An AP story from earlier this week highlights the work Scott Harrison and Charity Water is doing to to install sensors in wells in Africa so water flow can be monitored remotely. With declining sensor prices, expect to see more sensors deployed to monitor charitable work in hard-to-reach places.
How Companies like Groupon and Kickstarter are Shrinking Design Cycles and Improving Supply Chains 0
Companies like Groupon, Quirky, and Kickstarter are slowly starting to have an impact on design cycles and supply chain efficiency in very interesting (and unexpected) ways. Take Groupon for example. It is in over 500 markets in 44 countries. Earlier this year Groupon launched Groupon Goods. Established companies are now using Groupon Goods in a number of ways. Obviously they are using it in a Woot!-like fashion to clear out excess inventory and discontinued stock. But they are also using it to test product attributes in a real market-oriented way. For example, imagine a company is bringing a new product to market. They’ve got the product in 15 different colors, but only want to ultimately bring four different colors to market. The company isn’t sure however which colors will sell the best. Enter Groupon Goods. The company can make a limited run of the new product in all 15 colors. Using Groupon Goods the company can then offer varying subsets of the color choices across several different markets within the 500+ served by Groupon. This live A/B test can then inform the company as to which colors are likely to sell the best. The company hasn’t relied on focus groups, consumer surveys, or marketing experts. They’ve tested the question in the “wild” and are basing strategic direction, at least to a degree, on what the market has told them.
In a similar way, companies – even established ones – are using Kickstart to determine if market appetite for a potentially new – but yet unreleased – product. If pre-orders are strong, the company can continue with their production plans. However, if pre-orders fail expectations, the company can scrap their plans and reposition scarce resources onto other projects. Supply chain timelines have shrunk which is enabling companies to use non-traditional approaches to test market appetite for new products or product feature sets.
We’re also seeing how companies like these are influencing the marketplace in other ways. Apple’s recently revised Lightning guidelines comes shortly after heavy publicity surrounding the Pop Charger Kickstarter campaign.
Moving forward, I expect to see an increasing number of companies rely more heavily on non-traditional go-to-market approaches. Ultimately, these approaches enable companies to rely more acutely on market information and rely less on their own intuition.
Today there is a tremendous amount of focus on the proverbial “second screen.” But today when most refer to the second screen they mean some screen adjacent (and subservient) to the television. I think this relationship is changing. As I’ve outlined in other places, ownership rates of connected devices has increased significantly in recent years. CEA predicts some 350+ million IP connected devices will sell in 2013 alone. Worldwide the tally will be well in excess of a billion devices. Among this count are tablets – which globally sold over 150 million devices alone in 2012. Global smartphones will approach 900 million in 2013.
Television continues to enjoy a greater installed base, but the proliferation of mobile/portable devices with connectivity and screens will cause that to change quickly. More, device usage among owners is changing quickly. We now spend 11 hours a day consuming media. At the same time, consumer attention is becoming increasingly fragmented across media platforms and devices. Flurry recently reported that consumers are spending 127 minutes per day in mobile apps, up 35 percent from 94 minutes a day during the same time just a year ago. At the same time, desktop web usage actually declined slightly – falling 2.4 percent from 72 to 70 minutes. This means that U.S. consumers are spending nearly two times more time in mobile apps than surfing the web on desktop computers.
Time spent with mobile apps is starting to challenge time spent watching TV. Flurry estimates that the average U.S. consumer watches 168 minutes of television per day, based on data from the United States Bureau of Labor Statistics for 2010 and 2011. As the chart shows, in December 2010 individuals spent about 66 minutes a day in mobile apps and 162 minutes a day in TV viewing. Today those numbers are at 127 minutes and 168 minutes. I think by 2014, we could see individuals spending more time on average inside mobile apps than they spend watching television.
Time spent within apps is also morphing. Entertainment apps and utilities gained market share at the expense of social networking and games. Last year, games took up 50 percent of time spent in mobile apps while social networking accounted for 30 percent. This year, gaming’s market share is down to 43 percent while social networking comes in at 26 percent. A recent report from Ooyala Global found “among users of connected devices, share of time spent viewing on tablets has grown 90% over the last two quarters, with nearly three-quarters of tablet viewing time spent on long-form content. Tablet owners in particular spent 71% of their total tablet video viewing time watching videos of ten minutes or longer and 30% of total tablet viewing time was spent watching content over an hour long.”
Today, consumers are increasingly engaging on multiple devices. We’ve become digital omnivores. According to recent research from Nielsen, 40% of Americans use their tablets or smartphones at least once a day while watching TV and 85% do so at least once a month. The Diffusion Group recently reported when it comes to the use of social TV apps among tablet-based social TV users, 84% use social networks like Facebook and Twitter to interact with friends about the TV program they are watching at that time (34% do so daily), 88% search the web for information about the program they are currently watching (22% do so daily), 70% text or instant message others about the program they are currently viewing (20% do so daily), and 63% use apps that synch in real-time with the TV program being viewed (16% do so daily). TDG reports, “the same phenomenon is observed among smartphone owners, though the frequencies of social TV activity vary (a bit lower for all but texting/instant messaging, which is a task better suited for smartphones as opposed to pads).”
Here is where I see the potential for the greatest impact on the “second screen experience:” if consumers are starting their engagement of a given media asset on a mobile/portable device then the flow of engagement changes and tablets (or smartphones) become the primary screen. TVs become subservient to them. Consumers will still watch content on the television, but how they get to that content is different.
What are the implications for story tellers? Here are a few things to think about:
1) Engagement is going to start with smaller screens but that isn’t necessarily where consumers want the engagement to end. Today, many studios and other content owners are using second screens as a dumping place for what they commonly view as secondary content (outtakes, interviews, etc). How does this change when the second screen is where the engagement is beginning?
2) Consumers are going to push content to the TV from their mobile devices. This means content engagement on the TV might not start in the beginning of the story.
3) With engagement starting on mobile devices, there are implications for video quality
4) With engagement starting on mobile devices, there are implications for video length
5) There are also implications for monetization of the content. If consumers start with the content on the second screen they might buy it on the first screen.
After releasing it’s first original series in February, NetFlix is planning to release at least five new original (and proprietary) programs in 2013. This shouldn’t be surprising for many reasons – namely NetFlix is simply following the path of it’s predecessors in the video distribution business. In this we also see that producing and distributing original content is higher up the value chain.
One of Clay Christensen’s great contributions to business analysis was showing that companies across diverse industries will naturally push to move up the value stream. From steel mills to automobile manufacturers to consumer electronics OEMs, we’ve seen low-cost start-ups slowly (but inevitably) move-up the value chain. With all of these moves, we then see new low-cost start-ups enter the market and begin to make the same trek forward (and upward).
HBO, Showtime, and Starz all began life as distribution platforms for others’ content before eventually moving into original content production. If anything, I’m somewhat surprised that we haven’t seen more cable companies and telcos – also large content and entertainment distributors – push into original content production and distribution. Arguably, their push up the value chain has remained within the confines of services. Cable companies have entered into Internet and phone services while the telcos have pushed into home Internet and paid TV services. Even Dish wants to push into offering cellular service. Coming in 2013, Verizon is launching Redbox Instant which enables both companies to move further up their respective value chains.
Just as HBO, Showtime, or Starz have done, Netflix has grabbed hold of a sizable market. Today Netflix has roughly 25M subscribers – compared to HBO (29M), Showtime (21M), Starz (19M). As the WSJ points out, Netflix believes that can achieve 60-90 million U.S. streaming subscribers. Those figures would suggest adoption of between roughly 50% and 75% of all U.S. households. Those types of figures are possibly achieved because a greater share of households move away from traditional paid TV services and join the ranks of Netflix customers. More likely, these types of subscriber levels will require significant overlap across other paid TV services which I believe suggests we’ll see the share Netflix spends on original content increase steadily in the years to come. For 2013, Netflix expects to spend less than 5% of its $2B annual content budget on original and exclusive programming and moving forward expects to spend between 5%-15% on original content.
The popular news site, Huffington Post, recently released a new iPad app to accompany the HuffPost Live – the social video site it launched back in August. As the app description states,
HuffPost Live is a live-streaming video network that uses the most engaging stories on The Huffington Post as the jumping-off point for real-time conversations and commentary – and invites viewers to join the discussion as on-air guests. Topics range from current events to entertainment to tech to parenting to health and fitness.
gigaom recently wrote how the App could be a second-screen break through. I think it points to the changing nature of tablets and TVs. Tablet ownership has increased significantly in the last year – from about 11 percent of US households last year to 31 percent today. I expect tablets will be in nearly 50 percent of households by year-end.
Over the last year there has much discussion about tablets as second screen devices to the TV. We are seeing how tablets as second screen devices are changing storytelling. But I also see the role of tablets changing – as individuals increasingly use tablets and smartphones to tee-up videos and other content for the TV. In this way, we could be witnessing the beginnings of a change in the flow of video content that starts with the tablet instead of the TV.
Today writers/directors/producers are using tablets and second screens to tell a story that is tangential to the primary story. But ultimately, viewers might find these tangential stories more compelling or of more interest to them and might want to push these secondary story lines to the primary set. With apps like the HuffPost Live app, users can utilize their tablets to serve up content to their TVs. Users are ultimately gaining more control.
For more of my holiday expectations:
Holiday 2012: Part I
Holiday 2012: Part II
Holiday 2012: Part III
Holiday 2012: Part IV
Holiday 2012: Part V
Holiday 2012: Part VI
Holiday 2012: Part VII
A tremendous amount of Holiday and Black Friday news in the past few days. Let’s jump right into it:
I went through some of the DEMO 2012 companies. Here are the ones I find most interesting:
YouBetMe: Facilitates betting on anything with your friends
RecBob: app/platform for managing recreational sports
The Taploid: turns your facebook feeds into Onion-esque tabloids
ube: app/platform for managing multiple connected devices
Over the last two weeks we’ve seen massive promotions and much fanfare around the Windows 8 launch. Here are just a few of the circulars and email promotions I’ve caught over this time.
One thing somewhat unique about this Windows launch compared to previous Windows launches is hardware innovation. Of course there is always some hardware innovation when new software launches. This is particularly true with OS launches, but the hardware innovation we are seeing around this Windows launch is especially pronounced and I expect even more to come.
There are just 65 days until the 46th Annual International CES official opens its’ doors. Over the next roughly nine weeks, I’ll try to summarize and write extensively about some of the things I expect to see.
Yesterday I was Los Angeles to participate in an event announcing several new additions to Entertainment Matters at CES which is entering it’s third year at CES. In 2013, Entertainment matters will feature a variety of events and conference sessions, including: TweetHouse Presents, Innovations in Social Business, Digital Hollywood, Content in the Cloud, Variety‘s Entertainment Summit: Film & Technology and the 2013 IAWTV Awards Gala. CEA also announced it is expanding its content-focused tracks by introducing a new conference track, Content and Disruptive Technologies. This new track will included five sessions: