Tag Archives: Kindle

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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