Global Video Business Will Be More Fragmented in 2016

Granted, it often is tough to glean much of value from global and aggregate figures, for business prospects in any particular country. 


The global subscription video market, which has been shared between cable and satellite providers, will see a significant amount of share taken by telcos by 2016.


Video services revenue on a global basis was $261 billion in 2011 and is forecast to grow to $371 billion by 2016, Infonetics Research estimates. 


Globally, the top 20 subscription-TV revenue leaders accounted for 50 percent of the revenue, while the top 20 subscriber leaders represented just 30 percent of subscribers. 


In the U.S. market, satellite share has been relatively stable at about 32 percent to 33 percent, while telco market share is growing. 


Whether "telco" share continues to creep up, or is transformed, remains a question. Many observers long have anticipated that, one day, U.S. telcos would simply both U.S. providers. In essence, telco share could, in that scenario, rise to more than 40 percent of the U.S. market. 

Is Voice a Product or a Feature?

It appears the Australian National Broadband Network is setting wholesale pricing policies that will raise new questions about the ways voice services can be packaged for sale to consumer customers. 


Each wholesale connection apparently costs a retailer $24, and both broadband and voice are included and required at that price. In other words, a retail provider "must" buy both broadband and voice capabilities from the NBN.

That raises an interesting question. Will re?"tailers sell voice and broadband separately, or as a bundle? And if they do, will consumers reset their expectations about the features a broadband connection "typically" provides, and what it costs?

In other words, is domestic voice a "feature" or a "product?" There are growing signs in the U.S. market that service providers are starting to consider shifting retail packaging from "voice as a product" to "voice as a feature." The new Verizon Wireless "Share Everything" plan moves in that direction, with voice and text messaging essentially becoming part of a basic "use the network" connection fee. 

Charter Communications is reported to be considering ending all sales of consumer voice as a stand-alone product. Apparently, in the future Charter voice will be a product that only can be purchased as part of a bundle including something else, the obvious candidates being broadband access or video entertainment. 

That's a half step towards making voice a feature of a network connection fee. Just how far the trend might go is not yet clear. But a reasonable person might argue that making voice services a feature, rather than a product, is the "best" way to assure future voice revenue. 

Charter Move Shows Why Fixed Network Voice Will Not Ever Go to "Zero"

Since the number of fixed network voice subscriptions has been dropping for at least a decade, some might suspect that there is no end to the decline. Some of us have argued that there is some equilibrium point that will be reached, when the number of subscriptions actually stabilizes. 


A new policy by Charter shows why that will be the case. Apparently, Charter is going to stop selling voice subscriptions as a discrete product, and will in the future only sell voice in conjunction with at least one other service, either entertainment video or broadband access. 


"Going forward, we will not offer Charter Phone as a standalone product," a Charter spokesman apparently has confirmed. 


If you think about it, that also is how Verizon Wireless will price its "Share Everything" services. use of the Verizon Wireless network requires a basic subscription that includes unlimited U.S. domestic voice and texting, with variable payments for mobile broadband service. 


The point is that if voice becomes a feature of a broadband access service, the number of voice accounts in service will drop only so far as broadband access or entertainment video. 

Are Telecom Profit Margins "Excessive?"

Gross revenue is never the same thing as "profit." But many businesses are so capital intensive that actual profits are slim. In fact, though it often is believed that oil industry profits are out-sized, they actually aren't, according to the U.S. Census Bureau, Standard & Poors and the American Petroleum Institute. 


Oil and natural gas industry profits were about 6.7 percent in the third quarter of 2011, for example. 


Telecom service provider profit margins aren't that much different. Verizon has a six-percent profit margin while AT&T has about an 11 percent margin. 




 

Are Tablets Better Commerce Vehicles than Smart Phones?

Tablets are "better"than smart phones as a channel for commerce and shopping, in part because users are more likely to purchase after searching for a local business and tend to spend more per purchase than mobile phone users, a study sponsored by the Online Publishers Association has found. 


Some studies also show that tablet purchases are larger than those from PCs.   According to the 2012 Shop.org and Forrester Research "State of Retailing Online" survey, 49 percent of retailers say their average order value from tablets is now higher than traditional web sales. 


Nearly three in 10 (28%) retailers say they are seeing about the same average order value from tablets as their website. 

Consumers Will Store More Than 1/3 of Their Digital Content in the Cloud by 2016

The desire to share content and to access it on multiple devices will motivate consumers to start storing a third of their digital content in the cloud by 2016, according to Gartner. 


Gartner said that just seven percent of consumer content was stored in the cloud in 2011, but this will grow to 36 percent in 2016.


"Historically, consumers have generally stored content on their PCs, but as we enter the post-PC era, consumers are using multiple connected devices, the majority of which are equipped with cameras." said Shalini Verma, principal research analyst at Gartner. "With the emergence of the personal cloud, this fast-growing consumer digital content will quickly get disaggregated from connected devices."


Gartner predicts that worldwide consumer digital storage needs will grow from 329 exabytes in 2011 to 4.1 zettabytes in 2016. This includes digital content stored in PCs, smart phones, tablets, hard-disk drives (HDDs), network attached storage (NAS) and cloud repositories.


Average storage per household will grow from 464 gigabytes in 2011 to 3.3 terabytes in 2016. 

Do Millennials Really Complain More Often Than Others, Online?

Millennials leave the most critical review online, a study sponsored by Bazaarvoice has found, but by such a small margin a reasonable person might well conclude there is essentially no greater amount of "negative" reviews left by Millennials, than created by members of other generations. 


Overall, about 82 percent of online reviews are "positive."(click on the image for a larger view)

Baby Boomers are slightly more positive than the other generations, assigning three percent more five-star ratings to products than members of other generations tend to do. 


Millennials give one percent more one-star product ratings, the lowest rating possible;  the most of the three generations studies. 


Millennials are "decidedly middle-of-the-road," Bazaarvoice says, creating the highest percentage (seven percent) of three-star reviews, but the fewest one-star (very negative) and five-star (very positive) product ratings.


You might argue that Millennials are the most realistic reviewers, in fact. If life is a "Bell" curve, with the great mass of instances "in the middle," and only small percentages at the very high or very low ends of the scale, in terms of product quality, then the Millennial ratings make perfect sense. 

Verizon Wireless "Share Everything" Helps Marketers Using Text Messaging

Obviuously, as more subscribers shift to Verizon Wireless "Share Everything" plans, there will be implications for application providers and other third parties whose customers use the Verizon network.


The plan isn't  favorable to streaming video providers, is relatively neutral where it comes to most other application providers and actually could help marketers who use either text messaging or multimedia message service. 


Historically, text message marketers have had to worry about annoying prospects by essentially making users pay to receive messages. Under the new "Share Everything" plans, that won't be an issue.


The central annoyance still will be the sense of "invasion" on the part of users to unobtrusive messages in a channel that is considered highly personal and private. No change of plans is going to change that constraint.

Agent Network is Key to Peer-to-Peer Mobile Money Services

Managing the agent network is the most critical post-launch success factor for a telco-sponsored mobile money service, analysts at McKinsey and Company say. 


Agents conduct the cash-in and cash-out functions, enabling customers to convert cash into electronic money and back again in convenient locations; in the eyes of the customer, the agent is the face of the company.


Many providers focus on building their agent networks as fast as possible, but that is a mistake,  McKinsey says. Getting the agent network rollout right is one of the most complicated aspects of launching mobile money.


If a provider enlists too few agents, customers perceive the system as difficult to use, or even useless. On the other hand, if there are too many agents, many of them cannot generate enough business to cover the cost of managing liquidity.


As an example, one of the keys to Safaricom’s continued success has been its decision to match network growth to customer-base growth, ensuring a steady 1,000 transactions per agent per month.


The initial network will likely number in the hundreds, not thousands, and it does not have to cover the entire country. Safaricom launched M-Pesa with just 400 agents in a country of almost 37 million people. For larger countries, some experts urge a regional launch, accompanied by later rollouts.

Success Metrics for the Telco Mobile Money Business

Although there are relatively few success stories in mobile money to date, there is an emerging consensus among experts about some of the critical metrics for a successful business model, McKinsey and Company researchers say. 

Four of the key indicators are the percentage of active mobile-money users in the telco’s subscriber base (more relevant for a telco but could be adapted for use by banks in the future), the number of customers each mobile-money agent serves, the average number of transactions each agent conducts each day, and the average number of transactions each customer conducts per month. 

Indicator	Success is
% of active mobile-money users among total telco subscriber base	>10%
Number of customers per agent (across growth trajectory)	400–600
Average number of transactions per agent/day	30–50
Average number of transactions per customer/month	>2.5

Source: McKinsey and company

Facebook is Introducing Subscriptions and Ending "Credits"

Facebook is adding subscription capability for Facebook applications and ending its use of "Facebook Credits," its virtual currency.  Instead, Facebook will switch to payments denominated in local currencies. 


Some might argue the move is designed to make it easier for Facebook applications to integrate with other apps for purposes of shopping and commerce. "Real" currency is the coin of the realm for e-commerce, not virtual currencies, generally speaking. 

RIM Weighs Sale of Hardware Business

BlackBerry maker Research in Motion is considering splitting its business in two, separating its struggling handset manufacturing division from its messaging network, The Sunday Times reports. 


Keep in mind that in its most recent quarterly report, RIM said it earns 68 percent of its revenue from selling hardware. RIM earned about 27 percent of revenue from services. 

RIM could spin off the handset operations as a separate company or sell it, a move that would be inconceivable for a firm such as Apple, for example. The difference is that RIM makes significant revenue providing messaging services.

Who Uses Mobile Over the Top Apps, and Why?

About 11 percent of smar tphone owners use mobile VoIP applications regularly, compared with only 5% of mobile users as a whole, according to Analysys Mason Group. 


About 29 percent of smartphone owners use over the top messaging, compared with 17 percent for all mobile users. So the issue is why there is a difference and what it might mean for service provider efforts to compete with their own OTT apps, or sustain their own bundled offerings. 


The adoption of mobile OTT services may indicate that some users are willing to sacrifice certain features, such as extensive customer care capabilities, in favor of others, such as group chat messaging, Analysys Mason says. 


By focusing on features that are valued by particular users, OTT service providers can apply an alternative business model, often at no additional cost to the user. To compete, service providers must identify market segments and then create services that appeal to those specific segments, Analysys Mason suggests. 

Consumers are Rational about 4G

Adoption of 4G mobile phones has nearly quadrupled since early 2011, going from 1.4 percent in the first quarter of 2011 to 7.6 percent in the first quarter of 2012,  Nielsen Online says.  

Consumers under 34 are most likely to have already adopted 4G and 63 percent of teens are likely to consider switching to 4G within the next year (of course, that will require parental approval, so you might approach that particular finding with circumspection). 

Also, 55 percent of respondents are unable to identify any forms of 4G technology, so it is not as though most people actually understand the value proposition. 

Also, as you would expect, consumers who value "speed" are early adopters. The research also found that 4G capability is considerably more important for those purchasing a data card or mobile hotspot than either a smartphone or tablet. 

That makes sense. Smart phones don't show the obvious benefits of "faster" connections as much as PC or notebook experiences tend to do. 

But there is another interesting finding: current 4G users are five times more likely to consider 4G as a replacement for their home broadband connection, compared to users who have only 3G connections. 

How Much Does Remote Work Suffer From "Lack of Tools?"

According to new data released by harmon.ie, 77 percent of mobile workers finish documents, proposals or presentations while on the road, with more than half literally finalizing materials in the 11th hour.


Some 84 percent of traveling executives and managers report that they cannot work effectively on collaborative projects while on-the-go despite increased enterprise adoption of iPads and smartphones. 


Of course, some might argue, blaming tools is sometimes an excuse. Another study by harmon.ie found that people get distracted while working, losing at least an hour a day of potential work time from various distractions specifically caused by collaboration and social tools intended to increase the value of collaboration. 


The study found that 53% of IT users waste at least one hour a day dealing with all types of distractions. The point is that too much sometimes is made of "lack of tools." The tools themselves cause lost productivity.


Some people just whine.