Wednesday, March 21, 2007

Capuccino Blog - Newsprint, Coffeeshop Music and Tech Conundrums

I was going to write something deep and insightful about the future of the newsprint industry, in context of digital convergence, but its way too late already - well past my bedtime. So let me give you the capuccino blog instead.

To start with Paul McCartney has signed up for Starbucks Music label. My thoughts (1) not like the music labels didn't have enough worries than to have to also compete with coffee shops. (2) nice one by Starbucks but no prizes for spotting talent early! (3) Don't really have a 3 but its nice to have lists of 3 - because less than that should really be a sentence and not a list. Oh wait, I do have a 3 - Starbucks has done quite well with their Hear Music label - and they do have excellent taste in music - going by what they play in the stores.

On another note, here's a technology conundrum - my laptop no longer catches my wireless signal if I sit in bed and hold it straight - as you would expect me to, to type. The Wifi router is at the corner of the room, next to the window 8 feet away. If I turn the laptop by around 30 degrees or more along any axis, but ideally on a vertical axis, then the wireless signal works fine. Short of that I have to click on a link and lift and turn the laptop so it can "catch" the link. Its a throwback to 25 year ago and listening to sports commentary on little AM transistor radios.

Back then to Newsprint. Quick summary - demand continues to shrink. Consolidation is in the offing. Prices have actually gone up significantly over the last few years thanks to the consolidation, though its currently dropping in the face of shrinking demand. Chinese Newsprint is likely to make inroads over the next few years. Operating costs of players like Catalyst have been trimmed as far as they will go. Newsprint, as I've discovered is almost totally recycled. UK Newspapers have been ahead of commitments in recycling numbers - some 80% of UK Newspapers currently use recycled paper - so the millions of free newspapers on the tube every evening does not apparently constitute an environmental disaster. But its a scary place to be - in the newsprint industry - along with staff costs this is the biggest cost for newspapers. And ePaper is on the way, from companies like Fujitsu. There, I've done it. Detailed version to follow.

Monday, March 19, 2007

Social Network Fatigue

Having had the opportunity to do a small project on social networking, I went looking for social networks. This by itself i s ironic, as you know, since social networks come looking for you nowadays. Rather, they jump out at you at every nook and corner of the internet. And span every possible activity, interest or hobby you can espouse.

The Wikipedia lists close to a hundred Social Networking sites here. Many of them have their own myths and stories to tell. Some, like 43 Things aren't what they appear to be. Others such as DontStayIn are surprisingly successful. The best known ones such as Myspace have become infra-dig. The only surprise there is how, with an interface and usability that could have only been created as a learning project, it managed the success it did.

Wikipedia offers a number of very academic measures of social networks - from the obvious, such as Cohesion and Density, to the rather more arcane "Centrality Eigenvector" (a google like measure which makes nodes with more connections more valuable, since you ask!). However most of these are inward looking and serve only to analyze the nature of the network, and not its value. We need some more apparent, external and and ideally measureable parameters to evaluating the true value of social networks.

These could include average time spent, relative importance to users/ centrality to their lives, trust levels, dispersion of the audience/ user base etc. Some of these would lead to clear monetization values for business oriented networks, others would at least establish their utility to the user community. The sheer number of users tell their own story, but I would be wary of the myspace phenomenon - everybody has a myspace page - but fewer and fewer actually use it.

It also seems apparent that we're suffering from Social Networking Fatigue - I mean how many social networks can one subscribe to? Granted, some of them are more subtle - Last FM or Stumble or even Delicious aren't explicit social networks (Hence Social Networking as a feature probably works better than Social Networking as an objective). But in the past few weeks I've been invited to a social network for Movies, one for Books, one for writing, one for photographs, and the list keeps growing. I do use Flickr, Linked In and have enjoyed exploring Second Life. But where will it all end? And each of the new ones want you to log in to your Hotmail account and invite every single one of your contacts. How unreal is that?

One of the innovations we need is a Social Network Interface Definition - something that allows users to create their own interests, in a private space and will allow them to share selected information with multiple networks based on permission and without entering additional information. I mean, I entered my favourite movies when I created my profile on Blogger, surely there should be a way of sharing that same list with Flixter?

Here's to web 3.0 then, when we can enter all information just once and then share, network, and reuse promiscuously!

Wednesday, March 14, 2007

Caller Beware! The Ides of March

The convergence bandwagon is rolling on nicely. 3i has expanded it's media investments team. City based funds with institutional funding, such as YFM are investing in a magazine that serves the media and advertising industry. You know things are good when even such naval gazing can be funded.

Disney has announced "parentpedia" - the site aimed at mums. But it seems it hasn't yet learnt from history. The danger of announcing something publicly before the site is actually up and typing the URL into a browser can get you there, is certainly infra-dig in todays world. This is the best you get now.

Talking of tough times, phone shows have a really bad week - make that month. No sooner has the scam-mongering around phone in game shows become yesterdays news, and ITV's phone based shows are limping back on air (although ITV Play seems like it's still stuck in a cross connection), that new stories are emerging. Channel 4 reported problems on a racing show with phone in contests. BBC1's Blue Peter has it's own story to tell about phone-in problems this week - 14,000 calls, but a failure to pick a winner from them - and a decision to fake a winner. You'd think by now the phone bit was the one piece people had actually figured out. Or is there a possibility that the choice between pulling a show off the air and letting it run despite the phone problems is laced by the commercial willingness to forego the healthy income the phone contests generate? Channel 4 & Five earn £ 17m from phone-ins - not an amount to be sneezed at. Possibly the only firms worse off than the broadcasters are the phone companies. Eckoh unfortunately seems to be the company at the forefront of all discussions. It also claims to be the victim of false allegations. Which suggests that its never too late to occupy the high moral ground!

Which reminds me, the ban on gambling advertising is being lifted, albeit with checks and balances in place. Sadly this is still not going to make a tangible difference to the handful of Partygaming shares I'm still clinging on to. Yet.

Thursday, March 08, 2007

Theory & Practice

The Guardian considers its competitors to be "broadcasters, search companies and web publishers" - as reported in the paper itself, as it prepares to invest a lot of money into a web 2.0 website.

On the other hand, implementation is always harder than it seems, as this article about Virgin-customers' tribulations with NTL suggest.

Another triple-player across the Atlantic - Time Warner Cable - went public recently and although its share price has fallen from its launch, this appears to reflect the overall market correction rather than the company's own prospects. Although its interesting to seggregate the impact of consolidation (integration of Adelphia) from the impact of the convergence.

So which is riskier? Doing convergence, or not doing convergence? Aye there's the rub!

Tuesday, March 06, 2007

Converged Media Ahoy

I've argued earlier, that print publishing companies are going to look more like the BBC in future - part publishing, part web and part TV. The Hearst Magazines, US, which produce Cosmopolitan and Esquire are among those proving me right. And while Cosmo TV may start with being more like video content on a website, more and more aspects of the TV model will permeate over time. Key characteristics being scheduled programming, delivery to a TV set and a one-to-many broadcast model.

This is a good example of a converged business model - but to drive benefits, needs to work across the customer relationships and profiling layers and integrate operationally.

Talking of which the Sky-Virgin stand off is a harbinger of things to come as each business looks at establishing hegemoney over what is now a converged value chain. Today it's Sky the channel versus Virgin the platform. You can bet Virgin will seek its pound of flesh if and when the tables are turned. The ripples may be felt on Freeview as Sky mulls taking its channels to pay TV to offset the loss of revenues. This seems like a classic lose-lose solution. Virgin loses audience and popular programming, Sky loses revenue, and a lot of viewers lose content they're used to. It seems like a hugely retrogressive step. While the world ponders more interoperability and Web 2.0 takes root, traditional TV viewers are forced to choose between one platform versus another and undertake painful switching costs or lose their favourite programs. This is the kind of things which pushes people into Youtube. These are the triggers which create inflexion in the industry.

Monday, March 05, 2007

Convergent Contexts

It's not unnatural for most people, hence most businesses, to look at a new opportunity with the same lens that they have used for many years in their familiar contexts. So it is, that the content industry looks at IPTV as new channels for selling more of the same content, and the Telecom businesses see IPTV as a way of reducing churn and improving ARPU. To an extent this is also the impact of traditional valuation methodologies used by analysts to evaluate these companies, even in the face of new business models.

Recently I was at Chinwag london's event on Mobile Metamorphosis. And listening to people talk about the mobile advertising space it struck me even harder how hard it is for people to step out of their comfort zone. We all talk about being consumer centric, but truthfully, very few businesses have actually translated this into a specific proposition that is convergence-centric.

By this I mean for example, that a typical consumer probably doesn't really distinguish between IPTV and Cable or even Satellite. They may know their TV is provided by Sky or Telewest or Homechoice (now Tiscali) but thats about it. Also consumers don't analyze whether a piece of content fits the screen resolution of a mobile phone or not. Consumers react much more viscerally. They either like something or they don't.

While the industry spends time poring over what kind of content or advertising might be suited to the mobile phone screen size, resolution or battery power, consumers probably don't really care. What I do care about, as a consumer, is that when I'm out of the house, usually, my only access to information is what is on signages, or what I can access through my phone. At that time I don't really care about screen size or resolution. If I can get a map of an unknown area, a local cab company number, a score update of a match I'm missing or an ability to access my email for a phone number somebody sent me, I will really not care about how aesthetic the experience is, as long as its usable.

The same information no matter how well presented, is useless to me, at home, because I wouldn't use the phone, given the availability of my laptop or TV. I'm not yet convinced that most businesses use context well enough. They rely on what they know - which might be TV or mobile or content or access. And this is a source of value erosion as far as convergence is concerned.