Tag Archives: Google

How does the Future of TV look like?

YouTube localization

YouTube localization (Photo credit: Wikipedia)

Youtube turns 8 in a few days. Just a kid, but mature enough to tell us what the future of TV will look like.

According to eMarketer, in 2012 advertising spending on online video in the US was $2.9bn. A sizable market, but less than 5% of the $65bn spent on TV ads. 

Not too impressive if it were not because online video grew by 47% year on year. At that rate of growth, it would just take 8 years for online video to surpass TV ads spending. Just by the time Youtube would turn 16.

And there are reasons to believe that the 47% growth we saw this year is just accelerating, led by YouTube. Here are 3 reasons why Youtube will drive an even bigger growth:

1. Better ads.

  • Advertisers are increasing their spending.  “YouTube is […] home for major brand advertisers.  On YouTube, our top 100 global advertisers spent over 50% more in 2012 than they did in 2011,” they said in their last earnings call.
  • Ads are getting better both for user experience, and for brands. Advertisers like the new TrueView skippable ad format, through which they only pay if viewers watch the ad. 
  • The potential of Google to better targeting ads to user profiles and context is unmatched.

2. Better Content.

  • Growing number of Professional content available: VEVO and Liga BBVA are just two fine examples I love.
  • Perfect platform for amateurs to turn pros with an ad-based business model
  • Youtube could soon enter the paid-for-content subscription model. This hints they could start making deals for live sport events, one of the strongholds of Pay-TV operators.

3. Better Features.

  • HD at 1080p is a reality.
  • Multiscreen is a reality. Same content on mobile, tablets, PC and TV
  • Social is embedded and there are huge potential for “second screen” options that could potentially integrate better with online TV than with traditional TV

Online TV and traditional TV borders will blur. And when they do, Online has all the advantages to win.

 Milestones in Youtube early life:

  • First video uploaded (“Me at the zoo”) in April 2005
  • Google buys Youtube in October 2006
  • 720p launched in December 2008
  • One billion daily views in October 2009
  • 1080p Full HD launched in November 2009
  • 2 billion daily views in May 2010
  • Trueview ads launched in December 2010
  • 3 billion daily views in May 2011
  • 4 billion daily views in January 2012
  • First video to reach 1 billion views: Gangam Style – PSY, December 2012
  • #2 search engine (bigger than Bing, Yahoo, ASK and AOL combined)
  • 800 Million+ monthly unique visitors in January 2013
a-brief-history-of-youtube-infographic-shortymedia
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Why Google gives Android for free?

mobile-advertising-forecast
You will find more statistics at Statista

The chart already answers why Google gives Android for free.

Google is set to dominate advertisement, in any digital form.

  • Google dominates online, which it is about to surpass print media as an industry.
  • With Android, Google is set to dominate mobile ads, whatever form it may take, beyond search and display. As eyeballs go to mobile, Google will have an advantage position by controlling the OS.
  • And TV is the next one to disrupt. Youtube might be turning to be profitable by now. The experiments in online video ads are beginning to pay off, as it shows the amount of content agreements Youtube is getting into.

Googe wants to control the underlying technology platform, so that whatever evolution digital ads go, they are at the leading edge. Chrome and Android are the most obvious cases. On2, Widevine acquisitions followed the same rationale.

Google strategy to kill competitors is also getting more and more obvious: Give for free the core value of your competitor.

  • Google Apps against Microsoft Office
  • Chrome and Chrome OS, to make the OS irrelevant, as all apps run in the browser.
  • Android against Apple iOS

Digital advertisement, powered by Google, is one of the biggest enablers of the Digital Renaissance. Google enables both publishers and advertisers of any size to benefit from online advertisement. They are one of the biggest ‘patrons of the arts’ for the long tail.

Highlight data points in the chart:
Mobile ads market in US is $4 bn in 2012. Facebook managed to get $339m, even if they just started mobile ads this year.

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Is this the End of the Smartphone Era?

When Nicholas Carlson wrote that the end of the smartphone era is coming, he overstated the comment I made to his post the day before. He had asked his readers whether Sailfish OS was the next big platform. I answered:

DOA. I bet the next big platform won’t look like a phone.

That sparked Nicholas’ imagination and the next day he came with his post: The end of the smartphone era is coming.

Is this the end of the Smartphone era?

Of course not. The point is not that the smartphone era is close to its end. The point is that to disrupt a market taken by iOS and Android, you’d better come with something radically different. Else you have no chance. If you are able to wow consumers into a new platform, it won’t be a phone.

The next platform will not look like a phone.

Google knows it and that’s why they lead the pack to explore what the next step will be. Google Glass is the most visible example. Watches and other wearable computer gadgets will surely spark your imagination. You could argue those things are not new, but hey the Tablet was not a new concept and it was not a reality until Apple made it happen. Glass today is not compelling enough, but if they fix a few things, I would bet it will. Maybe that’s why Microsoft reportedly issued a patent application for a similar concept.

The platform that ends the smartphone era is still unknown. For sure, it’s more likely to look like Glass that than a phone.

If you were wondering to wait until next Xmas to renew your smartphone, no need to.

How different you have to be to beat iOS and Android?

Samsung Note was a perfect example of how to make something different from the iPhone riding on the wave that people talk less and less and write, read, listen, watch or take pictures much more.

Amazon was disruptive in the business model. They sell the Kindle Fire at a loss, because they are in the content distribution business.

But Windows Phone and Blackberry. Sorry guys, so far you are just changing colors, and have no chance unless you come with something that breaks the rules again. Maybe RIM could keep exploring keyboard and variants: Many of us still complain about typing on an iPhone compared to how good it was to type on a Blackberry.

Any other new platform like Meego/Sailfish cannot just bet on being more open than Android. Android is open enough. But hey it is good for us consumers that someone keeps Google honest in not being evil.

How did disruption look in the past?

During years, Nokia kept doing telephones with a dial pad, despite you make most calls from your address books, and despite the huge growth of texting. RIM, Microsoft PDA-phones had already moved a step forward, though it was Apple who reinvented the phone.

The iPhone was a totally disrupting concept with a ‘wowing’ UI and a breakthrough decent mobile internet experience, that had nothing to do with horrendous WAP or Brew.

In short: The end of the smartphone era is not coming (soon)

You are happy with your iPhone or your Galaxy, and just wonder whether this is the end of the smartphone era. It is not.

 

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How does Disruption look like in Print Media

Not because you already anticipated it, it’s less of a dramatic picture. The chart from Statista shows the result of how technology reinvents industries.

In 2004, Google’s $3Bn business seemed nothing compared to a $70Bn industry. Only eight years later, Google is bigger than the entire Print Media business in US.

A single company — let’s call it the disruptor— is worth more than the entire industry it disrupts, in less than a decade!

Though it is the company that gets more attacks from the newspaper and magazine industry, Google was not the only one driving the change.

  • Some years ago when you wanted to sell a car or a house, there was one obvious place to advertise: Newspapers. Nowadays you would only think of eBay, Craigslist or Carlist.
  • Bloggers were the first to grab readers from traditional media, though Google Adsense dollars helped here.
  • Then came the big social media boom with Facebook and Twitter attracting eyeballs from other media.
  • And finally, also contributing to the decline in offline revenue, Print Media has gone online, though they have not been too enthusiastic about exchanging “paper ads dollars by online cents.”

Print and online magazine advertising spending in the U.S. from 2010 to 2016
You will find more statistics at Statista

After disruption, is the resulting market smaller or bigger?
U.S. Print Media went from a $72bn peak in 2006 to $42bn in 2011. Where has all that money gone? Online, right?

According to GroupM, online ad revenue in US in 2011 was $34.5Bn (*). You make the numbers and that means that the size of Print Media + Online combined add to $76Bn. Around same market size as in 2006.

Roughly, you could conclude the combined market of “disrupted + disrupting” has not de-materialized the industry.

Jobs: A collateral damage of disruption?
The most visible effect in jobs is the change in skills and preparation. New jobs online require more preparation than those in the old industry. And for sure they need different skills.

Disruption due to new technologies often creates inflation in preparation. The lowest rank worker in the new industry will require far more preparation than in the previous one. E.g. Less skilled jobs like printing operation or distribution are replaced by technology. If you are a junior journalist you are now in the lower ranks, in the sense that the jobs less skilled than yours are all replaced by technology. You need much more preparation to be a journalist than to be a guy in the distribution chain.

On the other hand, a system like Adsense enables a bigger crowd to benefit from advertising. Now if you are a junior journalist you can join the Long Tail of  bloggers and be self-employed. Online ads, combined with indie publishing, are the foundation of the Digital Renaissance we live in.

How does print media respond to that?
Sadly enough, we have the example of France, where print media lobbies politicians to tax the innovator, in order to protect the status quo and delay the inevitable. As RIAA already demonstrated in the music industry, trying to stop change with lawsuits is not the best way to deal with disruption.

* Google makes 95% of revenues from Ads and U.S. represents 46% of their worldwide business. As Google reportedly has 44% market share in U.S. online ads, numbers are consistent.
Global online advertisement spending in 2011
You will find more statistics at Statista

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Google TV should turn into Chrome TV


Chrome has revolutionized web browsing. It has evolved the web in 3 years more than in the previous 10. ChromeOS, though, has failed to challenge the PC and laptop status quo, in part because it was conceived before the iPad era, in part because you resist to have a machine that is almost useless when offline.

But the area Chrome would revolutionize is the TV, and this is where Google opted for the Android-based Google TV. A mistake.

The TV and the Web are made to each other, and a ChromeTV would have much more impact in the TV industry than what Google TV might have. Why?
– A Web browser is something that any TV-set manufacturer would integrate without the legal issues of a platform like GoogleTV, owned by Google and tied to potential content rights and other patent issues.
– HTML5 and CSS3 provide a superb framework to develop compelling apps for big screens like TVs.
– The TV-set is “fixed” by nature. If it is connected, it will always be connected, unlike a laptop or tablet. Therefore you can live with just a browser on it. No need for a proper proprietary OS.
– The Web also on the TV? What else can Google dream that would better fit their search and ads business model?

Happy 3rd anniversary Google Chrome!!!

[Chart] Search Vs. Discovery

 

The chart via Business Insider seems conclusive on the Google versus Facebook war of who is more relevant for online advertisers.

When people want to buy something they go first to Google. Full stop.

If I want to buy a bycicle to go to work I will go first to Google or Amazon and research. But what if I discover in Facebook that my friend just got an ebike from China, and I did not even know electric bikes existed? What if Facebook shows a banner on a brand of eBikes close to my friend’s post?

The chart neglects the value of discovery. How important is for marketers how people discover their products?

Google is king on search, but social media is king to discover new things. That is gold for advertisers too. Not sure if $50bn worth of it though… At the end I might still search the ebike on Google and check the reviews in Amazon.

 

 

Why Google Acquires Widevine?

W3C’s HTML5 FAQ page might give some clues (see screenshot) about why Google buys Widevine, a DRM vendor that powers Netflix among others. What if Google adds DRM to HTML5 video?

Google did something similar when they bought On2 and open-sourced VP8 as part of WebM. This move pushed MPEGLA to make h.264 royalty-free for Web video. The iPad did the rest to accelerate adoption of HTML5/h.264 video in the web.

HTML5 video with DRM is what Youtube needs to convince content owners, movie studios in particular, that their content will be protected. Furthermore, HTML5 video with DRM, combined with cool HTML5 UIs, makes the Web Browser an ideal front-end for video on any screen. Where there is a browser, Google will make money with ads.

Adding open source DRM to HTML5 is consistent with Google’s web centric vision. Chrome OS is a perfect example of that vision, illustrated in this recent post on Google’s blog (with Eric Schmidt’s talk on the Chrome event this week).

I tend to think Google sees this acquisition more strategic than just adding DRM to GoogleTV.