Think Forward

Why do I pay for advertising supported television?

I was having a conversation the other day with one of our clients around the future of television. We were all talking about observations we have all made about the broadcast industry and where we think it is going. I came away from the conversation confused about the paradox in which we find ourselves with most of America. We pay money, most people $50 or more, for something that was once free and the experience has not changed. Think about that, it used to be free that is where advertising came in to subsidize the broadcast costs. So TV was free but advertising supported. However now we pay for almost exactly the same thing, over 70% of the most common channels are the main networks, and we still see ads.

So I am asking the question to what I am paying for and why do I see ads if I am paying for it. This I believe will be a driving factor as digital TV becomes the standard. New services will show up that we pay for because of the value of brings. Advertisers will need to get creative if they want to get our attention in the future.

Digital Photo Frames With A Purpose

Connected photo frames are one of the areas I am watching and evaluating very closely these days. After speaking with a number of companies that are leading some innovative efforts around connected photo frames I am convinced that the single purpose connected photo frames will be a small part of the connected home ecosystem. I say that because once you put a simple single purpose photo frame in a location you start thinking what else can I do with the frame.

Take this new device from GE that is also a landline phone with photo caller ID. This is a great example of a photo frame that adds value to another device in the home. Pandigital also makes one specifically for the kitchen that is a photo frame/TV but is also tied to the internet for recipe's. This is a display with a dual purpose but it is also specific to the room it is in, the kitchen, and adds value to what goes on in that room.

However it is not device that does everything. I feel that if a photo frame is sold that does to much it may not be successful. But if there is specific use cases that consumers can relate to and its functionality is simple then I feel they will be successful. The challenge for makers of these frames to move beyond general purpose frames and into more specific frames. This means they must design features and services that assume these displays will be used in a specific room for a specific purpose.

This is not the way OEM's tend to think however I feel it is a critical mental step if anyone wants to be successful in the future consumer connected digital ecosystem.

From analog to digital = From linear to nonlinear experiences

In many of our corporate presentations to our clients we describe how we believe we are in the middle of this journey from analog to digital. We explain how the first block of this 50 yr journey was bringing digital technologies to the enterprise. Then we explain how the next 25 yrs will be the journey to bring digital technologies to the masses. I feel as though a more fundamental observation needs to be made about this transition so that we can understand the impacts of digital technology in the future and the value that it will bring to the masses.

The observation in which I am referring to is the fact then when a digital technology presents itself in the market we always move from a linear experience to a nonlinear experience. Meaning something that was experienced in one way may now be experienced in many different ways.

In the business realm the entrance of digital technologies directly increased efficiency and productivity. This was observed early on with the first application on the personal computer assisting in moving away from paper based solutions in the workforce (linear) to digital forms of databases, communication, accounting, etc (nonlinear). I recall my first job in 1997 at Cypress Semiconductor was to completely overhaul the system of document control which was all paper based and convert it to a digital system all through the corporate Intranet. This move from linear to nonlinear experiences or processes greatly impacted and will continue to impact the enterprise of tomorrow.

In the consumer realm we have seen only a peek at what the move to digital will bring. Tivo was a good first example. Before Tivo television could only be viewed at a certain time, on a certain day, in a certain place. Unless of course you were an expert with the VCR at which point you inconveniently and many times unsuccessfully, in an analog way, time and possibly place shifted the one show you recorded. Or you could be a complete geek and have two VCR's in order to capture multiple shows. None the less this was a cumbersome process. Then Tivo entered the picture and changed the model of what was the only way to experience TV to a whole new experience of possibilities and new ways to consume television content.

We are also only beginning to see the digital shift and its impact on communication with our current cell phones. We believe we are on the verge of a mobile/computing revolution that will impact greatly many linear experiences consumer have in the world and create new nonlinear possibilities.

Suffice it to say we believe that we are at a inflection point that we will look back on in the many years ahead. Our observations will continue to amaze us at the amount of impact digital technologies had on the many aspects of our life's that we never knew existed.

Paradox of Choice

I wanted to highlight a book I have been reading called the Paradox of Choice. This book has a lot to do with consumer psychology, something I have been studying a lot lately.

The premise of the book is about how too many choices, or really to many complicated choices, actually dis-satisfy consumers instead of actually satisfy them.

I will be putting out a Brief of this book to all our clients highlighting some important things as it relates to consumer choice and how consumers make decisions about products. So if you are a paying client of ours you will get it soon. If not and you are interested feel free to e-mail me.

Almost a year and Apple still the champ

I was just observing post CTIA that it has almost been a year since the iPhone release and I still haven't seen any device that is better then the iPhone. Apple needs to get a lot of credit for being SO far ahead of the curve. I feel like this is in part due to the mobile industry first and foremost underestimating Apple and second because for quite some time there has been a lack of innovation in the mobile industry.

I recall having some conversations with friends/colleagues of mine who are close to the wireless industry. They affirmed my observation that the operators underestimated Apple. They felt for sure the iPhone would not be as revolutionary as it turned out to be. Suffice it to say when the iPhone was released mass panic hit the other operators who were in instant search of a device that could compete.

Here we are almost a year later and still nothing comes close to the iPhone experience. Now in a few month's Apple will release its version 2 of the software and potentially a 3G iPhone. I have been privileged to, under NDA, see some of the upcoming devices and feel that toward the end of the 08 year we may see some things that offer equally compelling mobile experiences.

The biggest challenge however is that Apple does not stand still and has established itself as one of, if not THE, most innovative consumer products company in the market.

Does Facebook have a future

Just as more and more people are discovering Facebook, observed by the number of friend requests I get from colleagues , I am already beginning to wonder if the end has begun for Facebook. Not only has Facebook struggled and not shown a single compelling model to make money they are also struggling to keep people engaged for any period of time. Some of my latest research with over 100 social power users under the age 25, that I have observed follow and set the trends in social media, have begun alluding that they are spending less and less time on Facebook and on average less then 2 minutes at a time. They may still “check” it several times a day but again only a short burst. This does not bode well for advertisers because the future of advertising on the web will rely more on integrated efforts as opposed to banner ads or static advertising as we see today.

On top of all that Facebook does not have history on its side. If history proves true that once a market, in this case the market is social networking, reaches maturity it moves from standardization to segmentation. In short the market fragments. This is exactly what I think will happen with social networks. I have said before and still believe that social networks will number 1) become more community centric then networking centric and 2) much more focused or specialized.

All of that being said I am not sure what the future holds for Facebook. Facebook is at a number of crossroads and they need to figure out very quickly how to re-engage with people and keep them engaged by making it possible to have meaningful relationships with another human. This is the difference between a networking mentality and a community mentality. I particularly have not seen or heard a shred of visionary thinking from any top exec at Facebook that leads me to believe they have any clue where they are going. I am also quite excited about a few other communities that are popping up, which will remain nameless as they are in stealth mode currently, that may very well demonstrate what the future of online communities may look like.

How to talk to your GPS

I have recently been trying out some of the latest in car portable navigation systems. Many of these are now voice activated for my convenience of not having to use my hands while driving to configure the device. This is a great idea however current voice technology makes this a poor experience. I can see where this technology is going and how it would be nice in the middle of my route to simply say "find me a Starbucks" and be re-routed to the nearest Starbucks. However this is not quite the experience delivered currently.

I initially thought I would use the voice activation more then I have. And unfortunately more often then not when I do want to use the voice activation it doesn't work. The flip side is that is generally starts working when I don't want it to. An example being that I'm talking on the phone, through my hands free bluetooth device, and in the middle of the call usually with a client or a reporter my GPS will gawk loudly at me "DID YOU SAY CANCEL ROUTE" or my favorite "SAY A COMMAND." Interestingly during a conversation this can happen several times. There have been some times during a less formal conversation when I actually get in an argument with my GPS. It would make a great short video sometime if I have time to have my interns make it this summer.

All that being said the experience still needs to get better and more streamlined. I see where GPS manufacturers are going with the technology but more quality assurance needs to go into these for the price point for the present market.

The Digital Nucleus - My new digital home addition

I've been testing for a while now several of the entries into the home server market by Microsoft and several others. Prior to these servers I used a mesh-network of my electronics to distribute and access my digital content on all my displays.

Recently though I added several connected photo frames that can accept "streamed" content that really pushed me to now have all my media content in one location. This led me to move all my media that I want connected like photos, video, music etc onto these servers as the digital backbone or "nucleus" as I like to call it.

I am a strong believer in keeping your data network seperate from your media network. In short that means that I would have one network, say 802.11x to let all my machines get to the internet for data. Then a seperate more proprietary network that connects my entertainment devices to things like my digital nucleus/server or each other. This way the experience of video not skipping or music getting lost, pictures not being delivered in full quality will not happen. Their is a higher level of quality assurance in this model where the media network and the data network is seperate.

The result now is all the video I create, photos I take and music I acquire are all now automatically synced with my storage server and readily available to access at any time by my TV's, PC's and connected photo frames.

Thus far the experience has been quite positive and my assumptions of the importance of a digital nucleus for the family or individual has been confirmed. Wheter that nucleus is online, mesh network of devices or a dedicated server is yet to be flushed out. However the option that it is all three is highly likely.

It's official Blue Ray is our Hi-Def format.

It appears it is official as we all thought would happen as a windfall from several retailers and studios backing Blue Ray. This has been a fascinating event to watch. We can learn many things from this war that will be useful in the future of the electronics industry.

We all knew that having two formats was counter productive to the consumer electronics industry. If we could have aligned with one format at the outset everyone would have benefited. I hope now that this has happened several times we can not make this mistake in the future.

On that note in the future we may not be looking at a format war but more of a codec war. Lets hope that as the industry looks digital distribution that we are not in a digital format/codec war in the future. That will take technology industry and Hollywood to for once in their life collaborate for the better good of all interested parties.

From an outside looking in perspective I think that this is again the case where the better format lost. Sony lost with BetaMax and it was the better format. I say that HD-DVD was the better format because it was dual sided and supported HD-DVD on one side and DVD on the other. This I feel has a very compelling value proposition to consumers because when they buy the disk it is backward compatible and not constrained to one location. So taking the movie to a friends house our playing in non HD-DVD player in the house is possible.

Obviosly we are already looking to the future of distribution whether movies will be rented/streamed to the home in an on-Demand fashion or people will buy them and keep them locally stored to be served up to the home remains the question.

That being said I truely hope Hollywood starts to grasp some innovative new business models that create value around motion pictures and new consumer services.

I believe Sony fought a well played game and their efforts with PS3 and Sony Pictures support is what won this battle for them.

Millennial voters and the 08 election

Because I have spent a great deal of the last 5 years researching the Millennial mindset as it relates to technology and media, I have been brought in to do some advising of several political campaigns. Every political candidate has always viewed young voters as an elusive group that rarely votes. There are a number of reason young voter turnout is generally always low but this year will be different for several reasons.

1. This year more then any year that I have been able to vote, which is just over ten years now, it truly feels like our vote can count. There doesn’t seem to be a clear winner yet in any race which really makes it feel like each vote means something.

2. The second is the Internet. Several campaigns have tremendous online platforms utilizing every possible community and web based technology to communicate with the public and encourage involvement. Because there are so many hot topics that are resonating with young voters the Internet has allowed all of us to get more information on the issues and see which candidates resonate with our values.

3. The third is psychological for Millennials. The Millennial mindset is very different from past generations. Academic research has pinpointed this demographic has having many of the same traits as the WW II generation called the “Greatest Generation.” Millennials are very sensitive to the worlds issues and feel that as a group they can be a part of the solution to make the world better. Many things have contributed to this from the news, to the Internet as well as celebrity support etc. However due to the overwhelming feeling that our country has a tainted brand and that this election is an important step in re-establishing the greatness of America not only locally but abroad as well is understood by the younger voters. This is a large contributing factor to younger voter turnout.