Category Archives: Uncategorized

Sophisticated Client Hones Tactics and Strategy Using Broad Information Sources

I love our clients. They are so smart.

As part of a tour of our clients in the Mid-Atlantic region, I met with one yesterday, a media, community and e-commerce company, to discuss how they make strategic and tactical decisions. After all, my aspiration for Jupiter is to provide key support to our clients who face high-stakes decisions. “What are the primary sources of information you use when making those decisions?” I asked. Here’s what this client told me:

- comScore traffic data, for competitive intel and to support ad sales
- Omniture analytics, to help them deeply understand visitor usage patterns
- An outside advisory board composed of people inside and outside their vertical industry, to generate, test and validate ideas
- For each of their major content areas on their site, a panel of experts, some of whom contribute content, others who critique content, who advise on trends in the sector and best practices online
- A panel of super users–consumers from outside the industry who have deep interest in the subject matter are are influential with other consumers
- And JupiterResearch of course, for insight into broad online trends, strategies, best practices and business models in their space

Worth nothing about the expert and consumer panels: those are obviously two-way communication channels. Our client avidly seeks feedback from those sources, while hoping to positively influence them and spread the message about what they are doing.

The client has made a substantial investment in all this, but it is serving them well as they rapidly gain on established competitors and begin to redefine consumer and business expectations in their space.

Some of Our Best Recent Research

Each quarter I review the research we’ve published over the preceding 90 days and recognize our best work at an internal research meeting here at Jupiter. I thought a broader audience would be interested in seeing what I consider to be some of our best among the more than 100 great reports we published in the first quarter. Here they are:

Community: Getting Value Beyond Product Launch – Emily Riley
European Next-Generation Digital Music Services: Remove Consumer Barriers to Drive Mass-Market Adoption – Mark Mulligan
On-Demand Music Services: Jump-starting a Sluggish Market with Ad-Based Models – David Card
US Online Category Advertising Forecast, 2007 to 2012 – Mark Greene
US Online Retail Forecast, 2007 to 2012 – Patti Freeman Evans, Vikram Sehgal
US Paid Content Forecast, 2007 to 2012 – David Card

And the winners of our Q1 research award:

Web Site Localization: Best Practices in Global Expansion – Zia Wigder
The Internet Television Value Chain – Bobby Tulsiani
The E-mail Marketing Buyer’s Guide, 2008 – David Daniels

I highly recommend you take the time to review this research. I welcome your comments on it.

Not Only Does Money Not Buy Happiness, But Now We’re Poorer Too

Strange surge in interest in happiness: A book about which countries harbor the happiest and least happiest people; an article on how misspending our time (especially in “neutral downtime”–mostly watching TV) is impairing our happiness; how living in a McMansion can bring us down (now you tell us); and today an article on how money might just buy happiness after all (published, unfortunately, just when so many people seem to be getting poorer).

This last one is interesting. riffs on a paper by a couple of economists that sought to overturn a staple of psycho-socio-economic thinking since the 1970s that money (or, more broadly, economic growth) doesn’t buy happiness after all. The article cites new research that says it might just. But it acknowledges that some things–spending time with friends and family, shorter commutes–don’t cost money.

Not so sure about that. If you consider what it costs to have a short commute to your job in Manhattan, or what it takes to afford time with friends and family, you might conclude that the best things in life were free, but they are getting costlier.

Creative Destruction vs. Destructive Creativity

Most of us will never be in a position to wreak destruction on the scale of the $7.2 billion loss that “rogue trader” Jérôme Kerviel at Société Générale apparently has.

But it’s an inescapable fact that technology, efficiency and leverage carry destructive powers of impressive sweep as surely as they carry constructive ones.

This notion captivated mass attention in the “atomic era,” when mutual assured desctruction was not just a risk but a strategy; concerns about the impact of accidents continue to drive opposition to nuclear power in some quarters.

It gets some attention whenever a massive oil tanker like the Exxon Valdez spills, creating more damage than ever would have been possible with less sophisticated vessels.

It commands the full attention of the media industry who sees its business threatened by a global epidemic of digital piracy and the devaluation of media products even as it opens the door to new business models.

The more powerful the technology, the more desctructive power it carries with it. While some champions of new technologies may be reluctant to put the brakes on technologies that promise exciting advances over how things were done in the past, most new technologies are deployed by responsible people with good intentions and safety in mind.

Recent history suggests, though, that despite enlisting safegards against unintended consequences, some will unvariably occur.

It’s the rocky road of progress.

So Much in the News

Media Personalities Bounce Back
Don Imus, the widely (but not universally) criticized radio personality, who used to commute in cowboy hat and boots from his apartment on the Upper East Side of Manhattan to MSNBC’s Secaucus, NJ studios is returning to TV on December 3 “on RFD-TV, a cable and satellite channel that caters to farmers, ranchers and equestrians, as well as others who merely aspire to live a small-town life.”

Judith Regan, former publisher at ReganBooks who was working with OJ Simpson to publish a book intended to cash in on the notoriety of the murders Simpson is accused of, filed a suit against the News Corp and other defendenants, accusing them of an “assault on her character and reputation.”

Media Cross-Ownership Rules Challenged for Our Own Good
FCC Chairmain Kevin Martin proposes media cross-ownership rules that, in the WSJ’s spin, seem tailor made to faciliate Sam Zell’s purchase of the Tribune Company.

Martin appears to believe that most local newspapers will never make it on their own and they need to be combined with other organizations to remain viable.

Wall Street Journal Going Free. Or Is it?
Murdoch has been publicly ruminating about it for a couple of months. The New York Times reported pretty definitive comments by Murdoch along those lines this week, while portraying executives at the Journal as unsure. Here’s an analysis of how the Journal could come out ahead if they forgo their estimated $70M in subscription revenue for the site.

AT&T Investing in Stopping Video Piracy
The WSJ reported today that AT&T is investing in Vobile, a company that specializes in identifying pirated movies on the Internet. More info on Vobile.

WiMax Hopes
Good synopsis of Craig McCaw’s career and his efforts to build a national WiMax network, including the recent setback presented by Sprint Nextel’s dropping a planned joint venture in wake of the departure of Sprint’s CEO.

iPhone in China
Various articles about Apple’s talks on bringing the iPhone to China. The $399 US price tag of the iPhone is nearly 3 times the average monthly per capita income in China.

Android and Openness

The dialectic of open vs. closed systems is the one of the most important influencers on the evolution of the technology industry.

Some recent examples of this tension in our industry:
- the release of DRM-free music
- syndicating your content
- publishing your APIs (as Microsoft was forced to do) and file formats
- open wireless networks, a key point of debate surrounding the upcoming auction of 700 MHz wireless spectrum, and an oft-cited inhibitor of the growth of mobile media and advertising.
- open source (both native open source initiatives and proprietary developments that have been “open sourced” by their original corporate developers)

Often, incumbents oppose openness, as it threatens to disrupt a cosy ecosystem whose benefits accrue mostly to them, while new entrants embrace it, as it promises to give them a leg up.

Google is an example of a behemoth who is also a relatively new entrant, in mobile and in social networking (Orkut aside). This explains both the company’s embrace of the openneess strategy of Android and OpenSocial and its likely ability to to have a major impact in both of these areas.

Read Michael’s take on Android for more info. And clients, you are welcome to sign up for our JupiterTel on Wednesday morning to delve into the meaning of this announcement for your company.

“Apple Has Destroyed the Music Business”

… said Jeff Zucker today at an event organized by the Newhouse School of Public Communications.

“If we don’t take controle on the video side, they’ll do the same” to video.

Zucker made the comment in response to a question by moderator Ken Auletta of the New Yorker. (Auletta did a fabulous job of volleying one penetrating question after another at Zucker.)

Zucker put in context the highly publicized conflict between NBC Universal and Apple over pricing on the iTunes TV show store. NBC sought to introduce flexible pricing; Apple refused.

Zucker said NBC wanted to take any single one of its shows–and would even allow Steve Jobs to pick the show–to experiment with variable pricing on iTunes. In the near term, it wasn’t about money, suggested Zucker, who said NBC Universal earned $15 million dollars through iTunes sales. It was about being able to experiment.

Update (and I’ve heard from readers about this): It wasn’t just about experimenting on the price points for digital downloads. NBC was also asking for a cut of Apple’s iPod sales, at least at some point in the negotiations. Zucker himself said so.

“Nobody has figured out the economic model on the digital side,” Zucker said.

I had the opportunity to ask him how NBC Universal was navigating this uncertainty. These times call for experimentation, he said. Thus NBC’s multiprong Internet video distribution strategy, with the support of NBC’s branded destinations like nbc.com as well as “superstores” like the just-launched hulu.com, for example. [See David Card's brief initial thoughts on Hulu.] And Zucker’s insistance on variable pricing.

Even today, even to Zucker (and I’ve said so myself), figuring out Internet video is all about experimentation. Companies who allow themselves to be locked into a business model too soon may put themselves at a disdvantage as the contours of the internet video future begin to emerge.

Leopard: The Art of Balance

Mossberg’s review of Leopard, Apple’s new operating system version, is in today’s Wall Street Journal.

He highlights all of the features Apple emphasized to me in a demo this week, plus some results of his speed and compatibility tests. He pronounced it “an evolutionary, not revolutionary, release” and “better and faster than Vista.”

One of the biggest challenges in product development, especially software development, is determining what features to include and what features to leave out. While Apple touts some 300 new features in Leopard, the execs I spoke with were especially proud of the company’s judgement about what to leave out of a product.

The features Apple is emphasizing in its in demonstrations fall into three main categories, which present an attractive, balanced meal to users:

- Aesthetics (and usability). Adding coverflow to the Finder is a prime example. Makes it more enjoyable to browse your files, and maybe easier too.
- Conscience. Time Machine, an attractive and simple backup facility; and networked parental controls are good examples of providing features that people -should- use but maybe don’t.
- Connectivity. Apple has added a number of features to exploit network effects and make your mac more valuable if your family and friends have them too, such as elegant video iChat.

Global availability of the product is set for 18:00 on Friday, beginning in New Zealand.

Back from the Mountains

Every year we go to the beach, and every year it becomes more obvious that beach vacations are a metaphor for the human predicament. For while in his soul the contemporary man seeks to realize the loftiness of his essential nature, in actual life he finds himself whacking a ball against the windmill arm in an eternal game of mini-golf.

Middle-aged man seeks the spiritual grandeur of a mountain vacation, but is trapped in the saltwater taffy of a beach vacation. He seeks to ride a dude ranch horse among whispering pines and timberline silences, but society is structured such that he finds himself in a piercingly loud ski-ball arcade surrounded by “Party Like a Rock Star” T-shirts and eating a funnel cake.

(from the NYT.)

I’m back after a wonderful break with my family in the Adirondacks.

We hiked about 60 miles of trails, and enjoyed wild forests, mountain peaks, streams, lakes, waterfalls and peace.
Forest.jpg
On some of the trails we did not encounter a soul; on others, we sometimes crossed paths with other hikers, often exchanging a brief greeting that seemed to say, “I don’t know you, but we share a secret.”

Macabee.jpg

We didn’t see much wildlife–local experts say the park system is so large that the bobcats, martins, and other mid-sized mammals have no motive for straying closed to humans. Black bears are not hard to encounter there, but it’s better not to and we didn’t either. We did see a salamander–my favorite amphibian–frogs, wild turkeys and deer.

Salamander.jpgFrog.jpg

To navigate the High Peaks region of the Adirondacks we used trail maps and guide books published by the Adirondack Mountain club. We also camped for a few nights at an ADK-managed campsite at Heart Lake. Adirondack Mountain Club is a great organization, with the pragmatic mission. It is “dedicated to the protection and responsible recreational use of the New York State Forest Preserve, and other parks, wild lands, and waters vital to our members and chapters.” A founding principle was to make this wilderness accessible to greater numbers of people, for to know this area is to care for it and to have a stake in its preservation. If you’ve been there, you know what I mean.
Heart Lake.jpg

You can appreciate the beauty of a forest in its sights, its sounds and its smells. And you can be dazzled, too, by the complexity of a forest. To gain a deeper appreciation of how forests work, I read a wonderful book, Reading the Forested Landscape, by Tom Wessels. The book is a natural history of forests–focused on central New England but applicable more broadly in the East–that uses examples from real and idealized forests to illustrate how you can look for key indictators in a forest, such as the stone walls common in New England (which invariably were not used as property markers but as fences to keep in livestock), or mounds, stumps, snags, and charactertistic compositions of plan species to deduce the historical narrative that unfolded on that patch of soil. He takes us through the evidence he finds in an oak forest in Vermont to implicate the great hurricane of 1938 as the cause of its current appearance. And we are amazed so much can be read from the forest around us.

Is this really the way we want to spend the summers of our lives? Am I going to spend every August of my declining years sitting on broiling sands feeling inferior to the lifeguards? In fact, probably.

It’s the human predicament.

Let’s hope David Brooks is wrong (as usual).

I hope you had an inspiring summer.

Beware the Seduction of the Miscellaneous

David Weinberger’s excellent book, “Everthing is Miscellaneous” is enlightened, exciting, and inspiring. And taking it too literally could destroy your business.

Because my recent reading of Andrew Keen’s “The Cult of the Amateur” got my blood pumping, and given the frequent juxtaposition of Keen and Weinberger, I was prepped for a direct counter-attack in Weinberger’s book.

You don’t exactly find that, but you do find is a very persuasive explanation of the value of non-hierarchical, messy systems (such as tagging) for organizing information. You also find some controversial assertions about the nature and creation of knowledge and how the Internet is affecting business.

Most aggravating to me is how Weinberger keeps smudging the line between understanding, meaning and knowledge. Now, I recognize that line smudging is the subversive work he champions in the book. But temperamentally rigid folks like me may be frustated with this boundary blurring. And categorical promiscuity may cause some, maybe even me, to misunderstand what Weinberger is up to.

Take Wikipedia, for example. For Weinberger, Wikipedia is an example of the awesome power of collective intelligence, harnessed by an elegant social media framework, to create knowledge. Wikipedia shows, he says, how “a miscellaneous collection of anonymous and pseudonymous authors can precipitate knowledge” (p. 139). But is knowledge created in Wikipedia? Or does Wikipedia merely suck it out of other, more traditional sources, weakening or destroying their business models? Read that sentence closely and you think, sure, they are “precipitating” it–shaking it loose from a variety of other sources–but they are not creating it.

He characterizes Wikipedia as a grand conversation, and then says that “conversations aim at understanding, not knowledge” (p. 203), suggesting that it’s not about knowledge, but rather the mutual understanding taking hold in the community that has arisen around Wikipedia. Wikepedia may be better characterized, then, as a social network that links people who shared interests such as Paris Hilton [], Psoriasis and oregano.

Weinberger says “knowledge isn’t in our heads: It is between us” (p. 147). But not all knowledge is socially constructed. Much of it comes from patient, solitary work conducted by lone researchers.

Weinberger is quite enthusiastic about the idea that the dynamic, unreliable and unauthoritative nature of much of the information you find on the Internet requires us to be more engaged and critical consumers of information. “The trust we place in the Britannica enables us to be passive knowers: You merely have to look a topic up to find out about it” (p. 142). But that’s what great about sources like Brittanica. It’s why the creditials of the contributors have value; it’s why we pay skilled editors. Can you trust the accuracy of that Wikipedia entry? Who knows? Look at the edit history, look at the track record of the last person who edited the article. “Deciding what to believe is now our burden,” Weinberger says, approvingly(p. 143).

Weinberger creates a false dichotomy between passive knowing–in which you can trust the authority of a source–and active knowing–in which you have to be skeptical and validate the accuracy of information you read. I would rather have the accuracy relatively assured, freeing me to actively analyze the implications of the information I read, rather than wasting time fact checking my encyclopedia.

In his descriptions how the Internet is transforming business, Weinberger is clearly enthusiatic about the changes. But there is a kind of idealistic or panglossian tone suggesting that the Internet makes everyone better off, and that all businesses should jump on the bandwagon and set their information free. “Now that information is being commoditized,” he writes, “it has more value if it’s set free into the miscellaneous. For example, airlines do better when their proprietary scheduling and pricing information is made available to travel sites such as Expedia, Travelocity, and Orbitz.” That’s true, and it largely because airlines are not in the information business; they are in the transportation business.

Companies in the information business, from newspapers to Brittanica to my own, however, would do well to read Weinberger cautiously. Here’s an example of a dangerous misreading of the information ecology of the Internet:

Google … owns the information it has gathered (or at least the metadata it has gathered from the pages it has indexed), the ways to navigate it, and the experience users have on the site. But Google has been innovative in letting that information be miscellanized. For example, by making it easy for people to do mashups with Google Maps, combining maps with other information, Google maps have become the defacto standard on the Web.

This is misleading for the simple reason that the core data of Google Maps is not owned by Google; the company licenses it from NAVTEQ. Google’s core proprietary data–data on page rank, the mechanisms of relevance, AdWords pricing data–are all secret or tightly controlled by Google, and understandably so: being too open would enable competitors and a new breed of search intermediaries to grab a share of Google’s revenue.

Arguing that companies must free their data so customers can use them as they like, Weinberg writes “…the most successful businesses will have to get over the second-order assumption that they own the customer’s experience. In a truly miscellaneous world, a successful business owns nothing but what it wants to sell us. The rest is ours.” It kind of sends a chill up your spine, doesn’t it? But what many businesses are selling is the experience. It’s why we go to restaurants instead of “aggregating” our own ingredients and cooking them ourselves. It is how companies can differentiate themselves and compete, particularly in the face of relentless commoditization.

Weinberger’s book is highly stimulating. But his enthusiasm for the new “digital disorder” needs to be tempered with some skepticism, particularly on the part of traditional businesses, who will need to be open and wily to survive and thrive in the Internet’s next era.