This is the fourth episode in the Find Your Popcorn podcast series, in which Consumer Product Strategy Analyst Nick Thomas describes new ways that media companies can monetize their content in the digital age.
A cynic might argue that the music service "leak" was bad news management from Google, aiming to portray itself as a doer of music industry good, not bad. Whether that was intended or not, it raises an important point. Some time or another (and it looks like it’s going to have to be sooner rather than later) Google is going to need to decide whose side it is on. If it's serious about throwing its weight behind becoming a major digital music player, it's going to need to start making concessions to its label partners. And of course it will start seeing more of a business rationale for doing so: How long will it be before ad revenues from keywords alongside P2P links start to look smaller than potential lost Google music revenue? (Remember we’re not talking about cutting the keyword inventory, just ensuring that legitimate links appear in searches for keywords to appear against).
On Friday EMI announced some major reshuffling to its org structure and additionally a repositioning of the company as a “comprehensive rights management company serving artists and songwriters worldwide.” Underpinning this is a closer alignment of EMI Recorded Music and EMI Publishing (which may have possible implications on EMI Publishing being sold as a standalone business).
The repositioning is the result of an internal strategic review, so it pays not to pass it off as consultant-speak window dressing for the re-org. Indeed Terra Firma has something of a track record of repivoting the structural focus of EMI.
So what does being a “comprehensive rights management company” mean? In principle it shouldn’t be that much different from what EMI and other labels and publishers already do (i.e., they create revenue for artists and songwriters by exploiting their works across multiple products and formats). Of course this core task is a much more complex one now than it was 10 years ago. As recorded music revenues continue to free fall, the importance of alternative revenue streams with brands, telcos, and device companies has risen exponentially. Add to that the numerous digital music formats, and you’ve got a complex mesh of revenue streams. And that’s without even considering other key revenue streams such as traditional synch and of 360 deals. The days of record labels just being record labels are long gone.
Last week, O2 in the UK and AT&T in the US announced an end to "unlimited" mobile data on their smartphone tariffs.
Many have argued -- some discussed with me on twitter last week -- that the impact on consumers will be minimal as very few consumers currently use a greater amount of data than the new data limits. This is only a part of the story. There will be unintended impacts as the new limits will alter mainstream consumer behaviour:
The perception of "unlimited" is as important as the reality. Like the word "free", "unlimited" is a powerful word in helping consumers feel sufficiently comfortable to experiment with the mobile Internet. Any sense that a consumer will incur extra costs, or a glacial throttled speed, as a result of using too much data will cause consumers to alter their behaviour. And, as mobile Internet adoption is still relatively small, this could cause a slowdown in usage that will harm the mobile industry. Handset makers will see slower demand for advanced smartphones while operators will see lower revenues, alongside the lower data costs that they so desire.
Consumers' expectations have been set by their home broadband experience. Before the arrival of unlimited mobile Internet tariffs three to four years ago, adoption of mobile Internet was tiny. The vast majority of new mobile Internet users never used the older tightly limited mobile data tariffs -- the time when 10Mb was a generous bundle -- but the new consumers that have started using mobile Internet in the post "unlimited" data era have been conditioned by home broadband. In the home, most packages are either unlimited and marketed as such, or so generous with their data limits so as to be effectively unlimited.
In a similar vein, I'm unconvinced that the widely publicised AT&T and O2 moves will mean an end to "unlimited" mobile Internet tariffs across the board in Europe. In diverse countries across Europe there is fierce mobile operator competition. The iPhone is non-exclusive in most countries. Other advanced handsets typically enjoy brief periods of exclusivity before being offered on all operators.
This competitive dynamic enables consumers to pick and choose the best offer from the variety available, and so encourages mobile operators to differentiate. O2 showed its hand early with its new iPhone and smartphone tariffs last week, I expect we will see a variety of options from the six operators in the UK that sell the 3GS today or have announced they will sell the iPhone4. In markets with fewer mobile operators -- such as France -- and a lesser competitive dynamic, the range of offers will likely be more uniform.
Click on the video below to view the latest episode in our podcast series "Find Your Popcorn." In this episode, CPS analyst James McQuivey answers the question "Will consumers ever pay for content again?"
Let us know your thoughts. Do you agree? Do you think consumers will ever pay for content again? Is charging for access to content the answer? Or is the fight against free unwinnable? (The registration process for commenting is now quick and easy.)
"To a man with a hammer, every problem looks like a nail," he said. “We have our hammer [with Windows],” while Apple had its own hammer with the iPhone operating system that it was expanding to support the iPad.
This is significant. Because Microsoft has failed many times in the past using full versions of Windows in tablet designs such as Ultra Mobile PCs, Windows for Pen Computing, Windows XP tablet edition and the rest. These past failures were due to a lack of convenience. Microsoft must avoid repeating history now. So, Steve Ballmer is wrong: Windows 7 is not the right hammer for tablets to compete with the iPad. Why?