Charlie Rose interviews Bill Gates a few weeks ago in Seattle. They talk about the remarkable life of a man who changed the World by putting a computer on everyone’s desk. And about someone who we all expect will make an impact with the foundation he runs with his wife. You may like or dislike Microsoft, but Bill Gates is an admirable man.
December 28th is the Spanish equivalent to April Fool’s day. That is why I had to read twice the news that iFart Mobile (see video) was the best selling application in App Store during the holidays (iTunes Link).
Quoted from the iFart creator, Joel Comm’s blog:
All I knew was that a lot of people would be getting iPhones and iPod Touch MP3 players on Christmas Day. Christmas came a day early for us. On 12/24, my jaw hit the floor when I checked my stats. We sold 19520 units, providing $13364 in net income after Apple takes their cut. I now knew that Christmas Day would be bigger than I would have imagined. I made sure I was sitting down before I checked my day-after-Christmas stats. It was a good thing. On Christmas Day, 38,927 people purchased iFart Mobile. Thirty-eight thousand nine-hundred and twenty seven. Wow. Thats $27,249 net. Again I say, wow.
I can only say wow too.
How would iFart rate on the checklist for killer Apps?
Ten years ago the RIAA fought the decrease in sales of music CDs by different means, including: taking their customers to court, lobbying to have the ISPs stopping Internet Access to anyone who shared music files, and imposing taxes to any device able to store or play music, assuming everyone was in piracy.
Ten years later, all these actions from RIAA seem ridiculous. In 2019 music is no longer sold in discs or in any physical format. All music is distributed online and, to what would have been a surprise for RIAA in 2009, for free. Artist distribute their tracks freely online, and encourage their fans to share them with their friends.
Social Networks like Facebook, MySpace, uTube and Amazon.net play now a central role in the music industry. All artists compete for attention and try to influence others to become fans. Becoming a fan of a band gives the user access to their songs, to their music videos and to buy their merchandise online.
Artists get the ad revenues from their sites, and more substantial revenues for the $0.99 monthly fees that the SuperFans (premium fans) pay to have access to exclusive content around artists, such as interviews, live chats, or clips behind the scenes. Superfans enjoy other benefits, including discounts in tickets for live concerts.
In 2019, the labels and the RIAA have almost disappeared, and artists now deal directly with their audience, thanks to the social network platforms that manage the SuperFans subscriptions, as well as the online purchases.
Now there is a huge amount of semiprofessional artists that generate some revenues from their creations. Still there are a few celebrity artists that command hundreds of thousands of SuperFans.
Music did survive the era of the Recording Labels. The new Online Music era is more democratic in who gets the attention, and has removed inefficient intermediaries between artists and fans.
Cartoon found via Wired.com
This post is a prediction of what could be written in ten years from now about the Music Industry. Soon another post about Movies in 2019.
An interesting analysis from Telco 2.0 compares the business of YouTube versus Hulu in 2008. The table summarizes the key data used in the analysis:
|No of videos/day||1000+ million||3-4 million|
|Average duration||2.75 min||27.5 min|
|% clips with ads||3-4%||80%|
|2008 Revenues||$118 m||$52 m|
|2008 Loss||$91 m||$9 m|
According to Telco 2.0, YouTube would be generating revenues of $118 million, versus $52 million for Hulu, while the low percentage of videos carrying ads in YouTube would make them lose $91m versus only $9m for Hulu.
Hulu business model is closer to that of broadcasters and it shows in a better margin. To make their disruptive model fly in the next years, YouTube will count on:
- decreasing costs of infrastructure: storage, processing, bandwidth and efficient data centers
- ability to place ads in clips from amateurs and semiprofessional creators
- agreements with media companies to become their online video platform in return of a share of ads
Meantime more players are coming to the party, like CBS betting on tv.com to compete with Hulu (NBC Universal and News Corporation’s online video joint venture). But, in a crowded market, also others are getting weaker, like Joost giving up their P2P model and with few options to survive only as one more flash video site. Despite Joost’s announcement, do not discount P2P TV, that is far from dead in China.
As for IPTV, according to a report from Gartner in September:
“Worldwide subscriptions to internet Protocol television (IPTV) services are on pace to reach 19.6 million subscribers in 2008, a 64.1 per cent increase from 12 million subscribers in 2007, according to Gartner, Inc. Worldwide IPTV revenue is projected to total $4.5 billion in 2008, a 93.5 per cent increase from 2007 revenue of $2.3 billion.”
In 2008, no doubt Online Video got the headlines, but the IPTV Telcos still got the bucks.
The essence of Net Neutrality is “All Packets are created Equal“. No ISP should block or prioritize any traffic based on what the IP Packet carries. That is, no VoIP/Skype, YouTube video, music download or Bittorrent traffic should be processed differently based on its nature. All packets will be equally treated by the network infrastructure.
This week the Net Neutrality debate has been agitated by an article in The Wall Street Journal accusing Google of violating the net neutrality principles with their OpenEdge efforts to locate Google servers in the premises of broadband providers. Google was quick to deny the accusation and clarify their position in their official blog.
What is wrong with investing in more servers and putting them closer to the users? With Google/YouTube handling such a huge traffic, it is normal that Google wants to cache as close to the users as possible to make their service better. Caching is not a new practice in Internet. Companies like Akamai have been doing it for years, specially for video and audio streaming.
Net Neutrality is not about “let’s forbid anyone to invest more to improve their service over others”.
Net Neutrality should not prevent either that a Telco can build a separate IP network where they can prioritize their own traffic depending on its nature, e.g., to provide IPTV HD multicasts streams. Telcos must be free to build alternative IP infrastructures to deliver innovative services, as long as they also offer a neutral broadband service. If anyone wants to build a new top-notch IP network to provide 3D holographic pictures, no one should forbid it. The only thing the authorities should guarantee is a competitive market for a broadband access service where all bits are treated equal. Public initiatives to incentive investment on high-speed broadband are also advisable as the Internet is a key public infrastructure, as important as roads or railways.
Some facts about Online video:
- Online TV is growing. The number of people watching online video will grow from 563 million in 2007 to 941 million in 2013 according to ABI research, echoed by NewTeeVee.
- People watch far more hours of TV from the couch than on the PC. According to Nielsen (see table above found via GigaOm), 142 hours/month for TV versus only 2.5 hours/month for Internet video. Online TV will sure grow, but still a long way to catch the habit of watching TV from the sofa. A habit that will surely remain for long duration shows, like movies or NBA games.
- TV devices connected to Internet will grow from 28 million in 2007 to 300 million in 2013 according to IMS research echoed by NewTeeVee.
- Some lucrative consumer segments are ready to pay for quality, speed, ease-of-use and exclusive content (e.g. Apple knows very well this segment). Some reports foresee penetrations as high as 20% and even 50% in developed countries urban areas.
- Online TV is social. YouTube social component is part of its success. Joost has just added Facebook Connect.
- P2P will keep growing, and that includes also a growth of licensed content relying on P2P or P4P networks, although illegal traffic will still dominate for some time.
IPTV Telcos should defend from the threats of Online TV by embracing it:
- Address facts 1 to 4 by providing a one-stop-shop to integrate Online TV within the IPTV Service. Provide a quick, easy-to-use way to enjoy Online TV from the couch, integrated into the IPTV Service. Why not embed iTunes, YouTube or Hulu channels?
- People will manage to have only two to three devices connected to the TV in the living-room. IPTV Telcos should position their set-top-box to be the box to connect the TV set to Internet without hassle (including legal P2P) and in the way defend from other boxes that could make IPTV replaceable later (e.g. Apple TV, PC2TV or HTPC units).
- Add Facebook Connect to IPTV, so that you can see who of your friends is watching the show, or browse what shows your friends are watching.
In other words, keep the boxes from “over-the-top” players away from the living-room for as long as possible. Differentiate from the “over-the-top” players with the unique experience that IPTV can provide on exclusive live HD content, like live concerts (expect music artists to do more of these, as recording sales drop) or sport events.
Will Internet TV Kill IPTV?
Android announced this week that 14 new companies are joining the Open Handset Alliance. The new members are: AKM Semiconductor, ARM, ASUSTek Computer, Atheros Communications, Borqs, Ericsson, Garmin International, Huawei Technologies, Omron Software, Softbank Mobile Corporation, Sony Ericsson, Teleca AB, Toshiba Corporation and Vodafone.
- Sony Ericsson sold their shares of Symbian to Nokia to be able to run to Android, as predicted.
- ARM does want to power Android handsets processors (G1 has a Qualcomm processor)
- Even Vodafone will put Vodafone Live on Android. Wouldn’t they sell it as a mobile App in App Market and make Vodafone Live available to users from any carrier for a wider audience?
- Softbank (is this the same Japanese mobile operator that sells iPhone?) might be hoping for an Android flip phone that meets the Japanese taste for clam-shell phones.
- Garmin, fearing of the strong threat of mobile phones with A-GPS and Google Maps to their navigator devices, might be thinking that better partnering than fighting. Garmin already launched its first GPS-phone, the Nuvifone, earlier this year. It seems that there will be more to come, confirming that GPS and Phone synergy is here to stay.
- Nokia, RIM, Microsoft and Apple keep resisting to join the “Alliance”, and remain in the dark side of the Force. No wonder Android logo looks so much alike C-3PO!
Let’s get ready to enjoy the cool devices that the members of the Alliance, as well as Apple, Nokia and RIM, will bring in their own star wars.
Android, may the Force be with you.