Stalker Heaven: Snap a Picture, Get an Identification

I’m generally someone who lives a very public existence and suggests that most people get used to that notion.  Google, however, is about to test our limits here.  They’re apparently about to introduce a mobile application comparable to their existing Goggles but instead of identifying places, it identifies people. [UPDATE:  Google denies working on such an app or at least terms it speculative.  In any instance, my observations below stand.]   Even to me, this one is creepy.  They’re already defending it by saying the default is “opt out” and that users must explicitly choose to share their pictures and information.  I have so many problems with this approach that I can’t begin to address them all.  But here are just a few:

  • “Informed consent” is only reasonable where the individual involves is making an “informed” decision.  Are people really going to read the fine print before they opt in?  Of course not.  And even if they did, is Google going to manage things in a “do you really want to do this” fashion or are they going to say “great, you agreed, let’s move on and forget about what you’ve really just done here.”  They’ll do nothing to discourage participation.
  • These things are a moving target.  Remember when you signed up for Facebook?  If it was more than a year ago, your privacy options were fairly limited then.  Only under extreme scrutiny and now the threat of governmental intervention has Facebook made its changes and defaults more open and user-friendly.
  • We’re doing things we never thought about when we signed up for a platform.  Facebook at first was about connecting with “friends” and sharing status messages.  We’re now sharing pictures and, even more  intimate, location.  I’ve only friended people on Foursquare (a location-based service) who I care to have know where I happen to be.  I’ve got over a thousand friends on Facebook, some of whom I don’t care to have know where I’ve checked in and where I happen to be.  I’ve set up a group on Facebook called “location OK” and have only included those friends whom I’m comfortable having know where I’m located, and I’ve set my privacy settings on Facebook so that Places check-ins can only be seen by members of that group?  Have you done that?  Do you know anyone else who has done that?  Probably not.  You set up your settings for a use case that may no longer be the case, and haven’t adapted.  This “creeping  incrementalism” has made it easy for you to ignore this stuff.  Managing Facebook and Google is no longer simple.
  • Deep integration.  You have no idea how much information you’re sharing across networks.  Every time you click “allow” to sign in with Facebook or Twitter, you’ve set up a data-sharing arrangement that goes well beyond what you ever intended.  Go look at your Twitter and Facebook settings and see how many people you’ve enabled to have access to your data and credentials.  I’ll bet you don’t even know what half of the things you’ve got in there are.  When I sign in like this, I change their default setting so that the approval is good for one day only.  Of course the default is “until revoked” which is polite language for saying “forever, because you’ll forget about this 10 seconds after you clicked it.”

As I said, I could go on and on.  So what’s going to happen here.  The scariest thing is that this mess has created a situation where the government’s going to step in to help save us.  Yikes!  Grandstanding politicians.  Just what we need here.  What we really need is for someone to create a really great privacy management tool that helps us manage all the complex relationships we’ve established and manage all the information we’re sharing in an easy-to-use, coordinated, centralized fashion.  Apple and Facebook and Google and Amazon are going to fight you at every step.  That leaves you, Microsoft.  Symantec?  Cisco (who needs to boost its consumer initiatives anyhow)?

Someone tell me a legitimate use case for this software, beyond stalking.  “I should know their name but I forgot”?  “They look familiar but I’m too embarrassed to ask”?  If this were anyone but Google (or other big players), I might ignore this app.  But Google?!  Do no evil??  This will be used for evil.

The New York Times Paywall: New Coke?

So, after just retweeting several NY Times stories and thinking “take that, paywall,” I’m left wondering whether there’s a new Coke thing going on.  Does anyone believe it’s possible that the whole paywall thing is actually a bogus plan?

For those of you who don’t know, the New York Times is instituting a paywall whereby you can read a limited number of Times’ stories in any given month but to get more, you have to pay.  There are a few loopholes to the scenario, however.

  • If you’re a subscriber to the dead-tree version of the newspaper (and I am), you have unlimited access via the web or mobile.
  • If you come to an article via a social media link (e.g., Twitter, Facebook), you can access the article without regard to how many other articles you’ve already accessed.

Already there are innovators out there, coming up with ways around the paywall.  One Twitter user set up a feed that Tweeted all of the articles in the Times so that you could find all relevant links in one place.  Others are setting up Facebook groups.  The Times has responded by asking Twitter to take the feed down, although their objection was based on trademark misappropriation (the name included the Times’ name) and not on the basis of its content.  Of course, that’s the Times’s only recourse here.  It will be easy to reconstitute the feed via a defensible (and, I’m sure, highly retweeted) feed.

So, is this part of the Times’s strategy?  They knew the holes existed.  They knew people would exploit them in innovative ways.  So now, people are probably Tweeting Times’ stories way more than before.  I’ll bet their page views go up after the installation of the paywall.  So they’ll get some minor subscription money (from the suckers) but more importantly, they’ll preserve a few dead-tree subscribers (who now think they’re getting a better deal) and they’ll grow their page views because it’s now the forbidden fruit.

 

Are they that smart or devious?

 

 

Microsoft Tries to Derail the Barnes & Noble Juggernaut (!?)

In the legal morass that is Android comes the latest news that Microsoft is suing Barnes & Noble, alleging patent infringement.  Think about the surface absurdity of that one.  Microsoft suing Barnes & Noble.  Even The Onion hasn’t contemplated this scenario.  So, what’s really going on here.

At a macro level, here’s what’s happening:

  • These kinds of patent lawsuits are so common that I’ve almost stopped looking at them altogether.  Usually it goes like this:
    • Someone sues someone else.
    • The someone else counter-sues.
    • The two companies exchange patent cross-licensing agreements, usually with one side or the other having to kick in some cash.
  • There’s a slight twist to the whole Android scenario, again though one that’s not uncommon.  Most of these patent lawsuits have focused on Android licensees and not the deep-pocketed Google.  It only makes sense to go after the weaker players, albeit ones with sufficient funds to pony up.

What are all these people suing in the Android space trying to accomplish?  It’s real simple.  If you’re trying to sell an operating system into a market where Google is giving it away, you need to make the OS appear not to be free.  In other words, you may not pay for the OS but by the time you factor in legal costs, your free OS all of a sudden isn’t so free.  Somewhere along the line, Google is probably going to have to ante up to help its partners by resolving all of these patent infringement issues.  It probably means Google’s going to have to write a check.  The good news:  they’ve got $34.9 billion in cash on hand and are printing more each quarter.  So much for the chilling effect on Android licensees.

What’s particularly interesting about the Microsoft/Barnes & Noble case is that presages interesting competition in the tablet marketplace.  Why should anyone be worried about Barnes & Noble or, by extension, Amazon?  The Barnes & Noble Nook e-reader actually runs on Android.  In effect, they’re selling a specialized Android tablet for $249.  How can they do that when the rest of the Android tablet marketplace is horribly overpriced as I’ve recently blogged?  Welcome to the new world of ecosystems and razors and razor blades.  Amazon and Barnes & Noble can sell these devices at low (or no) margin because the economics of incremental margin on the razor blades (books and other digital content) is so compelling and predictable that it pays to seed the market with devices.  That’s another reason why Apple, asides from supply chain efficiencies, can sell the iPad so competitively.  It can count on a reasonable income stream from the AppStore while in the Android space, those margins go to Google.

Yes, I know that the Nook and the Kindle are not general-purpose tablets.  Today.  But the color Nook is pretty darn close.  The Wall Street Journal’s Brett Arends even recently told readers how to turn their Nooks into tablets.  He overstated his case to make a point:  Barnes & Noble can do this easily and likely will.  If not, they deserve to follow Borders into bankruptcy.

Netting it out:

  • Google is likely to have to share some of its profits with its ecosystem to cover legal exposures.
  • Google is likely to have to share some of its app store revenues with partners.  Otherwise, the situation with competing app stores (already a fracturing standard) is going to get (much) worse rather than better.  They need to do this one quickly.
  • In other words, Android tablets need to get cheaper and Google will have to share its app and advertising revenues to make that happen.
  • Players like Barnes & Noble and Amazon can become strong players in the tablet marketplace because they have the economic model and ecosystem to compete with Apple.  Selling hardware alone is not much fun these days, and is only going to get worse.

Why Letting AT&T Buy T-Mobile Sucks for All of Us

Letting AT&T buy T-Mobile sucks.  Even more insidious are the rumors that regulators have already given this a wink-wink approval.  Why does this suck?  For many years, we Americans lived in a mobile telecommunications backwater.  Large portions of the industrialized world had better, more advanced telecommunications systems than we did and even emerging markets were leapfrogging over our infrastructure and approach.  Then along came Apple.  Regular readers here know I’m no fan of Apple’s business practices but give credit where credit is due.  Apple knew it had something big and knew that it could strong-arm one of our carriers into playing business by its terms.  So committed was Apple to this approach that it was willing to go with AT&T when we all knew, and have come to see more and more, that its network sucked.

Apple begat Android and for a brief period of time, we lived in a world where capabilities and platforms and ecosystems ruled, not carriers with their focus on profits at the complete expense of user experience.  We were already seeing how much carriers hated that world.  Have you seen the crapware loaded on your phone these days, crap that can’t be removed?  Look at Skype on Verizon’s Android.  I can download Verizon’s version of Skype (and not uninstall it after that), which not only just works on 3G, it requires that you turn off WiFi (so that no other applications can access WiFi while you’re Skyping).  I’ve never understood this but I’m guessing that Verizon is scared enough of Skype as a competitor that they want to give it minimal functionality.  This also means that I can’t use WiFi for Skype internationally, even while Verizon’s CDMA technology is deployed only in a few other countries around the world.  Oh by the way, I can download Skype’s version of Skype, but that works only over WiFi.

Get used to it.  This is the world we’re going to see.  We’re likely to see a trifurcation of the app store world.  Trifurcation?  Yes, we’ll probably see app stores emerge from the carriers since they’ll each impose their own requirements for apps to be certified for their networks.  At the very least, since both networks are likely to impose data caps, each with their own byzantine pricing structures, you’ll have to download the app that’s best optimized for the network pricing model.  (You’re going to love that one, app developers.)  And trifurcation?  Well, the cable companies have already banded together to offer unified WiFi in many markets (e.g., TimeWarner and Cablevision in New York City), to better compete against mobile/telco Internet/TV incursion.  We’ll likely see an app store emerge from there, with apps that are designed around a very different model, whereby you do your high bandwidth transactions when connected to WiFi, in an online/offline synchronize model as opposed to the mobile model of perpetually available bandwidth.

This is not progress.  This is not innovation.  In fact, it will stifle innovation and inhibit the deployment of broad-based mobile applications and infrastructure.  What can we do about this?  Not much, I’m afraid.  I’d love to say “write your congressman and write to the FCC,” but I’m not so young and naïve as to believe that would help much.  What would I like to see the regulators do here?  For starters, I’d love to see them disallow the deal on anti-competitive grounds.  If you believe the scenario I outline above is possible or even likely, this clearly is a combination in restraint of trade.  If they won’t do that, at least impose these regulations on the merged entity:

  • Limitations on data caps for a period of 3-5 years.  Anyone with an unlimited plan at the time of the merger gets to keep that as long as they maintain a data contract with the carrier.
  • A prohibition on a carrier app store.
  • Limitations on the crapware installed on phones and/or the ability to remove it, at least after 90 days of phone ownership.
  • Serious notifications of potential data overage where there are data caps.  We’ve only recently gotten that protection for call overages — long overdue, and prompted by European regulators, not ours.  In data, it’s much more insidious because we don’t always know when/how much data we’re using.  There should be onerous requirements on the carriers here, such that we can effectively meter our usage.  And there should be rollover of unused data.

I wish I believed any of this would happen, but I don’t.  Instead, I think we’re about to enter a period where the ironically named Long-Term Evolution (LTE) is actually a major step backwards on the evolutionary scale.  We’ll have faster speeds…and much less ability to exploit them in interesting and game-changing fashion.  It’s a shame that AT&T, who was once broken up by the regulators, is so adept at the regulatory game that it is about to win via acquisition what it could never win the open marketplace.

I’ve Come to Save Newspapers and Magazines

My friend Larry Smith is one of the most thought-provoking people I know.  We’re both members of a group called the Internet OldTimers and in a recent exchange there, he talked about being a subscriber to the print edition of The New York Times.  I’m also a subscriber to the dead-tree version of the Times and Larry set me to thinking about why I still subscribe to the newspaper.  What do I like about the print version and how is it different than online?

  • Editorial judgments are more clearly manifested.  Placement means something as does inclusion.  Online, placement is quickly ignored and all stories look the same.  And with unlimited space, there’s no judgment expressed via inclusion.
  • Layout matters.  A glance at a section front page tells me a lot in one glimpse and the reading of 50 words.  That’s much less the case online where layout is so blindingly similar from story to story, site to site.
  • Sections matter.  As I move from section to section, my mindset clearly changes.  Online is a much more random journey with few boundaries and as a result, either the mindsets don’t change very much and/or they’re jarring when they do.
  • The delivery mechanism is well-suited to the use of the product.  Paper is wonderfully portable.  I read it continuously from the bed to the bathroom to the kitchen to the train.  Online is bumpy and with few exceptions I don’t have a seamless experience across devices (although there are some interesting initiatives in this regard and I have high hopes for it once we finally bury this notion of the “three screen experience” to be replaced by the “integrated any-screen experience”).
I like what some publications are doing on the iPad (e.g. Sports Illustrated and Autoweek) and what the Times itself is doing with its Google Chrome app.  (I’m not mentioning Rupert Murdoch’s The Daily because first, I haven’t seen it and second, I don’t like talking about Murdoch.)  The Times’s Chrome app much more closely represents the newspaper experience.  It’s familiar and preserves the assets I mentioned above and brings some additional value to online via contextual linking.  But it doesn’t go nearly far enough.
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More importantly, I think what the good iPad publications show us is that the online news experience is not a newspaper or magazine brought online.  It has to be a multimedia tour de force that brings new elements to the publication.  It combines the best of newspapers with the best of television with the best of the Internet.  We’ve gone through this with the addition of other media.  Radio wasn’t merely reading the newspaper.  TV wasn’t merely adding pictures to the radio.  The great Internet “publication” will combine elements of all that has gone before it while adding those items that are uniquely Internet, including broad linking, commenting and sharing, creating an immersive, social experience.
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Now that I’d pay for.

1:1 Marketing is Wrong

[Quick note:  I'm going to experiment with what I call some short-form blog posts.  Being an analyst, I tend to want to explain my reasoning in depth.  Sometimes, however, I just want to get out a sharply worded position or observation, so I'm going to intersperse my longer pieces with some of these quick hits.  Let me know what you think.]

Some 20 years or so ago, in the early days of the Internet, marketing consultants Don Peppers and Martha Rogers came up with the notion of 1:1 Marketing.  The core proposition behind it is to treat consumers like individuals.  Sounds good, right?  Well, I think it has been a fool’s chase and I can’t begin to imagine how much money has been spent in its pursuit.  And the more data we accumulate, the further we get from being able to realize this “vision.”  What’s wrong with the vision?

  • From a marketer’s perspective, you don’t need to get to 1:1.  Let’s use beer as an example.  What do you need to know?  Probably just my gender and IQ.  To make a gross generalization:
    • If female, then light beer.
    • If male and IQ>93, then imported beer.
    • If male and IQ<93, then Budweiser.
  • From a consumer’s perspective, do you really care to have that close a relationship with your deodorant or your automobile?  At some point, it even gets creepy.  It’s just a deodorant for God’s sake, not a lifestyle expression (unless you use Axe).

Instead of 1:1 marketing, we — both sides of the equation — want sufficiently meaningful differentiation.  I’m not going to ® that term.  It’s not particularly catchy.  But that’s what serves both marketers and customers very well.  We don’t have to drive to deeper and deeper levels of differentiation.  We just need to get to some degree of meaningful differentiation.  Light beer or not?  Import cars or domestic?  Museums or baseball?  As brands drive to get finer and finer, bad things happen:

  • Costs go way up to accumulate and process all the unnecessary data.
  • You slow down your decision-making because you’re considering too many variables.
  • You get further away from what the customer self-identifies as their relevant affiliation.  I’m a Mets fan (I know, I know) and identify as a whole with that group, not an upper-middle class, educated professional with two kids, a dog and, occasionally, a job.  When you differentiate me from the rest of the group on some vague 1:1 notion, you diminish your attractiveness, not enhance it.

As a consumer, I generally identify as part of a tribe.  Identify those meaningful tribes and market to them, not some ridiculous notion of 1:1 that we’ll never achieve and would never deliver on its promise even if we could.  It’s time to say “the emperor has no clothes” to this whole 1:1 marketing thing.  Social media has given it new life.  Stop it now.

Facebook and Amazon Change the Streaming Video Marketplace

The entries of Amazon and Facebook into the streaming video marketplace stand to change the economics and dynamics of watching video online.  While shortcomings and constraints will slow their impact in the near-term, make no mistake about it:  the economics and approaches have changed.

It’s easy to dismiss these solutions in the short-term.  No, Amazon doesn’t have the library of a Netflix.  No, the Facebook experience isn’t optimized for long-form video consumption.  If, however, you dismiss these two based on these shortcomings, you’re missing the point.

Let’s look at Amazon first.  For Amazon, this is a shrewd, and necessary move.  Amazon Prime, which offers free two-day shipping for all Amazon purchases for $79/year, is increasingly irrelevant as Amazon’s book sales move to digital.  By the middle of last year Kindle sales on Amazon surpassed hardcover books, by the four quarter that extended to paperback books as well, and on Christmas day Amazon sold more e-books than physical books combined (although that number may certainly have been skewed by the number of people opening Kindles as presents that day).  Thus, it is clear that Amazon had to do something to enhance the value of Prime for its most valued customers.  Of course, Amazon sells much more than books so Prime still has considerable appeal even for those who consume their books digitally.  Amazon wins either way.  If you get value because of the free shipping offer, the availability of streaming video for no extra cost is a compelling value-add.  And if you’re evaluating the competing streaming video options, Amazon is cheaper than Netflix ($100/year) and offers more than just streaming.  (Here’s an interesting analysis of the customer overlap between Netflix and Amazon.)  What’s most notable about Amazon’s offer:

  • It’s cheaper than the market leader, without any other considerations.
  • It’s bundled with other value, making it appear free to a significant range of customers.

Facebook’s entry is much more limited and complex but longer-term perhaps more impactful.  Much more limited.  A single movie at launch, The Dark Knight (incidentally, one of my 10 favorite movies of all time).  But this one is much more potentially transformational.  So what’s interesting about Facebook’s entry here?

  • While initially a standalone experience (and probably a sub-optimal one at that), given its market position I expect Facebook’s movie-viewing experience to rapidly evolve to a social experience.  From a marketing perspective, that talks to the viral potential.  More importantly, though, from a viewing experience, you could envision how Facebook could leverage its platform to increase the social elements in movie viewing in both synchronous and asynchronous fashions.  For instance, you might not only chat with other friends in real-time while you’re both watching a movie, you might also see the comments from other friends appear at the same point in the movie even if they’re not watching it at the same time.  Facebook can significantly shape the social movie viewing experience in a way that doesn’t exist today.  Twitter leads the real-time synchronous market today (e.g., we all Tweet during the Academy Awards) but the non-real-time and asynchronous markets are very much in play and Facebook can lead the way here.
  • The role of Facebook Credits in paying for movies is very interesting.  I have long been a believer of “count down” models vs. “count up.”  A count-up model is one where you pay for each purchase.  Every transaction counts up the amount of money you’re spending on the particular activity, and thus is an individual purchase decision.  In a count-down model,  you have a pool of credits you can “count down” against.  In your mind, the money is already spent and it’s just about how you’re going to spend the money.  With Facebook Credits, users will have a variety of ways to spend their currency (games, movies, other products and services) and a variety of ways to acquire it (you can even buy gift cards at Target).  This will make it easy to make an impulse buy of a movie (whereas Netflix and Amazon at their price points are considered purchases).

For different reasons, the entrance of Amazon and Facebook into the streaming video marketplace change the landscape.  The net result is that the marketplace has new competitive requirements.

  • Movie viewing alone may not be enough to sell a movie service.
  • The social experience of watching a movie online is in its infancy but is likely to change very quickly.
  • The payment models for video consumption are expanding, and will include:
    • Subscriptions
    • Virtual payments
    • Bundling with other services

Why Do Android Tablets Cost More than the iPad?

You know me.  I don’t own any Apple products any more.  I have:

  • HP desktop
  • HP convertible tablet laptop
  • Android cell phone
  • Sansa MP3 player

I can see the utility of a pure tablet given how much I travel (which I think is its optimal use case:  on the train/plane/Starbucks).  I’d like to buy an Android tablet.  With yesterday’s introduction of the iPad2, I am however left scratching my head.  Even before this, I was wondering “how in the world can the Android tablets be priced 20-50% more than an iPad?”  Hence, my list of the top 10 reasons someone would buy/pay more for an Android tablet.

  1. What’s an iPad?
  2. I’d pay anything to avoid enriching Apple.
  3. I work at Google…although Google employees may hold out until the holidays to see if they’re getting one free.
  4. Google Maps.  Oh, you mean I can buy a third-party GPS solution that is every bit as good and works off
  5. I’m too unhip to be let into the Apple Store.  (There are those who actually posit the Apple Store as part of the reason.  Apple doesn’t have to worry about retail margins so they can price below those who must support those margins too.  I don’t think this is an excuse, though it is a factor.)
  6. I hate waiting in lines to get technology products.
  7. I drive a Lexus and have gotten used to paying premium pricing for the same products.
  8. There must be a TCO argument in favor of Android, right?
  9. XOOM sounds so much cooler than iPad.
  10. If I’m stupid enough to buy an Android tablet right now, I’m stupid enough to pay a premium for it.

Truthfully, I really don’t understand it.  I’d expect Android tablets to cost $100 less than an iPad.  At least.  At current price points, they’re going to kill the market.  So, what do I think the real reasons are?  I’m stretching here.

  • They know Android isn’t really ready yet for the tablet form factor so they’re pricing it so only the really committed will buy in now.  Purposely keep the market away even while you’re dipping your toe in.
  • The various parties to the ecosystem are really that clueless to think that their Smartphone success will translate to the tablet market and that they can support comparable/premium pricing.

Honestly, I’m baffled.  If they’ve got me ready to buy an iPad, they’ve really accomplished something very bad.

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