Formerly the Vice President of Business Development for AccuWeather, facilitating partnerships in Europe and Latin America, Michael brings decades of experience working in television and international markets.

He also previously spent nearly two decades at Axel Springer Group, leading US business and helping it grow into the leading European media company within the US media and agency community. During his time there, he enabled Axel Springer Group to become a world-class digital publisher with a significantly expanded footprint in the Americas.

In this Q&A, Michael shares insights on the evolution of television, the impact of new technologies, and what he most enjoys outside of work.

Q: How did you originally get connected to Vivaldi?

A: I met Erich Joachimsthaler a few years ago through a mutual friend. We have both been active in two organizations with “German executives living in the US.”

Q: Your business background includes time working with AccuWeather, SevenOne Media in Germany and Viacom/MTV in Latin America — how have you seen the television space evolve over the years?

A: Over the last few years there has been a strategic focus of big broadcasters to digitize TV building advanced TV products. Furthermore, there is major consolidation in the TV market to become more competitive versus the big players like Google, Meta, etc.

There are challenges in the TV spaces in terms of digital transformation:

1. TV usage shift/decline: There is an accelerated shift to OTT (over-the-top television) and VOD (video on demand).
2. Fragmented inventory: Various OTT platforms; tech challenges (like ad serving) and no holistic measurement.
3. Market and company structure: Transformation of silo structures internal/external; major change process.
4. Increasing competition: Netflix, Amazon and Disney enter AVOD (advertising-based video on demand) business; Google’s TV attack growing CTV reach.

Digitizing TV will reposition the TV space to secure and lever existing TV revenues and build advertising products to participate in a growing digital market.

While Linear TV is declining over the next five years, Advanced TV (Programmatic TV, Total Video and Addressable TV) will all grow steadily. This will secure and lever ad revenues for broadcasters in the future.

I do see the evolution from linear to digital/addressable TV. Streaming and personalized video formats are on the rise and related business models will drive the future for publishers and all players involved.

Q: How has location/region played a role in the work that you’ve done, knowing you’ve concentrated on different geographic areas? 

A: I have lived and worked in Europe, the US, LATAM, and Asia. In previous years, it was very important to be present locally. I learned a lot about customs and business practices which was very valuable. I traveled very regularly to all the markets I covered to stay in touch personally.

I feel that location/region does not play as big of a role today. You can perfectly do your job from anywhere remotely and it is more accepted, especially after covid. If need be, you can always travel and meet clients or colleagues in person.

Q: What are some current trends or challenges that you’re paying special attention to in the media and entertainment space?

A: The future is based on three building blocks: content, data, and tech. The combination of those three will drive the next years (e.g. Apple, Netflix …)

Also, cryptocurrency. There will be a massive runway ahead as the number of consumers trading crypto will double in the next 12 months. Crypto is expected to power ecommerce, video gaming, data, and NFTs. It’s going to become a mainstream payment method. Even on the ad side. It will be totally integrated. But it’s not clear what it will look like yet.

Q: How are you seeing the pandemic and work-from-home impacting what’s in store for the future of media?

A: Increased consumer time spent with technology and media has been sustained coming out of the pandemic. As the entire growth curve has shifted upwards, more consumer time will lead to new opportunities to grow and build businesses.

We will see more and more IoT (internet of things) such as AR/VR to go mainstream — in businesses as well as in households. Gamification will create access to Web3. In terms of ecommerce, in 2025, 10% to 15% of all automobiles will be sold online. Other categories like jewelry and furniture are expected to grow.

Q: What do you see the future of entertainment looking like? What opportunity areas do you believe are on the horizon?

A: With Web3 kicking in we will see more and more interaction of consumers in the metaverse. Real life is morphing into digital and the other way round. Brands needs to ask for support and knowledge to identify possibilities.

Video games are the next technology leading to the metaverse, and search, social, shopping, events, and banking will increasingly take place inside of video games.

Reach super users (26% of all users) account for the majority of time and money spent on ecommerce, VR, music, and video games, and super-serving them will be critical to drive growth.

Q: Looking over your career roles, including time in digital publishing with Axel Springer Group and in Business Development at Blockbuster Video, what would you say is the most valuable lesson you’ve learned?

A: The most important lesson is to stay in touch and nurture the relationships with business partners, clients and old colleagues. Never burn bridges with old employers, as the world is very small and even more connected — you always meet twice.

Q: What is a book or podcast you’d recommend, and why?

A: Bharat Anand’s “The Content Trap.” It talks about how to do well and not become a victim of digital transformation. It describes great case studies (Tencent, Shibsted and NYTimes) that are relevant lessons with learnings to avoid mistakes in digital transformation. A key takeaway is how content enables customers’ connectivity in a connected world.

For a podcast: Amobee Out Loud “Live from the Croisette,” talking about this year’s Cannes Lions.

Q: What’s a passion of yours outside of work?

A: I’m very passionate about sports — tennis, swimming, race biking, and skiing. I used to do track and field competitively. I’m also interested in political science and arts and enjoy history. Traveling is a big passion of mine. It opens your mind and puts things in a different perspective.

I left home at age 10 and went to boarding school in Switzerland. People were from all different countries, different religions, different food preferences. You really learn to understand people. It really helped in my career when I’ve traveled for business or private life. I’m able to have connections with people in different areas of the world. That’s the beauty of travel.

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For instance, Jamie Dimon, the CEO of JP Morgan Chase has taken to calling them “crypto-tokens,” rather than currency, and has stated that he views bitcoin as “worthless.” At the Berkshire Hathaway annual shareholders meeting in April, Warren Buffett said of bitcoin: “Whether it goes up or down in the next year, or five or 10 years, I don’t know. But the one thing I’m pretty sure of is that it doesn’t produce anything.” He explained further, “Assets, to have value, have to deliver something to somebody.”

But this perspective is not shared by all. Many large traditional financial players are beginning to test the waters to find the best way to participate in this new technology. They’re exploring how to leverage existing products and form partnerships to solidify their strategy around crypto.

In the first fiscal quarter of 2022, customers made $2.5 billion in payments using crypto-linked cards from Visa — a 150% increase from Visa’s crypto activity during all of 2021. Visa also expanded their offerings to include a crypto advisory practice for clients seeking additional services.

Rising consumer interest led Mastercard to partner with leading digital currency companies across Asia-Pacific to launch the region’s first crypto-linked payment card, and last year, Mastercard partnered with Bakkt, Gemini, and Mintable, among others, to let banks and merchants into its network of crypto-related services.

Finally, American Express has jumped in and recently announced the Abra Crypto Card, the first crypto rewards credit card on the American Express network that will transact in U.S. dollars and offer crypto back on any purchase category and amount.

Although this new evolution has been a roller coaster ride so far, the expansion of the cryptocurrency ecosystem is only going to continue, shaped by increasing consumer demand. In response, financial services companies and emerging fintechs have shifted from proceeding with caution to evolving their offerings in order to play more of a leading role in crypto.

PayPal is a great example, as they’ve embarked on a multi-year journey to constantly evolve their strategy to deliver on the desired customer experience. They’ve charted a course to allow customers to trade crypto, make purchases from over 29 million merchants, and share purchases socially with Venmo.

In short, like PayPal, the businesses and brands who can anticipate what consumers will want and identify how the technology, partnerships, and benefits of crypto can deliver on those expectations, will win.

As with any new technology adoption, it will require continuous listening to the consumer, a focused customer-first mindset, and the ability to test and learn so that consumers can help shape your crypto strategy. It isn’t a question of should you participate in the cryptocurrency space, but rather, what should be your role in the crypto ecosystem.

Larry Lucas is a Senior Partner at Vivaldi who specializes in business and brand transformation and driving change within organizations.  

Ben Kuenzle is a Partner at Vivaldi who specializes in growth and innovation, brand/marketing strategy, and product marketing. 

The post Financial Services: Why the consumer should lead your crypto strategy appeared first on Vivaldi.

Q: Who is the metaverse working for currently?

A: The metaverse right now works for scammers, criminals, bandits – people who are a bit unsavory, and perhaps for speculators or traders who have a lot of money to speculate or celebrities who buy a Bored Ape as a status symbol.

These new technologies have created a Wild West. The evolving question is — how does this create value to the consumer or society at large? How can a company or a brand then do good business? People who are not trying to speculate or scam somebody.

Q: Right now a lot of consumer brands are experimenting with the metaverse — what are the options for services or B2B companies? Is there a way they can engage at the present? 

A: One simple way that companies currently participate is to say if we do it here [in the real world], we should also be over there [in the metaverse]. Sort of like the old version of Second Life.

JP Morgan, for example, has Chase branch offices, and they recreated a branch office in the metaverse using the platform Decentraland. Or Gucci says if you like Gucci loafers in the real world and want to express yourself in the metaverse, maybe your avatar will have the same Gucci loafer, and you’ll pay a lot of money for it. Or there are advertising companies that say, hey, in the real world we do advertising on 5^th Avenue because a lot of consumers walk by, so we’ll create a giant billboard in the metaverse.

That’s where a lot of conversation is right now, which is not really constructive. People have started to build some things, but not a lot of activity is taking place — yet.

B2B companies will benefit from what’s called the industrial metaverse, which has recently been extensively discussed at the World Economic Forum at Davos.

Q: What do you think the inflection point will have to be, or what will have to happen technologically, to get us from where we are now, with marketing and entertainment leading the charge, to a future where businesses are better utilizing this new world?

A: There are a number of things that have to happen. The metaverse and Web 3.0 — it’s extremely slow. If you remember dial-up internet and AOL, where the screen would slowly fill up, that’s actually what’s happening with Web 3.0.

Another very important thing is the regulatory and legal framework. There are big problems right now – if you buy an NFT that is tied to a digital asset, the legal framework is not clear if you bought the copyright of something or merely the fair use. Legally with fair use, you can use it, but you don’t own it. The original owner still owns it. There’s no law right now.

In order to make the metaverse work for the rest of us, the speed and regulatory framework have to evolve fairly rapidly.

Q: There’s an idea that the decentralization that comes with Web 3.0 will give individuals more control over their personal data — what is the benefit of that for large companies or business services?

A: In Web 3, I have my identity on the blockchain, it’s encrypted and everything I put there stays there. I could have a digital wallet, an SSI [self-sovereign identity], and if I own that data, it’s spread across many computers: decentralized. It’s valuable because my data can be shared and aggregated and everybody can learn from the data. It isn’t just owned by one company.

I could create an NFT out of my data and every time I share it or provide access, I earn a token. I could connect my exercise routines, my eating habits, sleeping behavior, and then could use that data and buy health insurance. If I’m healthy, I could use it to get a reduction in insurance.

Right now, the value is exploited by companies that capture data, like Facebook and Google, via annoying advertising. In the future, decentralization will democratize things. I can create a value out of my data and trade or gift it. It creates value to companies because they can create better products and services based on the data. As I wrote in my book, it’s about winners share all, not winners take all. In the future the consumer becomes a lot more powerful.

Q: In Web 2, we’ve been in an era of deep “personalization” or something that’s been sold to us as “personalization,” and maybe what’s being advocated for in the future is a level of aggregation that allows for better overall products, even if they seem less “personalized”?

A: Personalization right now isn’t really personalization. Today it is about a limited context such as past purchases. It’s almost lost its original intent. Web 3 promises that it becomes real personalization — because I’m in charge of serving myself. Companies will only attract customers and business if they can truly understand the context and daily life of consumers. As I’ve said many times before, if content is king, context is King Kong.

Q: Do you see health tech or health care as being the industry that could benefit the most or most quickly from these new developments?

A: Health care is a big one because it’s extremely fragmented. One doctor in a hospital doesn’t know what another doctor in the same hospital on a different floor is doing. Never mind a doctor across the country. There’s an incredible fragmentation. With the aggregation of data, people start benefiting from each other.

Q: You’ve made the prediction that the cryptocurrency boom may end in a bust — do you foresee cryptocurrency reaching a level of stabilization, or serving as a testing ground for the blockchain, or something else?

A: Crypto is a financial instrument and that means it attracts criminals, scammers and speculators – in a good way and a bad way. Those practices will have to clear themselves out with the regulatory and legal frameworks. I think what will be left is an infrastructure that is far more efficient and effective than what we have now, which is a few banks controlling the banking system. In the metaverse, it’s permissionless; there are no intermediaries which charge you a fee for transfers. Money will be able to travel from me to you without any friction. That really creates consumer benefit. I’m bullish on crypto, and bearish on crypto as a speculative tool.

Q: Is there some inherent value to being the “first” in these new spaces? 

A: The standard recommendation by consultants and ad agencies is that you need to be participating and experimenting, and I think that’s a bit of a self-serving recommendation. Ad agencies tell you that so they can help you do that. I don’t necessarily think that’s the right recommendation.

At Vivaldi, we think differently. You have to figure out how to create real and meaningful value to consumers and create a competitive advantage for your company and brand. It’s better to start with: “Who is my customer? What is my product or service? How do we create value?” and then make decisions from that vantage point. Thinking about your business and framing it from your business perspective is a more thoughtful and practical approach to participating, rather than buying a lot of real estate on Decentraland just to have a presence there or hoping consumers will eventually come. Being first isn’t really the value, it’s being first in providing a meaningful benefit for consumers, that should be the value.

GLOSSARY:

The metaverse: A 3D immersive environment that exists both physically and virtually, built on Web 3.0 technologies.

Web 3.0: The third generation of the internet, which utilizes blockchain technology, operating in a decentralized way and a host of other technologies.

Blockchain: A list of securely linked records distributed digitally over a peer-to-peer network and publicly displayed as a ledger of timestamped transactions.

NFT: A non-fungible token, i.e. a unique digital element that exists as part of the Ethereum blockchain.

Cryptocurrency: A digital or virtual form of currency secured by cryptography, distributed in a decentralized method.

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