Concerned that I was getting too enthusiastic about the opportunities for Telcos to carve out a niche in the advertising space, I put in a call to a mate who has a relatively senior marketing role within a global mobile operator (let’s call him ‘X’).

X has been around the industry for a while - he was a product marketing manager for SMS way back when - “total joke, I was a little nobody put on this minor product that was going nowhere and then BOOM! the thing takes off, much to everyone’s surprise…”. He retains a healthy skepticism about the performance and future prospects of operators believing them to continue to chase mirages of revenue growth (3G, HSDPA, MMS, Mobile Content etc. etc.), rather than accept that the market has peaked and that the future holds near-term cost-cutting ( “slash ‘n’ burn” ) followed by long-term operational efficiency ( “yield management” ) with, at best, 2% per year earnings growth.

Here’s a highly edited ‘transcript’ of our call:
Me: So, tell me, where do you see the opportunities for operators to get involved in the advertising value chain?

X (laughing): Advertising - the latest great white hope, eh? We are recruiting like mad in this area and senior management see ‘the google business model” as being the next big source of revenue growth. But why? What do we offer: the portal sites can provide all the value that advertisers need? We operators don’t bring anything to the party - we can’t add any value. And, in any case, advertising (like most web browsing), just doesn’t work on the mobile phone - it is a crap experience. We will end up as an ISP and ISP’s don’t get a chunk of Yahoo! and Google’s advertising revenues.

Me: What about the customer information you hold on customers and the AAA benefits of the SIM? Couldn’t these be used to (a) provided better content and advertising to customers and (b) a better feedback loop to advertisers?

X: But we don’t understand our customers! We have a billing relationship and we know how much they spend but we don’t know what they spend it on beyond voice and messaging (mainly because so little is spent). Google, through its search facility, knows what I want at that moment and can provide relevant advertising at that moment. But we are rubbish at this - it is not, as you consultants say, part of our core competence ( ouch! ). Our portals are rubbish - noone wants to use them.

Me: But what makes them rubbish - bad structure, wrong content or over-priced?

X: All of the above but probably the last two are key - content is not compelling and it is too expensive.

Me: Well, how about outsourcing the portal to the specialists but with a deal to provide integration with your identity, CRM and network assets to promote personalised advertising? Higher advertising revenues would enable you to drop the price of content and potentially even make it free, like the new service annouced by Universal.

X: This all sounds fine in practice but even if we do outsource our portal to a Yahoo!, I just can’t see us managing the process effectively. I think advertising will be a small revenue stream but there is no way it is going to be the industry-changing event that people expect.

Me: I agree that advertising’s importance MAY have been overblown, but don’t you think that many of your objections are not really structural but based on your cynical belief that operators will execute badly? If this is your premise, then aren’t you assuming that they will never adapt or develop effectively.

X: Oh, I think you are absolutely right. But let’s face it, all the empirical evidence is on my side!

I am trying to persuade X to attend the event on the 4-5th October and expound his “cynical-bah, humbug” views about this at length.

4:27:54 PM    comment   

Today’s announcement by Ryanair that they plan to enable GSM roaming on their flights provides a useful lesson to carriers thinking of deploying fixed-mobile convergence (FMC) solutions. Historically telephones on aircraft have been a commercial flop. As we will see below, they have failed to satisfy the user need. It is possible most FMC technology has the same problem, but from the opposite direction: attempting to solve every problem at great expense to ensure lock-in, rather than the parts of the puzzle of most value to the user.

Understanding the problems of airphones

Many reasons have been put forward for the failure of in-air phones, such as cost, lack of privacy, and audio quality issues (from background noise). No doubt these are factors, but that doesn’t seem to stop people from talking on trains for the last decade or more. The Telco 2.0 approach is to decompose the value proposition the the user seeks, and then see how well the product satisfies that need. This is a core skill for the new all-IP world. When an industry goes from vertically integrated to horizontal specialism you need to be able to pick the unbundled parts of the value proposition you will specialise in.

In the case of a phone call, the user has to select their contactee from an address book; dial; and persuade the contactee to answer (is the caller ID someone I want to talk to)? Should the callee not answer, then there needs to be a means of leaving a forwarding identity (call me back at…). That means knowing your identity/number, and having the technical means to take an inbound call. Even if the call connects, there may be a need for the callee to call the caller back to complete the user’s objective. This may need to occur after the flight has completed — and the callee may not be aware of when you dip below the magical 10,000 feet and all powered electronic items suddenly turn into verboten objects of subversion.

Simply being able to place an outbound call only filled a small part of the user need. The number you need to dial is likely to be stored in the address book or call log of your phone, which naturally you’ve buried deep in your bag in the overhead locker, which you can’t access from your window seat, and aren’t allowed to turn on even if you can get it Even worse, the callee’s number may be locked up in your operator voicemail box as a caller ID or dictated message, necessitating even more expensive air-to-ground calls. Even that assumes the user can remember the way you access your voicemail from handsets other than your own SIM-enabled one.

And that’s just the beginning of the user’s problems, as you can see from the above “lifecycle” of the conversation. The complete value proposition includes address book, outbound identity (who am I?), inbound identity (how to contact me back — which may not be a phone call), outbound call handling, inbound calling and access to voice and other messaging services.

We didn’t dig into the privacy issues during the conversation, either. The call need could also broadly fall into one of three categories: information, transaction, or chatter. Information can be relayed as long as it isn’t some sensitive confidential business. Transactions are harder: do you really want to read your credit card details out to all seats between 31A and 33C? And personal chatter will lack emotional impact due to reticence amongst strangers.

Finally, payment isn’t part of the value proposition (as it’s something you take from the customer, not give to them). Still, having to get your credit card out is another opportunity to have a “can’t be bothered” moment.

The Telco 2.0 prediction is that the Ryanair service will be a success because it fixes all these problems. Furthermore, we would expect the bulk of the revenue to come from SMS, then from inbound termination fees, and lastly from outbound call fees — a complete reversal of the airphone model.

The FMC lessons

Much of the effort in deploying FMC technology has focused on one very narrow problem: hand-offs between fixed and mobile networks. With the airphone example, the operator didn’t solve enough of the user’s problem. In this case, it focuses on solving the least critical part of the puzzle, one that the user may care little about. The attraction to the operator is clear, in that they can offer a feature which is intimately tied to their network and handsets. The risk to FMC operators is bypass by nimbler players who cheaply pick off the piece-parts of the puzzle, without having to carry the costs of the FMC infrastructure.

Skype already offers me the chance to verify ownership of my mobile number, by sending me a security code to re-enter onto their web site. I can then send SMS messages with an outbound ID of my own cell phone number. Likewise, services can piggy-back onto existing channels to offer consolidated inbound and outbound identities. One unique solution for landlines is PhoneGnome, which can intercept inbound and outbound PSTN calls and bridge them with VoIP services to “steal dialtone” from the incumbent operator. [Disclosure: article author is an investor and advisor.] The same trick is harder to pull off on mobile devices.

Similarly, a consolidated address book could be offered using SIM card exchange, Bluetooth, Outlook sync, or network-managed address books. Today it’s a pain to provision the address book in your home DECT phone, but there’s no reason that should be the case in future.

FMC proponents also gloss over the loss of utility FMC may cause. Sometimes I may wish to call the place, not the person (“it’s coming to rain and I left the window open!”). I may want to partition my life, and turn off my mobile at night, but still allow urgent inbound landline calls.

In summary, FMC may be as much about satisfying the needs of operators to lock customers in as it is about fixing the problems of users. In the current environment that’s a very dangerous strategy given the multiplying number of choices users have and declining market power that network access ownership offers. Many users already have the FMC solution they seek: the standard mobile phone, and nothing else!

Managing social acceptability

There are some other noteworthy aspects of the Ryanair service.

Passengers on super-discount Ryanair aren’t likely to complain too bitterly about disturbance from ringing phones and dull conversation. The airline has skilfully set the expectation of service low, and generally over-delivers on the core values of punctuality, schedule and price. If you arrive alive for your €0.99, it’s a success. On more upscale airlines, there a potential problem from social nuisance. It wouldn’t be surprising to see some airlines compromise on allowing SMS and voicemail access only. This suggests that for once we may see some user benefit from vertical integration of network and application. A pure “dumb pipe” leaves you at best in a cat-and-mouse game with passengers on deep packet inspection and blocking of “anti-social” application traffic. Forcing users through gateways where you get to inspect the message adds value. The elimination of externalities of use exceeds the loss of innovation, and ensures a sound economic model. Dumb pipes are only a means to an end, not the end itself.

Connectivity is King (but it’s more than just a pipe)

Boeing recently shut up shop on it’s in-flight broadband service. This suffered similar troubles to airphone: a $1000+ communications device with limited battery life required, to be operated in a space where even Cirque du Soleil would struggle to swinging a cat. The service price was quite reasonable: indeed, for long-haul I would say it was cheap. Quality was patchy but generally OK. I’ve received a Skype call this way, so it’s real broadband.

The lesson is that, again, you need to look at the whole user experience and need. People want to communicate with people. That means giving them connectivity, service and devices. Connectivity alone is a raw potato: useful, but not tasty.

Mobility is Queen

Interestingly, similar GSM-in-plane technology deployed elsewhere could end up spelling bad news for Verizon, Sprint and KDDI, who use incompatible CDMA technology. If aircraft standardise on GSM, I can see a lot of churn ahead. Each then has a nationwide network in 2D, but nothing in the vertical Y axis! Coverage always beats features, speed and service in wireless wars. No wonder the bidding in recent ground-to-air spectrum auctions has been so well contested.

4:26:39 PM    comment   

Coverage here of Deutsche Telekom’s re-structure. In it is says:

“The telco also introduced its Telekom 2010 initiative - which it describes as a 7-point programme aimed at securing market share in Germany, targeting sustainable revenue growth in European markets, and ensuring T-Mobile USA becomes the Group’s largest business unit in the consumer area. Deutsche Telekom is currently bidding for (and is likely to win) additional mobile spectrum in the US.

As well as the specific regional and country focus, the three-year plan also calls for Deutsche Telekom to achieve a top three market position across all European business customer segments. It also calls for the company to concentrate on the main fields of innovation in the industry, including IPTV, mobile Internet and ICT services. “

We’ll be hearing from DTAG’s VP of Strategy Development at the Telco 2.0 Brainstorm on 4-5 Oct. A few questions we”ll be probing him (plus Gordon Smillie, his BT co-panellist, and I’m hoping to confirm a senior corporate France Telecom panellist as well) :

- Is there really a growth business in IPTV (as currently conceived). Speaking with those who’ve spent most time testing this (FastWeb in Italy is a good example - Signor Petazzi will be covering this in his presentation later in the day), we don’t see it. However, there are some interesting developments in P2P TV and more creative models of content distribution which we’ll be hearing about in the Content Workstream on Day Two.

- Is there really a growth business in ‘Retail’ at all in mature markets? (heresy!)

- How does the value chain need to be supported in a very different way to make ‘Mobile Internet’ economically sustainable? (Again, we’ll be probing this in a lot more detail on Day Two in the Broadband Connectivity session where we look at the current economics and what needs to change.)

- ‘Top 3 market position across all European market segments’? Top 3 versus who? Other telcos? Versus Internet players? Versus Systems Integrators? Who are the players in your markets in 2010 that you’ll measure yourself against?!

- How ‘Telco 2.0-compliant’ is this strategy?

Of course, the participants at the Brainstorm can put forward their own comments and questions via the event’s Mindshare process. In the meantime, we’re helping the panellists prepare for these questions in advance, so that we can create some constructive industry next steps from the debate…

If anyone would like to suggest some ‘probing questions’ in advance, please let us know in comments box below.

4:25:37 PM    comment   

The interest in Advertising-Funded Content is hotting up and Informa have recently published their prediction that the market will grow to a whopping $11.3bn (£6bn) in 5 years time.

Nice money… if you can get it. And getting a slice of the action seems to be on the radar screen for many operators. The mobile players in Europe, in particular, are recruiting advertising talent heavily, as they see this as a contributor to filling the revenue and margin hole created by market saturation and increased competition from MVNOs as well as new compeititors and technologies.

But Google, the masters of web advertising are not going to leave this market alone. They recently announced trials of their Mobile Adwords capability in US, UK and Germany. This enables websites to deliver adverts that are configured for mobile devices together with click-to-call functionality.

If Google and the other internet giants win the ‘battle’ (if one really develops), then operators may benefit from increased data transport (more people viewing cheaper content) and some additional voice traffic from click-to-call.

The trouble is, with prices in free fall in these areas, it remains questionable whether this will add anything to the top and bottom line. And what are they going to do with their advertising talent - look to drive more on-portal traffic with an advertising-funded content capability of their own?

4:24:30 PM    comment   

News everywhere today that Vodafone UK is to sell fixed broadband via BT Wholesale…

So, another big name enters the fray in the UK (after Orange, O2 and Carphone Warehouse). This will put yet more pressure on the minnows (Pipex, Easynet etc.) and continue to drive margins down in the broadband space. The UK comms market is looking crowded again (reminiscent of the fixed market in 2000/1) - everyone is looking to take a piece of someone else’s revenue.

The contract could be worth up to £500 million to BT, depending on take-up. But Vodafone will not be installing its own equipment at local exchanges. Instead it will resell BT’s IP Stream product. This contrasts with the fixed-line broadband strategies adopted by Orange and O2 which use suppliers that set up their own kit at the exchange level.

Unfortunately, there is only so much wallet available so only the leanest will prosper. Vodafone has an advantage with its scale but we don’t see them making a bean out of fixed broadband. Vodafone’s share price had a rise today, but is still trading at a very low level.

Some thoughtful questions here and an initial response from Dean Bubley here

But the key question is still - where’s the money going to be made from providing ‘access’ and how? This is of course the focus of the Day Two workstream on Broadband Connectivity at the Telco 2.0 Industry Brainstorm. We’re getting more and more distressed broadband operators booking into this session (ingoing hypothesis here) right now…

…who will be stimulated by a keynote from James Enck of Daiwa Securities and EuroTelcoBlog. James will start the session by laying bare the facts and trends re broadband. See his extremely useful post today on Illiad and the fibre revolution in France.

From an investors point of view, James would like to see some genuinely ‘out of the box’ thinking from operators. Our challenge is to create some on the 4-5th Oct.…

4:22:06 PM    comment   

Mostly the Telco 2.0 initiative is about strategy and changes to business models. We look outside the telco, and focus on the interface between the customer and the network. For a change, let’s look inside at execution.

Here are some quick ideas for making your organisation a leaner, more agile and efficient place by improving the supply-side equation of labour and capital.

1. Go commodity. Put a moratorium on proprietary equipment and software.

Google delivers incredible performance and up-time on specially managed farms of commodity hardware with tweaked open-source operating systems. Iliad apply similar ideas to the French telco market. You can too. At the very least, follow the lead of EnterpriseDB and use commodity software as a pricing lever: “We don’t tell Oracle users to convert from Oracle databases to us. We urge them to get some leverage with Oracle by converting just 5% of their databases to us.”

2. Don’t just expect productivity, teach it.

A ground-up change has been occurring in personal productivity. David Allen’s Getting Things Done has seeped into the management psyche, and sports a plethora of toolsets and blogs. They don’t teach you these effectiveness skills in school, and now it’s time to operationalise it and expect “effort management” to be a core skill of every employee.

3. Benchmark your IT costs again, the world just changed.

Amazon have done what Sun have long promised, and created a super-commodity computing cycle and storage service. As Thomas Anglero puts it with only the mildest exaggeration, you can build a telco for $0.15/hour utility costs. You can be assured Skype won’t be spending millions on IMS kit, so any centralised computing facility either needs to deliver massive benefits, or be delivered with all fat cut out. Your internal IT costs an order of magnitude too much compared to the best. Fix it before disruptive new entrants come in with negligible cost bases.

4. Empower and delayer.

We carry on the theme of senior management working on the business (making processes better), not in the business (reacting to daily events). They’re old buzzwords, but if Taco Bell can eliminate a layer of management whilst making their business improve, so can you. The good news is the timing is just right, since the ease of use and availability of collaboration tools to grease the process has never been greater.

5. Go agile.

The ideas that animated the Toyota Production System for cars have been applied to software with similarly spectacular results in terms of defect rates and throughput. Every telco has a software factory, even if sometimes outsourced to an integrator. You’re almost certainly using outdated metrics and methods. If this stuff is news to you, be scared — you’re late to the party. The good news is that Microsoft’s new developer toolsets will embody the best practices from the lean/agile development community, so this won’t be too painful to adopt.

6. Remove information gatekeepers. Share everything.

It sounds like philosophy, but if a piece of business intelligence or internal discussion doesn’t have a URL, does it really exist? You’re in a competition for the best ideas, and then executing on them. Any friction to the exchange of ideas needs to be removed, and that includes nasty communications silos like email. (“The boss’s inbox is where all good ideas go to die.”) There are big, traditional companies out there that have completely re-invented how they work together, and documented the process. Now’s the time to make blogs, RSS feeds, wikis, and advanced communications tools part of your standard internal repertoire.

4:14:08 PM    comment   

I have been talking to several middle and senior managers at mobile operators around Europe in recent weeks and the overall mood is grim. Several are sitting on or waiting for redundancy packages (which are generally quite generous), but most are not positive about securing another job within a competitor. The ‘musical chairs’, where employees could walk out of one operator and into another, of the last few years has come to an end and lots of people are wondering what they are going to do in the future.

Despite the bleak prognosis for many MVNO’s, as blogged by Om Malik amongst others, many coming out of mobile operators are considering a move into this area as a way to leverage their existing skills and earn an honest crust.

This got me thinking: what would a Telco 2.0-compliant MVNO look like? We have already blogged and covered in our manifesto and report in detail about how the integration of handset, UI, Services and Network is breaking down and how this will continue in the Telco 2.0-world. The premise for an MVNO start-up would thus be about customer control and choice versus traditional operators: the ability to choose any handset, customise your own UI and select own and third-party services.

I have jotted a few thoughts down below for a prospective Telco 2.0 MVNO. Please feel free to throw stones or, better still, come up with an alternative. The key assumption is that you do not have a bundle of capital to build infrastructure and market a brand. Rather than KISS, the CASH (Conserve All Spondoolies Herbert) principle applies.

Would this model make money? Don’t know, there is not much new here except the concept of putting it all together and focusing EXCLUSIVELY on customer control and value, but if anyone nicks the idea then I want 5% of all revenue achieved.

Background

• UK Mobile players battling for unique position in mind of consumer - high advertising but low differentiation = lots of noise:
  • Vodafone (formally positioned as quality premium brand) now premium + innovation (live!) + value & simplicity (Stop the Clock, Vodafone Simply) + instant gratification (Now!) - all for essentially same product
  • Orange used to be positioned around optimism (The future’s bright…) but now lots of mixed messages

• Growth in Young (16-35 year old) consumers with strong digital skills (web, mp3, mobile, pc) who are seeking control, participation (not passivity), flexibility and value with communications:
  • E.g. Big rise in social networking sites with user-generated content - MySpace, YouTube etc. where people exchange content and communicate
• Under-served Corporate market (larger SMEs through to Nationals) also seeking greater value from and control over mobile voice and data.
• Result is customers are confused, irritated by lack of control (contract lock-ins, hidden handset “subsidy” costs, little web self-service options), feel ripped off (stung when out of contract, locked in to high prices as prices move down for new customers)

Positioning & Customer Targets

• Customers are Young ‘Digital Kids’ (16-35) and central corporate purchasing depts for larger SMEs and Nationals
• Position in mind of customer is ‘you are in control’ of your mobile:
  • HANDSET: Get the handset you want free of any operator controls/portals/UI
  • PAYMENT: Transparent up-front or hire-purchase agreement for handset - nothing hidden; Pre- or post-pay options for services; Payment linked to usage NOT to predetermined contract bundle - no contract lock-ins
  • PRICING: Low-cost and prices reduce whenever market prices reduce - not locked in to high prices
  • ACCOUNT MANAGEMENT: Manage everything on-line - billing and payment, service activation etc.

Overall concept

• Range of handsets - off the shelf from manufacturer
• Customers buy handsets upfront OR via transparent high-purchase scheme over 12 months (this is the ONLY contract customer enters into).
• Prepay or a ‘NO CONTRACT’ postpay - customer pays for what is used each month (same attraction as prepay but no top-up hassle). Really SIMPLE approach: handset selection & payment + pre/post payment choice = core service proposition
• Most services automatically provisioned for use - e.g ‘pay-as-you-eat’ data package is available for all for web-browsing/email. Alternatively, customers select all-you-can-eat data service for monthly flat fee.
• Same price on pre- and post-pay for minutes, texts, data etc. Any price reduction affects WHOLE customer base - nobody locked in to high-price contract
• SIM-only option available - customers simply sign up for pre- or post-pay service and number is ported over
• Prepay service via Paypal, Postpay via direct debit
• Maximum customer control over account via web self-service for billing, activations:
  • Big benefit for Corporates wishing to manage purchasing centrally but control usage by dept/cost centre - numbers linked to cost centres through web interface.
• Potential deals with Skype, M$ to offer VOIP and IM clients (subject to operator agreement)
• Prices driven down by lowest-cost position:
  • 100%(?) web self-service - provisioning, customer service, billing. E.g. Drop-down boxes available for configuring Email solution on mobile for all major email accounts BUT no Email set-up support for exceptions.
  • Inbound email and IM customer service only - customer service issues simplified by single price plan, no airtime contract, simple and separate handset hire purchase, automatic/web provisioning of services.
  • Fulfilment for handset/SIM is outsourced and customers cover postage costs
  • Outsourced customer storage and processing infrastructure using Amazon’s S3 storage service EC2 CPU processing capability as described so eloquently by Thomas Angelero in his Telecom Tsunami blog
  • Outsourced billing capability
• Additional revenue-generating options - suggested to customer at sign-up or personalised and pushed at customer on mobile or web (when they top-up bill, change service options):
  • (Outsourced) handset insurance option
  • Other hardware sales - mp3, Slingbox (latter for offering Mobile TV service at transport cost - flat rate all-you-can-eat monthly payment) etc.
  • Accessories sales (Why not get a … for your phone)
  • Content download channel for catalogue owner - film/music/other content (poss ad-funded)
  • xDSL sales (either as distribution channel or reseller for a ULL provider or BT), assuming (a) market matures (lower customer service issues) and is (b) attractive (ie can make money out of a paid service)
  • ‘Click to recommend a friend’ and receive £x off your bill if they buy a handset or sign up for service

Marketing - critical ‘make or break’ area

• Low-cost viral Web 2.0 approach - blogospheres, get young film-maker to shoot quirky, humorous films of customers losing control of mobile and turning to the MVNO - “Take Control of Your Mobile…” and post on MySpace, YouTube etc.
• Paid search and contextual ads on Google etc.
• Email and SMS blasts - opt-in, of course

4:01:48 PM    comment   

So reports WSJ…after numerous fits and starts and speculation about shortcomings in MSFT’s IPTV software, some more details about Verizon’s usage of it is coming out.
Verizon IPTV service has rolled out in small bits in seven states, and MSFT’s IPTV software is an integral part of the box. But during the two years the project has been in development, the phone company became so frustrated with delays and technical glitches with Microsoft’s technology that it replaced some of Microsoft’s personnel and software with its own, according to the story. Verizon now has programmers working on the project at its facilities in Texas and India.
“The Microsoft subject is a touchy one for Verizon, in part because it has a long relationship with the technology company and is a customer for some of its software. Also, because Verizon wants to use some of Microsoft’s patents for its continuing work on TV, Verizon officials are reluctant to publicly discuss its current issues with Microsoft.”
Related:
– France[base ']Äôs Club Internet Will Offer Microsoft TV Edition-Powered Triple Play
– Microsoft[base ']Äôs IPTV Chief Leaves
– Microsoft[base ']Äôs Lichtman Defends IPTV Program

3:53:49 PM    comment   

[By Staci D. Kramer] One aspect is clear following a phone interview about Zune with Bryan Lee, Microsoft corporate VP and CFO, Entertainment and Devices Division: Microsoft may call Zune a digital media player but the focus is squarely on music, or to be more exact, a communal music experience. Where Apple emphasizes the video and audio experience on its higher-end players, Zune is a music player with what should be a good 3-inch video display and the ability to play some video. Zune Marketplace is a music service that one day may include video but doesn’t now. Lee calls that the “big vision and competitive difference” with Apple. We covered a lot of ground in a short period of time; here are a few highlights:
– What isn’t up for discussion today: pricing, quantity being shipped, the exact ship date. When I asked if pricing would be competitive, Lee said that “is the way I would guide you to think about.” He said he doesn’t want anyone to feel priced out of Zune.
– Lack of emphasis on video: Lee: “You’re right that there’s not a lot of emphasis on it and that really kind of goes to maybe a big vision difference and competitive difference that we see with Apple right now. Our goal right now is to celebrate music. Our goal is to make that celebration a communal celebration and not a solitary celebration and our goal is empower both the artists and then the consumers of that art. That’s really what it’s about. … That’s the big use scenario; it’s what people are doing,. Yes, there are some interesting headlines that come out every now and then about licensing 75 movies from your closely affiliated company but the usage around that, when you’re looking at the screen sizes, etc., it’s not a big focus.”
– Community: Despite all the music-sharing efforts already underway, lee sees this as a “vastly untapped” area. Lee: “You think about the social experiences around a YouTube or a MySpace or an Xbox Live, and what they’ve done to reinvigorate a lot of things. We look at those as much as the model as anything else.” People will be able to share Zune to Zune but the Zune Marketplace won’t be set up for sharing tracks.
– Future proofing: The wireless access is for sharing now but is also part of future-proofing from a technical standpoint. “… It really keeps the door open for lots and lots of innovation. Today the focus is on device-to-device sharing; tomorrow the focus could be on lots of things.” Every Zune device will have wireless. “We just see that as so central to the experience going forward.” For now, Zune will use cables to connect to TVs and stereos; that stands out more given Apple’s preview of iTV. Lee says wireless connections to non-Zune devices could happen over time.
Plays for Sure: Zune isn’t “Plays for Sure” compatible and the DRM-protected music from PFS services likely won’t play without the usual burn to CD workaround. Lee’s explanation: PFS was established to make sure non-integrated players and services were compatible; because Zune is an integrated environment, it doesn’t need PFS. Lee: “We wanted an integrated experience from the beginning. … Our focus is on giving the user one great experience.”
– Urge et all: Lee said he’s not sure he would describe Zune as direct competition with Urge or other Windows compatible music services. The gist: Zune competes directly with an integrated device/service like iPod/iTunes, not with companies opting out of the integrated experience.
– The long haul: When I asked Lee about outside expectations for success, he started his replay with a description of Zune as part of a “connected entertainment” vision that started six years ago with Xbox. Lee: “Whether someone thinks we sold 80 percent of what we should or 120 percent of what we should two months from now is an interesting factoid but isn’t going to dictate Microsoft’s commitment to this space and this vision.”
Related: Microsoft Zune: Not Just A Portable Device, A New Community-Based Platform
– Microsoft Zune: More About Zune Marketplace; Can Use Xbox Currency

3:51:52 PM    comment   

The dry-run for roll-out of 3G mobile services is finally taking off, as the government has provided low-power spectrum to GSM players BSNL, MTNL, Bharti and Hutch to carry out interface check on a non-commercial basis.

The trial spectrum has been given for one month and is 1/1000 of the actual 3G spectrum capability. It has to be used in a closed campus to see inter-operability of the interface with the existing system and is only for technical demonstration, the official said.

Commenting on why no CDMA player has been provided the spectrum,

Spectrum for carrying out 3G trial has been given to all who had applied under the National Frequency Allocation Plan on the 2.1 Ghz band, a senior Department of Telecom official said.

As far as CDMA players are concerned, while Tata Teleservices had sought 3G trial spectrum, it did not get it. On Reliance Communications, the official said, their case could not be considered as they had sought spectrum on 1900 Mhz band, which did not conform to the NFAP for their CDMA based 3G trials.

But if they (Reliance) ask us for spectrum on the 800 Mhz to carry out trial for EVDO (a version of 3G service for CDMA), we will consider their case, said the source.

Indeed good to see some real movement in the introduction of 3G services.

Source: ET

3:50:19 PM    comment   

Peter Chernin, Chief Operating Officer of News Corp., according to Multichannel News dropped the proverbial hammer on those who he sees are leaching off the MySpace ecosystem.

"If you look at virtually any Web 2.0 application, whether its YouTube, whether it's Flickr, whether it's Photobucket or any of the next-generation Web applications, almost all of them are really driven off the back of MySpace."

There is a good chance, a lot he said was left on the cutting floor, but if (and only if) he means what he says, then all those tiny start ups that are betting the farm on MySpace economy better watchout.

Regardless of what happens, it is important to point out that MySpace is neither DirecTV nor BSkyB. Instead it is MySpace, somewhat hard to describe, and perhaps that is why we channel Robert Young, who so eloquently wrote an essay called, Inherent Truths and Value of Community, back in September 2005.

So as time goes by, the foundation of ownership and control for content and distribution is increasingly shifting from corporate entities to people and communities. A phenomenon that will cause countless sleepless nights for old media and old-line technology leaders who don[base ']Äôt fully comprehend the significance of the dynamics at hand.

The utility of MySpace is that it is more than a social network. It is a platform, which puts users in charge of taking and assembling their pages, regardless of where the content comes from. It became one, just because it did not care what and how people put their MySpace pages together. Wild wild web? Sure, but millions saw it as the page they started their day, and spent most of their time on it.

In other words, MySpace is an “attention page” not a portal page. For millions of users, MySpace is their most important page, the one that has all their attention. That attention is why MySpace accounted for 10.8% of Google’s search traffic, and the reason why News Corp subsidiary, Fox Interactive Media was able to craft $900 million deal with the search engine giant.

News Corp should be doing its best to grab more of this attention, and figuring out how to make money in the process. Google deal was a good start, and they need to figure out a “developer” plan to make money, not come in the way of those who create widgets to put on MySpace pages, or the actual MySpace community.

This is something we have talked about in the past, in our podsessions. Glad to see our friends at Techcrunch are carrying on the crusade. I’ll let others chime in… it is late, and time to get some shuteye.

3:49:14 PM    comment   

CTIA, Los Angeles: News Corp[base ']Äôs COO Peter Chernin is certainly getting a lot of attention this week after emphasizing MySpace[base ']Äôs weight in the web 2.0 world. This morning, however, he was concentrating on Mobile as part of his keynote at the CTIA wireless convention in Los Angeles.

Chernin talked a bit about News Corp[base ']Äôs recent purchase of a controlling share of mobile company Jamba and how bullish the company is on mobile as an entertainment medium, but his most interesting comments dealt with the harsher realities of the mobile content business in the U.S. Finding mobile entertainment on cell phones is basically a joke right now, he said, adding some reality to the mobile lovefest going on in the convention hall.

His perspective coming from the entertainment industry: we[base ']Äôre selling something no one really needs so companies have to work hard and figure out a better way of making people want that content.

News Corp[base ']Äôs wireless push will likely be good for more than just the company[base ']Äôs bottom line. The mobile content ecosystem in the U.S. needs a heavy weight like News Corp to counter balance the carrier-centric system. And of course Chernin had a few ideas on how to improve it: The industry needs better and more simple business models, more attractive marketing, much easier ways to find the content on or off phones, as well as more standardization between handsets, Chernin says.

Any consumer who has tried to download ringtones or mobile games, would heartily agree. I test this stuff for a living and sometimes being able to just access and find the content is like pulling teeth. What do you think? Any mobile entertainment experiences you[base ']Äôd care to share?

3:47:40 PM    comment   

Indian operators are aiming to roll out 3G even before earlier generation services like GPRS take off. The country’s telecom regulator is already beavering away on issues like the price of 3G licenses, the allocation of spectrum and how much companies can charge for value-added services, and now it has allowed Bharat Sanchar Nigam Ltd., Mahanagar Telephone Nigam Ltd., Bharti Airtel and Hutchison Essar Ltd. to use 3G spectrum to test equipment in anticipation of a launch later this year, says Reuters .

Optimists say India can leapfrog slower-bandwidth tech with a speedy launch of 3G. But there are some questions whether India is really jumping ahead of the curve or blindly following in the footsteps of operators in more developed markets[base ']Äîwhere 3G’s fancy gizmos proved hard to sell to consumers. We know, high-end data and video downloads and Bollywood movies on your mobile, yada, yada, yada. But here’s a frank assessment: “3G as a revenue booster [in India] is far-fetched at this time,” Shubham Majumder of Macquarie Research told GigaOM.

On the upside, freeing up the 3G band may alleviate a spectrum shortage that makes a mobile call in a place like Bangalore a crapshoot on a good day[base ']Äîplagued by dropped calls and that infuriating “network busy” signal. But don’t get too excited yet. “A sudden, massive overnight migration to 3G may be unrealistic to expect,” Tonse Telecom’s Sridhar Pai told GigaOM. “It will also come with a fee, and some won’t adopt it immediately. In the intermediate time, it may make things worse.”

3:45:34 PM    comment   

Tuner kahuna

Modeo, the subsidiary of Crown Castle that is building out its own DVB-H mobile TV network in the US, has decided to go it alone, and launch the service anyway with, or most likely without, the endorsement of a major US cellular operator. It will now launch the service in October.âo[oe]

3:37:17 PM    comment