The Peloton in the Room

Peloton share price graph

See that cliff-dive there yesterday, that drop from $86 to $56? That’s what happened when investors learned that Peloton Interactive Inc. has now sold just about all the exercise bikes it’s really going to sell.

Capitalism despises this outcome. Making a high-quality good then calling it a day? No bueno, say the money-masters.

Similarly, lowering prices/democratizing the product is no answer — Adam Smith notwithstanding. Here’s CNN Business:

Peloton’s move to slash the price its lower-end bike by 20% to $1,495 in August was also a disappointment. “While the price drop led to conversion rates that exceeded our forecast, overall traffic has not met our initial expectations,” admitted Woodworth.

Analysts at Stifel Financial (SF) have slightly soured on Peloton’s future, writing in a note Friday that the firm expects it will take “several quarters to determine a more normalized pace of growth, or more skeptically, whether or not the revised outlook is an indication that the core product may be closer to maturity in existing markets than previously thought.”

CNN Business, 5 Nov 2021
elephant photo

Our prevailing socio-economic order still rests on finding and lavishly promoting ways of avoiding sufficiency, product longevity, and price-cutting. In the year 2021.

This is something to think about.

Shame Has No Place in Marketing

vitaminwate The Coca-Cola Corporation peddles its “Vitamin Water” brand of sugar-water as a vehicle for harvesting dollars from the long-standing (and largely business-implanted) public over-estimation of what vitamins are and what they do for human health and performance. A decent society would ban this pointless, cynical landfill fodder, and fine Coca-Cola for planning and promulgating it.

Something milder than that has happened in Britain, according to Advertising Age. There, the Advertising Standards Authority (an unthinkable institutional possibility here in the USA, of course) has told Coke it can’t run its normal ads for Vitamin Water, due to their blatant, exploitative falsity (which, of course, is the same thing as the brand’s very purpose and plan).

The news there, though, is more about the shameless, laughable lies Coke presented in its losing attempt at self-defense. As reported by Ad Age:

One poster was headlined “More muscles than brussels.” The complaints challenged the implication that the drink’s health benefits made it equivalent to eating brussels sprouts — a popular U.K. winter vegetable. Coca-Cola claimed that the phrase was instead a reference to former action-movie star Jean Claude Van Damme, who is commonly labeled the “Muscles from Brussels,” referring to his origins in the Belgian city.

Another ad claimed, “Keep perky when you’re feeling murky.” It jokingly advised consumers that if you drink Glaceau Vitaminwater you won’t have to waste your sick days on real illness, and can use them instead “to just, erm, not go in.” Coca-Cola insisted that the “perky” claim was about mood rather than health, and that it did not imply that the drink could prevent illness.

The ASA also received complaints that the ads promoted the range of drinks as healthy, when in fact they contain high levels of sugar. Coca-Cola’s defense was that the products are clearly labeled, and that 7.5 grams of sugar in 100 milliliters is not a “high sugar” content. However, the ASA upheld the complaints because the sugar contained in one Glaceau Vitaminwater represents 26% of an adult’s recommended daily sugar allowance.

It would make an excellent project to study the course of other corporate defenses to ASA charges. These speak volumes about the depth of dishonesty and contempt at the very heart of big business marketing.

“Behavioral Guarantees”

eyes According to Advertising Age for August 26, 2009, we’ve entered the age in which media conglomerates are selling air time to corporate advertisers via “behavioral guarantees.”

In the words of marketing research firm TRA, it’s:

Finally true accountability for TV! TRA, a media and marketing research company, has America’s largest second by second national live and time shifted TV database of 1.5 million households and the largest ever single-source database of 370,000 households that matches TV ad viewing to actual purchases of the product being advertised.

Basically, what TRA does is track what individual households watch on TV and what they then buy in stores, with an eye on the households’ exposure to specific ads. TRA then reports its findings to the broadcasters, who promise the corporate sponsors specific sales results from the ads they pay to air. If the promised buying behavior does not materialize, the ad-placing corporation gets a “make-good,” usually more advertising time for free.

And as always, this new market-totalitarian capacity is but the beginning:

‘This is where the future needs to be,’ said Donna Speciale, [media-time broker] MediaVest’s chief investment officer. ‘Our ultimate goal is to figure out how to better reach consumers and get our inventory much more targeted, not just buy the typical demographic breakout. That’s where all the testing in these different areas is heading, to get much more granular research.’

Write This One Down

Headline, page one, The New York Times, August 21, 2009:

World’s Central Bankers Voice Optimism About Recovery

It’s all over, this Great Depression III, they say. The stock market is somewhat happy and there’s an unfreezing of the short-term securitization markets, they say. You know, those two things are clearly the engines of economic well-being.

Jesus Palomino! This system is toast.

Write this down and remember it a year from now…

Quote of the Day

This, from the wonderful and quixotic-in-the-good-way Joe Bageant, strikes me as deeply true, and deeply related to big business marketing, among other things:

Our faculty of ordinary encounter has been systematically broken down. In its place we now have our unique social hallucination. Never do we encounter anything directly, yet we get the illusion of encounter. This includes encounter with each other. Anyone who lives in meatspace with his or her fellow Americans could not deny 57 million of them health. In this society no one is any longer capable of recognizing anyone else. Instead, we see others as the screamers at the town hall meetings, or as communists who want to give free healthcare to illegals and establish death panels. Or as Christian fundamentalists, or as liberals or conservatives. Or as celebrities or as nobodies.

The “New” GM: Now Selling a Product You Can’t Buy

230volt The level of desperation in the automobile-industrial complex is now so extreme, they are touting products that are not real. Can you buy a Chevy Volt? No. Will you ever be able to? Perhaps. Will these hype vehicles ever be affordable, reliable, and practical? Doubtful. Are they an intelligent use of the Earth’s remaining non-renewable resources? No way.

None of this will enter into public discussion, of course. This is market totalitarianism, and cars are mandatory. No questions asked or allowed.