Consumers around the world are more wary of trying new consumer goods products in the midst of a recession, say researchers at Ipsos Marketing. The global survey of consumer attitudes and behavior in 18 countries suggests that more than half of global consumers shy away from new grocery, personal and household products during an economic downturn.
One wonders if that same pattern extends to the business market as well, and explains the lower churn some service providers are reporting. There is anecdotal evidence that business customers, for example, are showing more hesitation about switching communications service providers, even as more seem to be receptive to pitches about "saving money."
Indeed, it would seem that many consumer attitudes also have a parallel in the small and medium-sized business markets. Some 70 percent of global consumers say they are not likely to try a new beauty product, for example. So new products and unfamiliar brands face an uphill battle. That might apply to hosted communications services or even, in some cases, uptake of new IP-based phone systems.
On the other hand, some 80 percent of global consumers say they are "very" or "somewhat likely" to switch from their usual brands to lower-priced brands or brands that are on sale during an economic downturn. That suggests a heightened sense of insecurity is likely in the background whenver a new provider or offer is weighed.
Communications is more a relationship than a one-off purchase, so consumer trends do not translate neatly to the world of communication services. Some 72 percent of consumers say they would switch to "store" or "generic" brands. The analogy would be switching from a recognizable communications "brand" and a company "they haven't heard of before."
“It is discouraging to think that new product introductions and carefully planned brand strategies might suffer from bad timing,” says Sunando Das, Ipsos Marketing VP. But one bit of advice clearly does apply to most communication services.
"Marketers can, and must, focus is value," says Das. Value obviously is a higher priority for consumers during an economic downturn. That doesn't necessarily mean pricing has to change, he says.
But consumer perceptions about benefits compared to cost should be explored to make sure consumers think there is a fair trade-off, he says.
http://www.ipsos-na.com/news/pressrelease.cfm?id=4337&wt.mc_id=1110011&ce=garykim.denver@gmail.com&link=4337&top=
Thursday, April 30, 2009
Consumers Wary of Trying New Brands, Are Businesses?
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Does it Matter Whether VoIP is Dead or Not?
It's typically pretty easy to get a robust conversation going about whether VoIP is dead or not, and what each of us means when taking a position either way. Interesting viewpoints exist on either "side" of the debate, relevant for technology enthusiasts and developers but rarely of interest to the mass market that will use the technology.
One might as well say, in advance, that now that Twitter seems to be reaching some sort of inflection point or critical mass, lead technology adopters and developers will move onto the next big thing. Technology rarely is interesting to technologists when it is simply "there."
I remember the same thoughts expressed about session initiation protocol. The disenchantment isn't worrisome. Technology enthusiasts simply have different values than mainstream users, who just want value they understand, easy to use, acquire and support, at fair prices.
Technologists love technology. Most people don't care, so most large, successful businesses are built in ways that hide technology from end users. It makes about as much sense to argue about whether "electricity is dead, or not," as it does to worry about whether VoIP is, or is not.
Technology always is most successful, and most ubiquitous, when it is just furniture. VoIP isn't yet "just furniture." But that is where we inevitably will go.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
58% Local Search Growth in 2008
Local search, using online search tools to find local businesses, products, or services, grew 58 percent in 2008, reaching an annual total of 15.7 billion searches, says comScore. By comparison, overall core U.S. Web searches grew 21 percent year-over-year, nearing 137 billion searches by the end of 2008.
About 75 percent of the top 100 keywords searched on Internet Yellow Pages sites were non-branded, indicating that a majority of consumers have not decided on a specific company or product brand when they begin their search, comScore says.
Nearly half (45 percent) of Internet Yellow Pages and local online directory searchers made an online purchase in the fourth quarter of 2008.
One wonders whether Google Maps and mobile Web access have at least something to do with the growth. Local search makes much more sense when one is out of the home or office, and Google Maps, with or without global positioning satellite support, makes it really easy to search for something one needs, where one is at the moment.
The other angle is that small businesses, which operate locally, now are investing more heavily in Web sites, which would allow them to be found more easily.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Satellite Broadband: What Will Reviewers Do?
There is little doubt but that satellite broadband providers will try to secure broadband stimulus funds to subsidize the cost of customer premises equipment, a move that Hughes Network Systems SVP Mike Cook believes could increase its subscriber base by an order of magnitude.WildBlue presumably also would see customer lift if such subsidies were possible.
There also is some speculation that funds could be sought for new satellite construction to offer customers much-higher access speeds.
Anything is possible, of course. But if I were reviewing grant applications, I'd be looking for projects that get broadband services to people as fast as possible, to as many people as possible, creating new jobs now, are sustainable after grant funds are gone and can get services to the most-isolated locations, across the United States, now.
Anything is possible. But looking at funding for new satellites that might not be launched for years, and consuming lots of program cash, compared to spending lots less and serving lots of rural customers now, would rank a lot higher.
Politically, I'd also (for better or worse) be looking in advance for evidence to justify why I made my decision. Enabling new broadband services to rural residents in all 50 states, within months, is safer than defending a relatively signficant capital investment that won't result in new services for some years.
Also, as a reviewer, I would be looking to get the biggest bang for the buck, spreading the money as widely as possible. On that score, subsidizing CPE would seem a more defensible choice that building satellites.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Social Gaming Grows
The number of people playing social games is expected to surge to 250 million in 2009, from 50 million in 2008, by some industry estimates. And there is a shift in the way games are used. Connecting with friends, and doing things with friends or other people, now is becoming more important.
It's but one more example of how social aspects of gaming, media and content consumption are growing.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Video, Social Networking Top Online Growth
Online users have significantly shifted their interests over the past five years, say researchers at Nielsen Online. Where portal-oriented browsing sites, such as shopping directories, guides and Internet tools or Web services used to be the top categories for user engagement, today the active Internet user tends to prefer sites that contain more specialized content.
There is a growing shift to more-fragmented usage, in other words, as well as more use of video and social sites. Video and social networking sites are the fastest-growing sites in 2009.
The number of American users frequenting online video destinations has climbed 339 percent since 2003, for example. Time spent on video sites has shot up almost 2,000 percent over the same period.
In the last year alone, unique viewers of online video grew 10 percent, the number of streams grew 41 percent, the streams per user grew 27 percent and the total minutes engaged with online video grew 71 percent.
There also are 87 percent more online social media users now than in 2003, with 883 percent more time devoted to those sites.
• In the last year alone, time spent on social networking sites has surged 73 percent.
In February, social network usage exceeded Web-based e-mail usage for the first time.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
1 of Every 7 Minutes of Media Use are on Mobile
More than a third of high-use smart phone users are taking action on mobile advertisements, according to AOL Platform-A and Interpublic Group of Companies UM. About 53 percent of smart phone users are clicking on advertisements.
Some 35 percent are requesting more information or a coupon, while 24 percent are making purchases, a new study sponsored by AOL and UM indicates.
The study shows 82 percent of smart phones get used at work while 81 percent are used while people are shopping. Currently, nearly one of every seven minutes of media consumption takes place on a mobile device, and six of every 10 consumers expect their mobile internet usage to increase significantly over the next two years, AOL and UM say.
And though there was a time when mobile Web access might once have been an area where U.S. consumers trailed other consumers, that is no longer the case. In fact, mobile Web access is so widespread that the use cases are morphing.
"Now mobile is less about 'wireless online' and more about being a highly personal, customized medium," says Graeme Hutton, UM director. So the big question is how smart phone applications evolve in the direction of answering unmet needs. The mobile Web is not simply a mobile version of the PC-accessed Web, in other words. It might be evolving in the direction of becoming a medium in its own right.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Wednesday, April 29, 2009
Mobile Twitter Passes ESPN, Facebook, and Google
Subscribers to paid community Predicto are different from users of the free mobile Twitter community, says Nielsen Mobile. Twitter has a dominant presence among young and male oriented audiences while Predicto attracts a more mainstream following with a broader penetration, particularly with the female and older demographics.
Twitter is the leading free mobile community, and Predicto is the largest paid mobile community, Nielsen says.
In the fourth quarter of 2008, Twitter amassed approximately 812,000 unique text messaging users, while Predicto Mobile interacted with over 2,303,000 unique users, according to Nielsen Mobile.
Some other key differences in the user breakdown of the two leading mobile communities include 57/43 percent male/female ratio for Twitter versus 45/55 percent for Predicto.
Some 49 percent of Twitter users are in the 35-plus age group versus 68 percent with Predicto. About16 percent of Twitter users earn $100,000 or more compared to 20 percent for Predicto.
During the fourth quarter of 2008, Twitter overtook other free mobile services including ESPN, Facebook, and Google. At the same time, Predicto remains the undisputed leader in the premium mobile space, further distancing itself from NBC in second place, Nielsen Mobile says.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Bye Bye RGU, Hello PSU, Says Time Warner Cable
New markets require new terminology. When the competitive local exchange business was roaring in the late 1990s and early 2000s, companies reported using a metric known as "voice grade equivalents," a metric they deemed a better measure of growth than "lines."
Likewise, cable operators began reporting "revenue generating units" when they ramped up new services ranging from voice and broadband Internet access to various types of digital video products.
So Time Warner Cable is using a new subscriber metric its calls a "primary service unit, which the company defines as the total of all discrete video, high speed data and voice subscriptions. A single household buying voice, broadband and video would repreent three PSUs.
The older RGU numbers are similar, but have included digital video or VOD services purchased in addition to basic cable. The new PSU metric presumably is intended to better reflect discrete numbers of voice, broadband and video accounts sold.
In the first quarter, for example, Time Warner Cable reported 26 million PSUs, but 34.8 million RGUs.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Time Warner Cable Reports: Still No Evidence of Cord Cutting
Time Warner Cable first quarter results are in, and, so far, nothing unexpected seems to be happening, relative to financial or subscriber behavior attributable directly to the economy. Comcast reports tomorrow, so we should be in fairly good shape as far as analyzing whether reported or claimed consumer intent to drop video subscriptions, or even scale them back dramatically, is happening.
So far, with results in from Time Warner, AT&T and Verizon, we can note that, despite what people might say, or what observers might believe, the business remains quite stable. We'll have to wait for several other reports from major satellite and wireless providers to assess what is happening with wireless, and to flesh out the video numbers.
But, so far, nothing unusual can be seen. Share shifts continue. Consumers might be scaling back on premium services or discretionary purchases such as video on demand. All of that is typical for a recession. But there is so far no serious evidence of any significant shift in behavior, compared to past recessions, in the video or fixed broadband segments.
Wireless might be a different matter, as the two major providers one suspects will show market share pressure have not yet reported. The issue is whether total postpaid wireless subscriptions have declined. Some shift to prepaid is expected, which potentially could lower average revenue per user, if new data service revenue does not grow faster than the slippage to prepaid voice. So far, data revenue growth remains brisk, so ARPU has not fallen. In fact, it has grown at AT&T and Verizon Communications, the two major wireless companies to report so far.
Time Warner Cable revenues for the first quarter of 2009 increased five percent ($204 million) over the same quarter of 2008, to $4.4 billion. Subscription revenues grew six percent ($256 million) to $4.2 billion. Video revenues rose two percent ($64 million) to $2.7 billion, driven by video price increases and continued growth in digital video subscriptions partially offset by a year-over-year decrease in basic video subscribers and premium channel and transactional video-on-demand revenues.
High-speed data revenues increased 11 percent ($107 million) to $1.1 billion while voice revenues were up 23 percent ($85 million) to $451 million. Advertising revenues declined 26 percent ($52 million) to $145 million.
Customer relationships were 14.7 million as of March 31, 2009. Primary service units, which represent the total of all video, high-speed data and voice subscribers, reached 26 million with net additions of 435,000 during the first quarter of 2009.
Revenue generating units (“RGUs”) totaled 34.8 million – reflecting net additions of 556,000 during the first quarter of 2009.
Triple Play subscribers exceeded 3.2 million (or 22 percent of total customer relationships), benefiting from 146,000 net additions during the first quarter of 2009.
Video penetration now is at 48.7 percent while high-speed data penetration of the customer base now is at 33.5 percent. Phone penetration is at 15.1 percent of the customer base.
Some 55.2 percent of households buy a bundle of some sort. A third of households buy a triple-play package, while about 22.1 percent of those bundle buyers take a double play.
Perhaps the most shocking number for anybody who has followed the cable industry over the past couple of decades is customer penetration of homes passed. Time Warner Cable today sells a service to 54.5 percent of locations the network passes. But looking just at multi-channel video, Time Warner sells video services to just 48.7 percent of households passed, down sharply from the nearly-70-percent levels operators used to have in many markets.
Industrywide, cable penetration now is at 51 percent, according to the National Cable & Telecommunications Association.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Mobile and Social Network Ad Revenue Hot Through 2014
Mobile and social networks are the hottest areas of online advertising growth, say researchers at Forrester Research.
The cumulative average growth rate for the six-year period from 2008 through 2014 is 17 percent, Forrester Researchers say. However, the growth rate for mobile advertising is much higher, at 27 percent per year, and the growth rate for social network advertising is 34 percent per year.
Click the image for a larger view.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Advertising Down, Internet Advertising Up, ZenithOptimedia Says
Consumers are saving money by spending more time at home, so media consumption is increasing, particularly of television and the Internet, says ZenithOptimedia Group. That might explain what appears to be consistent performance by providers of multi-channel video entertainment, though there are share shifts occurring.
And though overall advertising will decline globally in 2009 by about seven percent, Internet ad spending should increase 8.6 percent in 2009, down from 20.9 percent in 2008, ZenithOptimedia Group says.
Most of this growth will come from search advertising. The firm predicts U.S.search advertising to grow nine percent in 2009, while classified grows just 1.8 percent and traditional display shrinks 1.8 percent.
Internet video and rich media advertising is growing about 30 percent annually, while Internet radio advertising is growing 29.7 percent. Podcast ad revenue is growing 11.9 percent, but each from relatively small bases. Internet video, Internet radio and podcasting revenues represent about 12 percent of overall U.S. Internet ad spending.
Internet ad growth is predicted to grow at 11.3 percent in 2010 and 15.3 percent in 2011, ZenithOptimedia Group says. The Internet's share of total advertising will grow to 14.6 percent in 2011, up from 10.4 percent in 2008.
http://www.zenithoptimedia.com/about/news/pdf/Adspend%20forecasts%20April%202009.pdf
And though overall advertising will decline globally in 2009 by about seven percent, Internet ad spending should increase 8.6 percent in 2009, down from 20.9 percent in 2008, ZenithOptimedia Group says.
Most of this growth will come from search advertising. The firm predicts U.S.search advertising to grow nine percent in 2009, while classified grows just 1.8 percent and traditional display shrinks 1.8 percent.
Internet video and rich media advertising is growing about 30 percent annually, while Internet radio advertising is growing 29.7 percent. Podcast ad revenue is growing 11.9 percent, but each from relatively small bases. Internet video, Internet radio and podcasting revenues represent about 12 percent of overall U.S. Internet ad spending.
Internet ad growth is predicted to grow at 11.3 percent in 2010 and 15.3 percent in 2011, ZenithOptimedia Group says. The Internet's share of total advertising will grow to 14.6 percent in 2011, up from 10.4 percent in 2008.
http://www.zenithoptimedia.com/about/news/pdf/Adspend%20forecasts%20April%202009.pdf
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Triple Play Future for Web Business Models
Where are Web business models headed? Towards a mix of advertising, subscription and transaction models, says Bernard Lunn ReadWriteWeb COO. There are some obvious implications.
Advertisers will adopt a barbell approach: where they will buy media on a traditional cost-per-thousand basis for branding and cost-per-action for direct-revenue generation, he says. Cost per click will still be dominated by Google but will become less dominant as CPA gains traction, Lunn argues.
The big issue, though, is that Google so dominates the CPC business that it makes tough any other third party CPA model. Lunn thinks ad-suported media will be a mix of CPM and CPA models, but must deal with CPC to achieve a workable balance.
Content increasingly will be dominated by user-generated sources, if only because the amount of professionally-created content is not going to keep up with the amount of UGC. To make UGC consumable, more human editing will be required.
http://www.readwriteweb.com/archives/mapping_the_current_web_transition.php
Advertisers will adopt a barbell approach: where they will buy media on a traditional cost-per-thousand basis for branding and cost-per-action for direct-revenue generation, he says. Cost per click will still be dominated by Google but will become less dominant as CPA gains traction, Lunn argues.
The big issue, though, is that Google so dominates the CPC business that it makes tough any other third party CPA model. Lunn thinks ad-suported media will be a mix of CPM and CPA models, but must deal with CPC to achieve a workable balance.
Content increasingly will be dominated by user-generated sources, if only because the amount of professionally-created content is not going to keep up with the amount of UGC. To make UGC consumable, more human editing will be required.
http://www.readwriteweb.com/archives/mapping_the_current_web_transition.php
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Small Business Sees Web Site Investments as "Advertising"
In 2008 small and medium-sized organizations spent $6.7 billion on online advertising and will increase that spending relatively slowly between now and 2013, according to researchers at Borrell Associates.By 2013, SMEs will be spending about $7.4 billion on online advertising, representing relatively slowish growth of nine percent over a five-year period, an annual growth rate of a bit more than 1.5 percent annually.
That might surprise you, if only because the rate of growth is slow slow it might be considered "flat." But Borrell suggests something else is happening. SME spending on Web sites will grow about eight percent a year.
You might not consider Web site spending as advertising, but Borrell Associates says this is precisely how SMEs think about the matter. It isn't so much a shift of advertising from traditional methods, including telephone directory listings and direct mail, to the Internet. It is that small businesses see their own Web sites as a form of "advertising," perhaps a functional substitute.
Consider this a sort of shift to "earned media" (awareness gained through promotional efforts rather than paid advertising). The other angle is that small businesses rightly see their Web efforts as partly a direct sales channel, partly direct marketing and partly a substitute for other sales activities such as printing and distributing flyers, postcards and other direct marketing messages.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Tuesday, April 28, 2009
60% of Twitter Users Do Not Return the Following Month
Twitter’s unique audience exploded over 100 percent in March 2009, meaning it likely has reached an inflection point of some sort. But there are issues: Currently, more than 60 percent of Twitter users fail to return the following month, says David Martin, Nielsen Online VP.That means Twitter’s audience retention rate, the percentage of a given month’s users who come back the following month, is about 40 percent.
To put that in perspective, it is roughly the equivalent of turning over 100 percent of the user base every three months. Such a churn rate is unsustainable.
"It is clear that a retention rate of 40 percent will limit a site’s growth to about a 10 percent reach figure," says Martin. "A high retention rate doesn’t guarantee a massive audience, but it is a prerequisite."
There simply aren’t enough new users to make up for defecting ones, at some point.
When Facebook and MySpace were emerging networks like Twitter is now, their retention rates were twice as high, says Martin. When they went through their explosive growth phases, that retention only went up, and both sit at nearly 70 percent today.
http://blog.nielsen.com/nielsenwire/online_mobile/twitter-quitters-post-roadblock-to-long-term-growth/
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
CableVision to Offer 101 Mbps, Claims Blagging Rights
Cablevision Systems Corp. plans to sell a new 101 Mbps service (with 15 Mbps upstream) for $99.95 a month. The service also will include free access to Cablevision's metro Wi-Fi service, beginning May 11, 2009.
These days, such really-fast services are more a matter of marketing rights than revenue. Earlier this year, Tom Rutledge, Cablevision COO said the company didn't expect much financial impact from any of the really-high speed services in 2009, at least where the consumer market is concerned.
To the extent actual sales will be happen, they are more likely to be generated by small business users.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Monday, April 27, 2009
Are IP Telephony Suppliers Off the Mark?
Are VoIP retailers "failing to rethink their products aimed at small and medium-sized business owners?
It's hard to argue with this argument in favor of simplicity, savings and support. On the other hand, there arguably are other issues. Demand, for example.
Recent surveys conducted by Savatar Research over the last couple to several years consistently have shown relatively high awareness of IP telephony but flattening sales. Quarterly SME adoption rates of IP telephony have been falling since the third quarter of 2006, Savatar notes.
Since it is hard to think of any IP telephony provider that is not acutely aware of the need for simplicity, savings and support or extreme ease of installation so support isn't necessary, there still is some buyer resistance, apparently.
Savatar surveys also show fairly high awareness of new features IP telephony makes possible. About 38 percent of managers or executives at firms with up to 500 employees already believe IP telephony will save them money, says Savatar. At firms with less than 100 employees, as many as 42 percent of prospects might already believe IP telephony will save them money.
About 18 percent of prospects might be expected to believe that IP telephony offers a more innovative set of features, Savatar says.
Of course, some providers would argue they have cracked the code on IP telephony, and do not have any need to "rethink" how they are packaging and selling their products.
As Savatar says, SME buyers just want to be sure they are buying a phone system that works. Unified communications, software as a service, hosted and managed services, cloud computing and mashups are interesting to lots of us. Small organizations and businesses are unlikely to be so inclined. They just want a phone system or service that works.
It's hard to argue with this argument in favor of simplicity, savings and support. On the other hand, there arguably are other issues. Demand, for example.
Recent surveys conducted by Savatar Research over the last couple to several years consistently have shown relatively high awareness of IP telephony but flattening sales. Quarterly SME adoption rates of IP telephony have been falling since the third quarter of 2006, Savatar notes.
Since it is hard to think of any IP telephony provider that is not acutely aware of the need for simplicity, savings and support or extreme ease of installation so support isn't necessary, there still is some buyer resistance, apparently.
Savatar surveys also show fairly high awareness of new features IP telephony makes possible. About 38 percent of managers or executives at firms with up to 500 employees already believe IP telephony will save them money, says Savatar. At firms with less than 100 employees, as many as 42 percent of prospects might already believe IP telephony will save them money.
About 18 percent of prospects might be expected to believe that IP telephony offers a more innovative set of features, Savatar says.
Of course, some providers would argue they have cracked the code on IP telephony, and do not have any need to "rethink" how they are packaging and selling their products.
As Savatar says, SME buyers just want to be sure they are buying a phone system that works. Unified communications, software as a service, hosted and managed services, cloud computing and mashups are interesting to lots of us. Small organizations and businesses are unlikely to be so inclined. They just want a phone system or service that works.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Phone.com Debuts Consumer Service
Phone.com has introduced a "Virtual Number" service, allowing one primary phone number to function as the gateway to all of a user's mobile, landline, or VOIP phone numbers and devices.
Address books can be uploaded from most major email programs, and those entries can be used to program call routing based on caller ID, to enable click-to-call, call blocking or other functions.
The Phone.com Virtual Number essentially is a consumer version of the firm's business service, and will include voicemail, free international calling to popular destinations, send fax, call routing based on a time schedule, call recording, caller-id routing, SMS voicemail notification, email delivery of voicemail as a .wav file. Voicemail transcription is also available for a small additional fee, as are other upgrades.
Prices and plans range from $4.88 to $18.88/month (plus taxes) for unlimited minutes.
http://www.phone.com/
Address books can be uploaded from most major email programs, and those entries can be used to program call routing based on caller ID, to enable click-to-call, call blocking or other functions.
The Phone.com Virtual Number essentially is a consumer version of the firm's business service, and will include voicemail, free international calling to popular destinations, send fax, call routing based on a time schedule, call recording, caller-id routing, SMS voicemail notification, email delivery of voicemail as a .wav file. Voicemail transcription is also available for a small additional fee, as are other upgrades.
Prices and plans range from $4.88 to $18.88/month (plus taxes) for unlimited minutes.
http://www.phone.com/
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Mobile Web Sites 30% Slower than PC-Accessed Sites
Mobile Web sites are 30 percent slower than PC-based Web browsing, say Gomez, a provider of Web application experience management and web performance benchmarking, and dotMobi, the mobile domain registrar.
Mobile Web applications and sites do not yet match the performance levels of “traditional” Web applications, the firms say. Among the five metrics not measured and monitored by Gomez are "discoverability," how readily a consumer can find the mobile Web site using different URLs.
"Readiness" measures how well the mobile Web site renders on popular mobile devices. "Availability" measures the percentage of successful transactions or the availability of a Web page.
"Response time" is a measurement of how long each page takes to download and the duration of an entire transaction.
"Consistency" looks at how well the mobile Web site performs on different mobile carriers, in different geographies and time frames.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Lots of New Voice Apps are Fairly Subtle
Lots of new voice apps are fairly subtle, and many are related to call center or business-to-business applications, which is one reason one gets the impression (not unfounded) that innovation is voice is pretty limited.
As is typical, many are driven directly by customers with a specific problem to solve. Consider a new call screening feature developed by Stage 2 Networks, a provider of hosted PBX solutions, and BroadSoft.
The firms have developed an "Enhanced Call Screening" feature for Stage 2 Networks' hosted PBX service.
Stage 2 had a customer requiring that any inbound caller's name to be announced, even when the system identifies the 10-digit phone number as "Anonymous" or "Private".
A typical call screening feature provides a prompt to a caller to "please say your name," allowing the recipient to hear who is calling when caller ID displays block such information.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Verizon and AT&T: F. Scott Fitzgerald Said it Best
First-quarter financial reporting by AT&T and Verizon Communications now illustrates clearly how diverse telephone industry contestants, and the market, now has become.
Wireless now constitutes 57 percent of Verizon Communications consolidated revenue. Also, 27.9 percent of service revenue comes from data, with 58 percent of data revenue now earned from non-messaging services.
At AT&T, fully 72 percent of revenue now comes from sources other than landline voice.
Compare that with revenue sources at a typical independent, probably rural telephone company. There, revenues are very much tied to voice landlines in service. A typical small telco might earn 45 percent--nearly half--of its money from access revenues (terminating long distance traffic for another carrier), according to Telecom Think Tank.
About 35 percent of total revenue comes from universal service funds. Local service fees paid by end users is about 18 percent of total revenues.
Add it all up and 98 percent of small telco revenue is dependent on active voice lines. So note the clear dichotomy. AT&T and Verizon represent something on the order of 80 percent of all U.S. communications market share. And for these two companies, mobility drives the business, while multi-channel TV is becoming a key contributor, with broadband Internet access, to overall revenues.
Verizon also had 299,000 net adds for its FiOS TV service, which now is at 23 percent penetration of homes that can buy the service, and added 298,000 net FiOS Internet access customers, bringing penetration up to 27 percent.
Most other telcos do not have the option of relying on mobility, television or global enterprise customers to dramatically change their revenue composition. That is the big cleavage in the U.S. telco market.
The rich are different from you and me, " F. Scott Fitzgerald once wrote ("The Rich Boy" in the volume of short stories "All the Sad Young Men."). One might say the same about AT&T and Verizon, compared to virtually every other telecom company in the U.S. market.
For AT&T and Verizon, the transition to new revenue sources--away from wired voice--is largely completed. For many other telco, the future pattern is less clear.
Very-small telcos often also own separate cable TV or local wireless operations. The good news is that the "video" and "mobile" functions possibly already are provided. The less-good news is that small video and small wireless operations do not spin off the same level of gross revenue or margin that the national operators are able to.
So some independent telcos might well be said to have, or will in the future have, the same basic wireless-video-broadband strategy employed by Verizon and AT&T. Many others, though, will not be able to do so, and will have to craft strategies based on a different pattern. The issue now is what those patterns might be.
Wireless now constitutes 57 percent of Verizon Communications consolidated revenue. Also, 27.9 percent of service revenue comes from data, with 58 percent of data revenue now earned from non-messaging services.
At AT&T, fully 72 percent of revenue now comes from sources other than landline voice.
Compare that with revenue sources at a typical independent, probably rural telephone company. There, revenues are very much tied to voice landlines in service. A typical small telco might earn 45 percent--nearly half--of its money from access revenues (terminating long distance traffic for another carrier), according to Telecom Think Tank.
About 35 percent of total revenue comes from universal service funds. Local service fees paid by end users is about 18 percent of total revenues.
Add it all up and 98 percent of small telco revenue is dependent on active voice lines. So note the clear dichotomy. AT&T and Verizon represent something on the order of 80 percent of all U.S. communications market share. And for these two companies, mobility drives the business, while multi-channel TV is becoming a key contributor, with broadband Internet access, to overall revenues.
Verizon also had 299,000 net adds for its FiOS TV service, which now is at 23 percent penetration of homes that can buy the service, and added 298,000 net FiOS Internet access customers, bringing penetration up to 27 percent.
Most other telcos do not have the option of relying on mobility, television or global enterprise customers to dramatically change their revenue composition. That is the big cleavage in the U.S. telco market.
The rich are different from you and me, " F. Scott Fitzgerald once wrote ("The Rich Boy" in the volume of short stories "All the Sad Young Men."). One might say the same about AT&T and Verizon, compared to virtually every other telecom company in the U.S. market.
For AT&T and Verizon, the transition to new revenue sources--away from wired voice--is largely completed. For many other telco, the future pattern is less clear.
Very-small telcos often also own separate cable TV or local wireless operations. The good news is that the "video" and "mobile" functions possibly already are provided. The less-good news is that small video and small wireless operations do not spin off the same level of gross revenue or margin that the national operators are able to.
So some independent telcos might well be said to have, or will in the future have, the same basic wireless-video-broadband strategy employed by Verizon and AT&T. Many others, though, will not be able to do so, and will have to craft strategies based on a different pattern. The issue now is what those patterns might be.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Opera Mini: More Evidence of Rapid Mobile Web Use
In March 2009, Opera Mini had over 23 million users, a 12.1 percent increase from February 2009 and more than 157 percent compared to March 2008.
Opera Mini users viewed over 8.6 billion pages in March 2009. Since February 2009, page views have gone up 17.4 percent. Since March 2008, page views have increased 255 percent.
In March 2009, Opera Mini users generated more than 148 million MBytes of data worldwide. Since February, the data consumed went up by 19.3 percent.
Data in Opera Mini is compressed up to 90 percent. If this data were uncompressed, Opera Mini users would have viewed up to 1.4 PBytes of data in March. Since March 2008, data traffic is up 319 percent.
http://www.opera.com/media/smw/2009/pdf/smw032009.pdf
Opera Mini users viewed over 8.6 billion pages in March 2009. Since February 2009, page views have gone up 17.4 percent. Since March 2008, page views have increased 255 percent.
In March 2009, Opera Mini users generated more than 148 million MBytes of data worldwide. Since February, the data consumed went up by 19.3 percent.
Data in Opera Mini is compressed up to 90 percent. If this data were uncompressed, Opera Mini users would have viewed up to 1.4 PBytes of data in March. Since March 2008, data traffic is up 319 percent.
http://www.opera.com/media/smw/2009/pdf/smw032009.pdf
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Internet has Fragmented: Mobile, Video Will Accelerate Change
Though it is painful for many Internet proponents, the "Internet" now has fragmented. Though in a physical sense there might be said to be "one" Internet, in practice this is no longer the case.
There are lots of private networks, language communities have developed, and national government restrictions on unfettered access to content and use of services. In some sense, it still is true that any end point can reach any other public endpoint.
But we now are witnessing the birth of a mobile-optimized "Internet" as well as a "video-optimized" net, the primary constraint being screen size for the former, bandwidth the issue for the latter.
http://mashable.com/2009/04/27/my-internet-your-internet/
There are lots of private networks, language communities have developed, and national government restrictions on unfettered access to content and use of services. In some sense, it still is true that any end point can reach any other public endpoint.
But we now are witnessing the birth of a mobile-optimized "Internet" as well as a "video-optimized" net, the primary constraint being screen size for the former, bandwidth the issue for the latter.
http://mashable.com/2009/04/27/my-internet-your-internet/
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Friday, April 24, 2009
Bandwidth Caps are Just Buckets
Lots of people get upset about bandwidth caps that strike me as extraordinarily generous. Does anybody think the planet or the economy would be better off, companies better able to improve service or people given incentives to "do the right thing" if electricity, gasoline, water, natural gas or heating oil were sold on an "all you can eat" basis.
This is simple economics, folks. Most people can do all they want without ever worrying about bandwidth caps. That's why people like flat rate pricing. And most people don't abuse the reasonable use rules.
But when there is literally no penalty for consuming as much as some people seem to want, you get what economics teaches you will get: over-consumption.
I don't necessarily like my electricity or water rates. But I conserve because there is a penalty for unrestrained use.
Consider the difference between wireless "unlimited" plans and other plans that simply offer more minutes or capacity than you actually use in a month. Is there really any practical difference--for most people--between "truly unlimited" and "more than I can use" plans?
Caps are just buckets. As long as the buckets are capacious enough, the plans clear enough, the usage information available and the prices reasonable, buckets work. Bandwidth caps are just buckets.
http://stopthecap.com/2009/04/23/hissyfitwatch-cutting-off-customers-who-use-too-much-in-austin/
This is simple economics, folks. Most people can do all they want without ever worrying about bandwidth caps. That's why people like flat rate pricing. And most people don't abuse the reasonable use rules.
But when there is literally no penalty for consuming as much as some people seem to want, you get what economics teaches you will get: over-consumption.
I don't necessarily like my electricity or water rates. But I conserve because there is a penalty for unrestrained use.
Consider the difference between wireless "unlimited" plans and other plans that simply offer more minutes or capacity than you actually use in a month. Is there really any practical difference--for most people--between "truly unlimited" and "more than I can use" plans?
Caps are just buckets. As long as the buckets are capacious enough, the plans clear enough, the usage information available and the prices reasonable, buckets work. Bandwidth caps are just buckets.
http://stopthecap.com/2009/04/23/hissyfitwatch-cutting-off-customers-who-use-too-much-in-austin/
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Video, Social Networking Changing the Web
The growing popularity of online social networking and video content is deepening web users’ engagement with the Internet and is causing a dramatic shift in the global online landscape, says the Nielsen Company.
Nielsen’s research shows that since 2003, the interests of the average online user have shifted significantly, evolving from use of “short-tail” portal-oriented browsing sites, such as shopping directories, guides and internet tools, to sites that contain more specialized “long-tail” content geared to specific and interactive user interests.
This change is manifested by the fact that video and social networking sites are the two fastest growing categories in 2009, and will necessitate new ways of thinking about online marketing, Nielsen says.
The number of American users frequenting online video destinations has climbed 339 percent since 2003. The unique audience for online video surpassed that of email in November 2007.
Time spent on video sites has shot up almost 2,000 percent over the same period. In the past year, unique viewers of online video grew 10 percent, the number of streams grew 41 percent, the streams per user grew 27 percent and the total minutes engaged with online video grew 71 percent.
There also are 87 percent more online social media users now than in 2003, with 883 percent more time devoted to those sites, Nielsen says.
http://www.marketingcharts.com/television/socnets-web-video-radically-alter-online-behavior-8838/?utm_campaign=rssfeed&utm_source=mc&utm_medium=textlink
Nielsen’s research shows that since 2003, the interests of the average online user have shifted significantly, evolving from use of “short-tail” portal-oriented browsing sites, such as shopping directories, guides and internet tools, to sites that contain more specialized “long-tail” content geared to specific and interactive user interests.
This change is manifested by the fact that video and social networking sites are the two fastest growing categories in 2009, and will necessitate new ways of thinking about online marketing, Nielsen says.
The number of American users frequenting online video destinations has climbed 339 percent since 2003. The unique audience for online video surpassed that of email in November 2007.
Time spent on video sites has shot up almost 2,000 percent over the same period. In the past year, unique viewers of online video grew 10 percent, the number of streams grew 41 percent, the streams per user grew 27 percent and the total minutes engaged with online video grew 71 percent.
There also are 87 percent more online social media users now than in 2003, with 883 percent more time devoted to those sites, Nielsen says.
http://www.marketingcharts.com/television/socnets-web-video-radically-alter-online-behavior-8838/?utm_campaign=rssfeed&utm_source=mc&utm_medium=textlink
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Will Consumers Follow Through on Wireless Plans?
Some quarters are more important than others. The first quarter of 2009, for example, will provide an important test of whether consumers are "putting their money where their mouths are." The reason? Some surveys have consumers telling researchers they will cut back or drop important communication services.
A recent survey by Pew Research Center, for example, has some 20 percent of respondents reporting they’ve gone with a less expensive cell phone plan, or canceled service altogether. About 22 percent adults say they are saving money on their cell phone bills.
Young adults, the group that is the most likely to use mobiles, are the most likely to have taken this step: 30 percent of respondents under the age of 30 and 20 percent of other adults say they have changed cell plans or dropped service because of the recession.
Three-in-ten adults with family incomes below $30,000 say they have changed or cut their mobile service, and 13 percent of those making $100,000 or more say they have done so as well.
If those respondents really are acting as they say they will, we might expect a bit of an explosion as mobile providers report first-quarter results. To be sure, over the last couple of quarters there has been a clear upsurge in use of pre-paid mobile services, generally interpreted as a cost-saving measure.
Still, AT&T, the first mobile provider to report first-quarter results, had a wildly successful first quarter for post-paid plans. There are of course some other logical developments we might be watching for. Among the obvious economy measures are switching from post-paid to pre-paid plans, and that clearly is happening.
On the other hand, we will be watching for any signs of actual, industry-wide shrinkage of wireless accounts. A simple switch to pre-paid generally reduces average revenue per user, while maintaining subscriber numbers. That likely means some shift of market share among wireless providers, even if it does not automatically suggest overall subscriptions will dip.
Based solely on the AT&T results, respondents are not necessarily behaving as they say they will.
http://pewresearch.org/pubs/1199/more-items-seen-as-luxury-not-necessity
A recent survey by Pew Research Center, for example, has some 20 percent of respondents reporting they’ve gone with a less expensive cell phone plan, or canceled service altogether. About 22 percent adults say they are saving money on their cell phone bills.
Young adults, the group that is the most likely to use mobiles, are the most likely to have taken this step: 30 percent of respondents under the age of 30 and 20 percent of other adults say they have changed cell plans or dropped service because of the recession.
Three-in-ten adults with family incomes below $30,000 say they have changed or cut their mobile service, and 13 percent of those making $100,000 or more say they have done so as well.
If those respondents really are acting as they say they will, we might expect a bit of an explosion as mobile providers report first-quarter results. To be sure, over the last couple of quarters there has been a clear upsurge in use of pre-paid mobile services, generally interpreted as a cost-saving measure.
Still, AT&T, the first mobile provider to report first-quarter results, had a wildly successful first quarter for post-paid plans. There are of course some other logical developments we might be watching for. Among the obvious economy measures are switching from post-paid to pre-paid plans, and that clearly is happening.
On the other hand, we will be watching for any signs of actual, industry-wide shrinkage of wireless accounts. A simple switch to pre-paid generally reduces average revenue per user, while maintaining subscriber numbers. That likely means some shift of market share among wireless providers, even if it does not automatically suggest overall subscriptions will dip.
Based solely on the AT&T results, respondents are not necessarily behaving as they say they will.
http://pewresearch.org/pubs/1199/more-items-seen-as-luxury-not-necessity
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Thursday, April 23, 2009
New York Times Equity Now Worth Zero?
Quantum changes--such as when a liquid turns to gas or solid--are highly disruptive. That's what we've seen this year as decades of gradually-worsening business models have toppled major U.S. newspapers. Now one financial analyst says debt at the New York Times is so high it essentially values the company's equity at zero.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
CallVantage Closing Highlights VoIP as Part of Triple Play
AT&T is discontinuing its CallVantage "over the top" VoIP service, a move that has some observers calling AT&T stupid for turning its back on the future. But that isn't what AT&T is doing. It will focus on using VoIP as a key part of its triple-play or quadruple-play consumer offerings, instead of devoting resources to a small, if well-run service that offers little synergy or business value with the other things the company is doing.
It just makes more sense to focus on VoIP as a part of a bundle.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Solar Plants in the Desert Will Be a Disaster
Tundra and desert arguably are the most-sensitive ecosystems to be found on land, with their plant life highly susceptible to disturbance. So essentially "clear cutting" huge swatches of desert for solar factories is bad enough. Draining the important underground aquifers is worse.
"It is not in the public interest for BLM (Bureau of Land Management) to approve plans of development for water-cooled solar energy projects in the arid basins of southern Nevada, some of which are already over-appropriated," Jon Jarvis, director of the Park Service's Pacific West Region, says.
National Park Service hydrologists say nearly 16.3 billion gallons of consumption has been proposed by applications in the Amargosa Valley alone. That water cannot be replaced.
Nevada officials say the basin can support only half that amount. Rushing to approve huge solar projects without proper environmental review is dangerous. Clearing the desert and draining the aquifers is worse.
Solar power is a good thing. But not when destruction of fragile ecosystems is the price.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
EU Caps International Text, Mobile Internet Access Rates
As expected, the European Union has mandated price caps for international text messages, Reuters reports. Charges will be capped at rates as much as 60 percent lower for travelers in the European Union. The caps take effect in July
Operators will be allowed to charge customers a maximum of 11 euro cents (14 U.S. cents) for each text message, excluding sales tax, compared with current prices of about 28 cents, when customers use their mobiles outside their home countries.
Buying a song using a mobile phone or using a laptop with a dongle or GSM card to access the Internet will cost a maximum of 1 euro per megabyte at the wholesale level, from about 1.68 euros today.
Price caps that were introduced in 2007 on roaming voice calls.
The rule has to be ratified by each member state.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Solar Isn't Necessarily "Green." Neither is Ethanol.
In the desert, where many think we should create solar factories, solar is anything but "green." And that's before one considers the impact on aquifers. If you live out west, and you have spent even a little time looking at the matter, you realize that water is the truly-scarce resource.
"Wet-cooled parabolic trough systems require five acre feet of water per megawatt. The five plants planned for Amargosa Valley, Nevada, propose to generate from 150 to 1,000 megawatts, so we are looking at over 10 million gallons of water a year. This water is fossil water believed to be tens of thousands of years old, not recharged since the last ice age. Even if they buy out the private water rights, there still would not be enough to supply this massive use of water. Devil's Hole, Ash Meadows wetlands, and springs of Death Valley (all home to a great diversity of endemic pupfish) would be dried up."
If you look at the amount of water required to grow corn, to create ethanol, you face the same problem. Water is the scarce resource. There are other ways to create clean energy.
http://www.latimes.com/news/opinion/commentary/la-oe-pavlik15-2009feb15,0,7619561.story
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Forget Job Growth: Rural Broadband Never Pays for Itself
Surprise, surprise: rural broadband does not automatically lead to measurable job growth or other economic benefits. That doesn't mean we shouldn't provide it. But it likely is not ever going to provide a financial return for the companies that install it.
Aside from that, assume $5,000 investment per home passed. Assume a 60-percent subscribe rate, at $50 a month retail prices. Assume a 30-percent profit margin on such accounts.
The per-subscriber cost of installing broadband is $8333.00. Recovery of the investment cost, without factoring in the cost of capital or time value of money is about 14 years. If one assumes the useful life of the plant is 20 years, a company never actually makes money on such investments.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
AT&T Wireless-Broadband Bundles Show Strong Growth
Worth noting: AT&T CFO Rick Lindner says "our stand-alone DSL product which about 50 percent of the time is bundled with wireless has been very strong for us."
You might suspect there has been some recent promotional activity to encourage such behavior but that is not the case. "We haven’t been running any significant promotional activities I think in the last few quarters," Lindner says.
The implication: high-speed Internet access and wireless are the two foundation communications services.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
E-Commerce Growth Falls off Cliff
The rate of growth for online products plummeted from 24 percent in early 2006 to nine percent in early 2008, while the rate of growth for products bought at retail locations dropped from nine to five percent over the same period.One can think of lots of reasons why this might be the case. A more mature business grows more slowly.
There's less novelty effect. Perhaps it is just the impact of the recession, and more staples are bought at physical locations.
The issue is what happens after the recession ends. There's a line of thinking that with serious deleveraging happening throughout the economy, consumer spending will not return to its pre-recession level.
Off the top of my head, it's hard to see why this line of thinking is wrong, though it is worth noting that consumer behavior often surprises researchers.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Ad Priorities Radically Different Online
I estimate that direct response advertising accounts for about 80 percent of all ad dollars spent online, while in traditional media the situation is reversed," says Gian Fulgoni is chairman and co-founder of comScore. "There, branding dollars are estimated to make up about 75 percent of the market."
Why the disparity? "I believe that the very nature of the speed of the Internet and the young technical minds that first created online advertising both led to a focus on immediate response," he says. "The click metric is a good example of that."
“Time to purchase” is different for direct response ads, which aim at closing a sale or a transaction right here and now, and branding that builds brand equity that pays off over time.
Fulgoni thinks both are required. "For direct response ads to work well, it’s important that a brand’s equity have been communicated in advance of the consumer’s purchase decision," he says.
How do Internet media do brand building? "I believe it’s vital to take into account all of the marketing stimuli that affect consumer purchase behavior, not just that which occurred just prior to purchase."
"We should be wary of attributing 100 percent of the credit for a purchase to a click on a search ad," he says. Search might well have closed the deal, so to speak, but there is often a lot of other marketing activity that led the consumer down the path to purchase and, without which, closure might not have occurred.
The Atlas Institute, Microsoft Advertising’s research division, says “users exposed to both search and display ads convert at a higher rate: an average of 22 percent better than search alone."
http://www.comscore.com/blog/2009/04/branding_versus_direct_response.html
Why the disparity? "I believe that the very nature of the speed of the Internet and the young technical minds that first created online advertising both led to a focus on immediate response," he says. "The click metric is a good example of that."
“Time to purchase” is different for direct response ads, which aim at closing a sale or a transaction right here and now, and branding that builds brand equity that pays off over time.
Fulgoni thinks both are required. "For direct response ads to work well, it’s important that a brand’s equity have been communicated in advance of the consumer’s purchase decision," he says.
How do Internet media do brand building? "I believe it’s vital to take into account all of the marketing stimuli that affect consumer purchase behavior, not just that which occurred just prior to purchase."
"We should be wary of attributing 100 percent of the credit for a purchase to a click on a search ad," he says. Search might well have closed the deal, so to speak, but there is often a lot of other marketing activity that led the consumer down the path to purchase and, without which, closure might not have occurred.
The Atlas Institute, Microsoft Advertising’s research division, says “users exposed to both search and display ads convert at a higher rate: an average of 22 percent better than search alone."
http://www.comscore.com/blog/2009/04/branding_versus_direct_response.html
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Wednesday, April 22, 2009
Apple Sells 3.79 million iPhones in 2Q
Apple sold 3.79 million iPhones in its second quarter and 11 million iPods. No problem blowing past analyst revenue forecasts. Other smart phone manufacturers might be under pressure. Not Apple.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
T-Mobile Ultimately will Allow Skype over 3G
Despite understanable teeth gnashing over T-Mobile's blocking of Skype when using the 3G network, T-Mobile ultimately will allow it, either because customer pressure forces them to do so, or because European Union regulators do so.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Cablevision Systems Corp. Introduces Mobile Portal
If you are looking for some idea of what a cable-centric wireless service might look like, consider what Cablevision Systems Corp. is doing. After putting into place an extensive metro Wi-Fi network, it is launching a mobile version of its Optimum.net Web portal that's designed for all forms of cellular handsets but tailored for the company's 2.5 million cable modem subscribers.
The new mobile platform, accessible to handset browsers at m.optimum.net, is starting off with features including email, local traffic, weather, movie theater info, and access to Cablevision's digital TV lineup, but a remote DVR scheduler is on the roadmap.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Starbucks Gets 60% Redemption Rate for SMS Coupons
Starbucks Coffee Co. is running a loyalty program based on bar-code coupons stored on mobile phones, in Guadalajara and San Luis Potosi, Mexico and has gotten a 60-percent redemption rate.
Starbucks created postcards being handed out in malls, universities and retail outlets. Consumers to text the keyword STARBUCKS to short code 80080 to download a "buy-one-get-one-free" coupon.
Separately, customers can text the keyword VENTI to short code 80080 to receive various discounts and offers that change each time the coupon is scanned.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Glad the Term "Year of Mobile Marketing" Wasn't Used
Still, location is a powerful new capability for anybody with marketing or sales responsibilities. Who you are, what you like to do, and where you are, right now, are powerful attributes we ultimately will figure out how to use.
There's one clear historical footnote: everytime somebody declares any year "the year of...", it isn't.
http://www.adotas.com/2009/04/mobile-marketing-has-arrived-for-real-this-time-–-are-you-prepared/
There's one clear historical footnote: everytime somebody declares any year "the year of...", it isn't.
http://www.adotas.com/2009/04/mobile-marketing-has-arrived-for-real-this-time-–-are-you-prepared/
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
More Personalized Services for Mobile
Personalized services for mobile customers will grow from $806 million to $2.9 billion in annual operator revenue by 2011, say researchers at ABI Research. Among top applications are real-time charging for multimedia content and mobile Internet services.
Up to this point it has been difficult for carriers to easily charge customers for non-voice, non-text purchases such as music and video downloads. With an increasing introduction of real-time charging capabilities for these services, customers can do it by topping up their prepaid accounts or using a credit card.
Perhaps the greatest growth opportunity for personalized services comes from “metered broadband”: the ability to access the Internet on an ad hoc basis, or to extend in real time the access bundled in a subscriber’s plan.
Other personalized services include customized Web browsing, parental controls, and enhanced control of text messaging which will enable users to block certain numbers, set some automated forwarding rules, and otherwise configure their SMS.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
AT&T Results: No Negative Recession Impact
AT&T's first quarter 2009 results suggest it is not suffering from economy-induced customer budgetary caution. Its earnings per share were in line with its full-year outlook, the company gained 1.2 million net wireless subscribers to reach 78.2 million, ading 875,000 retail postpaid net adds, up 24.1 percent compared to the first quarter of 2008.
The company also posted its fifth consecutive quarter with a year-over-year increase in wireless postpaid subscriber average revenue per user, up 2.1 percent versus the year-earlier quarter to $59.21.
AT&T firther saw strong growth in its U-verse IPTV segment, adding 284,000 net customers, nearly double the company’s gain in the first quarter of 2008, to reach 1.3 million in service.
The company also posted a 471,000 net increase in total broadband connections, including wireline and wireless LaptopConnect cards, to reach 16.7 million in service.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Deutsche Telekom Issues Profit Warning
Deutsche Telekom AG has issued a profit warning which it blames on the economic slump, says Dow Jones newswire. Citing weak mobile operations in the United States., the United Kingdom and Poland, Deutsche Telekom says it now expects 2009 earnings before interest, tax, depreciation and amortization to be two percent to four percent below 2008's level of EUR19.5 billion, while free cash flow is set to reach around EUR6.4 billion, down from EUR7 billion a year ago.
But Deutsche Telekom first-quarter revenue rose by around six percent to about EUR15.9 billion. Free cash flow was between EUR200 million and EUR300 million in the first quarter of 2009, compared with EUR1.6 billion in the same period last year, it said.
Deutsche Telekom said it had "felt the impact of the economic slowdown and the more intense competitive environment," particularly in the United States and United Kingdom., while roaming revenue fell as consumers cut back on travel.
The weak zloty in Poland and weak sterling in the U.K. also hurt revenue and adjusted EBITDA, the company says.
Some observers think "blaming the economy" is less relevant than operational shortcomings, currency effects, market share shifts and other issues, though.
In Poland, revenues are expected to take hit following a 26 percent decline in the value of the Polish zloty to the euro, says Emeka Obiodu, Ovum senior analyst. The U.K. pound also is down 21 percent compared to the euro.
Competition rather than the recession remains the major problem, says Obiodu. "Generally, the market dynamics have not changed much and competition remains fierce."
"In fact, we have yet to see any disastrous performance from a mobile operator that can be blamed solely on the economic crisis," Obiodu says." Indeed, for each of the recessionary factors cited by Deutsche Telekom for its profit warning (apart from currency risk), it is possible to show a corresponding non-recessionary force at play."
Roaming revenue is down. But the EU has mandated cuts in mobile roaming. In the UK, off the four main mobile operators in the market, T-Mobile’s organic revenue growth for each of the four quarters of 2008 was the lowest, says Obiodu.
In the United States, intense competition and the increased push for unlimited bundles is having a major impact on T-Mobile USA. There are other explanations for the quarterly results, in other words.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Blu-Ray Sales Double, Packaged Media Not Dead?
A new study from Adams Media Research shows that sales of Blu-ray discs in the first quarter of 2009 nearly doubled compared to the same period a year ago, rising to nearly 9 million from 4.8 million in the first quarter of 2008.
Netflix also seems to be growing, and is expected to have 11.2 million subscribers by the end of 2009, after hitting the 10-million subscriber mark for the first time in February 2009.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Will Some Broadband Stimulus Funding Follow Irish Example?
At least some homes in rural Ireland will be supplied with broadband using satellite connections, after a deal was announced between Avanti Communications, the U..K satellite company, and Hutchison 3G Ireland, according to the Financial Times.
Last year the Irish government awarded a contract to Hutchison 3G Ireland to supply broadband to the 10 percent of the population whose locations are remote enough that extending fixed line connections are not feasible. Most of the 220,000 homes are in rural areas, and the majority will connect to the Internet using mobile connections, starting late in April.
Hutchison 3G Ireland could supply Internet access to up to 6,000 Irish homes through satellite connections.
Satellite connections tend to be viewed as too expensive and too slow, compared to wired connections. But sometimes wired connections are financially unworkable. Avanti is using Ka-band spectrum, which allows powerful spot beams to be focused on small areas.
Hughes Network Systems and Wildblue Communications in the United States also use Ka-band technology, offering higher-power signals and bandwidth.
The new broadband satellite services should cost around £20 per month, bringing them into line with prices for fixed-line and mobile connections.
One wonders whether anybody is going to figure out that for the most-isolated locations, satellite might be the most-efficient way to rapidly extend broadband access. Perhaps it won't offer maximum bandwidth equivalent to a fiber to the home connection or VDSL.
But that isn't the point. If you want to get broadband to isolated locations fast and affordably, satellite sometimes is the only option.
http://www.telecomseurope.net/article.php?type=article&id_article=8470&utm_source=lyris&utm_medium=newsletter&utm_campaign=telecomseurope
Last year the Irish government awarded a contract to Hutchison 3G Ireland to supply broadband to the 10 percent of the population whose locations are remote enough that extending fixed line connections are not feasible. Most of the 220,000 homes are in rural areas, and the majority will connect to the Internet using mobile connections, starting late in April.
Hutchison 3G Ireland could supply Internet access to up to 6,000 Irish homes through satellite connections.
Satellite connections tend to be viewed as too expensive and too slow, compared to wired connections. But sometimes wired connections are financially unworkable. Avanti is using Ka-band spectrum, which allows powerful spot beams to be focused on small areas.
Hughes Network Systems and Wildblue Communications in the United States also use Ka-band technology, offering higher-power signals and bandwidth.
The new broadband satellite services should cost around £20 per month, bringing them into line with prices for fixed-line and mobile connections.
One wonders whether anybody is going to figure out that for the most-isolated locations, satellite might be the most-efficient way to rapidly extend broadband access. Perhaps it won't offer maximum bandwidth equivalent to a fiber to the home connection or VDSL.
But that isn't the point. If you want to get broadband to isolated locations fast and affordably, satellite sometimes is the only option.
http://www.telecomseurope.net/article.php?type=article&id_article=8470&utm_source=lyris&utm_medium=newsletter&utm_campaign=telecomseurope
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
More Full-Time Bloggers than Lawyers?
If I had to pick just one, I'd say the Wall Street Journal is the single best newspaper in the United States. But this story is just wrong in claiming there are more people making a living blogging than lawyers in the United States!
It simply doesn't fit anybody's common sense experience.
http://online.wsj.com/article/SB124026415808636575.html
It simply doesn't fit anybody's common sense experience.
http://online.wsj.com/article/SB124026415808636575.html
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Advice for NTIA Broadband Stimulus Applicants
Some would argue "partnerships" are going to be key for winners of broadband stimulus grants under the National Telecommunications and Information Administration's program.
You might think this a simple matter of taste or fashion. It isn't. The statutory language favors non-profit groups. But non-profit groups typically do not have the ability to create sustainable communication networks.
There are some possible exceptions. Municipalities might dust off older business plans for municipal Wi-Fi networks. Even there, partnerships would likely be helpful.
http://www.successful.com/msp/snapshot-4-09.pdf
You might think this a simple matter of taste or fashion. It isn't. The statutory language favors non-profit groups. But non-profit groups typically do not have the ability to create sustainable communication networks.
There are some possible exceptions. Municipalities might dust off older business plans for municipal Wi-Fi networks. Even there, partnerships would likely be helpful.
http://www.successful.com/msp/snapshot-4-09.pdf
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Telcos, Airlines, Newspapers: Structurally Incapable of Making a Profit?
Some businesses, some would argue, are structurally incapable of making a sustained profit. Airlines are the typical example. Others seem to make money only if operated as monopolies. Electrical, water and natural gas services are examples.
This year, we have started to see major U.S. newspapers going out of business. So you would think advertising, a key pillar of the newspaper business model, has migrated elsewhere; to TV or the Internet. Clearly, some has. But migration to Internet venues has slowed.
You might attribute some of that to the recession. But there's a bigger problem right now. As advertising tends to follow eyeballs, you'd think Twitter, Facebook and YouTube would be getting more ad revenue. They aren't getting as much as you might think, or any at all. In fact, some online properties are faring better than print assets, but not by much.
In the first quarter, Yahoo's revenue dropped 13 percent while New York Times Company revenue fell 18 percent, and advertising dropped 27 percent.
So far, nobody has successfully replicated the two-sided revenue stream characteristic of so much of the "old" media in the "new" media space. It has proven largely impossible to monetize content directly.Nor has it proven easy to create stable and large advertising streams.
This is a bigger problem than some realize, as it is not confined to the media, new or old. In telecommunications, all the new fundamental services, IP voice, broadband access and video, are less profitable than older voice services.
Mobility has been key in enabling a transition away from long distance revenue as an industry mainstay. But even that will be under increasing pressure as mobility becomes a broadband access service, with similar margin issues faced by wired network providers.
That's one reason why some of us spend so much time writing about, and thinking about, business models. Right now, some models don't work, while others don't work well.
http://247wallst.com/2009/04/22/the-end-of-%E2%80%9Cnew-media%E2%80%9D-yhoonytgoog/
This year, we have started to see major U.S. newspapers going out of business. So you would think advertising, a key pillar of the newspaper business model, has migrated elsewhere; to TV or the Internet. Clearly, some has. But migration to Internet venues has slowed.
You might attribute some of that to the recession. But there's a bigger problem right now. As advertising tends to follow eyeballs, you'd think Twitter, Facebook and YouTube would be getting more ad revenue. They aren't getting as much as you might think, or any at all. In fact, some online properties are faring better than print assets, but not by much.
In the first quarter, Yahoo's revenue dropped 13 percent while New York Times Company revenue fell 18 percent, and advertising dropped 27 percent.
So far, nobody has successfully replicated the two-sided revenue stream characteristic of so much of the "old" media in the "new" media space. It has proven largely impossible to monetize content directly.Nor has it proven easy to create stable and large advertising streams.
This is a bigger problem than some realize, as it is not confined to the media, new or old. In telecommunications, all the new fundamental services, IP voice, broadband access and video, are less profitable than older voice services.
Mobility has been key in enabling a transition away from long distance revenue as an industry mainstay. But even that will be under increasing pressure as mobility becomes a broadband access service, with similar margin issues faced by wired network providers.
That's one reason why some of us spend so much time writing about, and thinking about, business models. Right now, some models don't work, while others don't work well.
http://247wallst.com/2009/04/22/the-end-of-%E2%80%9Cnew-media%E2%80%9D-yhoonytgoog/
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Tuesday, April 21, 2009
4.3 Billion Mobile Subscribers This Year
With mobile subscriptions expected to reach 4.3 billion in 2009 and to grow to nearly 5.4 billion by 2013, mobile communications have evolved from “nice-to-have,” to providing utility-like services, say researchers at ABI Research.
The trends driving these capabilities are evolving and include changing distribution models, greater choice of connected devices, faster networks and proliferation of mobile applications. All these choices highlight one of the biggest challenges facing the industry today: mobile services personalization.
“Customers increasingly want a personalized experience with their mobile device and service," says ABI Research Mobile Services practice director Dan Shey. Service personalization involves not only allowing them to find and select the right mobile services and applications but also to control, monitor, and pay for mobile services in a way that best suits their needs."
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
RCN Rate Hike Raises Ire
I have yet to meet or hear from a video customer who actually was happy about a rate increase, so it is no surprise RCN customers are sqwaking about the latest rate increase they are facing.
Up to this point there have not been many options. The favorite channels most of us watch (a different package for every single viewer) are not available a la carte. In truth, for a package of 10 to 15 channels, especially featuring sports content, it is doubtful a consumer can save much over current packaged rates.
But it is unlikely distributors can "forever" expect rates to be hiked without something breaking, somewhere.
In my case, two channels plus occasional use of a couple others, justify the entire basic package. But as rates continue to climb, so does the level of irritation.
So far, those two essential channels are not available online, or a la carte.
Of course, distributors aren't dumb. They can assume lots of viewers will be sorely tempted to opt for packages that deliver several channels of most interest, possibly with a "casual viewing" video on demand feature, that might satisfy many current customers.
Nobody knows whether a la carte or expanded VOD options would be revenue neutral. Distributors and networks have reason to fear any change in that direction would not be revenue neutral.
But I don't think some move in the direction of flexibility is avoidable forever. It might be fine positioning for a distributor to say the fees are higher, but so are the variety of channels.
That does not correspond with the way most people watch linear TV, though. Most people do not watch, or even want, most of those channels. And there lies the rub.
There are some precedents, however. Premium channels such as HBO always have been offered a la carte. But the movie channels, pay per view and VOD always have been fully subscriber-funded formats.
Ad-supported channels have reason to fear the economics of a la carte choice, though. Still, if you look at your on-screen guide, you can see some "natural" packages based around sports, news or entertainment that suggest logical packages that are more targeted than what is possible today. That might be a half step that could work, if most customers do not choose those options.
The system isn't seriously broken yet. But each rate hike increases customer dissatisfaction just a bit more. Someday, it will break.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
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