the lower NFL ratings. This is the sort of campaign that we’ve never seen before and it has created record ratings for the cable news networks. Others are pointing to a lack of stars (Peyton Manning has retired, Tom Brady just returned to the field). Others say the National Anthem protests have turned some fans off, while others point to a handful of teams that haven’t been good for at least a decade. (Think Cleveland, Miami, Tennessee, Jacksonville, Chicago, etc.)

NFL ratings
NFL ratings are down and the reason is an oversaturated market.

The presidential election is an interesting answer because, as Peter King of Sports Illustrated reported this morning, NFL ratings tend to sag a bit during presidential election years.

However, the drop has been even greater this time. Ratings are down 13.4% from last season, nearly double the drop of the worst election year decrease of 2000 (the Bush-Gore race). Is it just because Donald Trump has turned this election into a carnival act that’s accomplished the decline?

Over saturation has created the NFL ratings drop.

I don’t think so. I think there is something else brewing here. Mark Cuban predicted this NFL ratings decrease a few years ago because the league has oversaturated the market.

I agree, and think the NFL needs to think about what it can do to make its games more important. Right now, you practically get the NFL 24/7. There’s the NFL Network, there is a game every Thursday night and, last Sunday, there were four back-to-back games with an early contest airing from London in the morning.

Scarcity is actually a value, and one that’s hard to come by in today’s world. The internet and social media gives us access to anything at any moment, so scarcity is hard to come by. To be scarce enough to create importance means you must take control of your brand.

Think about Krispy Kreme. It held a cherished spot because access to it was hard to find, becoming the darling of Wall Street and southerners. I had relatives visit me (here in North Carolina) who wanted to go to a Krispy Kreme first thing.

Then Krispy Kreme went on an expansion kick, and the value of the brand quickly became diluted. The NFL has been on a different kind of expansion kick, and its lower ratings are the result.

Now, maybe we see returned spike after the election (although don’t think the news cycle will completely go away) and as the playoff races heat up. But the larger problem still exists. For the NFL ratings to return to normal levels, the league needs to slow down its plans to expand into Europe, eliminate the Thursday night games (which are usually terrible anyway) and realize that scarcity is a value.

Fatigued football fans is the result.

Elon Musk: Stop discounting the Tesla

One sure sign of a failing brand (or a failing market) is if it starts discounting. Fighting on price is sure fire way to send you into irrelevancy, unless you’re Walmart whose brand is but on low prices.

Elon Musk understands that. The CEO of Tesla sent an email to the entire company to vehemently stop discounting its cars. Musk and other Tesla executives caught wind of some situations in which reps discounted the cars.

Elon Musk understands discounting would lower the value of the Tesla brand.

In response, Musk said, “There can never – and I mean never – be a discount on a new car coming out of the factory in pristine condition. That is why I always pay full price when I buy a car and the same applies to my family friends, celebrities, no matter how famous or influential.”

Tesla has had a “no negotiation and no discount” policy since it started selling cars a decade ago. And there’s a reason for that. Fair price (or in this case, a luxury price) is important because consumers see the value in the brand and the product. We, as consumers, instinctively believe that you get what you pay for. The best product is not the lowest priced one. For some, always buying the top price means you are getting the best.

Discounting a Tesla is the start of brand failure.

The lowest priced products are rarely the market leaders. Sure, there are some items we will search for the lowest price, but in general we equate price with quality.

If you think about all the brands and markets that are currently struggling, most of them (if not all) began that descent by discounting. It’s an attempt to buy market share, forgoing the difficult work of actually creating a meaningful and preferred brand.

You become mired in a losing proposition once you battle on price. You will forever battle on price. Margins will shrink. And you will have taught target audiences to shop on price.

Think of the major pizza chains. That war is waged on discounting. Few see the difference between Pizza Hut, Domino’s and Papa John’s, except on the daily deals. Musk’s outrage is well placed. He knows that the perceived value of the Tesla cars will drop into the fray if the cars are discounted.

Another retail casualty: the CEO of Stein Mart

The retail industry is under siege, if you haven’t already noticed. Stores are closing, CEOs are leaving (being either fired or retired) and few know what to do in the battle against Amazon.

I have written plenty about this issue, maybe even more than you know. I am a regular contributor to RetailWire, which you can read about here. The single biggest question asked is, “Where do retailers go from here?”

Stein Mart
The resignation of the Stein Mart CEO is another demonstration that retail is dying.

The latest shoe to drop is the resignation of Stein Mart CEO Dawn Robertson, who left after same-stores sales declined 4% this past quarter. You sense a trend here. Office Depot and Staples, once thought to be merger partners, are looking for new CEOs. Macy’s is closing stores even though it promoted a national holiday hiring day.

It’s a mess out there for retailers.

The problems facing Stein Mart and others

The problems are two-fold for retailers, such as Stein Mart. First, they have never gotten the basic strategies of creating preference right. Secondly, they are behind the curve when it comes to online retailing.

Retailers were once powerful, thriving during the days when malls took over the marketplace. Malls were a community of stores, aping a downtown marketplace. Shopping at a mall was efficient and easy for buyers. Retailers reaped the rewards of shoppers buying more than they intended. (Think the Sam’s Club model. You go for a great deal, but stroll up to the checkout counter with loads of merchandise.)

In good times, brands often get lazy. They live off their success, thinking that there’s nothing they need to do to prepare for change. So few, if any, actually built brand preference. Instead, retailers fought over price, some adopting the Walmart model of always having a low price with others holding sales every week (that’s what has gotten Stein Mart in trouble). When you do that, you teach audiences to shop on price because you haven’t given them any other reason to choose.

So shoppers choose Amazon.

That second issue, failing to be a strong presence online, caught retailers with their pants down. They were slow to prepare and any preference they did have disappeared. In essence, retailers have reaped what they sowed.

What do retailers do now? They have to go back to the basics. Build a brand that actually stands for something, one that is different and better. That better part is difficult, but the different part is what has befuddled them. The retail choices all look, sound and, frankly, are the same. There’s not a squat of difference between Stein Mart and Kohl’s from the point of view of the customer.

No wonder we all shop on Amazon. At least we know what’s different there.

AB InBev as a parent brand for its beers

AB InBev, the global brewery that owns many of the world’s most famous beer brands, has decided that it will keep that name even after it purchases SABMiller.

Is that a good idea? My answer: It doesn’t matter.

AB InBev
AB InBev keeping its name is only important if it invests in the name.

Brand naming is an important process in gaining preference but, in this case, the name AB InBev is only as important to its beer brands as P&G is to its products. That is, consumers don’t even know the parent brand name and preference, if there is any, comes from the individual beer brands themselves.

AB InBev owns Budweiser, Corona, Stella Artois and many others, and you’d be hard pressed to find drinkers of those beers who know the name AB InBev. It’s the same thing with SABMiller. Consumers know all the Miller beers, plus Henry Weinhard and Fosters. But SABMiller? Not a chance.

The AB InBev brand structure is not for everybody.

It should be noted, however, that this is a very inefficient way to build a brand. For one thing, it’s extremely costly. Being a house of brands means you have to invest in each product like it is its own entity. There’s no relationship between, let’s say, Budweiser and Corona. They each have their own unique brands that have to create preference by themselves.

Most companies do not have the cash to do that. If you are a medical device company, for instance, giving each of your products its own unique brand name – instead of a descriptive one – means your parent brand does little to affect market share. Without the cash of a P&G, you don’t even create preference for those products.

Yet, it’s a parent brand that presents the easier path to preference. P&G has put some effort into highlighting the parent brand but it’s being half pregnant. The P&G brand, whatever it means, doesn’t really help Tide or Febreze.

It’s important for CEOs to remember that, if you have a powerful umbrella brand, then the success of one product lifts the preference of the rest.

So, is AB InBev keeping its name a good thing? It won’t matter until it invests in the parent brand.