Revolutionary Measures

Apple bets on reputation to drive streaming success

This week’s news that Apple is expanding into multiple new markets, including TV, gaming and finance is not unexpected. The market for iPhones is becoming saturated, with revenue from iPhone sales dropping 15% in the last quarter. So, increasingly Apple wants to be seen as a services company – it already has a successfully streaming product (Apple Music) and generated $10.9 billion of revenue from services, more than from selling Macs or iPads, in Q4 2018.

The announcement is also unsurprising for two other reasons. We now live in an experience economy, where people are more likely to rent or stream products and services than to buy them. And it joins a stampede of companies that want to be the digital provider of choice, for everything from entertainment and news to healthcare and control of your smart home.

black crt tv showing gray screen

Photo by Burak K on Pexels.com

This trend is turning digital companies that previously co-existed relatively harmoniously, such as Amazon, Apple, Google and others, into competitors. Combined with the rise of Netflix, this is disrupting the business models of existing content providers/film studios, leading them to scale up (witness Disney’s purchase of Fox) to try and compete.

Apple’s glitzy launch featured a host of A-list celebrities, from Oprah to Steven Spielberg and Big Bird from Sesame Street as it promised to spend $1 billion a year on original content. However, it is up against the likes of Netflix (which spent a reported $12 billion last year), and Disney, which counts best-selling franchises such as Marvel and Star Wars amongst its properties.

So can Apple succeed in streaming? After all, its existing Apple TV service has never really taken off. There are two factors it is betting heavily on:

1.Reputation as the champion of privacy
Throughout all the storms that have hit tech companies around privacy and use of personal data, Apple has aimed to position itself as the champion of the consumer. It has repeatedly stressed that it won’t share user data with advertisers, and even refused to allow the FBI to access locked iPhones belonging to criminals and terrorists. Apple boss Tim Cook continually reiterated the focus on privacy at the launch event, and clearly it is one of the ways it is looking to differentiate itself.

2.Market power
As Oprah said of iPhones “they’re in a billion pockets”, and Apple clearly has a huge, loyal fanbase to appeal to. That’s what has driven its services success to date, and even if it can only convert a small percentage of customers to its new offerings, it will be in the money. However, an awful lot of iPhones are in markets, such as China, where the new services are unlikely to be available, while most customers already have subscriptions to the likes of Netflix. The new Apple TV+ will allow consumers to bundle some existing services (such as HBO and Hulu), but not Netflix. And while it will be available on other hardware (such as Sony TVs), making it appeal to non-Apple owners may prove difficult.

So, when it comes to services and effectively its future revenues, Apple is essentially betting on its reputation rather than the deeper content reserves of its rivals. Can it take a bit out of streaming? Whatever happens expect a long and bruising battle as more and more companies try to differentiate themselves from the chasing pack and use communications and reputation to dominate the market.

March 27, 2019 Posted by | Creative, Marketing, PR | , , , , , , , , , , , , , , , , , | Leave a comment

Being a fox, not a hedgehog

In a famous essay based on a fragment of Greek poetry, the philosopher Isaiah Berlin divided writers into two groups – hedgehogs (who essentially know one thing in depth) and foxes (who know many things and see the world through a variety of experiences). This classification can be equally applied to all of us.

A Red Fox on an Evergreen, Colorado's porch.

As human knowledge has grown, and professions have become more specialised, people have been encouraged to be more hedgehog, and less fox. After all, the time, dedication and skills needed to become a brain surgeon, mean it is unlikely that the same person could train as a rocket scientist. So, since the Renaissance, where the likes of Leonardo da Vinci were equally adept with science and the arts, we have been pushed down the path of specialising and knowing one thing in depth.

This has obvious advantages – no-one wants to be operated on by a brain surgeon who only did half their training, but it also very limiting. As hedgehogs, people tend to view the world through the prism of their own experiences. Hence you might find that someone in the police force is by nature suspicious and on their guard, or a primary school teacher talks down to adults, treating them like children. These are obviously extreme cases, but we’ve all met someone and been able to correctly guess their profession due to what they say and how they say it.

More importantly, at a time when pretty much all the knowledge in the world is on the internet, and digital technology is changing how we work, live and play, being a hedgehog is also out of step with today’s reality. Sticking to what you know, rather than looking to acquire new skills limits everyone’s potential – it is no accident that the most enthusiastic and fearless users of new technology are children, who are naturally foxes as they learn.

However, becoming more fox-like is not easy. Like anything new, it involves giving up long-held, cherished beliefs and taking a risk. It can also be more difficult than it looks. The internet overloads our hedgehog brains with too much information, making it hard to see the wood for the trees. For example, when Spotify has tens of thousands of tracks how do we choose what to listen to? The safest bet is just to stream what we know about already, confirming our hedgehog tastes. Artificial intelligence that learns what we like automatically suggests more of the same, rather than throwing in a curve ball – “you like Puccini, have you tried Taylor Swift?”

So, how do we encourage our foxiness, but without losing the focus that a hedgehog brings? I think it comes down to three things:

1. Communication
It is easy to sit in our hedgehog silos, blaming other groups when things go wrong. Companies are full of inter-departmental feuds, with sales complaining about marketing who criticise engineering who grumble about accounts, until no-one is happy. Much better to actually sit down and listen to what everyone does, why they do it, and then try and fit it all together for the good of the wider organisation. The same principle applies in relationships outside work – understand the mindsets of those around you if you want to be able to talk their language.

2. Turn the internet on its head
In the same way that the internet encourages silos, it also provides almost limitless scope for new experiences. Rather than just extending what we do offline onto the web, use it to find new things to do, new skills to learn and new people to talk to. Type a random idea into Google and see what comes back (though be careful what you wish for), take up a new hobby or subscribe to the magazine used in the Missing Words round of Have I Got News For You?, for example. Obviously make sure it is legal, and while you may hate it, at least you’ll have had a new experience.

3. Don’t smother fox learning
As I’ve said, children are naturally foxes in how they pick up experiences from all around them. But at a certain age this stops, and they are focused solely on what they should be learning, at the expense of letting their imaginations wander. I’m not advocating dismantling the education system completely, but schools and universities should make sure they are teaching a balanced curriculum, and ensuring that students remain curious about the wider world. Why not get astrophysics students to read French literature at the same time?

When the Hedgehog and the Fox was written in 1953 there was no internet, smartphones or tablets and in many cases the solid, reliable, trustworthy hedgehog was the ideal to aspire to. Times have changed, and we all need to encourage our inner fox if we are to thrive in the constantly-evolving digital world.

December 9, 2015 Posted by | Creative, Social Media, Uncategorized | , , , , , , , , , , , | Leave a comment