Strategy Implications of Long Tail

Telecommunications is a business of scale, requiring huge capital investments. So it should not be surprising that the number of contestants is limited.

In the legacy wired voice markets, it once was an ironclad rule that the Regional Bell operating companies represented about 90 percent of lines in service.

In the U.S. wireless market, just four providers have about 90 percent market share.

As discrete video, wireless, broadband and voice markets start to merge, different names will start to appear. And it is conceivable that the share held by the few providers with the most share will broaden. Something more like a classic "80/20" distribution could occur, where 20 percent of providers hold 80 percent share.

What seems unlikely is that the roughly "L" shaped curve will change. You would be hard pressed to name a single business category (subscribers, profit, profit margin, revenue) where such a distribution is absent.

The obvious strategy inference is that if one is not likely to be found among the ranks of the 20 percent with 80 percent share, one had better have a clear niche. Geography, packaging, price, lead application, user interface, device, channels, customer segment or intangibles are typical ways providers differentiate.

In a service provider business spinning off more than $1 trillion annually in revenue, even small niches, fairly far out on the "tail" of market share, can be big businesses.

Is TV Advertising Permanently Broken?

TV networks typically get orders for $9 billion or so (nearly half of total annual advertising) in advertising commitments during the "upfront season," and, as you might suspect, expectations are somewhere between shockingly low to dangerously low. Some estimate the major broadcast networks might wind up getting $7.5 billion, a slide of between 13 to 20 percent.

New media is part of the reason; new ad targeting capabilities another. Anticipated dips in consumer spending likely are another reason. People aren't buying cars or financial products at the moment, so some advertisers seem to be scaling back their expectations for what advertising can accomplish, at least in the network TV channel.

So the issue, stated or unstated, is whether the change is temporary or secular (permanent). Certainly supporters of online or other targeted advertising channels would hope for the latter.

Some would argue that even if economic deterioration abates, there is no evidence that consumers and advertisers will revert to their previous spending habits.

So the issue is: is spending for network TV advertising on the cusp of a permanent, negative change, in large part because Web, targeted, mobile and online alternatives are becoming viable?

http://seekingalpha.com/article/139815-advertising-buy-audiences-not-media-brands?source=feed

Add Email Contact Info on a BlackBerry With One Click

BlackBerry users now can add contact information embedded in emails directly to their contact managers, with a single click, using "gwabbit for BlackBerry," now available a BlackBerry App World, Research in Motion's app store.

The app also can be downloaded from www.gwabbit.com. The app can add and update information in the BlackBerry Contacts or Microsoft Outlook directories.

Gwabbit costs $9.99 annually.

The "gwabbit for Outlook" app, released earlier, automatically identifies signatures in incoming emails and creates them as new or updated contacts on a desktop or notebook PC.  gwabbit for Outlook is available for a single, one-time fee of $19.95.  The two products together deliver complete email contact management for any professional on the road or at their desk.

Gwabbit is now available for all BlackBerry smartphones including the BlackBerry Bold, BlackBerry Storm, BlackBerry Curve series and BlackBerry Pearl series of smartphones.

Nearly Half of Consumers Say Lack of Advertising a Sign of Trouble

More than 48 percent of U.S. adults believe that a lack of advertising by a retail store, bank or auto dealership during a recession indicates the business must be struggling says Ad-ology Research.

Likewise, a vast majority perceives businesses that continue to advertise as being competitive or committed to doing business, a recent survey suggests.

The study finds advertising appears to play a key role in consumers’ view of how a business is doing, and by not advertising, businesses may be sending a warning signal to current and potential customers.

“It is critical to advertise in the current economic climate, to maintain long-term positive consumer perception of your brand,” says C. Lee Smith, president and CEO of Ad-ology Research. “Advertising not only assures consumers of a business’ reliability in a soft economy, but it can influence where and what they buy, especially when the ads address concerns about value,” Smith says.

http://www.marketinginsightstoday.com/archives/1223

"Easy to Use" Mobiles a New Niche

"Easy to use" mobile phones are a demographic "evergreen" market segment, Swedish consumer electronics company Doro believes.

In some cases it’s not a matter of whether customers are actually able to use a device, but rather they resonate with the image that the product conveys.

But there are some important design considerations. Larger characters on the phone screen and bigger buttons for dialing numbers are examples. Those with hearing loss can be provided devices that sync hearing aids using Bluetooth and have high quality speakers.

Though nobody can predict what will happen when today's BlackBerry and iPhone users age, they might not someday be able to view screens as well as they do today and might need better audio.

Maybe the buttons on a BlackBerry will be too small. And later in life, users might not be so busy. In that case, always-available email might not be so important, especially when users are paying for their own service and devices, rather than using company-supplied technology.

For today's seniors who have not used iPhones before, it is very likely that many such persons would reject the iPhone simply because of the device’s youth-centric branding.

Doro says it has been working with carrier partners both in Europe and undisclosed partners in the U.S. to investigate wireless health applications and other services that could leverage Doro’s easy to use phones.

As the wireless market becomes saturated, serving such niches will be more important.

http://mobihealthnews.com/2336/designing-mobiles-for-seniors-lessons-from-doro/

Hybrid Mobile Plans Gain Traction

MetroPCS and Leap Wireless both reported annual double-digit connections growth in the first quarter of 2009 and in some geographic areas are claiming a greater share of net additions than the big four mobile providers. 

Both are doing so on the strength of  unlimited prepaid plans, a strategy Sprint’s prepaid affiliate Boost Mobile also has adopted. Boost offers a $50 per month unlimited usage plan. 

MetroPCS and Leap Wireless also are pioneers of the "hybrid" mobile plans that offer a monthly allowance of voice and data but is paid for upfront and does not require a contract. 

"In the current economic climate, customers are finding their unlimited hybrid plans attractive, particularly as the plans are free from any long-term contract or credit checks," says Will Croft, Wireless Intelligence analyst. 

Video Consumption Climbs on All Screens

Online video consumption grew 13 percent in the first quarter while mobile video viewing grew 52 percent year over year. So you might think linear TV viewing decreased. Not so, says Nielsen.

(click image to expand chart)

In fact, linear TV viewing grew 1.2 percent year over year, even as consumption of other forms of video, on different platforms, grew.

The average American watches approximately 153 hours of TV every month at home. In addition, the 131 million Americans who watch video on the Internet watch on average about 3 hours of video online each month at home and work.

The 13.4 million Americans who watch video on mobile phones watch on average about 3.5 hours of mobile video each month.

Out of all different age groups, 18-24 year olds show signs of watching DVR and online video the same amount of time - timeshifting 5 hrs, 47 minutes per month, and watching video online 5 hrs, 3 minutes each month.

http://blog.nielsen.com/nielsenwire/nielsen-news/americans-watching-more-tv-than-ever/