Livewire

As I mentioned in my previous blog entry, the evolution of web browsing experience triggered by iPhone, Android, Blackberry and other new devices have attracted   a large mass of users to mobile web. Even the mobile browsers like Safari and Opera have started to evolve to dramatically improve the mobile web browsing experience. With these radical changes taking place, the lines between the PC and Mobile browsing experience have started to blur. But do the B2C websites keep pace with this mobile web evolution?

A number of market research studies continue to indicate that the web browsing experience remains to be poor despite the evolution in the mobile browsers. I would like to point you to some statistics that I came across related to this topic. Jeremy pointed me to an interesting market study by Bango that indicated that “half of the top 20 most trafficked websites are not optimized for mobile devices, despite the fact that mobile web users now account for an average of 5 percent of all site visitors”. A recent worldwide study indicated that a poor experience on their initial use of the mobile Web made them "reluctant to access" either the site - or the Internet in general - on their mobile phones again.

With the increasing number of users trying to get to the Internet from their mobile phones, I believe it is time for the websites to get up to speed with this new trend and see how they can best utilize the mobile web. Major Internet sites are beginning to optimize their site layout to address the population of consumers accessing the Internet through their mobile devices. But the number of users with the high-end phones like an iPhone or a Blackberry is far less compared to standard phones from manufacturers like Samsung, LG and Nokia (even these phones have started coming with an enhanced browsing capability). So when the websites are being designed to support mobile based access, they need to keep in mind a wider range of phones than targeting only high end phones which is the only way to increase traffic to their websites through Mobiles.

The Mobile Web user experience still has a long way to go and this time it is the websites that will need to evolve to address these user experience issues. With increasing mobile web usage and an increasing number of consumers with Mobile phones, will the B2C websites start taking this trend more seriously and start optimizing for mobile based access? How quickly will B2C websites take advantage of this evolution and start unlocking the revenues from an increased traffic generation is a question that remains to be answered. Will online retailers take advantage of this trend to start driving more transactions through the mobile phone? These are some interesting questions and we will have to wait and see how these websites evolve over a period of time to start addressing the Mobile Web market. I would like to hear your thoughts about this topic.

Posted by Sandeep Chandrasekar Seshadri at 06:39 PM | Permalink | Comments (3) | TrackBacks (0)

I have been sifting through a number of articles lately in regards to long tail video content. The latest meme has been the death of the long tail, I would say more specifically, the death of monetization of user generated video content. Just to be clear, long tail content available from various artists and producers will continue to be consumed by niche users, there is a model to monetize those revenues with a large digital library that is not moving physical goods (see The Long Tail by Chris Anderson). Additionally, certain user generated videos will continue to draw “crowds”. However, there are a few different trends that are affecting the model that we initially assumed where money would follow the user generated content (UGC) eyeballs.

First, the very tools that helped drive the UGC sites are now drowning those sites in video inventory. Inexpensive video editing or video capture tools with easier upload processes have created significant participation, hence exploding the long tail of UGC video. This enhanced participation has not created more valuable property, which is opposite the network effect. As an advertiser, it is now even more difficult to properly target your audience and protect your brand from being placed next to a less than desirable video. Proctor & Gamble’s GM of Inactive Marketing Ted McConnell was a bit more blunt in his assessment of social network UGC "What in heaven's name made you think you could monetize the real estate in which somebody is breaking up with their girlfriend?" (http://adage.com/digital/article?article_id=132606).

Secondly, the economics are still developing for online video advertising. According to the CEO of BlackArrow, video watched on TV commands $.50 per thousand views on average as compared to the same content being consumed online by the same audience size would only get $.05 per thousand views from advertisers (http://www.techcrunch.com/2008/11/13/online-video-wheres-the-money/). That is a ten-fold decrease from advertisers for the same professional content, this is not even considering amateur video

Lastly, the content houses themselves are starting to wake up to the internet as a complimentary channel. As I noted in previous blog entry, online video consumption doubled in the US last year. Also noted from TechCrunch, this has been aided by the trend of people using the internet as “catch up TV” for episodes that missed recording on their DVR. Sites like Hulu or the content owner’s (e.g. Comedy Central.com, ABC.com) are providing this outlet which is more attractive to advertisers who have better confidence in the target audience (however still with a lower price point). This shift from the content owners has developed this new viewing habit which actually captures more audience with real time, time shifted (DVR) and place shifted (what the DVR missed). Essentially, long tail professional content can be monetized, but long tail UGC appears to be challenged.

Clearly, the growth trends for UGC video will continue unabated as community participation continues to grow. It is my opinion, that the business model of Hulu, for example, with long tail professional content provides a better business model even with a smaller audience. Granted, having a large audience is easier than creating a large audience, but you still have to make money in the end. What are your thoughts?

Posted by Jeremy Kloubec at 03:25 PM | Permalink | Comments (0) | TrackBacks (0)

One of the more interesting developments mixing technology and politics has been the intent of the US President Elect Obama to create a CTO cabinet position for his White House team. Currently, there is not a single position in the Cabinet that drives technology strategy for the White House and this only seems like a logical position to create. My question would be “why did this take so long”? No major company operates without the use of technology to help run their business. Furthermore, leading companies use technology to create competitive advantage against their rivals through an optimized supply chain, business intelligence capability, sales force tools or a number of other uses. The same should hold true for the US government which is a massive entity in its own right.

There has to be significant opportunities to create shared service approaches for all the different e-government initiatives in addition to reducing dependence on paper based filings. This would create transparency and ease of use for the constituents. Also, a CTO position can drive initiatives to help US competitiveness by advocating for technology infrastructure improvements or programs to create skill sets needed for the future of business. I feel it is a terrific first step for a position that I hope continues to evolve and grow since it should be beneficial for all companies services the technology sector. What are your thoughts? Are there any other similar examples you have?

Posted by Jeremy Kloubec at 03:21 PM | Permalink | Comments (0) | TrackBacks (0)

Over the past years, we have seen the Wireless industry undergoing a significant change – the service providers’ walled gardens have continued to disintegrate with the explosion of the content and applications available for Mobile phones. In my opinion, a couple of factors have contributed to this phenomenon.

With the introduction of phones like iPhone and G1, the web browsing experience has moved away from a simple WAP-based access to a more PC like experience (though not there yet!!). Today, with browsers on many smart phones providing a near-PC web experience, not only has the mobile web usage grown but the number of channels through which the content on the internet can be consumed has multiplied. With consumers seeing more and more options to obtain and consume media on the phone off the deck, service provider’s control on the content being served has diminished considerably.

Mobile App Stores (lead by Apple and Google) are evolving and customers can now get access to thousands of applications. These App stores have created a distribution platform that connects the application developers directly with their consumers. On the other hand, the Service providers, who until recently, controlled what content and applications are made available to their customers, have started to lose control over marketing and distribution of applications and content.

As the Walled garden continues to crumble, the wireless operators should not become mere “conduits” to mobile content and applications like the Broadband service providers are in the traditional Internet world. I see this as an opportunity for the Wireless service providers to not only drive up Data revenues and introduce new Ad-based revenue streams but also to create new business models to remain competitive in this market place. I also see this as a potential opportunity for application developers and other companies to produce innovative content and applications that would attract consumers. What do you think the Service providers will need to do to retain their revenue streams from content sales and media delivery?

Posted by Sandeep Chandrasekar Seshadri at 10:13 AM | Permalink | Comments (4) | TrackBacks (0)

Two recent stories really caught my attention as innovative ways to drive additional advertising revenue. The first comes from Sky TV in the UK and the second from MTV Networks (part of Viacom). I would consider both case studies very significant and unique.

In the case of Sky, which does not own mobile assets, they will now offer cross-platform advertising placements on their TV and online assets in addition to  T-Mobile and Vodafone mobile portals (http://www.nma.co.uk/Articles/40382/Sky%20takes%20possession%20of%20mobile%20ad%20sales.html). This direct sales relationship allows for Sky to offer a full bundle and effectively compete with a quad-play (voice, broadband, TV, mobile) telecom service provider. Alternatively, T-Mobile and Vodafone deserve some credit for opening up their platform to allow this type of direct selling which creates value for all parties in addition to generating more mobile advertising opportunities. Supposedly Adidas and Fiat would be the first brands to take advantage of this bundled capability from Sky.

For MTV Networks, this seemed to be a case of “if you can’t beat them, join them” as they will be serving advertisements with their pirated content on MySpace (http://www.crn.com/software/212000095). No, that was not a typo considering the battles Viacom has been fighting to stop piracy of their content, just simply a different way of going about things. When MTV Networks metadata is detected for a video clip posted on MySpace, instead of forcing the clip to be taken down, an advertisement provided by MTV will be served. Now I do not agree with piracy, but the value of content does increase with distribution (assuming it has been properly monetized) and this is a unique way of creating value via an undesirable distribution method that is difficult to fully police. A tip of the hat to MTV Networks for coming up with an innovative way to address this problem.

Do you have any interesting new twists for monetizing advertising opportunities? I would like to hear them. At Infosys we realize the value of advertising to our customers (particularly telecom service providers) and have multiple ongoing research projects to create IP for making multi-channel advertising more effective. It is just one more way to stabilize average revenue per user as other parts of the bundle (voice, broadband, TV, mobile) come under price pressure.

Posted by Jeremy Kloubec at 04:08 PM | Permalink | Comments (0) | TrackBacks (0)

In a slight diversion from my typical subject matter, I cannot help but take note of the truly historic change that happened with the US Presidential Election. Barack Obama was voted in as the new Presidential Elect and represents a dramatic shift from past US Presidents in his ethnicity and background. Brands are represented by a logo or spokesperson, the new brand for the US is one of multi-culturalism. While the US already participates in the global economy, this new face demonstrates inclusion in the global community by example and not just words. While I do not believe that President Elect Obama has any superiority over past Presidents simply due to his ethnicity, he does have a unique opportunity to as an ambassador to the billions of other fellow travelers on the planet who may find hope in his message of inclusion. Working for a global company like Infosys has given me new insights as how we are so interconnected. My hope is that this connectedness only improves for the betterment of our global neighbors. Regardless of political stances, I hope all Americans can rally behind the new Presidential Elect as we all navigate the currently turbulent global economy in his term ahead.

Posted by Jeremy Kloubec at 03:06 PM | Permalink | Comments (0) | TrackBacks (0)

While we have already seen candidates in past US Presidential elections utilize the internet, mobile has become significantly more important than in previous election cycles. This has as much to do with shifts in consumer behavior as it does with new campaign strategies. While Americans were early adopters of the internet, a large part due to the telecommunications infrastructure in place, they had much slower uptake of mobile data services in comparison to peer countries in Western Europe.

The most intriguing use of mobile services during the current campaign was the announcement of Barack Obama’s Vice Presidential pick. While this would have been a first of its kind announcement, the anticipated 3M+ text messages had trouble being delivered and many went out late (http://www.fiercewireless.com/story/obama-text-message-promise-proves-unworkable/2008-08-25). I believe it is less of an indictment of the concept and more an issue of the vendor’s attempt to run mass messaging. (ed note- I really hope the emergency notification service works better than this). Another interesting thread is the sale of mobile content for the candidates John McCain and Barack Obama. As reported by the content aggregator Thumbplay, content such as realtones (high fidelity ringtone) and wallpaper have been selling almost 9 to 1 in favor of Barack Obama (http://www.fiercewireless.com/press-releases/obama-or-mccain-thumbplay-com-could-hold-answer-0?utm_medium=nl&utm_source=internal&cmp-id=EMC-NL-FMC&dest=FW). I am not sure this translates into a real comparison as to how people will vote since Thumbplay’s customer base is predominantly between the ages of 18-34 and live in metro areas which would skew to the profile of the average Democrat voter. Regardless, these are interesting uses of mobile and show how the use of mobile data services is continuing to mature.

Do you have any stories regarding the use of mobile for election purposes? Please share them.

Posted by Jeremy Kloubec at 03:38 PM | Permalink | Comments (0) | TrackBacks (0)

I have to hand it to Google, they have shown considerably more momentum as of late in regards to their Android platform. Maybe their strategy is to lull you a bit before striking, as release in to the market was panned by many writers as being uninspiring. I myself have been a bit lukewarm in previous blog entries in regards to the Android initiative as well, but I am starting to reconsider my position. While I am not completely sold on the idea that T-Mobile will get the boost from G1 that ATT is getting in terms of new customer adds in the recent quarter from their iPhone (2.4M third quarter iPhone activations http://www.att.com/gen/press-room?pid=4800&cdvn=news&newsarticleid=26227). I am sold on some recent moves by the handset manufacturers and the Android model for the operators.

The rumor mill had Motorola developing a new social networking phone especially for Android. I am not sure of the full benefit here in regards to social networking (does it find me a new BFFL? Ha!), but it is an interesting concept into the youth market. Then Motorola more recently announced that they would use Android instead of Symbian going forward in an effort to reduce costs (http://www.rcrwireless.com/article/20081030/WIRELESS/810309993/-1/rss01). While they are not a the dominant providers of Symbian phones, this is still a significant move since Motorola still has brand cache. It would also make sense that they could further consolidate their Linux initiatives with Android unless that would create an issue with Verizon’s LiMo announcement (http://www.informationweek.com/blog/main/archives/2008/05/verizon_limo_li.html).

In regards to the mobile operators, Google has set up a beneficial revenue share model for value added services to entice adoption. Remember, Google does not care about a revenue stream from Android (it’s free) or Android services, they want the associated search and advertising serving on each of those handsets. They seem to be willing to pursue some creative paths to achieve that goal. However, at some point they do need to care that some of their applications that they have opened up to the wider development community are completely killing their phones, user experience anyone? (http://www.networkworld.com/news/2008/103008-new-android-apps-a-mixed.html?page=1)

As always, I would like to hear your thoughts on Google’s next steps. 

Posted by Jeremy Kloubec at 03:46 AM | Permalink | Comments (0) | TrackBacks (0)

Consolidation is normal in most industries. Obviously extreme market conditions can lead to the “shotgun” marriages that are now happening in Financial Services, but Telecom has been relatively unscathed in the recent downturn. In the case of Verizon getting Alltel, Verizon may have benefited from the private equity consortium offloading Alltel only after holding it for one year (http://www.nytimes.com/2008/06/06/technology/06phone.html). Since most private equity firms hold their portfolio companies for considerably longer than one year, Verizon might have lucked in the deal to now create the largest wireless carrier in the US. The most recent merger news has been CenturyTel acquiring Embarq, which is a good move in my opinion, to give CenturyTel additional scale in its core market (http://www.centurytel.com/Pages/AboutUs/PressRoom/pressRelease.jsp?page=Corporate/Press_Release66.html). In full disclosure, I have met most of the C-level executives at CenturyTel and have faith that they will do a good job in with the combined entity even though they are merging with a larger company. My only current concern would be lack of a stronger wireless footprint in order to create a “quad-play” offering. This is probably the start of other rollups of rural operators.

While we may not see significant movement with large Telcos combining, I feel there may be significant activity for the industry’s software and content providers. In a previous blog, I had addressed impact in the venture community from the current credit crisis. Ron Conway from Sequoia Capital has reportedly advised his portfolio companies to start cutting costs while finding a way to profitability (http://gigaom.com/2008/10/08/sequoia-rings-the-alarm-bell-silicon-valley-in-trouble/). This is not always easily achieved since one (cost cutting) tends to adversely affect the other (building new revenue streams). The latest MoneyTree from PWC report shows a considerable third quarter dip in venture financing so Ron is obviously not in isolation here. In order to save portfolio investments, I would expect more match making with smaller software companies in order to provide scale to whether the current market. My concern is that these are new innovators and constraining them effectively constrains the launch of new and innovative value added services. On the other hand, with consumer spending starting to dip and recent reports of shrinking mobile spend, maybe this is a wise choice on the part of the venture firms since there may not be buyers for those services.

What are your thoughts on what will happen in the Telecom industry? Will more big companies merge or simply ride it out?

Posted by Jeremy Kloubec at 03:32 AM | Permalink | Comments (0) | TrackBacks (0)