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

Algorithms versus spontaneity – striking the happy medium

There’s been a number of recent pieces about the rise of self-learning technology that uses artificial intelligence (AI) to carry out tasks that would previously have been too complex for a machine. From stock trading to automated translations and even playing Frogger, computers will increasingly take on roles that used to rely on people’s skills.

English: NEW YORK (May 31, 2010) Visitors inte...

Netflix used an algorithm to analyse the most watched content on its service, and found that it included three key ingredients – Kevin Spacey, director David Fincher and BBC political dramas. So when it commissioned original content, it began with House of Cards, a remake of a BBC drama, starring Spacey and directed by (you’ve guessed it) Fincher.

This rise of artificial intelligence is worrying a lot of people – and not just Luddites. The likes of Stephen Hawking, Bill Gates and Elon Musk have all described it as a threat to the existence of humanity. They worry that we’ll see the development of autonomous machines with brains many thousands of times larger than our own, and whose interests (and logic) may not square with our own. Essentially the concern is that we’re building a future generation of Terminators without realising it.

They are right to be wary, but a couple of recent stories made me think that human beings actually have several big advantages – we’re not logical, we don’t follow the facts and we don’t give up. Psychologist Daniel Kahneman won a Nobel Prize for uncovering the fact that the human mind is made up of two systems, one intuitive and one rational. The emotional, intuitive brain is the default for decision making – without people realising it. So in many ways AI-powered computers do the things we don’t want to do, leaving us free to be more creative (or lazy, dependent on your point of view).

Going back to the advantages that humans have over systems, the first example I’d pick is the UK general election. All the polls predicted a close contest, and an inevitable hung parliament – but voters didn’t behave logically or according to the research and the Tories trounced the opposition. While you might disagree with the result, it shows that you can’t predict the future with the clarity that some expect.

Humans also have an in-built ability to try and game a system and find ways round it, often with unintended consequences. This has been dubbed the Cobra effect after events in colonial India. Alarmed by the number of cobras on the loose, the authorities in Delhi offered a bounty for every dead cobra handed in. People began to play the system, breeding snakes specifically to kill and claim their reward. When the authorities cottoned on and abandoned the programme, the breeders released the now worthless snakes, dramatically increasing the wild cobra population. You can see the same attempt to rig the system in the case of Navinder Singh Sarao, the day trader who is accused of causing the 2010 ‘flash crash’ by spoofing – sending sell orders that he intended to cancel but that tricked trading computers into thinking the market was moving downwards. Despite their intelligence, trading systems cannot spot this sort of behaviour – until it is obviously too late.

The final example is when humans simply ignore the odds and upset the form book. Take Leicester City. Rock bottom of the English Premiership, the Foxes looked odds-on to be relegated. Yet the players believed otherwise, kept confident and continued to plug away. The tide now looks as if it has turned, and the team is just a couple of points away from safety. A robot would have long since given up……..

So artificial intelligence isn’t everything. Giving computers the ability to learn and process huge amounts of data in fractions of a second does threaten the jobs of workers in the knowledge economy. However it also frees up humans to do what they do best – be bloody minded and subversive, think their way around problems, and use their intuition rather than the rational side of their brain. And of course, computers still do have an off switch………….

May 13, 2015 Posted by | Creative, Marketing, Startup | , , , , , , , , , , , , | 1 Comment

Will the internet kill the TV star?

Last month streaming service Netflix entered the UK to great fanfare and with a stated aim to challenge the likes of Sky when it comes to winning TV subscribers. A nice soundbite, but one that got me thinking about where we’ll get our ‘TV’ content from in the future. Obviously internet streaming companies such as Netflix and Lovefilm (and even Sky themselves) are now pitching themselves as the savvy choice for those who want to sign up and download the latest shows and films, often before they make it to TV.

However often that same content is available through other channels, ranging from iTunes to that old staple, the DVD boxset. So what can internet only services do to differentiate themselves, apart from price? There’s a lot of talk about creating their own content, from both Netflix and established brands such as YouTube but you need to either be spending big on stars or sporting events to stand out or focus on established shows that are already hits. Given the power of the likes of Sky, which can simply create new channels to maximise the impact of its content (as it has in F1), it will be a tough ask to muscle in. Just ask BT which saw its Vision service comprehensively outmarketed by Sky when it tried to go head to head.

Before I’m accused of being a Luddite, I do think Netflix will be successful enough. People do want to access TV content over the internet, and either play it direct on their internet-connected TV

Image representing Netflix as depicted in Crun...

Image via CrunchBase

or through tablet or laptop. Just look at the tremendous success of the BBC iPlayer and other TV catchup services to show how, promoted properly, viewers will flock to an easy to use solution.

Where the real opportunity is going to come is in super-services that make it easy for mass market consumers to access whatever programme or film they want, when they want. Consumers don’t care if it is on Netflix or Sky, just that they can click, pay automatically and watch. Essentially it has to be as simple as surfing to another channel without having to register or download software. And it has to span multiple channels – so you can watch the same content on your TV, laptop or mobile device wherever you may be. Get that right, build a brand and that will be the platform for control of future TV.

 

Enhanced by Zemanta

February 6, 2012 Posted by | Creative | , , , , , , , | 1 Comment

Do we want smart TVs?

This month’s Consumer Electronics Show (CES) in Las Vegas is a good pointer to the latest trends in technology. Last year the event was all about tablets, and this year smart, internet-connected TVs were all the rage.

English: Taken at the 2009 Consumer electronic...

Image via Wikipedia

The aim of these machines is essentially to make the TV the hub of the digital home, replacing the laptop or even tablet when it comes to entertainment. The viewers of the near future will be able to use social networks, run apps and play games all from the comfort of their sofa.

Now I’m the first to see the advantages of TVs that can stream programmes through services such as BBC iPlayer, Netflix and even YouTube straight to your screen, without needing to fiddle around connecting your laptop to your TV.

However some of the big claims being made for smart TVs simply don’t yet translate to the real world – often because the misinterpret how and why people watch TV. Here’s my top 5 reasons the smart revolution won’t be immediately televised:

TV is passive
The industry jargon is that TV is a sit back medium (as opposed to a lean forward PC), essentially for the majority of viewers interacting with their TV involves shouting at the screen rather than fiddling with a keyboard. Often people have had enough of interacting with a computer by the evening, so want the alternative of slumping on a sofa.

The user experience
It may appear basic to the titans of Silicon Valley, but TVs are simple and intuitive to use – even if you have hundreds of channels to surf through. And that’s what people expect – while lots of the smart TVs were voice and motion controlled this needs to be better than the remote if viewers are going to switch.

The TV replacement cycle
TVs are normally the most expensive consumer electronics device in a house – costing more than a phone, tablet or most PCs. So people don’t tend to replace them that often, which has two main issues for smart TV adoption. Firstly, it will take time to build up an installed base of smart TVs and secondly people are going to be wary about investing in a set that will potentially become obsolete in a year or two. Maybe this is the time for a revival of the concept of TV rental?

The internet by other means
There are already lots of ways of accessing the internet in your living room. Aside from laptops, you can get connect using games consoles, blu-ray players and a host of other devices. These all tend to be cheaper than a whole new TV so provide a simple method of getting online without breaking the bank. 

Competing standards
We’re used to different standards and technologies when it comes to technology, but the plethora of competing approaches – whether Google TV, Linux or the much-mooted Apple iTV could lead to fragmentation. The last big standards war was in first generation video recorders – and no-one wants to invest in an expensive TV that turns out to be the new Betamax……..

Don’t get me wrong – I think that the breadth of content on the internet and the ease of delivery mean that the future of TV is connected. However it will take time and a bit more industry-wide thought and collaboration if it is move to the mass-market and beyond the early adopters.

Enhanced by Zemanta

January 17, 2012 Posted by | Creative | , , , , , , , , , | 1 Comment