19 September 2015


So much interesting news today, but I'll limit this missive to two topics driven by Apple that have been discussed here, more or less, in the past.

First, the advert world is falling!!! Now, I'm more than willing to admit that I'm mostly a Luddite with respect to smartphones: I only use it as a telephone, rather than an entertainment/distraction device. I've better ways to burn neurons in a worthless way.
Just two days after Apple enabled ad-blocking apps through its new mobile operating system, iOS 9, users are embracing the new technology after long complaining that the ads track them, slow down web browsers and are just plain annoying. In less than 48 hours, several ad-blocking apps with names like Peace, Purify and Crystal soared to the top of Apple's App Store chart.

So, of course, the advert pushers scream "bloody murder!!"
"This will be hard on small publishers," said David Jacobs, chief executive of 29th Street Publishing, which helps publishers create apps. "There are definitely some small publishers out there that make 50 percent to 75 percent of their revenue from ads, and they have margins of about 10 percent."

Such assertions are, of course, baloney. InnterTubes adverts are no different from newspaper or TeeVee adverts: a shotgun of content at a, somewhat, captive herd of prey. It's, obviously, harder to avoid adverts in the latter two venues. Hmm, may be there's a business decision to be made here. The advert pushers ignore the gorilla sitting on the coffee table: people who block ads are the sort who're infinitely not inclined to click, ever. In other words, the advert pushers are scamming their business clients with "impressions" numbers, as if such numbers actually measured anything material. Such numbers are no more material than the number of folks who read the NYT are to advert buyers there.

So, I found the PageFair report. What was amusing was the nature of the comments. In the Red Corner, advert pushers claiming that ad blocking is stealing from them, while in the Blue Corner are ad blockers who say
Secondly, this is just a BS number. It's like the RIAA claiming that every single song shared is a loss in sale. The math was bogus then, it's bogus now. I never, ever, ever, click on click-bait ads. Furthermore, someone leaching off me to sell my browsing behavior without my permission is morally bankrupt. The model needs to die.
[BT Richards]

This sounds to my like the world upside down. I'm responsible for these companies missing money for something I didn't ask for? Don't get me wrong, there is nothing wrong with ads, but when someone is canvassing rubbish at my door I also slam the door in his face. So why should I accept this behavior in my browser, which has become my virtual door in the online world.

The comment stream goes on and on. The Blue Corner gets it: adverts are only valuable to those that *want* to be pestered, for everybody else not so much. The Mad Men have been getting away with the "impressions" fiction forever. It's just a scam, only on the innterTubes the scam is just more obvious. Boo hoo. If the advert pushers were serious about the problem, they can implement the Nuclear Option, which is to ban users who don't *actually buy* in some specified period. Obviously, such period would have to be measured from first visit to a pushing site. So, if I visit the ABC site which adverts the SPQR widgets, if I don't buy an SPQR widget within, say, a year, I'm blacklisted from ABC. That would establish that ABC really does provide measurable value to SPQR. Over time, the number of visits to ABC will likely drop by 99.8%, but the value of those visits to advert pushers is demonstrably real.

Will advert buyers and the SPQRs of the world admit that this is the only way to price adverts rationally? Not in the lifetime of Dr. Who (all of them).

Which brings us to the second topic: the sky is falling on the iPhone, and perhaps all of Apple's insistence to sell only to the 20%.
APPLE is offering a new way for consumers to purchase iPhones, and while the company is calling the new system a "financing" plan, it is essentially a lease. The idea is to get people to constantly trade in their one- or two-year-old phones for the newest models. And Apple is employing a tactic similar to one that luxury carmakers use to get more people driving Mercedes-Benzes, BMWs, Audis and Lexuses that they could otherwise not afford to buy: creating a monthly payment that is appealingly low.

Just as the house builders, then the car companies, came to understand that the sticker price is irrelevant to buying, so too now Apple. Got to get that monthly vig down below the pain threshold.
But, of course, these relatively small charges not only accumulate, they never stop, adding one more perpetual charge to consumers' monthly bills. Why not simply buy something as utilitarian as a smartphone, especially since new iterations offer only incremental changes for the average user?

(Aside: there is now the ultra low mileage lease. Cute. One might wonder how Apple will replicate that nuance?
The deal offered gives you only 10,000 miles a year, which is lower than the 12,000 miles that most leases allow - which is still far lower than the national average of 15,000 miles. Right of the bat, I am thinking, "Gee, you could really put your wiener in the wringer with this one!"

So, logically, the Next Step for Apple (get it?) is go ARM (not the chip) on the customers: cheap "lease" payment for the first six months, say, then a nice bump after that. "You're an upwardly mobile Yuppie, working in finance software? Well, then get the Edition. In a couple of years you'll be making more than enough to afford the upsized monthly. Just sign here."

I love it when the more money than brains crowd get clocked.
The Apple plan also seems more expensive than getting an iPhone through a cellular carrier, which will generally charge a lower down payment and build the rest of the phone's cost into the monthly payment. Now, someone on the Apple plan could essentially be paying twice -- first for the phone, and then for the portion of the phone's cost that is embedded in a monthly bill.

Apple's silly gross margin comes from somewhere. I'll leave it to gentle reader to connect the dots.

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