Mobile Fix – February 15

newTV – almost here?

A lot of the consultancy work we do is around how a particular industry is being disrupted and what might be an interesting way to turn the threat into an opportunity.

One industry that seems remarkably resilient is TV. Despite all the talk, people spend a lot of time watching the box, in much the same way as they did 10 years or 20 years ago. The audiences for individual shows is lower because of the choice, but the availability of video on lots of different platforms hasn’t impacted the traditional telly.

But (much like our argument that all the factors which led to the demise of HMV were around 5 years ago, when HMV was worth £500m) we wonder if the factors that will irrevocably change TV are already here.

First is accessing TV via the internet. Intel intends to get into the TV business with a settop box delivering TV over the internet, in an initiative led by former BBC exec Erik Huggers – who was heavily involved in the iPlayer. The innovative French ISP Free has had success with their Freebox set top box powered by Intel – although they do give them away free. As does BT and TalkTalk with YouView boxes.

Second is social. With Twitter buying 2 screen analytics firm BlueFin the synergy between TV and social is growing. But Facebook also play well in this space. As Facebook exec Dan Rose said this week, discovery is social;

“How did you hear about ‘Downton Abbey’?” Rose asked. “I discovered it on Facebook. I kept seeing it pop up in my news feed. The simple fact is most of us find the TV shows we enjoy by listening to suggestions from our friends. That’s the primary discovery mechanism for content right now. Imagine a future, though, in which you turn on the TV and see a feed of all the shows your friends watch. We think that’s a very compelling idea. Content discovery always has been and always will be social.”

Knowing what your friends are watching is powerful, as is the ability to chat with them about the programmes. We wonder if that couldn’t trump what’s trending on Twitter.

Some work we did around 2screen for a publisher a couple of years ago informed our thinking on this space. A curated Twitter feed is really powerful – real people like the idea you can see what celebs like Wossy or SurAlan think of the TV show you are watching. But what got people most excited was seeing what their friends are saying about a show – which without hashtags is still hard on Facebook. One concept that went down well was FlashWatching – agreeing with a bunch of online friends to all turn to a show you wouldn’t usually watch (like Coronation Street or Hollyoaks) and watch as a group.

As one of our smart Google friends tweeted recently

@damianburns: May be semantics but I keep reading about how mobile devices are the ‘second screen’. Can’t agree with that. They’re the primary screen IMO.

Third is around content that bypasses the main channels. Whilst the BBC, ITV and C4 still break shows we are seeing word of mouth creating hits on other channels. So the old model is creaking. Do Sony really care that most (probably) viewers of Breaking Bad watch it via a BoxSet rather than on AMC?

HBO obviously want people to watch their shows on cable, but now offer their customers a streaming service called HBO Go, so people can watch Girls or Boardwalk Empire on their laptop or smartphone.

And Netflix has now started to create their own content, where they want it to be watched as a stream. House of Cards has been well reviewed and NetFlix claim it is the best watched programme on their service.

So as content creators become more platform agnostic, does that have implications for traditional TV?  There is clearly a tension between the HBO model, where you have to subscribe to a cable channel to access the content and the Netflix one where you can buy into as much or as little as you want.

This tension is captured really well in this blogpost by Fred Wilson – with a killer quote from a Netflix executive

The goal is to become HBO faster than HBO can become us

A key factor is all this is that the business model isn’t just about advertising. Getting consumers to ‘rent’ TV shows on digital could be really profitable. And as well as Netflicks Amazon and Tesco play in this space. Tesco owned BlinkBox have deal with HBO to allow viewers to buy HBO shows before they come out on DVD.

Whilst this may seem niche now, with people like Tesco etc pushing it, we should expect it to go mainstream sooner rather than later.

And Google Chief Business Officer Nikesh Arora agrees. Speaking at a conference this week he suggests that online could take 50% of all adspend in the next 5 years – 4 times bigger than now. The tipping point? Internet connected televisions.

Mobile search – a bargain

New research from Marin highlights the rapid growth of mobile – in the UK they estimate the mobile of paid clicks grew from 14.8% in January to 24.8% in December. And cost per click is half that of PCs.

But it’s not all good news. Conversion rates on smartphones are much lower than on PCs or on tablets. We don’t see this as an issue with smartphones; instead its an indictment on the quality of mobile sites. We are seeing higher adoption of mobile sites, which is good. But too often these sites are just not very well thought through. Smart brands will be working hard to iterate their mobile presence and help visitors get what they want. There is still significant competitive advantage in getting your mobile site to work as hard as possible.

Doing business the Amazon way

A good round up of advice and tips from Amazon CEO Jeff Bezos is well worth a read.

Lots of smart thinking but our favourite is this one;

“If you decide that you’re going to do only the things you know are going to work, you’re going to leave a lot of opportunity on the table. Companies are rarely criticized for the things that they failed to try. But they are, many times, criticized for things they tried and failed at.”

And the FT took a look at the other end of Amazon – workers at one of their distribution plants in the UK.

Quick Reads

Topshop partner with Google to reinvent the Fashion show

Private Equity firm Blackstone have done an analysis of the digital marketing landscape. It’s done from a M&A perspective but is a good take on how the industry is adapting to mobile and social.

Google playing hardball with Patent tit for tat with BT.

former Modem colleague reminds us that the origins of online advertising were about solving problems for people; advertising so good it’s a service. Still a real opportunity today.

Social media buying firm TBG have issued a new report sharing their findings in Facebook ad performance. Basically good news for advertisers as costs are down dramatically in the US

Dave Drogba is one of the ad people we most respect and this interview is a good insight to how he runs his business.

Finally – one of our favourite books is Mirror Worlds; written in the early 90s. We found it via Marc Andreessen who raves about it too. The author David Gelernter has written a good article in Wired where he predicts the End of the Web, Search and Computer as we know it. A must read.

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