T-Mobile's misstep points to the challenges for virtual pay TV

Hi and welcome to this weekly edition of Insider Advertising, where we track the big stories in media and advertising.

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First: We extended our deadline to nominate top ad execs leading the charge on data and privacy. Submit here by April 5.

What we’re following this week: 

T-Mobile shuts TVision

Digital media layoffs

Workplace issues at Zimmerman Advertising

T-Mobile CEO Mike Sievert.T-Mobile

Virtual pay TV struggles

While new streaming services launch left and right, T-Mobile is pulling the plug on TVision, its 5-month-old attempt to retain customers with a $10 per month streaming service, Claire Atkinson reported. A few key points:

  • Its demise shows the challenges of the virtual pay TV services model that has struggled to find a profitable business.
  • These services historically haven’t offered much of a deal for would-be cord cutters. Another virtual video service, Hulu Live TV, hiked prices by $10 in November to start at $64.99 per month. TVision was troubled from the start, with the programming costing far more than it was charging.
  • In the streaming wars, T-Mobile’s loss is a win for YouTube TV and Philo, which it’s offering its customers instead.

Read more: T-Mobile pulled the plug on its streaming video service, TVision, just 5 months after launch

Also read:

  • T-Mobile is at a crossroads with its streaming video bundle, TVision, and everything is on the table — including shutting it down
  • The 199 days that doomed Quibi: How $1.75 billion couldn’t save the most hyped app of the year from a pandemic and apathetic users

Vice Media CEO Nancy Dubuc.Michael Cohen/Getty Images

Digital media takes another hit

Just as things are starting to look up with more people getting vaccinated and offices planning for reopening comes news of layoffs at a handful of digital media darlings, Steven Perlberg reported.

This may have surprised people who may have thought the blood-letting was over after last spring when advertisers hit the breaks, leaving many ad-dependent media companies to cut costs.

The challenges these companies faced aren’t new, though:

  • Vice Media and HuffPost can be viable businesses, just not necessarily the billion-dollar ones their venture capital backers envisioned. HuffPost was just acquired, a move that’s usually followed by layoffs as merged companies look to cut duplicative costs.
  • Mel Magazine, an arm of Dollar Shave Club, was known for its distinctive men’s lifestyle coverage, but as a brand-backed publication that didn’t have any ad revenue coming in, its financial purpose was unclear.
  • And Medium, which also announced cuts, has changed its approach to content countless times over the years, shifting from an ad- to subscription-driven model. This time it was to scale back its own publications that it started just a few years earlier.

Subscriptions and advertising support many news outlets very well, of course. These companies didn’t have enough of either, or their execution was flawed. Some digital media companies could get a lifeline by going public through SPACs. But the underlying business challenges they face aren’t likely to go away.

Read more: Vice Media just laid off a handful of digital staffers

Also read:

  • Dollar Shave Club has laid off all of its staff at men’s lifestyle site MEL, source says, and is looking for a rescue buyer
  • BuzzFeed is conducting layoffs at HuffPost weeks after it acquired the company
  • Bloomberg News has begun layoffs and nearly 100 people will be affected — read the full memo to staff

Jordan Zimmerman, founder and chairman of Zimmerman Advertising in Fort Lauderdale, Florida.Jock Fistick/South Florida Business Journal

Zimmerman Advertising complaints

Zimmerman Advertising and its founder Jordan Zimmerman bear all the trappings of success, with billions in revenue and clients like McDonald’s and Nissan.

But some employees said they experienced micromanaging, misogyny, and racism at the Omnicom-owned agency, Lindsay Rittenhouse reports.

From her story:

In April, Zimmerman Advertising — an Omnicom-owned ad agency in Fort Lauderdale, Florida, known for its work with clients like McDonald’s — laid off a batch of employees in the pandemic. That day, the founder and chairman Jordan Zimmerman addressed the remaining staff on a call.

Three people on the call said Zimmerman told employees that, while they were spared, they would need to work “two and a half times harder” or he would replace them with the laid-off employees who had “begged” for their jobs.

Fast-forward to this March, when some employees accused the agency of pressuring them to go back to the office, regardless of whether they had been vaccinated or had high-risk family members. In some cases, employees said management threatened layoffs if they didn’t return.

Read the full story: Employees say they experienced racism and sexism at Zimmerman Advertising, an Omnicom agency known for clients like McDonald’s and Nissan

Other stories we’re reading:

  • LinkedIn is doing ‘early tests’ of a Clubhouse competitor as the audio space heats up (Insider)
  • Scoop: Substack is raising $65 million amid newsletter boom (Axios)
  • Publicis shares rise on fresh M&A speculation about interest from Havas owner (Campaign)
  • IPG and Omnicom are touting a new tool to help advertisers avoid misinformation without hurting publishers (Insider)
  • Murdoch wants to shake up U.K. news with ‘aggressive’ TV service (Bloomberg)
  • Cameo aims to connect celebrities with fans and it’s now worth $1 billion (WSJ)

Thanks for reading, and see you next week. And remember you can sign up for this newsletter here.

— Lucia

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