Archive for September, 2007

IPTV has to grow in Germany

September 24, 2007

Goldmedia released a new study titelt “IPTV 2012“. It prognosed more than 2.5 million IPTV customers in Germany 2012 and a revenue growth of the German IPTV market from 12.6 million Euros 2007 to 420 million Euros in 2012. If you compare the German market, 100.000 IPTV user 2007, to the French, there are 2007 already 2 million IPTV customers, we are still sleeping. I don’t know if it’s just the better broadband structure in France…
As I wrote before, the service provider have to start marketing the new distribution channel. Most of the people have no idea what IPTV means, how it works, what the advantages are. There is a life after YouTube 1.0!
Anyway IPTV can get a very important content distribution channel. Video content on demand, interactive TV, personalised advertising…. all we ever dreamed of.

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Subscription Services – A Simulation Prototype For Descision Support to Music Shop Provider and Labels

September 20, 2007

That`s the titel of an article in the Medienwirtschaft journal from Prof. Dr. Buxmann (TU Darmstadt) and some co-authors.
The authors developed a software tool where they try to predict the revenues of a music subscription service based on empiric market data, the chosen price and the chosen contract and clearing models between shop provider and copyright holders.

The simulation tool can`t help you to find the perfect price point for the customer, because people make their buying decision not only price based (factors like service, usabillity, brand, shopping experience are very important facts you can’t really measure), but the tool can help to answer questions like: Is there any correlation between licensing fee price and the total revenues? How will the curve look like?
Which clearing and contract model between shop provider and copyright holder (GEMA and Label) is best for the label? Pay per play? Or  a participation in sales model? The latter seems more suitable in the simulation.
A quite interesting article I can recommend to read.

New Music Download Figures in Germany

September 20, 2007

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Bitkom released on the occasion of the German music fair Popkomm in Berlin new figures for the digital music market in Germany. The revenue for music downloads in Germany will rise 2007 to 60 million Euros, that’s a increase of 25 percent to last year.
At first glance the figures sound very positive and the press release sounds very optimistic too, but on the second glance they don`t. We are talking here about just 3,5 percent of the german music market.
The predicted growth on the digital music market equals just 0,7 percent of the total market. For comparison the music market in Germany declined last year 2,4 percent!

The growthrate for music downloads last year was 33 per cent, the year before 140 percent. Internet infrastructure is getting better and better, people are “living the net” now, people are hearing more music than ever and the music market is slowing down!

The market growth for digital music is too slow! The current business model is definitely not working yet! Sorry for being the killjoy.

The Age of Access

September 18, 2007

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I read the book a few years ago the first time for my diploma thesis. Now I saw the new third edition (2007) of The Age of Access from Jeremy Rifkin.
A great book I can highly recommend to read.
For my thesis the book helps me to describe changes in the consumer behavior cause of a changing economy system. I don`t know if every thought in Jeremy Rifkin’s book is completely right, but I agree and believe that we are going to an age of access. Property especially in the media, information based industry will loose it’s relevance, networks will become very important.
Here some ot Rifkins thoughts:

“The Age of Access, then, is governed by a whole new set of business assumptions that are very different from those used to manage a market era. In the new world, markets give way to networks, sellers and buyers are replaced by suppliers and users, and virtually everything is accessed. The shift from a propertied regime based on the idea of broadly distributed ownership to an access regime based on securing short-term limited use of assets controlled by networks of suppliers changes fundamentally our notions of how economic power is to be exercised in the years ahead.”


“In markets, sellers and buyers come together to “exchange” goods and services. In networks, by contrast, there are no sellers and buyers, but only suppliers and users and servers and clients. Property—both physical and intellectual—still exists but is closely held by the producers and “accessed” by clients on a “just-in-time” basis.

There are a number of reasons for this basic restructuring of commercial life. First, the near warp speed of economic activity makes discrete market-based transactions far too slow in the coming century. In the new era, because every product is “information intensive” and being continuously upgraded, virtually everything is treated more as a service one accesses than a good one acquires. The notion of exchanging and holding on to fixed property becomes an anachronism in a society where everything is continually evolving. Second, e-commerce reduces market-based transaction costs toward zero, narrowing the traditional profit margins on sales related activity. Third, information and telecommunications technologies allow for a continuous flow of economic activity, transforming commerce from a linear sequence to a cyclical process. In short, in markets economic activity is discrete and bounded in nature while in networks economic activity is uninterrupted and perpetual. In the future, individual market transactions give way to 24/7 commodified relationships in networks in the form of memberships, subscriptions, leases, rentals, and retainer agreements.”

Pricing Tells a Story

September 18, 2007

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That’s not really scientific research, but I like the idea of the Inc.com article.
Every price tells a story! It`s true. Tell an authentic and believable story and you will find acceptance.
That´s perhaps the biggest mistake in the media industry at the moment. There are no good stories, and insisting on copyrights is perhaps one of the boring ones.

Joost. Where does it go?

September 17, 2007

Iam a registered Joost beta user now, but I am using Mac OsX without an Intel chip so I am out!
Well I think it’s not the only reason why I am not so excited about the launch as I was when I heard about Joost before (called Venice Project at that time).
This says Joost about itself:

“Joost is a new way of watching TV on the internet. With Joost, you get all the things you love about TV, including a high-quality full-screen picture, hundreds of full-length shows and easy channel-flipping.”
“You get great internet features too, such as search, chat and instant messaging, built right into the Joost software – so you find shows quickly and talk to your friends while you watch. And with no schedules to worry about, you can watch whatever you want, whenever you like – as often as you want. Joost is completely free, and works with most modern PCs and Intel Mac-based computers with a broadband connection.”

At the first sight Joost looks like normal IPTV, but the real innovation is the technology based on P2PTV technology which is expected to deliver (relaying) near-TV resolution images. It turns a PC into an instant on-demand TV without any need for additional set top box. For Joost the big advantage of using p2p technology is the low traffic costs: Peercasting (Peer to Peer + Broadcasting)! Wired wrote about this a while ago.

The real challenge for Joost will be the licensing of enough good content to compete with the ad free “bit torrent” alternative. That’s a hard challenge! Over one million beta testers are a good start, but it is perhaps  just a media hype cause of the prominent fathers Niklas Zennström und Janus Friis (Skype and Kazaa founders).
Anyway, I love their ad:

IBM Study Says: TV is loosing

September 16, 2007

Found today an IBM Consumer Survey that shows decline of TV as the primary media.

Well perhaps all things you have heard before, and some studies (made by TV networks) will deny that, and show other results…
It’s clearly a question of definition.

Saul Berman, IBM Media & Entertainment Strategy and Change practice leader, said, “The Internet is becoming consumers’ primary entertainment source. The TV is increasingly taking a back seat to the cell phone and the personal computer among consumers age 18 to 34.

The global IBM survey shows the TV and the Internet are on equal footing as entertainment sources. 66 percent reported viewing from 1 to 4 hours of TV per day, vs. 60 percent who reported the same levels of personal Internet usage. Consumers are increasingly turning to online destinations like YouTube, MySpace, Facebook, games, or mobile entertainment vs. traditional television.

See the results of the study here.

IBM also published a video of an informal streetinterview sample, which found surprisingly similar results to the official survey.

Addicted

September 15, 2007

During some research about social networks I saw this RedHerring article.

According to a recent study released by an internet security company in Australia, social networks provoke a lost of billions of dollars each year cause of a drop in worker productivity, as a result of visits to social networks while at work.
Well, I can’t imagine….

Vodafone tries it now, seriously.

September 11, 2007

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For christmas Vodafone together with Omnifone launches in UK a new music subscription service called MusicStation. It offers unlimited downloads, file and playlist “sharing” with no additional data charges to the subscriber – all for £1.99 a week.
All major and the biggest independent labels are in with 1 Mio songs at the beginning.
It has a build in recommendation engine (something like last.fm) and the MusicStation’s technology also ensures that the memory allocated on the phone is always used to store the customer’s favourite and about-to-be-played music. This means that users can listen to their favourite tracks when in Flight Safe mode.
That sounds good. With the “right” handset (on the iPhone level) this can be a realistic business model.
We will see what people will report about the usabillity, design and performance of the system and userinterface after christmas.
But it can work. Perhaps not immediately, cause of the price and handset standards (can I use my mobile with every device? home audio system, car audio system …), but it can.
Big advantage for vodafone compared to iTunes, Napster or Rhapsody when they want to go online is the easy billing system and the already consumer learned subscription model at mobile services.

Rubin and the Public Good

September 11, 2007

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There was a great Rick Rubin story a few days ago in the New York Times Magazine. Rubin, perhaps one of the most important music producers alive, co-founder of Def Jam and now Co-CEO of Sony’s Columbia Records, made some interesting statements on the recent situation in the music industry.

“Until a new model is agreed upon and rolling, we can be the best at the existing paradigm, but until the paradigm shifts, it’s going to be a declining business. This model is done.”

He also mentioned some interesting thoughts on the pricing of music.

“The subscription model is the only way to save the music business. If music is easily available at a price of five or six dollars a month, then nobody will steal it,” says Rubin.

“In this new world, there will be a virtual library that will be accessible from your car, from your cellphone, from your computer, from your television. Anywhere. The iPod will be obsolete, but there would be a Walkman-like device you could plug into speakers at home. You’ll say, ‘Today I want to listen to … Simon and Garfunkel,’ and there they are. The service can have demos, bootlegs, concerts, whatever context the artist wants to put out. And once that model is put into place, the industry will grow 10 times the size it is now.”

He is so right!!! And than he said this:

“Either all the record companies will get together or the industry will fall apart and someone like Microsoft will come in and buy one of the companies at wholesale and do what needs to be done.”

Thanks Rick!

The Register wrote an article on Rubin’s pricing statements and mentioned some older statements to the “subscription theme” from Jim Griffin and Will Page. Both economists who see music as a public good in the future (One person’s consumption doesn’t harm another’s, non-rivalrous and non-excludable). Very interesting thougths.

I have the same point view. Music will be (actually is) for free, but I am sure that you can earn money with a great service performance and brand experience.
I like the last statement of the Register article:

“The trick the industry has, along with networks and other digital service providers, is making that $2 “feel like free”.”

The big question still is: Where is the optimal price point for such a subscription service?