El Internet de las Cosas

11 03 2013

Hace ya varios años, recuerdo que en un viaje en tren hacia San Francisco, leía una novela de ciencia ficción futurista. No recuerdo absolutamente nada de la novela, lo único que recuerdo es el capítulo en el que la refrigeradora notificaba a la familia que la leche y los huevos estaban a punto de acabarse y les preguntaba si enviaba la orden de compra al super mercado para suplir esos productos. Desde aquel entonces, hace más de 8 años, quería tener esa refrigeradora en mi casa.

Afortunadamente, mi deseo está cada vez más cerca gracias al Internet de las Cosas (IOT, por sus siglas en inglés). El IOT es un concepto que definió Kevin Ashton, co-fundador y director ejecutivo del Auto-ID Lab del MIT, a mediados de los 90’s. Consiste en que las “cosas” tengan conexión a Internet en cualquier momento y lugar a través de la integración de sensores y dispositivos RFID (Radio Frecuency Identification), de forma que en todo momento estén conectadas a Internet a través de redes fijas e inalámbricas. Dicho en otras palabras, estamos hablando de la digitalización del mundo físico.

¿Se imaginan hornos que puedan sugerir servicios de reparación antes de deteriorarse? ¿Vestidos que estén “consientes” de las tendencias de moda y sugieran looks alternativos? ¿Y que nuestro cepillo de dientes nos alerte de cualquier pequeña caries y pidiera por nosotros una cita en el dentista? Estas son algunas posibles aplicaciones del IOT y no se encuentran en un futuro tan lejano. Según el infográfico realizado por el área de IBSG de Cisco, en 2008, el número de “cosas” conectadas al internet ya excedía el número de personas en la tierra. Es así como en 2010 se registraron 12.5 billones de objetos conectados a Internet y se proyecta que para 2020 existan 50 billones ¿qué significa esto?

Significa, otra vez, una revolución de la sociedad y los negocios. Según Hans Vestberg, CEO de Ericsson, las repercusiones serán considerables, “si una persona se conecta a la red, le cambia la vida. Pero si todas las cosas y objetos se conectan, el mundo es el que cambia”. Estamos siendo testigos de la etapa más temprana en la que los objetos “tontos” se transforman en “inteligentes”. Esto para los profesionales del marketing, abre una clara oportunidad para desarrollar marcas más fuertes a través de la interacción entre productos y usuarios.

Consideremos la campaña que EVRYTHNG, una empresa de software basada en el Reino Unido, realizó para la multinacional inglesa de bebidas alcohólicas Diageo el año pasado. La compañía lanzó una campaña para el día del Padre en Brazil, en la que los consumidores usaron sus smart phones para escanear códigos de productos en botellas individuales de bebidas, convirtiendo cada producto físico en un único objeto digital. En este caso, el “hijo/a” podía usar su smart phone para crear un vídeo para papá y subirlo a la nube; mientras que el “papá”, al recibir la botella, podía descargar el vídeo para recibir el vídeo que su hijo/a le había preparado. Los resultados para Diageo fueron: incremento de lealtad a la marca, incremento de la personalización de la experiencia de marca, e incremento de insights sobre cómo sus productos fueron comprados, vendidos y usados.

Aún estaremos viendo la evolución del Internet de las Cosas y el impacto que generará en cada uno de los ámbitos de nuestras sociedades. Lo importante es mantener ojos y oídos abiertos para adaptar nuestras estrategias a un mundo en el que tanto personas como objetos, estarán totalmente conectados y digitalizados.

Links de interés
http://www.guardian.co.uk/sustainable-business/internet-of-things-connected-devices
http://www.fundacionbankinter.org/system/documents/8168/original/XV_FTF_El_internet_de_las_cosas.pdf
http://tecnologia.elpais.com/tecnologia/2012/06/12/actualidad/1339513417_979445.html
http://www.marketingdirecto.com/actualidad/digital/el-internet-de-las-cosas-abre-un-enorme-abanico-de-posibilidades-para-el-retail-en-el-2013ces/

Sources
http://blogs.cisco.com/news/how-the-internet-of-things-will-change-everything%E2%80%94including-ourselves/
http://www.muyinteresante.es/tecnologia/preguntas-respuestas/ique-es-el-qinternet-de-las-cosasq
http://blogs.hbr.org/cs/2013/03/advertising_and_the_internet_o.html

 





Yahoo! Connected TV: The war of Smart TVs just started (2/2)

16 09 2012

Manufacturers

For the first time, smart TVs are creating the opportunity for manufacturers to offer content and reach directly the consumer. Samsung Electronics and Sony Corp are entering in this battle by developing their own platforms and TV apps stores; meanwhile Phillips, Panasonic, Konka, Sharp and LG are focusing on partnering with successful TV platforms to sell more devices.

TV Platforms – Competitors

Three different competition categories can be identified: built-in platforms, over-the-top platforms (external boxes that can be connected to a Smart TV) and subscription platforms. Because of its devices penetration, Samsung and Sony are the strongest built-in platforms, even though Sony has not launched its TV Store yet it is planning to do so during this year. Google and Apple are among the strongest over-the-top platforms and Netflix and Hulu are the strongest subscription platforms.

Samsung TV store.

Samsung Smart TV has around 25% market share and recently celebrated the milestone of 1,000 registered applications and scored past the 10 million mark for number of downloads globally. According to Samsung statements, the store has reached more than 11 million downloads in total, with an average of 50,000 downloads per day. On May 2012, Samsung launched is Samsung Ad Hub[1] an advertising platform that will allow the delivery of advertisements to the front-page of Samsung’s TV interface.

Google TV

The total number of Google TV users is estimated to be fewer than 4.8 Million[2], almost 60% of Yahoo! Connected TV devices. In addition, a total of 64 apps exclusive to the TV-sized platform are offered through the Android Market compared to the 120 apps offered through Yahoo! Connected TV.

Google TV was available to users only through Sony and Logitech devices and from 2011 was also available through Samsung and Vizio competing directly with Yahoo!

Google TV can be purchased from $99 and apps go from $0.99. Developers pay $25 for registration to distribute on the Android Market and afterwards they get 70% of revenues.

 Apple TV

Total number of Apple TV units sold is estimated to be around 1.5M[3], almost 13% of Yahoo! Connected TV devices. First, second and third generations of Apple TV were launched in 2007, 2010 and 2012 respectively. It can be concluded that the platform is experiencing fragmentation issues for developers that might discourage them.

Apple TV is compatible with Hitachi, JVC, LG, Mitsubishi, NEC, Panasonic, Philips, Pioneer, Samsung, Sony, Sharp, Toshiba, Vizio, and Westinghouse[4]. In addition, the access to Apple TV can be purchased from $99 and apps go from $0.99.

Netflix

Netflix has 15 million subscribers[5] whom for $10 a month can access DVD’s by mail and unlimited access to a vast library of movies and TV shows that consumers can stream and watch instantly.  The streaming service is available through several devices: game consoles, RCA media players, smart TVS, media players (Roku & Tivo), iPhone, iPad and any computer. Just recently Netflix paid around $1 Billion for the rights to stream movies and TV shows from companies such as Paramount.

Hulu

Hulu is a co-owned company by ABC, NBC and Fox with more than 2 million subscribers[6] and focused on streaming mostly TV shows.  At approximately $8 a month a subscriber can access to unlimited TV shows access that can be streamed and watched instantly. Hulu, as Netflix, is available in several devices[7]: game consoles, RCA media players, smart TVS, media players, Blu-ray players, smartphones, tablets and e-readers.

Conclusion

“Connected TV is largely driven by content. Where there are compelling things to watch, the Internet becomes a major source of entertainment”. Paul Gray, Director of TV electronics research for NPD DisplaySearch

Smart TV is a growing and attractive market for many players. Since this technology has disrupted the traditional TV value chain now manufacturers and search engines can access directly to consumers’ TVs.

Yahoo! has the first-mover advantage with the highest customer base and a unique competitive advantage through its Broadband Interactivity System that  differentiates it from other competitors in the market. When analyzing the competition it can be observed how Apple and Samsung are hardware driven companies that break-even on content to sell more devices. Google is a technology driven company whose main revenue source is out of search and advertising and Netflix and Hulu are content driven companies that generate revenues from subscriptions. Yahoo! is a content driven company that generates revenue from advertising – very similar to the TV business model and so we can conclude that overall Yahoo! has the right start and the right capabilities to win this new platform war if it can generate higher network effects and if it  can open its platform to key players in order to generate more value.


[2] Xyologic: Google TV users under 4.8M, few download new apps. http://www.electronista.com/articles/12/02/13/xyologic.sees.few.third.party.google.tv.apps.used/. Last accessed: 11/06/12

[3] Benath contempt: The Apple TV  business model. http://www.asymco.com/2012/05/30/beneath-contempt-the-apple-tv-business-model/. Last accessed: 11/06/12

[6] Hulu Plus hits two million subscribers, more original content incoming. http://www.digitaltrends.com/home-theater/hulu-plus-hits-two-million-subscribers-more-original-content-incoming/. Last accessed 14/06/12

[7] Hulu Plus. http://www.hulu.com/plus/devices. Last accessed 14/06/12





Yahoo! Connected TV: The war of Smart TVs just started (1/2)

17 06 2012

Yahoo! Inc, defines itself as a digital media company that generate revenues from three sources: display of graphical advertisements (“display advertising”), the display of textbased links to advertisers’ Websites (“search advertising”), and other sources. Yahoo! offerings to users currently fall into three categories: Communications and Communities; Search and Marketplaces; and Media.

This post is going to focus on Yahoo!’s “Communications and Communities” category and more precisely in giving recommendations for its Yahoo! Connected TV. For this purpose, factors such as Smart TV Market Size, Smart TV Value Chain, key manufacturers and competitors are going to be analyzed.

Yahoo! Connected TV

Launched in 2009, Yahoo! Connected TV is one of the oldest and largest TV platforms with more than 8 million connected TV’s[1] and over 1 million active monthly users in over 135 countries. The platform is embedded on TV’s and other devices from manufacturing companies like Vizio, Samsung, Sony, Toshiba and LG. In addition, is an open-source and highly focused to have an interactive communication and relationship with developers through its YCTV blog, website, Facebook pages, Twitter account and Youtube Channels.

The platform offers more than 120 available TV Apps[2] that range in purpose from fun to functional, including social networking, streaming music, casual games, personalized financial quotes, locally relevant news, weather and sports, and more than 75,000 movies and TV shows on demand.

Yahoo Connected TV big value proposition is it content driven search capabilities and its platform for advertising through a broadcast interactivity system. This new feature – the first of its kind, offers consumers an immersive, real-time experience on the platform that brings people even closer to the programs and brands they love by enabling them to play along while they watch their favorite shows. On the other hand, it offers hyper contextualized, interactive and call to action advertisement. Meanwhile a consumer is watching a TV show, it can have access to information such as the clothes the presenters are wearing, the price and where they can buy it.

The price to access to Yahoo! Connected TV goes from the lowest range of Smart TVs ($200-$400). Its store offers a range of apps that range from $0.99 to $99[3]. In addition, developers get 70% of the apps revenue.

Smart TV Market Size

Smart TVs are defined as television sets that are capable of accessing the Internet that can be used to download and install applications, surf the web and more. Global Smart TV market[4] will grow at a CAGR of 20.6% from 2011-2015 and it is expected to reach $265 billion[5] by 2016 and to reach the 153.2 million units shipped by the same year, from 64 million units shipped in 2011. In addition, paid applications alone are anticipated to generate $1.9 billion by 2015 up from $10 million in 2010[6].

According to NPD DisplaySearch, 27% of the TVs shipped in the first quarter of 2012 offered some type web connectivity. Almost 20 % of all TVs shipped worldwide were actually Smart TVs, with services built right into the set[7]. China, Western Europe, North America and Japan are the markets with the highest penetration rates.

Imagen

Imagen

 Smart TV Value Chain

Key components of the value chain are content creators, aggregators, distributors, and end-users. Smart TV is disrupting the TV value chain in all of its aspects: content creators and manufactures can access directly to consumers, aggregators cannot control the content broadcasted through their channels, operators are not the only content distributor facing a though competition from TV platforms, and last but not least, the consumer will demand a smart TV not to behave as a computer nor as a simple TV, but the best of both worlds.

Imagen


[1] Yahoo! Connected TV Developer Event. http://www.yctvblog.com/blog/2012/05/01/yctv-develope-event/- Last accessed 11/06/12.

[2] Your TV Just got smarter: Yahoo! Introduces Dozens of New Connected TV Apps. http://ycorpblog.com/2011/05/05/connectedtv05052011/. Last accessed 11/06/12.

[3] Connected TV. http://connectedtv.yahoo.com/developer/tvstore/. Last accessed: 14/06/12

[4] Global Samrt TV Market 2011-2015. http://www.marketwatch.com/story/global-smart-tv-market-2011-2015-2012-05-16. Last accessed 11/06/12

[5] MarketsandMarkets: Global Smart TV market worth $265 Billion by 2016. http://www.prnewswire.com/news-releases/marketsandmarkets-global-smart-tv-market-worth-265-billion-by-2016-136643728.html. Last accessed 11/06/12

[6] Smart TV Apps- the next big thing in digital. http://digitalmarketinglab.com.au/index.php/2011/12/04/smart-tv-apps-the-next-big-thing-in-digital/. Last accessed: 11/06/12

[7] We’re all connected; Smart TV Market Share surges in 2012. http://www.bigpicturebigsound.com/We-re-All-Connected-Smart-TV-Market-Share-Surges-in-2012.shtml. Last accessed: 11/06/12.





Foursquare: Still checking-in?

6 06 2012

We can agree that Foursquare entered the market with the perfect timing hitting all the raising trends at the moment: smartphone penetration, social networks, location-based services and video games. It was the nerdy kid of the class that did all the homework right. No wonder as for April 2012, the three year old start up registered 20 million users, 2 billion check-ins and has trippled its revenues from around $5M in 2011 to $15M up to March 2012.

But not everything is sunny and shiny for Foursquare, despite of this excellent numbers and the increase of  awareness there are some questions about the real usage of the app (Is people still checking-in?) and its monetization (How and what is going to be charged?).

Real usage

Personally I started using Foursquare to discover new places around me, explore promotions and coupons and to actually share my location with my friends and family. One thing I noticed was that after one or two months of usage, I stopped checking-in into places because I didn’t like to open the app everytime I arrived to place. So my usage has decrease but I still check it out some times to see where my friends are and to find new places. Of course I thought that was my personal experience but it seems that is not just me. According to Foursquare’s CEO, Dennis Crowley “People are using the app, but they’re not checking in (…). I asked myself: did we break something? But in fact, it’s because people are using Foursquare to look for where their friends are, to find things, and as a recommendation service. It’s almost like it doesn’t occur to them to check in”, stated in TechCrunch. The question is how are they going to handle this? Maybe we will see some features that will allow users to automatically “chek-in” that would increase this activity. In addition to this, security issues need to be handled propertly in order to penetrate emerging markets such as Latam, Middle East and India where this is a high concern.

Monetization

Foursquare’s business division has different offers for place owners (resturants, bars, hotels, etc) and brands. As a place owner you can claim your place, create promotions and acces to analytics. As a brand you can publish offers and access to analytics. Up to now, Foursquare has up to 750,000 merchants registered in the platform but none of them has been charged yet, they have been using the app for free which is a great way to penetrate the market but the question is if they will be willing to pay for additional features when how to measure the ROI is still not that clear.

Conclusion

Facing emerging and strong competitors (Gowalla – recently acquired by Facebook, SCVNGR, Shopkick, etc) in order to leverage from its platform and continue growing, Foursquare need to develop new features to motivate its user activity and add extra features that would create value for merchants and brands.





Google +: now organizing the world social life

26 04 2012

When Google + was lunched in June 2011, almost everyone had very high expectations and wanted to see if this new social network was going to be a true hit for Google or if it would become just another failure like Google Wave or Google Buz.

The main objective of Google+ was to be part social network and part social search, offering a service that tie together all of Google’s existing sites including Gmail. If we go back into the company mission: “to organize the world’s information and make it unversally accesible and useful” there was a big part that they were failing to organize: users social life and time spent. There is no wonder why on march 1st 2012, Google changed its privacy agreement to allow the  company to collect and unify user data across all its web properties and of course there is no coincidence why its CEO, Larry Page, has made social networking a top priority in order to fullfill the gaps mentioned.

Even though Facebook is superior in both active users and time spent, Google + has been the fastest growing social network application. By year 1 Facebook had 12M users and with 9 months Google + has crossed the 90M user mark, which has been forecasted to grow up to 400M by the end of 2012. In addition to these data, we cannot disregard two things: 1) Around 625k new Google + accounts are registered daily and 2) Google + is a social network embedded (not integrated) in a mobile operating system (Android) and cloud applications (Gmail, Google Docs, Youtube, etc).When we look into the future, as adoption level of Google’s social network goes up, users will experience even higher network effects since it will converge all internet activity (traditional Google model)  into Google+ so the user can share everything from everywhere with its friends and family in a more easy, private and customizable way ( the social aspect that Google was missing).

 

 

 

 

 

 

 





Play that disruptive music

25 04 2012

Due to digitalization and digital convergence, the value chain of the media industry has been radically transformed in the past decades. Before digitalization, the value chain followed content creation, publishing, distribution, retail and consumption and now we can observe how content creation is directly sent to consumers through digital channels or better yet, the consumer is the one creating its own content (prosumer).

Even though TV, film, newspapers, magazines, book publishing and radio has been affected by this phenomenon, I would like to talk specifically about the music industry. An industry in which we have all seen and experienced several disruptive technologies that have changed two main things 1) music consumption and 2) the industry’s business model.

Music consumption transformation

The introduction of several devices, such as the MP3 format (1997), the iPod(2001), iPhone (2007) & smartphones and now streaming applications like Spotify (2010), have changed the way we listen to music and consume music. As consumers, we experienced mobility with the invention of portable ways to carry our favorite music and with the introduction of digital libraries like Napster (1999) and the iTunes Store (2003) we also switched our mindset from the acquisition of the entire album to only our favorite singles. In addition to this, the introduction  of streaming applications is switching the perspective of “owning” the music towards “lending” perspective where we are paying a monthly fee (subscription model) for listening our favorite singles of all times (hits or not) and most importantly where we are sharing our music with the community. Spotify is the leading disruptive application that has succesfully transformed the music industry one more time with $889M of revenues in 2012.

Business model transformation

Music consumption transformation has had a negative impact in the traditional industry’s business model. Just in 2011, trade revenue generated by the global recorded music industry in 2011 dropped by 3% to $16.6 billion, according to the International Federation of the Phonographic Industry’s (IFPI) annual “Recording Industry in Numbers”. Even though digital music consumption is increasing, the margins are not as high as the traditional business model.

We can observe in the graph how each disruptive technology mentioned above have impacted US record revenues turnover. Besides of disruptive technologies, the industry has experienced a focus change from “hit creation” towards “long-tail leverage” where they need to develop new capabilities to transform its business model and capture more value.

A very interesting approach is exposed by the Financial Times in its article “Music industry new business model” where they analyze a different busines model being used by the band Radiohead. According to its manager, Brian Message, “We’re trying to get away from a copyright trading model more towards a venture capitalist approach with artists”. Instead of signing away copyright ownership of songs in exchange for an advance and royalties, as happens in most record deals, the bands Message signs get to keep ownership of their work. The contract is a so-called “360 deal”: all income – from records, concerts, merchandise, commercial tie-ins, everything – is split between band and backers, after the initial investment has been repaid”.

Transforming the music industry business model is not unattractive when we can observe an increasing demand of digital music going 8.0 percent up from 2011 to $5.23 billion. According to Message and Barton in its article published in Harvard Business Review, there are two lessons to be learned: 1) stop treating artists as commodities, interesting when they produce hits and disposable when they don’t; and 2) value the artist-fan relationship as copyrigths.

Conclusion

As music consumption continues to change, the music industry has to be able to adapt to these patterns instead of fighting against them. Adaptability of its business model to monetize from a digitilize music era is imperative to succeed and will demand innovations leveraging on artists community base.

 





Customer-focus: to be or not be?

24 03 2012

We have seen how product-centered companies such as Nokia lost track of market demands and continued adding features that customers did not value. On the other hand, we have seen shareholder-centered companies as General Motors where even Jack Welch admitted it would be the dumbest idea to continue with this emphasis in our current context. We have also observed how customer-focused companies like Zappos have exceeded customer expectations by delivering an excellent customer service thus struggling to finance it. The path is blurry and we may wonder where is the balance?

In the era of accelerated information and increasing technology innovations, companies have no option but to become customer-focus. Mr. Ray Kroc – founder of McDonald’s, said it best: “Look after the customer and the business will take care of itself”. Even though I agree with this argument my only question is: Do companies really have to take care of every customer? I believe the word “profitable” is missing from Mr. Kroc statement.

Nowadays companies seem to be customer-obsessed rather than customer-focus. Firms are trying to acquire and satisfy every customer possible regardless of it cost. This is not the right approach. Customer-centric companies are the ones who understand what the customer values and the value that the customer represents to the bottom line. In this sense the firms that capitalize from this approach are the ones that have reorganized their entire operating model around the customer in order to accomplish two strategic objectives: the first, to increase satisfaction levels in order to rise repurchase rates and/or average ticket; and the second, to better allocate the costs that each customer represent in order to identify the profitable ones. With this in mind, in order to capitalize from customers, firms should focus on the ones who are profitable.

Sources
http://www.forbes.com/sites/stevedenning/2011/11/28/maximizing-shareholder-value-the-dumbest-idea-in-the-world/
http://blogs.hbr.org/cs/2011/04/welcome_to_creating_a_customer.html