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Content is King. Can Mobile Data Save the Music and Film Industries?

Chasing our present, asking it to help us change our future, is not going to help. Instead, the best way to predict the future is to create it. I just finished reading the book called Who Moved My Cheese: An Amazing Way to Deal with Change in Your Work and in Your Life. It’s an old tale, beautifully narrated by Spencer Johnson – one which has helped millions around the world. Can it help the mobile industry as well maybe… the one who is losing 23 billion USD to the creators of Whatsapp and the likes?

Mobile phone companies cannot survive the next 10 years by just selling 2-year contracts, minutes and SMS. But from my position as a customer, I see them dead set on a loosing strategy. Let me take SMS as an example, and here’s what I think makes Whatsapp an unbeatable competitor to SMS: 1) it’s reliable and you know when the recipient has read your message, 2) you can easily converse with multiple recipients independent of what device they have, and 3) it integrates easily with your address book. If everybody had an iPhone, only iMessage would be better! So sorry telcos… you won’t be beating this. Look elsewhere.

Back in 1996, Bill Gates prophesied that content is king: “Content is where I expect much of the real money will be made on the Internet, just as it was in broadcasting.” We all know that he is right now. We also know that those who did not master the art of adaptation have failed to make it through…

Remember Blockbuster? In 1994, it was purchased for 8.4 billion USD, calling for the acquirer Viacom’s chairman, Sumner Redstone, to call it a “global media colossus.” But it filed for bankruptcy in the United States in 2010. The most cited management mistake is its refusal in 2000 to acquire Netflix for just 50 million. Dish Networks acquired Blockbuster out bankruptcy in 2011, but finally admitted at the end of 2012 that it was scrapping its plans to turn it into a Netflix competitor.

When it comes to music, according to IFPI, “digital” now accounts to above 30% of revenue. Yet the same report, shows that despite the growth of over 8% between 2010 and 2011, this did not compensate for the loss in physical sales, and that the music industry slumped 8.7% globally (to USD 10.2b). It all started with a fight against Napster. That battle was won in 2001, but the war is long condemned to being lost.

The biggest enemy to the music and film industry is digital piracy. IFPI/Nielsen report that globally 28% of internet users regularly access unlicensed services.

The rise in revenue from digital accounts for the music industry is however encouraging. A reversal may eventually materialise also for the film industry: last year, GIA (Global Industry Analysts) estimated that the value of the movie-rental industry will rise to 4.7 billion by 2017.

But the whole point is why wait for the future to unfold when the mobile industry can be changing all of this, creating a bright future for itself and the arts? GfK reports that in 2012, phones accounted “for 17% of total time spent with the Internet across all devices, compared to 12% in 2011″. So shouldn’t this industry that’s loosing 23 billion USD a year to mobile texting applications, be investing sharply to build revenue from content and thus more time spent on the Internet?

Spotify comes to mind – “Turn your phone into a magnificent music machine with our award-winning Spotify Mobile Apps for iPhone, Android, Symbian and Windows Phone. Stream from our full library, or go offline and listen to your playlists without data charges.” says their page. The biggest inconvenience to this is that digital rights laws don’t allow Spotify to offer this service without geographical limitations.

At an investment from the telcos, of the total worth of the music and movie industries, everybody stands to benefit. Happier customers with cheap music and movies on-the-go. Telcos with a growing market propped by content which 13% of the global population spend their time on the Internet for. Music and film industries that can stop battling digital, and embrace it to the extent that it will be their main funding agent for years to come.

Here’s the proposal in figures: Should the telcos globally invest 10 b USD (the whole value of the music industry) and 4.7 b USD (the perceived value of film rental in 2017), and so 15 b USD annually, this would account to:

(Thanks for the inspiration M.R.)

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Revealing the next internet success story

When did you last think you need to create the next internet craze and become rich? Friends ask me if I have an idea for the next ‘big thing’. My reply is that everbody has ideas – yes of course, including me.

But, the internet is only just a tool for every one of the next big things. For years to come, every one of these is going to be a distributed system, and so one whose success is based on the collective effort of its users. Users who create content, share experiences, co-build knowledge and collectively solve tomorrow’s problems.

You only need to browse the list of Newsweek’s Digital 100 Revolutionaries on the 2/9 July double-issue. Or read this week’s Time story about Salman Khan’s Academy that teaches kids over YouTube. Or look around you, at the apps you use most frequently. None of these would survive if the users were simply ‘users’ – they are also contributors and co-creators. That’s what social media really is about.

Are you planning the next successful internet success story? Then you must be thinking about actively engaging your users in true Web 2.0 spirit.

Sony Network Breach and Trusted Identities in Cyberspace

The first law suit that hit Sony after the network breach comes hours after it revealed users yesterday that the Playstation Network and Qriocity experienced unauthorised access between the 17 and 19 April. The suit was filed on the grounds that Sony did not take reasonable care of its users data and that it took the company too long to inform its clients of the breach.

The law suit happens at the same time that Barack Obama is pushing a National Strategy for Trusted Identities in Cyberspace. The White House is worried that economic growth is being slowed by the trust that people have of Internet services. Breaches like that of Sony surely do not help to secure trust and in fact harm the whole climate… but could it have been avoided? Is it true, as is claimed by the law suit filed by Kristopher Johns, that Sony did not take “reasonable care to protect, encrypt, and secure the private and sensitive data of its users”? Whatever the case, I agree with Barack Obama’s statement that enhancing trustworthiness and privacy will boost businesses’ and customers’ confidence and lead to growth and innovation, online and across the economy in general.

Share iPhone 4 Internet connection with your iPad

Have you tried to tether your iPhone 4 internet connection to share it with your iPad? It’s not possible. But now that iOS 4.3 software update is out and downloadable through iTunes, iPhone 4 users are offered a new function called Personal Hotspot. Apple’s website says… “Enable Personal Hotspot and share your mobile data connection with your Mac, PC, iPad or other Wi-Fi-capable device. You can share your connection with up to five devices at once over Wi-Fi, Bluetooth and USB.” Thanks Apple…. it’s been a long while coming but we’re all grateful that this basic feature is finally here.

In my post on iPad 2 of the 14 March I had mentioned the Piper Jaffray survey that found that 65% of those who bought an iPad 2 on its US launch date already owned an iPhone. Now, I ask, will any iPhone user buy an iPad 2 with 3G? Probably not. It will be interesting to look at the trends of purchases following Apple’s release of Personal Hotspot on iOS 4.3.

People always need to know more… is Facebook always going to be enough?

People in general need to know just about enough about anything that surrounds them. Some of this is called is gossip, some known as current affairs and some as networking. It makes knowledgeable people interesting. It makes it easy for this lot of interesting people to have a thousand friends on Facebook – connecting with everybody, sharing photos, making events popular by attending them and YouTube videos a success because they post them on their walls.

Facebook Creator ZUCKERBERG (Photo by Andrew Feinberg - Everystockphoto.com)
Facebook Creator ZUCKERBERG (Photo by Andrew Feinberg - Everystockphoto.com)

A decade ago, the Internet was nicknamed the Information Superhighway. The world talked about building an Information Society. Companies talked about how many Knowledge Workers they employed. In the world we live in, you don’t ask somebody who comes in for an interview if they have Internet at home. You don’t ask if they use email, if they’re familiar with how to write a document on a computer, or if they are on Facebook. People don’t send in typewritten CVs through the mail. They apply online, or send a PDF through email.

At the same rate that people have become more connected to the Internet, computing resources have also become ever so more accessible. Using computing power to extract intelligence has become infintely more possible. We now need not think how much such power we need: we can hook to a grid that gives us much as we need, when we need it. Virtualised computing resources, available on demand, are sometimes referred to as cloud computing. The information superhighway has become a reality not because you can Google up just about anything, but because all this data is now connected. There is also so much computing resource that we can crunch it into the useful information we need, when we need it.

So, begs the question: When will this infinite computing resource be used to connect data and people intelligently? When will this be done so that it matters not where the data is stored, what email account you used to upload it, whether you tagged that person as a friend on Facebook or whether it’s on the Googlemail contacts?

Today: You meet somebody at a party. A month or so later, you need a graphic designer and you remember that the person you met at the party was a freelance designer with her experience at one of the big publishing houses in Milan. You remember just the first name: Inga. So you go to Facebook, look up the friend who organised the party. You look up his friends, and in it you find Inga. Then you add her as a friend. When she accepts the friendship request, you can send her a message asking to meet and discuss the project.

Tomorrow: You meet Inga at the party. A month later you need a graphic designer – quick – and you think she might be interested. So you start composing a new email… “Hi Inga, we met at Mike’s housewarming party…”. Email will match which Mike in all your contacts had an event called “housewarming” to which both you and an ‘Inga’ were invited. Privacy settings permitting, email will immediately connect you with Inga and offer to add her to your contacts. Inga has shared some photos of the party which are intelligently matched with your profile picture: you are prompted to validate them and if you confirm that it’s you in the photo they will also be published to your wall.

In February’s post about Usability I wrote about digital natives who need product usability to evolve and adapt to their expectations. Facebook has stopped being innovative and, at this rate, even if it now prides 500,000-plus users, it will be replaced by any future social engine that will make it possible for information to be truly ubiquitous. The next big thing will be the Facebook that is also a Google of what I call common intelligence.

Acknowledgements: Thanks to Juan Pablo for the inspiration.