To us, 2016 looks like a whiteboard kind of year. It’s time to start spit-balling ideas. Testing the waters. Sketching something new.
White, the color of our cover for 2016, is often misconstrued as the absence of color. In fact, white reflects all the colors of the visible spectrum simultaneously. And that’s sort of what we see going on these days—a mix of everything. A run-and-trip stock market. A herd of unicorn startups, but fewer IPOs. Huge digital opportunities and terrifying vulnerabilities.
But we see 2016 as “The Year of Experimentation.” The markets, the tools, the talents are there, and now is the time to give it a shot. Whatever it is.
In the pages ahead, you’ll see plenty of examples of new ventures and adventurous forays. It used to be speed versus scale, disruptor versus legacy model. But that dichotomy is dissolving as scale can be a server upgrade away and as corporate behemoths and nimble upstarts find common cause. Through acquisition and partnerships, both are leveling up, starting the transformation the future demands.
Still, speed and scale matter only if they’re applied to great ideas. And this will be the year when lots of ideas leave the whiteboard and get to prototype and trial. Yes, many will fail, but that’s OK. If the venture capitalists and entertainment studios have taught us one thing, it’s this: It’s worth nine failures to achieve one runaway success.
The canvas is blank, primed for those who are ready to leave their mark.
Have a prolific year of learning and doing,
Trying to get a read on the U.S. economy? Let’s take a look at the tea leaves.
The stock market gave investors a roller coaster ride in 2015, dipping and rallying. The Fed dodged and weaved around committing to an interest rate hike right up to the end of the year. Gas prices were low at the pump, but the energy sector reeled from oil oversupply and dropping demand. Six years into “recovery,” flat wages combined with low employment have economists wondering if a fundamental model of macroeconomics still works in a globalized-digitized era.
Overseas, little looked good: a debt crisis in Greece, currency devaluation and stock market meddling in China, lead footed recovery in Europe and a backslide in emerging markets, including Brazil and Russia. The global downturn led to a muscular U.S. dollar, but that meant international trade limped along.
Every business story seemed to have a positive or negative interpretation. America’s biggest employer, Walmart, reported that operating expenses would outpace sales growth—and its stock tumbled. And yet, its expenses are up because Walmart is investing in digital platforms, upgrading stores and increasing wages. It was a record year for mergers and acquisitions (roughly $5 trillion worth by the end of 2015), yet as The New York Times’ Andrew Ross Sorkin noted, the biggest M&A deals tend to happen at the end of a bull market (case in point: The all-time record of M&A activity was in 2007 at $4.3 trillion).
Then there’s the bubble talk —essentially that low-interest rates have artificially inflated prices of all sorts of assets, from stocks to fine art to tech startups. (But oddly not real estate.) Activist investor Carl Icahn won’t stop shouting that the sky is falling.
Here’s what we’re saying: The tea leaves? They aren’t even in the bottom of the teacup. Who knows what’s on the economic horizon?
This uncertainty requires resilience in the year ahead— resilience being that sweet spot between total preparedness and total improvisation. Much has been written about individual resilience—how business leaders bounce back from setbacks. The same principles extend to organizations: Know what you are about, know what’s really going on and know that you have options as conditions (inevitably) shift under your feet.
What does it mean to hold a job nowadays?
It’s estimated that by 2020, more than 40% of the U.S. workforce will be freelancers or contractors. Data from research group Economic Modeling shows the share of traditional nine-to-five workers in the labor force has been dropping steadily for more than a decade.
That growth in freelancing and the related rise of the Internet-enabled “gig economy” challenge long-held ideas of what defines a career. The trend is also leading to important questions about what, if any, obligations businesses should have toward their contractors.
This came to a head in the summer of 2015 when the California Labor Commission ruled that an Uber driver was an actual employee, not a contractor. Still, that was just one person. Then several weeks later a federal judge allowed Uber drivers to move forward with a class-action lawsuit to become designated employees. (Uber has been singled out as a particularly egregious case: Of the 160,000 people who work for the company, only 4,000 are considered employees.) If the class action succeeds, business professor Arun Sundararajan argued in The Financial Times, “Start-ups that rely on a large pool of smartphone-toting casuals working irregular hours may find that their business models are no longer viable.”
Contractors may have more flexibility in how and when they work (though not always), but they are denied the benefits and protections full-time employees receive, including retirement plan contributions, health or disability insurance, sick pay and half of Social Security/Medicare taxes. They aren’t subject to minimum wage or overtime rules, either. That disparity led Los Angeles Times business columnist Michael Hiltzik to write that sharing-economy startups like Uber “have always been based on something of a sham.”
Is it time to disentangle benefits from the job contract? Venture capitalist Nick Hanauer and labor leader David Rolf argue that it is. Writing in Democracy Journal, they say this shift away from full-time work creates such economic uncertainty for those piecing together multiple gigs that it “threatens to undermine the very foundation upon which middle-class America was built.” If micro-employment is the future, they argue, we need a mandatory benefits package that is prorated (for part-time workers) and portable and that accrues benefits (retirement, vacation days) over time. “A robust set of mandatory universal benefits would put all employees and employers alike on an equal footing, while providing the economic security and certainty necessary for the middle class to thrive,” they write.
Some on-demand companies, such as Lyft and Instacart, are listening. They formed a coalition with labor groups to advocate for a new system of portable benefits for independently contracted workers.
Is it really worth two years and $120,000 to earn an MBA? Plenty of people think so. The number of applicants seeking admission to full-time, two-year MBA programs grew 57%, according to the Graduate Management Admission Council.
But author and entrepreneur Seth Godin thinks that you can probably learn everything you need faster, cheaper and better on your own. That’s why Godin started altMBA for people seeking to hone their leadership or management skills. For $3,000, the five-week course is centered on hands-on projects—13 in all—designed to help people improve as leaders, decision-makers and agents of change.
“There’s a large and growing gap between what we know and what we need to do,” Godin told ZEITGUIDE. “We’re building a powerful tool for a few people, designed to help people level up.”
Godin’s altMBA isn’t the only option. More people are looking at MBA programs overseas that are shorter, cheaper and give them international experience. Online programs like edX, Coursera and Udacity are creating nanodegrees and specialization certificates.
Are these alternatives the answer to the lost time and price tag of post-secondary education? The jury is still out. The “MOOC revolution” has so far been a damp squib. (Many classes struggle with engagement and retention rates.) But interestingly, it’s not just computer classes that attract big numbers. Five of the 10 most popular MOOC courses in 2014 were related to leadership, management and entrepreneurship. That’s a strong signal that there is a mounting desire for options when it comes to education and accreditation.
Corporate efforts to create a more equal workplace for women have been around for years, at least theoretically. But measurable change has been slow in coming—fewer than 5% of Fortune 500 CEOs and 15% of top senior executives are women— so some companies and whole countries are setting concrete goals.
Germany, for instance, implemented a law requiring that at least 30% of all corporate boards’ seats must be held by women. In other countries, CEOs and chairmen who support gender balance but oppose quotas have signed on to the 30% Club, which supports business-led efforts to achieve the same end. So far, 48 American companies have signed on.
Among the companies trying to lead in this area is McKinsey, the strategic consulting firm that has published groundbreaking research on the value of female leaders to companies. Change is still slow and difficult. Even at McKinsey, which estimates that women’s equality can add $12 trillion to global growth, 39% of new hires but only 11% of top executives are women.
The kick in the pants that’s coming, however, may not be laws, government regulations or even moral imperative. Instead, it may be demographics.
Women already outnumber men on college campuses, and by 2023, that ratio is expected to be three women for every two men. Companies seen as retrograde on workplace equality risk losing the war for talent. Maybe not today, but soon.
Corporations aren’t known, generally, for spearheading social change, but they absolutely know when it’s in their best interests. For instance, 379 corporations signed a friend-of-the-court brief sent to the Supreme Court in favor of legalizing same-sex marriage nationwide.
“Many companies are focused on being seen as forward-looking, appealing to the best and the brightest younger employees and consumers,” said Marc Solomon, author of “Winning Marriage” and ZEITGUIDE friend. “That was a major driver behind these companies signing this brief: It’s creating a competitive advantage for themselves to show they are a cool, forward-looking company and aligning their values with those of millennials.”
So what do millennials think about the gender gap? A Pew study found that 75% of millennial women and 57% of men felt more change was needed to achieve equality in the workplace.
Anne-Marie Slaughter, president of think tank New America and author of newly released “Unfinished Business,” points out that corporations’ problem retaining women is often a symptom of a bigger workplace problem that’s affecting everyone: stress, overwork and a lack of flexibility around caregiving. “The problem is with the workplace, or more precisely, with a workplace designed for the ‘Mad Men’ era, for ‘Leave It to Beaver’ families,” she wrote in a New York Times op-ed. “Our families and our responsibilities don’t look like that anymore, but our workplaces do not fit the realities of our lives.”
Speaking of stress and overwork, are they actually good for an innovative business?
That question erupted out of HR offices into the wider world after The New York Times’ in-depth story about the cutthroat environment among Amazon’s executive ranks.
It brought a lot of negative attention to Amazon. But Times columnist Joe Nocera noted that CEO Jeff Bezos’ approach of stoking internal competition and driving employees to ulcers—nice or not—has succeeded for Amazon. It, after all, has grown hugely while its first-gen web peers (Yahoo, AOL) shriveled. Cass R. Sunstein pointed out recently in the Harvard Business Review that Amazon’s take-no-prisoners debate style, however brutal, does achieve better decision-making.
But is this high-pressure approach the only way to speed up innovation and meet customers’ escalating expectations?
Google certainly doesn’t think so. The company, which was voted the “Best Company to Work For” by Fortune magazine in 2014, is also wildly successful. Its stated approach: “To create the happiest, most productive workplace in the world.”
Many Silicon Valley companies have followed the Google model, offering gyms, free food and immersive open-office design to encourage interaction between employees and departments.
Tony Schwartz, founder of The Energy Project, wrote last year that despite seismic shifts in workplace culture and environment, employees are still overworked. In fact, the U.S. is the most overworked nation in the world. In response, Schwartz suggested that a successful workplace must enable people to meet their four core needs: physical, emotional, mental and spiritual. As he put it in an NYT DealBook blog post: “Is there any question that if people feel healthier, happier, more focused and more purposeful at work, they will perform better?”
Good question. One thing is sure: It’s not The Amazon Way or the highway.
Creativity is rarely optional in today’s business world. It’s important to create a work environment that encourages mental repositioning, reinvention and grappling with very big, very complex problems.
One way is to apply the principles of “Design Thinking” to abstract ideas. This way of approaching the creation of something new emphasizes empathy with the object/system’s end user, taking risks, valuing simplicity and tolerating failure as an acceptable price for discovery and innovation. The design firm Ideo was one of the first to popularize the methodology, which it used to create revolutionary products like the first iPhone. Why not use the same methodology to develop innovative strategies?
Companies big and small are also using Slack, a new enterprise chat app that integrates with existing platforms to speed up collaboration. The idea behind Slack is that all documents and conversations are transparent, searchable and #hashtagged into channels so teams can collaborate more effectively. “The app has spread like wildfire because creative teams start spending more time building on one another’s ideas and less time digging out of their inbox,” as Mike Arauz, co-founder of organizational design firm August and ZEITGUIDE friend, told us.
What about our physical environment? ZEITGUIDE asked several of our expert friends what they see changing in offices.
Here’s what they had to say:
“We are now in an age of Form equals Feeling. Office space for every company has to provide you with the emotional opportunity to live, work, play.” — John Bricker, creative director of the design firm Gensler
“Everyone’s talking about space, but it’s not just about having the largest conference table or room for a foosball table. Space also needs to be considered in terms of height and in terms of flexibility. The rapid growth of many companies, especially in tech or creative industries, has revealed a need for furnishings that can be reconfigured, moved quickly and rescaled according to momentary needs. Versatility matters.” — Rose Apodaca and Andy Griffith, co-owners of the Los Angeles design store A+R
“A space needs to reflect and maintain a culture of organizational health. We have open spaces where our employees can interact together, learn from our Kitchen Cabinet Talk Series, but the design represents not just innovation but warmth and soul of a collaborative community.” — Jennifer Rudolph Walsh, executive vice president at WME-IMG
“It’s important to bring inspiration from the outside in. There needs to be a porous membrane so you can breathe creativity and innovation into the building.” — Ross Martin, executive vice president, marketing strategy and engagement for Viacom Media Networks.
Viacom took Martin’s idea literally in 2015. It launched an artist-in-residence program to create site-specific installations for the lobby at Viacom’s Times Square headquarters. Rebecca Louise Law’s “Flowers 2015: Outside In,” which had 16,000 flowers hanging from wire, was the first. Further, Viacom employees help build the installations, making it a fully immersive and team-building experience.
“Food is having an innovation renaissance right now,” said ZEITGUIDE friend Mike Lee, founder and CEO of food design agency Studio Industries. “The food establishment is being challenged on an unprecedented level. The more we can give food entrepreneurs and innovators access to the funding and resources they need to grow, the more diverse and strong the food industry becomes.”
That transformation is underway. Take-out delivery is being Uber-fied. Groceries arrive pre-measured for recipes. Scientists are seriously eyeing affordable lab-grown meat. Fast food is becoming more healthful. Tech companies are hiring professional chefs to prepare healthful lunches and snacks for employees. Big soda is responding to health worries about sugar. General Mills has started a venture capitalist fund for food start-ups.
Every meal is up for grabs, as we have more options to fill our plates with entrees that are tasty and aligned with our principles.
As drive-thru lines get shorter, “fast-casual” restaurants are making inroads by offering more fresh, natural and often local ingredients. Chipotle has done well with the pivot. It became the first national restaurant chain to eliminate ingredients with genetically modified organisms. It also has a “no antibiotics” policy and offers organic meat. The company’s authentic brand of “Food with Integrity” may have contributed to a 300% increase in its stock price since 2010 (which went in reverse after a late-fall E. coli outbreak).
Shake Shack, which began as a food cart in Madison Square Park offering organic hamburgers, went public this year and now has 66 locations. Pizza Hut and Taco Bell have improved ingredient quality to hold on to customers. Even Wendy’s is offering a black bean burger.
These shifts in consumer preferences have left some iconic chains scrambling to realign. Subway’s U.S. sales declined by 3%, falling faster than any other of America’s top 25 food chains. Blame the processed cold cuts and cheeses. In response, Subway announced it will remove all artificial flavors, colors and preservatives from its North American menu by 2017. Also, for the first time, McDonald’s closed more stores in the U.S. than it opened. The iconic chain will probably have to do a lot more than offer all-day breakfast.
Despite any fast-food declines, overall demand for beef is on the rise globally. By 2050, there will be a need for nearly double the livestock we have today, as well as for more grazing land and feed.
That might be a problem for Planet Earth. Beef production generates 11 times more greenhouse gases per calorie than staples like wheat and potatoes but also five times more than other livestock. Grass-fed cattle—the preference of the health-conscious, green-minded consumer—actually produce twice as much methane as grain-finished herds and take up more land for longer periods.
So can you have your burger without a side of guilt? Once the stuff of science-fiction, cultured beef is becoming a real possibility. Dutch scientist Mark Post, who served up the first $330,000 lab-grown burger in 2013, thinks prices could drop to $30 a pound in 20 to 30 years. Brooklyn-based Modern Meadow is also experimenting with culturing meat and leather.
It might sound crazy, but the demand for meat will be met one way or another. “We have got to intensify. We’ve got to produce more with less,” World Wildlife Fund food expert Jason Clay told National Geographic.
California sustainable-meat company Belcampo has another approach: Produce super-high-quality beef at luxury item prices. The price tag would lead us to eat less beef, thus reducing its carbon footprint. But when we do crave a burger, we’d know its high price means a more healthful burger that comes from cattle raised more humanely.
We have another incentive to cut back. An international panel of experts convened by the World Health Organization concluded in 2015 that eating red meat “probably” raises the risk of colon cancer, as does consuming processed meats.
Here’s the bitter truth about sugar: A 14-year study found a significant link between consuming foods with added sugars (candy, soda, desserts, cereals, fruit juices) and high risk for cardiovascular-related mortality. Of course, it should come as no surprise that added sugars are also significantly associated with an increase in both fat and overall weight.
The nastiness of sugar was further brought to our attention by the “Life Hunters” viral video that documented the “sugar detox” of a seemingly fit young man. After one month without fast food, sugar and alcohol, his cholesterol and blood pressure decreased significantly and he dropped 10 pounds.
Sugar is today’s major public health battleground. Upscale grocer Whole Foods is being sued for misleading customers by renaming sugar “evaporated cane juice” in ingredient lists. Welch’s Fruit Snacks are also facing a day in court over false advertising: The company claimed its snacks were healthful, but they often contain 40% sugar.
Cities have proposed—though few have passed—soda taxes. But all the talk about sugar is having an effect. Total U.S. carbonated soft-drink sales fell 3% last year, and sales of full-calorie soda in the United States have plummeted by more than 25% over the last two decades.
One study by Gallup discovered that nearly two-thirds of Americans say they avoid soda in their diet and that more than half avoid sugar.
This is in contrast to categories like ready-to-drink coffee, bottled water and ready-to-drink tea, which posted volume growths of 19.1%, 6.8%, and 7.4%, respectively, in the first half of 2015.
As The New York Times pointed out, beverage preferences are set in adolescence. With the soda decline steepest among young Americans, a real crisis is developing for America’s pop juggernauts. “If kids grow up without carbonated soft drinks, the likelihood that they are going to grow up and, when they are 35, start drinking [soda] is very low,” Gary A. Hemphill, managing director of research for the Beverage Marketing Corporation, told The Times.
The $93-billion global chocolate industry could soon be upended by climate change. A study of Ghana and Côte d’Ivoire found that growing areas will “decrease quite seriously” by 2050 because of rising temperatures. The concern over the long-term livelihood of the cocoa plant, along with a booming market for chocolate in India and China, has led some to predict that the cost of chocolate will rise by 30% in the next five years.
To combat these changes, efforts have been made to map the cocoa plant genome and make it public. The hope is that it will give researchers the ability to breed better and stronger cocoa plants. Initial results from research centers in Miami and the Cocoa Research Centre (which houses 2,400 types of cacao) have been promising. While efforts by Mars and CIRAD, the French Agricultural Research Centre for International Development, have led to two mapped cacao genomes already.
But there’s another major issue with chocolate. A Tulane University study estimates that 2.12 million child laborers worked in cocoa production in the 2013-14 harvest season in Ghana and Côte d’Ivoire. In Ghana the numbers of children in the fields are down slightly, but in Côte d’Ivoire (which supplies 43% of the world’s cocoa) they are up almost 50% from five years earlier.
This travesty spurred federal class-action lawsuits against the big three in chocolate—Mars, Nestle and Hershey—accusing them of false advertising and violating California’s business and consumer laws. The lawsuit suggests that the companies have done very little to eradicate child slavery from the farms from which they source cocoa, despite publicly signing on to such efforts.
Fortunately, there are certifications meant to indicate an ethical supply chain. Those include Equal Exchange, Fairtrade and Rainforest Alliance, labels to look for when the craving takes hold.
Tired of the going to the grocery store? You are not alone. Technomic, a food industry consulting firm, predicts that services like Blue Apron and Plated, which deliver to your door all the ingredients needed to cook a meal, will grow into a $3 billion to $5 billion market over the next 10 years.
The “meal kit service” field is crowded and flush with start-up cash. Blue Apron raised $135 million in mid-2015, and the company is now valued at $2 billion. For Europeans there is HelloFresh, which closed a $126-million Series E funding round with an eye on the U.S. market. The Berlin-based company claims it’s already capable of delivering twice as many meals a day as Blue Apron. Elsewhere, there’s Chefday, which comes with step-by-step videos so you can cook along with chefs. Din pre-chops the ingredients. PeachDish has a Southern cuisine focus.
The NYC-based service Maple skips the cooking and delivers restaurant-quality meals from a menu developed by big name chefs, including David Chang, who is also one of its backers. ZEITGUIDE friend Khalil Tawil’s Umi Kitchen delivers home cooked meals.
Food subscription boxes are also all the rage, enabled by fulfillment services and online ordering. Treats, for instance, sends a box of snacks from a different country monthly. Batch curates its boxes around the flavors and tastes of a particular city.
ZEITGUIDE friend Andy Mackensen, co-founder and chief marketing officer of SnackNation Healthy Snack Delivery, has an interesting idea: Large-scale businesses should subscribe to healthful food boxes as a benefit for employees. “Companies who don’t have the budget for their own cafeterias want a simple turn-key solution that makes healthy snacking convenient and that satisfies workers who are tired of vending machine junk food,” he told us.
Many box subscriptions also generate ongoing customer feedback, information that could become valuable to food producers.
“So much of the tech world is looking for a signal from all the noise,” says Rory Eakin, a founder and chief operating officer of CircleUp, which connects investors to small consumer and food businesses and offers them management support. “These services offer incredibly interesting insights because of the feedback they get from consumers about the products in the boxes.”
Will dining out no longer require doing math?
The practice of tipping has been under siege, and a few high-profile restaurants are taking up the banner, implementing a more European-style system with all-inclusive menu prices.
Danny Meyer announced in late 2015 that the 13 restaurants in his Union Square Hospitality Group will be eliminating the tips for servers. To make up the difference, Meyer is going to raise prices to more accurately reflect what he calls the true cost of fine dining. NYC vegetarian restaurant Dirt Candy implemented a no-tip policy, opting instead for an administrative fee of about 20% added to each check. The move was an effort to provide more stable wages and better distribution between the front and back of the house.
Not everyone is convinced that an end to tipping is what workers, let alone diners, really want. “As the industry of hospitality, we’ve found the practice of tipping has traditionally attracted millions of employees to our industry,” says Christin Fernandez, the spokeswoman for the National Restaurant Association. “And [it] still has strong support from American diners.” Some San Francisco restaurants gave up on no-tip policies after losing front-of-house staff.
But fine dining restaurant Bar Marco in Pittsburgh found that a no-tip policy can work out well for everyone. The restaurant did away with tips and offered all its employees a base salary of $35,000 plus bonuses based on profits, health insurance, paid vacation and 500 shares in the business. The restaurant tripled its profits in two months.
To get the scoop on the latest food trends, we called Bon Appétit executive editor Christine Muhlke for her expert input. Here are some she found particularly savory and a few of our own as well.
Avocado toast, chia pudding and flat whites. You can thank the Aussies down under for those.
Speaking of photos of food, how about all that beautiful bread porn? If you’re avoiding the carbs, at least you can stare at the masterpieces being posted online.
Want to eat like Jessica Alba, Gwyneth Paltrow, Jennifer Aniston or Freddie Prinze Jr.? You’re in luck; they have dropped cookbooks lately. Supermodel Chrissy Teigen is next. Who said stars don’t have time to cook?
Expect to see this Middle Eastern spice blend come up in many of your recipes. Egyptian dukkah uses groundnuts as the canvas for the spice blend and Palestinian dukkah uses wheat berries and legumes as its base.
ZEITGUIDE friend Adele Yellin revitalized Grand Central Market in downtown Los Angeles over the last two years, and it has become a foodie mecca with more than 40 food vendors. Anthony Bourdain hopes to create something similar in New York with his $60-million food hall on Pier 57. Like Atlanta’s 9,000-square-foot Krog Street Market, Philadelphia’s Reading Terminal Market and Seattle’s Pike Place Market act as cuisine incubators that push food culture forward.
Sure, we’ve all had our hands slapped for snapping photos of every single meal we eat and posting them to Instagram. But as Bon Appétit’s Muhlke noted, there are benefits to foodies. She notes that it’s a great way to see what favorite chefs are doing. It “keeps me curious, healthy and in the know,” she said.
Superfoods for Beauty.
How about food not for consumption but for skin care? That’s exactly what chic West Village newcomer CAP Beauty is doing as it offers organic skincare products ranging from papaya-based probiotic drops to a spicy hot chocolate superfood blend.
The total wholesale value of tea sold in the U.S. grew from less than $2 billion in 1990 to over $10 billion in 2014. Americans drink over 80 billion servings of tea a year, making the U.S. the fourth-largest tea market in the world. One type growing in popularity is Matcha, an intensely vibrant powdered green tea. “Matcha is presenting itself as the first real alternative to your morning cup of coffee/espresso,” said Graham Mitchell Fortgang of MatchaBar in NYC. “Why now? People are paying attention to what they are putting in their body—and making a conscious decision to make healthier decisions.”
What do Bill Clinton and Beyoncé have in common? Veganism. Meat- and dairy-free no longer means deprivation; rather vegan has been rebranded as a healthful dolce vita or, as The New York Times called it, “vegan glam.” Moby just opened his own “effortless” vegan restaurant, Little Pine, in Los Angeles. It “doesn’t involve Birkenstocks and mashed yeast,” said the vegan. Michael Anthony, the James Beard Award-Winning chef at Gramercy Tavern and Untitled at the Whitney, has a new cookbook, “V is for Vegetables,” intended to “suggest a more healthy and luxurious way of eating.”
Content is king? If so, each kingdom is getting smaller and smaller.
Everyone is a content creator now. Networks and movie studios, of course, but also digital distributors like Netflix, Amazon Prime and Hulu. And digital media platforms like YouTube, Vimeo, Vessel, SnapChat and even Facebook are competing with both user-generated and premium content. Add to the mix marketers at companies like Red Bull, GoPro and Mattel, which have essentially created their own studios.
The result is an unimaginably competitive landscape. No wonder legacy media companies watched their stocks get hammered in 2015.
Studios and startups alike are coalescing around a familiar argument: It’s not the size of the audience that matters, but its stickiness, its depth of engagement, its desirable demographics, its key niche, etc. Disruption. Disintermediation. Democratization. Fragmentation. Call it what you want; it’s full of as many opportunities as headaches.
As Ross Martin, ZEITGUIDE friend and executive vice president of marketing strategy and engagement at Viacom Media Networks, says, “To get the attention of your consumers, you need to earn it. They need to see, feel and own the experience they have with your content. That’s how we move from impressions to engagement, from simple views to enduring fandom.”
Are we in a television content bubble?
That’s the concern FX CEO John Landgraf raised during the 2015 Television Critics Association summer press tour. “There is simply too much television,” he said.
The number of original scripted prime-time series on cable almost doubled between 2010 and 2015. Counting broadcast, cable and streaming services, there were 352 original scripted TV series in 2014, up from just 26 in 1999. That figure doesn’t include news, sports, talk shows, documentaries, movies or reality shows.
For viewers, the proliferation of all this content has its upside. More content does not mean lower quality. In fact, the opposite seems true. “Without this glut of ‘good’ TV creating a necessary space for competition among the networks,” wrote Merrill Barr of Forbes, “we would never get to the ‘great’ TV.”
Viewers may appreciate this wider selection, but the fragmenting audience creates a number of challenges, especially for TV networks.
Multi-platform viewing means that traditional TV ratings (live-plus-three-days) are down, and thus so are ad revenues for the networks. Meanwhile, the likes of Hulu and Netflix have absorbed the catch-up/binge-watching crowd, putting more pressure on networks to churn out fresh content. And the crowded field also means it’s harder for a new show to find its audience, let alone break out as a hit.
“Great series go through full seasons with barely any notice,” Tim Goodman lamented in the Hollywood Reporter, “and are at the mercy of channels that must decide whether to bring them back for a second season in hopes that overwhelmed viewers will eventually, somehow, hear about them.”
To some executives, these are nice problems to have. ZEITGUIDE friend David Nevins, CEO of Showtime, has noted that “there may be too much good TV. But I can’t imagine anyone saying there is too much great TV.”
When the HBO GO app launched in 2010, everyone wondered how long it could be before we all had truly à la carte TV streaming over the Internet, also called over-the-top, or OTT.
Nearly six years later, that day has (mostly) come. Anyone can get HBO NOW for $15 a month and stream premium cable shows without subscribing to cable. Other networks have followed; you can get CBS All Access and Showtime Anytime. NBCUniversal unveils Seeso, a new $3.99 streaming service dedicated to comedy, in early 2016.
Networks’ forays into OTT come in response to cord cutters (people willing to figure out BitTorrent and watch TV on a laptop), cord shavers (people tired of $149 cable bills) and cord-nevers (basically all millennials). Add new competitors like Netflix (69 million users), Hulu Prime (9 million) and Amazon Prime (60 million to 80 million users, mostly in it for the free delivery), and it’s evolve or die for traditional TV channels.
Most viewers want, essentially, the same thing: Easy/cheaper access to what they watch delivered wherever they want to watch it. But so far the OTT universe is more confusing (and equally costly) for consumers. Why is the HBO series “Veep” on Amazon Prime? But only one season? Oh, the searching. The clicking. The scrolling. The buffering.
Add up the cost of multiple subscriptions plus broadband service ($67 a month for some) and it can be pricey too, perhaps even more costly than what cable costs alone. If you really wanted access to all the shows, you’d need not only multiple subscriptions but also multiple devices, Geoffrey A. Fowler of the Wall Street Journal pointed out.
At the other end of the spectrum, plenty of (mostly young) people find plenty to entertain them online so they can skip networks altogether. As media analyst MoffettNathanson noted: “The real revolution is likely to come from outside the traditional ecosystem, from the Vimeos and Vessels and even Facebooks of the world, where content is being created and distributed outside the existing ecosystem, often at a fraction of the cost of traditional linear TV.”
We’ve heard it over and over: Mobile video consumption is rising. Today, 42% of online videos are viewed on mobile devices (80% phones, 20% tablets). The average U.S. consumer spends 220 minutes per day on a mobile device, compared with 168 minutes watching TV.
The movement toward mobile is transforming how content is presented.
Mary Meeker’s comprehensive 2015 Internet Trends noted that more mobile video is viewed vertically (straight up in our hands as opposed to flipping the phone on its side) than ever before. Five years ago, 5% of video (by time) was vertical; today 29% is. Blame it on Vine, Periscope, SnapChat and other social media platforms.
Mobile content is also shorter to suit ever-decreasing attention spans.
According to research from eMarketer in 2015, 50% of videos watched on smart phones are less than three minutes long, whereas 60% of time spent on tablet video was devoted to content longer than 10 minutes.
Other research from the Interactive Advertising Bureau found similar evidence; 57% of the global mobile users surveyed said they consumed content shorter than five minutes daily or several times a day, compared to 35% who said the same for long content.
This suggests that mobile bite-sized content continues to grow in popularity and that users pick the content that fits their screens. Chopping up late-night and sketch shows into mobile-size bits is just one of the new ways channels are reaching both screen sizes with the same content.
In 1999, no African-American actors were cast in television lead roles. 2015? The TV pilot season included 73 black actors in starring or supporting roles according to Indiewire.
Those numbers reveal a trend: Many movie studios and networks are moving toward more diverse casting in an effort to reach audiences across all demographic groups. And, certainly, the critical and ratings success of shows like “Empire,” “How to Get Away with Murder” and “Orange is the New Black” have proved that diverse casts are an asset. “There’s been an incredible interest from all of the networks in diverse casts,” said Dana Walden, Fox Television Co-Chairman/CEO. “Our shows need to reflect our audiences.”
Movies like “Mad Max: Fury Road,” “Fifty Shades of Grey,” “Sicario,” “Trainwreck” and “Pitch Perfect 2” further showcased the box-office allure of films fronted by women. Thelma Adams, writing in Variety, noted that creating more films centered on women could be a huge opportunity for Hollywood.
These few films signal a great start, but behind the camera there’s still work to be done. A report released by Writers Guild of America, West in 2015 noted that the percentage of people of color on TV writing staffs actually decreased between the 2011-12 season and 2013-14 season, from a peak of 15.6% to 13.7%. The number of executive producers of color also decreased in those seasons, from 7.8% to 5.5%.
So how serious is Hollywood about creating a more inclusive talent pool? Are training programs for minority writers and directors working or actually hurting?
African-American filmmaker Ava DuVernay has an idea: Change the vocabulary. “Diversity is like ‘Ugh, I have to do diversity.’ I recognize and celebrate what it is, but that word, to me, is a disconnect,” she said. “There’s an emotional disconnect. ‘Inclusion’ feels closer; ‘belonging’ is even closer.’’
If you want to know why Hollywood is looking across the Pacific so intensely, gaze at the box office numbers for three 2015 blockbusters:
“Jurassic World” made $652 million in the U.S. and $228 million in China.
“Avengers: Age of Ultron” made $459 million in the U.S. and $240 million in China.
“Furious 7” made $352 million in the U.S. and $390 million in China.
“Within six years China will probably be the largest film market in the world.” Thanks to success in China, the worldwide box office is expected to exceed $38 billion for the first time.
On its 25,000 movie screens (the U.S. has about 40,000), China will take in 16% of global box office revenues this year. More important: The country is adding the equivalent of 10 new multiplexes every week.
At the same time, Chinese film companies are becoming big
investors in Hollywood. Lions Gate struck a film financing deal with Hunan TV worth $375 million. The government-owned entity China Film Group invested in Universal’s “Furious 7” and Sony’s “Pixels.” Chinese private-equity firm Hony Capital has invested heavily in STX Entertainment. China’s Huayi Brothers Media Corp. has also taken a stake in 18 of STX’s movie projects.
Made-in-China movies are finding huge success too.
The animated film “Monster Hunt” became the highest grossing Chinese-made movie ever, raking in $381 million in domestic box office. It is now the fifth highest-grossing film in China of all time, behind “Furious 7.”
But will it play in Peoria as well as it does in Beijing? Can China take on Hollywood—or will it be more like Bollywood? India produces twice as many films as the U.S. (often more) and has a larger domestic audience, but it lacks crossover success in other countries.
China’s film quota also limits Hollywood’s options: The government allows only 34 foreign films to be released in China each year, pushing some films to delay their releases even as big global openings are becoming the norm. The new “Star Wars” film was bumped to 2016 in China, for example.
Regardless, Phil Contrino, vice president and chief analyst for BoxOffice.com, notes that Hollywood isn’t competing with China, but that the two film industries are intertwined. “Hollywood makes global products, and for the Chinese market to reach its full potential, Hollywood films and homegrown films will have to thrive side by side. The growth of the Chinese market means that both industries will be able to reach new levels of success.”
Except for Adele, who made record sales history in 2015, music streaming was the only area of major revenue growth for record companies. In fact, streaming revenue has finally surpassed that of CD sales and is gaining on digital downloads.
That’s why the streaming wars blew up this year. Jay Z’s Tidal was the first to take a stab at toppling Spotify, adding 1 million users after six months before receding. Apple Music was up next, with what appeared to be a winning combination of downloads, streaming, radio and a social media component— 800 million iTunes users. Initial reviews were tepid at best, leading the company to admit that it had more work to do. Regardless, CEO Tim Cook announced in October 2015 that it had 15 million users already. Apple’s entry also was believed to be the reason why Pandora saw its active users drop off. Its ad-supported model is mostly falling out of favor, and its radio-only services don’t stack up against on-demand options.
And then there’s French music streaming service Deezer, which had to abandon its IPO plans because competition in streaming is so stiff and the margins are so thin. Still, it already has 6 million paying subscribers and has yet to enter the U.S. market. It also uses a partnership with BandPage to give users concert listings, artist profiles and product and event offers.
Can Spotify stay on top? It is proving surprisingly resilient in the face of multiple tough competitors. In January, it reported having 75 million users and 20 million paid subscribers, doubling its paid users in a year. And though the service endured a net loss of $197 million in 2014, revenue grew 45% to $1.3 billion. But Apple has deep pockets. And so does Google, which tweaked its awkward beta music-video service into YouTube Red, a service that includes Google Play for music and ad-free YouTube videos. (Owners of iPhones pay an extra 3 bucks.)
Mark Gillespie, ZEITGUIDE friend and CEO of Three Six Zero Group, says this competition is positive for the future of the music business. On all platforms, subscriber bases are continuing to rise, and this means more money for artists. He also sees big potential for international growth.
“Emerging markets are now opening up, which means that we’re seeing revenue flowing from places that traditionally haven’t ever paid anything back to the artists,” Gillespie said. “A world where artists can survive on recording revenue again is coming closer every day.”
Across all of media, legacy companies are taking steps to future-proof themselves, looking for a foothold in new platforms and ways to hold on to audiences. Among the moves they took in 2015:
Buy Ad Tech. Verizon dropped $4.4 billion to purchase AOL for two reasons: first, for AOL’s growing ad network and technology (available on 40% of all websites), and second for the value of pumping Verizon data on mobile users into that network. Reports suggest that Verizon-AOL will be able to track the heck out of its customers.
Redefine Ratings. In an effort to better measure audiences in the fragmented media landscape, Viacom launched Vantage, an innovative, data-driven ad product that predicts with pinpoint accuracy what content will perform the best for ad clients across their portfolios of shows and networks. Rentrak, who plans to merge with comScore, another media measurement firm, launched its own Stickiness Index, a product whose purpose is to identify the TV shows with the most dedicated audience, as opposed to the biggest audience.
Appeal to the Young. Condé Nast (GQ, Vanity Fair) bought music-tastemaker magazine Pitchfork Media (including its website and print quarterly) to give it access to millennial men. For much the same reason, NBCUniversal Comcast plans to pour $200 million into Vox Media (whose digital properties include SB Nation, The Verge, Re/code and Eater) and another $200 million into BuzzFeed . CNN launched a digital news network called GBS (Great Big Story) for “urban-located, globally curious 25- to-35-year-olds” (in other words, millennials) to compete with BuzzFeed and Vice Media. Legacy companies including Fox, Viacom and Time Warner have decided to cut back on advertising to appeal to younger viewers who are accustomed to ad-free streaming.
Make Virtual Reality a Reality. Talent agency CAA and Disney invested in the virtual reality company Jaunt. The companies believe not only that the VR revolution is coming but also that it will go beyond gaming and spawn a new kind of cinema. The New York Times gave all its Sunday subscribers a Google 3-D cardboard device to use with its new Virtual Reality App, sponsored by GE.
Share Revenue. Apple (with its News app) and Facebook (with Instant Articles) showed that news and mobile can be a match made in heaven, especially if that heaven has really fast downloads and good ad revenue sharing deals.
Get Into New Content Spaces. Film organizations have brought gaming in, and gaming companies will now produce movies. Tribeca Film Festival hosted the Tribeca Games, a live eSports tournament. Activision, right after buying King Digital, the makers of popular app game Candy Crush, for $5.9 billion, decided it would launch a movie studio.
And then there’s the book business: We thought that with Borders closing and Kindles proliferating, bookstores’ days were numbered. But in fact independent booksellers have bounced back: There are 15% to 20% more bookstores than there were five years ago. E-book sales have slowed down. And the key demographic—millennial college students—still vastly prefers print books to digital. Even today, 87% of college textbooks are in print.
Digital advertising, which disrupted traditional display and broadcast advertising, is now at a risk of being upended itself. Despite digital ads representing a quarter of all the money spent on advertising ($137 billion globally), ad-blocking, lack of good “viewability” metrics and rogue Internet “bots” are threatening to stunt its development.
To ZEITGUIDE friend Babs Rangaiah, vice president of global media innovation and ventures at Unilever, this handwringing moment is a good thing. It’s making marketers think about how to engage consumers without those annoying pop-up ads that no one is clicking on anyway.
“The issues facing advertising right now could finally drive marketers to create things that were meant for the Internet and then leverage all the benefits that it has to offer—like interactivity, sharing, data—as opposed to just force-fitting the old with the new,” Rangaiah said. “The irony is that all these issues could be a great boon to the industry in the long run.”
Ad-blocking software and browser plugins cost publishers an estimated $22 billion in revenue in 2015. Around the world, people are fed up with web ads: 200 million users have installed ad-blockers on their web browsers, and there was a 41% global increase in ad-blocking from 2014 to 2015. It was Apple, however, that delivered the gut punch: For the first time it enabled ad-blocking on iPhones—taking a big bite out of the $100-billion mobile ad market.
Ad trade groups have considered taking legal action against ad blocking on websites. Hulu has taken a black-and-white approach, simply locking out visitors who have installed ad-blocking programs. WPP Digital President David Moore has suggested that the top 100 web sites do the same.
But ad-blocking is far from the only growing pain facing digital advertising.
For instance, no one is really sure how often digital ads, mobile or otherwise, are truly being seen by real consumers. Hackers, linked to organized crime in some cases, program internet bots to rack up fake ad impressions, then either sell the fake traffic to publishers or direct the clicks to their own fake pages. As a result, advertisers lost an estimated $6.3 billion globally in “bot fraud” in 2015.
The extremely loose definition of ad viewability—the baseline for whether an ad was actually seen or not by a user—isn’t inspiring confidence either. For a video ad to be considered “viewed” online, only half of its window needs to be visible for two seconds or more. (Basically the time it takes you to scroll past it.) A non-video digital ad is worse: One second and 30% of the video window area get the checkmark for “viewed.” Google has analyzed ad viewing and determined that overall, half of ads that are loaded onto a web page are never even seen by human eyes.
All this is diminishing the glow around programmatic advertising systems that were supposed to automate the delivery of digital ads with pinpoint consumer-interest accuracy. (Other problems with programmatic advertising came to light when Procter & Gamble and Toyota ads appeared before ISIS videos on YouTube.)
Marketers are signaling their unhappiness with the state of things. In early 2015, the big consumer firms put an unprecedented $20 billion in businesses with ad agencies under review. The industry consensus is that this technological disruption has outpaced many agencies’ ability to understand and mitigate the problems. As a result, brands are looking for agencies that put data and analytics first.
So who comes out ahead in an era of ad-blocking? On mobile devices, apps remain largely immune to ad-blocking, so news companies (NYT Now or Apple’s News app) and social media (Instagram, Facebook) that provide a superior in-app environment will probably have greater appeal to marketers.
On regular websites, native ads, which are essentially camouflaged as content, are also on the rise. Native advertising can be as simple as sponsored social media posts or an HBO-sponsored How Would You Die in “Game of Thrones?” quiz on BuzzFeed. Many media companies, from The Atlantic to Slate to The New York Times, have created in-house content development teams to push native ad ideas.
The California Sunday Magazine has gone so far as to turn nearly all of its print and digital ads into stories in their own right.
According to a survey by digital-marketing company Contently, consumers who read native ads that they identified as high-quality reported a significantly higher level of trust for the sponsoring brand. It’s not all rosy, though: the survey also found that 62% of respondents think a news site loses credibility when it publishes native ads. Regardless, Forrester Research estimates that by 2020, 15% of online display ads will be native ads.
Content marketing is a big-tent term that covers everything from consulting firm white papers to sponsored documentary films. The underlying idea is the same, however: Give away something of value (as either entertainment or information) in order to deepen the level of engagement with a consumer.
The big daddy of this approach has long been Austria-based Red Bull Media House, with its magazine, TV shows, books, DVDs and documentary films promoting its active lifestyle ethos. Other content marketing efforts have grown in sophistication and ambition in just a few years.
Land Rover promoted its upscale adventure branding with a thriller novella, “The Vanishing Game” written by best-selling novelist William Boyd. Though it got mixed reviews on Amazon, it did win big at the OMMA awards in 2015. On the more literary end of the spectrum, United Airlines has started a posh travel journal with award-winning writers for its first class fliers. Airbnb has launched its own print journal called Pineapple with stories revolving around travel, community and shared spaces. Uber has its drivers leave copies of its magazine, Arriving Now, in the backseat pockets of its cars.
GE, advancing its reputation as a source for innovation, co-produced “Breakthrough,” a miniseries for NatGeo on scientific innovations co-created by Academy Award-winning partners Brian Grazer and Ron Howard. GE is also producing its own science fiction podcast and comic book series.
Dell is also a veteran of creative branded content. It promoted its new tablet with a feature-length film (shown in four parts on Hulu) called “What Lives Inside” starring Oscar winner J.K. Simmons, Colin Hanks and Catherine O’Hara. There was also a social-media component soliciting sketches of a creature, with the winners animated in the film.
Ad agencies are beginning to see an opportunity for specialization in the field. Truffle Pig, a new agency co-owned by WPP, Mail Online and Snapchat, is trying to crack the code for cross-platform content marketing. “There’s definitely a hybrid approach,” Truffle Pig president Paul Marcum told Digiday. “It’s not just social media, not just traditional publishing and not just content.”
This makes even more sense when we consider how audiences are not only fragmenting but also multi-tasking as they watch anything online. A recent study by Accenture found that 87% of consumers are on a laptop or mobile device even while watching TV.
With 300 million users sharing 60 million photos per day, Instagram has become bigger than Twitter, asserting its value for marketers. On average, a post by top brands on Instagram will attract 50% of its comments within six hours of posting and a massive 75% of comments will be posted in the first 48 hours. That’s why by 2017, eMarketer predicts, 70.7% of U.S. companies will use Instagram for marketing.
Instagram has also become the hub of self-made fashion tastemakers, whose styled selfies attract thousands (sometimes millions) of followers. Danielle Bernstein of We Wore What is able to charge $5,000 to $15,000 to don sponsored apparel in her Instagram feed. But marketers are also trying to infiltrate and influence Instagram feeds with contests, hashtag campaigns and other forms of selfie marketing, knowing that 92% of people respect brand recommendations that come from their friends.
Snapchat is leveraging the selfie game with its “lenses” feature that superimposes animated effects on photos. Advertisers can replace those floating hearts and cartoon eyeballs with branded animations. The new feature hits a sweet spot: It turns user-generated content into a seamless marketing opportunity. That sweet spot costs advertisers $450,000 a day to participate.
Despite spam, junk mail and windfall offers from Nigeria, email is still an important platform in the crowded digital landscape. Why? Because it’s still the tool individuals can filter as they please, and it follows them from desktop to mobile. Email newsletters have the highest retention rate with customers among all forms of digital marketing. Newsletters also offer reliable analytics and an avenue for revenue through sponsorships and collaborations. A survey by Quartz found that 60% of global executives count email newsletters as one of their first three sources of news each morning.
That has led to the proliferation of must-have newsletters such as Newsweek’s Today in Tabs, The Daily Digg, Next Draft, The Sunday Long Reads and, of course, our own ZEITGUIDE offerings. Major news media outlets from Bloomberg, Fast Company, The New York Times, Politico and many others are trying to grab their readers’ attention (and clicks) via their inboxes. It also has led to TheSkimm, a newsletter for millennial women, raising $6.5 million in venture capital.
“Newsletters are clicking because readers have grown tired of the endless stream of information on the Internet,” the late media expert David Carr wrote. “And having something finite and recognizable show up in your inbox can impose order on all that chaos.”
Human attention is becoming rarer and more valuable. A study from Microsoft in Canada found that people now generally lose concentration after eight seconds. A Harvard Business School study posits that advertisers are spending more money chasing less attentive viewers.
Rather than retrofit pre-digital advertising techniques, ZEITGUIDE friend and serial entrepreneur Gary Vaynerchuk says that marketers have to “reverse-engineer attention.”
So what does that look like in action? Here are three creative ways ad agencies embraced the limitations in time, form and budget.
Interception. Volvo didn’t spend $10 million on a TV ad during Super Bowl XLIX. Instead it announced a car giveaway contest on YouTube (and “Jimmy Kimmel Live”) and asked Twitter users to nominate recipients of five free XC60s with #VolvoContest. Oh, and did it during other car companies’ ad spots. Ouch.
Undermine expectation. Insurance company Geico’s five-second “Unskippable” ad spots made the message (“SAVINGS!”) so short that the ad appears to be over before the user has time to skip it, but it’s also so surreal that viewers hang around for the full 30.
Scroll with it. Facebook’s muted auto-play setting for videos in newsfeeds creates a new form: the silent movie ad. “It has to be short, punchy, silent and visual,” said Chris Pape, executive creative director at Genuine Interactive. And the image has to evoke a visceral reaction within three seconds to stop the scroll.
Consumers have more options than ever when it comes to content, but marketers shouldn’t be concerned whether myriad options equal a waning attention span. In fact, a recent “attention study” conducted by Viacom’s internal creative agency Scratch in partnership with Spotify and Yale Center for Customer Insights notes that “75% of consumers believe their ability to pay attention is improving or remaining constant.” Instead, marketers should focus on how consumers engage with content and know them well enough to provide content that resonates with who they are.
Imagine this: You try on a blue blazer at the mall and two days later, an email lets you know it’s on sale. Or as you park at the mall, an app notification on your phone says a shirt you looked at online is in stock at a mall store in your size. Need to try it on? Put a hold on it online, then go straight to the store’s dressing room. These are just a few of the many possibilities that omnichannel retailing—connecting consumers to goods on all platforms—promises.
Retailers are working on how to make our digital tools—texts, apps, mobile web sites—most effective, not only to accelerate sales but also to build and retain a close, long-lasting connection with customers.
It’s complicated. It’s expensive. But in the long run it will be worth it. The chance to connect individually with a consumer and to personalize the buying experience to his or her desires and habits? That’s nirvana for stores.
“There’s never been a more exciting time to be in retail,” said Jeff Jones, ZEITGUIDE friend and executive vice president and chief marketing officer of Target. “A new shopping era is here, with consumers expecting truly personalized retail experiences—whether they’re shopping online, in store or both via a mobile device. The on-demand experience will define the future of retail.”
The two big retail stories of 2015 were that Amazon finally made profits while Walmart surprised Wall Street with flat revenues and a prognosis that revenues could drop as much as 12% in the coming fiscal year.
E-commerce, although it’s not saving the retail industry, is definitely rising in value:
According to the U.S. Commerce Department, the U.S. retail industry grew only 1% between mid-2014 and mid-2015, but online sales increased 14%.
With Alibaba in the lead, the first half of 2015 saw e-commerce sales in China jump 30% (although analysts do worry that China’s economic slowdown could affect these sales).
McKinsey & Co. estimates that e-commerce accounts for 4% of luxury sales and is growing three times as fast as the wider luxury industry.
Amazon projected that its fourth quarter sales in 2015 would be 25% higher than 2014. And a new player in the U.S., Jet.com, financed partially by Alibaba, is joining the competition with even lower prices than Amazon.
How can retailers use e-commerce to compete, given the brutal fact that 44% of online product searches start at Amazon?
Social media, perhaps.
Social media platforms including Facebook, Twitter, Instagram, Google, YouTube, Pinterest and SnapChat are also seeing the great potential of e-commerce, as 54% of shoppers currently compare prices through social media. They also see what their friends are buying and wearing. They are testing “buy buttons.”
Social shopping is still in its early days, but streamlining the see-want-buy process—especially on mobile platforms—is in the interest of both sides. This must be great news for retailers like Target, Publix and Walmart, which are particularly adept at leveraging social media—as well as those who lose sales on mobile devices because of cart abandonment.
“It’s still a frustrating process to go all the way through to complete the sale on a mobile device, especially a smartphone,” eMarketer senior analyst Cathy Boyle confirmed. “For retailers, this is a pain point for them. This capability of being able to shop and buy is really critical for them.”
Digital wallets and mobile payment systems (like the newly public Square) are also paving the way. Ken Seiff, a former Brooks Brothers executive, sums it up this way: “Mobile shopping is going to be like Tinder, where you can just swipe and get what you want.”
We aren’t there yet, but we’re getting closer. In 2015, 37% of all online Thanksgiving sales came from smartphones, up 131% from last year’s 16% figure.
Physical retailers also are investing in what e-commerce can never touch: the physical in-store experience. They’re experimenting with marketing partnerships, technology and design to make shopping more of an outing and less of a slog.
The Digital Sales Associate. At the Macy’s store in Manhattan Beach, Calif., there’s a peek at the Internet-of-things-to-come. It’s an athletic wear showroom where all the clothes are displayed on mannequins. Tap your smart phone on the tag, pick your size and a system of chutes from an adjacent warehouse delivers your selections to a dressing room. Ask for another size or color with a tap of a touch screen. At stores in New York and San Francisco, Rebecca Minkoff added giant touchscreen mirrors. They are virtual concierges for the stores, places to order coffee, ask for a dressing room or browse lookbooks. Retailers like Neiman Marcus are piloting their own smart mirror programs.
Interactive Hangers. Embedding sensors in hangers changes everything about the simple act of lifting an item off the rack. In some stores, hangers can track what items are in dressing rooms. In others, they ensure that all the shoes that should be on display really are. A hanger system designed by teamLab in Japan launches images and videos of the product. When you pick something up, you want to know more about it, and this system feeds that subconscious desire with styling options or product details.
Real window shopping. A test of interactive store windows at Bloomingdale’s and Adidas made use of valuable street frontage, even when the stores were closed. Using customized touch-screen technology, passersby could select items and, in the case of Adidas, even look at them on life-size digital models and make the models move. It was expensive technology, but it got high-engagement results. “If somebody ‘played’ with the window, this got 90% of the street’s attention,” said the creative director who piloted the project for Adidas.
Make it a party. IPhones, it turns out, aren’t the only products that people might line up for, creating fan-driven events at stores. Disney rolled out the new toys for “Star Wars: The Force Awakens” a full 15 weeks before the movie hit theaters, and fans went nuts. “Force Friday” as it was called, had people lined up at Walmart, Target, Disney Stores and Toys R Us. Add costume and Wookie cookies and it’s a party.
DIY products. Who needs a Princess Leia action figure when you can be the action figure? At “Super Awesome Me” kiosks (spotted at Target stores), you can design a 12-inch Star Wars or Marvel action figure with your own face. (It’s then shipped to you.) In 2014, Toys R Us used 3D printers to let kids make their own toys on-site. For the grown-ups, Nordstrom is carving out a “shoe studio” where stylists will help customers design their own shoes through a partnership with Australian startup Shoes of Prey.
The endless aisle. Stores started blurring the line between in-store and online shopping with computer kiosks in stores. New handheld systems developed by eBay are empowering sale associates to search inventory and sizes available at all other stores in real time. “The idea is to save the sale,” David Geisinger, eBay’s head of retail business strategy and innovation, told Women’s Wear Daily.
Virtual fashion shows. Tommy Hilfiger recorded its f all 2015 runway show in virtual reality, and visitors to its flagship stores can have a front row look at the fashions courtesy of a Samsung Gear VR headset. Top Shop and others have also tried VR runway shows in their stores. Question: When can consumers virtually strut the catwalk?
Go Cross-Channel. With its “Holiday Odyssey” campaign, Target created a cross-channel adventure story that was featured on television, digital platforms and in its stores. It’s a smart move considering that all of today’s hot licensed toys, including Minions, Teenage Mutant Ninja Turtles, Legos, My Little Pony, Barbie and more appear in the segments and that by the end of the story, they will all congregate in the Target Store.
Pam Kaufman, ZEITGUIDE friend and president of consumer products and chief marketing officer at Nickelodeon, who oversees the branding and retail of Teenage Mutant Ninja Turtles, calls the store the “third screen,” as in-store shopping creates an environment for emotional bonding. “Stores enable an authentic experience that allows you to connect organically with products as well as with your kids,” Kaufman said. Case in point: 85% of surveyed shoppers planned to do the majority of their back-to-school shopping in stores. Why? Parents see it as an opportunity to bond with their kids.
Microsoft’s move into retail—its flagship opened on fifth avenue—is clearly a response to the huge success of Apple stores. Apple has managed to create the ultimate playground for product fanboys, earn more per square foot than any other retailer and create a destination so popular it can squeeze landlords for rent deals. Microsoft hopes that once people see and touch its surface book they’ll be filled with Apple-style product lust.
Will Microsoft stores become a staple at malls? Apple somehow—perhaps by never discounting products—has managed not to alienate other electronics retailers that sell its iPhones and laptops. Can Microsoft do the same? Sony wasn’t so lucky. It went aggressively into consumer electronics retailing too a decade ago but is now phasing out all but two stores.
The other tech giant that entered brick-and-mortar retailing in 2015 was Amazon. It opened a bookstore in Seattle. And everyone wondered: why? Is it hoping to gain traction for its publishing imprints, which rival booksellers (understandably) won’t stock? Push Kindles? Or is it a big experiment in how people shop? In a hilarious piece in The New Republic, a onetime bookseller says the Amazon book store “is physically odd. It betrays inexperience with retail. The stacks are situated too close to one another so that you have to brush past other browsers—Paco Underhill’s famed ‘butt brush’—and can’t comfortably bend down to see books on lower shelves. The first display tables are too near the doors, which discourages browsing.” He gives it 2.5 stars.
Waiting is the worst. Here we are in 2016, and we’re still looking for the Wells Fargo wagon—OK, the FedEx truck—to come rolling into view.
Delivery—along with the desire for immediate satisfaction—is the big knot that every retailer is grappling with.
Amazon and Google didn’t wait for drones to pan out to start offering same-day delivery. Amazon is offering “Prime Now” delivery in 16 metropolitan areas. Google’s in the same-day game with Google Express in the Midwest (though it may be struggling after the departure of top executives). Uber struck a deal with Shopify and is marketing itself to retailers as an on-demand delivery service. Instacart is the big player in grocery delivery within a few hours, but lots of local specialty services are nibbling at its edges. And, of course, someone is sure that robots will deliver our groceries in the near future.
Click and collect is gaining popularity, closing the gap between online purchasing and immediately having your purchase in your hot little hands. This option has been popular in France for years, but the U.S. has been slower to adopt it. Target, for instance, put pickup counters at the entrance to new stores to make pickup swift—and to keep urbanites from worrying about packages left on their stoops. Grocers like Kroger and Walmart are testing click-and-collect in some markets: They’ll do all the cart-pushing and bagging so busy customers can just pull up and load the trunk.
Same-day delivery isn’t important to everyone, though. In fact, at least when it comes to plan-ahead holiday shopping, 87% of consumers say free shipping is more important than fast delivery.
Instagram has become a go-to source for fashion inspiration. Driving this trend is a small army of selfie stylist stars and new DIY designers. As The Financial Times reported, these selfmade style experts snap photos of their outfits for Instagram each day and attract thousands (sometimes millions) of followers. Michele Schuh, Old Navy media director, called the photo-sharing app the “ideal platform to shop on” because of its photo-first platform.
But not everyone is happy. Some top fashion designers are starting to complain that the pace at which styles change—driven by social media and digital fashionistas— has become too fast. Gap, J.Crew, Abercrombie & Fitch and other American retailers have struggled to keep up and are being undercut on speed and price. Foreign fast fashion brands including H&M, Uniqlo and Zara churn out runway looks in weeks after they are debuted, giving them an edge in this world of quick style changes.
Even luxury designers are responding to the shift. “I’m calendar-crazy. I’m talking about when you buy something,” Michael Kors told Women’s Wear Daily. “Most people today want the gratification. Quite frankly, if you buy it on Friday afternoon at 4 o’clock, you want to wear it on Friday at 7. I feel that now with the idea of immediate gratification, we probably are shipping clothes too early. We’re also promoting them too early.”
Other designers, like Rick Owens, find the energy and interest around fashion stimulating, offering him lots to respond to. “The fashion calendar is just having a cultural moment like the Sunset Strip in L.A. did with rock bands in the 1970s. In retrospect, we might look back and see this period as a breeding ground for a golden age of design.”
Karl Lagerfeld thinks designers need to stop with the whining. “If you are not a good bullfighter,” he said, “don’t enter the arena.”
Are you watching the NFL on your mobile phone? Or following your fantasy baseball team on an app?
How we engage with sports—and which ones we watch—is changing faster than a Jacob deGrom pitch. As the demographics of our country shift and as we become more connected internationally, so go the sports we love.
American youths have been playing soccer in large numbers for years, and the kids who grew up playing the game are watching it as adults. The growing Latino population has also contributed to making soccer the fourth most popular sport in the U.S. to watch on TV.
Meanwhile, American pastimes are finding fans overseas. Australian Rules Football star Jarryd Hayne made his NFL debut in 2015. Demi Orimoloye is a promising young outfielder who could become the first African-born major leaguer. The NFL has expressed desire to put a team in London by 2022.
Despite a drop in viewers for other TV programming, live sports remain a ratings and advertising powerhouse.
Networks have opened their wallets wide to pay for sports broadcasting rights in recent years. Consider the National Football League. DirecTV signed a $1.5-billion-per-year deal in 2014 for exclusive rights to show out-of-market games.
(That deal is now the focus of an anti-trust lawsuit.) CBS paid $300 million just to broadcast eight Thursday night games in the 2015 season. ESPN spends $1.9 billion a year for “Monday Night Football.”
Why cut such huge checks in an era of TV fragmentation? Simply put: Millions of people are still willing to arrange their personal schedules around a game.
Viewership of Major League Baseball on Fox Sports was up more than 26% at the start of the 2015 season and up 60% for early playoff games compared to 2014. Local MLB telecasts continue to dominate primetime in several markets. The NFL now attracts an average 17.6 million viewers per game telecast, and some Sunday/holiday games top 30 million viewers. For comparison, TV’s top-rated series, “The Big Bang Theory,” draws about 15 million for a new episode.
At the same time, much of the cost of these mega-deals is passed on to customers. This leads to a question: How high can the price of cable go before viewers cut the cord? The migration of sports fans away from the cable bundle is already underway. ESPN has lost 7.2 million subscribers in the last four years, three million of them just since last year.
“At some point consumers will say ‘Enough is enough,’” said Dan Rayburn, a media analyst at Frost & Sullivan. That temptation for fans is growing. The proliferation of user-generated streaming apps like Periscope and Meerkat and illegal streaming sites make it easy to find any game online free for those willing to sacrifice some video quality.
More important, the MLB, MLS and NHL all sell streaming season packages and keep expanding their online offerings. The NBA has offered fans the option of purchasing single games as well. Even the NFL partnered with Yahoo to experiment with online streaming of games this year. Could leagues become their own media companies and sell directly to the consumer, eventually leaving networks and cable/satellite providers behind?
With sports leagues and conferences flush with TV-deal cash, how that money is shared with players (or not) has become a contentious issue.
The most heated debate is over whether student-athletes should be able to share in the riches from broadcast rights, tickets and merchandise. College players who are the stars of ratings juggernauts like the NCAA Final Four Basketball Tournament still see absolutely no money from it. At the same time, a study found that of the players with full scholarships along with room and board, nearly 85% were living below the federal poverty line.
Although there has been growing public support for paying college athletes, the NCAA continues to balk at sharing revenues. For now, the players are losing. The landmark effort by the Northwestern University football team to unionize saw a major blow when the National Labor Relations Board declared it had no jurisdiction over state-run universities (which make up the rest of the Big Ten conference) and ducked making a decision. A separate federal appeals court decision offered an equally confusing outcome: The judges agreed that the NCAA’s use of athletes’ names, images and likenesses in video games and TV broadcasts violated antitrust laws but said schools still didn’t have to pay the athletes any cash stipends.
Both the court and NLRB seemed worried that stripping “amateur status” from college athletes would create chaos in college sports.
Andrew Sharp of the late lamented site Grantland suggested letting college athletes profit from their own images through endorsements and jersey sales, a practice allowed for Olympic athletes (who have long carried the amateur label as well).
“You can argue all day about whether it’s viable for any school to put an entire roster of athletes on its payroll, but there’s plenty of other money out there,” Sharp wrote. “Denying stars a chance to capitalize on that feels, at best, counterproductive. It’s the sort of thing that’s so clearly unfair it could absolutely lead to a lawsuit that brings down everything.”
The financial schism in sports isn’t confined to campus. The NBA’s $2.6 billion-per-year TV deal means that a pro basketball team is now, on average, worth $1.1 billion. Another heated battle over player pay seems certain when the NBA players’ union renegotiates its contract with team owners in 2017.
The gender pay gap in sports is also on the radar. An analysis by Forbes found that of the 100 highest-paid athletes in the world, only two are women: tennis players Maria Sharapova and Serena Williams, in that order. The U.S. Women’s National Team won the 2015 World Cup and attracted the biggest TV audience in U.S. soccer history. Still, sponsorship revenue and take-home pay for the tournament were but a fraction of what the men’s team earned in 2014. That’s to say nothing of the $88 million FIFA paid its own staff or the millions more in alleged bribe money that top officials collected in a scandal that rocked the soccer world. If any substantive reforms come out of the scandal, then perhaps we’ll see more of this money make its way into the hands of those responsible for the sport’s success, the athletes.
The skull-knocking of two soccer stars during the Women’s World Cup semi-final drove home that it’s not just NFL players who are at risk of head trauma in sports.
Still, evidence of how pervasive brain trauma is among former football players is the primary driver of the conversation.
The risk has prompted some high schools to do away with their football programs entirely. Some pro players are choosing to retire early rather than endure more risk. Not since Theodore Roosevelt threatened to ban the sport because of its violent nature has football faced such an existential crisis.
Even as NFL ratings continue to soar, the league is making rule changes to reduce head hits. The league says those changes have decreased concussions by 36% over three years. The league is sharing its data with helmet manufacturers to see if creating position-specific helmets might further reduce head injuries.
Paradoxically, it’s youth soccer—which many parents see as the “safe” alternative to football—that sends 10,000 U.S. kids a year to emergency rooms with brain injuries. It’s not just concussions that have some doctors worried. “The young brain is largely not myelinated. Myelin is the coating of nerve fibers that connect nerve cells. Similar to coating on a telephone wire, it helps transmission but it also gives strength,” Dr. Robert Cantu, an expert on youths’ concussions, told the PBS NewsHour in 2014. “And so when you violently shake the young brain, you have a much greater chance to disrupt nerve fibers and their connections than you do an adult brain.” He is among the brain experts who recommend banning headers from soccer until players are 14.
The number of American youths playing team sports has fallen in the last five years, in part because of safety concerns and in part because of their increasing cost, a reality that is making it harder for low-income children to participate. Data show that students from low-income families are four times more likely to limit participation in sports because of costs, and 27% of U.S. public high schools will not have any sports programs by 2020.
Despite strong evidence that new stadiums do not generate the promised benefits for local economies (and in certain cases make conditions worse for local residents), municipalities continued to approve deals providing hundreds of millions of dollars to teams.
The Milwaukee City Council approved $250 million to help the NBA’s Milwaukee Bucks build a new arena. The Atlanta Braves will play their last season at Turner Field in 2016 before moving into a new stadium for which the taxpayers of Cobb County, Georgia contributed nearly half the construction cost.
The San Diego Chargers, St. Louis Rams and Oakland Raiders of the NFL are all threatening to decamp for Southern California if they don’t receive the stadium financing they are seeking from the public.
In some places, the public is fed up. The proposed Olympics bid for Boston was killed in 2015 when residents revolted against the idea of using public money to finance an event that takes in billions in TV revenue. Los Angeles has resisted paying for a sports stadium for years; the two stadium sites under consideration are in neighboring Carson and Inglewood.
With little evidence that a new ballpark or stadium brings much to the local citizens, President Barack Obama has proposed disallowing the use of tax-free government bonds to finance these stadiums, a practice that has siphoned $17 billion in public money from stadium construction in the last 30 years.
Both sites claim their contests are based on “skill,” which means users are not betting on sports. Because that, of course, would be illegal. Still, it looks a lot like regular old gambling, what with the proliferation of “sharks,” allegations of cheating by insiders and addictive play. The crackdown may be coming. In October, the FBI started investigating the business practices of the sites. Shortly after, the Nevada Gaming Control Board told both FanDuel and DraftKings to get gambling licenses or get out, joining five other states to block major oneday fantasy sports sites.
Will the fantasy betting problems be a wake-up call to clamp down on all illegal forms of sports gambling? Don’t bet on that.
Sports leagues love how fantasy play drives engagement with their sports: NBA commissioner Adam Silver has repeatedly acknowledged that betting increases interest in basketball.
Sportscasters, knowing their audience, are being more explicit in their acknowledgement of lines and bad beats. Even the politicians are warming to the idea. Gov. Chris Christie of New Jersey pushed the legalization of wagering on individual games as a means of revitalizing a fading Atlantic City.
Works of art often reflect the circumstances of their time. Now their price tags are doing the same thing.
Pablo Picasso’s “Women of Algiers”—far from the Spanish master’s best piece—sold for nearly $180 million in May 2015, breaking the price record at an art auction. As for private art sales, that record fell too in 2015, when the Rudolf Staechelin family sold Paul Gauguin’s “Nafea Faa Ipoipo (When Will You Marry Me?)” to an unknown buyer for more than $300 million.
Is hyperinflation in the art market a sign of concentrated wealth? Globalization? Both?
“There are as many shoppers abroad as there are on Park Avenue or in Beverly Hills,” Adam Gopnik pointed out in The New Yorker. “Their money is chasing the same brand-name art goods, and there are only so many Picassos.”
Neil Irwin backs this up, writing in The New York Times that the number of people who “could easily afford to pay $179 million for a Picasso has increased more than fourfold since the painting was last on the market”—in 1997.
As its prices soar, art is being viewed as an investment and part of a financial portfolio that can hedge against stock market fluctuations and be used as collateral when needed.
Bloomberg noted that the stock market drops in August 2015 caused a flurry of activity for boutique art lenders, with owners looking for liquidity from art sales or loans.
“Ten years ago no one in the art market paid close attention to these corrections in the stock market. Now clients respond immediately,” said Elizabeth von Habsburg, managing director of Winston Art Group. Winston, an independent art appraisal and advisory firm, processed $1 billion worth of appraisals for art-backed loans in 2014, double the previous year’s.
Other financial and investment firms are getting into art financing. The Carlyle Group, a private equity giant, teamed up with Banque Pictet to offer loans to collectors using their art a collateral under a new business venture called the Athena Art Finance Corporation. The venture will offer loans worth as much as 50% of the value of any collection or specific artwork. Major investment banks like Citigroup, JPMorgan, Morgan Stanley and Goldman Sachs all offer loans backed byn artwork.
The injection of additional credit into art buying could further inflate a price bubble. But Olivier Sarkozy, co-head and managing director of the Carlyle Group’s Global Financial Services Group, says it’s time for the financial side of the art business to professionalize. “The $3-trillion-plus global art market is one of the least developed and least financially sophisticated markets of substantial size in the world,” he said.
Is Shanghai the next global cultural capital?
During Shanghai Art Week, there are three art fairs and 50 gallery openings. The city also boasts unique “art malls,” which are sort of private museums and cultural event spaces infused with high-end shopping. There are 10 in Shanghai—all financially supported by the regional government and founded by one of Asia’s most influential art patrons, Adrian Cheng.
This growing scene has piqued the art world’s interest. Paris’ Centre Pompidou is considering a pop-up Pompidou in Shanghai or Beijing. Vogue has sponsored art exhibits there. Christie’s opened an outpost in Shanghai in 2014. The Shanghai West Bund Development Group is building a massive cultural zone with studios, museums and event spaces among high-rise apartments.
Chen Anda, deputy director of the development group, senses a change in focus for the Shanghai government in recent years.
“Before it was focused on developing the economy,” And a told the Financial Times. “Now it is putting more emphasis on art and culture.”
Still, there are hurdles if Shanghai—or any city in China—is to become the next great international art scene. Importing art is expensive, with a 17% sales tax on top of a 6% duty for international art purchases. China’s cooling economy could slow the art market. There is also the issue of government censorship; some pieces were removed days before the 2015 art fair because they were deemed too socially or politically sensitive.
Other cities are also popping up as new and affordable alternative art centers to New York or London.
Mexico City leads the pack in Latin America. It’s annual Material Art Fair has been gaining recognition for its focus on emerging artists. Meanwhile, such galleries as House of Gaga, Kurimanzutto and the independent space Lulu continue to attract attention from artists, collectors and patrons.
Brussels is the burgeoning destination for young artists in Europe. The country offers a stipend for artists as well as a special tax system that favors them. Perhaps that’s why the Art Brussels festival and gallery scene have flourished in recent years.
Los Angeles continues to attract creative class transplants from the East Coast who aren’t all just hoping to break into Hollywood. Not only is rent in Los Angeles more affordable than in New York for artists and dealers, its buildings offer much more square footage for ambitious gallery shows.
“Many people say that there are more creative people—visual artists, musicians, writers, filmmakers—living in Los Angeles than there are in any other city in the world, and I feel it,” says Ann Philbin, director of the Hammer Museum in Los Angeles and former New Yorker. “It’s like New York in the ’80s. There is a huge, growing community of artists here.”
According to ZEITGUIDE friend and art advisor Elana Rubinfeld, artists and galleries are also abandoning large cities altogether for mid-size cultural hubs. Seeking generous space, strong communities and mild temperatures, transplants from New York have relocated or opened offshoot spaces in Dallas (And Now Gallery), Charlotte, N.C. (SOCO Gallery) and Nashville (ZieherSmith).
Online resources and frequent travel to art fairs make it easier to stay current from anywhere. And regional museums are buying and exhibiting work by younger and experimental artists.
So, are young artists writing off New York? That’s the question percolating through the highly acclaimed “Greater New York” show at PS1. Unlike the three previous iterations of this series, the 2015 version didn’t focus solely on young, emerging local artists. (Subtext: They can’t afford to live there.) Instead the selection of 400 artworks explores the nostalgia for the 1970s and ’80s in New York and the tension “between our desire for the new and the nostalgia for that which it displaces.” As critic Ben Davis wrote at Artnet, the show “feels like its curators have added a question mark to the end of the title.”
Art and fashion have always been linked. But luxury fashion brands have stepped up as patrons of fine art. “The symbolic value that the art world brings is attractive to the fashion world,” said ZEITGUIDE friend Bettina Korek, founder of For Your Art.
The Prada Foundation opened a new arts complex in Milan to showcase its vast holdings of art from the 1950s to the present. The Louis Vuitton Foundation opened a Frank Gehry-designed arts center in Paris that cost an estimated $143 million. Ermenegildo Zegna is staging public art exhibitions at its “maison” in Milan and commissioning artwork for its stores around the globe.
The confluence of luxury fashion and fine art benefits both. The investment in the arts infrastructure is sorely needed when public funds for museums are still in short supply. The association with art collectors and patrons is a way for these luxury lines to enhance their brands and their reach.
“Fashion is closely connected to visual arts,” says Anna Zegna, president of Fondazione Zegna. “Why can’t we praise it as a form of artwork that has been inspired and [that has] identically required creativity, work, research, dedication and passion?”
Museums and galleries are deploying digital technology in new ways to keep the art experience fresh and immersive.
The de Young Museum in San Francisco utilized beacon technology and Google Glass to enhance its Keith Haring retrospective. New York’s Metropolitan Museum of Art has a small team called MediaLab that is dedicated to enhancing visitors’ experience through new technologies from video games to augmented reality. One of their efforts was an interactive display using Oculus Rift virtual reality headsets and a Jackson Pollock splatter painting called “Autumn Rhythm (Number 30).” At the American Museum of Natural History, “telepresence robots” give tours of artifacts.
West Hollywood’s De Re Gallery in early 2015 exhibited “Alternate Reality,” which was billed as the first “virtual reality” gallery show. It had one painting hanging on the wall and the rest hanging inside a virtual replica of the gallery seen only through VR goggles. In London, Guardian critic Jonathan Jones was taken with the technology at another VR art exhibit in the fall of 2015, but he suggested that the artistic messages need to live up to the new medium.
Virtual reality could also have a business-side benefit for art dealers: They can send their “galleries” to potential art collectors anywhere in the world or host multiple shows simultaneously.
“I would hate to see the brick-and-mortar physical space go away. I don’t think that’s ever going to happen,” said Steph Sebbag, owner of De Re Gallery. “This just opens it up.”
As the world becomes more populated and more urban, our cities are becoming the systems and networks that will sustain—or not—human existence on Earth. That makes architecture much more than an aesthetic issue going forward.
Making a visual statement with a structure isn’t enough today, says ZEITGUIDE friend Marc Kushner, author of “The Future of Architecture in 100 Buildings.” Instead, leading architects are looking for new forms that support much-needed functions.
Take Chicago’s Aqua Tower as a prime example. The 82-story residential project features curving balconies of changing size and shape. Visually, the exterior produces the illusion of waterfalls or clouds. But this thin concrete façade also shades windows from the summer sun and—by confusing and dissipating wind— eliminates vibration and sway caused by wind sheer. In other words, the building is both an artistic and engineering marvel. Architect Jeanne Gang is now turning her attention to designing a police station that can address tensions between residents and cops.
In New York, the proposed + POOL is designed to be a public swimming hole in the middle of the East River. But the floating structure is also a massive filtration system that cleans a half-million gallons of river water daily. The result is a cleaner urban waterway as well a place to take a dip or swim laps in the warm months. In Los Angeles, Frank Gehry has been tapped to develop a plan for the 52-mile, much-maligned Los Angeles River. But it’s not about soaring steel bridges or a café-dotted quay. Instead Gehry is working with a team of hydrologists to use the river to recapture rainwater into aquifers instead of shunting it off into the Pacific.
“‘Starchitects’ are being replaced by ‘Smartchitects,’” says ZEITGUIDE friend Charles Renfro, partner at Diller Scofidio + Renfro, which designed The High Line and L.A.’s new Broad Museum. These architects are being asked to solve design and function problems in a brand-new way. “They are,” he added, “thinking long and hard about how to make buildings that are unique to their place while still participating in a global economy that allows them to take advantage of a worldwide expertise pool and the most economic location for fabrication.”
Renfro also noted the growing interest in design that is glocal—that is design that simultaneously addresses global considerations and the local environment. “Glocal may save us from the army of iclones—icons that are the same from city to city—that have been overtaking our landscapes and souls.”
Science news is a bit like a horror movie: What gets reported out of the millions of studies and discoveries often reflects the anxieties emerging in a culture. Think natural disasters, environmental ruin, artificial intelligence gone awry and interstellar infection.
It can seem grim. But one thing that we always find uplifting is how furiously scientists are striving to solve the planet’s (and universe’s) biggest challenges.
Scientists can’t do it on their own, though. Citizens, businesses and policymakers need to be on board as well. Science shows us a world of promise; it’s up to the rest of us to keep that world intact and move in that direction.
Here’s a hypothesis that is rattling some labs: What if the scientific method—observe, hypothesize, predict, experiment—isn’t working as well as we think?
A study by the 270+ co-authors called the Open Science Collaboration reproduced 98 experiments (100 total times) that had been published in top psychology journals. Although 97% of the original studies reported statistically significant results (meaning they met a 95% confidence threshold), only 36 studies met that threshold when repeated exactly by the Open Science group.
The problem may lie in how we configure scientific thought and inquiry. The academic research system rewards people whose work gets published, and the science journals tend to publish novel, successful findings. That can subtly lead to bias in interpreting results or can even influence selection of areas of inquiry. In other words, today science values innovation much more highly than verification.
Brian Nosek, director of the Center for Open Science, is trying to build a better way forward. He’s created a transparent web-based platform for housing any study’s methods, materials and data. That way anyone can review it and try to reproduce it. Nosek also thinks this could push peer-reviewing into an earlier phase of research, so that experiments are judged by the quality of the study design as much as by the published findings.
The Center for Open Science is now collaborating on a similar project to reproduce and verify high-impact cancer-biology studies.
Climate scientists finally have heavyweight allies talking about the damage greenhouse gas emissions are causing and what to do about it.
Pope Francis was the star entrant into the climate change conversation in 2015 with his major encyclical on the environment, “Laudato Si.” He framed environmental issues in scientific and moral terms, calling out a culture of rampant consumerism and waste, the inability of economic markets to end the exploitation of the poor and the disproportionate and devastating impact of climate change on the poor.
Recent studies predict, for instance, that degradation and desertification of arable lands from climate change and unsustainable agriculture could create an estimated 50 million climate refugees in the next decade. (The Syrian refugee crisis was exacerbated by intensive drought.) Before the U.N. Conference on Climate Change in December of 2015 in Paris, poorer nations called on the largest global polluters to finance a “climate change coordination facility” to plan for refugees. Some also have become more vocal about compensation for weather-related disasters.
It’s not all bleak. Global carbon emissions remained steady in 2014, the first time in 40 years that flat-lining carbon emissions were not correlated with an economic downturn. Much of that was attributed to a drop in coal use in China, the world’s largest polluter. China’s carbon dioxide emissions, predicted by President Xi Jinping to peak in 2030, might crest sooner and start to fall. China is to roll out a carbon cap and trade program in 2017.
India also announced a renewable energy pledge: At least 40% of the country’s energy will be generated by renewable sources by 2030, though it didn’t say when its total emissions would peak.
The tech moguls are contributing too. On the eve of the U.N. Conference on Climate Change, Bill Gates and Mark Zuckerberg announced a multi-billion dollar fund that will help “transition the world to a near zero emissions energy future.”
Since 1900, some 477 vertebrate species have become extinct, an extinction rate 114 times higher than normal and the highest since the disappearance of the dinosaurs 66 million years ago. To some that’s a signal that we may be in the midst of the Earth’s sixth mass extinction. This time around, an asteroid isn’t to blame. We are.
Some of the most threatened species right now are elephants and rhinos. The demand for ivory has exploded in China because a burgeoning middle class sees it as a status symbol. China agreed to a ban on the ivory trade, but the concern remains over how stringently this ban will be enforced. Rhinos are also affected by poaching for their horns, but loss of habitat, natural disasters and disease transmitted from other animals have also contributed to their declining numbers.
Oceans and marine life may be under even greater strain. A report from the World Wildlife Fund found that fish species used as food have been reduced by half since the 1970s, with the tuna and mackerel family down 75%. Although the steepest declines occurred in the last century, it’s worrying that global fish stocks haven’t rebounded. Between 10% and 12% of the world’s population rely on fishing for their livelihood.
Not helping: the eight million metric tons of plastic waste that winds up in the oceans every year, adversely affecting both marine life and humans. Scientists have discovered that mealworms can live on a diet of Styrofoam and certain types of plastic. By studying their gut bacteria, scientists hope to find new ways of breaking down plastic into safe soil-like waste.
But it won’t be long until they can. Researchers at Oxford University predicted in 2013 that robots or computers might be able to perform 45% of all jobs in the United States within the next two decades.
Advancements in robotics and machine intelligence are starting to touch our daily lives. The Google Now feature on Android phones “looks” at your smartphone screen and offers information it “predicts” you want. If a friend sends an email suggesting that you meet at a diner, the phone might offer restaurant reviews, reservations or directions. Apple’s iOS is doing similar things, such as prompting you when to leave for an appointment based on current traffic conditions. (Apple’s been trying to hire artificial intelligence experts like mad to beef up Siri and make it work without data that compromise privacy.)
Facebook has M, a personal assistant service the company is testing, that will use a mix of human input and machine intelligence. Another cool (but potentially creepy) application: Hello Barbie, an AI-equipped version of the classic toy that gets to know the children it plays with through questions about siblings, school and friends.
Expect to see the acceleration of machine learning capabilities—which rely on high-speed connection to data in the cloud—with the arrival of 5G Internet. Last year, ZEITGUIDE discussed how this next generation of superfast wireless data service will be the foundation of the Internet of Things. Of course, there is the question of whether hype and promise of 5G is getting ahead of the actual technology and spectrum availability.
The Large Hadron Collider, the 17-mile underground particle accelerator near Geneva, might be exploding some longheld models physicists have used to explain the universe. For instance, scientists at the LHC observed subatomic particles called leptons that do not behave like other subatomic particles.
Some are already thinking beyond the LHC. Nima Arkani-Hamed, one of the world’s leading theoretical physicists, is advocating for the building of a particle accelerator four times the size of the LHC in China. The LHC cost almost $8 billion to construct and costs roughly $1 billion a year to operate. Is it worth the price tag to figure out more about dark matter, quantum field theory, gravity, dimensions? Or is this what author Ed Regis criticizes as pathological technology, huge projects driven by emotion and not by rational, real-life concerns?
Speaking of real life, NASA discovered strong evidence of liquid water on Mars in 2015. If that means there might be life on the red planet, is that more reason for us not to send spacecraft there? Some scientists worry that Earth bacteria could contaminate Mars, or any planet where we are sending probes and rovers.
More unsettling for humanity: What if we were to bring something back from another planet that could devastate our own biosphere? (Didn’t anyone read “The Andromeda Strain”?)
None of this has stopped the Mars One project, which has narrowed its list of candidates for a colony on Mars to 100. Eventually, the project plans to select 24 astronauts and launch them to Mars in 2026.
The convergence of medicine and technology is speeding up discoveries, enabling precision medical treatment and leading to previously unimagined therapeutic uses for technology. Think virtual reality exposure therapy for anxiety disorders. Or prescribing a video game to concussion patients.
Start-ups and tech giants are thinking big—like stopping the biological clock. Google’s Calico, Palo Alto Longevity Prize and human DNA decoder Craig Venter’s Human Longevity Inc. are just some of the efforts under way to figure out why we age and how to extend our bodies’ expiration dates.
Most of us, however, would be happier if we could make a medical appointment online. A Nielsen survey found that just 15% of patients could email their doctors with questions or get their test results through an Internet patient portal. Rather than impersonalize medical care, ZEITGUIDE friend Dr. Jordan Shlain thinks technology can produce better doctor-patient relationships. “People need people,” Shlain said. “Digital devices and technology can feed me information about how my patients are doing, but I look at technology as also bringing patient and practitioner closer together.”
Five years after the passage of the Affordable Care Act, the healthcare industry is merging and consolidating: 2015 had the most hospital deals since 1999, and the five major U.S. insurers may soon merge into only three.
The ACA was designed to use market forces to slow the growth in healthcare costs, so will these mergers help or hinder that? Insurance and hospital executives say mergers will create economies of scale and squeeze out duplicative costs. Not everyone is convinced. In a letter to Federal Trade Commission Chairwoman
Edith Ramirez, the American Academy of Family Physicians wrote that “mergers in the health insurance industry would have an immediate and profound negative impact on the availability and affordability of health insurance for millions of consumers.”
Meanwhile, employers continue to shift more of the expense of healthcare to their employees. Workers today pay a larger share of premiums, often for plans that have higher deductibles. Average deductibles for employer-provided health plans surged nearly 9% between 2014 and 2015. How dramatic is the shift? A decade ago, only 4% of workers got high deductible health plans through their jobs; today 24% do.
Expect more of that as the so-called “Cadillac tax” arrives in 2018. This tax on low-deductible, ultra-comprehensive health plans would be paid by insurers, but the cost would likely be passed along.
According to Marshall Votta, ZEITGUIDE friend and senior vice president of Leverage Health Solutions, individuals must rethink their dependence on the healthcare system. Rather than rely on stingy policies and massive medical conglomerates, he sees people increasingly taking preventative health and wellness into their own hands, starting with attention to diet, fitness and even mindfulness.
“Americans are increasingly aware of the relationship between the choices they make, their personal health and public health, he said. “Fundamental changes are coming to the way the government and employers pay for healthcare, with physicians and hospitals being paid for the results of patient care instead of the volume of care delivered. These changes will create pressure on people to think: If you are doing stuff that is known to harm your health, should taxpayers, or your employer or your doctor be paying for that?”
Unnecessary medical tests and procedures have been in the crosshairs for years because of the monetary waste. By some estimates, a third of the money Americans spend on healthcare—all $2.9 trillion of it—is pure waste.
Surgeon and author Atul Gawande offered an in-depth look at unnecessary treatment in a powerful article titled “Overkill” in The New Yorker. In addition to fear, he points out, we also have new technologies that tempt us to look for trouble. “The United States is a country of 300 million people who annually undergo around 15 million nuclear medicine scans, 100 million CT and MRI scans, and almost 10 billion laboratory tests,” he writes. “Often, these are fishing expeditions, and since no one is perfectly normal you tend to find a lot of fish.” He tells of a micro-thyroid cancer caught on a scan that never would have bothered the patient, let alone presented life-threatening danger. Still, the patient’s doctor removed the thyroid at the patient’s insistence. The upshot? She had a bleeding complication from the surgery and will have to take a hormone replacement pill for the rest of her life.
The public release of Medicare payment data is starting to uncover specific doctors and medical groups that burden the system with too many tests and treatments. Medical associations are also reducing their calls for preventative screening for prostate and breast cancer, saying they result in more panic than saved lives.
Patients can avoid overtreatment with vigilance. Clinicians and researchers suggest asking what specific lab tests are being ordered and why. Prescriptions, too, should be explained in terms how it will noticeably affect a patient’s health (and not just “lower cholesterol”). Finally, getting shuffled off to multiple specialists is a red flag.
Advances in genetics also appear to be reshaping medical care, offering new ways to personalize tests or treatment.
One of the exciting possibilities is a new way to gauge physical aging by looking at gene activity. That could help identify, for instance, people who would benefit from early interventions for age-related diseases like Alzheimer’s. The 4K score test adds genetic risk information about prostate cancer to the standard PSA blood test. 23andMe re-started operations after receiving FDA approval for its $199 direct-to-consumer saliva test that checks for inheritable genetic mutations.
Scientists also have been adopting a new method of manipulating and splicing DNA in the nucleus of any cell with unprecedented simplicity, speed and precision. Called CRISPR, this technology dropped the price of genetic editing from $5,000 or more to about $30.
Research using the tool has exploded, including research into using it to correct genetic mutations in humans. Human clinical trials could happen in the next two years. Not surprisingly, major scientific organizations have called for an ethical debate on the subject—especially related to modifying human embryos.
“If we’re not careful, we will soon be in a post-antibiotic era,” Thomas Frieden, director of U.S. Centers for Disease Control and Prevention, warned in late 2013. We got a grim glimpse of what that could look like in 2015, when a superbug outbreak at UCLA’s Ronald Reagan Medical Center infected 179 people and killed two.
A report by the U.K. Healthcare Infection Society concluded that 700,000 people die annually from drug-resistant infections globally, including TB. Just in this country, at least 2 million people are infected with bacteria that are resistant to antibiotics resulting in 23,000 deaths in the United States.
There’s hope, though. Twenty-five new antibiotics were cultivated in soil in labs by researchers at Northeastern University in Boston, the first new antibiotics discovered since 1987. One called teixobactin has already cleared resistant MRSA infections from lab mice. The discovery, and the new method of growing anti-microbials, could be the game-changer that keeps us from entering that post-antibiotic age.
We also learned in 2015 about other promising pharmaceutical advances: progress toward a flu vaccine that lasts a lifetime, clinical tests on the first Alzheimer’s drug in a decade and news that Truvada is 100% effective in preventing HIV if taken prophylactically. Studies into psychedelic drugs have found a range of beneficial medical uses, including treating addiction to alcohol, depression, mental illness and post-traumatic stress disorder. The first malaria vaccine, while far from perfect, is getting a tryout. The Nobel Prize in medicine was awarded to three scientists who developed anti-parasitic drugs that drastically reduced river blindness and treated malaria.
Problems in free market drug pricing came under scrutiny in 2015 when the CEO of Turing Pharmaceuticals raised the price of an anti-parasite medication called Daraprim from $13.50 to $750 after purchasing rights to the drug. After much negative press, the company lowered the price again, but the issue of pricing and access to prescriptions is also heating up in the U.S. presidential race.
The only thing Americans seem to want more than to live forever is to stay happy while doing so. Antidepressants are still America’s third-most prescribed class of drugs (after analgesics and cholesterol-lowering drugs). And people from entrepreneurs to investment bankers are turning to mindfulness meditation to reduce stress and anxiety.
Drugs and meditation are not the only happiness tools. A new book by neuroscientist Alex Korb called “The Upward Spiral” says that setting goals, making decisions, expressing gratitude and human touch can actually help us maintain our happiness. But taking it easy is important too. As Scientific American pointed out, recent “research on naps, meditation, nature walks and the habits of exceptional artists and athletes reveals how mental breaks increase productivity, replenish attention, solidify memories and encourage creativity.”
Others argue we’re just too concerned with what goes on inside our heads. A new book playfully called “F*ck Feelings” from psychiatrist Dr. Michael Bennett and his comedy-writing daughter Sarah Bennett suggests we all might be better off spending less time discussing our feelings.
While slightly tongue in cheek, the book may be onto something. The New York Post noted this year that fewer people are seeking out talk therapy. American psychoanalysts have on average only 2.75 active patients. The American Psychoanalytic Association noted that the average psychologist’s age is 66, up four years since 2003. This suggest that field of psychotherapy may be—well—shrinking.
But access to medical treatment for mental illness remains a major issue. In the United States, up to 60% of adults with mental illness had no treatment in the last year, according to the National Alliance on Mental Illness. A lengthy expose by The New York Times also highlighted the difficulty of bringing modern mental health care to developing countries in Africa. At last count, The Times reported, “Liberia had just one practicing psychiatrist. Niger had three, Togo four and Benin seven. Sierra Leone had none.”
You can’t open a magazine or turn on the TV without some writer/rocker/celebrity sharing her or his latest favorite diet/ fitness/sleep regimen. Still, we at ZEITGUIDE are not immune to the lure of such trends. Here are some that have caught our attention:
Digital detox retreat. We’ve been big proponents of finding the time to unplug. For those of us who find ourselves just too addicted to the technology, a new trend might help: digital detox retreats. The idea has already taken hold in Brooklyn, where Folk Rebellion, a lifestyle brand driven by a mission to encourage people to become more mindful of the technology they use, recently collaborated with a local B&B to offer a 24-hour repose from all technology. To keep everyone relaxed yet busy, the retreat offers a hot tub, catered meals, yoga and more.
Whole30. Move over Paleo, the “Whole30” is here to take over as the latest dieting movement. As laid out in the book “It Starts With Food” by Dallas and Melissa Hartwig, this hardcore dietary reboot requires that for 30 days straight, you consume absolutely no dairy, grains, legumes, soy, alcohol, sugar or processed food. If you mess up, even in the slightest, you’re supposed to go all the way back to Day One. Better stock up on eggs and meat.
Sensory deprivation. Popularized in the 1970s, darkened pools of body-temperature salt water create the sensation that you are floating. Studies have shown that it can provide significant relief for chronic stress-related ailments. Enthusiasts claim to experience much more, including out-of-body experiences on a par with psychedelic drug use. The New England Patriots even installed one in their training facility.
The late start. We already know that lack of sleep can cause depression and increased risks of substance abuse and obesity. But a research into circadian rhythms has revealed that most adults aren’t suited to a 9-to-5 schedule until they are at least 55. Like college students, most of us would rather sleep in and get to work or class at 10 a.m.
Nobel nutrition. Doctors usually scoff at supplements, but a new anti-aging supplement called BASIS has five Nobel laureates on its corporate advisory board. The gel cap contains compounds that help with such metabolic processes as energy production, sleep cycles and cognition. ZEITGUIDE friend and California internist Adam Kawalek says he’s interested in it “because they claim to have scientific validation these supplements work.”
Dharma yoga. Last year ZEITGUIDE founder Brad Grossman was super into Bikram yoga. Now he’s swapping sweat for more serenity. Dharma Yoga is his favorite style yet because of its mix of traditional postures (to build strength and cardio) with mindful meditation and an emphasis on compassion. As Yogi Sri Dharma Mittra, who founded the practice in 1975, said: “The mind has to be free of disturbances to effectively concentrate.”
Nature gazing. You know that good feeling you get when you’re out of the city and surrounded by nature? Kate Lee of the University of Melbourne has measured that gaze-at-nature effect and found it makes us more productive. “In this research, I’ve been drawing on attention restoration theory, which suggests that natural environments have benefits for people,” Lee told the Harvard Business Review. “The theory is that because nature is effortlessly fascinating, it captures your attention without your having to consciously focus on it. It doesn’t draw on your attention control, which you use for all these daily tasks that require you to focus. So gazing at natural environments provides you with an opportunity to replenish your stores of attention control. That’s really important, because they’re a limited resource that we’re constantly tapping.” Time to buy some potted plants for the office.
In our digital age, every inch of the planet seems to have been “checked in” to, Instagrammed, shared, liked and Yelped. This is changing not only how we plan trips but also what we want out of the experience of travel.
Take hotels. When far-flung destinations actually felt distant, a name-brand hotel represented a known quantity, a safe harbor for the night. But when you can call Uber in Mumbai and Google map your way through Tashkent, that sense of clean-sheet security isn’t so valuable. And Airbnb and like-minded sites offer an alternative. Travelers don’t want the usual sights and sounds anymore but something unique that can become part of their own social media travelogues.
The travel industry had lagged behind the global economic recovery, but now it is taking off. In 2015, the travel industry outpaced global growth. It accounts for approximately $7 trillion of the global economy and nearly 10% of all jobs in the world, according to the World Travel & Tourism Council.
House-swapping, vacation rentals—these existed after the Internet and before Airbnb. And yet Airbnb did two things: First, it took the market out of the resort communities and into urban centers. Second, it lowered the price of entry for hosts. You don’t have to buy a condo in the Rockies anymore; you can just go away for two weeks. Airbnb isn’t alone in this space—the options run from couchsurfing.com to luxuryrentals.com—but it marked a tipping point.
It has certainly shaken up the hospitality sector. “For the first time since online bookings of travel became mainstream, hotels are being rewired and rethought from top to bottom,” Rafat Ali, CEO and founder of Skift, wrote in its global travel intelligence report in 2015.
First order of business: Stop the nickel-and-diming for Internet access. Gold stars for Hyatt, Starwood and Marriott. (Also, travelers hate “resort fees.”) Second, update the tech from the CD player-alarm clock era. At the new Baccarat Hotel in New York, for instance, a Google Nexus smart phone controls everything from the TV to the blinds to retrieving your car from the valet. Third, do the opposite of Airbnb: Create a place where travelers are, in fact, surrounded by their peers.
The major hotel chains are rolling out new “lifestyle” hotels around these principles, or as The New York Times summed up, creating “affordable, modern spaces that feel luxurious without being fussy or sterile.” Among core concepts: bigger and better public space, ideally with a lively bar; local touches, like neighborhood running routes or city-specific foods; a shared work lounge; and grab-and-go food (or knock-and-drop room service).
Vib, a new prototype being sold to franchisees by Best Western, is representative. The design blueprint shows automated check-in, virtual concierge, smart-phone “keys,” Bluetooth connectivity and WiFi-enabled smart TVs. The rooms are compact and modern, and the public spaces are larger and have cafés, game pods and “Zen zones.” The first Vib-branded hotels are opening in Miami, Chicago and Seoul.
Generator Hostels are doing something similar for the millennial or flashpacker crowd. The “design-led” hostels adjoin trendy bars with craft beers, mini movie theaters and even spas. The idea is that you may be getting a small, shared room, but your communal experience will be one of a kind.
Road trip! Let Google drive. Or Tesla.
Google tested its autonomous cars on public roads this year to prove them safe—perhaps too safe. The Tesla S got lots of attention for its auto-driving feature roll-out, but in truth, lots of carmakers already have similar semi-autonomous features developed, they just aren’t fully activated. Why not? Because the laws are too murky and because related businesses, including like car insurance, need to catch up.
Still, driverless cars seem too good to pass up. By 2022, Morgan Stanley estimates, this overhaul of the auto industry could save $488 billion in avoided accidents and add $507 billion in “productivity gains” per year. Of course it’s not just Google and carmakers in the hunt for the breakout automatic auto but also Uber and likely Apple. So how close are we to a car that can whisk us from L.A. to Vegas while we nap in the backseat? A co-author of a RAND report that is too long to read says “15 to 30 years.”
Meanwhile, electric cars are becoming less an oddity in urban and even suburban areas as their performance and capacity improve. As gas prices stay low, though, e-cars have to up their sex appeal. Porsche unveiled its slick Mission E concept car, which can get an 80% charge in as little as 15 minutes. Porsche is just one of the high-end carmakers chasing Tesla in the electric car market. Audi, Aston Martin and Bentley are also making electric cars that seem less dorky and more Daniel Craig.
Other unlikely transformations include taking the Elon Musk brainchild Hyperloop into reality. Or at least a Hyperloop prototype in California. For those of you who wrote off this idea as wacko back when Musk pitched it in 2013, here’s a reminder: high speed (750+ mph) transit in giant vacuum tubes, propelled by magnets. Will it work? Who knows—and it certainly has doubters on everything from its financial projections to whether it’ll be a “barf ride.” Still, two test tracks will soon be under construction (one at SpaceX and one in rural Kings County, Calif.), and there are hundreds of entries in a contest to design the travel pods. CEO Dirk Ahlborn says the whole system will also run on renewable energy.
Finally, airlines are trying to get a bit of renewable energy into their systems—in this case, biofuels. United Airlines tested a flight fueled completely from farm waste and oils derived from animal fats. It also invested $30 million in Fulcrum BioEnergy, a company that created a technology to turn household trash into fuel that can be blended directly with traditional jet fuels. Fulcrum claims its technology can cut an airline’s carbon emissions by 80% compared with traditional jet fuel. Alaska, Southwest and British Airways all have biofuel deals in the works—proactive steps before the EPA sets new carbon emissions rules for airplanes.
The currency devaluation and other economic gyrations in China have not slowed the outward flow of tourists. The number of Chinese citizens traveling abroad is projected to grow from 116 million in 2014 to about 242 million in 2024. That’s the equivalent of “almost all of Indonesia hitting the beach in a single year, or Germany, Iran and Egypt combined,” HSBC economist Frederic Neumann noted.
Last year, 2.2 million Chinese tourists visited the United States. By 2021, that number will grow to 7.3 million, contributing nearly $85 billion a year to the U.S. economy and supporting 440,000 jobs. Tourist arrivals have also spiked in Japan and South Korea.
The sheer number of Chinese tourists is already reshaping the hospitality industry. Hoping to attract luxury-leaning Chinese tourists who were coming to Europe but skipping the U.K., Britain relaxed its two-year visa rules. The Marquis in New York City changed coffee carafes so guests can make tea instead. Because the number eight is considered lucky in China, the Chicago Marriott Oak Brook puts coins in small mesh bags with attached welcoming notes for its Chinese guests.
This new influx of travelers hasn’t come without incident, however, with some Chinese tourists being perceived as unruly and disrespectful of the cultural norms of the nations they’re visiting. Some particularly brusque behaviors have perturbed fellow travelers and authorities alike. Anxious about how Chinese tourists are being perceived, the Chinese government has drawn up new rules for tourists. China Central Television ran an ad showing “good pandas vs. bad pandas” in a bid to cast the issue in a humorous light.
Still, for those travelers whose behavior is especially egregious, the Chinese government has created a blacklist that not only restricts their travel but also could affect their credit ratings.
Have you started planning your Cuba getaway? Since the U.S. reestablished relations with the country in 2013, restrictions preventing Americans from traveling to Cuba have been eased. JetBlue has started offering direct flights from U.S. cities to Havana. American credit cards and debit cards should start working on the island by 2016. This is handy, because Airbnb revealed that Cuban hosts have listed more than 2,000 vacation rentals.
So now that Cuba’s forbidden-fruit appeal is fading, what’s the next spot for off-the-beaten path travelers? Iran, says ZEITGUIDE friend and travel journalist Charles Runnette. He rounded up the spots attracting attention:
Iran is the new Cuba. With the nuclear agreement in place, the one amazing spot that’s off limits to American travelers might finally get back on the route map. (Note: the U.S. and Canadian governments still strongly advise against travel to Iran.) What’s in Iran that you need to see? Other than bustling Tehran, there are Persepolis, Esfahan and many more ancient Persian sites that are crazy beautiful. Oh, and there are great ski resorts north of Tehran. And did we mention the best caviar in the world, for cheap?
Chengdu! Chinese second cities are enjoying a boom in tourism. Chengdu, the picturesque capital of Sichuan Province, is famous for its majestic Mount Qingcheng, the natural habitat of the giant pandas, UNESCO World Heritage and Natural Cultural site of Dujiangyan and the incredible Sichuan cuisine.
While you’re at the Olympics… Trancoso. Where? Well, it’s in the Brazilian state of Bahia, so think pristine beaches, a rainforest, free-spirited locals, artisans, no cars, 400+-year-old town square, Capoeira and a Bahian menu packed with mom/ grandma recipes. Anderson Cooper built a house there. Wilbert Das, the former creative director of Diesel Jeans, has also created a hotel there called UXUA with 11 casas and a restaurant.
Pittsburgh. Really. This city has shaken off its rusting steel mill reputation and embraced its high-tech side. Both The New York Times and Travel and Leisure took notice, profiling the city’s burgeoning arts scene (it is the birthplace of Andy Warhol, after all), unique restaurants and affordable housing. The arrival of a new ACE Hotel (in a former YMCA) cements its reputation as a hip destination.
Islands magazine editor-in-chief Jennifer Caeser also has offered us insights on a few other emerging locales:
The Mergui Archipelago in Myanmar. Until a few years ago, these 800 islands spread across 14,000 square miles of the Andaman Sea were nearly impossible to get to. Now, however, smartly appointed state-of-the-art yachts are sailing here from ports in Phuket, Thailand, allowing sophisticated travelers to tour these fascinating jungled, mountainous sand- and coral-ringed atolls without sacrificing the comforts and conveniences of the modern world. Top Asia travel expert Remote Lands, for instance, offers five-day diving cruises around many of the islands. The country itself also has a bright future after years of military rule.
Scotland’s North Coast 500. The launch of Scotland’s North Coast 500 road has opened the country’s Highlands and northernmost seaside, letting intrepid travelers explore its rugged landscapes by car, motorcycle, bike or even on foot. The scenic 500-mile route combines nature and adventure, food and drink, history and culture, taking you past towering mountain ranges, centuries-old palaces and sandy beaches. An added boon: Recently added flights on Icelandair to the city of Aberdeen make it easier than ever to get to nearby Inverness, the capital of the Highlands and the perfect place to start the trip, which can be completed in as little as three days by car.
Finally, from Travel + Leisure editor Nathan Lump, we hear that the trend in cruises is toward more adventurous destinations. Luxury cruise lines in particular are finding that their customers are bored with the Caribbean. Hot (or, mostly cool) for 2016: the Northwest Passage, Antarctica and the (aforementioned) Andaman Sea.
This hand-picked list of films, television, theater, music, fashion and books is our way of acknowledging the ones that best reflect the forces shaping our times. Our decisions are not based on popularity, quality or even taste but on what we believe to best represent where we are in today’s culture.
“America is Hard to See” (closed) at the new Whitney Museum
The first exhibition in the new Renzo Piano-designed building told the story of how artists responded to America’s changing culture from the beginning of the 20th century until today. The result was a memorable survey of American identity and how it continues to transform.
Anna Wintour’s Take on New York Fashion Week – “Opposites Attract”
The fashion icon’s ideas and reactions had been expressed primarily through her editor’s column in Vogue and her silentbut-deadly glances from behind dark Chanel glasses at fashion shows. Now Wintour speaks to us directly (well, still behind sunglasses) in a short public video: She explains the spring 2016 looks as a case of “Opposites Attract,” with one set of looks sweet and romantic and the other “street” and provocative.
Produced and directed by Emmy winner Cary Fukunaga (who directed season one of “True Detective”) and starring Idris Elba, this Netflix film tells the harrowing story of a child soldier in an unnamed African country. The film earned accolades from critics and ire from theater chains, which took issue with Netflix’s choice to make the film available for streaming the same date it was scheduled for theatrical release. Netflix isn’t the first to try a day-and-date strategy, but earlier attempts (like “Snowpiercer”) were video-on-demand, not part of a subscription. Netflix’s huge subscriber base will be a real test of how same-day multi-platform releases could work out.
“Between the World And Me” by Ta-Nehisi Coates
This book is, first, an attempt to make the experience of being black in America very real by detailing his personal experience. It also, inherently, is about class, family, how we obtain knowledge and the experience of being an outsider. “Between the World and Me” won the 2015 National Book Award for nonfiction.
Based on Michael Lewis’ bestseller, the film reminds us of the collapse of the subprime-mortgage market beginning in 2007, but also makes us wonder how far we’ve actually come.
Todd Haynes’ most recent film explores repressed desires, in this case the love between two women (played by Cate Blanchett and Rooney Mara) in the 1950s. Are our tears a response to the tragic prevention of a true romance or recognition of how far we’ve come in 65 years, now that marriage is legal for lesbians and gay men in over 20 countries?
“Can’t Feel My Face” by The Weeknd
This hit song from Canadian artist The Weeknd talks about addiction. Some believe he’s addicted to his girlfriend. Some speculate it may be about his love for drugs. For some, it could reflect addiction to our smartphones.
“City on Fire” by Garth Risk Hallberg
Vogue describes this novel as “the kind of exuberant, Zeitgeist-y New York novel, like ‘The Bonfire of the Vanities,’ ‘The Emperor’s Children’ or ‘The Goldfinch,’ that you’ll either love, hate, or pretend to have read.” The murder mystery involving two New York writers in 1970 is told through ’zines, diary entries and newspaper articles. Oh, and it’s 900-plus pages. This novel is also an example of 1970s New York nostalgia, a topic of much conversation in 2015.
Comic books have been a hit on the big screen, so why not on TV? (OK, Netflix.) But these first two series of “The Defenders” Marvel compilation aren’t your run-of-the-mill superhero stories. They are dark and gritty, and they explore the human side of the hero who is sometimes vulnerable, confused and alienated. Perhaps they reflect the true entrepreneurial experience. A hero on the cover of Fast Company. A Unicorn in the business press. But being a founder of a successful startup ain’t always so easy.
No other star dominated 2015 like Drizzy. In February he dropped the mixtape “If You’re Reading This It’s Too Late,” and every single song on the 17-track release appeared on the Billboard’s Hot R&B/Hip-Hop chart. Then later that year, he released the biggest single (and most endearingly fun video) in the world with “Hotline Bling,” which spawned countless covers and parodies at warp speed.
Executive produced by ZEITGUIDE friend Brian Grazer, Empire reminded us that hip-hop is a powerful force in our culture and set the tone for what would be a landmark year for the genre. The show also reflected issues of race and gender equality that were at the forefront in 2015.
Father John Misty—“I Love You, Honeybear”
“When can we talk with the face, instead of using all these strange devices?” sings J. Tillman—the mastermind behind Father John Misty—on the track “True Affection.” It’s this kind of commentary on the absurd life of millennials (he’s one too) who can’t put down their iPhones but simultaneously want “real” experiences that Tillman perfectly explores on his excellent folk-rock record “I Love You, Honeybear.”
Regardless of what you think of Fetty Wap, he is the embodiment of “trap music,” a style of Southern rap that often revolves around tales of drug dealing. After being named in XXL Magazine’s 2015 Freshman Class, his three hits, “Trap Queen,” “679” and “My Way,” all made waves on the Billboard Hot 100 list and earned him fans like Taylor Swift and random white suburban kids (of course).
John Freeman, longtime editor of Brit-lit-mag Granta, set out on his own to produce a new, “more American” literary journal simply called Freeman’s. Produced twice a year, Freeman’s has already attracted a number of literary heavyweights, though he’s also weaving in the work of his handpicked new writers. He’s setting a new bar for how a print literary magazine can stay relevant in the 21st century.
Owen just got a new gig writing code and programming for GE, but as he quickly finds out, neither his parents nor his friends really know what that means. GE’s an “industrial company,” right? Not a Silicon Valley startup. The ads are a clever rebranding of a company that should also attract digital talent. Kudos to ZEITGUIDE friend and GE chief marketing officer Linda Boff and her team for showing the world that to succeed today, every company is—or has to become—a digital company.
Grimes (born Claire Boucher) became every millennial’s alt-indie darling in 2012 with the lo-fi electro-pop singles “Genesis” and “Oblivion.” Now she’s flipped the script with a full-blown pop album. Some may call it a blatant cross-over attempt, but a closer listen will reveal that Grimes’ new album offers everything you want from a pop record (catchy, dancy) while simultaneously challenging gender tropes often inherent in pop music.
While reading a biography of Alexander Hamilton, Lin-Manuel Miranda was struck by how the founding father used writing to escape his impoverished background—like so many contemporary rappers. From this seed, Miranda created a rap musical starring actors of color that asks whether America is truly a land of opportunity. It’s a question made all the more critical by concerns over the U.S. economy and growing race issues leading into the 2016 presidential election.
A lot has been said about the neuroscience underlying “Inside Out,” with some believing it to be an unfaithful portrayal of how the mind works and others thinking it’s right on the money. Either way, the movie was yet another undeniable success from Pixar, setting a box office opening record for an original story (as in not a sequel or derivative work). What’s clear is that our interest in how our minds work is never-ending.
Kendrick Lamar—“To Pimp a Butterfly”
The third LP from the 27-year-old rapper received widespread critical acclaim for its expansive sound and socially charged lyrics around what it’s like to be black in America. Rolling Stone critic Greg Tate described the album as “a masterpiece of fiery outrage, deep jazz and ruthless self-critique.” More important, it gave Lamar his first No. 1 on the Billboard 200 with 324,000 units sold in the first week. The new record also broke a single-day streaming record on Spotify upon release, with 9.6 million listens.
“M Train” by Patti Smith
Before digital technology was the basis for recording all our ideas, we depended on good old-fashioned memory. In her latest book, a combination meditation and memoir, Patti Smith chronicles both tragic and inspiring experiences with poetic words and Polaroid pictures (the original Instagram).
The post-apocalyptic setting feels more applicable today than it did in the 1979 original “Mad Max,” with issues of climate change, energy consumption, income inequality and migration all touched on in the film.
“Mad Men” Series Finale
The last scenes of the series feature ad man Don Draper hugging a stranger at a retreat and unplugging with hippies before cutting to the 1971 Coca-Cola “Hilltop” commercial. Point? The world needs a little more empathy. Even ad agencies. The episode also features Joan starting her own ad agency; anything Mad Men can do, Mad Women can do better.
The man bun seemed inescapable in 2015, another example of gender fluidity in pop culture. Celebrities rocked it, others mocked it. Most just wondered why. Especially since a poll revealed that 63% of American women either dislike or straight-up hate the man bun.
The film, based on Andy Weir’s 2011 novel of the same name, stars Matt Damon as an astronaut calculating how to survive after being stranded on Mars. It came in the midst of a year when life on the big, red planet began to seem a lot more probable, given NASA’s discovery of signs of liquid water and the release of a list of candidates for a potential privately funded mission to Mars.
On the heels of “The Mindy Project,” “Fresh Off the Boat” and “Dr. Ken,” this new Netflix series starring Aziz Ansari further illuminates what it’s like to be a child of Asian immigrant parents. The Washington Post reported that many children of immigrants found it affirming. “It was finally being able to see the bedrock narrative of your life told with nuance, not stereotypes,” the paper said. “With characters, not caricatures.”
Miley Cyrus’ brand of gender-bending, feminist-forward glam made the 2015 MTV VMAs the most tweeted about nonsports TV programming since 2011.
This Netflix docudrama tells the story of Pablo Escobar’s rise as drug lord amid Colombia’s backdrop of murder, kidnapping and rampant government corruption. The series provides a lens for considering the cartel problems that plague Latin America today and the role of the United States, its war on drugs and immigration policies in exacerbating the violence.
Director Lenny Abrahamson’s critically acclaimed adaptation of Emma Donoghue’s novel seems poised to earn several Oscar nominations, including best actress for star Brie Larson. She plays a young woman held as a sex slave for years in a garden shed who creates a world for the son she bears in captivity. The story explores innocence and imagination in the face of horrific circumstances.
Sesame Street introduced its first character with autism as part of an initiative to reduce discrimination and bullying of autistic kids. The character, Julia, was designed after years of consulting with researchers with the goal of reducing misconceptions about autism, one of them being that it’s an issue that affects only boys. Sesame Workshop was also in the news after announcing a new partnership with HBO intended to alleviate the budgetary constraints of public television, while helping HBO compete with Netflix Kids.
The retelling of how the Boston Globe broke the story of how the Catholic Church covered up sex abuse by its priests offers an interesting look back at the low points of the church, just as it is riding a wave of interest after the installation of Pope Francis. The movie showcases the power of investigative journalism and should remind us all why it’s vital to have newspaper that can speak truth to power.
This musical revival by Deaf West Theatre incorporates a new element in this cautionary tale about sexually oppressive culture: The lack of education for deaf children in the late 19th century further isolates the teens in this retelling. The production is a reminder of how art stays relevant through new contexts; this restaging is based on a 2006 musical itself based on a German play from 1891.
“The Story of the Lost Child” by Elena Ferrante
This is the last installment of the Neapolitan novels spawning the popular hashtag #FerranteFever. Revolving around the lives of two perceptive and intelligent best friends, the tetralogy explores the complexities of female friendships in the stifling, male-dominated world of their poor neighborhood in Naples. The series hits that rare sweet spot that appeals to both high literary minds and the airport lit sect.
Tabor Robak—“Fake Shrimp”
Robak’s work takes the oversaturated colors and kitschy aesthetics of our digital world, blows them up and puts them in an art gallery. Think Candy Crush meets the Whitney. Robak isn’t just appropriating the splashy tech-pop design, he’s joyfully reveling in it. The result is both high- and low-brow and smart about the imagery that is shaping our culture.
Bryan Cranston plays Dalton Trumbo, the screenwriter who won two Academy Awards under pseudonyms after being blacklisted at the peak of the red scare in the 1950s. It offers lessons for our own time about the danger of witch hunts and fear-mongering in an era of insecurity.
“Winning Marriage” by Marc Solomon
It was a landmark year in the fight for marriage equality, with the U.S. Supreme Court legalizing same-sex marriage nationwide. This book by Marc Solomon, a veteran leader in the movement, gives a stunning first-hand account of the ceaseless work that went into this effort.
The retrospective at MoMA this year reminded us that the 82-year-old, vilified as the woman who broke up the Beatles, originally made her name as a groundbreaking feminist artist at the forefront of the dematerialization of American art (the move away from objects to ideas).
A huge THANK YOU to my amazing team that brings our find, filter and focus process to life for our clients and in this ZEITGUIDE.
Throughout the year, while our customers are strategizing ways to reinvent the future, our team constantly scours, distills and contextualizes thousands of pieces of content and conversations with industry experts.
Thank you to my brother and partner, Scott Grossman.
Saxon Baird for his tremendous work in researching and writing for this edition. Matt Elmquist for his research and creative instincts. Ralph Robinson for his research, writing and editing contributions. Sean Jaques for managing all of our tech needs. And my assistant, Catherine Walsh, for helping to keep it all together.
Thank you to Robin Rauzi for what is now her fifth year of editing the ZEITGUIDE.
Also Kathy Gosnell for her copy-editing, Ash Carter for designing the original logo and Philip Johnson for creating the ZEITGUIDE cover design.
I also want to single out Kristofer Porter, for the third year in a row, for his art direction, design and illustrations.
A great thanks as well to all of our friends and industry experts who gave us exclusive insights to include in this year’s ZEITGUIDE.
And of course, thank you to our tremendous audience and their passion for constantly learning.
Here’s to another adventurous, inspiring and prolific year in 2016!
Creator, Founder & CEO, ZEITGUIDE
Note: All sources used to create ZEITGUIDE 2016 are linked to on our web and tablet versions.
ZEITGUIDE is a think-and-do tank of curious learners, creative thinkers and content producers.
Tapping a wide variety of primary sources and subject-matter experts, we design custom content and programs for organizations that must stay competitive, inspired and future-proof in the face of rapid cultural change.
We also offer a personal ZEITGUIDE membership, which includes this annual cultural compendium, as well as a subscription to our weekly bulletins distilling specific need-to-know subjects.
ZEITGUIDE was founded in 2009 by Brad Grossman.
For more information on our enterprise custom packages or individual memberships, please contact us at firstname.lastname@example.org or (212) 334-3893.
ZEITGUIDE’s mission is to guide leaders through our constantly changing culture so that they’re best equipped for the future.