Bradley Howard's Blog

Innovation is an ingredient

Jan 20, 2012 at 10:25am

Two large companies with completely different views on innovation, Saab and Kodak, have filed for liquidation and protection in the last two months.

It’s wrong to compare these two companies against modern day technology companies who are so good at innovation, because technology companies are so young by comparison, and companies change rapidly once several ‘generations’ of employees leave the company.

Saab haven’t released a brand new model for several years, so whilst I feel sorry for the thousands of employees worldwide, its a case of lack of innovation leads to staleness. Even the most loyal customers eventually grow bored, such as my next door neighbour who bought a new Saab (in the same colour) every three years for the last few years, bought a beautiful Jaguar XF last October.

In 2010, Saab’s revenue was £2.3bn and Jaguar Land Rover’s was £6.5bn. Jaguar has since released several completely new models and gone from strength to strength. In Q2 2011, it’s revenue was £2.9bn - and that’s during a recession.

It’s easy to look at Kodak as an innovative company though. They invented the first hand held camera, the Brownie, in 1900, and they invented the first digital camera way back in 1975. Unfortunately these landmark inventions weren’t enough.

Companies needs to keep on innovating again and again, literally ad infinitum.

And innovation isn’t enough by itself. It's merely an ingredient amongst good timing and marketing.

Photo courtesy of liftarn on Flickr

tags:

economy, innovation,

0 Comments

Review of my 2011 predictions

Dec 22, 2011 at 10:51am

Back in January I made 12 predictions for digital media for 2011. I did the same for 2010 - i.e. I made the predictions and then analysed them in December, and faired well. How did I do this year?

1. Rapid demise of Flash

Bang on here. We're witnessing HTML5 rapidly overtaking Flash, mainly because users want to view sites on their iOS devices, which don't support Flash. Flash for mobiles has been dropped in favour of Adobe Air - the problem with Air (an irony in the product name) is that it's too heavy for downloading over mobile: Adobe Air apps are very large. HTML5 is both very powerful and not linked to a specific vendor, which is exactly the type of technology web developers embrace quickly.

Prediction rating: 10/10

2. Local local local

The use of Google on mobile devices is increasingly rapidly, and one of Google's most powerful functions is to provide local results on mobile devices. Facebook Check In and FourSquare will continue competing in the future, providing more relevant functionality which is only good for end consumers.

Prediction rating: 10/10

3. LinkedIn to IPO

Yes, LinkedIn IPO'd in the summer at a market capitalisation of around $6bn. At the end of the first day of trading, shares were selling at over $94. They are now worth just under $65. The actual variance has been from $55 to $122. Personally I think the future is very bright for LinkedIn, as long as it sticks to it's core, professional-only values and steers cleer of Facebook.

Prediction rating: 10/10

4. More "paywalls" will increase the expectations of having to pay for content

I predicted that we'd see at least six mainstream publications start charging for online content. What was very difficult to predict was that this was going to be made possible via the iPad. The iPad has been the saviour of global newspapers by offering a simple charging model for content owners. Many newspaper websites are still free, but most apps charge for content. The main point is that user now expect to pay for content, but it took the shift to a new platform to illustrate this.

Prediction rating: 8/10

5. Financial Services move into social networks

Banks have had other things to worry about this year, and whilst many are dipping their toes into the water with Twitter and Facebook, I'm not aware of any doing it particularly well. Searching for the popular high street banks on Facebook returns a rather fragmented list. I expect this to change in the near future.

Prediction rating: 2/10

6. Facebook to follow Compuserve even more

Try and name a brand that isn't on Facebook. In January I said that we should expect a Skype messaging style interface and in July, we got Skype inside Facebook. I predicted we'd have a billion users by the end of the year, although this is unlikely to come true because in September, Facebook announced they'd broken through 800 million users - still an amazing feat.

Prediction rating: 8/10

7. A clear leader will emerge in Interactive TV

Interactive TV is now firmly called Smart TV, and no, a clear leader hasn't emerged yet. The remotes all look different, and operating systems are different, and with the latest XBox release, Microsoft is putting up a decent fight to use your games console as the Interactive device.

Prediction rating: 0/10

8. Rapid rise in CPC

I said that CPC rates would rise, and noted the cost of some terms. Here they are:

keyword	Cost in December 2011	Cost in December 2012
ebook	£0.55	£0.74
sandwich	£1.00	£1.05
drink	£1.00	N/A
laptop	£1.25	£1.31
paper	£0.75	£0.76

I estimated costs would increase at least 50% over the next year however they have mostly gone up a much smaller amount, with the exception of the highly competitive ebook market.

Prediction rating: 2/10

9. A $50 A5 eReader

I was $10 out - Walmart are selling an eReader for under $60. Bearing in mind there was nothing available for less than $120 at the start of the year, this demonstrates how mainstream eReaders have become.

Prediction rating: 6/10

10. App stores will decentralise, leading to confused customers (again)

The term app store has become abused. Now everyone has an app store whereas a year ago their product had an 'add-on'. If you go into a car showroom I'd half expect the optional extras to be available from an app-store! Fortunately the market hasn't become decentralised as predicted - to the benefit of end users.

Prediction rating: 0/10

11. The economy will continue to splutter

Obviously this has come true. I predicted that companies would need to start demonstrating clear revenues, including Twitter, and this has materialised as $140million this year.

Prediction rating: 10/10

12. Chrome to far exceed Firefox market share

Perhaps 'far exceed' is an exaggeration, however in early December Chrome overtook Firefox for the first time, and it's here to stay. I'm a big fan of Chrome for a number of reasons (all the settings are stored centrally "in the cloud", it auto updates seamlessly and it's very fast), and hardly use Firefox any longer.

Prediction rating: 8/10

So there we have it. Overall I was reasonably accurate with the predictions. I'm working on 2012 predictions, which feels more difficult at this time. Maybe it's the economy/ general outlook. Any help would be appreciated!

Photo courtesy of lacomj on Flickr

tags:

Adobe, Facebook, Firefox, Flash, Google Chrome, Kindle, LinkedIn, TV, advertising, apple, banking, ecommerce, economy, finance, iPhone,

4 Comments

A look at New York Times digital revenues

Oct 25, 2011 at 12:33pm

The New York Times has announced some details of it's online premium subscription (i.e. cash payment) model.

Full details

Digital

Digital businesses include NYTimes.com, BostonGlobe.com, Boston.com, About.com, other Company Web sites and related digital products. In the third quarter of 2011, total digital advertising revenues decreased 4.5 percent to $74.8 million from $78.3 million. Digital advertising revenues at the News Media Group increased 6.2 percent to $50.3 million from $47.4 million due to growth in retail and national display advertising. Digital advertising revenues as a percentage of total Company advertising revenues were 28.6 percent for the third quarter of 2011 compared with 27.3 percent in the third quarter of 2010.

In the first nine months of 2011, the Company's total digital advertising revenues increased 0.9 percent to $242.9 million from $240.7 million. Digital advertising revenues at the News Media Group increased 12.2 percent to $162.4 million from $144.7 million. Digital advertising revenues as a percentage of total Company advertising revenues were 28.2 percent for the first nine months of 2011 compared with 26.3 percent in the first nine months of 2010.

Paid digital subscribers to The Times digital subscription packages, e-readers and replica editions totaled approximately 324,000 as of the end of the third quarter of 2011. In addition to these paid digital subscribers, as of the end of the third quarter of 2011, The Times had more than 100,000 highly engaged users sponsored by Ford Motor Company's luxury brand, Lincoln, who have free access to NYTimes.com and smartphone apps until the end of the year, and approximately 800,000 home-delivery subscribers with linked digital accounts, who receive free digital access. In total, The Times had paid and sponsored relationships with over 1.2 million digital users as of the end of the third quarter of 2011.

Source: The New York Times Company

My interpretation

In the last quarter, there were 1.2 million registered users, of whom 324,000 paid something, and 100,000 were paid for by Ford (a great subscription model as long as there are no catches for either party) and 800,000 were covered by their print subscription. In other words, they have a churn of about 25%.
The site has 45 million unique visitors per month as of January 2011 - it's interesting that they use comScore to quote that 45 million. ComScore use an estimated data model, as opposed to NYT using their own actual data.
Anyway, 45 million unique users and 324,000 have paid something - that's a conversion rate of less than one percent, however paid for content is still very much in its infancy.
Those 45 million users probably don't include Smartphone users or e-readers (hats off to ComScore if that can get that data, however I suspect they can't).
Doing some extremely rough sums, subscriptions are 99 cents for the first 4 weeks and then $3.75 per week thereafter. Let's ignore the special offer price and let's assume Ford pay a full $3.75 per user. Ignoring the print subscribers who get the digital edition for free, that's a total revenue of $1.59 million per week. Let's assume NYT earned this revenue throughout the entire quarter (12 weeks), that's a total of $19 million for the quarter.
Digital advertising across the group (and this includes a number of other websites and newspapers) generated $74.8 million.

Lessons to take away from this quarterly statement

The premium digital content model still has a way to go - advertising still generated four times the revenue as subscribers.
'Wholesale' or 'sponsored' user bases are key drivers for the number of paid for subscribers - Ford pay for 100,000 users and NYT have 324,000 paying individual subscribers. Think of the effort that goes into the Ford deal compared to the direct to consumer sales effort.

tags:

analytics, business, content, digital media, ecommerce, economy, freemium, news, sponsorship, subscription content,

1 Comment

Site review: Zoomumba

Feb 14, 2011 at 11:21am

Thanks to Alan for contacting me and asking me to highlight up and coming new sites on the blog. One of the issues I have here is that I get sent so many sites each week - by email and Twitter, that it's difficult to do a review on all of them. Also, I'd rather to stick to the sites that I think are going to be successful rather than point to the many poor ones.

Chances are, if you have children, you already know about Zoomumba. It was introduced by my nephew to my son a fortnight ago, and now my eldest three are hooked. My wife too.

The site takes the Sims-like concept of creating a zoo, and puts it inside a browser. The typical, get-more-virtual-money-to-buy-more-attractions aim of the game seems to be addictive to my family!

From my perspective, the clever part of the game is the virtual currency element - you can only earn silver 'coins' inside the game to buy more attractions (e.g. animals, rides, amenities, merchandise shops, etc.). To collect gold coins though, well, you have to buy these with real money.

On Friday I joked with my wife that the kids will just need to spend more time collecting silver coins rather than trade our hard earned real cash for virtual stuff. At which point she owned up that she had let the kids "buy" some of the virtual currency. I won't report on the rest of the conversation.

Here's a related thought though - this week, VISA bought a virtual currency company, Playspan, for $190 million in cash. PlaySpan raised $18m in funding from Vodafone and Softbank last August, raising the total funding to $42m in three rounds.

Inside Network estimated that virtual goods in social games grew to $1.6 billion in revenues in 2010. I know where £2 of the 2011 revenues can be attributed.

tags:

business, ecommerce, economy, site review, technology,

0 Comments

The migration of Digital Money

Feb 12, 2011 at 7:28pm

The scan above is from this week's edition of my local newspaper.

There are two popular pairs of terms used to describe users in Internet terms - Digital Migrants and Digital Natives, and Gen X and Gen Y. Personally I prefer the first term because it describes the groups perfectly.

Digital Migrants are pretty much anyone over about 20 years old, who remembers life before The Internet. They (errr, 'we') had to change our mindset to adjust with the cultural and technological challenges and advances the Internet has provided. Digital Natives are the opposite group - those under about 20, who don't know any different.

Back to the article in the newspaper.

I have two thoughts regarding the 81 year old Mr Moller (and yes, I do think his age is important):

The poor old pensioner. Not everyone needs or wants a mobile phone. It's neither an identity or mandatory device (yet) and it should be up to individuals whether to have one or not. The pace of change is happening too quickly. After 40 years of credit cards (25 years older than mobiles), you can still live a perfectly normal life without plastic. Migration through technologies should be a slower process.
It's evolution. Yes you can live life without a credit card, however you can also live life without cash too, and just use plastic. It's natural evolution to move from cash, to plastic, to mobiles. In fact Mr Moller highlights the very real possibility of jumping straight from cash to mobiles. Mobile penetration is above 84%, so it's perfectly reasonable to expect everyone to have one.

Earlier this week we ran an event at Endava called The Future of Social Media for Financial Services. At the event, the author Richard Watson gave a speech on The Future of Money. I wasn't quite expecting to read an article in my local paper the following day highlighting that it's not so much about the future... it's already happening right now.

tags:

Endava, banking, business, digital media, economy, mobile, predictions, press, trends,

0 Comments

What businesses don't compete with the Internet?

Feb 4, 2011 at 9:04am

Looking at my high street, a third of all shops are now empty. Whilst we've had a very severe recession, the Internet has destroyed my local electrical, book and music shops as well as countless others.

What businesses based in shops (so builders, electricians, etc.) do not compete with the Internet?

Hairdressers & barbers*
Food - restaurants, sandwich shops and coffee shops
Beauty - nails, tanning, etc.
Hotels
Gyms
Bakers
Car cleaners
Pubs
Nightclubs

*It was my barber who started this discussion!

Whilst these shops don't have natural competitors on the Internet, they still rely on the Internet for mapping (i.e. a search for 'pub' on Google maps) and reviews (I urge all the owners of the shops above to keep checking review sites).

Any other suggestions?

Photo courtesy of Dave Patten on Flickr.

tags:

High Street, Hotels, business, ecommerce, economy, retail, technology, trends,

0 Comments

Twelve Digital Media Predictions for 2011

Dec 30, 2010 at 7:22am

Well here we are. 2011 predictions below. My 2010 predictions worked out pretty good and I've been asked for the 2011 predictions for the last six weeks.

1. Rapid demise of Flash

Flash has two big problems in 2010: Apple (specifically, the iPhone and iPad) and HTML 5. I don't see Apple relenting on their decision to enable Flash (specifically pre-compiled code), and users will start moving away from Flash sites out of necessity. Developers already like HTML 5, and it looks reasonably flexible to replace a lot of what Flash has historically need to be used for. YouTube is already using HTML 5 to deliver video. If the BBC iPlayer is using HTML 5 next year, let's award 10/10 for this prediction!

2. Local local local

Local businesses will 'never have had it better'. FourSquare, Facebook Pages and Places, and Google Places can all help local businesses. My local sandwich shop at work can now have a digital relationship with consumers for no cost. The rising use of smartphones will continue to provide more local results when searching (for example, type in hospital into Google on your smartphone - even at the moment it produces a list of local results).

3. LinkedIn to IPO

The Facebook for business, the most useful social network of them all if you want to hire staff, track companies, keep in touch with former colleagues, research 'people' will float in 2011.

4. More "paywalls" will increase the expectations of having to pay for content

Paywalls will undergo new branding, and together with mobile apps charging a subscription fee, the days of free content will start coming to an end. I'm not saying all sites will become pay only within a year, however expect to see at least another half dozen main titles beyond Murdoch's empire start charging for their hard work.

5. Financial Services move into social networks

Financial services are walking around social networks scratching their heads wondering how to approach the biggest B2C of all time. I predict at least one Financial Services organisation will get it right, and everyone else will copy and improve. Expect some big announcements of huge Financial Services brands linking together with the big social networks.

6. Facebook to follow Compuserve even more

I've likened Facebook to the walled garden environment of Compuserve before. Expect to see 'new' features in Facebook like sending files to friends, Facebook wireless access points or even broadband provision (remember - Compuserve started life as an ISP), premium (paid entrance) Facebook Pages, offline browsing or a phone service (think Google Talk or Skype). We'll all think it's brilliant, and then read the Wikipedia Compuserve article and realise we've been here before. I also expect Facebook to break into China and reach 1 billion global users.

7. A clear leader will emerge in Interactive TV

Buying a new TV at the moment? Which Internet/Interactive TV standard are you going to buy? There are so many types available, it's really confusing to consumers. By the end of the year (Christmas 2011) there will be one or two clear leaders. And expect to see a wireless keyboard lying on your sofa next year or 2012 instead of a simple remote.

8. Rapid rise in CPC

Ad CPC (Cost Per Click) rates are rapidly rising. Take the biggest network, Google AdWords. The cost per click of the following items as of 29/12 is:

ebook - £0.55
sandwich - £1.00
drink - £1.00
laptop - £1.25
paper - £0.75

I estimate costs will go up at least 50% over the next year because of the growth of online businesses, and they will all want to advertise their products.

9. A $50 A5 eReader

eReaders will hit a critical mass when the price point is low enough. I estimate this to be around $50 (£35) because this is a reasonable price point where a consumer won't be too upset at losing their eReader. At that point, schools will seriously consider replacing paper books with eReaders. Expect more mainstream books to only be available electronically.

10. App stores will decentralise, leading to confused customers (again)

The beauty of the iPhone's app store is that all apps come through the store tested and vetted. It also provides a full backup solution if you regularly synchronise your iPhone with a computer. The Android Market is the opposite - it's like anarchy! Apple are releasing their own full app store for Apple computers. Amazon will do something similar. You'll have lots of app store logins, and it will all be confusing. In fact it will become so fragmented that it will be similar to how you buy software at the moment - one piece comes from Amazon, another from Apple, another from eBuyer, and so on.

11. The economy will continue to splutter

It doesn't take a brain surgeon to work this one out. However the implications will be that brands will drive their marketing organisations to produce clearer ROI on campaigns (especially Facebook, to pay for the expensive UK based full time Community Managers). This is currently difficult to do, but marketing departments will drive analytics vendors to improve their products beyond just referrer stats. Despite huge funding increases at the end of 2010, Twitter will need to start generating some serious revenues, so expect ads on Twitter similar to the reach blocks on Facebook.

12. Chrome to far exceed Firefox market share

Chrome is here to stay, and will only increase market share when the new Google laptop (and tablet) arrives. Microsoft won't back down on Internet Explorer either. Which leaves Firefox in third place, and will just slide further down because users won't know why they'll want a third browser on their computer.

tags:

Adobe, Facebook, Firefox, Flash, Google Chrome, Kindle, LinkedIn, TV, advertising, apple, banking, ecommerce, economy, finance, iPhone,

2 Comments

How does the British economy benefit from the Internet?

Oct 28, 2010 at 12:46pm

via guardian.co.uk

From the Guardian today, an article commissioned by Google on the importance of the Internet on the UK economy.

One of the key conclusions of the BCG report is the estimate that, in 2009, the internet business made £100 billion in the UK. That is 7.2 % of the 2009 GDP.

You can read the full article here:

http://www.guardian.co.uk/global/datablog/2010/oct/27/data-store-economicgrowth

tags:

economy,

0 Comments

The expensive telecoms war

Oct 6, 2010 at 1:11pm

As Samuel Butler said, "In law, nothing is certain but the expense". And there's a lot of expense going on these court cases in the telecoms space at the moment.

You can read the background to this article and image on Information Is Beautiful.

tags:

Microsoft, Nokia, apple, economy, legal, mobile, telephone,

0 Comments

NHS Direct

Aug 28, 2010 at 9:58pm

I was disappointed to hear that the government have decided to shut down NHS Direct for a number of reasons.

On a personal note, as a family we have used the service many times. With four young kids we have all sorts of germs and knocks each month, and we've always received a good service from NHS Direct.

As a concept I think the service is spot on. When we were on holiday last week, one of us felt a bit under the weather. The local hospital was glad to see tourists, for a few hundred pounds on the first consultation. We had travel insurance, but to lay out the money and the aggravation of going to A&E on hospital just didn't appear. Whilst looking through the travel insurance documentation I noticed a phone number to speak to some private nurses, free of charge for the policy. After a quick call they gave a satisfactory opinion, some confident reassurance and suggested remedy. We took their advice and 24 hours later the problem had gone, with no inconvenience of having to claim back any expenses later when we returned from holiday.

If you try to imagine how healthcare will operate (no pun intended) in say, 25 years, I think we'll have a lot more remote healthcare. We will sit at home and have a video call with a doctor based anywhere in the World. As for how the doctor performs his tests (temperature, blood pressure and so on) - these devices are already available with USB connectivity (e.g. this BP monitor or this thermometer patent request), to send your results through immediately.

Maybe NHS Direct is ahead of it's time. When I speak to Americans, they are totally envious of our NHS, including NHS Direct. The thought of phoning a service that provides medical assurance (I would imagine this covers half the calls - and keeps the people who just want reassurance out of A&E) and advice - all without providing a credit card, is alien to most countries around the World.

I for one, will be sad to see it go.

tags:

NHS, economy, future, healthcare, holiday, patents, politics, travel,

3 Comments

Tags

Innovation is an ingredient

Review of my 2011 predictions

A look at New York Times digital revenues

Site review: Zoomumba

The migration of Digital Money

What businesses don't compete with the Internet?

Twelve Digital Media Predictions for 2011

How does the British economy benefit from the Internet?

The expensive telecoms war

NHS Direct

Bradley Howard

Other ways to find me: