I went to the Deloitte Media Consumer 2015 survey presentation presented by Matt Guest, their Head of Digital Strategy EMEA. The survey focusses on media consumption habits in the UK, and was an informal, highly interactive presentation. So interactive, that I apologise to the rest of the audience for asking so many questions.
The invite pulled out some key stats:
A third of us watch the same TV shows every day
61% watch on average one short form video a day
The younger generation prefers sharing social media content with a limited amount of followers
36% of adults feel they don’t need to go and see big releases in the cinema as they are available on demand so quickly
For up-to-date news content, 70% of users turn to Twitter
There’s a new shake up happening in the sports industry at the moment, and in one of the main organiser’s words, traditional sports “Can’t see if coming”.
Last week BBC radio produced a great programme called “The Rise of the Cyber Athletes” – it’s one of those radio programmes where they place a camera in the studio which kind of converts it into a standard TV programme…
The audience for watching cyber athletes compete in international electronic games tournaments is growing very quickly. And that audience is bringing considerable revenues and investment.
Cyber athletes have sports nutritionists, sports psychologists, training camps, rigorous training regimes – often up to 16 hours a day, and attract large audiences to live events.
Jason Gonsalves is the Chief Strategy Officer from BBH. He’s a passionate, blunt, experienced marketing executive.
BBH are increasingly becoming less of an ad agency and more working alongside brands on their business plans and digital strategy, e.g. the Guardian newspaper. Help businesses sell better in the connected marketplace.
The industrial production line constrained the pace of innovation. Whereas highly networked operations make ‘Agile Manufacturing’ a reality.
Companies such as Zara who can turnaround new fashion designs to shop floors in 12-15 days in an industry where competitors take around 12 weeks. All staff are trained to collate customer feedback and build this back to the manufactures.
3D printing reinvents the production line. Imagine 3D printing with fabrics or metals (already in use in the space industry).
Uber in the US very rapidly tailor their services to the customers’ needs. Within 24 hours Uber created a boats to work service during a metro transport strike. In a heatwave, they acquired 30 ice cream vans for users.
Crowd sourcing – there are 200 sites offering crowd funding and will become a $5 billion market in a few years. More brands will create incubators for start-ups. ‘Outsourced’ innovation through incubation.
BBH is doing this as well “due to the ad agency model being f***ed”.
Place: the age of hyper-context
Mobile internet access connects consumers everywhere to the global marketplace.
The smartphone is a powerful contextual computing device. It knows more about the consumer and your context (where you are, even the current weather where the user is). His view (no pun intended) is that Google Glass is an experiment in contextual computing.
Google now intuitively serves information in an intelligent, contextual way. Serving customers with more and more relevant offers.
Creating the conditions for Augmented packaging and point of sale to scale. When we have environmentally aware, contextual devices, then augmented services will take off
Price: Dynamic intelligent pricing
Getting price right is a tough challenge for any business. In Kingston a 98p shop has opened!
Pricing elasticity is a classic Big Data problem.
Dynamic pricing can enable retailers to offer different prices to different customers. Such as Orbitz. Based on user behaviour, location, even Mac v PC. The question is whether this is morally acceptable. (My note: this industry practice is called price optimisation).
From price aggregation to prediction algorithms… Kayak provides price trends, predicting whether prices will fall or rise in the next few days.
Future of financial services will move beyond credit and the transaction. See PingIt for a good example.
Promotion. The televisual web. The digital v TV debate.
Video content will be increasingly important on the web. The broadcast environment has been totally transformed – e.g. using Betfair on a tablet while watching a football game on the TV. Google Chromecast will accelerate the road to television/ web convergence. (My note: I’ve discussed Chromecast before – see This puppy changes everything). This will create a new environment for the video world, reinventing the television interface.
“What TV will be like in the future,” he said. “The simplest explanation is if you take your iPad and you stretch it out to be two metres and hang it on a wall that’s what it will look like. It will be beautiful, it will have all kinds of applications and it’s constantly getting better.”
Increasingly, all brands will become media brands who need to create and orchestrate a constant feed of content. e.g. Red Bull.
This morning I received an email from Amazon to say “Albums you have previously purchased on CD from Amazon are now available in Cloud Player for FREE”.
It’s always a nice surprise to receive something for free, and when I logged on to the Amazon Cloud Player, yes indeed the CDs I’d bought from Amazon in the last few years were all on there.
Half of all the CDs I’d bought from Amazon were gifts for other people. This reminded me of the nightmare I’ve had in the past with registering my children’s iPod Touch devices, and setting up iTunes for them. Or our ‘family’ Spotify account. Or just buying MP3s for my kids.
All of these purchases for other people are against the terms and conditions of use. I haven’t found a legitimate method of buying music for my kids like the old physical CD method. Perversely it’s easier to download music from BitTorrent for other people than legitimate methods. However, I’m completely against music piracy and feel that it’s morally correct to buy MP3s from iTunes, Spotify or Amazon and then give access to my kids.
Amazon has just brought this debate back to life where all the CD gifts for others I’ve bought in the past are now available forme to listen to via MP3s.
The next step will be for Amazon to offer the same service for videos and DVDs. If you bought a DVD film a while ago, you should be able to watch it over the Internet.
There are systems in place such as Ultraviolet which enable users to watch a film irrespective of the original purchase media. So if you bought a DVD or Blu-ray or Internet file for a specific film, you can watch it on the other media for no additional charge.
This is exactly the type of advantages that consumers want to see from cloud services. In fact, consumers don’t want to know about cloud any more than RAID storage, they just want life made easier, and with additional value thrown in as part of the package.
Three very interesting sets of financial results have been released in the last few days from digital companies.
Netflix – Q4 results
The future of watching video?
The company now has 33m subscribers worldwide after a 10% increase in the last quarter. (2m new subscribers in the US in the quarter, almost double the previous quarter, and 1.8m internationally in the final three months of 2012).
Net income in the fourth quarter was $7.9m, down from $35.2m in the same quarter in 2011. Net income for the year fell to $17.2m, down from $226m, as the company invested heavily in international expansion, launching in key new markets such as the UK. Revenues rose from $3.2bn to $3.6bn.
The Company sold a record 47.8 million iPhones in the quarter (that’s worth reading twice to take it in), compared to 37 million in the Q4 the previous financial year.
Apple also sold a record 22.9 million iPads during the quarter, compared to 15.4 million in the year-ago quarter. The Company sold 4.1 million Macs, compared to 5.2 million in the year-ago quarter – which follows the same downward trend in the PC market.
Apple sold 12.7 million iPods in the quarter, compared to 15.4 million in the year-ago quarter.
The most staggeringly impressive result is that gross margin was 38.6 percent, albeit it’s lower than 44.7% in the same quarter in the last financial year. International sales accounted for 61 percent of the quarter’s revenue.
Google – Q4 results
Remember that Google is less than 15 years old…
Google had $50 billion in revenues for the first time last year.
GAAP operating income in the fourth quarter of 2012 was $3.39 billion, or 24% of revenues.
Google Inc. revenues for the quarter ended December 31, 2012 was $14.42 billion, an increase of 36% compared to the fourth quarter of 2011.
Google Sites Revenues – Google-owned sites generated revenues of $8.64 billion, or 67% of total Google revenues, in the fourth quarter of 2012. This represents a 18% increase over fourth quarter 2011 Google sites revenues of $7.29 billion.
Google Network Revenues – Google’s partner sites generated revenues of $3.44 billion, or 27% of total Google revenues, in the fourth quarter of 2012. This represents a 19% increase from fourth quarter 2011 Google network revenues of $2.88 billion.
Other Revenues – Other revenues from Google were $829 million, or 6% of total Google revenues, in the fourth quarter of 2012. This represents a 102% increase over fourth quarter 2011 other revenues of $410 million.
Google International Revenues – Google revenues from outside of the United States totaled $6.9 billion, representing 54% of total Google revenues in the fourth quarter of 2012, compared to 53% in the third quarter of 2012 and 53% in the fourth quarter of 2011. Remember Apple are 61%, so they’re not too dissimilar.
As of December 31, 2012, cash, cash equivalents, and marketable securities were $48.1 billion!
I’ve had Sky TV at home for six months now, so Sky sent me a questionnaire asking for some feedback.
I said that the ordering and installation process was superb. Flawless. Within a month I had all the services installed, working perfectly.
Originally we bought Sky because we want to watch more sport, specifically football, on the telly, and it was getting frustrating not being able to watch it live without Sky. We’d used BT Vision for a few years, but to ‘upgrade’ to just being able to watch Sky Sports was a ridiculous process of upgrading (and paying to upgrade) our set top box.
Over the Christmas holidays I got a free trial to Netflix. My wife and I haven’t watched some of the more popular TV shows such as 24, so for a small monthly subscription, it seemed good value.
We now watch mainly Netflix during the week, with sport on weekends.
It’s amazing to see how far TV has changed from being limited to a handful of channels ten years ago, to multiple subscriptions and hundreds of channels now. And this is on top of our Spotify and Xbox Gold subscription!
I can’t see this model being sustainable. I think the future will see a standardisation across platforms and consumers won’t be forced into multiple subscriptions. A little like you can currently buy various additional channels through Sky.
Maybe we’ll do it through an Xbox style device, maybe through the TV itself (once Smart TVs become smarter).
So the Olympics are finally here. 7 years ago and around 9 billion quid later, we got to see an opening ceremony that was educational, humorous and grand (how did they convince the Queen to do that?), and a first day full of world records, surprises and disappointments. Fantastic.
On the digital media side, we’ve seen the BBC revamp their homepage (which became the same template as their microsites), and the video player has slowly been improving too. But when the Olympics started for real, the BBC video player sprang to life.
First, some background.
I don’t really subscribe to the second screen theory – I’ve seen some crazy stats that TV viewers use related apps on their mobile or tablet, to what they’re watching.
I do believe people (especially my family) sit on the sofa on their iPhone playing games or on Facebook – unrelated to the TV programme they’re watching.
We’ve seen interactive TV in various shapes and sizes. From crude red-button implementations (e.g. Sky Bet) to TV apps which mimic a web browser interface.
I’ve seen demos of TV apps which allow you to tweet or watch a Facebook activity feed during a programme – really annoying and disruptive.
However the BBC video player for the Olympics provides the perfect level of interaction, additional – read ‘relevant’ – information. Then throw in PVR-style functionality (for non-techies – it’s like Sky+ with rewind, etc.)
I watched the Tour de France on the ITV website and sometimes it was frustrating not knowing who was in the lead and the peloton – I wasn’t necessarily interested in specific positions, but you need to know if the camera is with the leaders or not.
The BBC player shows event information and allows you to look at a summary of a specific athlete as well. All in HD.
Here’s to the next fortnight, with super weather and medals galore for Team GB!
Recent news about RIM, the makers of Blackberry mobile handsets (when did people stop calling them mobile phones?) pulling out of the consumer market and maybe even putting themselves up for sale, got me thinking about other high profile, modern companies emerging, peaking and struggling in a short timescale.
Think about companies such as Blockbuster and TomTom.
Blockbuster first opened in the UK in 2009 and was sold to DISH Network last year after filing for Chapter 11.
Note that I’m not including short term, boom and bust .com-style companies from 2000, or more recent companies. I’m including companies that created a new market and had great profits for a period of time.
Have markets always been like this?
I hope that RIM recover. They found the ‘killer app’ – email – to drive smartphone usage into 21st century levels, at which point companies such as Apple and Microsoft improved the experience (mainly by moving the keyboard on to the touchscreen). However with technology become more consumer centric, I don’t think that exclusively targeting the corporate market is a successful move.