Friday, 13 July 2012

The Blackberry Death Spiral. A possible struggle game for one of the smartphone founders of mobile mail. A lot of companies will follow.

Why does every Tech CEO want to do the Steve Jobs style of presentation even when it doesn't suit? Thorsten Heins above, CEO of Blackberry, thinks taking off his tie and wandering around the stage, clapping, is eh, jobs-esque. "Have a great Blackberry world", he says "And let's rock and roll this". Really. Sometimes you're just better off just being you. It's 35 minutes long but you get a sense of Thorsten after 5 minutes.

And if you haven't seen Microsoft's CEO Steve Ballmer, another man under real pressure, go to the other extreme, do it. Honestly it's cringe worthy.

But I'll save you the trouble...what the?

Thorsten presides over continued troubles this week at 'Research in Motion' the Canadian public quoted company parent of The 'Blackberry'. A company which a lot of Canadians held up as a "national treasure" because it was the inventor of "mobile mail".

And it's the story of how a one-time market dominant player is struggling.

You have to see parallels between Blackberry and Nokia. Old world dominant brands who have lost their value because they didn't keep up. Online bloggers now are referring to it as 'The Blackberry death spiral'.

The first Blackberry (named by Lexicon branding by the way) appeared in 1999 as a two-way pager in Germany. Today, it retains about 3% (a massive drop from 9% in a year) of the smartphone market competing with Android, Windows and iphones where it has really struggled. Whilst, at the same time, Samsung, Apple and HTC have boomed. 

With over 70 million subscribers, the Caribbean and Latin America (yep, you know that) have the highest penetration of Blackberrys.

Although considered as "more secure" as an email sender, it's widely known in the US as "The Crackberry" which indicates its high usage amongst drug dealers because of that security. It was famously used in the London riots by thugs. However another well known "user" is Barrack Obama whom during his 2008 Presidential campaign became dependent on it and it acted almost as a celeb 'endorsement'. Which should have done a great marketing job for Blackberry, but didn't.

The problem is sales.

Up to March 2012, they shipped 11 million Blackberrys which was down 21% on the previous quarter. In its fourth quarter it announced a loss of 125 million usd and plans to save 1 billion usd this year by cutting up to 6,000 jobs out of its staff of 17,000.

Morgan Stanley downgraded the stock and shares have hit an all time low this week, down 94% off their peak value. That's 94%. Which is why its investors are not happy - not one tiny bit - and they're saying it loudly. Employees too are writing letters and posting about how unhappy they are with the company direction.

New CEO German Thorsten Heins (ex Siemens) who took over in January, promised investors he'd transform Blackberry into a "lean mean hunting machine" (I wonder did he mean "fighting machine" and it got lost in translation?) and used real rallying cries of corporate pride. The share price fell a further 5% as he spoke.

As the "new" CEO he says a lot - "Blackberry will be in the top 3 smartphone producers, soon" - but it should be remembered that he's actually been with the company since 2007.

"I have assembled a leadership team for RIM that's truly capable of taking us into future,"
he told shareholders but at the same time, pushed back the launch of Blackberry 10 until next year, missing out on the holiday sales at the end of this year. This will allow his competitors to further extend their lead on Blackberry and of course, they'll have to suffer the launch of iphone 5 which might take more Blackberry customers.

Seemingly Thorsten felt that they'd rather postpone their launch until they got the new Blackberry "right". Quality before Speed. Hmmmm, great if you have the time luxury to do that - which this company just doesn't.

Apart from what is considered his "poor" communication skills (one reason perhaps is because he's hard to understand - never a good start in the old communication stakes) and the company's poor R&D (no touchscreen for example), he has an inability to convince staff to remain with the troubled company.

On Wednesday the head of the Australian/New Zealand operations stepped down only months after he was given the job in April. The head of the business in India left in November and a steady stream of senior staff have left too including its head of legal, head of global sales, a CEO and head of software.

It's really extraordinary that Blackberry can't plough on with a base of over 70 million loyal subscribers (they have to be loyal at this stage). But it's become an old world, Nasdaq quoted, middle aged corporate with no right to be involved in the new space. A lot of companies are going to go this way in a lot of sectors. 

But perhaps I'm being unfair - maybe they will do it - a lot of people don't think so though.


Think what happened to video stores when Netflix came along and ask yourself, how did they let that happen? Think about major book chains who let ebooks get past them. Think about how mobile carriers (I know this is heresy but it will happen) are going to be decimated by Skype/voip? Think about traditional TV/Press broadcasting compared to online publishers? And it goes on and on.

The Web is the great brand leveller.

Funny really that no one in Blackberry even had the commonsense to see an irony as to where they had chosen to have this weeks investor meeting in Canada.

It was in Ontario. 
A city called....Waterloo.

Thursday, 12 July 2012

Aegis/Carat/Vizeum/Posterscope sells to Dentsu today for 5 Billion usd in cash. Just in.


Just in - literally - Dentsu have agreed to buy Media house Aegis for about 5 billion us dollars, outright (it's in cash). A big valuation on Aegis.

Dentsu (market cap of circa 8 billion usd) is the Japanese Ad giant (founded in 1901) and is the Japanese Ad icon with clients like Sony + Toyota. However, it has always struggled to achieve international stardom and ranked about 5th in size globally.

Aegis (ranked about 8th globally) is known as Carat, Vizeum and Posterscope amongst other brands and started its Irish presence by buying out 'All Ireland Media'. The irish business is headed up by Liam McDonnell and current IAPI President who was one of the All Ireland Media (AIM) shareholders at the time. It's quoted on The London stock exchange and originally had its roots in WCRS Ad Agency.

The single largest shareholder is Vincent Bollore notably an owner of international group Havas.

The acquisition will probably still leave the group in the top 5 still, behind Omnicom, Publicis and Interpublic.

The Sake will be flowing.

The Huffington Post Live, the world's biggest citizen journalism video venture goes on air August 13. Online news like you've never imagined it.


The Huffington Post is expected to launch it's full-day online video news network on August 13 (to be called 'Huff Post Live') but it's doing it differently under the growing banner of "citizen journalism". And the service is beginning to be revealed - although most staffers are sworn to secrecy.

The launch budget by the way....about 30 million us dollars. 30 million.
Every wonder why it's called 'The Huffington Post'? Because it was co-founded by Greek born, Arianna Huffington. One for the pub quiz of the future.

That's her on video at the top of this blog talking about citizen journalism and actually in an inspiring way. Here's what she blogged recently:

HuffPost Live, our new live streaming network, is launching August 13. One of our goals is to create the most social video experience possible. And that's why we're putting you, the HuffPost community, front and center in everything we do, including having you join us live on the air -- an integral part of the dynamic, ongoing conversation that is the heart and soul of HuffPost Live.

The days of media gods sitting up on Mt. Olympus telling us how things are have been over for a while. But now we have reached a critical mass where millions of people have a seat at the table and can join what has become a global conversation. People are tired of being talked at; they want to be talked with. The news is no longer about a few people telling everyone else what happened -- it's about everyone telling everyone what's happening right now. And how.
Never really a news "creator" at their 2005 start, actually more of a blog, The Post was a news "aggregator" but it has now moved firmly in the news gathering business, even winning a Pullitzer Prize in 2012. This is a dramatic move into video vlogging and not as a separate brand but as a link off their main site.

Firstly, The Huff Post Live is not carrying traditional Ads "live" in the traditional TV way.

So no commercial breaks and instead, circa 5 brand sponsors a day. Cadillac have already signed up as a launch sponsor and I'm hearing about some serious brands getting involved (and so they should). My understanding is that these will be like "in programme" sponsorship or like the "olden days" of sponsored hours/programmes.

Instead, archived content will have pre-roll advertising only, which will be lucrative too. The Huff Post is owned by AOL since 2011 (bought for 315 million usd) and so as The Huff Post Live, broadcasts every day, it's going to create massive video inventory which will then be used to create a "youtubey" platform for AOL.

Broadcasting live every day is a lot of video to create - an awful, awful lot and needing production teams, editors and in particular, checkers. Sources will need to confirmed if they move outside of their own crews. BBC has 50 people alone doing just that in their "hub" for example.

Secondly, it plans to carry 12 hours of live video every weekday - pretty impressive stuff for a newspaper and a HUGE endorsement of the need for publishers to have video. It will be "always on" running highlights when it's not actually live.

In fact this looks more like a TV Station with highlights at weekends. I'll bet too they'll resell other content (Netflix anyone?) at weekends. Remember we're talking 300 million minimum page impressions a month here. Comscore estimates 40 million monthly unique visitors. Massive!

We all know that Video grew 42% last year and is expected to grow 54% this year online (emarketer) so this is capitalising on that.  

Advertisers want video so badly, demand outstrips supply in Ireland, and that in a depressed market! But significant ventures like The Huff Post Live, may actually create a glut and weaken ad rates (video cpm attracts a premium because of the lack of supply right now). But there's no doubt, they're going to be a big supplier of online live video.

Thirdly, they have hired a 100 person newsroom including traditional CNN veterans and those from other TV networks. Massive resources. But they're not reporting the news as such, they're trying to develop the news.

"We're not trying to report the news," said Roy Sekoff, a founding editor of the Huffington Post who is heading up the streaming network. "We are trying to have conversations that the news inspires."

Or to quote Arianna Huffington again;

Instead, HuffPost Live will emulate the online experience. No one looks at their watch and thinks, "It's 10 a.m., time for some celebrity news, I think I'll log on to HuffPost!" Instead, readers come to our site to catch up on what's happening in the world and wind up getting caught up in the wide array of compelling stories we offer. You may start with a story on the upcoming presidential debate, then find yourself drawn to some celebrity news, followed by the latest viral comedy video and a segment on the benefits of napping.

In one way it's not unlike what Google's YouTube is hoping to achieve except they're offering their platform/channel for free if you supply the content. Huff Post are actually generating the content themselves.

This will therefore appeal to any of us who have an opinion on the news - read that as all of us.

But this venture and indeed the dramatic traffic of The Huff Post itself (the second most popular newsfeed on Twitter) which never had a real world presence, is a beacon of online publishing. It's creating jobs, it's creating online publishing to be proud of. And who'd ever thought that we'd see this level of investment in an online newspaper.

It unfortunately contrasts with many traditional newspaper companies which are hugely overburdened with debt from ill-timed purchases. Very few publishers will be able to raise money from the market any longer. Circulations are in decline. Ad revenues are in steep decline (-60%). Online Social media is taking money out of the market and online publishers are competing with them and having much lower overhead.

It's absolutely all changing but that is not to say, newspapers are idle - they are not - because I spend most of my day solving this issue with them (TBA). So they know it and are working towards solving it. Plus they still have the real world brands that have the power to push audiences to this site or to that site. However, they could look to The Huff Post Live as a model to go forward with.

Bring newspaper online publishing into the TV market by providing video and let the audience engage. As GetGlue are doing for TV content.

Because video news/weather/sport/entertainment/fashion/beauty etc is king.
It's what the audience online wants and it's what the advertiser wants.

August 13th we'll see the way it can be.

Wednesday, 11 July 2012

Twitter's row with LinkedIn is about Ad money. And an IPO. Tweeters might not be happy.

There's a lot going on it seems at Twitter, launched by Jack Dorsey below in his first Tweet above, July 2006. You'll note it was called 'Twttr' then a reference at the time to 'Flickr' (2004).

This is a story of a good Social network that is a real success but that now wants to make big money following on from the Facebook IPO. In doing that, they could lose their very essence. Is there an issue with making money? Yes, if it screws up the whole plan.

Recently ending its syndication deal with LinkedIn, meant that tweets no longer show up on LinkedIn pages - and LinkedIn is the poorer for it as its pages start to look sparse. It's the start of Twitter ending their relationships with third parties. Money is at the core of this because Twitters revenue has not been exactly spectacular as we're discovering.

Twitter (over 500 million users today) makes much of its revenue from Ads (according to Forbes, about 260 million usd last year) although is thought to have made a loss in 2010. A loss two years ago.

And from The Wall Street Journal Twitters revenue was even less than the Forbes estimate "Now Twitter is striving to mature its business to be fit for an IPO and finding it has a long way to go. Twitter's ad revenue reached $139.5 million last year, eMarketer Inc. estimates, while ad revenue at Facebook which is two years older than Twitter—was 22 times larger at $3.15 billion."

Not good either way. Shockingly bad actually.

Revenue is as always, based on advertising to eyeballs. So when third parties like LinkedIn, channel tweets onto their own platform, Twitter loses those eyeballs and the Ad dollars that go with it.

So what Twitter is trying to do is to bring those eyeballs back to their own site and therefore, "monetise" them by making more money through Ads. Forcing people to view the ads on Twitter alone. In doing that and creating higher revenues, it's getting ready for an IPO.

Interestingly too, about 80% of its traffic is via mobile, highly lucrative.

Rumours abound that Twitter is to do the same and cut-off Facebook shortly and a general "clamp down" on third party apps. GetGlue could be one in the firing line I'd guess.

From a Twitter point of view, it makes money sense and a precursor I'm sure, to an impending IPO with a value estimated at just under 9 billion usd. It has already raised more than 1 billion usd in venture funding so whilst that's fine, they'll want to see their money back sometime soon. An IPO is one way to do it. Money, money, money.

Rumours also abound that Twitter is about to acquire Sense networks next month, a mobile analytics company, that provides their data for, you've guessed it, advertising. They use mobile location data and behavioural data to fine-tune ad targeting. So local advertising is on offer here by geo location. It would be Twitter's sixth acquisition this year but interestingly in the Ad space.

Roll in the audience, give them more ads, and make more money for yourself. But from a customer experience it may not be so good. After all, customers want their tweets integrated to Linkedin/Facebook and others. It's much easier and spreads the word faster.

Recent changes on Twitter include website redesign, photo sharing in 2011, privacy updates (always comes with a warning because mostly it allows them to share more of your data), logo updates on June 5 which all sounded very "corporate" and in particular, improvements on their Search, long overdue.

So Twitter is turning into its own social network (it's the number 1 Social Media site in Japan, ahead of Facebook) but with only 140 characters, which is Not a Facebook. And opening up the possibility of a new "me too" SMS service which does integrate. 

Add to that alienating the whole world of developers who've helped get Twitter to where they are - and they're not happy about it. Not one bit and boy are they blogging about it. Twitter would do well to remember how quickly things can turn against you and the bottom line is that the internet is an "open" network not a closed one. 

It could be viewed that in an ambition to generate more revenue before an IPO, customers are being squeezed. Despite this quote "I'm never going to optimise for short-term revenue at the expense of user experience", said Twitter non-founding CEO Costolo recently, at a Wired Conference in NYC. 

He took over when the three Twitter founders departed although founder Jack Dorsey returned in March 2011 with whom he says he "works well". Jack Dorsey (media person of the year at Cannes 2012) seems to spend a lot of his time though, with his other venture, Square. So why did he come back? Optics?

There's a dramatic push on at Twitter to start making some money and in advance of an IPO (or indeed a Google trade sale?). It might be some way off just now, but it's coming. An IPO to make money for the Twitter shareholders possibly to the detriment of Twitter itself.

The question will be whether the changes and new money-making attitude will have a detrimental affect, notably on users, who are the very reason Twitter exists. In a Boardroom, a drive to make money might rule customer principles. I've seen it before and certainly these changes reduces the profile of Twitter on third party apps like Linkedin.

If it does alienate users, it will all have been for nothing.
Especially, and ironically, if an IPO is on the cards.
The 'P' in IPO stands for Public.

One hopes its NASDAQ ticket won't be TWIT.

Tuesday, 10 July 2012

Instaglasses from Instagram. This has the potential to replace smartphones. Smartglasses.

You'll remember the concept behind "google goggles" in April of this year.

And now we have Instaglasses which is the Instagram version.

Designed by German Markus Gerke, they include a 5 mega pixel camera and (I presume) some web access allowing you to take pics, run them through Instagram and post. So you capture the world as you go. A camera on your head. They'll also soften your view of the world and can actually make Instagram's Mark Zuckerberg look angelic.

Possibly video won't be far behind either, dramatically allowing Instagram to venture into the world of video-sharing. Now that would be spectacular for Instagram and start to make sense of The Facebook 1bn acquisition. In fact, you could stream live from the glasses and actually "follow" people in real time visually. So one better than Twitter because this way you'll see what the celebrity sees.

Not unlike Google Goggles, they're a bit of a dream, a prototype for now, but signify the way that Social Media owners are looking at new content delivery systems outside of mobile. If you own the delivery system, you own the world.

Imagine for example, we all had Instaglasses, then we'd all use Instagram and the traffic stats would explode. Importantly too, these glasses are very cool. Or if we had YouTube glasses, we'd all be video-ing onto youtube.

This isn't a flight of fancy but a hard nosed business way to get consumers using more Social and in this case, using more of Instagram. If glasses developed, there's no reason why they couldn't become smartphones. Say using Facetime or Skype, you can make that person-to-person call and see them with your glasses as you talk. Why not?

Other delivery system ideas have included in-car projection directly onto your windscreen where you can see all your tweets/posts etc. Watches too have been thought of.

The accessibility of Social through easy delivery whether by glasses/watches/phones whatever, will enhance its growth. The problem with the surge in smartphone ownership (driven in turn by the need for consumers to have access online) is that the smartphone owner dictates who has access to it.

So if, as they are, Samsung continue to dominant the mobile handset space, they'll become a player in allowing/denying access to their platform. Iphone 4 and 5 deals with embedding Twitter and Facebook into their operating system (OS) is typical of this "ownership".
You want to use our smartphones to reach your audience? How much? Exactly as the App store works.

Whereas, on the other hand, if there's other delivery systems (such as glasses), that issue dissipates. Instaglasses is another good indication of that thinking.

Expect something like them to be in the stores.
Expect to be wearing them.
Expect a surge in smartglasses.
This is going to be huge.

Monday, 9 July 2012

Netflix stream one billion hours in June. This online streaming is going to kill Television. And quickly.

There's been a surge in Netflix traffic and they've just announced over a billion hours of video were streamed in the month of June. Netflix is one of the online video streaming businesses, where at a flat 7 euro a month, you can have "all you can eat" video. It's a family online video store - in case you've been asleep for the last year.

Nice to see that Netflix CEO Reed Hastings revealed the billion hours on Facebook appropriately and it compares to about 2 billion hours streamed in its entire last Quarter of 2011. So massive growth going on here.

In return, there's been a surge in their share price from Thursday of +13% following a +6% gain on Tuesday. So investors are loving the news.

Netflix have a goal is to reach 30m subscribers by end 2012 and currently they've about 26.5m streaming customers (and 10m DVD customers). I think few will bet against them, and in doing so, they're collecting more cash to re-invest into their own programming. Whilst they start with movie streaming, having achieved an audience, they'll start pushing their own TV. Already they've developed one series and are looking for comedy/children's programming.

The great thing about Netflix is that they know their product weaknesses and they accept it - with a view to improving it. Refreshing. Because most traditional TV broadcasters live in denial.

Amazon's Love Film are experiencing similar good growth these days too. So it's all about online entertainment at the expense of TV.

Netflix/Love film and others successes, is a direct reason that people "in the market" are now talking about the "collapse" of audience ratings on cable TV. It's a fact that people are watching less cable TV and cable TV subscribers are in long term decline. Terminal decline.

Bad news for Time Warner, Comcast, Cabelvision and them all, as households are increasingly less likely to pay for TV. All people want now, is the Web and fast internet download speeds. Terrestrial TV broadcasters are now in the same boat and are going to constantly see their business in decline.

Not just because Netflix subscribers will obviously be watching less TV, but also because broadcasters are hamstrung by schedules - pushing out content at a time that suits them and not at a time that suits the viewer - and that's no longer acceptable. 

Equally with the high level of TV competition, and a recessionary market, broadcasters have less money to invest in quality programming. It's almost a cliche now for people to say "there's nothing on the telly tonight" because there isn't of any quality which in turn has driven consumers into the arms of Netflix.

But this collapse in TV has been going on for a while and the Netflix numbers will now just accelerate it.

In April I blogged about the growth in YouTube and the inroads it's making in TV.....

In May, I talked about how Nielsen are helping prove TV is becoming wallpaper as households leave the TV switched on in the background, but spend the time doing their Facebook pages, etc so about 40% are not "actively viewing".....

And I talked about the growth of programming supported by brands from online broadcasters that's leaving traditional TV in the shade....

And about the demise of traditional TV in general.....

In June, I came across the growth of '' and how citizen journalism news is changing the face of everything but notably news and taking it away from TV stations....

This month we saw Murdoch's News Corp, splitting in two to try to deal with the trend.

You don't have to read them, but you get the drift. This is a continuing story and traditional TV owners are in serious trouble from online broadcasters - And they're doing nothing about it. Absolutely zero except continue to depend on State handouts through licence fee support.

The explosion of Netflix and Love Film and others is going to drive viewing further and further online. And when that happens, Ad money is going to follow them and not from new budgets, but from budgets traditionally spent on TV.

Few major traditional TV broadcasters have any strategy to deal with this nor do they even try to understand it. One locally dominant station has 15,000 friends on Facebook - a chewing gum I work with has 30 times that. Imagine being less popular than a gum. I looked for their Pinterest page. Nah, not a sign.

Self-congratulatory messages about the success of their iplayers illustrates how little they know. If they think that re-broadcasting of the content through an iplayer is breakthrough, it's worrying, because it's actually "entry level" stuff. 

It's like a Bank spouting out about their banking online service as cutting edge. Or Tesco telling you how great it is because now you can shop online. That was the innovation of 10 years ago.

So online broadcasting and the explosion in Internet ready TV is coming fast.
New programming, which will be broadcasting at times that suit the viewer (on demand) in a totally customer service environment, will be the winner. It is the winner.

And as for the big old, traditional former TV monopolies?
Step aside.