Is it a good idea to encourage ALL employees to trade in these markets? Should insiders and/or highly uninformed people be allowed to trade? Do they help or hurt the market?
In the case, Dolores Haze, a manager on a search quality team, gave the opinion that the Google Prediction Market (GPM) was not a lot of help to her or her team. She felt it was her job to know the status of all projects. When a project in her division was posted on GPM, she knew what the outcome would be because she was so close to the project. When the market agreed with her, she wasn’t surprised and felt GPM did not offer her any new advantage. Instead, it simply affirmed her intuition. While she agreed that the GPM created excitement about projects Google-wide, she did not believe the GPM should be considered a resource when it came to making company decisions.
While I believe the GPM is great in terms of motivating people to learn what’s going on company-wide, I found it interesting that some people used the GPM to make trades hoping they would intentionally mislead the market. They had the advantage because they were so close to the project and felt strongly about the overall outcome. Still, it appears that GPM is yet another example of the “long tail” effect in that 80% of the trades are made by 20% of the people. Most people trade only once or twice each quarter. Therefore, the frequent traders are really only competing with themselves. I believe Google should continue to encourage all employees to trade in the market in order to get more accurate market prediction results.
Thursday, April 23, 2009
Thursday, April 16, 2009
Threadless
In what other industries or areas would Threadless’ community-driven product development model work well? And not so well?
I loved this case because I think Threadless has such an intriguing business model. Loyal customers visit the website each week to order their own unique, custom t-shirt wardrobe. I spent an hour looking at designs instead of writing this blog. This type of community-driven product development model has worked well on other websites we have discussed this semester like Etsy.com where buyers can directly communicate with artists and commission customized product. Unlike Threadless, however, the buyer is the designer, not the seller. Threadless is unique in that website visitors vote on the designs printed each week. The beauty of Threadless is the community of designers, voters, bloggers, and consumers that has emerged from this simple screen t-shirt business. T-shirts are a very basic, inexpensive product. When you print a unique design on them, they transform from a plain tee to a work of art.
In one of the videos in the case, the founder compares the website to an art gallery and I think that is an extremely valid point. People are going to Threadless to look first and purchase second. People are interested in the art and then being able to wear their “t-shirt art” as an expression of their connection to the community or the design. Threadless has kept is simple, offering t-shirts for men, women, children, hoodies, and some kid’s clothing. They are not offering customized hats, socks, underwear, etc. They have stuck their core competency: design something that is perfect to print on a t-shirt. I am not sure this type of business model would work for any type of customized product such as art, crafts, furniture, because the end products might be too complex for quick mass production and turnaround. Threadless has kept it simple. The t-shirt is the perfect blank canvas on which to print a design quickly, efficiently, and then sell over a million t-shirts.
I loved this case because I think Threadless has such an intriguing business model. Loyal customers visit the website each week to order their own unique, custom t-shirt wardrobe. I spent an hour looking at designs instead of writing this blog. This type of community-driven product development model has worked well on other websites we have discussed this semester like Etsy.com where buyers can directly communicate with artists and commission customized product. Unlike Threadless, however, the buyer is the designer, not the seller. Threadless is unique in that website visitors vote on the designs printed each week. The beauty of Threadless is the community of designers, voters, bloggers, and consumers that has emerged from this simple screen t-shirt business. T-shirts are a very basic, inexpensive product. When you print a unique design on them, they transform from a plain tee to a work of art.
In one of the videos in the case, the founder compares the website to an art gallery and I think that is an extremely valid point. People are going to Threadless to look first and purchase second. People are interested in the art and then being able to wear their “t-shirt art” as an expression of their connection to the community or the design. Threadless has kept is simple, offering t-shirts for men, women, children, hoodies, and some kid’s clothing. They are not offering customized hats, socks, underwear, etc. They have stuck their core competency: design something that is perfect to print on a t-shirt. I am not sure this type of business model would work for any type of customized product such as art, crafts, furniture, because the end products might be too complex for quick mass production and turnaround. Threadless has kept it simple. The t-shirt is the perfect blank canvas on which to print a design quickly, efficiently, and then sell over a million t-shirts.
Thursday, April 2, 2009
Wikipedia
How do Wikipedia’s processes for creating and modifying articles ever lead to high-quality results?
Wikipedia's 12 million articles (2.8 million in the English Wikipedia) have been written collaboratively by volunteers around the world. But does this collaboration lead to a high quality Internet reference tool? Wikipedia is a true “wiki” in that articles undergo a formal peer-review process and changes to articles are made available immediately to all readers. No article is owned by its creator or any other editor, or is vetted by any recognized authority. Except for a few vandalism-prone pages that can be edited only by established users or in extreme cases only by administrators, every article may be edited anonymously or with a user account. Wikipedia has never claimed to guarantee its validity as a “high quality” reference but its success stems from the fact articles are often self-policed by users and frequent editors who have made it their mission to make this wiki as valid internet reference as possible. I use Wikipedia on a daily basis to look things up and even with its easy open source editing model, I have never looked at the history of an article to determine its quality, validity or look to see if the article I am reading was recently vandalized. Like millions of other students, I generally use Wikipedia as an informal reference tool. I understand that it is not acceptable to use as a scholarly or primary reference in academic work but I will continue to use it as a stepping stone to learn more about anything and everything. There are lots of well written articles on Wikipedia but user anonymity means author bias and bogus information will never be eliminated.
Wikipedia's 12 million articles (2.8 million in the English Wikipedia) have been written collaboratively by volunteers around the world. But does this collaboration lead to a high quality Internet reference tool? Wikipedia is a true “wiki” in that articles undergo a formal peer-review process and changes to articles are made available immediately to all readers. No article is owned by its creator or any other editor, or is vetted by any recognized authority. Except for a few vandalism-prone pages that can be edited only by established users or in extreme cases only by administrators, every article may be edited anonymously or with a user account. Wikipedia has never claimed to guarantee its validity as a “high quality” reference but its success stems from the fact articles are often self-policed by users and frequent editors who have made it their mission to make this wiki as valid internet reference as possible. I use Wikipedia on a daily basis to look things up and even with its easy open source editing model, I have never looked at the history of an article to determine its quality, validity or look to see if the article I am reading was recently vandalized. Like millions of other students, I generally use Wikipedia as an informal reference tool. I understand that it is not acceptable to use as a scholarly or primary reference in academic work but I will continue to use it as a stepping stone to learn more about anything and everything. There are lots of well written articles on Wikipedia but user anonymity means author bias and bogus information will never be eliminated.
Thursday, March 26, 2009
Advantages & Disadvanatages of Blogs
What are the advantages and disadvantages of implementing internal versus external employee blogs in a corporate setting? Are there certain industries where one of these strategies makes more sense?
Advantages of both Internal and External
Authors of blogs have the luxury of focusing on a single issue as long as they want to
Bloggers can supply a mix of supporting information such as background research, links to other online materials, copies of other documents, and photographs
No space restriction, can post or link to all relevant information
Ability to disseminate information even quicker than traditional publication channels
Technologies to support blogging are widespread and often free
Keeping up with blog posts made infinitely easier by RSS
External blogs can be a source of revenue with ads
Posts to external blogs often give a behind-the-scenes look at the company
Internal blogs create a loyal following; help raise awareness of issues that need to be addressed
“Blog Monitoring” helps companies mine for external blogs for customer sentiments about the company and its products
External blogs are a good marketing tool, can be used to advertise in a tone and language to match brand campaign of a new product
Internal blogs allow for collaboration across functions, increased cooperation and the ability to share information quickly and efficiently
Blogs, both internal and external, create a record of an organization’s thoughts and conversations; this record is then searchable and consultable
Blogging is a growing trend in communication around the world
Internal blogging helps with knowledge sharing
Blogging creates an aspect of self-gratification that can not be measured
Blogs increase transparency and ultimately benefit companies who can be quick to issue corrections
Disadvantages of both Internal and External
Blogs are unsupervised, unedited, and unpremeditated
May be a waste of time for employees, it can be tedious in terms of upkeep
External corporate bloggers do not have complete freedom, companies often provide guidelines
External blogs are risky because the author could reveal a company secret, violate client confidentiality, or attract unwanted attention from a regulator or enforcer
External blogs would have to be reviewed by some kind of internal media relations group
Legal and compliance officers were weary of external company blogs arguing that not everyone has the right “voice” or “skill set” to blog
Blogs can be used in any industry. Blogs are a place for a group of similar-minded people to discuss any topic. Bloggers can comment on reviews on new products. Bloggers can comment on new software or IT problems and solutions. Bloggers might want to discuss child-rearing, finance, or exercise. Bloggers can blog about their daily lives, be it boring and exciting, and still develop a loyal following. The extremely rapid growth in blogs as shown in Exhibit 2 indicates that people are blogging and they are blogging about anything and everything. The sky’s the limit.
Monday, March 23, 2009
Thursday, March 19, 2009
Apple iPhone & Digital Music Market
Has the digital music market irreversibly tipped in Apple’s favor?
Mobile phone manufacturers’ worst nightmare came true when the iPhone was introduced in the U.S. on June 29, 2007. The iPhone’s international success was followed by the release of the iPhone 3G on July 11, 2008. Today, Apple is the third largest mobile phone manufacturer, after Nokia and Samsung. The digital music market and the mobile phone market have irreversibly tipped in Apple’s favor. The iPod is the kind of innovation that changes generations. People cannot live without their iPod and now some people can’t live without their iPhone. The only thing keeping me from getting an iPhone are switching costs. I would have to change from Verizon to AT&T/Cingular and that would mean losing my free mobile to mobile minutes with my husband and family because everyone else is on Verizon. I have an 80GB iPod so I don’t need it for digital music reasons so I can’t exactly justify the expense. But, a part of me still gets really jealous when someone whips out their brand new iPhone 3G. It was that same feeling that made me purchase my iPod in the first place. I guess I have just been brainwashed by Apple into feeling that false sense of need. As far as the digital music market is concerned, iTunes is still a loss leader for the iPod. It may have inadvertently created a price structure for subscription and non-subscription services but it still offers the most complete library. The sad thing is, illegal downloading is still a problem. When Apple reported in 2006 that its billionth song had been downloaded, consumers were still illegally downloading an estimated billion songs every month worldwide. This makes the digital music industry less and less attractive for handset manufacturers and carriers alike. Prices for subscription services may be going down but people are still finding free ways to trade music and I am not sure anyone can compete with that- not even Apple.
Mobile phone manufacturers’ worst nightmare came true when the iPhone was introduced in the U.S. on June 29, 2007. The iPhone’s international success was followed by the release of the iPhone 3G on July 11, 2008. Today, Apple is the third largest mobile phone manufacturer, after Nokia and Samsung. The digital music market and the mobile phone market have irreversibly tipped in Apple’s favor. The iPod is the kind of innovation that changes generations. People cannot live without their iPod and now some people can’t live without their iPhone. The only thing keeping me from getting an iPhone are switching costs. I would have to change from Verizon to AT&T/Cingular and that would mean losing my free mobile to mobile minutes with my husband and family because everyone else is on Verizon. I have an 80GB iPod so I don’t need it for digital music reasons so I can’t exactly justify the expense. But, a part of me still gets really jealous when someone whips out their brand new iPhone 3G. It was that same feeling that made me purchase my iPod in the first place. I guess I have just been brainwashed by Apple into feeling that false sense of need. As far as the digital music market is concerned, iTunes is still a loss leader for the iPod. It may have inadvertently created a price structure for subscription and non-subscription services but it still offers the most complete library. The sad thing is, illegal downloading is still a problem. When Apple reported in 2006 that its billionth song had been downloaded, consumers were still illegally downloading an estimated billion songs every month worldwide. This makes the digital music industry less and less attractive for handset manufacturers and carriers alike. Prices for subscription services may be going down but people are still finding free ways to trade music and I am not sure anyone can compete with that- not even Apple.
Thursday, March 5, 2009
Brightcove
What are the strengths and weaknesses of Brightcove’s business model?
Strengths:
Turnkey software platform for creating & maintaining broadband video channels that was faster than anything else on the market
Early customers included big names like the New York Times and Wall Street Journal creating a roster of reference clients
Bundled software platform service with content delivery network (CDN) fees generated a lot of revenue
AdNet Select advertising strategy was great at tracking impressions and targeting specific consumer groups- a big selling point to advertisers
Truveo search engine gives consumers robust search capability
All tools are branded, like Google
Weakness:
Platform is strong, but not so strong that other engineers couldn’t recreate in 10 months
Customizing the platform for big name clients drained engineering resources
CDN prices were likely to fall and revenue service might dry up, sense of urgency to generate revenue from advertising might lead to bad business decisions
Attracting high quality publishers when shifting more of its customers to revenue sharing arrangement was difficult
Brightcove had trouble identifying their ideal customer or audience
Third party affiliates or niche publishers were leery to give control to Brightcove
Do you want to have to negotiate with one of your competitors for search capability?
Pitching online advertising to companies was difficult; Brightcove was not investing rapidly enough to expand ad sales team
Wednesday, February 25, 2009
Winner-Take-All
2. Is search a winner-take-all business?
Like the article says, a winner-take-all (WTA) market is unforgiving. Most of the time, those who dare to compete with the winner inevitably face extinction. If search is a WTA business, then Google is on its way to becoming the big winner. Google’s win might be less intention and more the power of network effects. Unfortunately, Google does not register gains every month but according to Hitwise, an online measurement service, Google has surpassed the 70 percent market share benchmark. It estimates that Google has 72 percent of the United States total online search market, versus 17.9 percent for Yahoo and 5.4 percent belonging to Microsoft’s two search services, MSN and Live.com. Even better network effect numbers come from web site owners who track where their visitors come from report that Google’s search engine now refers 80 to 90 percent of their visitors. Competitors face extinction because of their unbelievably unprecedented network effects. As the article from this past weekend states, most people just use Google out of habit and we all know old habits die hard. Plus, one of Google’s ten rules states “It’s best to do one things, really, really well.” Google has one of the world’s largest research groups focused solely on solving search problems. Their tireless dedication to the search market has lead to new products such as Gmail, Gchat and Google maps which only to serve to spread their brand name even farther and increase their already strong network effects. Will there ever be anything better than Google? I don’t think so.
Like the article says, a winner-take-all (WTA) market is unforgiving. Most of the time, those who dare to compete with the winner inevitably face extinction. If search is a WTA business, then Google is on its way to becoming the big winner. Google’s win might be less intention and more the power of network effects. Unfortunately, Google does not register gains every month but according to Hitwise, an online measurement service, Google has surpassed the 70 percent market share benchmark. It estimates that Google has 72 percent of the United States total online search market, versus 17.9 percent for Yahoo and 5.4 percent belonging to Microsoft’s two search services, MSN and Live.com. Even better network effect numbers come from web site owners who track where their visitors come from report that Google’s search engine now refers 80 to 90 percent of their visitors. Competitors face extinction because of their unbelievably unprecedented network effects. As the article from this past weekend states, most people just use Google out of habit and we all know old habits die hard. Plus, one of Google’s ten rules states “It’s best to do one things, really, really well.” Google has one of the world’s largest research groups focused solely on solving search problems. Their tireless dedication to the search market has lead to new products such as Gmail, Gchat and Google maps which only to serve to spread their brand name even farther and increase their already strong network effects. Will there ever be anything better than Google? I don’t think so.
Tuesday, February 24, 2009
DoCoMo
1. Is DoCoMo wise to offer its existing mobile phone rivals access to FeliCa?
As stated in the case, DoCoMo could capture all contactless IC market share if they chose to offer FeliCa as an exclusive feature on their phones. On the other hand, DoCoMo managers were wise to recognize that, with strong network effects, FeliCa applications and reader locations would and could become the accepted form of technology a lot faster and more efficiently if DoCoMo’s rivals also adopted the FeliCa technology. I agree with this argument. This type of technology costs merchants much too much to cater to only one vendor or carrier. DoCoMo executives did not seek exclusive rights for FeliCa and consequently both KDDI and Vodafone quickly announced plans to adopt embedded contactless ICs like FeliCa on their phones. It is important, however, to note that DoCoMo will profit from rivals adopting FeliCa technology since it is a major shareholder of FeliCa Networks and therefore ulterior motives may exist.
As stated in the case, DoCoMo could capture all contactless IC market share if they chose to offer FeliCa as an exclusive feature on their phones. On the other hand, DoCoMo managers were wise to recognize that, with strong network effects, FeliCa applications and reader locations would and could become the accepted form of technology a lot faster and more efficiently if DoCoMo’s rivals also adopted the FeliCa technology. I agree with this argument. This type of technology costs merchants much too much to cater to only one vendor or carrier. DoCoMo executives did not seek exclusive rights for FeliCa and consequently both KDDI and Vodafone quickly announced plans to adopt embedded contactless ICs like FeliCa on their phones. It is important, however, to note that DoCoMo will profit from rivals adopting FeliCa technology since it is a major shareholder of FeliCa Networks and therefore ulterior motives may exist.
Thursday, February 19, 2009
Online Gaming
Since the writing of the Electronic Arts Case the Sony PlayStation 3 and the Nintendo Wii have been released and both have online gaming capabilities. What’s your assessment of the current online gaming market?
I don’t play video games and I couldn’t even begin tell you what console we have in our home. PS2 maybe? It belongs to my husband. I definitely had to do some research on this one but the timing is perfect since my parents have requested a Wii for the 30th Anniversary- although I am sure they will not be playing online. I know Wii was popular when it came out because it was cheaper than PS3, offered wand-like controls that captured your motions, but offered a less in terms of graphics for serious gamers. I know the Wii console can connect to the internet and access the Nintendo Wi-Fi connection service for free for up to 32 players. The online function is there but Nintendo seems more focused on targeting a different market, reaching a broader demographic and making more profit per console than developing their online gaming capabilities.
For example, how did my parents even learn about the Wii? Great marketing, according to a study published by the Nielsen Company, has attracted a broader audience and more female consumers to Wii than Xbox 360 or PlayStation 3. While the brand name might carry weight and reach a larger audience, the system is also used the least compared to its rival consoles. The Wii is reaching an audience that wants to play video games but wants to play siginificantly less than the 8 hours per week stated in the case.
According to the same study, Nintendo's Wii was used by more women age 35+ than either Xbox 360 or PlayStation 3. Nielsen explained this phenomenon as the result of titles such as Wii Fit, Guitar Hero, and Rock Band having "engaged an older female gamer like never before." The image of my Mom playing Guitar Hero is not one I want to dwell on but this still doesn’t answer the question regarding each system’s online gaming capabilities or who has the most market share.
The 2006 release of PS3 was Sony’s attempt to regain the brand trust of online gamers who used Microsoft’s Xbox 360 released in 2005 as their console. The PS3 quickly distinguished itself from its predecessors and competitors by offering a unified online gaming service called the PlayStation Network. This contrasted with Sony's former policy of relying on game developers for online play as stated in the case. The console also included robust multimedia capabilities, connectivity with the PlayStation Portable, and Blu-ray capability. As of January 8, 2008, there were over 17 million active registered PlayStation Network accounts worldwide and users made 330 million downloads. As of May 2008, Xbox 360 reported over 12 million subscribers to Xbox Live so it appears PS3 is gaining market share.
So in the end, it looks like Microsoft's XBox 360 and PS3 are direct competitors, while Nintendo's Wii is more of a first-time user or casual video gamer who would like the latest console but is not interested in online gaming.
I don’t play video games and I couldn’t even begin tell you what console we have in our home. PS2 maybe? It belongs to my husband. I definitely had to do some research on this one but the timing is perfect since my parents have requested a Wii for the 30th Anniversary- although I am sure they will not be playing online. I know Wii was popular when it came out because it was cheaper than PS3, offered wand-like controls that captured your motions, but offered a less in terms of graphics for serious gamers. I know the Wii console can connect to the internet and access the Nintendo Wi-Fi connection service for free for up to 32 players. The online function is there but Nintendo seems more focused on targeting a different market, reaching a broader demographic and making more profit per console than developing their online gaming capabilities.
For example, how did my parents even learn about the Wii? Great marketing, according to a study published by the Nielsen Company, has attracted a broader audience and more female consumers to Wii than Xbox 360 or PlayStation 3. While the brand name might carry weight and reach a larger audience, the system is also used the least compared to its rival consoles. The Wii is reaching an audience that wants to play video games but wants to play siginificantly less than the 8 hours per week stated in the case.
According to the same study, Nintendo's Wii was used by more women age 35+ than either Xbox 360 or PlayStation 3. Nielsen explained this phenomenon as the result of titles such as Wii Fit, Guitar Hero, and Rock Band having "engaged an older female gamer like never before." The image of my Mom playing Guitar Hero is not one I want to dwell on but this still doesn’t answer the question regarding each system’s online gaming capabilities or who has the most market share.
The 2006 release of PS3 was Sony’s attempt to regain the brand trust of online gamers who used Microsoft’s Xbox 360 released in 2005 as their console. The PS3 quickly distinguished itself from its predecessors and competitors by offering a unified online gaming service called the PlayStation Network. This contrasted with Sony's former policy of relying on game developers for online play as stated in the case. The console also included robust multimedia capabilities, connectivity with the PlayStation Portable, and Blu-ray capability. As of January 8, 2008, there were over 17 million active registered PlayStation Network accounts worldwide and users made 330 million downloads. As of May 2008, Xbox 360 reported over 12 million subscribers to Xbox Live so it appears PS3 is gaining market share.
So in the end, it looks like Microsoft's XBox 360 and PS3 are direct competitors, while Nintendo's Wii is more of a first-time user or casual video gamer who would like the latest console but is not interested in online gaming.
Thursday, February 12, 2009
Netflix
Since the publishing of this case, Netflix has entered the video on demand (VOD) market. What is your analysis of how Netflix has attempted to update their business model with VOD?
Throughout the company’s history, Netflix CEO Reed Hastings has repeatedly assured critics that the purpose of Netflix was not to provide DVD rentals through the internet but instead to provide the best home video viewing experience for its customers. Video on demand (VOD) at Netflix was first launched as a free streaming feature at no additional cost to existing online DVD subscribers. Hastings was correct to leverage Netflix’s existing brand and market share as a way to differentiate his company from other VOD competitors because Netflix announced yesterday that their subscription had reached a symbolic milestone obtaining 10 million subscribers. This number was achieved after adding about 600,000 new users in the month and a half since the start of 2009 and is growing faster than the 26% increase in users this past fall when, according to www.electronista.com, the movie rental firm added about 718,000 new regular users. Netflix expects to add between 100,000 and 300,000 more by the end of March. The company attributes this jump to the company’s online efforts which allow most existing subscribers to monthly physical DVD rentals as well as a subset of the Netflix catalog either on the web or on a supporting media hub. Netflix has been working tirelessly to obtain and maintain strategic partnerships with companies that will increase their power as a VOD distributor and as a brand.
The company again leveraged its brand when it significantly added to its video on demand options in late 2008. In November 2008, Microsoft and Netflix announced a milestone in their efforts to bring home movies to users of the Xbox 360. Since November over 1 million Xbox live users have downloaded and activated software that lets them access Netflix' library of movies and TV shows. Netflix for TiVo allows owners of Series 3, TiVo HD and TiVo HD XL DVRs that also maintain active Netflix subscriptions stream movies and TV shows from their Instant Queues. Titles can play in HD whenever the content is available, and the TiVo's own remote can be used both for navigating the movie as well as rating movies or checking descriptions before starting. The feature is free to customers of both Netflix and TiVo.
Netflix has also worked to gain support and exposure on newer LG and Samsung Blu-ray players who will allow for the streaming of videos on their players, as well as web support for Macs in addition to previous Windows-only support. Netflix is smart to realize that demand is increasing. The economy is struggling, people are staying in more than going out, and they want immediate access to movies and television.
Throughout the company’s history, Netflix CEO Reed Hastings has repeatedly assured critics that the purpose of Netflix was not to provide DVD rentals through the internet but instead to provide the best home video viewing experience for its customers. Video on demand (VOD) at Netflix was first launched as a free streaming feature at no additional cost to existing online DVD subscribers. Hastings was correct to leverage Netflix’s existing brand and market share as a way to differentiate his company from other VOD competitors because Netflix announced yesterday that their subscription had reached a symbolic milestone obtaining 10 million subscribers. This number was achieved after adding about 600,000 new users in the month and a half since the start of 2009 and is growing faster than the 26% increase in users this past fall when, according to www.electronista.com, the movie rental firm added about 718,000 new regular users. Netflix expects to add between 100,000 and 300,000 more by the end of March. The company attributes this jump to the company’s online efforts which allow most existing subscribers to monthly physical DVD rentals as well as a subset of the Netflix catalog either on the web or on a supporting media hub. Netflix has been working tirelessly to obtain and maintain strategic partnerships with companies that will increase their power as a VOD distributor and as a brand.
The company again leveraged its brand when it significantly added to its video on demand options in late 2008. In November 2008, Microsoft and Netflix announced a milestone in their efforts to bring home movies to users of the Xbox 360. Since November over 1 million Xbox live users have downloaded and activated software that lets them access Netflix' library of movies and TV shows. Netflix for TiVo allows owners of Series 3, TiVo HD and TiVo HD XL DVRs that also maintain active Netflix subscriptions stream movies and TV shows from their Instant Queues. Titles can play in HD whenever the content is available, and the TiVo's own remote can be used both for navigating the movie as well as rating movies or checking descriptions before starting. The feature is free to customers of both Netflix and TiVo.
Netflix has also worked to gain support and exposure on newer LG and Samsung Blu-ray players who will allow for the streaming of videos on their players, as well as web support for Macs in addition to previous Windows-only support. Netflix is smart to realize that demand is increasing. The economy is struggling, people are staying in more than going out, and they want immediate access to movies and television.
Thursday, February 5, 2009
P2P File Sharing and the Market for Digital Information Goods
1. Who will win the competitive battle between P2P file sharing networks and iTunes over the long run and why?
I think the critic in the last paragraph of this case made the best argument about the competitive battle between P2P and iTunes when he said: “in terms of stopping file sharing, any edict, even one the highest court in the land, is about as effective as a mop in a monsoon” and “iTunes isn’t about selling songs; it’s about selling more iPods.” P2P file sharing networks and iTunes are not competitors or rivals.
P2P file sharing networks will continue to pop-up, evolve into authorized pay-for models or get shut down, etc. I used Napster in college. My brother (five years younger than me) used Kazaa. The next kid will use whatever is the latest, greatest, and most importantly, free file sharing network that exists when they need it. When lawsuits started popping up about Napster after I graduate from college, I changed my free-loading user ways, felt like it was “cooler” to respect copyright laws and stopped downloading pirated music on my personal computer and/or laptop. I have been an iPod owner since they first came out but I have purchased less than $500 in songs and I am guessing this is more than many iTunes users. If I want the music, I go out and spend $9.99 on the actual CD and then load it into my library. Then I went home to Boston a couple of weeks ago, visited my brother, and then loaded his pirated music from his laptop into my library. I am a copyright violator once again. I am willing to pay $0.99 for a song or a $1.99 for a TV episode in case my husband accidently erased it from our DVR, but I also still routinely download the free iTune of the week- not because I like them all, but because it’s free so why not?
I am not sure the record labels will ever win this battle due to the fact that it is too difficult to prosecute and collect on this kind of copyright infringement. Suing grandmothers who have never touched a personal computer or high school cheerleaders turned internet celebrities does not help their cause either. I like Courtney Love’s solution about tipping artists for their music since a lot of the music I download happens to be more of the emerging, independent artists than big names like U2 or Beyonce. I heard on the radio this morning that Beyonce’s latest album that has more songs if you buy it in the store, but less if you download? From a marketing standpoint, that is a great way to encourage fans to go out and buy the actual CD rather than just downloading- especially for someone as popular as Beyonce.
So while P2P file sharing networks will continue to battle each other, the record companies the RIAA, iTunes will continue to be iTunes and I will continue my dependence on my iPod which I am quite certain I will never manage to fill.
I think the critic in the last paragraph of this case made the best argument about the competitive battle between P2P and iTunes when he said: “in terms of stopping file sharing, any edict, even one the highest court in the land, is about as effective as a mop in a monsoon” and “iTunes isn’t about selling songs; it’s about selling more iPods.” P2P file sharing networks and iTunes are not competitors or rivals.
P2P file sharing networks will continue to pop-up, evolve into authorized pay-for models or get shut down, etc. I used Napster in college. My brother (five years younger than me) used Kazaa. The next kid will use whatever is the latest, greatest, and most importantly, free file sharing network that exists when they need it. When lawsuits started popping up about Napster after I graduate from college, I changed my free-loading user ways, felt like it was “cooler” to respect copyright laws and stopped downloading pirated music on my personal computer and/or laptop. I have been an iPod owner since they first came out but I have purchased less than $500 in songs and I am guessing this is more than many iTunes users. If I want the music, I go out and spend $9.99 on the actual CD and then load it into my library. Then I went home to Boston a couple of weeks ago, visited my brother, and then loaded his pirated music from his laptop into my library. I am a copyright violator once again. I am willing to pay $0.99 for a song or a $1.99 for a TV episode in case my husband accidently erased it from our DVR, but I also still routinely download the free iTune of the week- not because I like them all, but because it’s free so why not?
I am not sure the record labels will ever win this battle due to the fact that it is too difficult to prosecute and collect on this kind of copyright infringement. Suing grandmothers who have never touched a personal computer or high school cheerleaders turned internet celebrities does not help their cause either. I like Courtney Love’s solution about tipping artists for their music since a lot of the music I download happens to be more of the emerging, independent artists than big names like U2 or Beyonce. I heard on the radio this morning that Beyonce’s latest album that has more songs if you buy it in the store, but less if you download? From a marketing standpoint, that is a great way to encourage fans to go out and buy the actual CD rather than just downloading- especially for someone as popular as Beyonce.
So while P2P file sharing networks will continue to battle each other, the record companies the RIAA, iTunes will continue to be iTunes and I will continue my dependence on my iPod which I am quite certain I will never manage to fill.
Thursday, January 29, 2009
EZBOARD: MAKING CUSTOMERS PAY
1. How should ezboard update their business model to reach their revenue goals?
First, ezboard must update their business model to reflect a shift in their target end user. It should not have been a surprise to the ezboard management that a shift occurred in its user base from an 18 to 25 year-old male to a 25 to 45 year-old female as well as a shift in discussion board topics from gaming and music to parenting, health, social support and television. Ezboard must first understand who is using their board before it changes its business model in order to reach revenue goals. Ezboard must then convince these users that being part of a network of discussion boards is better then being a member of a stand alone board because of the ability to reach out to other users like themselves.
Of the 75,000 active discussion boards in 2004, 23% subscribed to the Gold Community but Gold boards represented 65% of the page views on the site. Pricing terms for gold board subscriptions had not changed since their introduction in 2001 but ezboard should implement a pricing strategy to charge for viewing gold boards. Ezboard was willing to negotiate better rates for boards receiving 1 million views per month. It also states that roughly 4400+ users contribute an average of $23.26 to Community Chests on behalf of those large board administrators. Ezboard might want to work with the administrators of medium boards dealing with popular issues if they launch a new subscription model to encourage their users to contribute to their Community Chest in exchange for more features for that administrator. Large boards are less interested in attracting new members but incentivizing medium board administrators with additional features based on users might help increase discussion board membership.
With less than 1 percent of ezboard’s 10 million users considered paid users, ezboard needs to further establish the gap between registered users and non-registered users. Non-registered users should have “bare bones” features with no ability to personalize and limited time only access to boards before they must at least register as a non-paying user. The collected demographics will then be used to attract advertisers and increase revenue in that arena.
2. What services should they consider offering with the new Version 8.0 software?
First, ezboard must update their business model to reflect a shift in their target end user. It should not have been a surprise to the ezboard management that a shift occurred in its user base from an 18 to 25 year-old male to a 25 to 45 year-old female as well as a shift in discussion board topics from gaming and music to parenting, health, social support and television. Ezboard must first understand who is using their board before it changes its business model in order to reach revenue goals. Ezboard must then convince these users that being part of a network of discussion boards is better then being a member of a stand alone board because of the ability to reach out to other users like themselves.
Of the 75,000 active discussion boards in 2004, 23% subscribed to the Gold Community but Gold boards represented 65% of the page views on the site. Pricing terms for gold board subscriptions had not changed since their introduction in 2001 but ezboard should implement a pricing strategy to charge for viewing gold boards. Ezboard was willing to negotiate better rates for boards receiving 1 million views per month. It also states that roughly 4400+ users contribute an average of $23.26 to Community Chests on behalf of those large board administrators. Ezboard might want to work with the administrators of medium boards dealing with popular issues if they launch a new subscription model to encourage their users to contribute to their Community Chest in exchange for more features for that administrator. Large boards are less interested in attracting new members but incentivizing medium board administrators with additional features based on users might help increase discussion board membership.
With less than 1 percent of ezboard’s 10 million users considered paid users, ezboard needs to further establish the gap between registered users and non-registered users. Non-registered users should have “bare bones” features with no ability to personalize and limited time only access to boards before they must at least register as a non-paying user. The collected demographics will then be used to attract advertisers and increase revenue in that arena.
2. What services should they consider offering with the new Version 8.0 software?
- Users do not want a wide spectrum of services rolled out at once beyond their discussion boards. They are interested in specific functionality. It is important to roll out new version in phases.
- Users do want ezboard to add specific social networking functions i.e. the ability to create a friends list for sending messages easily to specific users
- Implement script-like software that is as good as if not better than script. Roll this version out to administrators of large boards first since they are the first to “jump ship” because of the ease of use of script software
- Keep and enhance the ability to make the discussion board highly personalized in design
Allow users to opt out of advertising as part of their subscription fee - Keep the functionality that board administrators can set up Community Chests so that members can help pay for large boards
- Allow users a forum to leave constructive feedback. Because word-of-mouth is so important to growing ezboard’s user base, ezboard must listen to its current users and be proactive in adding features, etc. It is important that ezboard identify how management will proactively use this feedback.
- Target ring advertising to that user based on search criteria or profile. Link ads to the search function. This increased advertising revenue 20% in 2003.
- Add blogging capabilities as a feature for gold boards or for paying users
- Because word of mouth attracts the most new users, incentivize current subscribers to invite friends in exchange for a discount on renewing their subscription
- Require registration of free users when they read a discussion board more than 5 times.
Subscribe to:
Posts (Atom)