Octavianworld: Cesar Brea's Weblog, continued.

What's NYT.com Worth To You, Part II

OK, with the response curve for my survey tailing off, I'm calling it.  Here, dear readers, is what you said (click on the image to enlarge it):

(First, stats: with ~40 responses -- there are fewer points because of some duplicate answers -- you can be 95% sure that answers from the rest of the ~20M people that read the NYT online would be +/- 16% from what's here.)

90% of respondents would pay at least $1/month, and several would pay as much as $10/month. And, folks are ready to start paying after only ~2 articles a day.  Pretty interesting!  More latent value than I would have guessed.  At the same time, it's also interesting to note that no one went as high as the $14 / month Amazon wants to deliver the Times on the Kindle. (I wonder how many Kindle NYT subs are also paper subs getting the Kindle as a freebie tossed in?)

Only a very few online publishers aiming at "the general public" will be able to charge for content on the web as we have known it, or through other newer channels.  Aside from highly-focused publishers whose readers can charge subscriptions to expense accounts, the rest of the world will scrape by on pennies from AdSense et al. 

But, you say, what about the Apple Tablet (announcement tomorrow! details yesterday), and certain publishers' plans for it?  I see several issues:

• First, there's the wrestling match to be had over who controls the customer relationship in Tabletmediaworld. 
• Second, I expect the rich, chocolatey content (see also this description of what's going in R&D at the Times) planned for this platform and others like it to be more expensive to produce than what we see on the web today, both because a) a greater proportion of it will be interactive (must be, to be worth paying for), but also because b) producing for multiple proprietary platforms will also drive costs up (see for example today's good article in Ad Age by Josh Bernoff on the "Splinternet"). 
• Third, driving content behind pay walls lowers traffic, and advertising dollars with it, raising the break-even point for subscription-based business models. 
• Fourth, last time I checked, the economy isn't so great. 

The most creative argument I've seen "for" so far is that pushing today's print readers/ subscribers to tablets will save so much in printing costs that it's almost worth giving readers tablets (well, Kindles anyway) for free -- yet another edition of the razor-and-blade strategy, in "green" wrapping perhaps.

The future of paid content is in filtering information and increasing its utility.  Media firms that deliver superior filtering and utility at fair prices will survive and thrive.  Among its innovations in visual displays of information (which though creative, I'd guess have a limited monetization impact) is evidence that the Times agrees with this, at least in part (from the article on Times R&D linked to above):

When Bilton swipes his Times key card, the screen pulls up a personalized version of the paper, his interests highlighted. He clicks a button, opens the kiosk door, and inside I see an ordinary office printer, which releases a physical printout with just the articles he wants. As it prints, a second copy is sent to his phone.

The futuristic kiosk may be a plaything, but it captures the essence of R&D’s vision, in which the New York Times is less a newspaper and more an informative virus—hopping from host to host, personalizing itself to any environment.

Aside from my curiosity about the answers to the survey questions themselves, I had another reason for doing this survey.  All the articles I saw on the Times' announcement that it would start charging had the usual free-text commenting going.  Sprinkled through the comments were occasional suggestions from readers about what they might pay, but it was virtually impossible to take any sort of quantified pulse on this issue in this format.  Following "structured collaboration" principles, I took five minutes to throw up the survey to make it easy to contribute and consume answers.  Hopefully I've made it easier for readers to filter / process the Times' announcement, and made the analysis useful as well -- for example, feel free to stick the chart in your business plan for a subscription-based online content business ;-)  If anyone can point me to other, larger, more rigorous surveys on the topic, I'd be much obliged.

The broader utility of structuring the data capture this way is perhaps greatest to media firms themselves:  indirectly for ad and content targeting value, and perhaps because once you have lots of simple databases like this, it becomes possible to weave more complex queries across them, and out of these queries, some interesting, original editorial possibilities.

Briefly considered, then rejected for its avarice and stupidity: personalized pricing offers to subscribe to the NYT online based on how you respond to the survey :-)

Postscript: via my friend Thomas Macauley, NY (Long Island) Newsday is up to 35 paid online subs.

A Springier #iPhone Springboard: Why, When, and How

Once again it's the Year Of Mobile.  Let's put aside for the moment whether you think this is still another macromyopic projection.  Assuming you buy that, there's no denying the iPhone's leadership position in the mobile ecosystem.  If mobile's important to you, the iPhone desktop is "strategic ground" whose evolution you should care about.

A frequent beef about the iPhone is that all apps are accessed from a single-level desktop, and that you have to swipe across several screens to get to the app you want.  (Sometimes, this can be life-threatening, as when a friend launches PhoneSaber, and you're slow on the draw.)  Today we're mostly stuck with this AFAIK, since my cursory research (browsing plus buttonholing some Apple Store folks) didn't reveal any immediate plans to upgrade the iPhone OS to address this.

It's interesting to see how what tribe you're from influences how you'd solve this.  If Microsoft (of yore, anyway) made the iPhone, the solution might likely be some sort of Windows Explorer-type hierarchical folders.  If Google made the iPhone, the answer to this challenge might be Gmail-style labels / tags.  If you come from the Apple/ Adobe RIA world, Expose might appeal to you.

From the business side, my mind runs to the "Why" that will shape the "When" and "How".  Here's a 2010 prediction:  big firms will stop thinking in terms of having one iPhone app, and more in terms of fielding "branded suites" of iPhone apps. 

Let's say you're a media firm, with multiple media properties.  These properties might share a similar functional need solved by a common app, like a reader.  Or, a single media property (say, a men's lifestyle one) might want a collection of lighter-weight, function-specific apps like a wine-chooser, a tie-chooser (take pictures of your ties, then have the app suggest -- via expert opinion, crowdsourcing, or an API for your significant other to code to -- which of your ties might go well with a shirt you see / snap a picture of at the store), and so on.

Without more dimensionality to Springboard, the BigCo app developer has two choices:

• Lard up a single app to do more within the "brand experience" it creates with its iPhone app.  But monolithic apps are slower and less reliable, presumably even if you're using the Tab Bar framework.  Plus, monolithic apps don't expand BigCo's share of the iPhone Springboard desktop, presumably a desirable strategic objective.
• Build multiple apps that get scattered across the Springboard, compromising the "critical mass" feel of the "branded suite" (apps that appear together make more of a brand impression than apps appearing separately, on different screens.  I don't have any data to support this, and you could argue the opposite, that apps scattered across screens provide more frequent brand reminders.  I think folks might be likelier mnemonically to remember "five swipes to the men's lifestyle screen".  Anybody got data?).

The BigCo marketing department has a choice not available to the lowly app developer, however, and that's to write Apple a check.  It's reasonable to expect that we won't all get access to the new "MDS" (Multi-Dimensional Springboard) API BigCo gets.  Today, Apple already price-discriminates among iPhone developers: the Standard enrollment charge is $99, while the Enterprise is $299.  As this platform becomes even more important, and as BigCos want to do more with it, it's reasonable to expect that Apple will get even more creative with its pricing, private or publicly.

So that's the "Why".  As for "When", I'm guessing no earlier than 2011, given Apple's Cathedral-style approach to iPhone development (this might provide an opportunity for Android, BTW). (Thanks for re-tweeting this, @perryhewitt .)

And "How"? I'm betting on an Expose-style interface.  Swipe down to "zoom in" to a single screen, swipe up to move to a "higher altitude" and view multiple screens at once, perhaps with a subtle label or background (brand-appropriate, natch) for each one.

Who's closer to this?  What do you know?

#Foursquare: So Very 2006

All this fuss generally about 2010 as (finally) The Year Of Mobile and specifically about Foursquare reminded me of a post my former Marketspace colleague Michael Fedor wrote in 2006 about the social possibilities of early location-based services technologies like Kmaps (for the Treo 650, which was an early coal-powered smartphone for those of you born after 2007).  Re-reading the post made me (again) proud of Michael, and proud to have worked with him and our compatriots.

Facebook at 250 (Million): What's Next? And What Will Your Share Be?

Facebook announced last week that it had passed 250 million members.  Since no social network grows to the sky (as MySpace experienced before it), it's useful to reflect on the enablers and constraints to that growth, and on the challenges and opportunities those constraints present to other major media franchises (old and new) that are groping for a way ahead.

"Structured Collaboration" principles say social media empires survive and thrive based on how well they support value, affinity, and simplicity.  That is,

• how useful (rationally and emotionally) are the exchanges of information they support?
• how well do they support group structures that maximize trust and lower information vetting costs for members? 
• how easy do they make it for users to contribute and consume information? 

(There are of course additional, necessary "means to these ends" factors, like "liquidity" -- the seed content and membership necessary to prime the pump -- and "extensibility" -- the degree to which members can adapt the service to their needs -- but that's for another post.)

My own experience with Facebook as a user, as well as my professional experience with it in client marketing efforts, has been:

• Facebook focuses on broad, mostly generic emotional exchanges -- pictures, birthday reminders, pokes.  I get the first two, and I admire the economy of meaning in the third.  The service leaves it to you to figure out what else to share or swap.  As a result, it is (for me anyway) <linkbait> only sometimes  relevant as an element in a B2C campaign, and rarely relevant in a B2B campaign </linkbait>
• Facebook roared past MySpace because it got affinity right -- initially.  That is, Facebook's structure was originally constrained -- you had to have an email address from the school whose Facebook group you sought to join.  Essentially, there had to be some pre-existing basis for affinity, and Facebook just helped (re-)build this connective tissue.  Then, Facebook allowed anyone to join, and made identifying the nature of relationships established or reinforced there optional.  Since most of us including me are some combination of busy and lazy, we haven't used this feature consistently to describe the origins and nature  of these relationships.  And, it's cumbersome and awkward to have to go back and re-categorize "friends". (An expedient hack on this might be to allow you to organize your friends into groups, and then ask you which groups you want to publish items to, as you go.)
• Facebook is a mixed bag as a UI.  On one hand, by allowing folks to syndicate blogs and tweets into Facebook, they've made our life easier.  On the other, the popular unstructured communications vehicles -- like the "Wall" -- have created real problems for some marketers.  Structured forms of interaction that would have created less risky choices for marketers, like polls, have come later than they should have and are still problematic ( for example, you can't add polls to groups yet, which would be killer).  And, interacting with Facebook through my email client -- on my PC and on my smartphone -- is still painful.  To their credit, Facebook opened up a great API to enable others to build specialized forms of structured interaction on its social graph. But in doing so it's ceded an opportunity to own the data associated with potentially promising ones.  (Like prediction markets; Inkling Markets, for example, lets you syndicate notices of your trades to Facebook, but the cupboard's pretty bare still for pm apps running against Facebook directly.)

The big picture: Facebook's optimizing size of the pie versus share of the pie.  It can't be all things to all people, so it's let others extend it and share in the revenue and create streams of their own.  Estimates of the revenues to be earned this year by the ecosystem of third party app developers running on Facebook and MySpace run to $300-500 million, growing at 35% annually.  

Them's not "digital dimes", especially in the context of steep declines in September ad page trends in, say, revenues of leading magazine franchises, as well as stalled television network upfronts. But, folks might argue, "Do I want to live in thrall to the fickle Facebook API, and rent their social graph at a premium?"  The answer isn't binary -- how much of an app's functionality lives in Facebook, versus living on a publisher's own server, is a choice.  Plus, there's ways to keep Facebook honest, like getting behind projects like OpenSocial, as other social networks have done. (OpenSocial is trying to become to Facebook's social graph as Linux is to Windows.  Engineer friends, I know -- only sort of.)  And, for Old Media types who don't feel they are up to the engineering tasks necessary, there are modern-day Levi Strausses out there selling jeans to the miners -- like Ning, which just today raised more money at a high valuation.  Still too risky? Old Media could farm out app development to their own third party developer networks, improving viral prospects by branding and promoting (to their suscriber lists) the ones they like in exchange for a cut of any revenues.  In this scenario, content gets added as an ingredient, not the whole main course.  

What is true in the new environment is that reach-based ad network plays surfing on aggregated content won't pay any more.  Rather we have to think about services that would generate more revenue from narrower audiences.  The third-party games created by Facebook app developers referenced above demonstrate how those revenues might stem from value through entertainment.  As we speak, Apple and its developers are earning non-trivial sums from apps.  Phonetag has its hands in folks' pockets (mine included) for $10/month for its superuseful -- albeit non-social -- transcription service.  Filtering for relevant content is a big challenge and opportunity.  Might someone aggregate audiences with similar interests and offer a retail version sourced at wholesale from filtering service firms like Crimson Hexagon?  Looks like Porter Novelli may already be thinking down these lines...

Let's push the math: a winner service by anyone's measure would earn, say, $50M a year. Four bucks a month from each person is roughly $50/ year.  You'd then need a million folks, 1/250th of Facebook's user base to sign up.  Reasonability check -- consider the US circulation of some major magazine titles. 

If your application service is especially useful, maybe you can get $2/month directly from each person.  Maybe you can make the rest up in ecommerce affiliate commissions (a 10% commission on $125 in annual purchases by each person gets you ~$1/month) and ad revenue (the $12 million/year nut would require one dollar per member per month; a $10 CPM would mean getting each of your million users to account for one impression on your service a couple of times per week, more or less, to cover that nut.)

We also have to be prepared to live in a world where the premiums such services earn are as evanescent as mayflies, especially if we build them on open social graphs.  But that's ok -- just as Old Media winners built empires on excellent, timely editorial taste in content, New Media winners will build their franchises on "editorial noses" for function-du-jour, and function-based insights relevant to their advertisers.  And last time I checked, function and elegance were not mutually exclusive.

So, even as we salute the Facebook juggernaut as it steams past Media Beach, it's time to light some design workshop campfires, and think application services that have "Value, Affinity, Simplicity."

Nike+ : Yet Another Good "Structured Collaboration" Example

Good article in Businessweek Monday about Nike+, the social performance tracking service for devoted runners.  Excellent example of "Structured Collaboration"  for more useful and "brand-safe" user-generated content ("UGC").

• valuable information shared: performance data (mileage, etc.)
• logical groups to share within (running buddies, virtual races) 
• ease of contribution and consumption (data synced when you sync your iPod, charts make reading data easier)  

Businessweek notes members have logged 93 million miles so far, and that Nike's share of the US running shoe market has  gone from 48% to 61% in two years.  

 

Next up, Nike Baller for basketball players.  Follows all three rules as well, and takes #3 one step further by being implemented as a Facebook app to go where its users are.

One thing I like about Baller is that it's designed so that useful information can readily flow from it.  For example, see this graph (data is illustrative) of what you can readily produce out of the way it captures and organizes information.  If you're a Nike marketer with access to this information, you want to be talking to the guys that (as Guy Kawasaki says of political conservatives) are "high and to the right":

Qik+Twitter+Summize+(Spinvision): We Have Met Big Brother, And He Is Us

Imagine if you could sit above the world, at whatever altitude you wish,  and see anything through anyone and everyone's eyes, in real time, filtering these streams to let through only those things you're actually interested in. 

Today, we have real-time video streaming (now -- though not always practically -- in 3G) via folks with Nokia N95's and Qik.  Qik lets people know you are streaming via Twitter, and you can filter these "tweets" with Summize (which I wrote about yesterday)  You can also get your Qik streams onto YouTube automatically.  Spinvision, a brother to Twittervision and Flickrvision, lets you see videos as they are uploaded to YouTube -- superimposed on a map of the Earth.

Now let's roll ahead 12-18 months.  N95's won't be the only devices with high quality camera/ video capture and GPS capabilities -- so, many more people will have this capability.  3G will be more widely available and adopted.  Twitter and Summize will be features of much larger players' services, so they too will move from the fringe to the mainstream as more people inevitable discover the utility of microblogging for different purposes, and the utility of filtering all that microblogging (and microvlogging).   Presumably, you'll be able to stream simultaneously on Qik and YouTube.   Google's just announced the availability of Google Earth running in a browser (though strangely, they didn't keep in sync with the release of Firefox 3.0), so we'll be able to  make our mashups even more dynamic and accessible.  Throw in a little facial recognition to boot, while you're at it.

What does all this add up to? A crowd-sourced, global/hyper-local, digital video, roll-your-own-channel, keep-your-friends-close-and-your-enemies-closer news network. 

What does that make you?

Postscript:

Imagine if rather than turning over a videotape to the authorities, she had streamed this.  Or if Zimbabwe, Darfur, Afghanistan, Iraq, or New Orleans for that matter, were live and unedited, 24/7, from a thousand sources each.   How will that change us?

My Mobile Internet World Interview for Bnet.tv

Monitor Group: Ceasar A. Brea by golemur

Pricing iPhone Freedom

It's fashionable among the digerati to complain about how Apple forces you to use AT&T's network.  It's even more fashionable to unlock the phone so you can add third-party apps and decide what carrier to use.  Folks then howl when Apple "bricks" their phones with firmware upgrades, and they lose wonderful third party apps they've grown fond of.  When they get the chance, they lecture the carriers directly.

I see both sides of this argument.  Apple's not interested in open standards here, they're interested in control and profit of their (you read it here first) "i*" franchise.  Control means minimizing the damage that the tasteless hordes can do to their wonderful products, and the associated premiums Apple can command in the market.  Profit means the estimated $18/month/phone that Apple gets from AT&T.  Hey, it's a capitalist system, they're entitled.  So what if by virtue of running a closed system they miss the chance to learn from outsiders innovating on their system?  It's not clear to them how opening up today would be any smaller a mistake than it was for IBM to outsource its PC's OS to a startup called Microsoft a few years back ;-)

I'm more interested in deals that get both sides what they want.  Some ideas:

1. Apple could give users a choice:  "Either you pay us and we unlock, or AT&T pays us and we lock."

2. Apple could offer an "ad-supported" unlocked version of the phone ("This phone call brought to you by..."  Maybe a deal with Google to personalize the ads based on the subject of the conversation?  They already do this with Gmail after all, and the privacy complaints seem to have diminished.  Crazy I know, but...)

3. Apple could get affiliate commissions from the third-party developers who make money (however) by running their apps on iPhones.

4. Since many of these developers are too poor, maybe an infrastructure player who benefits from development and usage of such apps might kick in a fund to subsidize unlocking, directly or indirectly.

5. A direct-to-consumer play might involve a loyalty program -- "Buy $x with us each month and we'll pay this nasty fee for you." 

The first of these is likely to happen only in cases where businesspeople can write off $18 a month justifiably, to use some network or app that's pretty important if not mission-critical.

The second would take lots of ads.  if we make a really simple assumption of an $18 CPM for the iPhone (which assumes a nefarious degree of personalization and contextualization to get a rate this high), that's a thousand impressions a month or roughly 30-35/day, or ~50 during waking hours, or hundreds during the time the iPhone's actually used.  If we assume a lower CPM, the number of impressions skyrockets accordingly.  All in a form factor where advertising is still swimming against the current, on a number of dimensions.  So, not much joy here.

The third... maybe, for select developers, like maybe Amazon, which might want to deploy an app that works better than the browser would for the mobile context.  But it would take *a lot* of purchasing volume for this to work.

In the fourth case, certain infrastructure providers would certainly have a "geek credibility"/ goodwill-building reason to do this, though they'd have to swallow their pride to pay to reach Apple's customers.  On the other hand, these arrangements are not unprecedented in tech-land -- they're called "partner programs".

I think the fifth case, maybe in combination with the fourth, holds the most promise.  Partner X says to iPhone Geek Y, "Buy my Product Z and as part of the bargain I'll pay your Apple Unlocked fee, or even toss in an unlocked iPhone into the bargain."   I can even see Apple signing up for this, via iTunes maybe?  Buy $x worth of songs each month, we waive your fee (of course there's the question here of simply compensating folks for purchases they would have made anyway, but that elasticity study is for someone else to do, if it's not happening already).

Hope to see you at Mobile Internet World on November 13 (click the "Mobile Internet World Executive Summit" tab for info on our 4p session) to debate it further!

Postscript:  Via my colleague Simon Neale, Apple's addressing some of the complaints (SDK for third-party apps, though not yet network choice AFAIK).

November 13 Boston Panel: "The Anywhere Transaction Model"

On November 13,  I'm moderating a panel on "The Anywhere Transaction Model" at the Mobile Internet World conference at the Hynes Center in Boston.   See here for details: http://www.mobilenetx.com/seminars/ (click on the "Executive Summit" tab).  Hope to see you!

Postscripts:

Video of Ford Cavallari's session, "Learning To Profit Through Anywhere Advertising":

http://bnettv.com/player.php?id=919

Video of session I moderated on "The Anywhere Transaction Model":

http://bnettv.com/player.php?id=927

Interview Condenet's Carrie Seifer (one of our panelists) did for bnettv:

http://bnettv.com/player.php?id=923

Interview I did on the session for bnettv:

http://bnettv.com/player.php?id=912

Twittervision: From Cool, To Tool

Following on the recent post I wrote about Twitter, it's occurred to me that location is a major feature of many of the use cases I envisioned.  Today I came across Twittervision, an interesting Google Maps mashup described here. Picture scenarios that filter Twittervision into logical groups (pre-defined groups of people watching a webcast, or people linking and reacting to news, for example).  Now picture further parsing the Twitter posts for the occurrence of keywords signaling reactions, a la We Feel Fine, and then mapping those occurrences to a heat map overlay on the Twittervision Google Map.  What emerges is an "evolving geospatialized map of emotional reaction to events".  Surely this has to be useful to some news organization?