Phillip Nones

Is “Pay to Play” the Future of the Web?

Phillip Nones Uncategorized , , , , , , , , , , , , ,

More than a few feathers were ruffled by Kodak’s announcement that the multiple millions of users of the company’s Kodak Gallery online photo-storage service may have their photos subject to deletion if they don’t begin paying an annual service charge ranging from $5 to $20.

Is this the beginning of a trend? Some web observers seem to think so. David Lazarus, in his recent Los Angeles Times business column, draws a parallel to automated teller machines that were introduced by the banking industry back in the late 1970s. At first, there were no service charges assessed when using ATMs. The banks wanted their customers to start using ATMs, thus helping to reduce the demand for more labor-intensive (read: expensive) teller stations.

Then, after a number of years of free service the banks began charging ATM service fees for out-of-network transactions and even some in-network ones. The idea was now that consumers had become comfortable with the technology and the “24/7/365” convenience of the machines, they would accept the fees without resistance.

“Why should the Internet be any different,” Mr. Lazarus asks?

I think the comparason isn’t totally apt. It’s true that there is a cost for Kodak or others to maintain the infrastructure (hardware and software) to provide archiving and other web-based services. But the fact is, those costs are not nearly as high as the “brick-and-mortar” expense of building an ATM system.

What’s more, the banks were in a stronger position to move en masse toward charging fees. After all, they operate under a government-issued charters. The barriers to entry – both regulatory and financial – are far more onerous than anything in cyberspace.

Anyone ever heard of Flickr?

And that’s the real challenge today. Who is going to be the first to jump into the fee-based waters? And will anyone else follow? Put it another way: will others follow the leader … only to find themselves drowning in a sea of new, free alternatives that spring up in response?

Just ask the newspaper industry how simple it is to successfully implement fee-based services on the web. There’s your answer as to how easy “pay to play” will be to implement.

No froth in the beer industry …

Phillip Nones Uncategorized , , , , , , , , , , , , , , , , , , ,

Can it be possible? The Beer Institute trade association is reporting that U.S. beer sales are actually declining.

Chalk up one more piece of evidence showing that this economic downturn is a vastly different animal. In previous periods of recession, beer sales did not really suffer. Perhaps that’s because it’s been a relatively inexpensive discretionary item. If you’re feeling down about the economy or your personal finances, why not drown your sorrows in a nice cold one?

Not so this time around. The Beer Institute reports that domestic brew sales have declined 4% in the first two months of 2009 compared to the same period last year, while import beer sales are off a whopping 19%. Not only that, foreign beer sales registered a decline for the entire year of 2008 as well.

Shipments from Mexico have fallen nearly 14% so far this year compared to last, led by Corona. But Corona is still America’s top-selling foreign brew, beating Heineken by a long shot. Speaking of which … beer sales from Holland have declined by an even bigger percentage (more than 25%).

What should we make of these statistics? Are Americans now tightening their belts on absolutely everything?

Or maybe we’re doing for our health what we’re also doing for our personal savings rate. Perhaps switching to something better than brewskies – like heart-healthy red wine? We’ll have to wait for the latest statistics from the National Association of American Wineries to find out.

What is YouTube’s Business Model?

Phillip Nones Uncategorized , , , , , , , , , , , , ,

The information is starting to trickle out. YouTube is hemorrhaging red ink. Credit Suisse estimated recently that YouTube will make approximately $240 million in advertising revenue – revenue that has come from a cavalcade of different forms of advertising, licensing and partnership deals.

Balance that income against estimated costs of over $700 million and you get a loss of more than $450 million.

What’s wrong with this picture?

Advertising Age magazine has just reported that YouTube is now selling advertising against 9% of its video views. That’s up from 6% a year ago. But those figures are still paltry. And it’s really no surprise since so much of YouTube’s content is user-generated, devoid of any significant interest and thus not really “monetizable” for advertising purposes.

No one – not even parent company Google, with a market capitalization of over $100 billion – is going to put up with such a scenario forever. The question is whether YouTube will ever be able to generate enough ad revenue to offset the huge bandwidth and storage costs associated with managing a humongous repository of video material. It’s a question that, even if Google’s own senior management doesn’t ask, the company’s shareholders should.

Paid subscriptions, anyone?

Holy Smoke! Social Marketing Gets Religion

Phillip Nones Uncategorized , , , , , , , , , ,

As if we needed further proof that today’s social marketing phenomenon is seeping into every corner of people’s lives … faith-based web sites are now embracing the latest social techniques full-on.

One such example is Tangle, a site that provides family-friendly content and forums with a Christian perspective. Since merging with GodTube earlier this year, Tangle has experienced rapid growth. Particularly popular is the site’s interactive “prayer wall,” a kind of cyber equivalent to Jerusalem’s Wailing Wall where members can post prayers and petitions to the Almighty.

But in a 21st century twist, other members can comment on those prayers, a kind of running commentary from the spiritual side chamber. Talk about spilling the beans! It’s certainly a far cry from the Holy Week tradition of private auricular confession to a priest.

Not all of the action is on the Christian side of the ledger, either. Our Jewish Community, a project of Cincinnati’s Congregation Beth Adam, provides information, insights and discussion points related to Passover and other Jewish holidays – complete with blog entries and Twitter feeds.

These social marketing initiatives, in combination with the proliferation of faith-based informational web sites, prove yet again that old-time faith is flourishing in new-world cyberspace. Indeed, the web has provided the most effective means yet for like-minded, smaller or geographically far-flung religious communities such as Eastern Orthodox Christians, Traditional Anglicans/Episcopalians and Sephardic Jewish communities to find themselves and nurture their shared beliefs and culture. Hey, more power to them.

Now, before we get too breathless about the mobile media revolution …

Phillip Nones Uncategorized , , , , , , , , , , ,

For those of us in the communications field or otherwise on the bleeding edge of communications, it may come as something of a surprise to learn that the rest of the world isn’t all that engaged with (or even interested in) many of the communications techniques and gadgets that so absorb us.

To underscore this point, a study published recently by the Pew Internet & American Life Project reports that only about one-third of the adult U.S. population finds mobile Internet communications to be particularly interesting or attractive to them. And, horror of horrors, the remaining two-thirds aren’t being pulled by mobility further into the digital world.

The Pew study categorizes information and communication technology users into different sub-groups that have been given catchy descriptive names. Five of them, labeled “digital collaborators,” “media movers,” “roving nodes,” “ambivalent networkers” and “mobile newbies” collectively make up just over one third of the population. The study combines these groups together as people who are “motivated by mobility.”

On the other hand, a clear majority of people fall into a second segment dubbed the “stationary media majority.” Sub-groups within this segment include “desktop veterans,” “drifting surfers,” the “information encumbered,” the “tech indifferent,” and those who are just simply “off the network.”

While it may be tempting to assume that the ranks of the “motivated by media” segment will continue to grow at the same rapid pace (or even faster) going forward, the Pew study throws cold water on such a notion. Indeed, it finds that the “stationary media majority” segment, far from becoming more comfortable or accepting of cell phones and other mobile devices, is actually displaying increasingly more negative attitudes about them.

Maybe it’s an understandable reaction to the relentless press of new technology for people to push back like this. And we’ve seen it before – back in the 1970s and ’80s with the high-tech/high-touch phenomenon when desktop computers were being introduced in a big way into the office environment.

People do come around eventually, of course. But it takes longer than many would expect. And it’s really too bad when some early adopters respond with impatience and exasperation. Instead, why not just chill and give the rest of the world a chance to catch up?

Even better, let them do it on their own terms and at their own pace.

Conference Centers to the Fore

Phillip Nones Uncategorized , , , , , , , , , , , , , ,

What a difference a few months make. “Way back” in 2008, high-end resort properties in exotic locations were doing a healthy business hosting corporate events. Large corporations have long been a core resort customer segment that has delivered volume business year after year – major contributors to the bottom line even as resorts have also attracted their share of weddings and other smaller events.

The economic meltdown has now brought hugely negative publicity to corporate events held at resorts, the result of news reports that federal government bailout money has gone to pay for them. These events have been described by politicians and the press as “outrageous,” “excessive,” “junkets” and “boondoggles” – places where well-heeled business types get to wine and dine and cavort in the sun on the taxpayer’s dollar.

Even the AFL-CIO union hasn’t been immune to the criticism, coming under fire for holding its annual convention at the exclusive Fontainbleau Hilton resort property in Miami Beach.

While one can certainly fault these companies and organizations for being politically tone-deaf, the fact is that business does get carried out at these events. Even in today’s electronic age, it is still important to organize face-to-face get-togethers on a regular basis.

Enter the Conference Center. This corner of the hospitality industry, long relegated to backwater status, has consistently labored under the image of being far less impressive and exciting than the resort segment. Now, sensing an opening, conference centers are making their move. They’re promoting themselves as a preferred location for serious business events – far away from tourist attractions or white sand beaches, extreme recreation or other distractions (the ubiquitous golf being the exception).

Properties like the Marriott Aspen Wye Conference Center in Maryland and the Wyndham Princeton Forrestal Conference Center in New Jersey are stepping up promotion, as is the International Association of Conference Centers. The basic message is that conference center properties are the places where productive meetings take place, free of distractions. “Serious-minded meetings are in … posh or over-the-top venues are out” is the order of the day.

Plus, right now it just sounds a lot better from a PR standpoint if you can report that your corporate event is being held in a location five miles from Trenton, New Jersey.

Skyscraper Graveyard

Phillip Nones Uncategorized , , , , , , , , , , , , , , , , , , , , , , , , , , ,

apartment-buildingBook TowerOn a trip to Detroit a few days ago, my family and I stayed downtown in one of the city’s newly renovated grande dame hotels. The 1920s-era Fort Shelby Hotel, now part of the Doubletree chain, reopened last December after being closed for more than 25 years. It’s a jewel of a property stuck in the middle of one of the most depressed cities in America. Reportedly, a whopping $80 million was spent on its renovation.

The timing couldn’t have been worse. Just up the street is the even more palatial Westin Book-Cadillac, which was the world’s largest hotel when it first opened in 1924. It, too, stood vacant starting in the early 1980s, miraculously avoiding the wrecking ball before being rescued in a $200 million+ renovation and reopening this past October.

So what will help fill the rooms of these showcase hotel properties? If a flood of reservations actually materializes, it will be for the myriad lawyers, accountants and government officials descending on the city to pick apart General Motors and Chrysler Corporation.

The city of Detroit can’t seem to catch a break. First, there’s the real estate crisis that has seen property values plunge even faster than the national average. Today, the city’s median home sales price is below $10,000, which has to be the record low for a major U.S. city.

Next up, the spectacle of dilapidated infrastructure, a dysfunctional school system plus governmental corruption, nepotism and favoritism run amok – all culminating in Detroit’s mayor being sent to prison.

Now comes the implosion of Detroit’s auto industry that has sparked the nation’s renewed attention on the crumbling city, including human-interest television reporting and lurid photo essays like the one just published in Time magazine.

Sadly, this is Detroit. Riding the People Mover, the 2.5-mile monorail system that loops the perimeter of downtown, one can peer into the second-story levels of building after vacant building. It’s truly a metaphor for the entire city … and a peepshow for the rest of the nation.

Is there a natural bottom? The investors in Detroit’s old hotels seem to think so. But you have to wonder, would those investors have moved forward with these initiatives knowing what they know today?

It was photographer and social commentator Camilo Jose Vergara who suggested more than ten years ago that the empty skyscrapers of downtown Detroit be preserved in their current state as a memorial and monument to a vanishing industrial age. Of course, the city government leaders were horrified at the idea and objected loudly. But really, what other use could they possibly come up with for these relics – silent and stark reminders that a city once the nation’s fifth largest has shrunk in under 50 years to less than half its former size.

The Titanic Tribune

Phillip Nones Uncategorized , , , , , , , , ,

The news about newspapers has been unremittingly bleak in recent days. The Rocky Mountain News.  Chicago Tribune.  Minneapolis Star/Tribune.  Going bankrupt or shutting down altogether.

And now we read that the Chicago Sun-Times has announced that it, too, is filing for bankruptcy.

Even more depressing than these reports is reading about the tactics some news organizations are adopting in order to roll out a new business model that’ll supposedly keep their brand “on the beat.” So now we discover that the Seattle Post-Intelligencer is going all-digital. The Hartford Courant is sharing its staff with two local TV stations and combining newsgathering duties. And the Detroit Free Press is cutting home delivery to three days a week.

This is like rearranging the deck chairs on the Titanic.

Strip away the flurry of activity and it all boils down to this: How many consumers really need newspapers anymore? Sure, there may be a smidgen of news in the paper that can’t be found (easily) on the Internet. But the issue is really one of preference and behavior.

Ask yourself: Who do you personally know who subscribes to your daily city paper? How old are they? I’d be surprised if they were born after 1950. And while the over-60 set may still prefer the ritual of reading the paper over a morning cup of coffee (a paper they paid for, no less), that’s a scenario one encounters less and less in the rest of the population.

The fact is, people want quick access to the news when and where they need it. Usually in short information bursts. On the go or at their desk … but far less often in an easy chair at home. The online sites of newspapers can provide this, of course, but so can so many other sources. No longer the big kids on the block with little competition and huge barriers to entry preventing others from encroaching on their turf, today’s newspaper publishers must clamor for attention among a gaggle of other online outlets – most of whom know how to play the game a whole lot better.

Darwin … or dinosaurs? The final verdict may not yet be in. But we already know how this is going to turn out.

Search … and destroy? Nah.

Phillip Nones Uncategorized , , , , , , , , , , , , , , , ,

New statistics published earlier this month by Hitwise show that Google continues merrily on its way to even greater heights of dominance in the search engine field.  Despite the Don Quixote-like efforts of other search engines like MSN, Ask and Yahoo to take a run at Google’s position, the latest stats show that Google’s search engine is as popular as ever.

More popular, in fact.  The numbers reveal that Google’s share of search activity has now risen to 72% versus 67% a year earlier, whereas the others continue to decline.  Yahoo is in second position, but getting 21% of search share is about on par with H. Ross Perot’s vote percentage in the 1992 presidential election – all hat and no cattle.

More startlingly bad is MSN’s performance at around 7% of search activity, because they’ve been trying hard to make a dent in Google’s position. Keep on trying, gents.  Maybe you’ll break 10% share before long, although I doubt it.

Does any of this come as a surprise?  After all, people are creatures of habit. And when a habit gets as big as this, it’s really hard to break.

Also, most people typically take the path of least resistance. And when it comes to search, isn’t Google the easiest path?  Simple visual layout … easy to use … robust results.  What’s the point of going anywhere else?

UPDATE – 4/1/09 – As if on cue, another search engine bites the dust.  Wikia has announced it is closing down its Wikia Search project.  Introduced to great fanfare last year, Wikia was intended to be a user-generated, open search engine.  The problem?  Wikia Search was simply not generating any sort of worthwhile volume.  In fact, traffic was running about 10,000 unique users per month.  That’s just a blip on the screen — and certainly disappointing considering the success of other initiatives like Wikipedia and Wikia Answers.  Further proof that to be first in cyberspace with a good idea and good execution is a huge advantage … and to be fourth or fifth is considerably more difficult, even fruitless.

Welcome to the Customer Service Department … Dante Alighieri will be your tour guide.

Phillip Nones Uncategorized , , , , , , , , , , , ,

Who hasn’t faced the frustrations of dealing with what passes for customer service today? I recall an ordeal several months ago when I spent the better part of three hours on the phone with Hewlett-Packard’s customer service department – if you could call it customer service – trying to get an issue resolved with reloading a printer driver for an HP model that is no longer classified as “current” – which in my case was a printer I purchased five or six years ago.

Because my model was older, I was transferred to a different help desk that turned out to be an outsourced/offshore area of HP’s customer service. (Presumably, the good folks at HP seem to think that outsourcing technical questions about older equipment will actually give their customers access to better knowledge than their own in-house personnel can provide …?)

The first 90 minutes of my ordeal were spent trying to talk to someone who could actually solve my problem, but about 90% of those 90 minutes were basically spent on hold. The next nearly 90 minutes was taken up with attempting to get my $59.99 service charge reversed, since I had been unable to speak with anyone who could actually assist me with my problem.

That’s an evening of my life I’ll never get back.

… Which made a new book just published on the woeful state of customer service capture my attention all the more. In Emily Yellin’s book “Your Call Is (not that) Important to Us,” (Free Press, ISBN-13: 978-1416546894 … also available in a Kindle edition), the author gives us plenty of statistical information, polling results and excerpts from studies to help chronicle the sorry state of today’s customer service affairs.

But it is Yellin’s “customer service hell” anecdotes – far more horrific than my own experience with Hewlett-Packard – that stick most in the memory. Those stories certainly provide fodder for a sort of morbid fascination; reading them is not unlike seeing an auto accident unfold in slow motion before your very eyes: You know what the final result is going to be but you can’t resist seeing it through all the way to the end.

Fortunately, not all is bad news. The author also cites some examples of where companies are trying – pretty diligently – to deliver a customer service experience that is at least “serviceable.” The book is a worthwhile read.

But back to my own experience. How did things turn out? Well, after nearly three hours on the phone, I was finally able to get my charge for service reversed. Then, rather than spend any more time trying to work with my HP printer, I simply purchased a new one. It was a Canon.