Scott Galloway: Growth Is the New Profitability

Scott Galloway: Growth Is the New Profitability


A loser: profitability. The most disruptive company in the largest economy, Amazon, is setting the cue for a new relationship between investors and companies. Simply put, vision and growth have replaced profitability. Amazon wasn’t profitable until 2001, seven years after it was founded, and since then its profits have been negligible. What happens when Amazon reports a big profit? Jeff Bezos calls senior management into a room and says you fucked up and greenlights a bunch of very expensive initiatives that will deliver against long-term advantage. This gestalt around capital formation has moved all the way down the ecosystem. Small companies now pursue leadership versus profits. Why? The market doesn’t seem to demand profits from quote-unquote innovators. A continued loser: Ad-supported television. There’s almost triple the amount of sports content than there was ten years ago, but fewer people are watching it. On top of that, tech giants are buying the digital rights to sporting events. Amazon recently purchased NFL streaming rights for $50 million, quintupling the bid from last year from Twitter. Facebook also signed deals in March to stream Major League Soccer matches and is in talks to buy the digital rights for Major League Baseball games. Prediction? In the next 24 months, we’re going to have one of the Big Four – Apple, Amazon, Facebook or Google – buy the rights to the Olympics, March Madness or the Super Bowl. This is one of the last bricks to fall from the wall protecting the industrial ad complex. The winner: Viewers, who will have more options to view content on their own terms and hopefully, for at least now, fewer shitty ads shoved down their throats. The losers? Those of us that wouldn’t have known unless we watched ad-supported TV that there was a treatment for opioid-induced constipation. Hi, I’m Frank, I take Movantic for OIC – opioid-induced constipation. I tried prunes, laxatives, still constipated. Had to talk to my doctor. She said how long you been holding this in? What the fuck. A winner? Reviews, which have fundamentally changed the way we shop. Most adults under 50 read online reviews before buying new products and one in four shoppers check Amazon reviews even when they’re inside a store. A third of online shoppers claim they won’t buy products that don’t have positive reviews. The average consumer rating on Amazon is 4.4 stars. We’re living in Lake Wobegon. All the women are strong, all the men are good-looking and now all the products are above average. This is the part of the episode where I usually make some snarky comment about my prostate or porn. However, many of us were having a difficult time coming up with something humorous with all the images coming out of Syria. We wanted to spend this time talking about some of the things we can all do to try and help. You can donate or volunteer at the following charities. The International Rescue Committee has rescue workers in Syria providing medical services and emergency shelter, Save the Children is addressing the emotional scars of Syrian children and Oxfam is helping settle Syrian refugees in over 90 countries. I’m going to spend some time investigating Lifeline Syria where you can sponsor a Syrian family. I will let you know what I find out. We’ll see you next week.

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