Juniper also estimates in-game purchases will overtake the traditional pay-per-download model as the primary source of monetizing mobile games by 2013.
Tuesday, November 30, 2010
Juniper also estimates in-game purchases will overtake the traditional pay-per-download model as the primary source of monetizing mobile games by 2013.
While 17 percent of the younger demo was interested in a pay-per-episode Hulu model, only 11 percent of those 35 and older wanted to buy that way. Overall 49 percent of youth had no interest in pay models while 70 percent of the 35+ group suggested they were not interested in such fee-based offerings.
Eagerness to use the Web to catch up on or re-experience TV content varies a bit from genre to genre and even more from show to show. People are more likely to want to re-watch comedies than other genres, but a subscription service like Netflix was more appealing for its run of dramas since viewers wanted access to whole season.
Now interconnection agreements get tarred.
Peering and transit agreements aren't net neutrality issues.
So much for the couple of years headstart over other 4G providers.
Monday, November 29, 2010
Apple, Google, Motorola, Samsung and HTC could be early winners as tablets start to cannibalize the PC market, some might argue.
Mary Meeker Internet Trends presentation
Stortz says taht “on November 19, 2010, Comcast informed Level 3 that, for the first time, it will demand a recurring fee from Level 3 to transmit Internet online movies and other content to Comcast’s customers who request such content."
“On November 22, after being informed by Comcast that its demand for payment was ‘take it or leave it,’ Level 3 agreed to the terms, under protest, in order to ensure customers did not experience any disruptions," says Stortz.
The maker of the Windows operating system has proposed a range of possibilities in these early talks including creating a 'virtual cable operator' delivered over the Internet for which users pay a monthly fee.
A new "premium" form of video on demand, which would make new releases available in streaming format just 45 days or so after they start showing in theaters. In the past, newly-released movies have appeared on VOD services about 120 days after theatrical release.
Video-on-demand services often price such movies at a price of about $4.99. But studios think the new earlier release window could allow them to price movies at perhaps $25 a view. Whether consumers will have the same value perception is not so clear.
Studios also like the better profit margins. Generally, studios get as much as 80 percent of that early VOD revenue, and much less for a DVD copy. DVD rentals might net a studio about 30 percent margins, for example.
Consumers are also embracing mobile as a shopping tool. On Black Friday, 5.6 percent of people logged onto a retailer’s site using a mobile device, a jump of 26.7 percent compared to the prior Friday. That suggests users are using their mobiles inside stores, for example, perhaps for comparison shopping.
Jewelry retailers reported a 17.6 percent increase in sales.
But there also is some evidence that consumers know what they want, where to get it and are being very targeted in their efforts to find those items. People are viewing 18 percent fewer products on sites than they did last year, suggesting that they are shopping with a specific item in mind and quickly moving on.
Consumers appear increasingly savvy about their favorite brands’ social presence, and are turning to their networks on social sites for information about deals and inventory levels. While the percentage of visitors arriving from social network sites is fairly small relative to all online visitors—nearly one percent—it is gaining momentum, with Facebook dominating the space.
read more here
So far, online and other alternative video channels are mostly complementary to existing multichannel video entertainment services. Consumers using the greatest number of alternative platforms also tend to spend the most money on traditional subscription services, the study found.
But the study also suggests the potential is far greater.
Only 10 percent of consumers express an interest in trying TV show and movie viewing from the Internet to a computer or tablet screen. In contrast, interest surges in viewing this content on a TV screen via a computer connected to the Internet, and it climbs even higher for devices designed specifically to stream content to the TV, such as AppleTV and Roku.
"The average American's capacity to consume video content is impressive," said Maryann Baldwin, Vice President of Magid Media Futures. "As new video viewing platforms such as instant streaming and mobile apps proliferate, consumers are simply adding them to their portfolio of video viewing options. Our research indicates that this is definitely not a zero-sum game -- at least at this point, it appears that traditional subscription services and alternative viewing platforms can coexist with services like 'TV Everywhere' locking in revenues for traditional providers."
In addition, the study indicates that when the availability of Internet content has caused consumers to cancel their traditional service subscriptions, these circumstances remain the exception. Only a very small minority of consumers are even considering cancelling their subscriptions.
Only one percent of consumers report that they have cancelled their subscription service in favor of accessing content available on the Internet, and only 2.5 percent of consumers use Internet content exclusively.
In terms of future cancellations, only three percent of consumers report that they are even considering cancelling their traditional subscriptions without replacing it with a competing subscription, suggesting a relatively stable subscriber base for traditional providers.
Purchase and rental of DVDs continue to be most at risk from the growth in use of alternative video viewing platforms.
The online survey was conducted in October 2010 using a nationally representative sample of 1,208 adults age 12 years or older.
read more here
“It’s a very attractive market for us,” said Michael Woodward, vice president of AT&T’s mobile-phone portfolio. “The opportunity has been to improve the rate at which people are attaching data plans and that starts with texting.”
To reach the older market, wireless carriers are offering lessons in how to text, introducing phones with oversized buttons and fine-tuning their marketing strategies. AT&T has boosted its advertising in media that draw older generations, including the AARP magazine from the over-50 advocacy group and the “Dancing With the Stars” series on Walt Disney Co.’s ABC.
About 23 percent of the respondents indicated using some form of cloud computing now, while 61 percent of the respondents are likely to increase their cloud computing spending in 2011.
In Nigeria, South Africa, and Indonesia, over 90 percent of Millennial-age users said they use their mobile phones more than desktop or laptop computers to access the Internet.
On "Black Friday" of 2010 (the day after Thanksgiving), eBay saw a 30 percent increase in mobile bidding activity, compared to 2009 levels. And since the launch of its first mobile application in July 2008, nearly 30 million items have been bought or sold using eBay mobile apps around the world.
Many practical details remain to be ironed out, and it is too early to make a firm judgment about how the structural separation will affect Telstra's market and financial position. But the separation ought to provide some evidence, over time, of how important "network ownership" is for a major tier one telco.
Generally speaking, most executives of tier one service providers continue to believe that access network ownership confers business advantage. Ownership means service providers can create more advanced facilities on their own accord, without the restriction of leasing only such capabilities as a third party might be willing and able to supply. Comcast is free to create and sell 50 Mbps broadband access connections whenever it wishes to, because it does not have to rely on a third party to create such features. Wireless providers can upgrade to fourth-generation networks on their own schedule, rather than waiting for third parties to build such networks.
Also, to the extent that a single network can be used to support multiple services (the whole idea between IP networks), ownership of a broadband access network allows creation and offering of many complementary services ranging from voice to entertainment video, business services and conferencing, for example.
Smaller competitors, on the other hand, frequently deem widespread wholesale access to be the underpinning for their business operations, since they cannot afford to build their own access networks on a widespread basis.
So at least in principle, the coming NBN ought to allow many more retail service providers to try and grab some share of the consumer and smaller business markets. In principle, that should lead to Telstra having less overall market share.
In June 2010 Telstra's share of the total Australian communications market was just over 60 percent, but virtually all observers expect Telstra's share to decline in 2011 and 2012.
Optus is perhaps the major contestant Telstra faces, as Optus has market share between 21 percent and 22 percent. Vodafone and Hutchison have merged their Australian businesses and could be a stronger competitor as well. Optus has built and operates a number of hybrid fiber coax access networks in Australia and is not likely to decommission them, suggesting that Optus will use the NBN access facilities at some point to expand into new geographies.
Optus competes in the mobile segment as well, operating a wireless 3G network that reaches more than 97 percent of the Australian population.
Historically, one might argue, the competitive benefits of robust wholesale access have been most clear in markets where the former telecom monopoly represents the only fixed-network access capability in a region. One might argue that the benefits arguably are least when at least two strong facilities-based access networks exist in most markets.
Despite concern about Telstra's strong position in the market, its declining market share, across virtually every fixed-line and mobile service, suggests that the move to a NBN framework will not fundamentally change the Australian marke's dynamics. At least immediately, the NBN will spur many new entrants.
But communications always is a scale-dependent business. Over time, the normal market dynamic is for disparate smaller operators to combine in an attempt to gain more marketing scale. The NBN will not change that dynamic. One might predict an initial flurry of new entrants into the wireline markets, followed by a period of consolidation where market share concentrates in a smaller number of viable players.
Nor will the Telstra structural separation necessarily settle the argument about the strategic importance of access access ownership. One might argue that Telstra's retail unit's success now will be judged solely by its retail effectiveness, not the advantage of its network asset ownership. That will be true to some extent. The problem is that Telstra's market share has been declining for some time.
A continuation of that market share shift would not conclusively prove that access network ownership was important, and that Telstra "needed" those assets. At the same time, it is perhaps unreasonable to expect Telstra's market share to tumble without end.
At some point, Telstra's share should stabilize. That would not, in and of itself, "prove" that the access ownership ultimately was unimportant. In the U.S. market, where strong telco and cable competitors face each other in nearly every local area, the two players dominate consumer markets, roughly splitting new markets and gradually taking share in each others' legacy markets as well. There are a few markets where a third fixed-line contestant operates, but those scenarios are relatively rare, and no third provider typically has market share anywhere near what the local telco and cable operator have.
There are some market segments where a third provider has significant share. Satellite entertainment video provides one example. Also, looking just at the "voice services" market, mobile providers collectively have more than 50 percent voice market share, across all network access types.
read more here
In fact, one illustration of how much device trends have changed in less than a year can be gleaned by forecasts of "emerging devices" published as recently as January 2010.
One such forecast, published by Strategy Analytics, shows no "tablet" or "media tablet" category at all. In all likelihood, tablets are going to displace a portion of the forecast notebook and netbook sales.
Growing user interest in media tablets such as the iPad also is affecting near-term sales, said Ranjit Atwal, research director at Gartner.
“PC market growth will be impacted by devices that enable better on-the-go content consumption such as media tablets and next-generation smartphones,” said Raphael Vasquez, research analyst at Gartner. “These devices will be increasing embraced as complements if not substitutes for PCs where voice and light data consumption are desired."
A comScore study revealed that when video was included in the shopping experience, visitors were 64% more likely to purchase than without it, and stayed on the site for an additional two minutes.
Saturday, November 27, 2010
The apparent consensus developed during a series of three meetings held earlier in 2010 that included executives from software companies, processors, and merchant and wireless trade groups, carrier, bank, and card-network representatives.
Friday, November 26, 2010
The Western Digital "My Pasport" external hard drive is number five on the list. The Garmin GPS navigation device is sixth; the iSymphony 32-inch TV is seventh.
The Canon Powershot camera stands at eighth, while the LG Blu-ray player is ninth. The Tom Tom GPS device is 10th.
It is worth noting that eight of the 10 top-selling devices is a portable device of some sort.
Amazon top-selling electronics list
Compared to October 2009, more consumers report they have reduced spending, or changed providers of, cable TV, wireless or fixed-line voice as in October 2009.
There is some small evidence of less cutting in areas such as purchasing of generic products, brown bagging a lunch,going to the hair stylist or cutting magazine subscriptions, for example.
The latest survey suggests more consumers now have dropped landline service, compared to October 2009, a finding that would surprise very few observers, one suspects. In the mobile service area, a logical conclusion is that people are keeping service, but adopting other measures to reduce cost, such as switching plans, switching providers or moving to cheaper prepaid service.
Thursday, November 25, 2010
Advertisers want more accurate measurement and the option for more targeted and clutter-free ad inventory. Meanwhile, U.S. marketers are willing to explore alternatives to the 30-second TV commercial as they shift budget from TV to social media, banners, and search.
More forward-looking marketers are ready to experiment with online video ads, branded entertainment, and interactive TV.
Wednesday, November 24, 2010
“The potential benefits of cloud are a shift from ’capacity’ on demand to ‘capability’ on demand, a reduced cost of computing resources and a shift from technology use to ‘value’ consumption,” says Rakesh Kumar, Gartner VP.
Among the top-10 items are e-readers, the Nintendo Wii, the iPhone and the iPod Touch.
Tuesday, November 23, 2010
"It is clear that over the long term historical levels of spending and revenue cannot be maintained going forward," the GAO warns.
The debt problem predates the economic downturn and is driven on the spending side largely by rising health care costs and an aging population, says the Government Accounting Office.
read the full analysis here
The Harris Poll surveyed 2,258 adults surveyed online between September 1 and 3, 2010 by Harris Interactive.
When asked if, over the past year, the amount of time spent doing various activities online has changed, one quarter of online adults say that they have increased their time spent shopping (24 percent) online, as well as their time spent reading product reviews (25 percent).
Small business marketing budgets leaned toward websites this year, with 39 percent of SMBs with fewer than 1,000 employees spending greater than 20 percent of their budgets in that area. Online spending is expected to continue in favor of websites, as 17 percent of respondents plan to increase budgets for their sites in 2011, the highest percentage increase in planning for any marketing item included in the survey.
Social media is predicted to be the third most increased area for online marketing spending next year. Among the more than 750 businesses surveyed, 34 percent indicated that they currently engage in social media marketing. Of those using social media, Facebook (80 percent), LinkedIn (37 percent) and Twitter (27 percent) were the most commonly used platforms.
The State of Small Business Online Marketing Budgets
Viewers of 30-minute TBS sitcoms like “Meet the Browns” watched, on average, 40 percent of the episode, including the ads, if there was one minute of ads and 37 percent of the episode if there were 16 minutes of ads.
The takeaway is that viewers watched, on average, for the same number of minutes no matter how many ads were embedded within the program.
Since the recession started in the fourth quarter of 2007, U.S. consumers have apparently been cutting back on their spending. But Bureau of Economic Analysis data suggests that consumers have been cutting more in some areas than others, and actually have increased spending on many communications services.
BEA show aggregate personal consumption expenditures were up 2.9 percent, or $285 billion, between the fourth quarter of 2007 and the end of the second quarter of 2010, for example.
Mobile device spending was up almost 17 percent since the fourth quarter of 2007. And spending on communications and multichannel video services was up by five percent.
Americans were spending a little bit less on clothing and hotels; a lot less on foreign travel, video and audio equipment (think televisions), and furniture. The big drop came in motor vehicles and associated goods and services, like gasoline. Spending on household furnishings dropped six percent.
Spending on international travel dropped 7.4 percent; purchases of audio and visual equipment dropped 8.4 percent; spending on motor vehicles declined 16 percent; while spending on moving, freight and storage services dropped nearly 20 percent.
Spending on pets increased 14.4 percent. Spending for child care increased 13 percent. Health care spending grew 11 percent while education spending grew 13 percent.
Finding stores is seen as highly valuable by about 61 percent of respondents.
(Click on image for larger view)
About 89 percent of respondents to a recent JiWire survey say they likely will use location-based apps and services during the Christmas shopping season.
Some 36 percent plan to use location-based services to find product reviews while 33 percent plan to discover current inventory at nearby stores. About 26 percent plan to connect with social networks through location-based features.
On average, 30 percent are willing to travel more than five miles to redeem a mobile coupon.
“The networks aren’t blocking Google TV because it’s Google," AdAge notes. "They are blocking Google TV because it is putting a web TV show, with web TV show economics, on a TV, which would be incredibly disruptive to their business."
Monday, November 22, 2010
The number of U.S. households paying for TV subscriptions is falling outside the largest TV markets, and growing in the biggest markets, a new analysis by MediaBiz suggests.
Between the first and third quarters of this year, 335,000 fewer homes out of 100 million subscribed to TV service from a cable, satellite or telecom company, according to research firm SNL Kagan.
But the latest local data show that subscriber drops have largely fallen outside the biggest markets. The 10 biggest media markets collectively saw their number of TV subscribers grow by 125,000 from the first quarter to the second quarter, while the rest of the country lost 279,000 between those two periods, according to MediaBiz.
read more here if you have a subscription to the Wall Street Journal
The company also announced that the price of its popular subscription combining unlimited movies and TV shows streamed instantly over the Internet and unlimited DVDs delivered quickly by mail, with one DVD out at a time, will increase by a dollar a month to $9.99. Prices of subscription plans allowing for more DVDs out at a time will also increase.
In part, that is because Cisco is banking on video becoming integrated into other existing modes of communication, and in part because "unified communications," whatever you think UC is, and whatever you think it includes, has been in the marketplace long enough to have lost some of its luster.
The change of nomenclature has been underway for a few years already.
read more here
But a new book published by Oxford University essentially argues "too much reliance on advertising" is the problem newspapers in some countries face. The study, commissioned by the Oxford-based Reuters Institute for the Study of Journalism, examined newspaper industries in several countries, including the US, UK, Germany and Brazil.
In many countries where online activity is high, including Scandinavia and Germany, newspapers are still faring well, with titles typically generating 50 percent of revenues from advertising.
The U.S. newspaper industry, which has generated more than 80 percent of its income from advertisements, is today in a much more serious crisis than its counterparts in Germany and Finland, where advertising typically constitutes about 50 percent of total revenues, Reuters suggests.
To be sure, there probably are numerous reasons why newspapers are in trouble. See http://www.splicetoday.com/politics-and-media/five-key-reasons-why-newspapers-are-failing for one view on what the problems are.
But it might seem somewhat silly to suggest that excessive reliance on advertising is the problem. Advertising only works when users already have ratified their appetite for consuming content in a particular venue. To argue "too much advertising" is the problem, or more accurately, that declining advertising now is the problem, sort of mistakes a symptom for a cause.
In the United Kindgom and the United States, where advertising accounts for a larger proportion of revenues, the picture is worse, but could be explained by a cyclical advertising recession which has seen spend fall dramatically in recent years, the study suggests.
That ignores the fact that readership has been falling for decades. Falling readership leads to lower ad spending and lower ad rates, which leads to lower revenue. But those problems are directly related to the availability of other channels that have more user engagement. People have shifted attention to other media formats.
The book challenges the conventional wisdom that the Internet has undermined business models by claiming there is no correlation between Internet usage and newspaper profitability. Up to a point, that is undoubtedly true. But likely only up to a point. To be sure, newspaper readership has been declining for decades, including the period before the advent of easily-consumable Internet news.
But advertising is shifting throughout the media world, and it might be wishful thinking to assert that the growing use of online channels is not directly responsible for a shift of growing amounts of advertising.
To be fair, one might argue that the researchers mostly are saying there should be a better balance between end user payments and ad support. That's fair enough, but anybody who has spent time in print publishing would agree that it is tough to get large numbers of readers to pay very much for the ability to read publications. The reason advertising historically has been important in the publishing business is precisely that readers do not necessarily "value" print content all that highly.
Friday, November 19, 2010
Groupon might be seen as a "social coupon" or "digital coupon" business. That makes it a mobile marketing and advertising vehicle as well. Local advertising through media including newspapers, direct mail, radio and the Internet will reach $133 billion in the U.S. this year, according to BIA/Kelsey, a consulting firm.
The idea is to make the devices easy to sell in traditional retail venues, but also easy to activate for service later, on any GSM network. You can probably expect the carriers not to be quite so enthusiastic to embrace the same concept for mobile phones, though.
According to the survey, 58 percent of light data users said they would change carriers to get an unlimited data plan. Among the highest data users, that figure rose to 67 percent. 'Customers generally have strongly negative perceptions about UBP, and these are often not correlated with self-interest,' Bernstein analyst Craig Moffet said in a research note, referring to usage-based pricing.
And price resistance is stubborn. Even when the price for such a service is just 10 percent to 20 percent higher, businesses are significantly less likely to switch to a 100-Mbps service from what they currently buy.
As you might guess, if small businesses are hesitant to spend 10 percent to 20 percent more to get 100 Mbps, they are even more hesitant to spend more for an extremely fast Internet connection of 1 Gbps. This is especially true for prices that are 40 percent or more higher than their current prices.
If you asssume the average prices now range between $70 a month to $124 a month, then survey respondents show significant resistance to paying much more than $84 to $149 a month for 100 Mbps service, or $98 to $174 for 1-Gbps service.
A score of "1," shown by a shorter bar, would indicate strong willingness to take the action.
The point is that small business users aren't willing to spend much more to upgrade from their current level of service to 100-Mbps service.
The most surprising finding is that even the same prices, or prices 10 percent 5to 20 percent lower do not cause small business respondents to become certain of switching. Scores around "3" indicate a "maybe, maybe not" attitude.
No matter what these respondents say about wanting higher speeds, they don't appear to be willing to pay much of anything for it.
read the full report here
"FCC Chairman Julius Genachowski will imminently flout the will of the American public, the Congress, the unions, numerous civil liberties and minority groups, former FCC officials, and even members of his own political party, and unilaterally impose Net Neutrality regulations on the Internet," said Mike Wendy, director of Media Freedom.org.
"In light of other recent statements, it represents a 180-degree shift away from his call to ‘catalyze private investment, foster job creation, compete globally, and create broad opportunity in the United States.’"
"When all costs for retirement benefits are totaled up in city government, they exceed $370 million this year, or roughly two thirds of the city’s entire payroll expense," says San Diego Councilman Carl DeMaio. In other words, of taxes paid by city residents that are spent on personnel, only a third actually support current employees supplying services to residents.
That same problem is going to overwhelm most school districts as well, leading to inability to educate today's school children because nearly all funds to support schools will have to be diverted to pension obligations.
This cost structure cannot be sustained, DeMaio says, and any organization with these excessive costs for retirement benefits would face bankruptcy in short order.
Unless San Diego takes significant actions to mitigate future payments on the unfunded pension liability, the growth rate of these payments is almost certain to outpace the growth rate of tax revenues, he says. All of that will be unpleasant and painful, but there now is no escaping the decisions.
San Diego's current forecast for 2012 through 2016 already shows scores of millions of deficits in every year.
The city’s defined benefit pension payment has climbed from $154 million last year to approximately $230 million this year. And it only gets worse. According to the pension system actuary, it will climb to $343 million in FY 2016 and spike to $511.6 million in FY 2025.
In addition, pension-related health care obligations add another $120 million a year, at current levels.
"To put the magnitude of the pension problem in a more simple perspective, if General Fund revenues grow at a rate of two percent per year, fiscal year 2014 projects the city’s defined benefit pension payment alone to consume more than 20 percent of general fund revenue: one out of every 5 dollars," says DeMaio.
Rupert Murdoch, News Corp. CEO, believes that within a few years, tablet devices will be priced and sold through mass market retailers at reasonably affordable prices, and that, at some point, every member of the family will have one. That obviously makes a tablet the ideal "reader" platform.
But there is another side to bubbles. "Even in a bubble, there is a germ of truth and reality," Santos notes. Google was a dot com, but was different. It proved to be the provider of a consequential new technology, unlike most of the other inconsequential endeavors.
In January 2005, Wedbush Securities stock analyst Michael Pachter called Netflix a "worthless piece of crap." He put a price target of $3 on the stock, at the time trading around $11. The doubters thought Blockbuster, Wal-Mart or Amazon, with their economies of scale and established customer bases, would simply destroy Netflix. Ironic, eh?
So would Google renew its contract with Mozilla after November 2011? That depends on how many search queries, and how much revenue, Google gets from the deal today. If the money outweighs Google's long-term strategic plans for Chrome, then Firefox is safe.
But as Chrome encroaches on Firefox's market share, there will come a tipping point where the search deal no longer makes sense for Google.
The form factor might ultimately lead to differentiation in the tablet space. Most tablet users will wind up using them as an e-book reader and video player. So the issue is how much value a user places on larger screen size versus portability. It isn't so clear yet how much content creation actually will be done on such devices. They are built for consumption (reading, watching, hearing) more than creation of such media.
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