Posts tagged ‘Technology’

A dying web, or a dead one?

App icons flying out of an iPhone

Billions and billions of customers served

While apps didn’t hit the 13 billion mark in the article I wrote in October (they did hit 10 billion in January ’11 so frankly, that’s close enough), some equally staggering stats have come out about Apps.

  • An estimated 4.5 billion apps sold in 2010, generating $6.8 billion in revenue
  • An estimated 15 billion apps sold in 2011, generating $19.7 billion in revenue
  • An estimated 21.6 billion apps sold in 2013, generating $29.5 billion in revenue
  • Of the nearly 400,000 apps live in May 2011, 62% are paid

While the numbers originally estimated in this October article were off, I believe the argument still stands.  Do you?

Here’s the original article:

I saw  on Gizmodo that 6.3 billion Apps from Apple’s App Store have been downloaded in just over 2 years. It took 5 years for music downloads from iTunes to reach this level.  This works out to be around 17 million apps downloaded each and everyday.

At this rate, the number of downloaded apps is estimated to reach 13 billion by the end of this year, the same as the number of songs downloaded from iTunes by the end of the year.  The fact that apps are reaching this big number at twice the speed of music downloads is pretty remarkable.

As a result, I’m beginning to buy Chris Andersen’s article in Wired Magazine where he argues the Web is Dead. (more…)

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Digital induced madness

I’m feeling a bit snarky after this weekend.  Maybe it’s the weather, or the chaos in Egypt.  Or maybe it’s because I am still so bemused, befuddled, bewildered and be-Fooled  at the whole concept of Digital Copy and why on earth studios are just so stubborn about thinking that customers give a damn about it.

I sat down with the kids to melt my brain to Despicable Me, and was subjected to a 3 minute trailer on how great Digital Copy is and how it’s the future of entertainment on the go.

As I watched the sleek and sexy production, I had to go “pffft” (meaning “as if”) when the trailer walked through a few use cases that no one on earth is going to ever do.  They showed a couple at the top of Mulholland Drive in a convertible, overlooking LA, with their laptop on the dash and watching a movie.  “Take it with you where ever you go” was the voice over.   I had to ask, who the hell is going to bring their laptop so they can watch a movie at the top of Mulholland Drive?

And then, it cut to a scene with a mother shopping in the store while her toddler, safely strapped in the cart, watched a movie on her mommy’s cell phone.  “Now moms can entertain their kids any time on any device.”  What?!  What mom is going to give a toddler a cell phone so that they can watch a movie in the store?  Wait a minute – maybe they are on to something!  With Digital Copy, you never even have to make eye contact with your kid since they will be glued to all your devices to watch movies!

OK, I get the point – watch movies wherever you are.  I’m all for it.  But really, what customers really care about watching movies where ever they are?  Aren’t movies best enjoyed at home, with your family or friends, on a screen that doesn’t cause your eyes to hurt, or your neck to ache, or your wrists to cramp?

This is the crux of the issue for all digital entertainment, Digital Copy prominently included, and for the dozens of companies/consortia out there trying to do something about it.  We’ve got to ask ourselves, who really cares?

By the way, Despicable Me was great.  And the best part was watching it with my kids on a lazy Sunday afternoon.

CES Eve

JB - the Frenchie with the quote

It’s CES Eve – are you just so excited you can’t stand it? For legions of Fools out there in the world, the most sacred and wonderful time of the year has arrived.  Christmas, Kwanzaa, Hanukah and all that are nice and everything, but the news and stuff that comes out of CES just can’t be beat.

Or can it?  This year I am a bit worried, and a bit haunted by Jean-Baptiste Alphonse Karr’s most appropriate and oft quoted “Plus ça change, plus c’est la même chose” – The more things change, the more they stay the same.

I could go on and on about a ton of things that are changing but staying the same (like 3D and still wearing glasses?), but I want to focus on one of my favorite topics: how we watch movies.  No doubt we are going to see a flurry of press releases of new entrants in the digital video space that promise new experiences and new ways to enjoy movies.

New new new

Did you hear about Intel’s entry into the space?  Intel Insider will offer downloads of films in high def to the PC on the same day as DVD and Blu-Ray for some Warner releases.  I guess their new Sandy Bridge chips will work so awesomely that customers will buy Intel based PCs so that they can watch movies.

And then there’s the much anticipated announcements from Ultraviolet (the consortium) based on the work they have completed to create the future of entertainment.  However, on the eve of CES, the top hit on news was something about the discovery that exposing carrot slices to ultraviolet light actually boosts the antioxidant activity of the colorful veggie.

La Même Chose

But my concern of much of the upcoming noise is that, well, so what.  We all still like to watch movies on DVDs and Blu-Rays.  When I talk to my friends about how they watch movies, they all mostly rent from Netflix and buy an occasional DVD.  I also get a sense that because of all these new offers and confusing array of prices and windows – like day and date VOD, changing rental prices through iTunes, different HD and DVD prices, DVDs becoming available so soon after it’s in the theaters – that we as consumers are just waiting ‘til content is cheap enough and convenient enough to consume.

I get a sense that even with all this new stuff out there, we are all just doing the same things we ever did.  While there is so much change out there, everything kind of is still the same.  But, I’m hopeful that CES won’t disappoint…I think.

A page from WikiLeaks

Leaks can, and do, happen

Based on my new Assange-like desire to set information free, today’s topic will consider some flaws with some leading industry consortia.

UltraViolet, whose unfortunate doppelganger to the skin-stinging UV, “is being designed to create a revolutionary new approach to digital entertainment,” and clearly, to create a viable alternative to Apple.  UV’s goal of interoperability — of content and devices across retailers so that consumers don’t even need to think about what content works with which devices purchased from what retailers — is noble and exactly what consumers need to address our confusion that the industry itself has unfortunately created.  Even my Mom would appreciate their efforts to make things simple.

Alignment where there is none

But achieving interoperability comes down to the huge task of aligning the often competing interests of all the players in the industry.  From what I can tell from a scan of the site and some documents, it is no wonder that UV – which began more than 24 months ago – is still talking about the thousands of technical specifications, rules, requirements, obligations, licenses, and alphabet soup of newly created acronyms.  However, while UV states it is making technical and legal progress toward creating a “revolutionary approach,” I just don’t know.  It seems to me that UV is underestimating the importance of key players.

As we look at the 60+ members of the consortium, there are significant companies from all over the industry – but who’s missing from the roster of those companies that are actively involved?  UV has been so focused on creating the “right” technology and standards that is has overlooked companies that have access and relationships to consumers that are most likely to adopt.   Companies that have existing customer bases that can drive awareness, education and interaction with consumers are not actively engaged, nor do they seem motivated to contribute.

Key non-players

Netflix, while listed as a member, doesn’t really seem overly concerned with UV.  Based on Netflix’s actions of continuing to march ahead in the marketplace with the AppleTV deal and the more than 200 devices they are on (not to mention the stink they are causing with the studios), it doesn’t seem they are playing along.  Have any of you seen public announcements from Netflix that mention UV?

Players with lots of customers walking through their doors are choosing to wait and see how far the UV can get without them are the large retailers like Amazon and Wal-mart.  Both of these retailers have chosen a different route.  Amazon’s 99 cent TV episodes through Amazon On Demand indicate it is getting into the game – and is activating a price strategy to steal share.  But how is Amazon engaging with UV?

Wal-mart’s acquisition of Vudu was interesting (and expensive), but we haven’t really heard that much about it.  Another noticeable absent retailer is Target.  We have to remember that these retailers are key to driving adoption of new products and services.  And the only true retailer that is participating like Best Buy seem to be going down their own path with CinemaNow.  So you have to ask, why aren’t there more retailers involved?

Bueller?

After thinking about this for the past few days, UV needs access to consumers to drive awareness and ultimately adoption.  It must determine how to motivate companies that have real face to face relationships with customers like my Mom so that they can explain what undoubtedly will be, um, totally confusing.

Without the key players there, the danger is summed up in the classroom scene in Ferris Bueller’s Day Off.  I unfortunately see Ben Stein as a metaphor for UV, and UV will be looking for Customers.  Customer’s…Customer’s….Customer’s?

Big scissors

Following up my cord-cutting article from a few weeks ago, I picked up some staggering evidence that we are witnessing a seriously disruptive trend for cable companies.  At the same time, these stats provide sunny evidence for online video sites.  Check out these tidbits:

Losing subscribers

According SNL Kagen’s recent analysis:

The US multichannel market fell by 216,000 subs in Q2 2010 and again was down 119,000 subs in Q3 2010.  This represents the single largest dip for cable subs since 1980!

Customer behaviors are shifting

In a study of 800 customers (ok, it’s not a HUGE group surveyed but I think is decent directional data):

39% watch TV online or on a handheld device at least once a week; 25% watch TV online or on a handheld device at least once a day

And obviously the next generation of viewers is shifting

37% of 18-34 year olds watch TV on an alternative platform; 44% of 15-17 year olds do the same

More time is being spent watching video online

175 million US Internet users watched online video content in October for an average of 15.1 hours while US Internet audience engaged in 5.4 billion video sessions

And advertising is following

There were close to 4.6 billion ads viewed in October…

1.1 billion video ad impressions at viewed at Hulu (that’s 37 million per DAY), 533 million through Tremor Media Video Network, 435 million through ADAP.TV (a video ad network), 374 million through BrightRoll Video Network.

Those are some pretty big numbers…And to put things in perspective, another article talked about TV’s effectiveness at pulling an audience together and cited Super Bowl 2010 with 121 million viewers at its peak.  Indeed, TV still rules for pulling together a one day audience, but Hulu and the others sustain some massive audiences.

This all adds up to some bleak news for cable companies.  But I’m thrilled with the abundance of choice out there that’s damn near free.

So for now, where are those scissors?

No more Keychest

Fresh news from over my long weekend that relates to my previous post: Disney’s Keychest is “being subsumed by a larger plan.” Thanks, paidContent.org and Andrew Wallenstein, for the coverage!

It seems that Keychest will no longer be competing with Ultraviolet, and my earlier concerns of the formation of competing format islands is less likely to happen. According to Bob Chapek, President of Distribution at Walt Disney Studios, the hard work that was done with Keychest will become “the engine for [Disney] to harness the power of multiple Disney utilities into one ecosystem.” I’m not really sure what that means, but I look forward to hearing more about Disney Studio All Access to reinforce my (and your) desire to buy Disney products.

When this is all said and done, I think this is good news for you and me. It means that while UltraViolet and its United Nations-like workflow of reaching agreement still has a long way to go to making something happen, you and I will benefit from less clutter in the marketplace. While Disney nor Apple have not joined Ultraviolet, at least this story closer to having a happy ending for us.

Rentership beats ownership

There has been lots of recent buzz in the press about Redbox announcing its digital service in 2011. Today, Wal-Mart announced that it is (finally) doing something with its $100 million acquisition of Vudu. These announcements got me to thinking about the not-so-subtle shift  from Ownership to Rentership and my personal conflict of what this is doing to the entertainment industry.

Redbox and Wal-Mart are up to something

As way of background, Redbox insinuated that it would add a Web-based rental service to its network of DVD kiosks next year.  This means if the Coinstar-owned company is going to deliver on its promise, Netflix may have a competitor sometime in 2011.

Wal-Mart announced with that Toy Story 3, customers will receive a download code that they can use on their nearest Vudu player to stream the movie at any time without the disc involved.  Does this signal that Wal-Mart is finally getting into action in digital? Maybe Wal-Mart will do something else with Vudu, like team up with Redbox.

These movements tell me that big players are laying the groundwork to help me rent more content than ever before.

From Ownership to Rentership

A great article in Wired talks about how we are slowly moving away from an Ownership Society of the American dream of owning stuff like houses, cars and collections of CDs and DVDs.  Instead, we are moving to more practical Rentership Society where we can enjoy unlimited choice that comes without the cost burden of owning stuff.  For those of you who have thrown a ton of cash into a kitchen remodel only to find out that you break even on the sale of a house, you understand.

While I’m holding on to my house and not moving into a rental down the street, my personal shift from Ownership to Rentership is really clear in how I consume media.  I no longer faithfully go to Best Buy every Tuesday to get the latest.  I now wait a bit, sample stuff from iTunes or Grooveshark or Last.fm or Pandora and then, maybe I buy it.  Instead of buying the DVD, I rent it from Netflix.  And NOW, as I recently wrote, I am increasingly viewing stuff through Neflix my AppleTV.

What about entertainment?

But wait a minute.  I am conflicted.  I am a happy consumer, but what does this do to the entertainment business?  With labels (and just forget about artists) making fractions of pennies for each stream, subscription service revenues don’t really amount to a hill of beans. With this trend, artists will have to work a helluva lot harder to perform their music live and make money.  With more than 50% of a studio’s revenue coming from selling movies and TV, well, let’s just say that renting does not make them much money either.  At this rate, studios stop making movies.  Scary stuff.

So what’s the entertainment industry doing about it?  Lots of companies have invested in consortia like UltraViolet and Keychest to answer these questions, but what are they thinking in terms of rental?  I am skeptical of industry groups doing anything in the best interest of the customer.  Afterall, content owners just want to protect their bottom line. The entertainment industry needs to remember:

Everything, everywhere, all the time. That’s the dream of the Rentership Society. And we’re almost there. If you want to be able to possess some things, in some places, some of the time, well, keep on buying. But I vote for infinite abundance, on demand. Doesn’t that sound like the new century’s American dream? – From Wired’s Abandon Ownership!

Are you moving from ownership to rentership?  What does it mean for the industry?

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