We are in Uncharted Territory, But Get Ready for Change

This graph shows U.S. job losses from the start of the recent recession, in percentage terms. As you can see at a glance, the recession has been an outlyer. Click chart for a larger view.

As they say, "we are in uncharted territory." I use the past tense deliberately, meaning only that by most measures, we passed through the bottom as early as March 2009 and are now, in halting fits and starts, in a growth mode.

So it might be time to stop talking about "recession-induced" behavior, even though we are, by the most recent estimate, down about 8.1 million jobs since the recession began. All other things being equal, it makes most sense to look for signs of changing behavior as the recovery takes hold, as slow as that might be.

As Canadian hockey great Wayne Gretzky once quipped, you don't skate to where the puck is now; you skate to where the puck is going to be. The adage, as it applies to most providers of goods and services, is to anticipate rebuilding, rather than extrapolating from recession behavior permanently into the future.

The main thing now, despite the severity of the downturn, is how behavior will start changing. It is as important to anticipate what people will do, instead of gearing one's business to "how they have been recently behaving."

The reason is simple: by definition, the economic background is changing, meaning people will start to have opportunities to change recent behaviors. As the economy recovers, new discretionary spending is going to build. It will be spent somewhere. So the issue is anticipating how, and skating to the puck.

What Does Text Message Actually Cost a Heavy Teen User?

The frivolous answer to the question "what does text messaging cost a teenager" is "nothing," because a parent is paying. Perhaps a better way to phrase the question is "what does text messaging cost the parental unit paying for the service?"

Nielsen might have an answer. The research firm analyzes more than 40,000 mobile bills every month to determine what consumers actually are spending. The results suggest "staggering" levels of usage.

American teenagers are consuming 3,146 messages a month, which translates into more than 10 messages every hour of the month that they are not sleeping or in school.

Even the under-12 users aer sending 1,146 messages per month, which is almost four text messages per waking hour that they are not at school.

One thought you already should be having is that there is no way usage at that level is occurring on an "a la carte" basis. And you are right. Only a very small percentage of people who text message are doing so on a pay-as-you-go basis, which typically means a 20-cent per message rate.

Most users have buckets of usage. Because of that, most users are paying about one cent for each message.

From the first quarter of 2008 to the third quarter 2009, the effective price of a text message has decreased by 47 percent, in large part because so many users now are on unlimited or heavy texting plans.

Global Reach of North American Mobile Sites: 80%

About 80 percent of North American mobile Web sites have substantial traffic from around the world, a study by Motally finds.

"If you divide the world into seven regions--North America, South America, Europe, Asia, Africa , Middle East and Oceania--80 percent of mobile sites get traffic from at least three regions outside their own. About 72 percent of applications are used in four or more regions, Motally says.

“Any investment in the mobile Web hould at least consider a global audience,” Motally says.

About 53 percent of sites and 41 percent of apps in Motally’s study drew significant visitors from all seven regions.

The other important finding is that feature phones, particularly in regions like South America, Asia and even Europe, are important devices for mobile Web traffic.

While feature phones aren’t a major component of U.S. mobile websites, they are responsible for over 20 percent of traffic in Europe and for over 40 percent in Asia and South America.

AT&T Seen Keeping iPhone Exclusivity Until 2012

AT&T will likely keep its exclusive hold on the iPhone for the next 12-18 months, rather than ending its exclusivity in mid-2010, says Jonathan Chaplin of Credit Suisse.""

"We believe there is a 75 percent probability that AT&T keeps exclusivity in 2010," says Chaplin.
"We conclude that there is only a 50 percent probability" that AT&T loses its exclusivity agreement at the end of 2010.

Chaplin also believes AT&T can afford to compensate Apple at a rate high enough that Apple could reasonably conclude it has essentially nothing to gain by allowing Verizon or other carriers to sell the iPhone.

http://gigaom.com/2010/02/04/att-seen-keeping-the-iphone-through-2011-analyst/

Giving Up on Hulu, Going Back to Cable

It's just one subscriber's view, but Dan Frommer of Silicon Alley says his experiment with getting all his entertainment video from Hulu and other sources has failed.

Two years ago, he thought he could do it.

Now, he says, "I really like having it." High-definition programming is part of the reason. But the main reason is that "there's still way too much good stuff that's not online."

"Anything that relies on a live, nationwide cable audience, like most live sports, or the Oscars, or "MythBusters," isn't going to be available for free online for a long time," he says.

"So while the "Hulu household" experiment was fine, I'm actually pretty glad it's over," he says.

"I agree with Henry Blodget that the TV industry is eventually going to be severely disrupted by the Internet, and eventually, I hope that I'll be able to get everything I want to watch online," he still maintains.

But it's going to take longer than it should, because TV companies are still fairly insulated -- especially as Comcast buys NBC -- and can protect their legacy business models for a while longer.

Bad and Worse News on Job Front

Unemployment rose in most cities and counties in December, signaling that companies remain reluctant to hire even as the economy recovers, according to a new report from the U.S. Labor Department.

The unemployment rate rose in 306 of 372 metro areas, the Labor Department says. As bad as that is, matters may be worse.

Job losses during the recession may have been underestimated by close to a million jobs. The prevailing figure is that the recent recession cost more than seven million jobs. It appears the Labor Department might have to revise those numbers, making the actual total eight million.

The shockingly bad news is that over the last 10 years, according to ADP data, the United States actually has added no net new jobs.

In December 2000 there were 111.65 million U.S. employees working. In January 2010 there were 108.14 million Americans working.

In May 2008 there were 115.2 million U.S. workers. That means the country must add back 7.1 million jobs--or more likely 8.1 million--to get back to where it was before the recent recession began.

That raises a question many of us have not been asking. Up to this point, the issue has been "when will the recession end?" with the implicit assumption that a relatively normal job recovery pattern would follow.

The recovery appears to have started, though we will have to wait for some time to date the actual turning. point.

The new question is what happens to growth rates and job recovery as the recovery continues.

Some have argued that consumer behavior has permanently altered because of the severity of the recession, which would imply a slower rate of growth, even if other negatives were not in place.

But there is no way to test the thesis of new consumer behavior patterns in the near term, because it will take years before consumers really are free to choose new patterns of behavior. There is a difference between "permanent" changes in behavior and "temporary" changes. We seem at the moment stuck in a "temporary" mode: people simply are not free to change their behavior at the moment. So long-term conclusions cannot be drawn.

That has obvious implications for the marketing of most consumer products and services. The recession is over, but recessionary buying habits will persist for some time. We cannot know whether these changes are permanent or cyclical.

Will Facebook Become a News Portal?

Is Facebook encouraging direct distribution of news content? Yes. Will it become an important "news portal"? That's hard to say, yet. But there is no question more news is appearing on Facebook, and that Facebook is encouraging that trend.

"Your friends on Facebook help you cut through the clutter so you can read what's most relevant to you, discover new items and carry on thoughtful discussions," says the Facebook blog.

"Just as your friends can post news throughout the day, so do many news outlets," Facebook says. By connecting with friends' Facebook Pages, users can stay updated and interact with outlets such as The New York Times, The Guardian and CNN, CBS Evening News and CNBC, Facebook suggests.

"At any given time, the news on your home page can consist of celebrity gossip posted by your sister, sports scores from the ESPN Page, and a political debate among your friends as they cite their favorite blogs," Facebook notes. "With so much information at your fingertips on one site, Facebook can serve as your personalized news channel.

By way of comparison, Google Reader recently accounted for .01 percent of upstream visits to news and media websites Google News accounted for 1.39 percent of visits and Facebook 3.52 percent.

In fact, Facebook recently was the fourth-largest source of visits to news sites, after Google, Yahoo! and msn.