Think Plank

change of address...

2010-04-25T09:23:00.000-07:00

this blog is now available at www.thinkplank.wordpress.com

Full Circle for the Beeb, and the need for Labs & Playgrounds

2007-06-10T15:20:00.001-07:00

Is it just me or does anybody else see the irony of this message on the BBC message boards: "Sorry, but you can only contribute to 606 during opening hours. These are 09:00 until 23:00 GMT, seven days a week." - we've come a full circle back to when the Internet is now open only during working hours.

Is this actually a good thing? Does this mean that the Internet is now so mainstream that it needs to reflect the traits of any mainstream media or business entity? Or is this just sad?

On a different and more positive note, it's becoming clear that any major player in the Convergence space worth their salt, needs to create a "lab" within the enterprise, so that new ideas can be created, funded, tossed around and tested. Sometimes these labs can be industry initiatives rather than specific business oriented. But the lack of such technology playgrounds is a key inhibiting factor for existing businesses not being able to create successful new businesses.

I first heard Charles Dunstone mention this in an Ofcom program, that no great new internet / new media businesses has been created by a big corporation. It's obvious why, if you think about it from a disruption point of view.

This article from the New York Times - presents some of the initiatives which are cross industry but the lessons to be learnt are similar.

Do you have a lab in place?

weight of the Internet

2007-06-08T13:51:00.001-07:00

Very interesting tidbit from the guardian - the weight of the Internet ...

Ted Talks - a glimpse of the future

2007-06-03T04:51:00.000-07:00

Thanks to Progga for sending me this, it's a stunning demo of the future of human-machine interaction . How long does this take to go from lab to market?

Warhol, Twitter and Universal Broadcast

2007-05-17T12:54:00.000-07:00

Andy Warhol didn’t have a clue about how right he was. Did he look into a crystal ball? Or did he have secret conversations over space and time with Marshall McLuhan? Whatever it was, he would have been happy to stroll through the blogosphere, arm in arm with Mr. McLuhan.

Warhol suggested that everybody wants their 15 mins of fame. McLuhan suggested that the world was shrinking to a “global village” where people would know each other anyway. The blogosphere marries these 2 precepts. 15 minutes is now 15 seconds. The village is now a courtyard. We’re infinitely connected, but our attention span is microscopic and shrinking.

Made me stop and think. Last time I counted (I actually listed) all the people I know – personally, not professionally – I totted up a list close to 500. Is it scary or cool that I can communicate with the majority of them in an instant? Is it worrying that I don’t speak with most of them from one end of the year to the other? Should I stop meeting more people? Am I losing a friend every few days?

My friend Jasmine keeps asking me this question about blogs – but why the %$£& would anybody want to read what you have to write? Or what anybody else wants to write? I don’t have a great answer yet, because right now I’ve not made up my mind whether our need to tell is greater or lesser than our need to listen.

Whatever it is, Twitter takes us a step closer to the infinitesimally attention span in the eternally connected space. Microblogging as it is called, allows you to post barely a thought, and let your friends pick it up. The really interesting thing here, is that personal communications are fast approaching broadcasting. Look at Rawflow – they let you broadcast onto the web at no cost. Whether you blog, podcast, vlog, broadcast or IM, whether you skype or text, the communications model is increasingly one-to-many. And this is probably the only way we’ll get to stay connected with the hundreds of friends we want to accumulate in a lifetime.

What we need is better listening devices. A single, simple application which allows me to collate all kinds of messages – broadcast, peer to peer, feeds, pods, bytes and broadsides. Without having to manage multiple interfaces. Microsoft has plans for a universal messaging application – the great grandson of Outlook, and Pageflakes & NetVibes are starting down that road. But we’re a long way from the simplicity of sticking in an antennae and sitting back to watch all those broadcasts streaming in!

Transparent, Naked and Worth £ 8.7 billion.

2007-05-15T09:55:00.000-07:00

Especially liked this piece from Tom Glocer in the FT. In a time when takeovers are shrouded in mystery and the most eloquent soundbyte you can get from the management team is "no comment" - this is a bit of a beacon - especially, given that it's in the public domain. I'm of course talking of the £ 8.7 billion acquisition of Reuters by Thomson.

Read it here. (May require FT Subscription)

They call it the Naked Corporation . "They" among others, include Don Tapscott and David Ticoll - who wrote a book by that name. The age of transparency, they argue, is upon us. And as somebody wrote in the Wired Magazine if I remember correctly, "if you're going to be naked, you'd better be buff"

I believe that increased information, made richer by convergence, and more ubiquitious, will make us all more transparent. As I've argued before, we are less susceptable to persuation - by brands, by governments, by authorities - simply because we can find out the truth. Even religion, in due course, may not be beyond the reaches of Google.

Nonetheless, the first step is for corporations to be transparent and Glocer makes a great case for transparency. May his tribe flourish.

Convergence In India - underlined by Innovation

2007-05-14T12:06:00.000-07:00

There is compelling evidence to suggest that the convergence phenomenon will sweep through India as well, but equally, there's plenty of proof that it will have a unique shape, meter and velocity.

I would expect, for starters that India will see a huge amount of innovation. The early signs are there already. In the IPTV segment, rather than build monolithic yet stratified organisations (which is how you might describe most Telcos rushing to do content on IPTV), MTNL has contracted 3rd parties such as Aksh Optifibre to run the IPTV content service on it's pipes. The technology infrastructure - including middleware and DRM is entirely provided by UTStarcom. This approach makes small investments possible for these local players. When I met with Aksh they explained their numbers were quite modest, but it seems to me that IPTV can be profitable at those numbers.

The real killer app in this case may well be the residential VOIP service being rolled out - which will allow users to call US (for example) for a very nominal Rupee rate. Watch this space.

While IPTV may be shackled by the extremely poor broadband penetration - the mobile uptake in India obviously has no such problems. Yet another innovation (and an example of how the Indian public will at least try anything thats new) is the live via animation genre. An example of this is the Intvo application that provides "live" cricket on mobile phones.

How Far Does £ 20 million of Content Get You In India?

2007-05-10T07:38:00.000-07:00

Over the past couple of years I've noticed the Indian media market is contrariwise, with respect to global trends. Print is still booming and new newspapers are being launched. Television is exploding. Broadband access is abysmally low and mobile phones and rates are getting even cheaper.

This article in the Economic times continues that theme - it suggests people are paying a lot of money for content. Content has been losing its sheen the world over - unless it's fresh, live and exclusive, ideally sports content. There really isn't a big price tag on decades old catalogue. Or is there? GV are paying Rs 175 crore (in excess of £ 20 million) for a catalog of 8000 titles, mostly from the 40s to the 70s. According to the article the notable titles include: Sherlock Holmes And The Secret Weapon (1943), Attack Of The Monster (1969), Murder On Flight 502 (1975), Clashes Of The Ninja (1986), Ghost (1963) and Murder With Music (1941). Now simple arithmatic will tell you that on average, these titles will need to earn in the range of £ 2500 (approx Rs 2.2 lakhs) to break even. The average view will earn (on a webcast, which is the primary purpose apparently) in the range of Rs. 25-30 - given the age of the content and the fact that you can hire a DVD for 3-5 times that much. This means we're talking about each title being viewed 7500 times to break even. Given the paucity of bandwidth in India, thats a heck of a call.

Of course, I know nothing about film distribution and GV have built a successful business doing just that. But this deal, funded by money raised for the purpose has me a wee bit skeptical.

Capuccino Blog - Newsprint, Coffeeshop Music and Tech Conundrums

2007-03-21T16:57:00.000-07:00

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.

Social Network Fatigue

2007-03-19T04:45:00.000-07:00

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!

Caller Beware! The Ides of March

2007-03-14T15:55:00.000-07:00

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.

Theory & Practice

2007-03-08T15:55:00.000-08:00

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!

Converged Media Ahoy

2007-03-06T09:53:00.000-08:00

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.

Convergent Contexts

2007-03-05T15:06:00.000-08:00

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.

Lessons from the Online Games Industry - Part 2

2007-02-25T03:03:00.000-08:00

In my last post, I spoke about games as learning tools, the social benefit of games and the need for design and architecture.

It's worth remembering of course the online games industry itself is still at an early stage of evolution - and this is reflected in the level of development maturity we see in interfaces, UI or architecture. Many comparisons can be drawn with the early stages of the Internet.

This actually leads to our next point of discussion - which is that the ARGs (Alternative Reality Games) are very good at using multiple media, each to the best of its capability. Perplexcity from MindCandy Design used puzzle cards sold through Borders, online, offline, events, and other media over a 2 year game which recently ended with somebody finding buried treasure outside of London.

Which brings me be to the most important lesson of our session. Something I've argued before but was brought home much more vividly, in the discussion. In a world of falling content prices, and uncontrollable piracy, digital natives migrating away from television, the magic word is "Experience". It's what customers and audiences pay for. It's the reason why we pay 5 times as much to watch a film in a theatre instead of at home. It's the reason why people stay logged in to Second Life or Habbo Hotel for as long as they do. The only way forward for big media is to focus on Experience. Highlighting it through multiple media, online and offline, games, interaction, engagement, community and anything else that does the trick.

The question is, is big media listening?

Lessons from the Online Games Industry

2007-02-23T10:01:00.000-08:00

In what ranks for me as one of the best Convergence Conversations we’ve had till date, episode X wandered through the world of games, stories, design and ludic, liminal and learning experiences, in the short span of an hour and a half.

The first obvious stream of discussion worth touching upon is the interfaces and overlaps between learning applications and games. Games can be specifically designed with learning experiences in mind. Lets call this explicit learning through games. These are objective driven, and their effectiveness can be measured by the learning results they do or do not deliver. You know, a game with falling letters which trains you to type better without looking at the keyboard.

The second and potentially more powerful learning is that which occurs implicitly through games. This isn’t measurable, often because these games weren’t created as learning tools. We’re talking about learning social processes by participating in tribal games – such as World of Warcraft. The kind of things families were once supposed to imbibe – belonging, pulling your weight, doing the dirty work when necessary, participating in team decisions. These are important lessons that can actually be learnt from games. At the other end motor skills, cognitive skills or other spatial and social skills can continuously be enhanced as a bye product of games. The question here, perhaps, is how to harness them.

Which off course suggests that there is actually a valuable social benefit to be derived from games, contrary to what Boris Johnson would have us believe, when he said “Its time to garrotte the game boy and paralyze the playstation and it is about time, as a society, that we admitted the catastrophic effect these blasted gizmos are having on the literacy and prospects of young males. They become like blinking lizards, motionless, absorbed, only the twitching of their hands showing their still conscious” In actual fact even parents are noticing that their children are developing and growing through experiences in games which prepare them for working in groups and with other people in work situations.

Clearly a lot depends on the game design and architecture. This is an conscious decision by skilled people. It was commonly felt that games designers are terrible storytellers. Of course, it may well be argued that writers aren’t the best at designing compelling interfaces. But the ARG format appears to be one of the most powerful – primarily because of its flexibility – it uses each medium to its best use, rather than force all the experience onto one medium. A tendency to only talk about Second Life is natural, but Second Life still has many limitations especially in it’s interface. The ability to mix real life with online experience is clearly a powerful stimulant for users. Although the ARG’s like other games face the challenge of scaling to millions, rather than thousands.

still to come... state of development, the secret of the experience, and more...

Digital Music Longs to Be Free

2007-02-13T09:27:00.000-08:00

When we ran the Intellect Convergence Conversation on "What Price Music"? - many of us argued there that the technology solution to policing rights has no future. We also argued that the only deterrent to piracy was to lower prices to a point where it would not make sense to pirate music.

In December, 2006, Moser Baer in India announced that they would sell DVDs and CDs at a price low enough to deter pirates. They announced a price point of Rs. 34 for a DVD movie (under 50p) and Rs. 28 for CDs (well under 50p) - this, truly, is a deterrent price point for pirates.

Last week, Steve Jobs suggested that DRM be dropped from music sales. Of course, Jobs had the security of the success of Apple iTunes behind him before he suggested it. It would have been a completely different announcement at the start of the iTunes journey, had he made it then! Of course, now that Jobs is out of the DRM closet, EMI have also announced that they've been mooting the same proposal.

Bottomline, the music industry is starting to stop fighting the dying light of it's old business model. As I've argued before this is great news for consumers. Prices will continue to drop. Advertising & marketing models around music will get a filip. There is a lesson in this for tv and movie content as well.

For the music industry the question may well be - is it too late already?

Innovation

2007-02-02T16:22:00.000-08:00

Attended the Beers and Innovation session organized by the NMK. Ian Delaney from NMK has his version reported here. The topic was "Do Agencies Innovate?"

Apart from the interesting conversation on the evening, I found it an excellent counterpoint to the work on innovation done late last year by the Government, as well as a good time to reflect on the concept of innovation.

I often think Innovation has become a 4-letter word. Everybody likes to have a bit of it, most people think others are doing it all the time and very few people know how to do it well!

Here are some of the most common myths I’ve discovered when people discuss innovation:

There’s always a tendency to confuse innovation with any sort of creative work. This is especially true when it comes to the digital agencies, and creative industries in general. Every marketing campaign is touted as innovative. Clients demand it, agencies trumpet it. It feels like no creative job ever gets done without innovation. Of course, the reality is a little removed from this. Plenty of good creative work exists which is not innovative. A print campaign with an eye-catching visual is simply, good.

There is also often a misconception that to solve any problem, innovation must be a necessary ingredient. This is also not true. In fact, innovation is often the hardest approach to a solution (short of invention) – and often has equally low success rate. When I was involved with the Intellect’s Innovation Council work recently, it seemed that the government was very keen to adopt innovative solutions. Only, many of the problems that governments grapple with don’t actually require innovative solutions – but rather more obvious and industry standard ones. For example in Government circles, getting different departments to drop their silo mentality and work across departments is seen as an innovative practice, something many large organizations have been doing for decades. Innovation – at least as most dictionary definitions suggest – involve something new. Whether we should treat it as new just because it’s not been done before by us, or by people like us is a debatable matter.

Innovation is good for everybody – this is partly true, but not all organizations need to be innovative – and certainly not at all points. For best results, innovation needs to be nurtured, managed, evaluated and appropriately scaled. Innovation usually suggests an improvement or a good outcome, but that would suggest that it’s only the successful ones we’re talking about. Uncontrolled innovation is the organizational equivalent of a nuclear explosion. Suppose in a large organizations, each of 10,000 employees came into work one day and decided to be “innovative” and new/ different about the way they did their work on that day. The result would only be chaos, of course. Just like in a nuclear reactor, the system needs to be engineered to release a certain amount of energy – no more and no less for it to be harnessed and effectively used.

The full paper on innovation can be obtained by writing to me at ved@thinkplank.com

Convergence Conversation at Intellect: Where Next for Broadband?

2007-01-26T10:55:00.000-08:00

Jan 25th we had the Intellect convergence conversation IX on broadband, attended as always by a stellar group of participants. Here are some interesting thoughts that came out of it:

Where will demand for broadband come from?

even if it comes from just people wanting to view entertainment content, it's worth looking at as there are potential benefits to society from there
more direct benefits could be reaped by corporates driving more and more teleworking / home-working which has potentially a big environment and productivity impact.
a number of people may not even be aware that they are using the broadband / internet in some future applications - they may be using educational, telemedicine, entertainment devices, which unbeknownst to them, are using broadband data-pipes.

(In fact the idea of "internet" and even "computer" may disappear, like the "motors" have disappeared, simply by becoming ubiquitous - as everything becomes connected and has a chip for computing ability)

An interesting rider on this is the view that one of the biggest barriers preventing further adoption, especially for older age groups is the computer. There is potentially a market for a pure browsing device with a hugely simplified set of instructions - which allow basic communication, browsing and other human functionalities with easy tools.

However, with all these expectations, there is still an act of faith required for businesses to invest today, into what would be clearly a huge investment into next generation access networks. Taking into account that this could take up to 10 years for a complete roll out, this clearly presents a need for somebody to drive the funding decision in order for the industry and the economy to ensure it doesn't miss out on the benefits of next generation access.

Clearly, once the network is in place, the ongoing revenues which are collected via metered or other forms of content access can be shared by content / service providers with the ISPs/ Telcos. However the immediate of upfront investment is one that the content industry cannot underwrite.

An additional trigger is on the horizon - the 2012 Olympics. Which also have other pressures, such as the need to broadcast it in hi-def. This means that there could be a spill over effect if terrestrial TV cannot handle the requirements, it may spill over to the next generation broadband providers to deliver the HD TV.

Creating a huge bipolarity is the other end of the adoption curve where some 40% continue to be affected, as I noted in yesterday’s post. Interestingly it was brought out that a large share of this population don’t have bank accounts, for example. So lack of broadband may no be the only socio-economic challenge here!

Although there is a clear case for the government to step into a potential market failure and fund part or all of this investment gap, it would be dangerous to confuse public with private funding, as it would skew the market and adversely impact a bunch of existing providers.

The role of wireless in next generation access is another real question but it really didn’t get addressed in the conversation as sadly, we ran out of time. But may be another Convergence Conversation on the role of Wireless in Next Generation Access will take care of that!

Broadband UK - more bandwidth or more coverage?

2007-01-25T02:13:00.000-08:00

Although commonly, most people associate broadband with a fatter pipe and higher speeds, one of the real differences, as I've said before, is that it drops the marginal cost of Broadband to Zero. Thereby creating a real incentive for exploration – which leads to information, learning, discovery and entertainment (The always-on aspect of broadband also takes away the deterrent of the “dial up” effort). In essence, always on broadband pushes people into the "Information Society". Leading to much higher consumption of online services – both government and private. This has an impact on overall costs for the economy as these are much cheaper to deliver online than physically. Online banking is a good example of private services which save time and cost for buyer and seller. Online payment and collection of council taxes or license fees are examples of government services which save time and money for individuals and society as a whole.

This is a very relevant issue in the UK today as there is an emergent bipolarity with respect to the future of broadband. On the one hand, the large, vocal and influential content industry in the UK is lobbying hard for next generation access - which is loosely translated into higher bandwidth - going from the current 8 MB to 24, 50 or even 100 MB over time, being delivered to homes. Of course, there are countries which are actively driving towards Fibre-to-the-home environments.

On the other hand, there is still some 40% of UK homes which are not broadband homes yet. I'm still looking for data on the exact Internet habits of the lowest end of the adoption ladder, but it should be a key concern for the industry and the economy. For the industry (access, content and online services), it will mean a lost market in the short term and an impending regulatory drag in the long term since sooner or later the government will need to legislate to bring this group into the "information society". For the economy it translates to a cost - since both private and public services can be more efficiently delivered over broadband. Not to mention the less measurable impact of a more aware society, faster dissemination of important news and the longer term impact on education, health etc.

So which should be the primary focus for Ofcom and the Government at large?

The Ofcom already has a public discussion paper out on Next Generation Access - which can be found on the BSG website and also, on the Ofcom website in which addition has the executive summary. The paper suggests that Ofcom is indeed concerned with providing clarity on the regulatory regime for next generation access. This is a very important and worthwhile objective - regulatory stability is one of the key drivers of investment. The Ofcom paper also underlines that it does not consider providing incentives for specific organizations to invest to be its remit. Overall the paper makes very relevant starting points about the issues around next generation access. 2 areas seem to have been underserved in the paper though.

The first, a "sin of commission" is that the Ofcom actively stays away from defining a specific bandwidth target - prefering to stick with a softer definition of "capable of delivering sustained bandwidths significantly in excess of those currently widely available using existing local access infrastructures or technologies." It suggests that the next generation access can only be defined basis the next generation of services. This is putting the cart before the horse. Waiting for the next generation of cars to be built in order to define what the next generation of roads should be. Although this is an early stage of the discussion, having a specific number would be a better starting point for people to react specifically.

The second, a "sin of ommission" is that the Ofcom largely sticks with bandwidth as the main distinction between current and next generation access technologies. While this is an important factor, it is by no means the only one. Discussion points around other aspects of future access networks could include areas such as symmetry, security, interoperability with other networks (such as mobile, or home-networks), ease of metering, implementation of more advanced protocols etc.

To be honest, apart from Video on demand (read: how quickly a movie can be downloaded) and immersive games, there seems little by way of really compelling content or services propositions out there which would necessitate having hugely more bandwidth. Of course, this could change once people become familiar with such high-bandwidth access. Live television is another area, with many people pushing for HD TV over IP. However at this stage, this certainly falls into the category of an national indulgance - given the penetration of HDTV, the profile of users and providers, and the availability of alternative platforms already.

Which brings me back to the other end of the debate. The cost of a disconnected (40%) body of citizens. The PWC Report on Cost-Benefit for Broadband Connectivity done for the EU suggests that there is a net benefit over costs per person to the tune of 176 Euros, in 2007. Roughly translated for the 24 million people that the 40% represent , this would mean 4.3 billion Euros or close to 3 billion Pounds. Whether or not you agree with the exact numbers of this report, which can be found here, the huge benefits for education, egovernment, information and content services, and the overall potential quality of life improvement is unquestionable, as is the significant savings for delivering essential information based services.

It's worth noting here, that in terms of accessibility, some 99.8 % of the UK's population can now access broadband - as their local exchanges support it. This is now not a technical or network problem, as much as a marketing and educational challenge.

The worst case scenario could be an ever widening digital divide, with some people enjoying speeds upwards of 20MB and some still not convinced to connect. The longer term economic and social aspects of this could be quite serious for the UK.

Marrakech - Souk

2006-12-21T17:11:00.000-08:00

Travelling through the Souk in Marrakech, caught by the afternoon sun filtering through the bamboo slats.

Weekend Reading: web 2.0, services, video searches and more...

2006-11-25T11:34:00.000-08:00

Amidst the catching up of sleep last weekend, I spent some time catching up on the Web 2.0 juggernaut that shows every sign of running amock the moment you look away.

A good place to start is the venture-blog which, as you would expect, catches trends early.

One of the areas to watch is the superabundance of tools for blogging (Vox), linking and interconnecting (Sphere). Sphere actually uses a widget which you can install in your to track contextual posts on topics you cover.

The second area is the continuous progress of video tagging and searching. While I've spoken about Video tagging earlier, Dabble is a service which tries to add a layer of intelligence around video searches by actually measuring how people view and link to videos on the web.

A final area is that of the software services model - i.e. defining software as a service which masks the technology and exposes only the service construct. Which essentially means that as long as you have defined interface, you don't really care how the software does its job. As more and more software is written this way, it becomes easy to use a specific functionality without having to buy the whole software (or install it). Yo can try it with services like Flickr and Pageflakes.

In the future you could therefore expect to blog to a number of websites, which you could then contextualize and link to other relevant content/ blogs and pull them into your own publishing environment. It's like doing deals on the run - like the proverbial changing of tyres while the car is still moving.

Stumbling and Searching - the best of both worlds

2006-11-20T16:07:00.000-08:00

I stumbled upon a website today - curiously called www.stumbleupon.com - the premise of this application is that there are people who don't want to google for all their information and surfing but actually want to stumble upon interesting content. Having installed the application (a browser bar - needless to say), the first site it took me to at random was one for measuring broadband speeds (my upstream speed is 340KBPS, but I get 4Meg downstream speed - in case you were wondering). The next site I was directed to after hitting the same button again, was a collection of Einstein quotes. Although not authenticated, by the collector's own admission, its full of little gems such as "Science without religion is lame. Religion without science is blind."

I can think of quite a few reasons why lots of people would like this kind of surfing experience:

I often like the radio rather than my own CDs because I like not knowing which song will play next. Its kind of boring when you know the next song and the one after that.
For a lot of people the joy of surfing is lost if you have to work for (google) everything. And People do get tired of Youtube, Myspace and even the BBC website.
The problem with search is that you're not likely to be surprised or mind-expanded. I mean how likely is it that you'd search for something you've never thought about??

and this led me to understand a key dynamic of the TV-PC unification discussion that so many folks like to have. The TV is historically a "stumble upon" environment. People like to "channel surf" not knowing what little gem they'll discover. Sure, there's always the 57 channels and nothing's on syndrome. But so often we find programs... that we didn't look up in the guide and didn't get told about - but we just discovered.

While enough effort is afoot to change the TV to a search and view mechanism - rendering most of tv like a "Google" experience, it begs the question - will there not be people and occasions to just stumble on good content? I think we all know that most of us at some points of time (and some, most of the time) will prefer this mode of discovering content on TV. And nothing bears this out more eloquently than www.stumbleupon.com which has created such an island of discovery in the middle of an ocean of tagging, sorting, socially-networked-recommending and ever better seek and retrieve mechanisms.

Moo

2006-11-16T16:57:00.000-08:00

Today I discovered moo.com - yes, I know, I'm uncool, and I get things late. But having discovered it, I've ordered my cards. And I'm excited. And since in most such things I'm the barometer of the "early majority" - Moo will soon be a pretty common phenomenon, I'm sure.

Cash Cows to Stars

2006-11-09T01:21:00.000-08:00

The Economist Magazine carried an article recently about the interest of private equity in the media industry. There have of course been no end of bids for media businesses. Today's FT carries a story about a bid for the Tribune Magazine from Eli Broad and Ron Burkle. Well known private equity firms like KKR and Carlyle have evinced interest, and rather well known media businesses from ITV, Vivendi, and Pearson, have been the subject of such bids.

The reason forwarded is a simple, financial one. Markets need growth, private investors just need the cash. As Bhaskar, the Founder & CEO of Recreate Solutions (now sold to Corpus) told me once, you can either have a growth business or a "lifestyle" business, as an Entrepreneur. Of course, the cash coming out of these businesses may not fund lifestyles but other investments for private equity players.

Some of the other reasons mentioned include (a) better management (b) better access to debt and (c) freedom from the constraints of S-Ox and other strictures of public markets.

Its the last, which needs extension. The reality appears to be that Media businesses don't run very well as publicly held businesses. Decision making needs to be snappy and new opportunities need to be addressed quickly. Moreover, with significant changes sweeping through the business and technological landscape which sometimes questions the very viability of some businesses, it needs the owners to make some big bets on the future of these companies. This is very hard to do for a public company.

However the real value of these businesses may well be more than just the cash cows they are purported to be. These are big brands which over the years have built great consumer value and represent something significan to consumers by way of their propositions. If they could create relevant and new products then they have the brands to deliver these to consumers.

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In Defence of "Good-Old" Media

2006-11-08T03:31:00.000-08:00

All around us there is the rumble and crash of old media edifices falling. The image is either a Stalinesque one or that of a terminally ill patient whose concerned relatives are arguing about the right time to switch off the life-support system. OK, so I'm stretching that a bit, but you only have to look around you to see the carnage in some parts of the sector.

The newspaper & print media in general after ignoring the threats for too long and then continuing to believe in their invincibility, have all but thrown in the white flag. Many have now started working with Google as it starts to look more and more like the "all things to all people" - when it comes to aggregating eyeballs. Recent moves by Google to move into both print and radio advertising suggests that the biggest threat Google presents isn't to media businesses as much as to media planning, buying and the advertising business. Ultimately some of that revenue will always flow back into content, except for classified advertising, which has truly "flown the coop".

Today's FT reports that EMAP have called in the BCG to "review" its Magazine business (requires subscription). The article also hints that this will lead to cost cutting in the group. Seems strange to call in a high profile consulting company to tell you what you've already decided to do. None the less, unless the folks at EMAP truly believe that people buy FHM for the quality of their editorial content, it should be reasonably apparent that young men will prefer to go find what they want on the Internet.

In all of this, though the news about the demise of media in general are "greatly exaggerated" Here are a few reasons why.

1. People still consume news and entertainment - and by and large, don't like to go searching for it every day. This doesn't mean that they'll read or watch any rubbish that you put out, but that people evolve their own, simple patterns for finding what they want, and like to go back to the same places, till they get dissatisfied. Good examples of this are the BBC website, the Guardian website, Youtube (on the verge of dissatisfaction?), and a number of successful TV channels.

2. People also want/ need to consume services - which may or may not be tied in to content. Classifieds (like jobs searches) was a service which was tied in to content because it was the only way of getting to a large number of people. Trade and other focused magazines continue to attract their share of jobs and classifieds. But there's no reason to suggest that the best way to find a plumbing service or a second hand car is in a mainstream newspaper. Newspapers that realized this too late had to suffer at the hands of the ebays, craigslists, and monster.coms of the world. Successful services like Flickr and skype not only take advantage of basic needs, they also should and could have been thought of by existing businesses.

3. The published (note: not printed) word, has a value which is distinct from that of the audiovisual. It stays there in front of you as long as you want. In an audiovisual, if you get distracted for a few seconds, you have to rewind back to where you were, and this is not possible for 80% of the audiovisual (a/v) content we consume. Published content can be consumed at leisure, with interruptions, at your own pace. Whats more it can be searched, underlined, highlighted, passed around and marked up with ease. Although technology will change and morph our ability to manipulate audiovisual content the same way, the published word will not go away in a hurry. But tying it to any format (including a website on the internet) is restrictive and dangerous. Think RSS and see a service called pageflakes

4. A/v content obviously has the advantages of being more compelling, dramatic, worth a thousand words etc. But a/v content is not the same as television. Equally, there are a bunch of services which can and need to be delivered around a/v content. Advertising is one such service, that meets the needs of one set of stakeholders. But surely, the ability to search and tag, to highlight or "underline" - are some of the things we'd like to see in video content as well. Enter blinkx and services like Veotag and Click.tv

What's changing is the "easy street" of content distribution. This known and trusted model of newspapers, magazines and TV channels - which has become all but formulaic. It just means that content - both published and audiovisual, and services (connected to content or otherwise) will have to think a little harder about what consumers want, how much they're willing to pay, and how to make money of them.

What Price Music?

2006-11-02T16:03:00.000-08:00

As expected our Intellect Convergence Conversation session on "What Price Music" - started with a few strong positions and some edgy interactions, but surprisingly, got quite constructive towards the end with more than one participant suggesting a longer time-frame would have suited the discussion.

At the heart of the problem was the challenge of "competing with free" - how do you compete against the free giveaway? What can actually help increase the value perception and hence the price of the product? This is the big question the industry must answer.

A part of the problem lies in marketing - how to raise awareness of the value of music? Or, perhaps, how to raise the relative value of music, since, as somebody pointed out with this classic quote from a 12 year old - "we have to spend money on shoes, phones, music... if I could download the trainers for free on the net, I'd pay for the music!" Of course, the irony shouldn't escape anybody - the same consumers are probably downloading ringtones for 2-3 Pounds each.

On the other hand, perhaps this IS the future of the industry - the average price of the product has come down and this is here to stay. Certainly a large number of people are of the view that piracy is not really curable. It needs to be factored in to the economics of the business. This means that a part of the answer is structural - the industry has to re-organize itself against these lower prices. After all there are plenty of industries, which face the challenge of having to innovate in order to bring prices down year on year for their clients - ask any of GE's suppliers.

Isn't it funny though that there's such a consistency in music pricing? I mean its almost an arbitrary figure. Even though we quibbled about whether its actually consistent, the fact remains that there are only mild variations in the pricing of new albums (irrespective of number of songs, effort, quality of recording, past track record of the performers, etc. Even less so for tracks - which are uniformly priced at 79p, on iTunes and other platforms. Of course, the reason for this is that this is the only way the industry can work, without confusing the consumer and the retail environment by evaluative pricing for each piece of music.

The issue becomes a little clearer if you consider that digital music really has an "infinite supply" and so it needs an almost arbitrary price to make (and clear) a market. Although people have suggested alternative "stock exchange" type models with prices going up with the number of items sold, this is far too expensive to implement and also will not help tackle piracy.

There are other pricing models out there in existence - including those of Yahoo, eMusic and others - largely focusing on subscription revenues against which you can download or play tracks as you go. These have had mixed success and with Spiralfrog set to launch, these attempts are still playing themselves out.

One of the interesting thought-experiments you can conduct goes as follows: if you had access to ALL the music in the world, ever created, how would you decide what to listen to? Clearly, one lifetime would be far too little to even sample every piece of music! Therefore you would need somebody (or some tool) to evaluate and make recommendations to you. These could be based on your past preferences, defined parameters or by market opinion. Which ever it is, you might be willing to pay for this service, even if the music itself is free. This may well be one of the value sources for the music industry.

Another obvious point around which opinions largely coalesced is that one of the main ways to price music is to bundle it with services. These could be ancillary services which have a loose affiliation to music - such as broadband, or "coffee shop ambience", or they could in fact be the outcome of studying listening/ usage patterns for music. For example, it might be possible to charge a few pounds for creating playlists - based again on defined or assumed parameters. E.g. "weekend party at home" or "high energy music for exercise".

There are of course services out there which are doing some pretty complicated analyses already to match the kinds of songs you like to the kinds of songs you might like. Pandora is one such service.

The bottom line is that simply selling the songs will have a limited and potentially shrinking market in the long term. Prices will need to drop, and even then, piracy will not go away completely. All businesses in the industry will need to work harder at marketing the value of music to the consumer and ensuring that this is reflected in the price they're willing to pay for it. But more importantly, over the next few years, the industry will have to be structurally clever and innovative in product design so as to create a bundle of services around the music using which businesses can make the consumer an offer he can't refuse.

Until then, the debate on music pricing will go on.

YouTube Future – Napsterization or Brave New World?

2006-10-26T03:48:00.000-07:00

It was as clear as the writing on the wall. Almost as the ink was drying on the signatures on the Google/YouTube deal, content companies across the world were sharpening their knives in anticipation while dialing their lawyers with the other hand!

NetResults, a company representing the rights of Formula 1, Australian Open Tennis and others, is the latest to identify over 1000 videos which it demands be removed from YouTube (with another 10,000 to follow). This follows the Japan Society for Rights of Authors, Composers and Publishers (Jasrac) forced YouTube to remove some 30,000 videos from its archives.

This is despite YouTube moving to limit the length of the videos to 10 minutes earlier in 2006.

Youtube has already looked at deals with CBS and the labels – BMG & Universal – whereby the owners of content get copyright protection as well as automated software to trap copyright violations.

There are 2 likely outcomes of this. The first is that content owners get all huffy and demand that their content be removed. This is the initial response of most content owners or their representatives – as in the case of NetResults. This needs to get classified in the “really-bad-move-which-shows-we-haven’t-learn’t-anything-from -Napster-and-the-music-industry” section of our idea bank. There is a character in Mahabharat (the great Indian epic) who cannot easily be killed in battle because every drop of blood that falls on the ground creates another incarnation. In the same way, you can expect a hundred underground file sharing and video sharing sites to pop up, increasingly hosted in remote countries, where the legal process is slow at best and copyright is a grey area. To be followed by annual releases by industry analysts on the billions of dollars of lost revenue.

The second possible outcome is that content users will stop trying to fight the dying of light and recognize that content sharing on the web is here to stay as sure as night follows the day. They will then focus on how to exploit this rather than how to stop it. A starting point is the sharing of advertising revenue. Rather than demand that the content be removed, they should negotiate for a much higher percentage of advertising generated by the content.

Of course we’ll get both kinds of responses and some in the middle. But its telling that the music companies who have suffered in the Napster saga have been quick to get to the ad-sharing model.

There is an issue of right and wrong here, which I’ve sidestepped so far. In our current framework of thinking copyright theft is wrong. And I believe this. However, in any society, the majority defines the “acceptable” behaviour and it’s the deviant who is seen as a criminal. Laws follow majority thinking. So in due course, I expect that the legal framework on content protection will shift subtly but surely to reflect the views of the majority, whatever it might be at the time. Remember there was a time when “witchcraft” was wrong and punishable by death. And carrying fire-arms without license was once perfectly legal in many societies but is a criminal offence today. Hosting pirated content was deemed a crime recently, irrespective of whether the content was put there by somebody else or by the hosting entity.

It will be interesting to see if the YouTube story follows the lose-lose model of the Napster saga or creates a brave new world of content monetization.

Pageflakes

2006-10-21T03:01:00.000-07:00

About 7 internet years and 1 bubble ago, I had an idea - why not create a completely user centric browsing experience. A really correctly named "MyPortal.com". The idea would be to use web services to create little windows which you could build without knowing any HTML, but just by using drag and drop tools. So you could say - in this box on top, I want a link to my bank. Here I want to link to all my utilities - phone, gas, water etc. Here's a link to my council tax, local library and gym, and on the other side, a window for all my favourite blogs. Right at the bottom, a link to my yahoo, and other personalized pages, my news papers... you get the idea.

I knew at the time, that a good idea like this lasts about 6 months (which is about 5 internet years, or 3 internet years and 1 bubble - bubbles initially speed up and then dilate internet time).

So its wasn't a surprise when I discovered pageflakes in the sign off line from a friend who works at Benchmark. Although largely US Centric and not absolutely user focused as was in my mind, the site pretty much delivers the experience I had thought about and no doubt, they'll add the rest. The key difference is that this is all server centric - which means any data you share will reside at their end.

It would be nice to have a local version as well, but of course, that means you're tied to a device. Can't win them all! But here's to pageflakes - long may the idea thrive.

Print Publishing's Growing Pains.

2006-10-19T12:27:00.000-07:00

I continue to believe that the line between print and broadcast will start to blur and then vanish. As we speak, the print publishing industry is reeling. Strategy and reorganizations abound. In LA the Tribune company has faced open revolt as they try to cope with the downswing by reducing editorial staff. Many others, from Dow Jones to the Guardian - household brands all, have announced strategic rethinks.

As is common with most media businesses, newspapers have traditionally under invested in the technology changes changing their world. This is true both for internally facing tech - which drives the business and external - i.e. the web and other consumer facing technologically evolving channels. As the FT reports, the Business Week Magazine, which has been running from 1929, has only had a part time editor for the web version till last year.

The numbers tell their own story - the online advertising has risen by 60% year on year, while print advertising is, of course, flat. The print version has under 1 million circulation now. Even accounting for (say) 5 people per copy, it still reaches less people than the online edition which has 7 million unique users and 50 million page views. The fact that online advertising is still only 13 % of the total, is probably brought about by lack of support there as well.

And still the real numbers aren't getting discussed - the number of registered users, the number of actual clicks on advertising, the hundreds of stratifications possible on the user and usage data which can be fed to gleeful advertisers. Of course nobody in publishing is talking about video numbers, though the FT, and most other magazines are dabbling with podcasts, and videos. This is a mistake. This will grow and the smarter publications will become "pan-media" companies. You only need to look at the BBC to see how it can be done.

Google, Youtube and the Napster Effect

2006-10-10T03:03:00.000-07:00

So it's happened. Given the success of the MySpace exit, Youtube was always going to attract its fair share of suitors. It's just a shame that 2 of the most promising plays in the Web 2.0 era, have cashed in. It's the equivalent of Google, Yahoo, Ebay and Amazon selling out 5 years ago to the Microsofts, Viacoms and WalMarts.

No prizes for guessing who the winners are here - the founders of Youtube - Hurley & Chen - who, having seen it happen to their earlier employer - Paypal, have now walked successfully down that road themselves.

Google is a winner too, sort of. As one of the quoted analysts mention, this essentially adds a whole lot to their inventory. They still need to integrate the search technology, work out better indexing and delivery but its all good from there.

Big Media are happy too - they have much greater leverage with a listed and wealthier entity than with a start up with no revenues or business model. They can exert a much greater influence on their content, and the pirated versions therein.

The only losers in this deal may be the punters. The 50 million people who come to the site to see the latest gaffes from George Bush or the Peter Crouch wonder-goal, or just sample the range content from weird to wonderful, and from inane to inspired. For them, the crack down on "illegal content" may take a chunk out of the Youtube allure.

If the Napster story taught us anything though, it's that preventing 50 million people from doing something they really want to online, is like trying to prevent ageing. If indeed there is a crackdown on the pirated content on Youtube, it will create a whole generation of YouTube clones. Which will be a whole lot harder to track and take down, but equally, harder to find - you'll have to be in the know as a consumer, as to which site is the flavour of the month for your favourite content. They will appear occasionally on Wired Magazine and on geeky message boards and other places where digital culture builds its crossroads.

Is the Tide Turning?

2006-10-06T13:43:00.000-07:00

Is the tide turning for the Music industry? They've coralled the pirates, threatened consumers and grimly held on to their turf, withstanding the furious digital onslaught. But will they actually beat the unstoppable force that is the consumer?

Victor Keegan writes in the Guardian " The recording industry's imposition of its own contract law - which can last forever - on top of the laws of copyright can, as the British Library has pointed out, override "fair use" provisions and even end copies for the disabled. The government should resist industry pressures to nail down costly long-term restrictions when the digital revolution is making content cheap and accessible." (read the article here)

Once consumers really start voicing their feelings will the unweildy economics of the Internet drive a wedge through the current models and margins of the recording industry?

What Ikea Could Learn from Amazon

2006-10-04T06:04:00.000-07:00

There are some basic flaws (annoyances for consumers) with the Ikea superstore model as it works currently (or doesn’t in some cases).

First, you can select all the right bits and pieces, make diligent notes, but then in the self service area (where you go to pick up all the components of your cupboard or table or shelves… ) you may well find, as we did, that the colour you chose is out of stock, or perhaps the model itself. This is despite being told upstairs that things were in stock. One explanation here is that the last piece may have been sold and collected between your seeing it and collecting. As this gap may be an hour or more for a lot of people, this is quite likely.

The second challenge is the sheer physical work involved – K and I struggled and at times I was picking and trolley-ing boxes which were marked as “2 people required for safe handling”. I saw lots of people struggling with the weight of the material and anybody not used to lifting say 20-25kg weights and being able to handle the unwieldiness of boxes 6 feet long, must not try this alone!

A final issue is that often people make mistakes or Ikea themselves do. My friend Carmen was stuck at checkout because they insisted she had only picked up 3 legs of the table she chose and they refused to facilitate her paying and then providing the 4th leg. Our cousin Kiki came home to find his chest of drawers had a drawer less. On calling Ikea he was told that they would need to watch the CCTV footage to assess the veracity of his claim.

All of this can be avoided if Ikea takes a leaf or two from Amazon. The Ikea experience is similar to Amazon in that the buying decision is segregated from the fulfillment. Of course in Ikea the payment comes right at the end. Here’s how it could work a la Amazon.

Ikea should have “electronic” payment stations situated across the store itself. Customers could get hand held equipment (these can be rented for a price) which allow the creation of a “shopping basket”. By linking this to the inventory position in the store, customers can first, get a near-live update of the stock position and can make substitution decision while in the store itself. When customers are ready to complete their purchase they could do so on their handheld or at payment booths scattered across the store.

Fulfilment should be done by professionals, using RFID and other automation technologies, so that when an order is placed, the Ikea trained people can pick, stack and have it ready for collection at the gate. This avoids customers having to wrestle with both the weight and shape of packed desks and bookcases. The use of effective technology is a key issue for ensuring that across the entire store the stock position is accurately mentioned to the last unit.

You can even imagine “warnings” given to shoppers who have chosen an item which is down to (say) it’s last 5 pieces – so they would know that they needed to have a back up.

Finally, by the method above, the number of errors will come down, simply because of better trained people and better use of technology. Replenishment also will be faster as you wouldn’t have shoppers meandering through the store trying to push a 100 kilo trolley around other shoppers.

The phrase “Click & Mortar” used to be a popular phrase a few years ago, essentially to imply that virtual retailers needed to adapt parts of their physical brethren. It is perhaps as relevant for real world retailers to pick up the odd leaf or two from their online colleagues.

Governments v Business

2006-09-22T01:55:00.000-07:00

One of the most interesting tussles to watch over the next few months and years will be the global struggle between governments and businesses.

Why is this a struggle?

Well primarily because businesses are overwhelmingly focused on one goal - delivering value to shareholders. Governments have a juggling act to do. Protecting citizens, encouraging business, raising and spending public finances, and many many more.

The US government has been in a tangle over the laws about Gambling. They haven't yet made up their minds about whether it is or isn't illegal and if the former, then which regulation exactly if falls foul of. And which forms of gambling are illegal? Primarily in the US, Gambling is legal in certain states, and it's interstate gambling which is illegal. And although Poker as a show on TV is legal, it appears to be illegal for the internet. 2 different senior executives have been arrested. And all we have is confusion. The reality for businesses of course, that in today's world, it can be based anywhere and run as efficiently.

Gambling is just one example. Whether it's taxation, consumer protection, copyrights, or any other aspect of business, Governments across the world need to innovate. The creation of Ofcom was a key step in the UK and the Ofcom's record has been good. But given the pace of change in the market, you can understand why it's hard for any government body to stay in step.

User Generated Content

2006-09-18T12:04:00.000-07:00

Here's an interesting one - besides a view through Laurence Lessig's eyes of the world of user generated content, it's a pretty good example of how Web 2.0 works.

IBC 2006 Day 2

2006-09-09T10:06:00.000-07:00

There are 2 themes that dominate the IBC this year... but when I say dominate... it's almost in a subversive way. The IBC website highlights the first of them - IPTV. Only to be expected. The strange case of the mature industry without consumers continues to ravel and unravel. There are ever more solutions, capabilities, products and technologies coming through and maturing. I attended a demo by Espial, and walked through the stalls of Scientific Atlanta and about 20 others. Same story. Impressive offerings, no consumers. Sting sang "heavy clouds but no rain" - this should be the current theme of the IPTV industry. Amidst the hundreds (over a thousand) exhibitors, permit me the awful pun of suggesting we need to focus on the "inhibitors". The first of these probably is my oft repeated moan that there are no real consumer facing innovations beyond VOD and some games. And no killer app that will swing a few million user suddenly. The second is probably that the biggest Telcos are dragging their feet on significant roll out of services, while smaller ones lack impact. Major broadcasters haven't swung yet, understandably, holding firmly onto their traditional advertising revenues. Finally the real economics, infrastructure and rights issues are being resolved slowly.

But the second key theme, announced with less fanfare up front, is the sudden emergence of DVB as a viable platform with a real agreement on the adoptions standard, which was signed this June. Although just like other emerging platforms, you would expect a lot of mis-adventures and the occasional stop-start, the DVBH (Mobile TV) engines are beginning to rev. Time to start thinking about yor mobile TV offering, if you haven't done so already.

Website.

2006-09-07T00:20:00.000-07:00

This blog has been neglected for a couple of weeks, while my writing skills and considerable amounts of time and energy have been channelled into putting up the ThinkPLANK website. Finely handcrafted, the website is now available at a URL near you. www.thinkplank.com.

Back to blogging soon.

Don't Just Store It, Flash It

2006-08-21T15:52:00.000-07:00

Today's news that Sandisk is launching a flash memory based music player to compete with the iPod Nano marks a another milestone in the evolution of Flash based storage. A journey that started a while ago and is a great example of why sometimes a solution in search of a problem may still be a great invention. Well documented by the Economist in this article, the "floating gate memory" has its humble ambitions enshrined in this quote from the same article...

"Dr Sze, who now works at the National Chiao Tung University in Taiwan, recalls the initial reaction to this breakthrough. “My boss said ‘Simon, tell me, what use can you think of for this device?' I could not think of anything.” As a result, he was told to bury the result in an obscure journal, lest this useless invention draw the ridicule of his peers. "

It has become apparent that the Flash Memory (all the USB Sticks, and memory cards that go into cameras and the gadgety phones) will eventually catch up with traditional (RAM and ROM) memory. Flash memory can be rewritten like RAM but it can also retain data when switched off, like ROM.

In the march toward convergence, these memory devices which are additionally able to store more data in a single cell and are engineered to have a much smaller form factor are key to more usable and versatile devices which can fit into the palm of your hand.

This also has additional ramifications on Consumer Electronics devices. As governments mull on a possible levy on devices that have a "standby mode" on grounds of energy consumption, there is clearly a need for many devices to stay "on" while it interacts with service providers even while it is not being used actively by the consumer. Expect flash memory to make an appearence here as well, as a temporary but reliable storage which can feed both content and metadata to multiple devices.

Don't expect your laptops to become miraculously lighter overnight, but do watch the growth of Flash Memory and see how it creeps up on you.

Squaring the Circle on Travel Online

2006-08-16T08:52:00.000-07:00

Excellent article in the FT today - "Travel Guide books arrive at a Digital Destination" suggests that:

(a) it's possible to embrace the web and yet retain the niche print audience. The Rough guide puts all its content online, but most travellers don't travel with laptops. And the book is still a lot more convenient than a 100 page printout!

(b) the web and printed content often service distinct purposes. Apparently people buy the book for the "real excitement" of the holiday and as a memento in a shelf. I've done this so I have to agree - the Footprint guide to Egypt was brilliantly well put together - less gloss, more value. Come to think of it, putting a travel guide for, say, the Easter Islands, on your shelf, is as much a expression of your intent, and can even be used as a lifestyle statement!

(c) the web and digital editions can be much more agile, addressing needs which print simply cannot. E.g. the 2 page pdf download on complete solar eclipse from Bolivia was downloaded over 65000 times.

Having said that I'm yet to see a website which pulls the entire travel experience together. The guide, the bookings, the expert advice, the local language dictionary, the online photo album space, the list of cybercafe's at your destination with maps, a service for buying stuff and getting them sent home while you wander further, updated news on travel, weather and other relevant stuff. Specific questions answered on a personalized WAP site accessible via mobile. The mother of all travel mash-ups?

COIP or Cautiously Optimistic about IP

2006-08-15T15:24:00.000-07:00

It's been the essential suffix for accronyms. The must-have accessory for 3 letter and 4 letter abbreviations of the technology world. Since forming one half of an extremely successful duo (along with TCP) in the early days of the Internet, IP (Internet Protocol) has gone from strength to strength, being involved with storming the Bastille of Voice and even taking on the might of Television.

IP which essentially enables / is synonymous with Packet Switching technology - allows you to send data before a circuit is set up. Hence the term "connection less" and also the reason why web pages are "stateless". Packetization is what enables the fault tolerant public internet. IP addresses allow millions of computers across the globe to be uniquely identified.

No wonder then that the march of IP has been inexorable. But as we all know the Internet wasn't designed or set up to replace telephones or television. It wasn't intended to deliver high quality of service. And although IP version 6 (the next version due to be adopted over the next few years) could address some of these problems, current services have to innovate around these challenges.

Which is one of the key reasons for bearing in mind a key distinction between IPTV and delivering TV content over the Internet, which also uses IP but isn't IPTV. What's the difference? Well this isn't an "industry definition" but IPTV should be used to define a set of services where the quality of service (picture, sound, frames, resolution) are all controlled and maintained at a level equivalent to Television. This is different from dumping a lot of content onto a server and allowing people to watch it over the Internet. Though the latter uses IP as well, the quality of viewing is determined by completely "extraneous" variables such as volume of traffic at the time, available bandwidth for the user and the provider, number of hops from the user to the server etc. In fact you can even deliver TV over the Internet but not use IP (this was, I think what HomeChoice from Video Networks was doing - they had their own protocol instead of IP). Of course it remains to be seen what Tiscali will do, having purchased Video Networks.) Of course if we all had fibre to the home and bandwidth became "infinite" then this distinction would lose value. AT&T and Verizon are both trying to make this happen in the US.

The same goes for VOIP. While you can connect and talk over a number of devices, there is a current gap between quality of service on public telephones 99.99% acceptable call quality, whereas VOIP providers are at 80% on average. No wonder analysts are questionning Skype's growth and seeing a flattening out.

Bottom line, IP is still an irresistable force. But it's velocity of world domination may depend on the quality of networks, or the emergence of IPV6. In the meanwhile, providers will need to pay to play. Only by delivering truly comparative services (with traditional TV or Phones) will IP based services succeed and for the next 24 months, this could need some investment as well).

Newspapers, 2016?

2006-08-14T15:55:00.000-07:00

Sickie on Friday the 11th - no post.
Still under the weather today. Just a few thoughts:

What will the newspaper industry look like in 10 years? Here are 10 pointers.

a) each niche (example "cricket") will have 1 or 2 publications which will dominate globally
b) the successful ones will redefine their business design radically. Including tabloids, broadsheets and financial papers.
c) News distribution will be as it happens, not published once a day.
d) Paper based distribution will not vanish but will drop to a tiny fraction of today's volumes - and may favour magazine formats - like weekend newspapers.
e) paper based printing may be decentralized - printing may be done in local offices and homes
f) Push and pull mechanisms of delivering content will both coexist.
g) consumers will choose the time and device for viewing the news
h) "newspaper" companies and "broadcasting" companies will be indistinguishable from each other - from news gathering to production and delivery will be a mix of written and audiovisual content
i) individual writers/ content creators may become much better known and followed than specific papers.
j) clear lines will be drawn between news and entertainment - and public service publishing (including broadcasting) may dominate news.

More on this soon...

Truth, Or Some Such Thing, Will Out.

2006-08-10T14:15:00.000-07:00

To recap what I’ve said before at various points, with information ubiquity, arbitraging on facts and exploiting your consumers’ partial knowledge will pass into history. In general information about everything will be more and more accessible and the few remaining gaps will be plugged by public knowledge.

For example, I made a mistake yesterday by calling Tata Sky the first DTH in India, which Raj was quick to point out (Thanks Raj!) It is, in fact the third. Dish from Zee and the state owned Doordarshan or "DD" have both gotten there earlier. Interestingly, DD’s reason for adopting DTH was to enable the last 10% of the population which couldn’t access terrestrial television.

On the much larger canvas of public life, we’ve had stories about citizen journalism nabbing errant politicians, and magazines finding out their rogue contributors. Nick Anthis, a recent graduate of Texas A&M caught out George Deutsch, the Bush appointee to NASA who claimed he had done a PhD from that insitution, and Wired Recently fired a contributing writer, Philip Chien for fabricating quotes or mis-assigning quotes. Interestingly Philip seems to have taken the trouble to create a Hotmail account for the contributor of thr quotes, but the IP address used by this hotmail account has been traced back to his own machine.

At the same time, technology is being put to use for more devious purposes. One of which is the tapping of the Royal phones – for which News Of The World is facing further Censure, following its earlier penalties this year itself

This comes at a time when increasingly a generation is opting for more information rich environments – over traditional, unidirectional broadcast communication.

Like it or hate it therefore technology is here to stay. It’s a part of our lives that we can no longer choose. But technology itself is neither good or evil. It can be used for either, though.

The other and more immediate danger is that in the deluge of information, it can become hard to ascertain facts. Wikipedia is an excellent example. It’s a great starting point for any research but by definition it can be wrong at a point in time. Sometimes this can be guarded against, as in the case of Colbert but mostly, the boundaries of truth and facts are a bit fuzzy in a Schrodingers Cat sort of way.

So while we can say with a certain degree of hope that ultimately in this converged, online and plugged-in world, truth will always prevail, the truth can sometimes have a tortuous journey to the surface of public awareness.

Tata Sky Rises, ITV Stumbles

2006-08-09T09:19:00.000-07:00

An Era ends an Era begins.

In India, Tata Sky launches the first Satellite based DTH Television distribution system. Coming on the back of analog terrestrial on which you essentially get government controlled content and Cable, which is a lawless world, where anything goes (the local cable guy decides what the neighbourhood gets to watch and a number of channels look like they've been filmed through a snowstorm), the DTH should find a readymade market for upscale consumers willing to pay for quality. Thereby slicing out a chunk of advertising revenues as well. Starting with 300 cities, the offering lets consumers have 55 channels for the equivalent of $5. Although IPTV operators are making noises about kicking off as well, Tata-Sky should have a lead of 5 years before Broadband penetration catches up. Also ironic given the doom and gloom surrounding the satellite industry worldwide.

At the same time, in the UK, Charles Allen prepares to leave the increasingly muddled ITV which with every passing day seems to be in no-mans land. Despite owning a number of valuable properties, the broadcaster seems to be in perpetual transition.

A key question may well be - how many broadcast channels of different hues is there really room for in future? Does ITV's future depend on its owning the "TV Drama" space? And is that really defendable? Is it a shifting target?

ITV would do well to cast it's eye over the future of entertainment drama. Which may well lie somewhere in an alternative reality environement with players, not viewers. Where people pay money to buy virtual provisions and equipment to act out their wars and their loves. And guess what! There's space for advertising there as well.

Another question worth asking is "Has ITV really taken advantage of its new Media opportunities?" The website is essentially a support for its Television programming as opposed to the BBC website, which is an independent news dissemination entity. The iTV Mobile site seems much the same - and there don't seem to be too many non-TV properties which have been adequately explored.

Friends Reunited which is a non-TV property doesn't seem to get much airtime on TV - which is the reverse cross media push one would expect. More than likely, its just me that's missed the ads or the programming. But its easy to create formats around school crushes and where they are now type programs.

Of course we know that good execution beats good strategy in these times of fast change and shifting industryscapes. ITV's website has a section on local news from where you cannot navigate back to the original ITV website. This is probably symptomatic of some of the challenges of ITV's structure where amidst the strategic reshuffling, execution becomes a victim.

A last thought. ITV isn't supported by license fee or public funds in the same way as the BBC. Why then is there such a strong UK focus? Whither globalization? Especially given the global nature of web properties, the dramatic influx of non-English people into the UK such as myself (Friends Reunited is useless for me), and the inroads that non-UK media has made into the local market - be it Yahoo, or Google, or CNN or Myspace. I wonder how many people in the UK download the John Stewart show from the Comedy Central website and if there are any comparable shows that the UK's leading commercial broadcaster has, which are accessible to people in the US or anywhere else in the world. Numbers anybody?

Unbundling the PC - Scope for New Devices?

2006-08-08T00:24:00.000-07:00

Sony Corp has just announced a new device - a small hand-held device called Mylo (my life online, if you really want to know!) which is a 2.4 inch screen, a thumb keyboard and is intended for instant messaging, and other Internet based communication. Can do email but can't do corporate email (read: No Outlook, although it doesn't say what would happen if you tried to do Outlook Web Access). Yahoo and Google chats are included and Ebay and Skype are also partners. Of course, it plays music and talks with other Mylo devices. Mylo was also Sony's branded Wireless service.

Which brings me to an interesting point - the unbundling of PCs and phones. Even as feature packed and Swiss Knife like devices have proliferated in this space, there has, I believed emerged a large market for unbundled devices. Let me elucidate with some examples of products not yet in the market (to the best of my knowledge!). Of course the new Swiss Army Knife comes with a USB memory stick and an MP3 player which is detachable, so when you board a plane you can just carry the music and leave the knives in your luggage. This is worth remembering as we continue forward.

The PC has moved from computing, to office automation, to communications and finally to an entertainment device. To be really honest, an abominably miniscule fraction of people probably use more than 1% of the computers "computing" capability - both in terms of hardware and software resources. So isn't there a market for a pure browsing device? A stripped down device with a laptop form, which can be used for browsing and viewing files with a very stripped down computing functionality? And priced at an entry level? Pepper Computing has both such a device as well as the engine to allow others to make this device. But I'm willing to bet most of you will not have heard of Pepper Computing! Sonly's Mylo is priced at $ 350 which seems quite expensive. This could be an ideal second computer - for kids to browse on. See my earlier reference to Miuchiz, yesterday.

And why not have PC's themselves which you can stack up and buy functionality as you go? From a software perspective this is what Writely and other web based applications are seeking to achieve. But can hardware components be made plug and play? Just like the USB port has moved to the front of the machine for consumer PCs, could we have PCs where you can plug in more computing power soon? So that you enter the market with a low RAM machine aimed at surfing the web and upgrade as you go?

The same applies to mobile phones. My mobile phone, the XDA Exec, is 8cm X 13 cm X 2 cm. It flips open and has a querty keyboard and a 3.6 inch screen. Which is great while I'm working and looks like my laptop has its own mini-me. But if I could pull out a sliver of it which just gives me a basic phone functionality and slip it into my back pocket when I'm out for the evening and don't need my Outlook calendar, tasks, skype, notes, Wi-fi connections, or Powerpoint, Excel and Word, that would be fantastic.

To be sure, this isn't a new idea, there have been discussions like this going on for years. But it may be an idea who's time has come.

Value Migration & Convergence

2006-08-07T15:51:00.000-07:00

Adrian Slywotzky, of Harvard Business School, wrote a great book in the 90s, called Value Migration. I rate it as one of the top 10 business books I've read. The core premise of the book is that value (as measured by capital markets) migrates, from company to company, from industry to industry and from business model to business model.

The reasons for value to migrate may be many. Technology change is a common theme. Another is blurring of industry boundaries. And the pattern of migration may also differ. Blockbuster migration, from products to services/ financing, disintermediation and re-integration are some examples. Slywotzky says that like good chess players presented with a picture of a game in progress, people who have spent enough time understanding value patterns in industry can identify patterns in play by looking at snapshots. This is useful as you can stay ahead of competitors by predicting and staying ahead of such shifts. Also, if you understand the reasons for the shifts, you can obviously take early action.

The reason I'm reminded of this, is the shifting value pattenrns across much of the telecom, media and entertainment industry. Here are some current examples.

The WSJ reports today, that there is a marked trend of value shifting back towards the cable companies in the US. Cable subscriptions are growing and they've gone back to levels last achieved at the turn of the decade. A key reason for this is, of course, the ability of cable companies to offer triple-play services, which Satellite companies cannot do easily. There's a long shadow over satellite companies in general - leading to questions about the Satellite side of the News Corp Business, across the World (DirecTV, BskyB, Sky Italia and Foxtel). Though BskyB's purchase of Easynet and launch of the Broadband service suggests a counter strategy is already in play.

Of course for News Corp, there's the upside of MySpace. For those wondering about how MySpace was going to return the 600 million odd dollars NewsCorp paid for it, Google has signed up to be the exclusive search provider on MySpace for the sum of approximately $ 900 million. This is value shifting into search advertising (or so Google is hoping) which will come at the expense of other advertising budgets. Brands like Fosters are experimenting with Web-only marketing campaigns. Are we getting the drift of Value Migration again?

Where's this budget coming from? Well Print and Radio are still fighting with their backs against the wall. Newspapers have been in decline over the past 10 years and anybody who says this isn't true is either deluded or using intentionally specious arguments. The Wall Street Journal has recently started selling ads on its front page. Trinity Mirror has just announced a strategic review. Some French dailies are demanding government subsidies for survival, against a backdrop of the top 4 national dailies in France losing collectively over 5% circulation in the past year alone. (See FT Article: French Dailies Struggling to Survive.)Though some groups such as Dow Jones and Pearson have announced strong results, it's clear that these are businesses which have strong technology plays and also are providing business information as much as general news. Technology change has played a huge role in shifting value from paper publishing to online publishing. The Huffington Post, a collection of bloggers (assimilated by Arianna Huffington) with their own following, and started in 2005 has just raised $ 5 m in venture capital from Softbank and others.

It's not just media. MGA Entertainment, makers of Bratz dolls, has now invested over $20m in creating the first of 5 technology enabled toys (Miuchiz). A handheld console with characters for playing solo, or using infra-red with other consoles, or plugged into PCs to become a part of an online community (Planet Mion). Traditional toy manufacturers and retailers have seen their value erode for some years now, and again there are some signs of where they are going to. See graph alongside for Hasbro - Source: YahooFinance.

The technology quotient of most businesses seems to be on the rise and this is increasingly being rewarded by the market. Though, a closer look might show that rather than just technology, it's technology which drives relationships which is capturing much of the value today. Where are you in this migration?

Of Hubs, Gateways and Doorkeepers

2006-08-04T11:05:00.000-07:00

The way to a man's heart may well be through his stomach unless, as my humourist friend Rahul maintains, you're a cardiac surgeon. However increasingly, the way to his wallet, if you're a media, content, or entertainment business, may be through his home hub.

There has been plenty of writing about the potential of home networks. This one in the FT today (subscr) suggests that they may already be among us. According to this, Thomson's Livebox (mistakenly refered to as "lifebox" in the article) has sold 2.5 m units in Europe. And BT have also announced a similar device using the same design.

In its most evolved form, the home hub can store content, connect to the Internet and serve all the devices in the home - laptops, televisions, phone devices and game consoles, all wirelessly and most using IP.

Although there are counter views, and people quoted in the same article argue that the PC does this job well enough, once IP based voice and Television take root, and the number of devices in the home increase, the hub clearly comes into its own. Cost may be an issue but Intel's Viiv is one of many products aiming to drive the price of chips down. And with the world-wide chip market consolidating, fast, it's quite likely that prices will move down and stay down - driving more adoption by consumers.

Will the home be network centric or server centric? Another question debated in the article, but again you would have to believe that the route to the network centric world is through the server stage. Again, the hub is the closest thing to the home server. How complex will it be? Well hopefully the providers will figure out a set of simple interfaces. Ruwido is a company that makes interesting input devices (keyboard/remotes) and Motive creates software intelligent automation software which goes into services delivered by broadband providers. These will play their role in simplifying. But to be honest, how much more complex can the home hub be than some of these?

Another company (also mentioned in the FT Article, and one that has an innovative approach to in-home networks is Ruckus, which uses an innovative network design to ensure signals can go through walls and are directionally sensitive, and also analyses for dropped packets.

Whatever the network design, though, you would do well to keep an eye on the "Home Hub" space. Companies which aleady have a device in consumer homes are making their play to become this device. TiVo has signed up a number of content providers including NBA, CNET and iVillage, according to this article from the Wall Street Journal online, with some content coming straight to the box off the Internet. Likewie, According to the piece, the users of devices such as this don't even know / remember sometimes whether what theyre watching is coming to them via the web or via traditional broadcast systems. Whoever owns this space could well weild as much power as Microsoft, did, in the PC era.

Speaking of which, as you know the Ray Ozzie has just declared the PC era over, at Microsoft. But more on that another time. For now, keep your eye on the Home Hub, because Microsoft (Zune?) could pop up there as well.

More Convergence Consumer Commandments

2006-08-03T14:39:00.000-07:00

... So as I was saying, there's a bunch of more things I'd like to see in order to be really impressed.

The first of these would be overall efficiency in post sales servicing. I know this is the unsexy part of the business, filled with irate and intransigent consumers from hell and some hundreds of faceless call centre operators from some distant land. But all this adds to the customer experience (as it does I'm sure to the bottom line). So it would be nice to have service with the same enthusiasm with which one gets sales inputs. When I bought an earlier phone - on a Three contract, and lured by all the 3G hype, I paid dearly for my enthusiasm. The store knew nothing about any problem I had or how to solve it. The call centre teams (irresepective of wher they were) knew even less, if that was possible. Anybody's who's been in BT's call centre labyrinth will have their own epics to tell. The last time we moved, it took 3 weeks for the engineers to find the reason why we weren't getting broadband at home and another week for an engineer to actually come over. The problem itself took 20 minutes to fix. By then we'd begun to know quite a few call centre guys by first name and were actively talking about getting together for a drink, given how much time we'd spent together! Everybody was polite but nobody had answers.
Wires, connectors and interfaces. A simple first step towards the holy grail of "Interoperatability" would be simplification of the interfaces. That way we could avoid building snake pits at home and our work spaces could look less complex than the wiring of an aircraft control panel. It came as a pleasant shock to find that both my Sony camer and my O2 phone use the mini-usb port. OK so somebody may sell a wire less, but trust me I'd pay to have one less wire to connect.
Modularity. Bill Joy, from Sun wrote an article many years ago extolling the wonders of modular design in computing and hardware. It would have been fantastic if my space station phone with all its wonderful functions could have a moduler "just phone" bit that I could detach, slip into my pocket for an evening out and save myself the embarrassment of carrying what looks suspiciously like a small laptop in my pocket.
Now we're getting into fantasy territory but it would be really great if I could get software that worked seamlessly across these devices. I've finally got my laptop and phone in synch, but thats because both now run Microsoft Windows versions. Actually, Microsoft are the good guys in my life since it works simply with the camera, the phone and the desktop. And doesn't need me figure things out.
Finally, life would be so much easier if we had unified messaging, unified entertainment and unified information/data environments - so that all these could reside in a common and secure space, with back ups and pulled off into any device for consumption at that point of time, and from anywhere in the world. A home hub? A local distribution point? Or just in the pages of a science fiction novel?

Well, the thing about commandments is that there have to be 10 of them. There you have it. Check out the first 5 here.

I, Converged Consumer!!

2006-08-02T16:06:00.000-07:00

Okay – we’ve talked about the converged consumer before and we’re going to talk about it again in 3 weeks time at Intellect. In the meanwhile, I’ve put on the hat of a converged consumer – which I am actually and I’ve taken off the mask of an industry analyzer.

Let's introduce my convergence habits: I subscribe to the Sky Premium packages with the football games and the movies. I also have multi-room and the sky plus (DVR) in one of the rooms. (I even subscribe to Man-U TV, how desperate is that!) I have BT’s land phone line (BT Together) and Broadband connection. I’ve just signed on for the XDA Exec mobile phone from O2 (yes it does look like a spaceship and takes both hands to hold it to my ear). I’m a subscribed customer of TMobile’s hotspot, paying monthly. As an entrepreneur, I’ve invested in an HP Pavilion Laptop which I can stare at for over 12 hours a day for a variety of reasons. I used to have a Palm Tungsten C which I am looking to sell (hopefully on Ebay). I have a Sony DSC Digital Camera. I use Flickr, Linked In, My Yahoo, MySpace (and no I'm not the only Myspace user older than 35). I subscribe to and access online versions of TimeOut, HBR, NMA, FT, WSJ etc. I have email accounts for different kinds of mail in gmail, yahoo and hotmail. (I signed up for AOL mail today). I use the Windows Live messenger and Yahoo Messenger prolifically. Increasingly regular user of Skype as well. I have a wireless network at home powered by a NetGear router.

You could say as a consumer I’m quite up to date on convergence. However...

I still don’t have wireless music played to my stereo system via the home network. I don’t have IPTV as yet. I am yet to configure my Sky TV Guide via my phone. I’m not yet a subscriber for content coming to my mobile. So there’s scope for further convergence.

Here are my commandments for wooing me as a consumer:

Make it simple. I understand some technology. I’ve been working in this space for 12 years. But the a few of products I use, are always far from simple. It’s apparently still my job to figure out the often complex instructions and products. Nokia is my favourite company for simplicity. Sky does a great job of making it easy to use it's products i.e. as a consumer you don't have to worry about the technology. But its far from elegant to play around with. Pull the Set Top Box out of the phone socket and before you've had time to count the pins on the plug, you'll get a threatening letter from Sky!
Make sure they interoperate reasonably. I’ve owned phones with cameras for over 3 years now, but despite all the great pics I clicked, I could never get them off my phone into my hard drive.
Can you give me a common, itemized bill? Once a month, listing my calls, land and mobile, and my hours on skype, and the broadband charges and the fixed line rental. And my t-mobole and O2 mobile bill. (Can there not be a standard interface for billing information in a web 2.0 standard which a 3rd party can pick up and collate bills for individuals? Where are all the geeks when you need them??? And every time I change my credit card (or as has happened, recently lose it) I have to go into a frenzy of phoning to tell each provider to replace card numbers.
Make switching easy. Its scares me to think of what might happen if I’m forced to change any of these. Even switching my landline requires me to think many times. How many days will I be without Broadband? Who do I contact if things aren’t going to plan? But using a product because I'm too scared to change is probably not an ideal situation. At best you get a consumer thirsting for revenge.
Excite me. Figure out what I want to do the most and give me that. I’m not looking to date or chat. But I think a mobile version of the linked in which works on the pocket PC OS and I can carry out would be useful. I’d love to get more sports highlights which I’ll happily pay for but I’d like to get them on my phone and then transfer them to my PC or even TV.

How are we doing so far? Want more? Come back tomorrow for the remaining commandments. Plenty more to come.

The Future of Advertising – Less Is More

2006-08-01T03:34:00.000-07:00

Advertising is not being revolutionized, contrary to some popular and public opinion. It will not disappear overnight. Or magically reappear tomorrow in a form that we can’t recognize.

However…

It is slowly and surely mutating and the changes are tectonic. And may be unrecognizable from today’s advertising given a few years.

The real changes aren’t about youtube, myspace and video piracy. Nor about the well chronicled and already announced death of the 30 second spot well commented on by Maurice Saatchi in his FT Article “The Strange Death of Modern Advertising”. Where he talks about sociological, technological and psychological impacts creating the big change.

The deepest and most insidious (for defenders of today’s advertising) is the continuous and ubiquitous spread of information. As our access to information goes up with every passing day, we become less amenable to persuasion. Earlier, the sheer effort of comparing information regarding features, service, experience etc was a key factor in our dependence on what advertising told us. The classic snake oil salesmen depended on their clients not knowing much about what they were selling. This included a complete lack of knowledge about benefits, competition, prices etc. Information Arbitrage was the basis of a lot of 20th century marketing and selling. Modern advertising is of course less cynical, by and large, but it still has it’s cesspools of cynical selling that depends on buyers not knowing better.

In this environment of buyer ignorance, came the image makers. This phrase from the eponymous book by William Myers is born of the ability of advertisers to influence greatly the world view of their consumers.

However, with information has come disenchantment. Information has opened our eyes to the failures of our businesses, our governments and our heroes. Wide eyed wonder has perhaps been lost for ever. The UK is currently at 70% broadband availability. We will soon be in a world of ubiquitous and permanent connectivity. Where any assertion can be checked and any fact can be ascertained with relative ease. As Steve McLaren takes charge today, his managerial track record can be found here on Wikipedia. This site on England Football, will track his ongoing performance as well. The point is, its all there. The FA cannot convince the England football fans an “image” of Steve McLaren that doesn’t fit with the facts. If you feel like something more inspirational, this video (from youtube, where else!) will tell show you how he transformed Middlesboro’s performances last season. No scope for spinning, image creation. Max Clifford be warned, its getting harder every day.

This is the reality for advertising today. Whether your product is Tony Blair, the New Beetle or Mr Muscle cleaners. And if you thought it was just one persons word against the other, that’s where user content and user groups have played a major role. Services like TripAdivisor will give you the low down on other travelers experiences.

Bottom line, you can’t convince me.

The answers for advertisers and marketers may lie partly in the category and information content of their products, but more importantly may like in focusing on “informing” rather than “persuading”. Of course this may push companies to focus on the product itself so that the information isn’t a disincentive for the buyer. The focus may shift back to creating good products.

Well that isn’t all that bad then!

Scratching The Knowledge Economy Rhetoric

2006-07-31T00:09:00.000-07:00

The Knowledge Economy has the ring of the perfect rhetoric. Knowledge and Economy come together nicely - both words individually bringing adequate gravitas and combining to create a suitably impressive catchphrase. At the same time, as with any good rhetoric, its hard to pin it down to what it really means.

However, the FT reports today in passing that the EU budget recently cut R&D spending increases in order to maintain farm subsidies. This is probably one example out of a hundred that point to the "Knowledge Economy" rhetoric being just that - a rhetoric. Under other impressive sounding catchphrases - such as the "Lisbon Agenda", attention is drawn away from the fact that if anything there is an Economy of investment in Knowledge building.

My personal anecdote is that I can get someone to come home and help set up my new laptop, load some software and set up a firewall, for about 70% of the cost of getting an electrician to come in and fix a single loose wire in a faulty oven. Does that sound like a knowledge economy?

One of the challenges in the UK of course is that geeks aren't "cool". This isn't a trivial point. In a social hierarchy, geeks command less respect and position than wannabe big brother contestants. Compare that with either the US, where the Brins, Pages, Yangs, Jobs and even the Bill Joys and Ray Ozzies are right up there. Or in India where from Nilekani (Infy) right down to the entry level programmer - the geek is revered. And this isn't just lip service. Average salaries for technology professionals is likely to be comparatively much higher (than other professions) in India or in the US compared to Europe. And furthermore, your attractiveness to the opposite sex (your "mating potential") is also likely to be enhanced - again I stress this is not a trivialization - it sits at the core of the ability to attract more people into the profession in the long run and giving it a real impetus.

And so the question is, when you scratch the surface of the knowledge economy rhetoric, do you see a think veneer over what remains an old world, traditional, orthodoxy? Or would you find a truly vibrant environment where knowledge and investments into knowledge are recognized and rewarded boldly?

Whither, the Converged Consumer?

2006-07-28T17:11:00.000-07:00

At Home? Or At Risk?

In all the debates, events and industryspeak, one hears the obligatory references to the “Consumer” and there’s usually a sharp split on opinions regarding the consumer. But many questions remain unanswered and you get the feeling that the Converged Consumer is an unknown animal.

This is not without reason – as true convergence is just starting to break around us. As we’ve noted before, there will be 4 services launched in the UK before the end of the year which will offer voice, television and data (BT, Sky, Homechoice, NTL/Virgin). The last of these will be a quad play with Mobile thrown in. Although many argue that the line between fixed and mobile telephony is about to blur anyway.

Bottom line, the converged consumer is a beast we will get to see and understand only starting now. Although Homechoice has been around for a while, it’s market presence has been marginal and there has not been a choice situation yet. For the majority of households consuming Sky Television and BT Broadband (this should be some 8 million homes) the time has come to choose Broadband from Sky or TV from BT, or junk them both in favour of NTL or Homechoice.

The Broadband space alone gives us a good idea of the kind of tough competition we can expect.
According to the FT, in 2003, just 6 per cent of the UK's 25m households had high-speed internet access. The figure was 26 per cent in 2005 and 39 per cent in the first Q1, 2006. According to some analysts, 70 % of households will have broadband by 2010. And it’s not just the number of connections, by the end of this year it is estimated that an 8 Mbps connection will cost about the same to a UK consumer as a dial-up connection did three years ago. Services as fast as 100 Megabits per second have been trialled in the UK, and there is limited availability in some parts of 24 Mbps packages. (all data from the FT, from articles published on July)

I believe that permanent connectivity and broadband access can be significantly lifestyle changing. You suddenly start becoming more web reliant, more specifically Google reliant. On a typical work day, my morning starts with 2 hours of reading – sitting up in bed, while sipping my coffee, I read the relevant sections of the FT, the Wall Street Journal, the Guardian, The BBC Website, the Economist and a host of other emailed news updates. The thing is, I do all of this on my laptop, making notes as I go and bookmarking, scribbling, or referencing. All of which I do online or on my laptop. Going anywhere means a search on a mapping website and looking for things to do involves a search on the TimeOut website, or the SouthBank or specific venues – Regents Park, the Roundhouse or the Royal Albert Hall. The need to remember goes down drastically when all the information is at hand. No matter how esoteric, it will be found in Wikipedia or About.com or on some remote website Google will find. I find myself getting irritated when Google can’t find some information or the website of a company I’m looking for.

People speak often about the dual screen experience or indeed the multi screen experience, with children or young adults using the 2, 3 or even 4 out of laptop, a gaming console, a mobile phone, and the TV simultaneously. This may get simplified with IPTV which is one way of bringing these experiences on to a single screen. The thinking is similar for the Microsoft-Nortel announcement for creating a unified messaging interface. This means that your emails, instant messages, voice mails and any other forms of communication will all come to a single mailbox which can be accessed through outlook on your PC, or on your mobile phone or soon, on your IP enabled TV. Of course there is the question of user adoption – which typically lags technology capability. But some of these are very compelling ideas so the only question is when and not if.

While not everybody will jump into an immersive, lean-forward experience, and turn into “Armchair Athletes” as a well known consulting firm calls them, there will be a dispersion of consuming habits – a distribution covering leaders, and laggards and businesses will have to live with a “portfolio” of digital consumers who will need different types of offerings and solutions depending on where they fall in the adoption curve.

The fun as they say is just beginning.

More on this to follow. The Intellect Convergence Conversation in August will be about the Converged Consumer, and that should throw up some interesting perspectives as well.

More on Non-Linear Storytelling

2006-07-27T15:40:00.000-07:00

Keeping to the same theme as yesterday's update, there is a story in the Wall Street Journal which talks about Lean Forward Media which provides a capability to create DVD's which can have decision points in the story i.e. the user gets to decide from a list of options what a person in the story should/ should not do. This leads to a different outcome of the story for each choice made. The DVD therefore ships with a large number of storylines (easier with Animation!) and the user gets to participate in the story telling.

I see this world coming closer and closer to reality based multiplayer online games, which evolve a narrative of their own. An example of this is Perplexcity - which has its players and its storyline. At some point even during a dvd you may be asked to solve a puzzle else the story doesn't go forward, or perhaps play a game.

There already many games which are more biased in favour of roleplay over winning and losing. This line will continue to blur. In the absence of ad-breaks or more importantly in the world of time-shifting and ad-skipping, these decision points may be the place for advertising - but ham handed efforts will kill both the experience and the idea, for others.

The Future of Entertainment?

2006-07-26T15:06:00.000-07:00

Today I had the privilege of being asked to think about things 6 years ahead. Thats pretty good going for somebody who has to scratch his head when asked about weekend plans on Friday evening. But as a part of a group helping create a Technology Vision for the 2012 Olympic games, it did jog the grey matter a bit. (and thats not just the hair pulling).

2012 is a long time away and a lot can happen in that time. But there are exciting changes afoot right now which could play themselves out interestingly over the next few years. Michella Ledwidge's Modfilms, featured currently in the Creative Commons website this week is one such company working on an exciting frontier - Remixable film content. Platforms which could allow us to share and remix film easily, blurring completely the lines between story telling, listening and participating.

Another area that got me thinking the more obvious one about Networked Digital Outdoor media. Where content/ advertising can be displayed and centrally managed, intelligently adapted and perhaps even occasionally personalized. (an ad in which Beckham winks at you if the display recognizes a brand you're wearing as you walk past?).

Outdoor advertising has seen a bit of a lift in recent times with summer, the world cup and the growing need for clutter cutting which is getting impossible to do inside the house. This article (subscription reqd) says that Outdoor advertising in the US crossed $6 bn this year and is growing at 8% and is expected to reach $10bn in 2010. (The maths clearly doesn't add up, but hey it makes a good story!) - the fact is with the clutter and confusion on Television, it may be a good time to get digital and creative in an outdoorsy way, especially while summer lasts. Digital displays cost 10X of traditional ones, but the payoff may be greater still. There is the added novelty value of bluetoothing information to user's mobiles and allowing people to actually interact with a hoarding.

Do you have a Mobility Strategy?

2006-07-25T16:54:00.000-07:00

Face it. Your customers are spending more and more time out of the house, away from the devices you love to reach them on. May be they're wandering after a glass of wine too many. Wondering where to find a cab home. May be they're hot and bothered after picking up the kids from school and trying to fit in a grocery shopping trip. Or perhaps, they're rushing from work to a party via the gym. Whatever it is, it seems like your only chance of getting a message across to this set of incessantly mobile consumer is on the one device they carry around - the mobile phones.

So do you have a strategy in place? Are you reaching them through a WAP site - through "off portal" content? Are you allowing them to transact? Change settings? Are you thinking in a more broad way about the whole mobile lifestyle and crafting a strategy around it - something that might actually benefit the consumer?

For sure, the mobile consumer is here to stay. The question is, can you reach her?

Rights Management - The Light at the End of the Tunnel is the Headlight of an Oncoming Train

2006-07-24T04:07:00.000-07:00

At our monthly Convergence Conversations last Wednesday, the topic was Content Rights. Which is an oxymoron to start with because if there's one thing most people are not, its content. For record labels and film & tv distribution, the summer of discontent includes the frustration of not being able to shut down all the illegal file sharing (an exercise akin to catching raindrops to keep the ground dry); the direction of businesses like the BBC to make a whole lot of content available free; and the inability of technologies to keep the hackers at bay, just to name a few.

For users, there is immense ague at not being able to play purchased content across devices, the high complexity involved with buying new devices in the data deluge in terms of specifications. Then there is the paucity of service which still plagues the industry.

In all of this, the one interesting point our discussion threw up was that "The Rights Management Problem is not solvable under the current framework". The existing approach, which tackles the problem by going geographically, channel and medium wise and then uses a number of distinct and often complex structure of rights, is (a) outdated (b) too complex and (c) technically and structurally infeasible. Nobody argued that rights should not be protected, simply that it can't be done in the current approach.

As if to support this argument, Yahoo and Sony have just announced the DRM free release of Jessica Simpson's single "A Public Affair". According to Yahoo... "DRM doesn't add any value for the artist, label or consumer"

http://www.newmediazero.com/Articles/28619/Yahoo!+and+Sony+release+digital+single+without+DRM.html (may need subscription)

Bad news for Tech vendors, good news for consumers. For the rest of the industry it's time to think.

Walmart does UGC

2006-07-22T04:01:00.000-07:00

http://www.nma.co.uk/Articles/28618/Wal-Mart+to+base+ads+on+user-generated+content.html

this article (may require password) - shows how businesses are jumping into the UGC arena to ensure that they (a) get a foot in the door (b) use it to involve people more in the brand (c) hopefully lower content production costs if a bulk of the content comes in from audiences for some of these ads. It talks about WalMart asking users to submit videos from users, which can be used in WalMart advertising.

Sainsbury's also insists that they're doing user generated content (see this NMA article) but it's hard to understand how this is different from good old discussion forums and message boards?

Is user generated content actually different? I suppose for it to be seriously considered "content" it needs to be something which attracts a sizeable audience and is distinct from user forums for Sainsbury's products and services. i.e. People should be coming to see the content itself, and distinct from shopping at Sainsburys. Tom Sawyer has been cited as one of the earliest examples of user generated content.

So you first need to get "content" right before doing user generated content. Measurement or reports of such content seems to be harder to come by, so the jury, as they say, is out on this.

User Generated Content

2006-07-21T17:06:00.000-07:00

User Generated Content (UGC) – has caught the world by storm – not unlike “portals” some time ago. It seems everybody needs one. I’ve chaired an Intellect Convergence Conversation on the subject and also been to a couple more – notably the one organized by Mint Digital, in London recently.

I still ask the lingering question – is it too late to be thinking about User Generated Content? And the answer is probably yes, if you’re looking to make a quick buck on the 15-24 age group audience. About 30 businesses are ahead of you in the queue – notably MySpace (Now News Corp, looking to recover about 600 million dollars), YouTube, MTV, BBC and Flextech (Trouble) and many more.

Is there any point thinking about it then? Yes, resoundingly yes. And here are some of the things worth thinking about:

a) how do we get adults to participate in UGC activities? What motivates adults? How do we reward them?
b) How do we slice and dice the undifferentiated markets into specialized communities? This may be the key to a) above. For example, a focused community of property professionals?
c) The Enterprise Market – UGC may well be the next layer on Enterprise Knowledge Management systems – say engineers from Automotive Testing & Service businesses sharing info on specific types of problems/ faults and their resolution. How to enable this?
d) How do brands deal with this? How do they get the same kind of feverish participation which YouTube and Google Video enjoy? How should brands react to users spending more and more time on YouTube, or its equivalents? Should you advertise on YouTube or build your own UGC concept?

Television companies believe they have the lead in this – because they can bring TV audiences and 15 seconds of “real fame” for their users. Internet companies believe TV has had its day. Clearly Television has the benefit of existing audiences and a mature and accepted channel. But it is hampered by the excessive rights issues around Broadcast, and also the more stringent regulations/ dos and don'ts on TV. And as somebody rightly suggested, the moderation of the same can become significantly large activities.

http://en.wikipedia.org/wiki/User_generated_content here's the Wikipedia link on the matter

http://www.powazek.com/2006/04/000576.html I liked this contra-view on UGC by Powazec

http://moblog.co.uk/index.php mobile blogging

http://bloombox.tv/ Mint Digital's new tool for creating UGC sites.

More to come....

DOES “INFORMATION TECHNOLOGY" MATTER?

2006-07-02T16:46:00.000-07:00

The well known article “IT Doesn’t Matter” by Professor Nicholas Carr in the HBR, 2004, apart from being one of the most misquoted articles in recent times, has been a crutch for some business leaders to turn their backs on Information Technology. While some of the arguments are absolutely valid, I believe the conclusions people take away from the article are erroneous and dangerous and Professor Carr has probably been a bit naughty in leaving some of this clarification out of the piece.

There are broadly 3 key reasons why the Carr line of logic needs to be reviewed carefully.

First, he takes a particularly homogeneous view of IT. IT is not a tool, it’s a function of business. Calling IT non-strategic is like calling the finance or marketing functions non-strategic. Of course there are many bits of the financial side of a business which are prosaic and commodity oriented, such as everyday accounting. But equally, there are aspects such as investment or long term financing options which a business would not dream of calling commoditized, or non-strategic. The same is true of IT as a function.

Second, whenever he talks about IT, he refers to the “Technology” and not the “Information” part of IT. And while he is right that many parts of Technology, especially hardware are getting “commoditized”, this is definitely not true of all of Information technology.

Third, despite starting with the assumption that much of IT is commoditized and beyond the realm of Strategy, he goes on to provide plenty of scenarios where businesses are getting it wrong. If it’s that commoditized, shouldn’t it be quite easy to use?

A lot of people have used this article to justify arguments on cutting back IT spends or questioning the value of Information Technology and this is why the impact of this piece is more dangerous than it could be.

One of the assertions Prof. Carr makes early in the paper, is that for something to be a source of sustainable competitive advantage, it needs to be a scarce resource and not an abundant one. Hence, he argues given the abundance and proliferation of databases, desktop tools et al, IT now falls into the category of “ubiquitous” and hence it cannot be a source of competitive advantage. However, while he’s right that tools like word processors, spread sheets and corporate networks have become “costs of doing business” this clearly does not represent all of IT. Telecom businesses all over the world are working to build better billing systems & provisioning systems. Retail businesses are looking for improved recommendation engines, data analytics and more responsive supply chain systems. Moreover, you only have to look at any report or a case study on major IT projects to know that successful implementation and risk management are certainly not as ubiquitous as we’d like them to be, and certainly, consistent and strong implementation of major IT systems by itself can offer competitive advantage to businesses. On the question of long term sustainability of such advantage, one may question whether anything offers a “long term, sustainable competitive advantage” or by definition, will competition erode such advantage in the long term.

Prof. Carr also uses the example of the telegraph, railroad and other additions to the “infrastructure of commerce”, as examples which no longer provide competitive advantage. However, in the case of IT, the pace of change is still high, and with new technologies & systems coming to the market, or even innovations which allow improved business performance, there is high return on investment for companies that invest wisely into IT and track innovations and new technologies in the space. What would be the future for a Retail organization that turned it’s back on RFID? Or for a small business that didn’t explore Voice over IP? Can a Bank or a financial institution today ignore the risk management, fraud detection or identity management technologies today? Yes, the race for bigger servers, or fatter network pipes is now a commoditized one. But we’re a long, long way away from commoditized information and decision systems.

In talking about the commoditization effect too, Prof. Carr takes a simplistic view of the race for standards. He asserts that most standards have now been built into the off-the-shelf technologies, that the standards have been built into the (commonly accessible) infrastructure. The reality is that there are many aspects of IT where we are a long way away from real standardization, and to assume that the standards are there, that they have been universally adopted, and in fact built into the product is a huge leap of faith or oversimplification.

He also suggests in the article that the same software, is being used in the same way with similarly reengineered business processes making all business replicable and devoid of differences. This again is an oversimplified view of an SAP world. In reality, such commonality only shifts the benchmark to other parts of the business – such as decision making, knowledge, and forecasting systems which are yet to be replicable across businesses. It’s a fait accompli to suggest that because businesses are buying the same software, IT is no longer of capable of delivering advantage. It is probably accurate to say that companies who implement SAP or large off-the-shelf ERP looking to simply adopt industry practices, are either playing catch up or only achieving parity – not advantage. This is not a liability of IT as a discipline. It’s a failure of specific businesses to understand how to derive competitive advantage through better use of business information.

The consistent use by Prof. Carr of IT only as an Infrastructure resource is probably the article’s biggest shortcoming. Along the way, he makes a few statements which can best be described as ranking with Bill Gates’ apparently mythical assertion that “640k of memory on the desktop should be enough for almost anybody”. Professor Carr says “...And as for IT-spurred industry transformations, most of the ones that are going to happen have likely already happened or are in the process of happening.” And also asserts "...we already have considerably more fiber-optic capacity than we need."

One of Professor Carr’s conclusions is that companies should separate essential investments from “discretionary, unnecessary or even counterproductive” ones. Taken out of context, this is dangerous. While it’s true that large, mature companies which stay off the cutting edge of technology to ensure maturity of products and usage, are doing the right thing, this is markedly different from calling all of Information Technology non-strategic. Despite not being the classic “innovators” or “early adopters” of new technology, Wal Mart, Dell or any other business in a similar space need to continue to treat the “Information” and the systems that deliver such information as strategic and better and more accurate, meaningful information will always be seen as strategic too. The key to this discussion is that IT isn’t about hardware, memory size or off-the-shelf systems any more. IT is about better and better ways to manage information. In this regard, we are a long way away from achieving any kind of commoditization. Innovation and invention are both progressing apace and we are nowhere near the end game. It would be disastrous for companies to not recognize the strategic importance of the “Information” in Information Technology. The race for simply building better “technology” may well be over, in many (though not all) industries.

Professor Carr’s article is a good warning for companies to stop spending blindly on “better technology” but it is a dangerous and potentially destructive mistake to extend this to the task of managing information better for business results.

Excellent Article on the Future of (Print) Media - Winners & Losers

2006-06-25T02:00:00.000-07:00

http://www.ft.com/cms/s/d0ea7202-01ec-11db-a141-0000779e2340.html

Requires subscription I think.

The article suggests that there is indeed a bright future for print and other media - but only for those that adapt - largely via the ability to create a differentiated product and adopting technology trends. For print media this may mean either serving niche needs such as trade presses, or becomming better aggregators, or better filters for customization.

It suggests that the phenomenon of "free content" on the Net applies only to commodity content and that people still pay for differentiated content - as in the case of digital radio, mobile texts and pay television.

It also paints a picture of a consolidated industry structure with local information collectors, larger aggregators, niche providers and other such roles which all feed into a common market.

The one area where I disagree with the piece is that it predicts the dominance of "National Brands" - whereas I believe that the internet blurs national boundaries both sociologically and commercially. So the brands that dominate will be global, not national brands and those that dominate global segments and interest groups.

IN SEARCH OF MEANINGS...

2006-06-14T07:36:00.000-07:00

In Search Of Meanings…

Complexity is often the price of progress and in the world of Digital Media, if the price is anything to go by, there must be a whole lot of progress! Primarily because an obvious by-product of the Digital Convergence bringing together the industries Telecom, Media and Technology, is the ensuing convergence of industry lexicon.

Here’s a look at some words you thought you knew…

Television: The problem is that in many cases, including this, the device, the service and the content have all clubbed under the same name. Which is fine as long as all TV related systems and components are insulated from other Industries. If the same live “tv” content gets streamed to your PC or iPod, are you still watching television? Somehow “I’m going to lie around on Sunday morning and watch PC” still doesn’t have the ring of credibility (and perhaps even sanity) yet. So the Television Set (we don’t usually mention the “set”) is a device. The content is perhaps better described as Televisual, simply to retain taxonomical accuracy and to distinguish from the device. Words and phrases take time to enter the main stream from the confines of labs and industry speak. But they do get there – witness blogs, iPods, Macs and even Bluetooth and Wi-fi. (Radar and X-rays before that). What about the stuff behind then? The network and the broadcasting stations?

The “Network” is a beast of a concept but in reality is perhaps the simplest, because once you boil it down to conceptual meaning of connectivity all networks start to look the same and can atleast be clubbed into a few standard formats. So a Network is essentially the means of connecting devices to each other or to intelligent/ communicating sources. Be it a mainframe computer or a broadcasting station. Networks can be wired or wireless. But they all have protocols defining how they behave, how they, and devices on them can be identified, and found and how / how much data can be transmitted over them. But wait, here’s a twist! In the US, the word “Network” often refers to large scale Televisual Industry players who own a series of local TV stations. Just when you thought it was safe to go back into the murky waters of definitions…

Which brings us to the word Broadcast. Rooted in the evolution of Radio, the word Broadcast has come to mean mass communication of a number of kinds. But it essentially implies a one-way, one-to-many information flow, with typically no limits on the number of devices which can receive the signals. Which has led to the alternative kind – restricted transmission to a defined group of people as “narrowcast”. Which is logically consistent for the time being. But then on computer networks (especially IP Networks) which allow both types, you can multicast or unicast. The difference here goes beyond the numerical – in an IP multicast environment you tune in to a broadcast – i.e. you come into the stream at a point of time, like catching a radio show half way through. In a uni-cast, you typically start a stream from the beginning. You are the only user, and you get to hear it from scratch. Hence a typical broadcast or IP Multicast environment, the sending of information is independent of the listeners. Even if not a single TV / Radio set is turned on, the broadcast is still taking place. Conversely when you stream a “unicast” you initiate the stream and so there is no stream without the receiving device. And the reason all this is relevant is, if you are streaming your favourite episodes of “Only Fools and Horses” to your IP based Television, for your personal viewing, from the BBC archives, are you still “watching TV”? Is the BBC “Broadcasting” Clearly, the plot thickens once the same IP networks start serving all these different purposes.

Of course to do any of this, you’d still need broadband. But what’s broadband? Pooh! You say, everybody knows that. But as the Wikipedia correctly points out, Broadband is always a relative term, understood according to its context.” What we understand of Broadband is anything that does not require a dial up, and is typically an always on internet connection offering 128, 256 or higher amount of data speeds. Of course the reality is that 512KBPS or 1MBPS is quite the entry point nowadays and 4-8 MBPS is what you need for broadband that can get you “televisual content”. Its worth remembering that in analog broadcasting broadband, technically also refers to the range of frequencies as opposed to the data carrying capacity. And Broadband is just a loose industry name for a whole range of technologies such as DSL, Wi-Fi and others. It doesn’t have a sharp, technical definition (i.e. a specific amount of bandwidth after which it becomes “broad”). So 512KBPS soon may not qualify for Broadband, definitely so in a world of commonly available Fibre Optic connectivity.

Still to come: Media, Mobile, Browser, Channels, Programs… and more!

Funding Media, Saving Advertising

2006-05-22T10:27:00.000-07:00

The Shifting Landscape of Advertising – Or: How To Finance Media?

There are many, many changes sweeping through the world of media, content, and news delivery, but for a brief few minutes, let’s shine the light of our attentions on the business end – the end where money comes in from. Yes, lets take a close look at the advertising-content nexus, and why things may be dramatically different in the near future, for advertisers, content businesses and consumers.

Ever since the birth of newspapers and magazines, there has been an unquestioned link between content, readers and advertisers. Readers want the news and entertainment that the media provides. Advertisers need to reach the readers / consumers. Media needs money to make up the difference between what consumers can afford and what it costs to collect and distribute content. This is what has bound these three constituencies together some 300 years.

The first newspapers date back to the early 1600s and the first print ads may have appeared even before them, in printed books. Discreet classifieds were the norm through the 17th century. The advertising industry grew more mature with the evolution of agencies in the late 19th century.

Of course, a key propellant for the growth of print advertising was that consumer goods had no alternative way to reach their consuming audience apart from through the print media. The industrial revolution created mass production, but to make mass production viable, you needed mass consumption, which would drive the scale up and costs down. Enter mass commercial communication aka advertising.

On the other hand, Media has always needed the funds advertisers have provided to make the business model viable. It’s well known that the price consumers pay for newspapers would barely cover the cost of the paper and distribution, let alone the content, editorial, production costs etc.

This has occasionally led to a conflict between commercial interest and editorial freedom. Newspapers and magazines usually work with a fixed spatial ratio of content to ads. Reduction in advertising often causes shrinkage in magazine sizes. A commercial and iconoclastic view of media as a business has been that it delivers eyeballs to advertisers. A major Indian newspaper owner created shockwaves through his organization and through the editorial fraternity in the early 90s by declaring that editorial content is the stuff that fills up the spaces between ads.

Again, given that media is a watchdog for democracy often and comes up against the other major societal force – political will, the matter has been further clouded on occasion by the political bias that business itself gets from time to time. It has been postulated that Fox News shaped the outcome of the US elections, by declaring George Bush’s victory before the outcome was actually decided leading to some Gore voters not bothering to go vote. However this occasionally uncomfortable nexus between editorial power, commercial power and political power has withstood many a stern test and survived till now.

In all of this consumers have largely accepted that if they want content it must be interspersed with advertising and consumer behaviour has ranged from ad avoidance to actual interest in the occasional advertisement. The marketing manager of today lives in this fuzzy world where he / she hopes that inserting an advertisement in a TV show or a print publication will get noticed by some people, some of whom will remember it and some of that subset will actually act on the advice of the advert.

But something big has changed in recent times , and is changing as we talk.

First, The Internet has provided a bypass for businesses to reach consumers without having to go through media. Post the hype and bust, one trend that has underscored the last 3 years is that newspapers are losing classified advertising to online businesses which are focused vehicles connecting buyers and sellers. For whom it has been said, producing content would be a “ridiculous distraction”.

Digital media has also become a byword for consumers in more and more regions of the world. Digital television and online publishing have both become the mainstays of their formats. In the UK, online advertising is set to outstrip print advertising, so the money is following the users away from print as well.

Further, the technologies available to consumers are also allowing them to avoid more and more advertising – especially on digital media. So the goal of actually reaching the consumer through mainstream advertising formats – i.e. slipped in between chunks of content – is becoming more and more elusive.

Bottom line, advertisers can’t reach their consumers through mainstream media and traditional formats, especially on digital media. Consumers are increasingly adopting more and more digital media formats. This leads to the big question for media content – who will fund content creation and distribution?

This is why this space will be a very interesting one to watch. There are a number of options and models which the market has already thrown up, and no doubt, there will be more to come. Among the models already out there are user generated content and more digital distribution (which over time will lower costs), paid for content (will only work for some consumers and some content), and opt-in advertising – where consumers agree to watch advertising in order to access free content.

The first of these, user generated content – is a subject of discussion all by itself, but if it works, it allows a news “aggregator”, to abdicate the tasks of both content creation, and editorial selection. Thus, largely removing the problem itself, by lowering the cost base of content creation.

The second, digital distribution, needs to be explored cautiously. Though it can lead to lower costs, technology expenditure can spiral if not monitored. You can also be sucked into a continuous cycle of technology upgradation and “running to stand still” in a race with competitors to be continuously cutting edge.

Paid for content clearly is a form of Nirvana – but it’s clear too, that this will work only for about 20% of the content which will capture 80% of the content revenues. In the UK premiership football is one of the key drivers which allows Sky to collect almost 5 billion pounds of revenue from subscriptions alone. And of course we’re all used to paying for movies. This goes back to content branding and value. Unknown serials, unknown musicians and even films with unknown directors and casts will need help to induce trial. This may be advertising funded, or samples, but clearly this is one area where sponsorships will go a long way. Of course the form of sponsorship may itself change from a traditional advertising to product placements, or more innovative formats, but that too, is a discussion by itself.

Finally, we have opt-in advertising, and this may be as radical as leaving content generation to the audience. If customers are actually going to decide if they want ads at all, why not allow them to choose the category of ads to watch? So that if people are looking for a car, they may be happier watching car ads instead of beer ads. Of course it leaves one with the question of when exactly people want to watch beer ads. But you can well imagine that the opportunity to talk with people who have already expressed an interest in the advertising category would be a higher value proposition to advertisers, and this will lead to higher revenues for media businesses for the same amount of advertising. For the advertiser, this would represent achieving a more focused ad spend while retaining the same budget.

All the underlying trends are in place for these scenarios – more connectivity, more on-demand content, shift of decision making power to the consumer and increased participation of users/ consumers in the media creation and delivery process, and even in its financing. What could be better?

MOVING TO THE ON-DEMAND WORLD – KICKING AND SCREAMING…

2005-08-16T17:04:00.000-07:00

In an ideal world all our content and services would be delivered to us where we want it and when we want it. It would be nice to watch a news bulletin or an episode of our favourite serial while waiting in an airline lounge, on our laptops. Or at least, be able to set aside time for watching the sports round up without having to give up our Saturday nights out. Or even to get our fix of news, scores or travel updates while on the move – i.e. on our mobile phones or handheld devices.

We get spoilt easily. Its hard to remember most of us grew up having to go to a bank to withdraw money, watching a single digit number of tv channels, using a phone with a really long wire if we wanted to take the phone to another room or at least restricting it to use at home. Or that our primary source of information was the newspaper, radio and TV, in differing orders of priority.

No matter, to come back to the issue at hand, we’ve all gotten more than used to mobile phones, the Internet, multichannel TV and more. Some of us are quite comfortable placing bets or ordering a brochure for a car through the remote control and TV. I’ve gotten used to accessing dictionary.com on my mobile phone through WAP to check word meanings. (the last word I checked for was febrile).

WAP in fact is good evidence of the fact that though some ideas may not work the first time round, once they align with the trends and standards, they can easily come back stronger. The first time round, nobody understood WAP, it required a completely distinct set of technologies and was clunky. In its new avatar, WAP is a useful extension to existing websites. Its painless to set up and painless to access.

So the point of all this is really to highlight a key trend in how we access content and information. We’re slowly and surely moving to an ON-Demand world. This means that those technologies which don’t support on-demand content, or services, will face extinction or the dreaded downward sloping curve in analyst reports.

Whats new? You may well say. And you would be right in context of the web. But so far, only about the web. Soon, though we’re seeing a number of extensions to the on-demand scenarios.

Television is the most significant one among them. Because television is one of the older technologies which the world uses so universally. But on-demand television is not only imminent, its compelling. One of the routes to on-demand television is the PVR/ DVR, for which TiVo is the best known brand. TiVo itself has recently announced it will allow users to watch trailers off the web, but using their TV sets. Yet another example of the convergence of broadcast and data networks, this allows users to download sample shows to their set top box from a broadband connection.

Another route to on-demand television is the resurgent VOD movement – championed largely by cable companies. You can see where this trend is heading – the old video rental business which was short circuited in many markets with the Netflix model, is now taking another jump to a point where you don’t have to rent videos at a store or DVDs by post, you simply select it and it comes straight into your computer or set top box or your spanking new “Home Entertainment Centre” where it stays for a fixed period of time before wiping itself out. Right now you can simply watch a movie on demand – but this is early days yet. The move from on-demand movies to on-demand news or sports isn’t such a big one either.

Yet another really big technology wave which will push us firmly into the on-demand universe is IPTV. As it becomes technologically feasible for a mass market and commercially viable, it has the power to “change everything” again. But one of the key impacts of the technology will be to create a very strong on-demand model for all kinds of programming.

So what are the impacts of on-demand entertainment?

First, it will sharply segregate the market – a sort of digital divide to those who do and those who don’t. Habits die hard and it may be a while before couch potatoes want to do anything more than aimlessly flip channels. This segment, while diminishing, will certainly be around for a while unless IPTV proves to be a killer application. At the other end of the user spectrum, will be savvy, informed users for whom TV watching will largely mean carefully selecting shows and probably choosing their time, place and device. Watch the bulletin on media stocks on the phone while waiting for the train. Watch the week’s sports summary and goals on Sunday morning on TV and the new King Kong, by Peter Jackson on the laptop while traveling on work to New York. Of course younger people will take to this model better and adapt lifestyles faster so in 10 years the old way of watching Television will seem as strange as not having mobile phones or an Internet connection at home.

Second for the latter category – the on-demand users, “Channels” will become a thing of the past. People will make their own clusters of programs they want to watch. Content owners will need to respond to the market and to competition, by unbundling programs from channels. Users will no longer subscribe for months to a Sky Movies or a bouquet of channels, but will select and pay for specific programs. This will allow some users to lower their spends, but by and large, it will simply mean a different rationalization of the same spend. Channels may still continue but as recommendation engines and “categories” rather than transactional entities. This may not be a bad thing. For one a lot of bandwidth may get conserved (remember, currently all channels sky broadcasts come to your dish/ set top box. Second, content providers will clearly be able to charge differentiated rates for better content. The cream will rise to the top. If users are paying 40 pounds a month for a package essentially to watch Premiership matches, the same users may end up spending over 50% of that simply to watch the specific matches and not worry about all the other things that come alongside it. Over time, this will eliminate any content that doesn’t have it’s own market. Filler programming will vanish. The pressure to fill 24 hours of channel time will go away.

The face of adverting will also change significantly. If the channel model is dismantled, so is the 30 second spot as a fixture. Entirely new and creative advertising models will need to be found. The ability to make this work, of course, will define the price users have to pay. All advertising may become interactive, simply to ensure that users work their way through the ads in order to access the free content that is sponsored by the ads, or indeed, make the choice to pay for the program and watch it free of sponsorship messages.

As Television device technology improves and with adoption of HDTV for example, the television industry will cut into the DVD market further. The two may morph – what exactly is the difference between streaming a movie from Blockbuster.com or from Channel 4? Service delivery will become key to this.

Individual consumer date gathering and managing will probably be the holy grail of marketing content. The ability to add context engines and recommendation engines, with permission based marketing and revealed preferences from consumers about the types of content or services they want, will help to delivery very sharp and individualized service bundles.

None of the players will die or go extinct of course. News Corp didn’t become Newscorp without being keenly in tune with the market. Satellite TV may get marginalized if the technology to make truly mass market on-demand doesn’t come along in time, but expect Sky to morph as required. News Corp has recently been in the news for investments of some 2 billion pounds in web related businesses and some of these may well find their way into your TV set sometime – may be as searchable video blogs you can disseminate and view on your tv set?

As with the internet, storage devices and data volumes will dramatically surge as more and more digital content is stored at peoples houses and on local storage. Cyber crime will go up and so will cyber policing. Interoperatability between formats and between devices will (hopefully) improve. Regulation will continuously struggle to stay abreast of technology and its impact.

But most of all, as consumers it will be exhilarating and enfranchising while for businesses it will provide greater rewards for excellence, while punishing the mediocre and the truly bad. Here’s to progress then, for progress it shall be.

Crazy Frog Bad Frog

2005-06-30T05:26:00.000-07:00

I just wrote a simple paper trying to establish what the real value to consumers, of something like convergence should be. One of the areas which I just touched upon in the paper was the need to educate consumers about the dangers posed by unscrupulous providers. Here's a clear example of this - an area where even informed and technologically aware people are prone to risk.

http://news.bbc.co.uk/1/hi/england/4626517.stm

A New Light

2005-06-28T15:23:00.000-07:00

In 1939, the German astronomer, Johann von Maedler, put together 2 Greek words – “fotizo”, meaning light, and “grafo” meaning writing to create a word popularized by his British counterpart – the British astronomer Dr. Herschell – a word we all know today as photograph. In fact most of us are quite familiar with whipping out a mobile phone to snap a picture of a friend or an incident. Photography didn’t exist before the 1830s, which was strange by itself because both the impact of light on chemicals like halides, and the pinhole-type cameras (or Camera Obscura) were known for a long while by then. Sometimes it takes a bit of inspiration to cross fertilize two sets of skills, technologies and discipline and create an entirely new idea.

Shortly thereafter, also in Europe, a strange thing began to happen to Art. People like Manet and Monet created a new style of art which we know today as impressionism, but back then was ridiculously low in detail. Not only that, it seemed to spark more and more diversions from most forms of realist painting styles. Along came the fauves (Matisse), Expressionists (Kandinsky), Surrealists (Dali), Cubists (Picasso) and the Pop Artists (Warhol).

Now as you know, Modern art elicits strong responses, questioning the very notion of Art, questioning if Tracy Emin’s unmade bed is actually worth calling art any more than the hole in the wall in my friend Joe Schorge’s hallway.

However, the point I’m making here is that there is first, a fundamental connection between the invention of photography and the emergence of Modern art. And second that this is an oft repeated pattern in many aspects of life around us.

With the advent of photography, Art ceased to become a means of accurate representation. Go to any castle or museum – from the Versailles Palace to the Tower of London and you will see the larger than life portraits of every ruler worth his NaCl since time immemorial. By the end of the century, however you would expect to find photographic portraits rather than painstaking oils. Quite apart from the fact that the sitting times were greatly reduced, there was simply too much going for photography, for this even to need explaining. The question for Artists at this point of time whether articulated or not (or even consciously felt or not), would have been “what happens to us now?”

The fact that Modern art has a life of its own and has taken us into many new avenues of social and emotional exploration is a happy outcome of this, but it is my belief that it wasn’t a natural progression, nor was it coincidence. It was in fact, the emergence of photography which pushed artists to find new meanings and expressions for their talent.

The reason this is all relevant today, is just like Photography and Art, there has, over the past few years been dramatic interplays between new and old mediums of expression. It is now a commonly accepted axiom that TV took away the who, when, where and what from print, leaving newspapers to largely provide the analytical “why” for readers. What is less touted and yet absolutely true, that the Internet did exactly this to TV – it took away the “what, when, who & where” - essentially “news” and “information” mantle from TV and left TV largely with entertainment and perhaps the “how”. Actually for any event that could not be predicted – from the attack on the Twin Towers to the tsunami, the Internet has greatly outstripped Television for news delivery. TV still remains a more dramatic medium and so any planned or forecast-able event (like Michael Jackson’s trial) will still draw people to TV. But clearly this has forced TV to change itself over the past years to occupy a news space it now shares with both print and the Net. In fact newspapers have gone through yet another repositioning with the Net. The “tabloid” format – for reading in the commute is a clear & creative response for capturing commuters – another word for audiences without access to TV or the Internet.

And here, therefore is my second key observation, as new changes, new technologies come down the pipe, especially the disruptive ones, they will always reposition the old formats, technologies and mediums.

This leaves organizations with some important strategic choices. First, they need to ask themselves to what extent are we tied to a technology or a delivery mechanism. And second to understand the emerging shape of their industry in the wake of a new and disruptive technology to be able to capture value in the evolving landscape. A good example of this can be found in the music industry. Faced by the wave after wave of music downloads, the ease of duplication, the blurry legal boundaries they can (as they are choosing to do) fight the tide. This is a difficult and and in the long term largely ineffective approach – very akin to trying to hold water in your hands. Or they can consider their role in the emerging space and seek to capture value using new technologies. Consider this thought – if you were suddenly allowed access to all the music that’s ever been recorded – how would you decide what to hear? You couldn’t sample it all in one lifetime and anyway, wouldn’t you love a good recommendation engine? Somebody to tell you what’s good and what’s just all right? Isn’t that what labels actually do and are good at doing? But rather than seek to create mass markets out of a few “stars”, may be there’s a different model based more on profiles. Anyway, the idea is not to theorize on Music Label strategy, but rather to build a case for the recognition of the fact that the old models won’t work in the face of disruptive technologies – and an active and creative search for value creation in the changed landscape is the order of the day.

BBC is one organization that has successfully reinvented itself – from a radio company, to a television behemoth, to an Internet giant, albeit with less constraining factors and risks to contend with.

The bad news is that the new value distribution may simply not be as lucrative for the incumbent market leaders in any scenario. But trying to fight against the dying of light isn’t really the best response. A really useful book to read in this context is Adrian Slywotzky’s “Value Migration” (HBS Press). And it’s not just music labels who are in caught in the cross-hair of technology change. It’s also the traditional TV channels facing entirely new worlds with IPTV, VOD and time-shifting, it’s telephone companies facing a threat from VOIP, and CD Player manufacturers (think Discman) from Digital music players (think iPOD).

The old positions, the old value capture mechanisms (CD sales, for labels and mass audiences for prime-time television) may be on the wane. It’s up to these businesses to look for the new value mechanisms, just like Art did, a century and a half ago. There are of course, many realist-artists working today – most of them work in obscurity or as illustrators. The question for many of today’s media businesses, is, are you headed for obscurity, or could you be the next Claude Monet of your industry?

Structuring Convergence - Slicing The Elephant (2001)

2005-06-27T05:39:00.000-07:00

This was written a while back - 2001 to be specific, but I think it still serves to understand convergence better and though the individual elements have moved forward and the piece seems very introductory and "naive" to me today, I chose to not tamper with its original flavour, in this posting.

STRUCTURING CONVERGENCE: SLICING THE ELEPHANT
Written: 2001
We have been hearing of convergence for a while now. The debates have been raging as to whether this is just another hype-cycle or perhaps something deeper. The answer of course is both. Just like the Internet itself, there is a very large penumbra of hype around a very revolutionary core. Those who ride the hype curve may find themselves washed ashore on the sands of disillusionment. But those that ignore the core may find themselves drowning in a sea of change. As managers and business leaders, you need to stay in step with the many faces of convergence - as they could offer you entirely new ways of acquiring customers, servicing them, interacting with them or building operational efficiencies within your organization. If you belong to the media or telecom industries of course, expect a Tsunami.

Depending on where you approach the problem from, you could be seeing a different picture of convergence. Like the proverbial elephant, convergence offers different things to different people, each of them correct though none of them paint the picture completely.

At the core of convergence is, of course, the coming together of voice and data. This sounds basic but the ramifications are really epochal. To dismiss the trend of convergence thus, is akin to dismissing the Internet as a larger network and nothing more. It is, of course much more than that. And like the Internet, as and when it becomes mainstream, convergence will create fundamental changes in the way we communicate, transact and live our lives. It will draw new social patterns and systems. It will cure some societal problems and spawn new ones. It will make telemedicine, tele-government, DTH, Video-on-demand, Videoconferencing and voice activated remote devices a part of our daily lives. In the converged world, your digital music system will not be playing CD's, but will instead, log in to the record company archive in which you have a library membership (probably at the cost of 1 CD), and play any song you select from the approximately 100,000 tracks available. It will also have a memory or index of all the tracks you've played and how many times you've played them, so that it can soon set you free from the task of selecting music to play. More importantly, the pipe that carries all these bits of data back and forth from your home will be the same one that carries your voice when you use the phone. But I'm jumping the gun here. Lets get back to the Elephant as we see it today.
In an attempt to demystify the not-so-white elephant, I've tried to slice it into manageable pieces.

Device Convergence:
This is the front end of convergence. This is the part where your phone is also a memory device and an Internet access device. Or where your TV is also your Internet monitor. Or where your PDA is also your phone. And down the pipeline are devices that we probably cannot conceive of, in our pre-converged consciousness. It is quite possible that the next generation will sit around in the evening watching interactive programming on Interactive-Tele-Entertainment Devices (known today as the Microsoft Xbox), and fighting over not which channel to watch, but over a vote that will decide what the lead character in an interactive soap should do.
Players in all the industries touched by these trends are gearing up for this world of converged devices. Sony, Nokia, Microsoft, 3Com, DirecTV, to name a few. The changes will not be sudden. The products will morph in incremental fashion. Today's avatars may not look like revolutionary products, but make no mistake, these are the harbingers of tomorrows converged lifestyles. DirecTV today is only TV with programming delivered directly to the home via satellite. However its roadworthy cousin - the GM OnStar program is delivering not TV programming, but real time data to and from Vehicles.

Which brings us to the second third aspects of the convergence phenomenon. The access and the Network. Clearly, carrying voice and data together imply a certain minimum pipe-size. They also require unique systems for controlling, managing, estimating and routing the traffic that is flowing through these pipes. If you are going to access the Net through your PC, your TV and your Mobile Phone, it clearly means that each will have its unique connectivity challenges. While the PC is the easiest to hook up to the public network, the TV is not. Enter Cable Modems. And since you want to do more than send text messages - you actually want to see a replay of your favourite game, or movie or sitcom, you actually need a heck of a lot of bandwidth coming into your device. Broadband access promises to deliver this kind of bandwidth in an affordable manner. Broadband itself spans technologies such as XDSL, Cable Modem, Wireless (3G), Fibre to Homes and Satellite. Going one step further, the backbones and carriers (where Fibre is the common messiah) is where the flood of converged voice and data traffic will be rushing around the globe. At the core of this are a new generation of switch called the Softswitch. This is a piece of software that allows switching between (New) IP and (old) Circuit based networks. While the former is the Internet's standard, the latter is the domain of the PSTN (Public Switched Telephone Networks). Cisco, Nortel and Lucent are all throwing significant amounts of money behind Softswitch technology.

Apart from the equipment providers, carriers and last mile providers also jostle for space in this layer of convergence. The carriers are at this point of time recoiling from the excesses of the past couple of years. But players like Level 3 Communications and Qwest, should not be written off just yet. One of the interesting trends in this space is the shift of network intelligence from the "core" to the "edge". This means that routing and traffic management, for example could happen much closer to the consumer than earlier, and very close to the "last mile". The last mile itself, is currently witnessing a plethora of hitherto unconnected competitors. Just think, potentially the competition for your Internet connection could be between MTNL, or your cable connection provider, or your mobile phone company, or a Satellite company that wants to beam you up, Scottie!

Services & Industry: All this dovetails into the next layers, of converged services and industries. Here's where the story gets really interesting. Expect to see many new services being rolled out here. And old services morphing significantly. For example, in the converged world, how do you get billed? Who do you pay? Who exactly owns this pipe into your home? And how do they bundle new services? It is possible that entire industries may converge. Telecom, Media and Gaming, are 3 industries where the boundaries may blur soon. The Time Warner/AOL merger is offers a sneak peek into what may happen across the space. A well known investment bank uses the term "Mediacom" to define a new merged entity in this space. Marshall McLuhan may be proved right in ways that he would not have imagined. The medium and the message are indeed converging.

What everybody wants to do is offer a bundle: a bundle that has access, gaming, news and entertainment. This was, of course the dream of many portals in what is now a footnote of the digital revolution. However in the converged environment, it may become necessary for this bundling to take place at least one step before the customer. Accordingly profile capturing and storage would be narrowed down at this point, and the entity that controls this would in fact own the customer and this would obviously be a goldmine. (Watch this space for Microsoft's move spanning .NET, Hotmail, Passport and Xbox).

ConsumptionThe most understated and potentially the trickiest hurdle that convergence has to cross. The end user and his habits need changing. People speak about the lean-forward nature of the PC and the lean-back nature of the TV. Stance apart, a converged world will essentially blur the lines between entertainment, media and work, in an immersive space. How will we take to it? How will our parents? Our children? It may take an entire generation for this to become a way of life. What will be the societal impact of this? We will be at once, more connected, and more isolated.

Clearly, different parts of this will move at different speeds. Triggers will be independent as well as interdependent. The challenges will vary. Most importantly, the combined impact of all these layers of convergence will definitely stretch our imagination to conceive in any degree of comprehensiveness.

2005-06-26T15:05:00.000-07:00

Knowing Where to Start ...

Have you ever thought about something for so long, so intensely and so obsessively, that you’ve created an ocean of thoughts inside your own head, with its own ebb and flow, spring and neap, to the point where when you’re asked to speak about it, you just don’t know where to begin?

This is precisely where I find myself today. Somewhere in 2001, I sensed, rather than understood that a series of tectonic changes were afoot, in Media. Tectonic not just because of their seismic impact but also because of their subterranean nature and superficial invisibility.

Over the past few years I have held a thousand strands of this change in my head, trying to weave them into a coherent picture – a task a long way from completion. May be the assumption of a coherent whole needs challenging. This blog is an attempt to give these individual tendrils of thought their own due, without subsuming them into some visionary whole. May be doing this will initiate a debate which will give me some of the answers. May be just organizing my thoughts for communicating to you will be a key force for me to understand it better myself. May be these thoughts will simply find fruition as distinct and discrete elements not requiring the grand synthesis.

One of the reasons I jumped at the opportunity to move to London, when it presented itself, was the chance to be at one of the media epicenters of the world. London is unique in its media density – a fact often missed by people who have spent a long time here and have no reason to reflect on the alternatives. The tapestry of media in London is enriched by the cultural diversity paralleled only, perhaps, by New York. And the presence of institutions such as the BBC, which create an entirely new dimension to the media discussion – every discussion about the BBC invariably ends up as a discussion on very fundamental questions about the role of media in a democracy, the need for free speech and the cost of information in any society.

At the same time the changes I speak about are all around us – in the way media is produced, delivered and consumed. These changes are crudely speaking, technological. But there is a very exciting and emerging interplay between technology and culture which consistently impacts Media in non-linear and complex ways. Is the iPod about technology or culture? Is Time-shifting a technology phenomenon or a behaviour change?

To understand these changes is hard enough. To predict outcomes is near impossible. But the very fact that Media continues to play an increasingly central role in all our lives makes the outcomes significant and the understanding vital to our ability to influence our own lives.

In this blog, I hope to be able to record my observations, identify patterns and initiate meaningful discussions about what these changes are, how to understand them better, and what their impact on us might be.