Posts Tagged ‘industry trends’

Murdoch: Go Back to the Drawing Board

Thursday, April 8th, 2010

Rupert Murdoch is out making news today that pay walls are a great idea and fingering Google Search as his nemesis. He’s off the mark on two points.

Paywalls are attempting to monetize access to content. That model died the day Tim Berners-Lee released CERN HTTPd. Raw access to content will or has been commoditized and that trend will only continue. Especially in the realm of content creation where there is little value add (read hard news), there just isn’t enough invested that the crowd can’t do as well or better that allows for simple monetization of that access. In point of fact, using the paywall in such a way that you break the network effect devalues the the content in question by taking it out of the conversation.

This is why I say that Murdoch has the wrong boogeyman. Murdoch is not competing with the Google search and Adwords. He’s competing with Google Reader.

As Reader continues to improve it will start to learn how you consume news and start to make staying informed easier for the end user. The real challenge for major news organizations is how to go back to the product development drawing board and understand their businesses as services that add value for their end users.

Newspapers were begun to facilitate news aggregation and to  make keeping informed easier, more reliable, and enjoyable in the days where telegraphs were expensive or even earlier where 6-8 knots or 20 horse miles per day was the speed of information.

It is now time for news organizations to start thinking about how they are particularly able to add value in ways that leverage the network effect (instead of hindering it) and starts to organize the crowd and the news in ways that both entertain and speed the end users acquisition of news information.

Money can be made and subscriber bases can be grown by major news organizations, but they will be grown because the news business makes a pitch to news consumers that adds value to how the consumer uses their content today instead of simply disconnecting content from the open network. News organizations that choose to try to understand the news I want and offer it to me for one price across my PC, iPhone, iPad, game console, Boxee Box, etc. will give me a reason to be their subscriber.

I’ll note that I have but one login to Netflix and that login knows what I like, what I’ve consumed, helps me find new stuff that will amuse me and comes with a single cross channel price.

Which news organization will compete with Google Reader to make me happy to pay them?

Gene HoffmanTags: , , , , , , ,
Posted by Gene Hoffman in CEO Blog | 1 Comment »

Don’t Waste the Internet on TV?

Monday, March 15th, 2010

Recently, Avner Rosen of Boxee debated Mark Cuban about the future of television. I didn’t get to see the debate (GDC overlaps with SXSW) but I saw Mark Cuban’s post debate post. It’s actually kind of funny as Mark had always been a visionary in the past, but it is what happens when you make a major capital investment in things like HDNET it colors your perspective. His basic thesis is that either because “Application Specific Networks” or the large capital investments in distribution infrastructure are pretty efficient, there is no reason that TV will migrate to the internet.

AOL proved that “Application Specific Networks” are an excellent way to lose a whole lot of money. It was profitable while it lasted but AOL is now a shell of itself and has to reverse its walled garden to hope to keep the small business left. Mark’s comment that there isn’t a revenue model to get content providers to move is just funny. Napsterization comes to everyone. My big question for Mark, though, is how did those large capital investments in shipping, warehouse, and retail capacity work out for Tower Records…

As seems to be common in these major channel disruptions, people seem to be focusing on simply replicating the old distribution channel. TV over the internet is going to be about a lot more than just access to TV and movies. It’s going to be about being able to use video in new and different ways that will be impossible to replicate over a satellite and a waste of bandwidth over last mile connections that could otherwise be part of the total IP bandwidth of the last mile bandwidth instead.

I can’t wait to turn my TV provider off. We’re close.

Gene HoffmanTags: , , , , , ,
Posted by Gene Hoffman in CEO Blog | 1 Comment »

Facebook Platform Trends

Friday, March 5th, 2010

Facebook is wildly popular, the latest comScore report shows that it currently has 38.3% reach across all internet users and they have doubled their unique visitors (111%) over 2009. Facebook’s success has led to a massive economy of third party applications built around their 400 million strong (and growing) user base.

Most of those applications make money through advertising or virtual goods and currency. Regardless of the mechanism, the underlying success factor is attracting a large number of users. That either creates an attractive demographic for advertisers, or creates a user base that will convert at some percentage into paying customers. Over the last few months Facebook made several changes that change the playing field for application developers monetizing on their platform.

1) The biggest of these changes is Facebook Payments. They’ve spent a lot of time working on building a payment infrastructure and it won’t be long before the only method of payment for applications will be Facebook Credits (at a 30% cut to Facebook ala Apple’s iTunes)- http://news.cnet.com/8301-13577_3-10460201-36.html

2) Secondly, there is an increasing shift towards limiting communication between applications and users, this has been ongoing for quite a while as Facebook balances notification spam and the major source of customer acquisition for many apps –  http://www.readwriteweb.com/archives/facebook_silences_app_notification_spam.php

3)   Facebook has been shifting more and more burden onto developers. This is a good thing overall for the community and encouraging developers to contribute value for the community. They are basically forcing their developers to shift from being a dev shop into providing a full customer experience including customer service, policies and monitoring. http://wiki.developers.facebook.com/index.php/Policy_Examples_and_Explanations

These trends will continue as Facebook continues to grow – it will be harder and harder to create a profitable business on their platform. The outstanding question now is will developers re-evaluate their relationship with Facebook and develop their own stand-alone portals?  The difference between offering an application on Facebook and offering it on a stand-alone site used to be quite large, but that gap is narrowing quickly. The freedom to control the customer experience is compelling, as is the ability to control customer billing and put more revenue in your bank account.

Will Facebook work with developers and entice them to stay on the platform? Or will it become a marketing channel for users to get acquainted with off-platform brands? Either way, it’s going to be an interesting year for social apps!

For more on the tradeoffs associated with “on or off” platform applications – Susan Wu of ohai! has a great post on her blog.

Jeremy NusserTags: , , ,
Posted by Jeremy Nusser in Data Geek, Marketing Fury | No Comments »
  1. Pages:
  3. 1
  4. 2