Tech

Are Those Robots Slacking Off on the Job?

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Much concern is being expressed these days about technological unemployment driven by robotics, artificial intelligence, etc.  But labor productivity numbers have been more in the direction of stagnation than in the direction of a sharp break upwards…see for example this BLS analysis.  Note especially Chart 5, which compares productivity growth in three periods:  1947-2007, 2001-2007, and 2009-2016.

See also this piece, which looks at total factor productivity across continents.

So, what is going on here?  Why have the remarkable innovations and heavy corporate and government investments in technology not had more of a positive effect on productivity?  I have my own ideas, but am curious about what others think.

Disruption – MoviePass

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MoviePass is a service that has gained a lot of new users lately – it allows you to see unlimited movies (only one a day) each month for $9.95, which is essentially the price of a single ticket. How it works is that they give you a Mastercard that is connected to your mobile phone – when you get to the theater, you connect with them at that time and they authorize the card specifically for the amount needed to pay for the movie and then you pay and go inside. The process is set up so that theaters can’t deny MoviePass at the box office because it is basically just another Mastercard and the only way to disable it would be to disable accept MasterCard, which is impractical or likely impossible for a host of reasons. The movie theaters receive the full price of the ticket through MoviePass, even if it is more than the $9.95 subscription fee (movies can cost almost $20 in Manhattan, for instance). In the short term, this is a “boon” for movie theaters because Wall Street investors are subsidizing their full price tickets.

Here is a NYT article on the growth of MoviePass. Per the article, they are adding 1 million subscribers a month. The ostensible play (what they say) is that they plan to “break even” on the cost of the service (if you see roughly one movie / month) but then they will make their money on using data from customers in an aggregated fashion to sell to the movie studios for marketing and targeting. They believe that this data and targeting consumers can add 5-7% to the box office gross. Note that the guy who helped found MoviePass was an executive at Netflix and RedBox named Mitch Lowe and he is very sophisticated financially and connected so he is a serious rival to the movie industry in general.

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Disruption – Amazon Basics and Amazon Essentials

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“Amazon Basics” is a line of low cost products created especially by Amazon. “Amazon Essentials” is an apparel line created by Amazon. This picture has a “basics” speaker and a low cost “essentials” product (the notebook):

– a portable wireless bluetooth speaker for $19.99

– Essentials dot matrix notebook for bullet journal for $9.92

I was impressed by both of these items. When you go to Amazon and either the basics or essentials section there is a wide array of products to choose from at amazingly low prices.

Amazon is choosing which markets and products that they want to compete in directly and they offer what appears to be reasonable quality products at low price points. If you cycle through the product list you can see a lot of everyday products or items that don’t normally have a strong branding component.

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Disruption – Delivery

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Traditionally the big companies that handle “last mile” package delivery are Fed Ex (ticker: FDX), UPS (ticker: UPS), and of course the US postal service. These companies have hundreds of thousands of employees (often unionized) and billions of dollars of planes and trucks and other transportation assets.

Amazon (ticker: AMZN) recently began expanding their transportation capabilities, both in the form of their own airplanes and leveraging an “Uber-like” workforce of contractors leveraging an app to deliver packages in their own cars with a program called “Amazon Flex“.

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Chromecast, Roku and Cutting the Cord (Potentially)

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It’s Christmas time and we don’t have a fireplace in our high rise apartment. So what’s the next best thing? A video showing the Yule Log (there also is a Nick Offerman 45 minute one where he watches you and drinks whiskey and someone looped it for 10 hours, look it up on You Tube). This is playing through my Chromecast ($20) via Youtube and could be done through my Mac, iPad, or iPhone. And it looks great.

We finally gave up on our old Samsung TV and bought a new 55 inch “smart” TV from TCL with Roku included. The sound quality is great I got rid of my front speaker and subwoofer when I took my old TV to Goodwill and don’t plan to buy a new one (maybe I will with Xmas gift cards). Once we connected it to our router I was surprised at how high quality the TV picture was and how fast it booted up. You can quickly go into either Roku or something like the Chromecast (below) or just turn on the cable box directly (we have xfinity). Right here at the intersection of huge amounts of online content, high bandwidth, and seamless performance you can see how cable dies (although cable provides our Internet service, but this is a parallel question).

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