Content Matters

Tablet Wars: iPad Giving Ground to Android

Fred Wilson has an interesting post on the A VC blog this morning, referencing a Forbes article that suggests that Apple's market share of the tablet market has dropped from 81% a year ago to 52% today, with Android grabbing the other 48%.

The Forbes article notes that most of the Android gains are due to the Kindle Fire:

Amazon’s Kindle Fire accounts for far and away the largest slice of those: half of the Android tablets in use are Kindle Fires, and they represent 21% of the overall tablet market.

Those numbers sound a bit suspect to me, and apparently to many readers of Fred's blog. And they are hard to verify, as Amazon does not release sales figures for the Kindle Fire. According to research firm Strategy Analytics, iPad global market share actually increased during Q2, 2012 from 62% to 68.3%, shipping 17 million iPads during the quarter. 

Yet, there's no escaping the fact that Android traffic is increasing, particularly on a global basis. Apple's iOS accounts for roughly 50% of mobile web traffic in the US, according to StatCounter, as compared to 41% for Android. The two were dead-even at 40% a year ago, but virtually all the Blackberry and Symbian market share have been absorbed by Apple.

On a global basis, the picture looks substantially different. Symbian's losses have been split among several operating systems, with Nokia's Series 40 gaining 15%. But it remains largely a 2-horse race between iOS and Android. Yet in the global market, Android, which had been tied with iOS for market share in May, has now taken a sizable lead with nearly 30% of the market.  Of course, these figures are for all global traffic, both smartphone and tablet.

I think it's likely that Android will begin to take more market share from iOS among tablet users in the coming 12-24 months. Ironically, the launch of a 7" iPad Mini, rumored for later this month, could actually help the Android market as well. An iPad Mini could "legitimize" that size, form factor and price point ($199-299) for tablets, making them accessible to a wider audience. And while many will certainly choose the Apple product, that new awareness should also drive sales of the Kindle Fire, the Google Nexus and other Android-based tablets.

But the key, of course, is understanding the markets you serve and what products they are using. In the B2B world, there's really only one player today. Comparing notes with others, tablet market share among knowledge professionals seems to be 90% Apple today. That, too, may change, but I'd encourage B2B publishers to focus their efforts on making great iPad apps, and not worry about Android until you start to see demand from your customer base.

 

 

 

Microsoft’s Yammer Acquisition Validation of the Mobile Enterprise

This week’s acquisition of enterprise social media provider Yammer by Microsoft (MSFT) for $1.2 billion raised a lot of eyebrows. While specific revenue figures are not available for Yammer, I’ve seen estimates of Yammer revenue in the $10-20 million range. Yammer peer Jive (NASD: JIVE) reported revenues of $77 million for the year ending 12/31/2011, with a 4^th quarter run rate of nearly double that.

Clearly Microsoft didn’t buy Yammer based upon its direct revenue potential. Instead, the acquisition was an acknowledgement of where the market is heading, and how Microsoft desperately needs to reposition itself for the future.

For those who’ve never used it, Yammer is best thought of as “Twitter for the enterprise”. It’s a great way of sharing information among workgroups or departments. Microsoft, of course, has long dominated communications inside the enterprise, with Exchange and Outlook. But as communication shifts away from email, and as the enterprise becomes more mobile, that market position is at risk.

Microsoft today is at risk of losing the desktop to the iPad while the Office document market has seen inroads by Google and other cloud-based services. Installed software, upon which Microsoft’s empire was built, is slowly, yet steadily being displaced by SaaS models. They’ve struggled to gain a foothold in mobile. In many ways, their future seems dim.

While Yammer alone won’t reverse that course, it does provide an immediate platform for Microsoft to remain relevant in mobile communications within the enterprise.  As more and more users rely upon devices that do not run Windows and sit outside the firewall, tools like Yammer give Microsoft a way to remain relevant.

There are many other ways in which Microsoft can play in this market. Its acquisition of Skype was one. The market for systems to allow the enterprise to manage today’s BYOD (bring your own device) world is wide open. And while, I’d initially thought RIM (NASD: RIMM) was best positioned to adapt its Blackberry Enterprise Server to the Mobile Device Management (“MDM”) space, their inability to recognize and adapt to market changes have left a huge opening for Microsoft.  In fact, I wouldn’t be surprised to see Microsoft acquire an MDM provider like AirWatch or Zenprise in the near future.

The $1.2 Billion price tag may seem high for a company with low 8-figure revenue, but Microsoft is sending a clear message here that it understands the dramatic changes that mobile and the cloud are driving, and is looking for ways to remain relevant into the future.

Is Apple a Net Job Creator or Destroyer?

Apple's been taking heat lately about their manufacturing locations and treatment of workers at FoxConn and elsewhere.

Today, the company struck back, releasing a study showing that the Company and its ecosystem have been responsible for the creation of 514,000 U.S. jobs. About 10% of those jobs are with Apple itself (47,000 of their 70,000 employees are in the U.S.), the rest include jobs by companies in their supply chain (e.g. Corning, creator of iPad and iPhone screens) as well as those of the Fedex workers who deliver their products.

The company also made a point of noting that their 21 call centers are located in the U.S., while they could have saved money outsourcing support to India, for example. The driver there is not goodwill, of course, as they point out that the reason they keep their call centers in the US is that they believe it provides a better customer experience.

Apple further estimates that more than 210,000 jobs were created from the iOS app ecosystem since 2007, extrapolating from a recent TechNet study.

I won't quibble with the numbers. They used an outside firm to develop the study and I've got no insights to challenge their methodology. At the same time, pushing that study out could be a slippery slope.

It won't surprise me to see other studies come out, aiming to tally up the number of workers displaced by Apple. We've recently seen the bankruptcy of Kodak, a company which lost its footing early in the digital camera era, began to recover a bit, then got displaced by the cameras in their phones. The Netbook industry has vanished with the emergence of tablet computing and the laptop industry is taking a good hit as well.

Conversely, iTunes has done a lot to save the recording industry from complete death. Until iTunes made it convenient to buy music, most digital music was pirated. While the music industry may not love Apple's business terms, there have clearly been many music industry jobs saved by iTunes.

Now, it's not Apple's job to keep people employed at other companies any more than it would be Google's job to keep the newspaper industry afloat.  Transformational technology, by its very nature, is disruptive. And society votes with its pocketbook as to whether these issues matter to most individuals. When the iPad 3 is announced in a few days, millions will line up to order one. Unless there is pressure from consumers, Apple and its peers will continue to source materials from the least expensive providers. I'd gladly pay a $50 tariff for a "fair trade" iPad, or maybe a $100 higher fee for one made in the US. But until consumers demand those options, we can't expect Apple to change.

So, is Apple a net job creator or destroyer? That's hard to tell. I'd wager there have been many more jobs displaced by Apple than enabled or created by them. And while that's not their responsibility, they do have to be very careful before initiating a PR war in which they may not come out smelling sweet.

In the meantime, I miss the days when the co-occurrence of Apple and Jobs in a sentence was referring to their founder.

Men are from Mars; Women are from Pinterest

Unless you’ve been on Mars, or perhaps a Moon colony, you’ve probably heard about Pinterest and how it’s the fastest growing social net out there. 

According to comScore, Pinterest now has more than 11 million active users, making it the fastest independent site to hit 10 million monthly unique. The average Pinterest user spends 98 minutes per month on the site, trailing only Facebook and Tumblr in social media time spent.

Even more interesting, TechCrunch has reported that as many as 97% of Pinterest users are female. That number seems a bit suspect – it’s actually based upon Facebook advertising stats and is the percentage of people who have “Liked” Pinterest on Facebook. There could be a gender bias among those who click “like”, but with over a million Likes, it’s a pretty meaningful statistic, even if slightly inflated.

The impact of Pinterest goes beyond its usage to how it's driving huge amounts of referral traffic. Pinterest has grown from 2.5% of referral traffic in December to 3.6% in January, according to Shareaholic. That puts them in a virtual tie with both Twitter and Google, trailing Facebook and StumbleUpon.

Depending upon whose definitions you like, Pinterest is sort of a visual listmaking/sharing tool or a Delicious meets Tumblr bookmarking tool. Basically, when you see an image of something you want to bookmark, you click on a button to “pin it” to your Pinterest wall.

Since it was the hot new thing, I registered for the early beta of Pinterest, then set up three pinboards – one of books I’ve recently read or are on my to-read list; a second of guitar gear I own or is on my wish list; and a third – leveraging the hottest current internet meme of #Linsanity with a pinboard called Linterest.

The first thing I noticed when using Pinterest is how easy and natural it is to share information. It’s very similar to Delicious in that if you want to share something, you click the toolbar button, pick the image you want to share, then add a brief comment. It’s much easier than posting to Tumblr, for example.

The second thing that I noticed is that I’m really just not a list maker. I created these three lists, but doubt that I would pin things on a regular basis. Ironically, I’ve been a big Delicious user over the years – but I’ve always used it more as a bookmarking service – helping me find things later, regardless of device, rather than as a social sharing service. But list making? It's not for me.

Which brings me back to the gender gap. I’m no sociologist, but of what I’ve read, it seems that women are more likely to be list-makers than men. That’s not an absolute, of course, but my anecdotal experience suggests it to be the case. In addition, some of the applications that Pinterest seems perfect for tend to have wider appeal to women than men. Pinterest seems perfect for sharing fashion ideas, interior design, crafts and other visually compelling items. Pinterest is already the top-referring social site to both MyRecipes and Cooking Light, surpassing Facebook. According to Time Warner’s Tina Imm, “The majority of our traffic [from Pinterest] is coming when people check the recipes on our site and 'Pin' it. Ultimately, when you pin those recipes onto your own boards on Pinterest, that is where the viral activity happens.”

So, what does this mean for publishers and ecommerce sites? The most obvious impact is that it reinforces the trend towards more visual content. While images and video were considered nice to have just a few years ago, they’ve become more critical in the tablet environment and with sites like Pinterest, images are no longer optional.

For some sites, Pinterest is an obvious fit. In addition to the fashion, design and recipe sites mentioned above, travel sites, restaurant and hotel sites, realtors, sports teams and entertainment sites should rush to add “Pin It” buttons. Any product-related site should embrace Pinterest. It’s perfect for car shopping, for example, and for any ecommerce site - Etsy was an early adopter.

But there’s no reason to limit Pinterest to these markets. Publishers tend to be very cautious in adding social features to their sites – yet there’s really no downside to adding a social sharing button. A Pin It button alongside your Twitter and Facebook sharing buttons (you have added those already, haven’t you?) provides just one more way to drive traffic. In time, your users will figure out the best ways to share your information – so just give them the tools to make it easy.

I'm also interested in seeing how Pinboard gets applied to mobile. While I'm not a list-maker, I frequently use the camera on my iPhone as a reminder. If I see an item that I might like to buy at a later time, I'll take a quick picture of it. I'd love to see Instagram add Pinterest integration, so I could keep a running wish list of items I might want - using photos taken through Instagram. 

Going Native: Deciding between HTML5 and Native Apps

Almost every publisher I speak with these days is in the midst of developing, implementing or revising their mobile and tablet strategy. With technology changes coming faster than most can keep up, the mobile strategy you developed six months ago (post iPad 2 but pre-Kindle Fire) is most likely out of date.

And with the news that there were more iPads than desktop computers sold in the fourth quarter of 2011, it’s no surprise that mobile strategy is on the top of everyone’s mind.

Yet when speaking to publishers, I find lots of confusion. And the one topic that seems to cause the most confusion is the decision on whether to build native apps. Despite the near-religious debates that often arise on the topic, the decision on whether to go native app or not is based on a handful of straightforward questions you can ask yourself.

So, here’s a starting point for your decision tree on whether to go native.

How many platforms do you plan to support? Are all of your customers (current and intended) on a single platform? How likely is that to change in 6-12 months? For which platforms do you think that you need to provide full support and for which might a simple mobile browser version work? For most publishers, the iPad has emerged as the key tablet platform, with no clear second choice. It’s possible that the Kindle Fire may become a clear number two, but that’s not happened yet. And while smartphones are ubiquitous, the question will be whether your customers view phones as a real way to access your content.

How important is it for you to have your app included in the App Store? If you expect users to discover your app via the App Store, then you’ll need to create a native app. Or, at least put a native app wrapper around your HTML5 app (more on this later). Of course some publishers are choosing to bypass the app store, noting that buried among all the games and social tools, it’s unlikely a user will find your app unless they are specifically searching for it. That said, it’s important to keep in mind that providing an app in the App Store also gives you a way to get screen real estate. In theory, a user can save a browser page to their Home Screen, but I’d wager that fewer than one in ten have figured out how to do this.

Will your app generate revenue? There are many reasons to launch a mobile presence. The obvious one is for revenue generation – either via subscription, in-app sales or advertising/sponsorship. But there are many other reasons to launch. Perhaps it’s a lightly-used mobile companion to a desktop app, or a promotional app for brand awareness. While the latter two may be very important, it will be easier to justify the development and ongoing maintenance for a native app when you can tie it back to revenues.

Do you need both an online and offline experience? This can be a hugely important factor for certain types of apps. For example, news apps like The Daily or the New York Times need to support an offline experience. Readers often download the latest issue before reading it on a subway or airplane. Of course, to keep downloads manageable, the offline versions usually exclude video (which is streamed when online) and other large media formats, but the bulk of the experience can occur offline. But it’s not just news apps – the London Tube app provides maps of the London Tube and is available offline. Surprisingly, some of its competitors only work when connected – hardly useful when you’re on the platform and hear a message that the Jubilee Line has been closed for service.

Do you need to access any special phone features? HTML5 is powerful but there are some things it cannot do. On the iPhone you cannot access the camera, the microphone or the light or gyro sensor with HTML5. That’s not a big constraint for most app developers, but it can be for some. Crowd Fusion client Tecca wanted to embed a bar code scanner in its app. That required a native app.

 HTML5 is improving rapidly… but it’s still not the equivalent of an app experience. This is important to understand. If you’re reading this blog post, I assume that you own an iPad. If not, I really recommend that you get one immediately. It’s almost impossible to understand how the app world is changing things if you’re not spending a good portion of your day on the iPad.

As I mentioned above, HTML5 web apps are getting better. But they still seem clunky when compared to comparable apps. Let’s take a look at a few to start:

Electionism is a brand new tablet-only HTML5 based news publication from the Economist. In fact, Economist parent, the FT recently acquired Pressly, the development team that built the Electionism site. I’d like to give kudos to the Pressly team. Electionism is one of the best HTML5 web apps that I’ve seen. Yet it still doesn’t feel quite like a native app.

Music discovery engine We Are Hunted is another compelling HTML5 web app. It works very smoothly for browsing artists and listening to music, but it’s a fairly limited app. If you want to buy music, the app simply launches out to iTunes for the transaction, then you have to manually return to the browser.

The good news is that HTML5 is improving rapidly. It’s sort of like the early days of AJAX development on the web. AJAX was really cool – you could potentially do things on a website that could previously only be done in a standalone application. But the early AJAX apps were clunky and felt like they were pushing the limits of browsers. That’s sort of where HTML5 stands today. But it’s already a huge improvement over the world of HTML and Flash and will continue to improve dramatically in the coming months.

It’s not an all-or-nothing choice. There are numerous hybrid apps on the market, using HTML5 for all that it can do, but wrapped in a native app wrapper either to provide special functionality or to get into the App Store (though simply putting a wrapper around a pure HTML5 app may not gain approval in the App Store). For Tecca, whom I mention above, while the bulk of the app is serving up content via HTML5, they needed an app wrapper and scanner as part of their offering, so wrapped it all into a native app.

So how do you make your decision? Think about your responses to the questions above. Hopefully, by now, you understand that the native app - HTML5 decision is not based on a set of preconceptions, but rather by the specific needs of your business. And, of course, your strategy can vary by device platform. There's nothing wrong with having an iOS app for the iPad and a compelling HTML5 web app for other mobile platforms, if you believe your most active users will be using the iPad. It's harder to remove an app than to add one - so if you're unsure about a platform, use an HTML5 web app to support that platform until you learn enough to make the decision to invest. And no matter what decision you make today, you'll need to reassess that decision every 3-6 months going forward. Welcome to the exciting world of mobile apps.

Innovate, Don’t Legislate

It’s an oft-repeated tale. An industry gets disrupted by upstarts with new technologies and business models. The incumbents act quickly – turning to their legal team for advice. Litigate and legislate and the typical responses that come back.

The approach to SOPA and PIPA is hardly new. We’ve seen this play out many times in many industries, most notably in the music recording industry. But in each case, the approach ultimately fails. Sure, it may slow the erosion of your business, but in the end a broken business model is still broken. And all of those efforts to solve the problem through legislative and legal efforts simply distract companies from focusing on what they really need to do, and often alienate your customers.

SOPA (and PIPA) are not the only current examples of this. The Research Works Act (H.R. 3699) recently introduced by Representative Carolyn Maloney (D-NY), aims to reverse the current public access policy under which any taxpayer-funded research is provided free of charge via the NIH website after 12 months.

The bill is being pushed by scientific journal publishers, who currently get a 12-month exclusive to sell the research in recognition of their efforts to coordinate the process of peer review.

My goal here is not to debate the specific merits of the Research Works Act nor those of PIPA and SOPA. Instead, I’d like to suggest a better way forward for publishers than relying on legislation and litigation. But before I do, I think it’s important to note that public policy or legal solutions are certainly appropriate in some instances.

My first job out of school was with a startup called Legi-Tech, a McClatchy-backed online service which tracked legislation. (This was, of course, in the pre-Internet days.) Legi-Tech soon faced a competitor – it turned out that the State of New York decided that providing access to legislative information on a subscription basis was an attractive opportunity for them as well. Fair enough – we believed we could certainly put out a better product than the State could. But the State, or its Legislative Bill Drafting Commission to be specific, went further. They made the full text of new bills available on their service 2-3 days before the printed copies were made available to the public – or to LegiTech, to provide through our service. We believed that violated the freedom-of-information act – they were giving preferred access to public information to those who paid them. So, we hired lawyers and filed suit. Eventually, we won a settlement. Eventually, while we won that battle, we lost the war and Legi-Tech ultimately was shuttered. But in this instance, litigation seemed proper. We were not looking to protect our own rights, but rather to fight unfair business practices of the state-owned entity.

In most cases, litigation and legislation are the wrong approach.

Rather than investing in lawyers, what if these companies invested their time and efforts into trying to identify the best possible experience for their users?

For example, with movies, it’s pretty straightforward. The “going to the movies” experience is very different than the “I’m tired – let’s stay in and watch a movie” experience. Yet, as Fred Wilson notes in his Scarcity is a Shitty Business Model post, the movie industry as a whole would make significantly more money if they would make new releases available in theaters, on DVD and streaming, globally on the same day. But, with the exception of some small indie movies who are experimenting, the industry refuses to adapt and loses out – to piracy, to video games and to other forms of entertainment.

For b2b content, it’s largely the same. Journal publishers seem concerned they will lose out on the one-off use. To me, this seems misguided. B2B publishers should look to get 80-90% of their revenue from their core markets. For journal publishers, this would include life sciences companies, universities and government agencies. Their focus should be on delivering the best solution to meet the workflow of those users – on desktops, tablets and other platforms. That's where they can maximize their revenue opportunities.

Yes, there will be light users who have an occasional need for their content. Aggregators can pick up some of that business – by making their content easy to find and by providing top-notch metadata, summaries and analyses, which will make those users’ jobs easier.  But the answer is not to make that content inaccessible via the public web.

A good example of this is the market for SEC filings. In the pre-Internet days, there were companies that made their living by Xeroxing copies of SEC filings and overnighting them to users. When the SEC decided to put their filings online via EDGAR, it could have been the death of these providers. Yet today there are a half-dozen or more filings providers (Thomson Reuters Disclosure, EDGAR Online,  ICC, Perfect Information, Morningstar) all finding their own niche in this competitive space. While the one-off user is typically happy with the free service from the SEC, the business user is happy to pay for better search and better access, embedded within their workflow.

And, of course, the digital music business provided great lessons for other industries. The music industry started out with an L&L (legislation and litigation) approach, but it failed pretty miserably. Users wanted a way to get all of their music onto the devices they used in their daily life, and the threat of lawsuits were not a major barrier. What changed the industry was iTunes. Once users had an easy and convenient way to buy music for their iPod most chose that path, abandoning the free downloads. Today, with iTunes, Amazon, Google Music, Rhapsody, Spotify, HypeMachine and others, there’s no reason for most to pirate music.

The organization with the biggest push behind SOPA/PIPA is, of course, the Motion Picture Association of America. This is the same organization that sued to stop the VCR in the 70s, saying it would kill the motion picture industry. Of course, DVDs (the successors to VHS) now account for a third of their revenue. This should come as no surprise. The CEO of the MPAA is former Senator Chris Dodd, who succeeded former Kennedy aide Jack Valenti. The day that the MPAA hires a product person to run them will be the day that industry changes.

Of course, there will always be the handful of users who will choose piracy. For the most part, these are users for whom their time is less valuable than money. And they’re not likely to buy your product regardless. It’s a lot like the market for counterfeit luxury goods. When my niece was around 10 years old, she wanted a Kate Spade handbag for Christmas. Luckily, the tabletop vendor near my office had them for $25. Now, lobbyists will claim that my purchase cost the real Kate Spade $300; but there’s zero chance I’d have bought her a real one, even if no counterfeits were available. As Tim O’Reilly eloquently notes:

The people who are pirating are most likely the people who would never give you a nickel to begin with. Piracy serves people on the fringes who are not being served adequately by legitimate markets. Frankly, if people in Romania can download my books and enjoy them, more power to them. They weren’t going to pay me anyway.

The pro-SOPA lobby puts forth estimates that piracy of digital media costs the US $200-250 Billion per year and an amazing 750,000 US jobs. Yet, all the calculations of losses are bogus, as noted above. The only real economic losses come around the fringes – where you have users willing to pay for a service but who choose to use an otherwise free or inexpensive version. And that $250 Billion figure? It’s made up. According to the Cato Institute’s Julian Sanchez:

The $200–250 billion number had originated in a 1991 sidebar in Forbes, but it was not a measurement of the cost of “piracy” to the U.S. economy. It was an unsourced estimate of the total size of the global market in counterfeit goods. Beyond the obvious fact that these numbers are decades old, counterfeiting of physical goods imported in bulk and sold by domestic retail distributors is, rather obviously, a totally different phenomenon with different policy implications from the problem of illicit individual consumer downloads of movies, music, and software. The 750,000 jobs number had originated in a 1986 speech (yes, 1986) by the secretary of commerce estimating that counterfeiting could cost the United States “anywhere from 130,000 to 750,000″ jobs. Nobody in the Commerce Department was able to identify where those figures had come from.

Now, let’s look at what most media companies have failed to do, while they’ve been fighting the legislation & litigation battles:

• They’ve failed to identify ways to leverage the changes in technology and media consumption to create new products for their core customers.
• They’ve failed (for the most part) to introduce compelling new mobile or tablet-based applications.
• They’ve largely failed to experiment with new business models, instead focusing on keeping the status quo.
• They’ve largely failed to embrace the technologies, tools and approaches (cloud, agile development) which the upstarts have used to displace them.

All in all, they’ve failed to create significant value-add that will give their customers no reason to ever consider the lesser, free alternatives and to reinforce the overall value of their brand.

Now, that’s not to condemn all media companies. There have certainly been sparks of innovation across all segments. But on the whole, publishers have been focusing a lot more energy on legislation and litigation than on innovation. And that’s a strategy that’s destined to fail.

Note: For those interested in more details on the Research Works Act, I’d suggest reading Michael Eisen’s blog post on the issue or this one from Scientific American.

Blackout SOPA

If you're like me, your twitter stream for the past few days has become a sea of avatars all with the #BlackoutSOPA banner at the bottom. At last count, nearly 5,000 users have updated their avatar with the message. 

To show your support, simply click the BlackoutSOPA link to update your avatar with a single click.

Of course, showing support for the BlackoutSOPA project is simply a gesture. Your Senators and Representatives, even those who are on Twitter, are unlikely to see you in their stream. That said, a number of major web companies (including some little companies like Google, PayPal, Yahoo, Wikipedia and Facebook) are considering a one-day web blackout in opposition to SOPA. That would go a long way in generating media attention to the issue.

However, elected officials respond most to their voters and donors. So, I hope that everyone who updates their avatar also takes a moment to call their elected representatives to let them know your position.

Here's a site that provides the contact details for your representatives and also provides a mini script for your call. 

SOPA and PIPA are poorly constructed bills. They do little to go after the true causes of piracy, and instead give large companies tools to decimate startups. Our politicians all talk about the need to support "job creators" but SOPA and PIPA are tools to stifle innovation and hurt early stage innovators. I'm particularly embarrassed to see that while NYC hopes to rival Silicon Valley for startups, both Senator Chuck Schumer and Senator Kristen Gillibrand have expressed support for PIPA.

I just got off the phone withe the office of my representative, Nita Lowey (NY18) and was thrilled to hear that she's now leaning against SOPA. When I last checked with the office a few weeks ago, she'd not yet taken a position. 

Bandwidth Usage is not an Occupy Issue

The New York Times today has gotten lots of attention for a ridiculous headline on a poorly written story:

Top 1% of Mobile Users Consume Half of World’s Bandwidth, and Gap Is Growing

The story itself is kind of silly. Yes, it's a fact that a minority of users utilize significant amounts of bandwidth on mobile devices. That's not new - in fact, it's why AT&T, Verizon and others have put caps on what were previously unlimited data plans.

Yet in the story, the writer compares consumption of bandwidth to consumption of oil:

The United States, with less than 5 percent of the world’s population, consumes about 23 percent of the world’s daily oil production, according to American government figures. Japan, Germany and Italy, whose populations together make up less than 4 percent of the world’s total, accounted for 31 percent of global natural gas imports in 2010, according to the International Energy Agency.

Yes, that's factually true. But where there is a finite supply of oil in the world, bandwidth is potentially infinite, depending upon the capital investment that telecoms are willing to make.

Showing even more ignorance of the issue, the author quotes an analyst suggesting that some of the imbalance may be based upon the use of SIRI in new iPhone 4S devices:

Arieso researchers, in their latest survey, found that users of Apple’s iPhone 4S downloaded 276 percent more data from an operator’s network than did people with the Apple 3G, which has been on the market since June 2008.

Part of the reason for the increase in download volumes may be Apple’s Siri voice feature on the iPhone 4S, Mr. Flanagan said. Siri allows consumers to dictate to the phone and enter more text and data into the network in an easier way.

Really? The reason iPhone 4S users consume more bandwidth than iPhone 3G users is due to their use of SIRI? That's absolutely ridiculous. There are multiple reasons iPhone 4S users are probably using more bandwidth:

• They are early adopters - so they're much more likely to be consuming video and using other bandwidth-intensive applications
• Performance on the iPhone 4S is much, much faster than on the 3G. Those who are still using a 3G are unlikely to use bandwidth-intensive services as the performance will be unacceptable.

The story, which is based on a survey done of European mobile users, also lumps together mobile phone, tablet and laptop use. The drivers of bandwidth on laptops is likely different than it is on smartphones, but there's no effort to dig into that.

Even the accompanying photo makes little sense. The image shows users reading their smartphones while coming out of the subway tunnels to travel over the Manhattan Bridge. But I doubt these users are watching video or doing other bandwidth-intensive work during this 3-minute period where they can access the web. Instead, they're probably checking email or reading text-based news, since they'll be back in the tunnel shortly.

But what bugs me most of all is the silliness of the title, an effort to equate this to the 1% vs 99% of the Occupy movement. While smartphone adoption is certainly most prevalent among the top 25% of wage-earners, it's not a 1% issue. The checkout clerk at my local Stop & Shop has an iPhone 4S; the Associate at Lens Crafters who helped me with my reading glasses a few weeks ago has an iPad 2 and previously had the first iPad. She told me that when the iPad 3 comes out, she'll upgrade to that one "I have to have it". So bandwidth consumption cannot easily be mapped to a socioeconomic scale. In fact, I'd argue that the wealthiest (who are often older) are somewhat less likely than a younger, middle class audience to use their smartphones and tablets for video and other heavy bandwidth applications.

This kind of linkbait headline and sloppy journalism is what I'd expect from a B-rate blog. The New York Times should do better.

 

 

Mad Men 2011 aka digital ignorance redux

I’m looking forward to a new show that’s targeted to hit the small screen (in whatever form it may be) in the year 2041 - Mad Men 2011.

The premise sounds pretty cool – they flash back to the year 2011 and look at the ad agencies and media companies of the day and – full of anachronisms and the seemingly bizarre behavior of the day.

Like the current Mad Men series, it will have infidelity and corporate infighting, but what will make the show special will be those flashbacks to 2011. No, I’m not speaking of the retro fashions. And it’s not the fossil fuels that powered their cars then, but rather the fact that the leaders of the agencies of 2011 themselves seemed like dinosaurs.

In the pilot movie, they’ll open with a scene at a large media conference. CEOs of various media and agency companies will be discussing their use of social media. Here are a few of the gaglines you’ll hear:

Maurice Levy, Chairman of mega agency Publicis will be asked about  whether he uses Twitter, to which he’ll reply:

"I understand how to wash dishes. I don't do it regularly"

[queue laugh track]

Hachette’s Arnaud Norry will eagerly chime in:

"I think communicating with text only with a very limited way of expression is not my style"

The scene ends with several media leaders openly ogling the shapely rear-end of one of the agency associates while one slowly exhales cigarette smoke. Oh, wait, that was a commercial for a Herman Cain campaign ad from the same year.

If only these were punchlines from some future retro show. In fact, they were real quotes coming out of this week’s Reuters Global Media Summit. The fact that major media executives can still be so dismissive of social media is sad. More than anything, it shows a complete lack of understanding that the current display advertising model no longer works.

As Andy Weissman describes it:

“…display ads online are the wrong metaphor. They come from a construct where web services were viewed as "pages" - magazine pages. They were invented by applying an old model (magazines) onto a new medium (web services) and assuming that the user is a "reader" and will accept being interrupted. Over time, the web has proven both these paradigms to be untrue in a truly profound way.”

Would Levy hire a practice leader for Publicis who has never worked in advertising but has "watched plenty of commericals on television"?  More importantly, would a client allow Publicis to assign them an account planner who had never worked in the agency business nor ever used the client's products and services?

What media and agency executives still seem to miss is that social media is not just another publishing platform. Twitter is not about pushing out 140 character headlines. It's about engagement and you can't understand engagement by simply watching someone else do it.

 

 

 

 

 

The Verge Offers a Compelling Vision for Online News

To much anticipation, consumer tech blog The Verge launched yesteday. The Verge is the newest site in the newly named Vox Media stable, joining SB Nation, and is led by Joshua Topolsky and much of his editorial team from Engadget along with publisher Marty Moe.

Engadget, of course, was the leading gadget blog on the web (and, at one time was the top overall blog in terms of traffic). Josh and much of the Engadget team left as AOL closely integrated the blog into the Huffington Post organization.

SB Nation had already made a name for itself through its dual focus on great editorial content and a heavy emphasis on its technology platform. In fact, their mantra, under CEO Jim Bankoff, was Always Be Coding, not the typical fare you’d expect at a media company. And they are bringing that technology focus, along with an emphasis on local, social, real-time news to the new site as well.

I think the Verge is well-positioned for success in this market. Others have commented on their fresh-looking UI. I agree, but design can be copied by others (and other sites, like Newser, have created similarly compelling visual designs). I see two critical factors that position The Verge for success:

Posts built on top of Structured data. Blogs are just blogs – a bunch of articles you can browse or search for. But The Verge starts out with a structured database of products and layers its articles on top of that. This provides a number of benefits:

• Great product pages. Take a look at the page for the Samsung Galaxy S II Epic 4G Touch. It’s got specs, reviews, photos, a video and an easy comparison engine.
• Better navigation – The Verge offers faceted filtering, so you can find stories on digital camers from Canon, Nikon and Panasonic, costing under $200 and with a review score of 6 or higher. The filtering is a bit quirky right now, but I expect they’ll resolve those bugs quickly.
• Easy new product development. It would be incredibly easy for The Verge to launch spin-off products - like sponsored mobile apps ranking the best products by category, or to offer up APIs to shopping sites. For every top 10 list you can imagine, they could easily pop out an app or microsite.
• Better SEO for the publisher – blog posts have a short shelf life, but detailed product pages can live for a long time.

The other key feature that The Verge has incorporated from SB Nation is the concept of Story Streams. Similar to the experimental Google Living Stories, Story Streams are designed to allow the reader to follow a story over time. A new reader can read the full story, while someone who’s been following the story can dip in for a quick update. Writers can update posts anywhere within a story, and those updates can be pushed out to readers. Unlike most editorial articles where additional data shows up at the end of the story, with Story Streams, you’ll typically see the newest information at the top, with links to prior updates.

Looking at the Story Stream for the Amazon Kindle Fire, there are 12 updates, beginning with rumors of the new Kindle in late September, and ending with a gallery of images from last week.

The consumer technology space is a crowded one, and The Verge will not have an easy time leapfrogging the existing players. But they've got all the ingredients to make it happen.

And for online media companies looking for ways to drive revenues and create new products, they could do a lot worse than looking at The Verge's use of editorial on top of structured data as a model.