Tuesday, September 25, 2007

DuPont uses Video to Reach Younger Generation

Here is a powerful illustration of how DuPont uses Brightcove to reach younger generations. I expect to see more established companies embrace video technologies as a central mode of communications and conversations.

What other companies are already on the video bandwagon?

Monday, September 17, 2007

Monetizing Content in a Network Era: The NY Times Decision

One of the most profound implications of the shift to a network-era is the location of cash register. Many content owners were adamant for a long time that their content is so valuable that the consumers will pay subscription fees. New York Times allowed its physical newspaper subscribers to access their electronic content without paying extra while seeking to attract on-line subscribers for a fee. However, today, it announced that its content will be free.
This particular statement is particularly noteworthy.
“But our projections for growth on that paid subscriber base were low, compared to the growth of online advertising,” said Vivian L. Schiller, senior vice president and general manager of the site, NYTimes.com.
The shift from paper to online compelled NY Times to rethink its revenue sources; online revenue is less about direct subscription fees but more about online advertising. NY Times has finally seen its internal numbers: $10 million annually--which may limit its ability to garner a higher amount through advertising. As the article noted:
What changed, The Times said, was that many more readers started coming to the site from search engines and links on other sites instead of coming directly to NYtimes.com. These indirect readers, unable to gain access to articles behind the pay wall and less likely to pay subscription fees than the more loyal direct users, were seen as opportunities for more page views and increased advertising revenue.
Network era is shifting the cash register. Will Wall Street Journal, Economist and the Financial Times follow suit? Will this impact other content like music and video?

Sunday, September 16, 2007

Apple Macintosh versus iPod

An article in NY Times today that discusses how Apple missed a window of opportunity during the introduction of Vista. The market share for the Macs is stuck at around 3% (down from a high of 14% in 1984). Randall Stross does a good analysis of Apple's retail strategy (including the relationship with Best Buy). But, winning market share in the personal computer arena (against Windows) is more than just fixing the retail and distribution strategy. Windows succeeded because of the strength of its network of complementors. Apple made a strategic decision long back to keep Macintosh closed (and not open to third-party developers). Apple's production-constrained for sure.
In contrast, Apple made iPod compatible with Windows: that decision (more than anything else) has made Apple enjoy a commanding market share. If Apple had required that we buy Apple Macintosh to use iPod, it would have had a market share in single digit. Stross concludes with this sentence about the strength of Windows.
Mr. Kay, of Endpoint, described a Microsoft operating system and its thousands of certified supporting hardware vendors and the two million device drivers as forming an enormous flywheel.
What Apple has going for it is a similar flywheel with iPod and iTunes (and potentially iPhone).
Succeeding in network-era competition is more than crafting an effective retail strategy--which is necessary but not sufficient. For early clues about network-era leaders, look at the pattern of complementors linked to it. That's what defines Microsoft with Windows (but not Zune) and Apple with iPod (but not Macintosh). At the same time, these network-based advantages are not sustained for longtime unless the leader nurtures and evolves the ecosystem.

Saturday, September 15, 2007

Can Yahoo Beat Facebook?

During the heydays of the dotcom, AOL was riding high. It enjoyed steady subscriber growth and very little churn. It bought Time-warner and was going to redefine the media landscape. Ensuing events proved its strategy to be costly and foolish. The anticipated synergies never materialized. Amazon, eBay and Yahoo survived the dotcom explosion and have established robust business models with impressive market capitalization levels.
Nowadays, the question is who will win in the social networking space? Will it be MySpace? Facebook? Google with Orkut? Bebo?
Or will it be Yahoo? Yahoo got into the social networking scene with Yahoo 360 but that service seems to be losing steam. MySpace and Facebbok seem to be fighting for leadership (and Bebo seems to be doing well in the UK). Yahoo, still a leader as a destination site in terms of unique visitors, is now jockeying to compete against MySpace and Facebook with the launch of Yahoo Mash (in beta, invitation only). A CNET Review seems to indicate that it has a good chance.
To beat the leaders, you have to be not just different but also superior. It seems to have taken the best of MySpace and Facebook as a starting point. In addition, it has incorporated some core features of Wikipedia: your friends can edit your pages (a scary thought!) But in the spirit of wikis, there is a revision history so users can roll back the changes; and there are privacy options so that you can decide who gets the rights to edit and so on. From the review, it looks like they are extending the social networks to include the core ideas of wikis.
Ultimately, it's all about leveraging interconnected strands of network effects. First: Can it create stickiness within its customer community (direct network effects)? Will individuals switch from MySpace and Facebook to Yahoo Mash? Will wiki-like features catch on?
Second: Can it orchestrate a vibrant community of developers that design widgets for Yahoo mash (indirect network effects)? Will developers offer their widgets for Yahoo preferentially over Facebook? Mark Zuckerberg realized the importance of courting the developer community in establishing the Facebook platform.
The winner will be the one that can leverage both sides of the network effects in a virtuous dynamic fashion.
My prediction for the near-term: Advantage Facebook (Over 30 million active members and an enthused developer comnmunity that developed over 65 million applications!).

Friday, September 14, 2007

Random Thoughts on iPhone

Just some thoughts on iPhone.
1. It has reached the million units mark in 74 days. According to AppleInsider: “One million iPhones in 74 days -- it took almost two years to achieve this milestone with iPod,” said Apple chief executive Steve Jobs. “We can’t wait to get this revolutionary product into the hands of even more customers this holiday season.” The race is on towards 10 million by 2008 end. Aggressive pricing will surely help.

2. The early buyers (the fanatics like me) will get a $100 credit (details here). This is unusual but Steve Jobs decided wisely not to alienate his loyal ardent enthusiasts!

3. iTunes will provide functionality to convert songs into ringtones and that should appeal to the users seeking value from the convergence of devices and applications. Moreover, iTunes Wi-Fi music store will be launched soon (bypassing the mobile operators network to access music).

4. Will we see a 3G iPhone soon? Strong indications are coming from Germany that it may happen before the end of 2007--the question is will it be in USA or elsewhere?

Apple is in the midst of the kind of challenges that we expect to face when competing under fast-changing conditions, where success depends not just on the focal company's actions but how it orchestrates a network of alliances and partnerships.

Thursday, September 13, 2007

iTunes and iPhone Ringtones: Another Step in Convergence

Apple is finally allowing consumers to convert their purchased iTunes music into iPhone ringtones. Here's a brief summary from AppleInsider.

iPhone Ringtones
In addition, iTunes customers will now be able to create custom ringtones by selecting up to a 30-second segment from over a million participating songs on iTunes and easily sync them onto their iPhone. Once a customer has purchased a participating song from iTunes, including previously purchased participating songs, it will only cost 99 cents to make up to a 30-second segment of that song into a ringtone and easily sync it onto their iPhone. Customers can personalize their ringtones by choosing which portion of the song they want to use, and setting custom fade in and fade out points. iPhone users can assign a custom ringtone to be their default ringtone and they can also assign them to individual callers in their address book.

It will be very interesting to see how network operators react to this move as they were fighting hard to defend their profit streams from ringtones--which globally is estimated to be around $5 billion.

Winning in a network-era calls for careful understanding of likely shifts in the location of cash registers. In this case, the network operators, who could historically defend their ringtone profits, need to figure out a way to earn their share with other partners in the fast-changing business network.

Monday, September 3, 2007

Thoughts on GPhone and GPay (Taken Together)

Lots of buzz around in recent days about GPhone. The rumors center on the notion that Google will experiment with a branded phone in India (using a network of alliances and partnerships); then it may expand to other countries including USA and Europe. There may be some merit in doing it in India--one of the fastest growth markets in the world. Besides, many do not have PC-based access to the Internet and mobile phones serve as a gateway to access the Net.
I never paid serious attention to GPhone rumors. Here is a good overview of the rumors and news articles. Then, I saw this posting today in London-based Timesonline about GPay. It refers to a patent filing that has been published by the US Patent Office on August 30, 2007. Clearly, SMS-based payment systems exist in many parts of the world: So, what's so great about GPay? Also, Google has an online payment system, Google Checkout that competes not so effectively against EBay's PayPal. So, the question is: Is GPay a serious threat?
Unlike other SMS-based payment services which may be fragmented and not have the computer processing capability to collect and analyze the massive amounts of data, Google may be in a much better position to link 'search' to 'purchase' thereby providing valuable insights to marketers (and advertisers). GPhone and GPay taken separately may look like 'me-too' imitations but taken together hint at the power of information to provide insights into how (and when and where) we access information and how we buy products and services.
Where's the cash resgister located in GPhone and GPay? It's not just in a share of the revenue from the mobile operators that offer GPhone. Nor is it just in transaction fee from GPay payments. It's more about monetizing advertising in the mobile arena and offering insights to the marketers about placement of advertisements in context. GPhone and GPay may well be the link to Google's serious foray into monetizing advertising in the fast-growing mobile space. Viewed this way, Google is not deviating from its core business at all. In fact, it is aggressively using its core capability to exploit emerging new market niches. I am watching to see Google's moves in the coming weeks and months. I am also equally interested to see what the competitive responses and counter moves in the business network.

Sunday, September 2, 2007

Big (IBM) and Small (Scrybe) Companies Use YouTube to Promote New Offerings

It is not surprising that YouTube is becoming an efficient way to promote ideas in development (it is a superb alpha test marketing platform, I think). Here are two examples worth taking a look at.
IBM has put a quick tutorial on its tool QEDWikiQEDWiki on YouTube.

A small start-up company based in Pakistan, Scrybe Corporation--which has developed a personal information manager--launched the product on YouTube in October 2006.

Both IBM and Scrybe Corporation can gauge the degree of interest and excitement about its offering by monitoring how this video is received (watched, downloaded and embedded on different web sites).
Is this a new way for Google to monetize YouTube beyond advertising?