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Category Archives: Business & Technology
I’m working on a project with long-time local media research and banking firm, BIA/Kelsey, to create a new series of sponsored white papers that explore key issues in the local media market from an objective perspective, offering new options and approaches to profitable engagement in local markets.
Our first paper, Optimizing Local Marketing: SMB Marketing Needs Do-It-With-Me Models, which is sponsored by Vendasta, published today. We’re leading a discussion at LinkedIn, which I urge you to join. Do download the paper now and share your thoughts on how to make local marketing work in the LI forum.
The paper examines the pressing need for consultative marketing services that blend easy-to-use digital presence management tools with hands-on marketing expertise for companies that are too large to continue to market on an ad hoc basis and too small to hire and retain full-time marketers while paying for expensive enterprise tools that are often overkill, and over-priced, relative to the SMB’s needs.”
Specifically, it’s the “troubled teens,” when a company is between 10 and 19 employees, that represent the greatest opportunity for local marketing services players to step into a startling gap in success. Even as smaller and larger firms continue to grow, albeit with very high failure rates among the smallest businesses, it is the teen companies that fail at a rate more than an order of magnitude greater than other businesses of any size.
I love the Oxford English Dictionary. When I bought my copy of the Compact Edition about 15 years ago for $299, I began poring over it using the magnifying glass provided for that purpose. Since then, I’ve watched for the online version to become a reasonable proposition. It hasn’t.
Today, one can buy a year’s individual online access to the OED for $295, four dollars cheaper than the print Compact Edition cost me a long, long time ago. In fact, the print Compact Edition has increased to $380 over that time. The online edition is still the same price as a print product 15 years or so ago.
Granted, the definitive source of information about the English language isn’t cheap. The OED’s authority is partially a function of its ability to define the language. Why has the OED remained stratospherically expensive in digital form? It seems obvious that the company could go down market with the price and drive both more sales and, with existing customers like me who have never had the print copy fail us, get ongoing revenue for providing updates in real-time.
The cost of fulfilling a digital order — one order, not the infrastructure — for access to the OED is microscopic in comparison to the print version. The cost of Microsoft Office, Adobe Creative Suite and everything else has fallen while the OED sits tight on a small institutional market with some dedicated wordies like me picking up print editions.
The OED should be $29.95 a year, not per month. They could get $99 a year easily. I’ll pay that price right now, just give me the opportunity.
The lack of a lower-priced product makes no sense, when the OED could literally wipe out the competition with a reasonably priced web service based on its brand. At minimum, please open an API for developers and allow others to innovate on search and presentation while focusing on its linguistic excellence. Let them sell the subscription as part of their app cost and take a share. Give me my words in more places — apps, platforms, contexts, such as embedded in other applications as an up-sell — and I’d consider $199 a year. The magic price is south of $100, I believe.
What got me started on this topic today? My copy of the Oxford Learner’s Dictionary app, the closest I can get to a digital OED for $29.99, asked me to rate it. My response was to look for a way to get the real OED, even if it cost me more. No one would reasonably pay the same price for the digital service as they did for a book they may replace once a decade or less often, if they ever replace a book.
Digital books are revenue streams. Tap into it, OED.
Doc Searls provides an excellent summary of the implications for trends in marketing and consumer privacy related to FaceBook’s $19B acquisition of WhatsApp. Here’s my take on the deal terms:
We have to assume there is a lot of overlap between the FB and WhatsApp user base. And, regardless of what anecdotal information we have about how people pay for or use the service, the potential revenue from the WA user population remains purely speculative. So, what do we actually know?
FB values WA users based on their activity, which represents about one message per day per user at the highest level. They are slightly more engaged than FB users, with 70% daily usage rate vs. FB’s 63% of users active every day. They are paying $1 per message sent per user/day, or roughly $0.00273 per message sent over a year. That’s a manageable low cost of traffic acquisition, but because the payment is concentrated in time, the financial impact on FB’s business could be pronounced, though we must acknowledge there is downside risk to the deal, too.
CNN Money reports that FB sees revenue of approximately $1.72 per user globally. It’s much higher in the US and Canada, where revenue is about $4.85 per user/year. This means the combined company could make up to $0.72 per user in the first year, if they implement ads in WA. However, it is important to note that FB’s ARPU for the Rest of the World and Asia are sub-$1. If most WA users are in Asia and developing countries, which I’ve understood is the case, the deal loses money more often than not under current conditions.
I doubt people will pay for the WA service (it’s unproven now) and, if they were to pay $1 a year, the deal is only a break-even for those users who pay. If 10% pay, which is a typical “Freemium” conversion rate used in projection, there is not sufficient revenue to prevent WA from being mined as a source of user data and implied intentions. As WA is integrated into FB, notably to FB’s user surveillance regime, which is the core of the FB business, it will likely need to add ad or VRM revenue to make the deal worthwhile. And that puts the whole deal in jeopardy, since there is little to no switching cost for users.
There’s a discussion the VRM project mailing list (home page here), hosted by Doc Searls and Harvard University that suggests that the erosion of personal privacy may have been planned by our government or, at least, the National Security Agency. Of course it was planned. Here’s my response to the list:
Agreed, the fingerprint reader doesn’t require nightmare scenarios involving severed fingers to justify outrage. The simple fact is that a thief could walk up to you on the street and point a gun at you, demanding that you unlock your phone. That’s a variation on the kidnapping-for-ATM-access scheme that is used in some U.S. cities and many cities in the developing world as the most convenient way to kidnap someone. The fingerprint reader simply makes that easier to do. It’s not a new threat to privacy as much as evidence of the continuing consolidation of the destruction of privacy we’ve allowed to happen.
Point of information, since I broke the original Clipper Chip story (learn more) for MacWEEK (a day before the Times): The NSA had several concurrent efforts to intrude on public crypto standards in the early 90s. They had established an advisory role with NIST (National Institute of Standards and Technology) in the late 80s with the plan of driving backdoors into all potential public crypto standards. It wasn’t a fallback strategy after Clipper was outed for its NSA backdoor, but part of a campaign on many fronts that was largely ignored by public policy people and despite complaints from privacy advocates, who do not all wear tin hats.
At the same time as Clipper, NSA was imposing its advice on NIST for the MD-5 message-digest hash algorithm that is used to generate 128-bit keys, which opened the door to what we are living with today. The NYT’s John Markoff and I both reported that, too, though our publications’ archives don’t seem to be accessible for free access. National cryptography policy has resided in the armed forces for far too long, to the point where it is negatively impacting U.S. technical competitiveness. This does not happen by accident; it was planned and abetted by both political parties.
I think it is well past time to refer to privacy advocates as shouting cranks. It trivializes legitimate citizen concern and, because of the intrusion into public communication, marginalizes consumer complaints. Customers have been waving companies like Apple and Microsoft off supporting Fort Meade for years. But these companies, both of which resisted NSA suggestions that they compromise their security in the 1990s, have continually heard their privacy-concerned customers described as cranks and edge-cases. We eroded our own privacy and sacrificed the economic power in personal information willingly.
We got here by not being activist enough, not by being too crazy to make the case that our security in the knowledge that we speak in private in our homes and papers is a 21st Century human necessity, and certainly a U.S. necessity.
Amazon Cloud Drive: Learn More. Click the link and consult the pricing table at the bottom of the page. Go ahead, I will wait. All future media purchased from Amazon will be stored free on the service, but it is the migration costs I’m looking at here.
Cloud Drive is “free” — that is you can store 5 GB of music, about 1,000 songs or 20 minutes worth of HD video before paying for additional storage. I looked up what it would cost to store my 1.6TB iTunes library: $1,600 a year.
My Zune library files, both the music I’ve purchased and the albums I listen to, are stored and accessible as part of the music subscription service.
If I were to embrace Cloud Drive as my media storage service, I’d be adding about $1,900 a year to my media costs in order to migrate my current collection to the Amazon service.
The everywhere-access of cloud storage is a great user experience, but not if you have to count storage costs by increments of hundreds of dollars a year. Amazon needs to assess the value of a heavy media buyer over their lifetime and recognize that zero-cost migration is the price they will pay to get a shot at a new customer in in this environment.