Dana Blankenhorn

Sell ESPN

For all you read about how great Walt Disney CEO Bob Iger may be, the stock has gone nowhere in 5 years. It was at $101/share at the start of May 1998. It’s $102 now.

Iger got thrown into the culture wars by Florida Republicans, and while many are applauding his strategy, he wants to get out soon and needs a big win.

Selling ESPN will be a big win.

What stock analysts will tell you is that cable is dying, and ESPN is more dependent on it than anyone. It now collects $9/month from everyone’s basic cable bill whether they watch its channels or not. That’s a big reason many are canceling cable.

But there are two bigger problems looming over the company.

The first is the cost of broadcasting rights. That’s rising fast, and ESPN is losing rights auctions. It now dominates only hockey and college football. It has one-fourth of the NFL, one-half of the NBA, one-third of baseball. It has lost cricket and soccer, two huge global games. Its ESPN+ streaming service is now the home of leftovers and depends on (often crappy) local broadcasters for its feeds.

This is going to get worse because of the second problem.

The Other Urban War

A lot of people want to say American cities are a war zone. They’re not. The whole country is.

But there is a form of warfare happening in our cities. It’s a development war, a transport war.

It’s happening for two reasons.

First, cars don’t scale. Each car takes up space, whether moving or parked.

Second, demographics and economics are creating urban density. A research university, and the businesses that spin off from it, cluster together. The people who work there don’t always make a lot of money.

The Missing Middle of the American EV Market

GM’s decision to axe the Chevy Bolt has me pissed.

It’s further evidence, as if any were needed, that the incumbent U.S. car companies are run by idiots and deserve to go under.

This comes just months after the Administration put forward its regulations under the Inflation Reduction Act.  They want cars assembled in the U.S., with U.S.-made batteries. They also want mid-market vehicles. That means sedans and coupes priced under $30,000.

Guess what Detroit isn’t going to produce?

We have too many electric Cadillacs in the U.S. market. Every damned start-up that followed the success of Tesla has an ultra-expensive car. Rivian, Lucid, Fisker. None will be able to get under the Administration’s price limits.

Cable News (1980-2023)

Broadcasting is dead.

Radio is dead. TV is dead.

Networks no longer invest in these channels at all. Click around some time when you have a chance.

What most people didn’t know, until today, is that cable is also dead.

Most of what you see on major (and minor) cable networks is the same dreck you see on broadcast, reality shows and game shows that cost very, very little to produce. Scripted shows are out. The surprise is that re-runs of this crap can get a rating. Networks don’t even have to produce much new.

What everyone wants is streaming. They want to justify that $10/month (then more) of your money, paid exclusively to them, the programmers. That’s where all their money goes. It’s going to Peacock, it’s going to Paramount Plus, it’s going to MAX. They need to be the “big three” networks because they aren’t. They’re fighting for 5^th, behind Google’s YouTube, Amazon Prime, Apple TV and Netflix.

Even Disney must cut corners to stay in the game. They have total domination over sports, and they’re cutting people at ESPN, which has its own problems I’ll explain later.

In that kind of world, where do you think Fox News, CNN, and MSNBC fit in?

They don’t.

China White

When the history of our time is written, 20-30 years from now, it will be clear how China beat the U.S. in the race for the electric car market.

It was China’s industrial policy that done it.

China used policies best described by Joe Studwell in his book “How Asia Works.” It’s what Japan, South Korea, and Taiwan did. Government sets the strategy and tells business what it wants. It creates incentives allowing business to ignore short-term losses and do it. Then it pulls those incentives once the mission is accomplished, consolidating the market in the strongest hands.

Chinese policymakers also knew, from the beginning, that lithium would be to electric cars what the operating system was to PCs, the point of control for everything above. Lithium has become the world’s China White. 

There is only one big winner in the electric car sweepstakes. China’s CATL dominates the battery space and is almost entirely home grown. Founder Robin Zeng is now richer than Alibaba’s Jack Ma, thanks to assuring ample supplies of lithium from his home country, but also Indonesia and the Congo. 

The Lesson of Buzzfeed

I have been out of Northwestern’s Medill School of Journalism for 45 years now, and the chief lesson I was taught there should still apply.

It came in my magazine business course. It was the only one I aced.

The lesson was simple. Know your reader.

Journalism is about organizing and advocating a place, an industry, or a lifestyle. You need to know who your target market is, organize that market, and represent its interests. That’s why newspaper publishers would go to chamber of commerce meetings. It’s why industry magazines organized trade shows. It’s why a publication’s mailing list was its key asset. Its why publishers exist, to sell, and why they stand above even editors on the masthead.

A Minor Announcement

Over the years my blog, and now my Substack, has covered everything from sports to history, from technology to urban planning.

Now, as I enter the last lap of my career, it’s time to focus.

From here forward, my main subject will be the business of technology. Other topics will intrude, they always do in my mind, but I have spent my entire life fascinated by the intersection of these subjects. I’ve learned a lot about them. And that’s what I want to share.

The first point I will make is, don’t get carried away by the AI hype. It’s important, but it’s not a destination. AI isn’t the Web, or the Cloud. It’s software, which can take huge inputs and deliver what appear to be rational outputs. Its key outputs won’t be music, or art, or stories like this one. It will be insights drawn from networks of sensors, on millions of devices, measuring systems as large as cities and hospitals. AI is a productivity tool, like a SaaS database, and its evolution is built on that base.

Beating Jim Crow

What Republicans in the South are trying to do is to reimpose the political and social order that went by the name of Jim Crow.

Between the 1877 withdrawal of federal troops, and the 1964 Civil Rights Act, the South had a social order based on racism and the misogynistic tenets of the Southern Baptist Church. This required strict separation of the races, and the sexes. Blacks were either exiled to the North or condemned to lives of brutality. It wasn’t slavery. In many ways it was worse.

What sustained Jim Crow was a leaky economic boycott by the North. Atlanta tried to resist it, with economic exhibitions, with education, then with social pressure. (To learn more about the struggle, read anything by or about W.E.B. Dubois (1867-1963).)

The “white” history of this period, from Henry Grady’s New South Speech to the story of Coca-Cola, is much less heroic.  What businesses mainly did was treat the South as a colony. Tobacco and cotton drew a price, but most of the value went elsewhere. What modernity came in, starting in the early 20^th century, was a century-old order of textile manufacture, drawn from New England by cheap labor. The South remained backward.

The status quo was protected by white race riots, by lynching, and by laws like Georgia’s “county unit system,” which prevented liberals from ever winning statewide by requiring candidates to win a majority of its 159 counties. This was defended by poor white farmers, the “wool hat boys”  whose muscle, and guns, maintained segregation.

The North built railway networks, utility systems, then scaled high-margin manufacturing. The South didn’t. That is, until the advent of air conditioning which, combined with the Civil Rights movement, blew the whole thing up.

World War III May Be Unavoidable

There are days when I am glad to be 68 and running out of time here on Earth.

This is one of those days.

A third World War would doom all human life. The only sure way to prevent it is to give up all liberty, to retreat from Taiwan and give up Ukraine, to wait for fascism to roll over us and for every country to have its own dictator. Even that’s not so sure, because the first thing a secure dictator does is go after the neighboring dictator.

That’s the world we’re facing, and it seems there’s nothing that can stop it. Taiwan has been surrounded. Ukraine is unable to get out of its own lines and is being systematically destroyed. 

The war has also come home. Fascists are on the march throughout the American south. In Texas, in Mississippi, in Tennessee, in North Carolina, and in Florida, white nationalists are pushing to see who can push the frontiers of autocracy furthest.  I would like to believe they’re overreaching, that they can be pushed back. But that reduces the national unity we need to face the external threats.

The AI Silly Season

We’re currently in the “silly season” of hype over “Generative AI,” machine learning programs whose output can be text, code, pictures, audio, or video.

There’s a lot of experimentation and there are a ton of bad takes.

Here’s how it’s going to go.

There are two things to know.

First, any software requires training before it becomes useful. Right now programs like ChatGPT are creating garbage. Interesting garbage, but garbage. As people learn how to get value from these tools, however, there will be huge jumps in productivity. The timing and size will differ from industry to industry, and from organization to organization. But it will happen. People will be able to do more, high-quality work in less time. This won’t reduce the need for people. It will give people more things to do.