broadstuff

The BBC New Media home experiment has just ended, the NooMeedja kit has been taken away and life is back to normal.

For those who haven't been following it, this was an experiment where a bunch of "digital home new media" devices were installed in a family's house for a month and they were left to get on with using them. Links are to week 1, week 2, diary and Conclusion:

In the experiment they were given Wifi, iTunes for music and video, HDTV, WebTV access, a Sonos in-house music system

For the mouse-lazy, here is a precis of the conclusions:

- The family got used to getting a quick video news update from the BBC News website.

- Watching a news bulletin and downloading a movie was not too challenging.

- And for the movie, they went to a DVD subscription service, which also offers downloads, and pretty quickly the movie was on the Media Centre. But they thought the service looked pretty costly - and were not impressed with the selection on offer.

- Ugly Betty and Web TV

Watching Ugly Betty proved to be difficult. The new dedicated internet television services, Joost and Jalipo, did not impress at all. After a few false starts, they managed to download the Joost software and view the service on the television. But Dean's (the father) verdict?

"It's rubbish - I'm not interested in old episodes of the Man from Uncle," he said.

"If it was something like episodes of 24, it might be worth the bother."

And Suzanne was not much more impressed with Jalipo, a platform for pay-TV on the internet: "I can't see myself paying for that."

What of Ugly Betty?

Well their experience trying to download an episode seemed to encapsulate all the promise and frustrations of internet television.

A quick search revealed that it was available via iTunes and on Channel Four's 4OD.

But closer examination revealed that only American customers could buy television programmes from Apple's online store and an attempt to download from 4OD failed because the site was not compatible with the Vista operating system on the PC.

The family did find the programme on various file-sharing sites, but were nervous about the whole copyright issue, so stopped short of downloading.

Just as well, wrestling with bitTorrent is not for the faint-hearted

Added together though, this really says that PC based digital video entertainment is not yet over the "Chasm", and has a way to go before it gains mass market adoption. To quote again:

With internet television in its infancy, our new media family may have been trying it just a little early.

Despite their problems with both the technology and the content, they have emerged enthusiastic about the idea.

"It could be so much better in a year's time," says Dean Boston.

"When you look at the content that's available in the States you have to ask 'when is that coming to Britain?'"

However, in another telling comment, they note that when all the various PC's were removed (Mediaplayer, laptop etc) they felt that they missed that more than expected, it really slowed them up.

They also found they used internet radio quite a lot once it became easy to do.

Our take, based on our own trials (of our own families, with varying setups based around web TV, cable TV, home networks etc):

(i) Absolutely agree on deployment of hardware...having a few more computers on a home network massively speeds everything up

(ii) A dedicated webTV device hooked to the TV really grows on you.

(ii) The technology deployed in teh BBC experiment was diverse and complex, so integrating it is difficult. We have experimented with a simpler rig in our MyPCTV setup - Windows XP and MP3 only, no Apple gear - has less functionality, but much simpler to inter-operate

(iii) Kids learn a lot of the techniques automatically and are natural users of new technology.

(iv) Our experience of Internet radio is interesting...everyone preferred Pandora (they found it got them to new music they liked far faster than Lastfm), and then the exposure to new music started a new wave of music buying.

In terms of understanding the difficulties in organisation change, Niccolo Machiavelli (1469 - 1527) had it sussed:

"There is nothing more difficult to carry out, nor more doubtful of success, nor more dangerous to handle, than to initiate a new order of things. For the reformer has enemies in all who profit by the old order, and only lukewarm defenders in all who profit by the new order. This lukewarmness arises partly from fear of their adversaries, who have law in their favor, and partly from the incredulity of mankind, who do not believe in anything new until they have had an actual experience of it."

This post is partly driven by reading about TrustedPlaces' experience in getting $1m funding (well done guys - all that partying has paid off - now comes the hard bit !) and partly by our own experiences over the last 2 years in talking to companies that are potentially impacted by the emerging broadband media world.

Broadband IP / web 2.0 / whatever buzz phrase one wants, multiplied by the penetration it now has, simply changes the way people interact online. The bandwidth available means, that to a greater or lesser extent, everyone will be an online media business.

Re TrustedPlaces, its interesting because we did a bit of preliminary work for an established business in that space a while back, but who did not (and still have not it would seem) found the compelling reason to change, their risk now of course is that new - and now funded - startups begin to eat their lunch reviews.

The difficulty of course, as Machiavelli showed, is that its is very hard to change the Established Order until it is crystal clear that the New Order works, and that the Old Ways do not anymore - and that can be too late (or at least severely value destroying) if the competitors are fuelled with large amounts of Other Peoples Money and a "Free till we get Big" business plan (or even just good at what they do).

And, (it seems to us) a tipping point is now emerging - we are seeing companies (outside of the immediate telemedia industry, which has already been heavily impacted) we spoke to 1 -2 years ago now coming back and saying they are finding these new businesses starting to compete seriously, and at the same time, from restaurant reviews to real estate, from TV to telephony, from financial services to fantasy gaming, new businesses are increasingly getting funded to go out and compete some more.

Its also interesting to see how some of the "Web 1.0" titans are reacting. Google plays the Cisco strategy and buys everyone, Yahoo and eBay place bets - sorry, buy strategically (Yahoo pays a lot less for its bets though ;), Amazon is shifting from bookshifter to bitshifter with the Cloud, and Microsoft is currently playing corporate patent troll on the open source movement.

All signs that, as another wise man wrote - The times, they are a changing.....

Forrester are predicting that (here on Reuters):

"In the video space, iTunes is just a temporary flash while consumers wait for better ways to get video. They're already coming," said Forrester Research analyst James McQuivey, the author of the study, who also called the paid download video market a "dead end."

Forrester estimated that sales growth is not likely to triple or even double in 2008 and beyond, after early adopters and media addicts have already started using the services.

Confusion over different video file formats, difficulties watching downloaded videos on television screens and other technical problems have kept average users from paying for shows online.

However, in (nearly) every other media arena the endgame is a combination of:

- Free Content
- Bundled paid-for content
- Pay as you Go content

Why, oh why, should content over the 'Net be any different?

Undoubtedly Ad funding will increase in the online space, but here's the kicker - the global Ad industry is just not big enough to fund every type of media play out there *once it scales*. In the early days - especially if its cool - the Ads will rush in, but Global Ads are "only" a c $0.5 trillion industry - global Media & Entertainment is c $1.5 trillion already, the $ 1 + trillion Telco industry wants some action too, and loads of other Web 2.0 bizplans are also assuming Adspend comes their way.

We can believe that in the early days, getting going on Ads is a much lower risk play that trying for subs or PAYG - remember soap subsidy drove commercial TV.

But with the best will in the world, that Adspend is going to be mightily thinly spread to Adfund everyone, and with the Ad Inventory glut, if anything prices will drop to levels wher Ads are just not enough except for the most populist sites.

So eventually some of the content will just have to be paid for in other ways, unless you assume Adworld undergoes heroic growth (or TV undergoes desperate underfunding).

In addition, the interests of Advertisers and media audiences are not really aligned, so it is highly likely that some content will just never make it to an Ad supported world - yet there will be, in the global market, enough people who want to see it to make it worth showing.

Also, we suspect there will be people who just don't like Ads, especially if interaction = intrusion, and will be prepared to pay for content that is Ad free.

Or just take it off the 'Net on bitTorrent etc.......is there perhaps an alternative scenario that says people will pay for quality or download for free off "p2p sites, and ignore any site that overdoes the Ads?

We wouldn't write off paid content just yet.....most likely scenario is a mixed industry model

Interesting article on TechCrunch arguing that Web 2.0 technology drove the Porn 2.0 industry rather than vice versa.

I am a bit dubious about this claim of Web 2.0 leading Porn 2.0. From a strictly research point of view of course, we have looked at pornsite tech over the years (we however do not own a pornograph to play it on) and...errrm..."user generated content" was around pretty early, ditto social networks based around "dating". They may not have used AJAX or widgets but the functionality was there in concept.

The reason is that the industry is so big and so competitive that it has to innovate early - to quote from TechCrunch, referring to a video on the industry.

It is staggering how much actual money flows through porn and how many people are involved in the industry:

- 89% of porn is created in the U.S.
- $2.84 billion in revenue was generated from U.S. porn sites in 2006
- $89/second is spent on porn
- 72% of porn viewers are men
- 260 new porn sites go online daily

The only thing that amazes me about this is the US owns 89% of the market, its not as if they have Bunker-Hunted the raw materials!

One wonders when the BRIC nations will take over this market as well...or at least be part of an outsourcing drive?

This post was sparked by a debate going on on the Mobile Monday discussion group

Vint Cerf (now of Google) was recently quoted as saying that:

Many people often confuse the internet with the "web". In fact, the "web" — the pages you and I see when we are online — is one of many applications supported by the internet. Since the commercial availability of the internet in 1989, the percentage of the world's population going online has increased dramatically. Current estimates indicate that one-sixth of the world's population is now online. Given this level of growth, it is not beyond reality that we may see over three billion people online by 2010 — that's nearly half of the world's population!

This anticipated growth can be attributed to two main factors — mobile technology and the increased localisation of content. With approximately two and a half billion mobile users across the world (many more people than have access to a personal computer), the scope for internet access via the mobile is huge. It also gets around the problem of access to a fixed line, which in the developing world is often limited to the wealthy few in urban areas. According to estimates by the World Bank, more than two-thirds of the world's population lives within range of a mobile phone network.
I'm not sure I agree in total with this analysis - at least the mobile bit...in that I agree with Vint re the potential, just not certain if the mobile industry today is correctly structured to deliver the Internet promise.

I think it has 3 main barriers on the device side, and 3 on the network side:

On the device side, in my view mobile suffers from:

- Form factor - most mobile devices are not fit for purpose for internet usage in any serious way, and PCs are also more powerful gear, you can simply do more with it. In developing countries where its mobile or nothing then a mobile will do - but it's not an endgame. I am told that many have already discovered that "western" (ie designed primarily for OECD use cases) phones are not fit for purpose as mobile IP devices and Chineses and Indian entrereneurs are now building mobile internet devices that are increasingly more laptop than phone.

- Standards - mobile is like the PC industry pre MS DOS, PC's have huge economies of scale - there are not in fact 2.5 billion mobiles out there, vs 1.5 bn PC's - the mobile stack splits by operator and phone, giving a plethora of different subsystems such that an application built for one cannot necessarily run on another.

- "Mobile Web 2.0" structurally cannot happen in the walled gardens beloved of mobile operators. This doesn't matter so much early up but starts to matter as the applications become more widespread and powerful

The main disadvantage of the PC vs mobile as an IP device right now is price, but given the standardisation in the PC world I would hypothesize that getting a boned down laptop/pda to a decent price point is very possible compared to adding functionality to mobile phones.

On the network side, the assumption that fixed line is dead is risky...I recall this being trumpeted 3-4 years ago in conferences in the UK and US, about the end of (Western) fixed line Telcos....same rhetoric is now being bandied about the developing world. I don't buy it as it is only significantly cheaper to roll out wireless IP networks (per MB served) than fixed line if the following is true:

- there is low population density - people packed into apartment blocks are cheap to wire up if labour costs are low.

- you have to dig up roads, not just loop wires over poles (looping wires uses cheap local labour and very little western capital equipment)

- the bandwidth takeup is fairly low - the aether has a limit to bits that can be transported, the ground does not. Pumping phone calls through it is one thing, pumping broadband content is another

One could argue that in the past a key reason mobile telephony took off was perhaps more due to state (and internal) bureaucracy impeding the national telco's activity (and/or governments auctioning spectrum for currency with a guaranteed non compete period) rather than any de facto economic rationale. But, as more and more Fixed Line Telcos have the shackles removed the competition hots up, mobile arpu falls, and the business cases are less viable.

There are 2 key further things I can see on the Network side for the future of mobile (as opposed to wireless) networks looking less rosy are mainly:

- bandwidth....when dsl was 500 kb per sec and 3G was 384 kb per sec, the difference could be ignored. Now there is an order of maginitude, its not so easy - and the fixed line economics in high density cities (typical of the developing world), where cable can be looped on poles and labour is low cost, are not so much worse than mobile.

- competition from other wireless technologies. If one was rolling out a wireless IP network today in a greenfield situation, would one use mobile technology?

What this implies to me is that a simple mobile transport / mobile device based architecture is a very simplistic way of thinking about the developing world, and the truth is likely to be a much more heterogeneous, especially in the big cities. (Mobile is key in rural areas, but the population - and usually money - are mainly, and increasingly, in cities)

Do mobile networks have a part to play - absolutely. Ditto mobile phones. Will the developing world's IP be on mobiles medium term - no, or at least not the mobile phone device as we understand it today.

So what will it be like? It will need to have more input functionality, and very probably a bigger screen.

The one device form factor I really like is the Nintendo DS Lite, with 2 screens, one that doubles up as a touch keypad. Another option is to separate input keypad from device, so one can carry a pad around to plug into a 'phone (not a very successful option in mobile consumer electronics to date though). The Blackberry style - screen plus keypad - is another obvious form factor, as is the iPhone design with configurable keypads.

What can be expected is a lot of experimentation over the next few years to get this device's form factor optimised.

When a concept has lost credibility, time to rebrand:

Digital rights management (DRM) is the wrong term for technology that secures programmers' content as it moves to new digital platforms says HBO Chief Technology Officer Bob Zitter, since it emphasized restrictions instead of opportunities.

No, indeed.....

Speaking at a panel session at the NCTA show in Las Vegas Tuesday, Zitter suggested that "DCE," or Digital Consumer Enablement, would more accurately describe technology that allows consumers "to use content in ways they haven't before," such as enjoying TV shows and movies on portable video players like iPods.

The rise of CyberNewspeak

As we and others have noted eg Freedom to Tinker:,

“rights management” is itself an industry-sponsored euphemism for what would more straightforwardly be
called “restrictions”. But somehow the public got the idea that DRM is restrictive, hence the need for a name change.

Where could they have got that idea from?

This is fascinating*...Bloomberg reports that:

In a quarterly poll of 500 cabbies by U.K.-based corporate- recovery specialist Begbies Traynor, the drivers said traffic between the City, London's financial district, and London's airports has declined and the number of calls to take bankers home from the office at night is on the wane.

I wonder what 'Net based datastreams would give these same sort of early indications.....one assumes Google or Yahoo can analyse their searchstreams to get a view of early indicators, but what publicly available data might be available

This sort of early trending would be worth a lot.....retail financial investors for example, who are typically left out the loop and get sold the financial products long after the trend is underway - in fact so late that its apparently better to be contrarian, as a recent article in The Financial Analysts Journal by Thomas Arnold, John Earl and David North showed:

They essentially looked at how a company’s stock price responds to a cover story in BusinessWeek, Fortune and Forbes. In general, positive stories come at the end of periods of positive performance and negative stories after periods of negative performance. When a cover story appears it tends to signal the end of the performance trend - ie it is no longer “news” - and typically marks the turning point.


And of course this does not take into account the...ummm...."exclusive social networks of financial professionals" that the retail investor is left out of (the poor old retail investor usually being the bigger fool at the end of the bubble).

Making the chinese whispers echoing around the walls open to all would be truly disruptive.....

(* Saw it originally on Samizdata)

We've had these little Karma buttons on each post for just over 3 months now, its interesting to watch what happens. Typically the first few votes are fairly +ve, then we get a whole tranche of -ve votes, and then over time more +ve again.

The - ve votes seem to arrive in packs, is this a sign of collusion?

The +ve votes don't seem to have much of a pattern except rewarding agreeing with popular wisdom. We of course think this blog is full of wit, erudition and good sense - but that don't seem to matter nearly as much as saying what everyone likes to hear....

Simillarly, we've noticed that -ve votes are very focussed on subject (un) popularity rather than any discernable type of article style, wit or even argument. No doubt some articles are worse than others, but that does not seem to draw the ire as much as going against the grain of the zeitgeist at any time.

And insult Twitter at your peril

(Having said that, the worst voted article was an early and fairly lame attempt to define different types of social net and its applications)

As we're always looking to improve, comments on what works and what doesn't are welcome.

Also others' experience of karma etc is welcome...we see blogs with glowing stars and think lucky them, great stuff...and then...hmmmm....no karma trolls or are they manipulating that

Not promising we'll change of course....the Karma chameleon approach of changing our colours just to go for popularity isn't what this blog is about.

Mixing metaphysics.....

From NMK.....

Research from US firm BlueLithium has shown that while Web 2.0, user-generated content sites perform less well than traditional sites when it comes to conversions, the cost of advertising on such sites is so low that they are nonetheless more competitive when it comes to the cost-per-conversion:

When comparing ads shown on non-UGC sites to UGC sites, the ads shown on non-UGC sites had a 32 percent higher conversion rate. However, due to the lower cost of advertising on UGC sites, the cost per conversion for non-UGC sites was 58 percent higher. Therefore, on average, UGC sites generally provide a considerably lower cost per conversion.

A companion study based solely on the top 250 most-trafficked sites in the US found similar results:

The study showed that the conversion rate of ads shown on non-UGC sites from the comScore top 250 was 175 percent higher as compared to UGC sites. However, given the significantly lower cost of the UGC media, the non-UGC comScore 250 sites have 7 percent higher cost per conversion as compared to UGC sites.

In other words there is a ceiling to the rates UGC / Web 2.0 sites can charge for Ads, and it is pretty low and very dependent on the relative economics between Web 1.0 and Web 2.0 sites. And as competition increases this won't get better...

Wonder how many just-launched Web 2.0 Ad based business plans will survive very low Ad rates ?