Posted on August 22, 2012
Much like illusionary cold fusion the legitimately attainable smart-home-of-the-future has been an overly promoted concept for more than twenty years. But presently there are three reasons smart-homes may be coming of age, particularly within multifamily dwelling units where property managers have a profit motive.
First, a sizeable majority of consumers are familiar with WiFi and steadily more comfortable using it. Many have become habituated to surfing the Net at their favorite coffee shop or restaurant. Some are using services like Sling and Aereo to connect to home televisions in order to watch favorite shows while traveling. Given such habits many can readily comprehend that it might be sensible to connect appliances to the Internet as well.
Beyond familiarity, WiFi is an inexpensive way to connect to the Internet throughout the house. While full household coverage often requires multiple access points, wireless networks are far less expensive than the hardwired schemes previously specified in the smart-home designs of yesteryear. Read more…
Posted on August 14, 2012
As the chart below indicates, Nielsen confirms that YouTube has become the most popular source of recorded music for teenagers in the thirteen-to-seventeen age group. CDs ranked fourth whereas conventional radio barely nudged-out Apple’s iTunes for second. Furthermore, YouTube ranks third for all of us over seventeen, trailing only radio and CDs which ranked first and second. Yet the most significant point is the behavior of the thirteen-to-seventeen year olds. Their consumption patterns are likely a leading indicator for the mass market model of the future. As they age they will take their habits with them into older demographics.
Posted on August 6, 2012
Only about a year ago many industry observers falsely concluded Netflix was pioneering the chief video entertainment business model of the future. The service economically permitted users to stream popular movies and TV shows over the Internet. Since then it’s become increasingly evident that the legacy content providers aren’t going to let Netflix license their catalogs at attractive rates. Simultaneously, it’s likely they’ll simply price much of their content beyond the Netflix budget. Most recently, the company’s second quarter financial results underscored such points as the combined DVD-rental and streamed-service subscriber count declined.
In sum, Netflix is looking more like a video version of profitability-challenged Pandora Media, than a trail blazer toward a lucrative streaming video future. Pandora is the leading Internet Radio service whose margins are squeezed tightly by unavoidable music royalty fees. Despite continued subscriber growth, at $10 Pandora’s stock is trading below its year-old IPO at $16.
In our analysis, innovations at YouTube are better indicators of a future video entertainment scenario. That’s because YouTube gets most of its content for free, yet is able to share advertising revenues with the content provider. Especially promising are YouTube Channels.
There are three types of YouTube channels.
First, everybody who registers with YouTube – typically to upload their own videos – is (often unwittingly) creating a personal channel. If Joe-the-Plumber uploads a video, by default he also generates a personal channel. Anyone subscribing to his channel will get a feed of (1) every comment he makes, (2) all the “likes” he clicks, and (3) every video he uploads. Normally such channels are boring and reveal more about Joe’s viewing habits than the typically infrequent uploads disclose about his videographer skill.
Second, some YouTube users restrict their comments and “likes” to an alternate user-name. Thus, the channel of the prime user-name only includes the owner’s uploaded videos. Some such channels are popular and can be tracked at VidStatsx.com. An example of a posting on one of the popular channels is provided here. While amateur features are obvious in the example, it also shows talent that is likely to only get better.
Third, YouTube is investing $200 million into scripted programming for one hundred channels. In recent years new types of studios have formed to create such videos. Examples in include, Maker, Machinima, Mahalo, and Vuguru where pioneering producers have been reported to take jobs for as little as $1,000 a month.
Yet YouTube viewing has been growing. As the chart below documents YouTube viewing doubled over the past 18 months whereas Hulu’s traffic has been flat.
In our analysis, the preceding chart validates Clay Shirky’s “Theory of the Long-Tail”. Each of us has personal interests that cannot be satisfactorily addressed by mass media because the audience size is too small. But the Internet enables fractionally small audiences to find content germane to their special interests. And an abundance of aspiring actors, producers, and other film workers means that such programs can be produced economically. A vast number of aspirants shut out of Hollywood will flock to a new generation of studios making scripted programs for YouTube. Some of them – probably only a small fraction – will produce works that can drain audiences away from shows produced by legacy programmers.