Digital Time

Content is not king in the land of convergence

ITV this week announced a loss of £2.7 bio for 2008. When Executive Chairman Michael Grade was appointed, he embarked on a ‘content led’ recovery for the company. Indeed it is generally accepted that what Grade has done is to focus on the content, significantly increasing programming quality and ratings, particularly for the week-end schedule. However in light of the repeated discussion we have had about convergence amongst main stream media, it is perhaps not surprising that a focus almost entirely on content is not what is currently required, delivery of the content is at least just as important.

The fact that ITV has just not understood how convergence and on-line developments are changing the nature of their industry is reflected in some of their ventures into and increasingly out of on-line businesses. The most famous of these is Friends Reunited, which they appeared to buy in some part because News International had acquired MySpace. Now ITV having failed to capitalise on the dynamic nature of social networking are trying to get rid of it. Similarly they are trying to sell on-line business directory Scoot, which like Friends reunited was a market leader before ITV got hold of it. Even more surprising they are selling the online video service ITV local. It is as if the focus on content has taken too much resource away from some of these key on-line businesses.

Clearly if ITV is to survive ( and it is difficult to see how it can remain in it’s current form) the online businesses need to be more closely related to the provision of content, effectively ‘adjacent’ businesses as opposed to stand alone businesses.

It is interesting to contrast the ITV situation with the BBC. In some respects the BBC model of not needing to immediately monetise on-line services lends itself far better to the development of such services, just as Google and Facebook have highlighted how monetisation comes with time so the BBC have been able to invest and develop their strong on-line brand and on-line provision of content. ITV by contrast seem to have bought established businesses with the idea of immediately generating revenues.

The dis-connect of internet phone services

 Interesting article in the Times this week about internet phone services: ‘Have time and tide run away from internet phone services already ?’ Of all the internet related technologies from Facebook to Twitter and Napster, the one where, to an internet outsider, there appeared to be an obvious success factor was internet dialling. Who wouldn’t want to get free phone calls to anywhere in the world ?

So why have internet phone services remained a relatively niche product ? Ofcom recently reported that the percentage of adults with broadband phone services dropped to 14% in Q1 2008, that is the same level as when Ofcom started collating the figures 4 years ago. The Times article suggests that internet phone services have not taken off because of the move from fixed line and mobile operators to move to flat-rate tarriffs rather than paying per call.

I would disagree. I think this is a classic case of a disruptive technological advancement coming too soon. It is one thing to give the consumer the ability to make internet phone calls, it is something else to make it easy for them to do so. I believe, in this age of convergence, we will at some point see handsets that easily allow the user to make and receive both fixed line calls and internet calls such that user behaviour does not need to change significantly in order to benefit from the use of internet phone services. When we achive that internet phone services will take off. It is far too premature to be calling an end to internet phone services. Ebay are in the process of trying to find a buyer for Skype, I would argue that whoever picks that up in the current economic climate is likely to bag a bargain.

The everpresent threat to the on-line brands

It remains difficult to find many broad statistical measures of on-line fraud. Perhaps the best is from IC3 in the US which compiles some measures of on-line fraud. What surprises me is that the major on-line brands do not do more to provide protection for the on-line consumer. The potential damage to their brands from major frauds or many minor frauds would be substantial. Internet auction fraud is the most reported offence to IC3, totalling almost half of all the complaints (44.9%) and yet ebay back in 2007 stopped providing any insurance to buyers. Perhaps because they had too many claims ? Some protection is now offered via paypal, provided you claim within 45 days. Guess what, you will find a lot of ticket sellers on Ebay for events that take place more than 45 days away - it seems very easy to take someones money and simply say you will deliver the tickets near the event time. Your tickets wont turn up and you have no recourse to ebay or paypal. Problems like this have helped build the business for the likes of Seatwave, who, with their more stringent security measures, are taking a lot of the genuine ticket buisnees away from Ebay. Google are used by many small companies to provide their ecommerce platform. Yet if the company you order goods from fails to deliver (as in 19% of all on-line fraud), google are quick to step out. In the age of social networking, it may not take too many dis-gruntled on line shoppers for the word to spread about the problems associated with buying through particular channels, whilst that also provides some inherent consumer protection, it could also have devastating consequences for the likes of ebay if they get caught out by too many ‘easy’ scams or are not seen to be providing more in terms of direct insurance themselves.

Digitally remastered or born again

I have been reading a book called Born Digital. The book was highlighted to me by someone I found myself corresponding with on Twitter. This confluence of events make me believe that I am getting thoroighly inbrolied in the digital world, I have come a long way from my initial sceptical views of the likes of Facebook and Twitter. Born Digital looks at the differences that those born post 1980 face in terms of their identity and social skills when compared to those of us that did not grow up in an on-line world. With what I have read so far I would say it is a very worthwhile read for anyone contemplating marketing products to this generation. It also brings up some interesting economic discussions in terms of the likley long term economic benefits to those that the book refers to as ‘digital natives’. There is a clear risk of further economic divergence between those countries where the internet and digital education is widely available and those countries or geographies where it is not. If you follow through the economic discussion it speaks strongly to the idea in the UK to try and provide broadband connectivity to the whole country at a low cost. There is a good summary of the book (which incidently can be updated wiki style on line) at: http://borndigitalbook.com/index.php

Lured in…

As my journey into on-line networking continues I feel I am getting lured into the time wasting nature of this environment. I find myself fascinated by the random mutterings on twitter which at first seemed so pointless. Never before I engaged with such a media did I imagine that I could become interested by Philip Schofields fire place or Jonathon Ross’ DVD collection! Following my last post I have even found some friends on facebook, not many, but enough to see the attraction, although I would rather not have been sent photos of myself at a 16th birthday party from a school friend who tracked me down after 20 odd years. I have now tried linkedin and suffice to say no one who I have worked with over the last 16 years is on there, further evidence of the lack of digital experience perhaps of those of my generation (or at least those who went into banking).

Delving into some of the research on social networking I was interested to read of the class divide between the likes of MySpace and Facebook. Apparently because Facebook was initially a Harvard only site and then only open to students with a .edu address it is seen as attracting a more intelligent community than MySpace which was open to all. This social divide seems still to continue, one example is with the military which has banned MySpace but not Facebook. The fact that demographic groups can be targetted on different networks presumably just adds to the marketers dream that is social networking sites.

More on the class divide can be seen at the link above,

Anti Social Networking

In an attempt to become digitally connected and in the interests of internet marketing it seemed appropriate to set myself up on these various sites that so many of the class are on. I mean of course the likes of Facebook, Twitter, Flikr and others. 

This week I have concentrated on Facebook and Twitter and have to say that it amazes me that these applications are a) so hard to actually get to grips with and b) so popular. Perhaps it is in part by defintion that digital networks reach out more to people that have most in common with those already on the network. When I log in to facebook I struggle to find anyone I know from my social and work circles. Whatsmore whilst it is very easy to get a log in for Facebook I have no idea what I am supposed to do  once I have logged in. Perhaps valuations are all about how many are on the network, rather than what value is to be had from being on the network ?

As for Twitter this seems to be a combination of largely unintelligible comment and barely disguised corporate marketing. I downloaded a couple of IPhone applications to highlight what were the most discussed threads and amongst the likes of ‘White House’ and ‘Obama’ you suddenly find Wii or IPhone, these threads seem to be full of direct marketing thinly disguised as social comment. It strikes me that in our discussions of the value of networks we also need to consider the potentially detrimental impact that in-direct marketing has on the credibility of the content of the networks. 

In the meantime if someone can explain to me what I am supposed to do on facebook now that I have a log in I would appreciate it ?

Next week.. perhaps linkedin better fits my anti-social networking profile.

Internet Pawn

With the internet and internet access having developed rapidly over the last few years, a period of relative economic prosperity and abundant credit, it is interesting to think how the dynamics and product innovation may change as we enter a potentially prolonged recessionary period. More specifically are there tools which have or can be developed on the internet which are aimed at helping during a downturn? Presumably auction sites at least for used goods are likely to attract increased interest from those trying to raise additional cash. As far as I can see there is not yet any kind of site which helps you find the best pawnbroking deal. In the US one business concept which does seem to be attracting some attention is ‘layaway’. Not a term I had come across before, but this relates to you going into a shop finding something you like and the store puts it to one side for you and you agree to make regular instalments to pay for the item. Once you have paid in full you can collect it. Buckle a youth clothing store was written up in the FT last week as bucking the retail trend and their layaway service was sighted as one of the reasons. It was very popular before everyone over the age of 10 had access to credit cards, but as that changes so this service is increasing in popularity. On the net there is a company Elayaway.com which provides this service for a vast range of products. My question is what else is out there which would have been unimaginable in an environment of easy credit but which stands out as a great idea now ?