Tag Archives: Cloud Services

Teamcoco, Twitter, Facebook and Conan peek into the future

As I grapple with a case titled “TV Everywhere” and consider the possibilities ahead of Amazon in a fast converging digital media landscape – TV, Internet Video, Content  Owners/Providers, Broadcasters and the infrastructure providers – I wonder if we haven’t seen it all already and why some of these players refuse to be “Frenemies”.

I would like to walk through an example to illustrate why we might have seen it happen already.

Teamcoco

Conan O'Brien

Conan O’Brien, without any reservations, has disrupted the strangle-hold broadcasters cast upon the hapless content creators. I have watched Conan for 6 years now and continue to enjoy his shows and brand of humor. (Please don’t hold that against me). Conan, a Harvard graduate, is probably one of the most educated and intelligent night-show hosts on TV. After the much debated NBC fiasco (involving Jay Leno, who I have to admit sadly, is a fossil in this dynamic digital media landscape), Conan picked up after himself. But not on his own. A fan started a Facebook page, another fan started a Coco (as Conan is fondly referred to) support page and overnight hundreds of thousands of fans joined hands. Conan candidly admits he knew zilch about the possibilities with current technology and how he was asked by NBC to _stop_ the negative press on Twitter about which he had no idea. Soon, his team crafted a plan to circumvent clauses in the NBC severance contract using social media technologies – Twitter and Facebook.

Now, Conan’s shows are made available the very next day with excerpts and teasers presented to users well before the shows. Teamcoco is a really busy webpage for its content and layout. It’s updated multiple times everyday. It has Twitter and Facebook widgets – not a big leap considering that’s how the team got its new start. What’s surprising is that Teamcoco has embraced technology just as any savvy TV producer has to by using Foursquare, Getglue, etc to allow users to engage with the team for real-time “checkins”. I doubt if Conan reads all comments, but, I bet, his team draws his attention to some witty comment, tweet, or feedback from his fans. He has 1.5 MM fans on Facebook according to his website.

Takeaways:

1. TV Content should be free: Maybe, not all. Although, I can’t think of any reasons why all content shouldn’t be free except ofcourse justifying the huge investments and operational costs ;-). If TV content is made available for free, you will have more eyeballs than when it is not. Unless, somebody figures out innovative business models around content, there will always be bootleg sites offering “free” content or customers will opt for cheaper options than expensive packages.

2. Content Ownership: Ideally, content creators should own content than the broadcasters or production houses. But, then, the media industry may need a bigger incentive to even fund new ventures.

3. Revenue Streams: If content is free, it imposes more restrictions on the broadcasters ability to make money or enjoy the same riches they did a few years back. The broadcasters need to come up with innovative business models and additional revenue streams to counter the loss of revenue in making content free. At least, this prevents the bootleg sites from eating into the broadcasters revenues.

4. PEOPLE: Whichever way you look at any business, it all boils down to the customers. No matter how good your analytics are, market research and marketing plans are, customers still have to buy your products/services. In the entertainment industry, people play a bigger role than in other businesses. Hence, it is important to think along the lines of social networking websites or businesses. Successful businesses are those that can start from the people (customers), provide a perception of “openness” and have short feedback loops (with customers) to actively indicate that the businesses put people first.

Why?

Both entertainment businesses and social networking seem analogous to me. Acquiring customers, retaining customers and engaging customers are the 3 edicts of a successful social networking business or entertainer (Read TV host or show)

Customers enjoy feeling wanted. This means, you are only helping your cause by engaging with your fans rather than pretend it is all a passive interaction where TV shows don’t really involve fans’ participation.

How are Conan’s shows on TBS different from his shows on NBC?

1. Actively engages customers/fans: For example, last night, Coco walked into the audience to select a fan to give him a free ticket to New Orleans. To use a digital camera and capture festivities in Mardi Gras. Conan was sitting with the audience briefly as well. Message to viewers: Conan “cares”.

2. Seeks feedback: Everyday, teamcoco sends updates, invites comments about shows or some activities such as Live cam, and more importantly, includes those in their commentary or show itself. For example, for Conan’s twitter anniversary, they invited fans to write his bio for twitter. How many of us have engaged with a celebrity as closely?

3. Listens to Customers: On the day of Steve Jobs key notes and official release of iPad 2. Conan had a mock advertisement of Apple’s iPad advertisement. See here. On the same day, they had a stage setup similar to Angry Birds and played a “real” Angry Birds(See here here) in front of the audience. Even though his fans couldn’t have cared less if he had talked about the iPad or Angry Birds. It conveys, to atleast a portion of his target segment, that the team commentates on key current events (albeit in a fashion that best suits his fans and sometimes, more knowledgeable than your average Joe) and hot topics of the day.

4. Conan Owns: Conan owns the content. Which is why you see his shows being made available the same night or night after. His team has the liberty to use the show’s content to generate more eyeballs, engage fans across various media, devices and ultimately, keep his fans happy and excited. For its part, TBS, (this is purely conjecture) may be getting a portion of the revenue alongwith the TV ads during Conan’s TV show. I don’t have data to analyse how much $$ TBS might have enjoyed if it had operated under its old business model, but, I believe this might be more profitable.

So, we have seen how content creators, broadcasters and content owners have disrupted the status quo in the media industry with Conan’s example.

Now, consider the problem at hand: Amazon needs to roll out new services/products with not just a viable business model to stay in the game, but, actually disrupt the tug-of-war between broadcasters (CBS, NBC), service providers (Comcast, Verizon), internet video providers (Hulu, Netflix) and other players (Google/Youtube, Apple). I don’t have all the answers. But, here’s what I am considering:

1. Kindle is one of the most successful products from Amazon. It has been going through price-cuts over the years while improving in its feature set and core capabilities. It sells for only $139 and $189 with free Wi-Fi and 3G+Wi-Fi connectivity respectively as compared to the price-points for iPads or tablets that range from $399-$799.

2. Kindle Store offers around 810,000 books. Not to mention the newspapers, magazines, singles and blogs.

3. Prime Subscription: The newly introduced Prime Subscription offers 2-day shipping and 5000  “commercial-free”  TV shows and movies for $79/year.

4. Amazon Elastic Compute Cloud (EC2) web services: Interestingly, they are priced based on data usage or per hour used with a tiered pricing scheme.

5. Customers: Amazon has slightly more than 100 MM customers. This implies, they have around 100MM credit cards information,  analytics on customer behavior and purchase patterns.

If Amazon can’t roll out a product/service that disrupts the media industry, there are very few players with that scale and free cash flow to roll out “TV everywhere” services. Admittedly, Amazon’s core strengths lie in its retail operations, but, since it diversified into Kindle and Cloud Computing, it has looked like a different business altogether.

Unfortunately, it needs to play ball with CBS, TBS, NBC, Disney etc. It needs to work with service providers such as Verizon, AT&T and Tmobile to gain any significant momentum. But, all of these players are rolling out services on their own or working with Hulu or Netflix. Not to mention the elephant in the room Google/Youtube which will start airing live NFL matches later this year.

I go back to my earlier Conan example. All that matters is eyeballs. In other words, all that matters are the customers (your people). How many of Amazon’s customers might be inclined to subscribe to the $79/year plan? How many new customers might be willing to subscribe to the $79/year Prime membership even if Amazon throws in 2-day shipping? Therein, lies the rub.

Here’s my Billion $ idea: (Inspired by various ideas people more qualified than I have floated around)

1. Free Kindle. Offer Kindles for free. Introduce a new product line specifically for the Tablet PC segment leveraging the Kindle brand.

2. Prime Subscription. Offer it for FREE. But, customers need to sign up for a  2 year PRIME subscription equaling $158 over 2 years.

3. Content. Offer more content. Sign up more partnerships and make more movies and TV shows available.

4. Live Content. Importantly, sign up to offer LIVE streaming games and music concerts. Create another pricing scheme for people watching LIVE matches.

5. App Store. Set up App Store similar to Kindle store. Make more apps available, including those tailored towards amazon’s businesses, products and services.

6. Location-based Services. Amazon is one of the most qualified companies enjoying deep synergies with location-based applications. Infact, it may not be too far before Amazon sets up partnerships with other retailers and resellers to offer a “Same day Pick up” option to consumers where you can purchase from Amazon and based on your location, pick up the purchased item from the nearest store. Or push coupons from nearby based on the items on your “wish-list” matching prices on Amazon.

Rationale: When iPad2 has been released and there are 100 different tablets in the pipeline or to be released in 2011 including competitive products such as Xoom etc., Amazon really has no play without dangling a service alongwith its tablet PC play. It can leverage its Kindle brand to offer a tablet PC specifically for this market and customers interested in watching TV shows/movies. But, why would anyone choose Amazon’s new “Media” Kindle over iPad or the Android based tablets? Well, if it’s free… it makes the choice easier. Ultimately, it’s the other revenue streams that can make money for Amazon. Not the price of the hardware. And to drive more eyeballs to its video service, this is probably the best option for Amazon.

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Social Networking – How it all happened!

Social Networking is not a hype any more. It’s not a phenomenon any more. It is the present. We live it, breathe it and thrive in it. For the laggards, you have to try it. Well, what is “it”? Social Networking is the concept of communicating with friends (acquaintances) in lieu of email (the chosen form of communication for the last 15 years), sharing information such as images, videos, web-content etc., For the purposes of this post, let’s just focus on social networking for people building personal networks. At this stage, Facebook is synonymous with Social Networking. In fact, it is fast catching up as a verb just as Google did.

Social Networking Timeline
Social Networking Evolution

I thought I went back a long way (depending on your perspective ofcourse) with social networking. From the picture, it’s obvious I don’t. From the late 70s till now, we have been exposed to variants of “social networking”.

For those of you who don’t have the patience to read the whole post, I suggest watching this interesting video from Time.com (< 3 min). Unfortunately, Time.com hasn’t provided a source, but, I believe the sites and/or events mentioned are in the ball-park.

The Why, How and Who?

All along people have tried to form communities, chat rooms, forums etc., but none offered an intuitive and easy solution. For instance, with chat rooms, it quickly gets ugly to manage and contribute effectively. And there always remained a small matter of anonymity that the internet fostered. To be fair, these problems haven’t been solved completely, but, we are moving along in the right direction.

Early in the decade, when Friendster was launched, I tried it once. Then came along, Hi5 and then myspace, followed by Orkut. I spent a fair bit of time on Orkut because most of my friends were on Orkut. I got myself a facebook account just for the heck of it really early. Everyone, soon followed me. As you can see, most of these sites’ success depends on their ability to attract users and more importantly, engage and retain them. As Mark Zuckerberg says in his interviews, the human element is important for “social networks”. He should know. He took down myspace and the rest of the competition that had a stranglehold in some markets. For example, Orkut was really popular in Brazil (Latin Americas) and India. Now, there’s been a huge immigration to Facebook. In fact, last year (barely a few months back) Facebook overtook Orkut in India.

 

Social Networking - Facebook+iPhoneIt’s hard to predict technology trends. Mary Meeker is probably as accurate as anyone can get. She’s a Cornell MBA as well [Shout out to her]. Her Internet Report published in 1995 was called the Bible. See here – The Internet Bible. In Google’s atmosphere event, she presented an interesting report on mobile internet. The slide on the right [with some modifications from me] depict an example from the current hyper-growth technologies – Social Networking (Facebook) and (iPhone) What’s interesting is that Social Networking is increasingly mobile and by design, enable communication on the go. Tying back to my cloud services posts (here, here and here) earlier, this goes to show social networking will be one of the biggest drivers for cloud services. Currently, Facebook hosts 15B photos and has more pictures than Photobucket, Flickr or Picasa combined and people upload 100MM pictures daily. As can be seen from the above slide, applications at the cross-roads of mobile and social networking will be the real hyper-growth areas and to a large extent, applications without a mobile flavor don’t make sense. All the Fortune-1000 companies are investing in cloud services, social networking and mobile applications to enable better productivity for their employees.

We’ll explore if enterprises are right to invest their $$ on their own versions of social networking applications or are better off leveraging existing platforms in a later post.

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Cloud Services – Market Size and Landscape

Following up on my post defining and disambiguating (hopefully) cloud services and cloud computing, I hope to quantify the cloud services market and lay out the landscape to better understand the various players in this industry.

Cloud Services Market Size – 2014

IDC and Gartner probably have the best possible data points for any given industry. In this case, let’s assume they are reasonably accurate. We see that the Cloud Services market is forecast to be approximately $150B by 2014 from $68B as of this year.

So what?

1. We will see more applications being deployed in the cloud. Ergo, more data and content will move from being hosted locally to ubiquity.

2. Most of these services will occur in the enterprise landscape as almost all companies are cutting back on datacenter expenditures and are looking for cheaper and efficient application hosts. Case in point – Salesforce, which is enjoying greater success in recent times. Please take a bow Marc Benioff for envisioning and to some extent, helping create this landscape 10 years back!

What exactly lurks in the murky and dark recesses of data centers? Who are the players? Please click on image below:

Cloud Services Landscape

If you can dash to my earlier post about cloud computing/services, you will find that the the 2 boxes at the bottom of the landscape image indicate how virtualization and hardware are the true cloud computing pieces. The rest can and should be called cloud services. In combination with “Infrastructure as a Service” (Iaas), they form the basic building blocks for cloud services.  Notable names in these areas are Sun (now Oracle), HP, Dell, IBM, EMC, VMware (vSphere), Rackable, Eucalyptus, Joyent and Amazon’s EC2 web services.

Platform as a Service (PaaS) has a few major players: Microsoft (with Windows Azure – thanks to Ray Ozzie), Joyent and Appistry.

Software as a Service (SaaS) has many players and is much more fragmented. It is really the Cloud Services sector that most of us refer to when we mention cloud services or computing. Notable players include: Google (docs, apps), Microsoft Live Services, Microsoft Sharepoint, Salesforce.com, workday, netsuite and appexchange.

As it must be obvious, only SaaS is open to disruption for smaller players or startups. The rest might need scale, higher capital outlays, more consumers who can be locked in and startups are usually short of all of these. Hence, an easy entry point for startups or potential disruptions could be offering a great solution in SaaS and slowly, branching out into a platform and then infrastructure and all the way to virtualiaztion/hardware.

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Music in the Cloud

I want to quickly touch upon one of the hottest areas in cloud computing – “Music in the Cloud” for the better part of the last 2 decades.

Music1
Cloud Market Segments

Some of the most common cloud services that we use currently include Enhanced Buddy Lists, Video and Enhanced Voice (Skype),  Social Feeds (Facebook Statuses, Twitter Feeds), Location Sharing (FourSquare, Facebook Places) and Media Sharing (Youtube, last.fm and Pandora).

Music in the Cloud has 2 forces, namely, the content owners and content consumers. Content Owners typically includes music labels, artists, media companies etc. Content Consumers includes everyone else who listens to music and willingly or actively shares music amongst friends using social networking platforms or just sharing platforms.

These 2 forces often clash and cause friction amongst all. It took a Steve Jobs to disrupt the dated revenue models in the music industry with his iTunes selling music for a buck. Soon, content owners relapsed into their proprietary behavior. We have seen companies such as mp3tunes fight for its survival because the content owners aren’t too happy when we buy music once and start sharing it amongst all the myriad devices that we own. How can “Music in the Cloud” succeed in this cloudy and murky environment?

Music2
Music in the Cloud – New Revenue Models and Revenue Streams

Enter catchmedia, Next Big Sound, spotify, soundcloud and thumbplay. We will look at some of the possible revenue streams – Storage, Subscription and new innovative revenue streams including content-sharing leveraging true cloud services.

Many of you would have seen an ad by Ford to access your playlists or songs on the go. I believe that is exactly where we are headed, ofcourse, after all the DRM issues are ironed out and all the stakeholders are on the same page. Soon, you don’t have to _carry_ your songs around (or any media for that matter). For example, consider catchmedia. Its value-prop is that your playlists will be accessible at a hotel-room or your car or just about anywhere as long as you have access to a device that is hooked to the internet and can play music.

AI: I will soon write a post on how these small players are revolutionizing small portions of the music industry and how/why a much grander vision is warranted to completely enable consumers to adopt a new experience to listen to music.

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What is Cloud Computing? Is Cloud Services same as Cloud Computing?

Cloud Computing is “Internet-based Computing”.
Broader Definition: Cloud Computing is the use of resources such as server data and applications (think enterprise payroll systems, MS Outlook) from a location not limited to a specific geography. In other words, “the cloud” is basically a black-hole to the user and his/her data becomes magically available anytime anywhere on any device.

Then clearly, Cloud Services is Cloud Computing.

Short answer: No.

Cloud services are applications that make data (in the blackhole called cloud) available to users.

So, “Cloud Computing” + “Cloud Services” = “Data anywhere anytime on any device”.

Why should the difference between Cloud Computing vs Services matter?
Because each is a different market and addresses different needs.
For example, Cloud Computing market is typically the IT infrastructure offered by companies using datacenters, servers, hardware and virtualization.
Cloud Services could be a simple “Photos in the Cloud” service such as Picasa and Flickr or a simple “Music in the Cloud” service such as Thumbplay and Catchmedia or “Apps in the Cloud” service such as Google Docs.

As is obvious, cloud services build off of cloud computing’s hardware etc to offer tangible benefits to customers by offering novel ways to access and consume data/applications.
Cloud Services is projected to be a $150B market by 2014 with 21.5% CAGR while Cloud Computing is to be a $14B market by 2014.
From a business perspective, Cloud Computing would need more capital outlays and capex. This obviously is a huge barrier to entry for startups and so, scale is king here. Which is why traditional big companies such as Amazon, Google, Microsoft are in the best position to offer Cloud Computing. Obviously, a combination of cloud computing and services will be offered. But, Cloud Computing as a separate market is off the table or a very difficult market for startups.
Cloud Services, on the other hand, is a ripe ground for innovation or disruption and the best ideas with good execution will be successful. All you need is an idea and some cash to pay for storage or user subscriptions to start a new cloud service to become popular and gain traction in the market.

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