Techie and the Media

The Upside Of The Downside of Technology

ONE THING I LOVE ABOUT traveling, and trust me there aren't that many, is that I get to grab all these freebie business magazines. I picked one up the other day and came upon an article about Bluetooth--stereo Bluetooth and the Advanced Audio Distribution Profile (A2DP).

Now, for the uninitiated, Bluetooth is short-range radio technology that allows you to network devices wirelessly. Many mobile phones, PDAs, laptops and desktop PCs are Bluetooth-enabled. The wireless link can be up to approximately 30 feet and allows data to be exchanged between 2 Bluetooth--enabled devices. One of the advantages of Bluetooth is that the devices do not need line-of-sight (meaning they do not need to be able to "see" each other) and data exchange rates can reach upward of 700 kilobits per second. A2DP, on the other hand, is a technology that allows users to stream music from a mobile phone, for example, to a headset without wires.

So now that I have bored the pants off you with the technology, let's focus for a moment on the application. There has been much made of the "problems" that Bluetooth has caused the entertainment, think music, industry in Europe, because people are "trading" content files off of their mobile handsets without necessarily paying for the content. Think of this as Bluetooth piracy. In fact, The Mobile Entertainment Forum (MEF) recently published an analysis that claimed that, and I quote, "around 80% of mobile phone content has been hacked or downloaded onto mobile phones, illegally from websites, or through the use of Bluetooth, memory cards and other storage devices . . . . Combined, these activities are predicted to cost the mobile entertainment industry around 2.7 billion [euros] this year alone. An additional 800 million [euros] is missed due to the lack of widespread interoperability for content across PCs, mobiles and MP3 players. In total a staggering 3.5 billion [euros] of revenue will not be realized, which is in excess of half the income from the entire European mobile entertainment industry."

Now while I agree that this has a huge negative impact on the industry, let's try and look at the glass as half-full for a moment. Here in the U.S., Bluetooth-enabled handsets are growing. A recent study commissioned by the Robert H. Smith School of Business at the University of Maryland found that 11 percent of those surveyed had Bluetooth technology as a current feature of their mobile phone, 45 percent had used the technology, and 30 percent considered the technology desirable to have--more so than picture messaging, text messaging and the mobile Internet. Now, if we took that usage and interest, applied demographic segmentation and device penetration in the market and came up with the number of handsets that were owned by, let's say, 16- to 25-year-olds, all of the sudden we could turn this trading behavior that Bluetooth technology enables on its ear.

The music industry was a bit late to the game, but even they are trying their hand at using "traditional" Internet-based peer-to-peer networks as a marketing platform. Now, let's take that mobile set and see how we can capitalize on that emerging trading behavior as a new marketing vehicle. In much the same way that brands are starting to tap into online social networks, brands should also be looking at these personal mobile social networks as the next frontier. I guess we could call it miral initiatives--the application of a viral campaign on a mobile platform.

Now some of you may be stunned, knowing that I am generally a "glass-is-half-empty" kind of gal, that I would be touting a strategy that is at least two years out before becoming mass. But I guess the adage about old dogs and new tricks is true, but not as true as the one about history repeating itself. My suggestion is simply that maybe it is time we start looking at the upside of the downside of technology. You tell me.

You Aren't In Kansas

Variety wrote a great piece today about Mobile TV in South Korea. Mobile TV passed the 1 million subscriber mark. Now before you get excited, understand that this is not middle America. This is a fully-wired, technology happy consumer base.  Geo-enhancements also contributed to the astounding adoption levels - the spread of broadcast networks beyond the Seoul regions, increase in enabled technology and coverage in transportation tunnels.  Makes you stop and think what needs to happen before this takes off in the U.S.

Wireless Baby

A while back, I wrote a declarative technology manifesto. One of the technologies that I identified was wireless. The following is just an example of some of the developments in this sector.

Chaperone. This is a new branded service from Verizon Wireless, a venture of Verizon Communications and Vodafone Group. This announcement follows on the heels of Sprint's service, which was announced in April, and a Disney branded service with the same feature set.

Technology Value: High. This type of service is the precursor to location-based-services that will travel up the wireless food-chain into mainstream handsets and service packages.

Consumer Value: High. Parents will pay a premium to keep their children safe. Remember, services that are of value to the target will get adopted quickly.

Brand value: Low-medium. It is unlikely that advertisers will get to use this platform until the handsets move up a demo or two.

ESPN Mobile. After much ado about nothing, ESPN mobile has come down drastically in price. Handsets are being discounted heavily, as is package pricing.

Technology Value: Medium. If anything, this is an expensive experiment in what features and functions next-generation handsets should have, and how consumers value branded-technology and services.

Consumer value: Low. Content may be king, but is not persuasive enough to get even the highly engaged sports consumer to adopt on a mass scale.

Brand value: Low or high. With such a small group, you are either loving this crowd (the consumer is engaged) or abandoning ship (there is no consumer). It is the ultimate in mass versus niche.

IDC. While not a mobile company, it identified what its executives believe to be the Top 10 emerging wireless entertainment companies to watch. The are, in no particular order: Action Engine, Airplay, iLoop Mobile, LOC-AID, Neven Vision, Promptu, Roundbox, Surfkitchen, Third Screen Media, and Volantis.

Technology value: Medium. If you are a manufacturer, you likely do not have these guys on your radar. If you are an applications developer, you might have a clue.

Consumer Value: Low. Much the same way that consumers watch programs, not networks, they likely don't care about the companies themselves--only the services they provide.

Brand value: Medium to high. At least you can try and stay a couple of steps ahead of the marketplace by getting educated and getting ready. Moreover, the truly innovative brands will see it as a new product placement platform as much as an advertising vehicle.

.mobi. This new domain is a designation for Web sites that are designed specifically to be viewed on mobile phones. While this was approved by Icann (the Internet Corporation for Assigned Names and Numbers) last year, it was not until recently that a company was able to buy this kind of domain.

Technology value: Medium to high. At best, this will provide an agreed-upon framework that will force development by a certain set of standards that have been developed by the W3C (the World Wide Web Consortium, which is the governing body for Web standards). At worst, the development community will ignore it and continue to try and massage Web-based content for an alternative form factor.

Consumer value: High. Any improvements over the experience that consumers have been faced with is high value. Remember that a good experience is a repeatable one.

Brand value: Medium to high. Any time standardization comes into play, metrics, measurement and formats are soon to follow. For anyone schooled in the art of explaining the return-on-investment, standardization and predictability are key variable of the equation.

While each of these developments may seem unremarkable on its own, the insights and opportunities that they represent in concert are important. Together, they point to the formation of a viable and sustainable mobile platform that is able to deliver content and services that will elicit a positive consumer experience. After all, isn't that the goal?

Oh, That Battery Thing I was Talking About

The Business Week headline reads:  "Samsung's Fuel-Cell Gambit: The South Korean outfit is backing a project to build handsets powered by fuel cells instead of conventional batteries"

A good starting point.

The Sequel to the Prequel Before it has Aired

This is will only make sense after you have read tomorrow's blog entry so bear with me.  The five outlying technologies to add to the Technology and Media Futures Consumer Technology Manifesto are as follows:

1. IP Video

2. Next-generation game consoles

3. High definition technology - from TVs to DVDs to programming to STBs

4. Podcasts

5. Anything that increases the efficiency and security of content distribution networks

When the Student Eclipses the Teacher

Does Sony's move to support Apple's choice of the AAC format mean that Steve Jobs has won the war? Or merely the battle?  All I know is that in November of last year, I wrote a piece about teaching the mass market and the importance of critical mass. Hang on folks, the ride has begun.

iPod as a Verb
by Lydia Loizides

         April Fool's Day, 1976 and Apple comes to be. After several product launches that rocked the industry and became the basis of what we know computers to be today, the Apple Macintosh was launched in 1984 with the now famous Super Bowl advertisement based on George Orwell's novel 1984.
        Fast forward. The year is 2001 and there are approximately 2 million MP3 players in the U.S. market and many, many legal and illegal music services. But the market is going nowhere, fast. P2P hysteria, a global music market crash, and little-to-no mass consumer awareness, and along comes Apple with a music player called the iPod. Two years later the connection from platform to service is made and iTunes is launched. By the end of 2004, Apple had sold 200 million units. Three months later 300 million songs had been sold. Three months after that, the company says it has hit 460 million songs sold. In the course of 4 years, the iPod has grown to dominate the market with 76% market share as of June, 2005 (Jupiter Research puts the number at about 12 million MP3 players connected in the U.S.). Apple has since become synonymous with online music (much to Sony's dismay) and there are numerous derivations of the iPod that have flooded, and more importantly, been adopted by the consumer market.
        So why the diatribe? Because all great businesses need critical mass before the chance of a product succeeding is better than 50/50. The iPod is almost there. The fact that video for the iPod costs $1.99 today, it really doesn't matter. It doesn't matter that the quality of the video at full-screen is no better than VHS. It doesn't matter there are over 15 applications that I can find to break the rights management on the file and share it with all my friends if I were so inclined  It doesn't matter that there is only a straw-man of a business model in place.  What matters is that the iPod for video will entice, educate and entertain an entire generation of mainstream consumers who, up until this point, had no idea what the term "mobile content" meant. Having sold and downloaded over one million videos in the first 20 days after launch, Apple has proven a market exists and that people are willing to pay.  The iPod, an entertainment platform small enough to fit into my purse, will "cross the chasm"  to mass market faster and better than any break-out technology of it's generation (DVD not included).
        Hang on folks, we are in for a hell of a ride.

Where There is a Will, There is a Technology

Don't blame the messenger, is this case, the technology.  The Mobile Entertainment Forum today  published a release about the impact that the lack of mDRM has on the the European industry.

In conjunction with Frost & Sullivan, the MEF says that 80% of all mobile phone content has been acquired illegally - whether that is through websites, Bluetooth, or memory cards.  Like every other delivery channel, MMS and premium SMS platforms are being compromised. The estimate  is that these activities are producing losses in the order of €2.7 billion for 2006 alone. Another €800 million will not be realized due to the lack of interoperability for content across PCs, mobiles and MP3 players. The grand total: €3.5 billion lost. 

Is the U.S far behind? Will wireless being touted as the next break-through technology platform for content, maybe we ought to pay attention to our brethren across the pond. After all, where there is a consumer will, they will generally find a way.