Jun 022014

One of the great changes to the telecommunications industry is the rise of video. As part of the Decoding the New Economy video series we had an opportunity to grab a quick chat with Torsten Sauer, Ericsson’s Vice President of Broadcast services.

Video is the great challenge for telecommunications company, broadcasters and consumers with Cisco Systems predicting by 2018 over 50% of internet traffic will be videos.

As designer Gadi Amit told this website a few weeks ago, the problem is compounded as the broadcast world evolves from a three or four screen environment to an almost infinite range of screen sizes and devices.

With most of that traffic being over mobile devices, Sweden’s Ericsson has been adapting to the the industry’s change to mobile video with a series of acquisitions in the broadcast production space. Sauer explained some of the motivations and strategies behind Ericsson’s moves in the industry.

Red Bee Media

Ericsson’s acquisition of British content house Red Bee Media earlier this year is one of the areas where the company is looking at growing its services.

“Consumer behaviour is changing and that represents a huge transformation for the industry,” Sauer says. “We want to be a catalyst for that transformation through providing the right services.”

Along with more traditional fields like basic production services, Sauer sees the company’s opportunity in building the metadata into videos making them more accessible over the very crowded internet.

A multitude of screens

The other key opportunity Sauer sees is that by creating richer content, it becomes easier for creators, broadcasters and advertisers to serve appropriate content to viewers depending upon both their interests and the devices they are using.

“It’s a great opportunity for broadcasters to address new opportunities and revenue streams on different devices and in different locations.”

Sauer’s view ties in with Gadi Amit’s in that the proliferation of ways to watch videos is going to create great opportunities for broadcasters to find different ways to show their work.

The innovation race

With the proliferation of channels, the field isn’t just left to the incumbents with Suaer seeing the entry of new broadcasters as one of the great opportunities.

“There will be a lot of opportunities for a lot of new players, that will create a healthy innovation base. It’s a very exciting time to be in this industry.”

With video marketing exploding, Sauer sees it’s important for non-broadcast businesses to experiment with video; “It’s now the time, business models are not all set and technology models are not all set.”

Just as businesses have to deal with a more mobile marketplace and workforce, we’re also seeing video becoming more important. It’s a great opportunity for businesses to develop new channels.


Jun 012014
how are we using data in our business

Late last month writer, painter and software developer Maciej Ceglowski spoke at the design and technology conference, Beyond Tallerand in Dusseldorf.

The Internet with a Human Face is his closing keynote for the conference – let’s try to kill that kill that awful term ‘locknote’ for closing presentations – and is a wonderful overview of the unintended consequences of the internet we’re now seeing emerge.

Maciej compares the internet’s effects with that of the motor car in the Twentieth Century – the rise of the automobile totally changed society in ways our great grandparents couldn’t have expected.

Unexpected consequences

In many respects the changes were positive; the age of the motor car saw massive increases in living standards through the second half of the century. However the immediate downside of those efficient supply chains were equally massive increases in obesity rates, suburban alienation and urban sprawl.

A similar thing is happening with this wave of technological changes; as Maciej describes in our presentation, our views of how the web was going to evolve is turning out to be very different to what we expected.

One great example is in small business advertising where we expected online channels would democratise marketing. Instead the exact opposite has happened.

Maciej’s view is far broader than just the relatively trivial problem of small business advertising, particularly with the ‘Internet never forgetting’ with the concentration of the industry in one of the world’s great earthquake zones as another major risk.

Building an internet we’re not ashamed of

Ultimately, though Maciej sees the problems facing the internet industry as a design problem.

“I have no idea how to fix it. I’m hoping you’ll tell me how to fix it. But we should do something to fix it. We can try a hundred different things. You people are designers; treat it as a design problem! How do we change this industry to make it wonderful again? How do we build an Internet we’re not ashamed of?”

While being ashamed is a big call, and probably unfair in that it’s like blaming Henry Ford for 2014 childhood obesity rates in Minnesota, Maciej has flagged that there are real adverse unintended consequences to the way the internet is evolving.

All of us involved in the industry need to recognise those adverse effects and start acting to fix these problems.

May 302014

At the Code Conference held outside Los Angeles last week, analyst Mary Meeker delivered her annual State of the Internet slideshow covering the trends and opportunities in the online world.

One of the most watched graphs is the time spent on media versus the advertising spend on that channel.

For years Meeker has shown print is receiving a higher share of advertising dollars for the amount of time consumers spend on it compared to online channels.

That implies print revenue is due for collapse and online advertising revenues will surge. Here’s the 2014 chart.


If we track this over the last five years, here’s what we see with the ‘difference’ column being the sum of print’s over-representation and online’s (mobile and web) under-spending.

Year Print time Print share Online time Online share difference
2010 12 26 28 13 29
2011 7 25 36 23 31
2012 6 23 38 25 30
2013 5 19 45 26 35

The collapse in print’s share of consumer time, down 60% in five years, is stunning and the 2012-13 changes may indicate advertising spend may is now collapsing as marketers start to adapt to the changed marketplace.

It could be however that advertising as we know it has to change; one of the key reasons for online – particularly mobile’s – spending being under represented is because no-one is quite sure what works in the newer mediums.

Advertisers may know that consumers are moving from print channels, but at least they know what works in print. Online the experts’ guesses are still not much better than the amateurs’.

In short, we’re still watining for the digital era’s David Sarnoff. As Mary Meeker keeps reminding us, it’s a $20bn a year opportunity.


May 112014
are corporations becoming the new Internet gatekeepers

Hachette Book Group is the latest victim of Amazon throwing its weight around the bookselling industry reports the New York Times.

While it’s not the first time this has happened, Amazon’s willingness to bully suppliers – and disappoint customers – is a taste of what happens when one company controls a choke point in the distribution network.

In the early days of the internet we believed the web would eliminate the middleman, instead the net put the existing intermediatries out of business and gave us a new, global breed of gatekeepers.

The galling thing about Amazon is the company has barely made a profit in its 20 years of operation, one wonders how profitable it will be once should the operation manage to wrest control the entire bookselling industry.

In many ways, Amazon is a cautionary tale for everyone trading online; beware of allowing any one platform too much power over your business.

Apr 192014
newspapers are dying as the media business models move online

Last week, Google’s share price slumped on news of poorer than expected revenue results and website Asymco has a detailed examination of how the company’s growth might have reached its limits.

Asymco’s warning to the online advertising industry is clear with the warning that revenues might start to decline in 2016.

That online advertising may have reached its peak means even an even more uncertain future for businesses rely on those revenues, and times have been tough for those sites in recent years as returns have fallen.

At the same time online ad spending seems to be peaking, print advertising revenues in the United States dropped a further 8% last year with income at now at 1982 levels. It seems publishers can’t win either way.

So its now wonder that online services like Google and Facebook are looking to payment systems and other ways to generate revenue, for online publishers things are even more problematic.

What is clear is the advertising driven revenue methods that work so well for the broadcast industry aren’t working for online publishers and quite possibly other internet based businesses as well.

The online industries need a David Sarnoff to figure out a model that works.


Apr 112014

The big tech news story of the last two days has been the Heartbleed security flaw, that might have compromised users’ passwords and other details.

Given the nature of the bug where a server can tricked into giving away bits of what’s stored in its memory, it’s hard to say exactly what has been compromised – on most sites you’d be very unlucky to have your password on banking details in the system at the precise millisecond a malicious attacker exploited the bug – but the risks are still real.

While webmasters and system admins around the world are frantically patching their systems, for the average user the best advice is to wait before changing your passwords as if the bad guys already have your details you’d have probably used them by now and changing your logins on a vulnerable server might actually increase the risk of crooks stealing your information.

The Internet of Things

The longer term risks with Heartbleed are actually in embedded systems and the Internet of Things; many systems will have hard coded implementations of the buggy software which may never be patched and these devices may be give up much richer data than a web server would.

It’s another illustration of how difficult the task of keeping embedded technologies up to date and how to secure the Internet of Things.

Open source blues

While there’s no shortage of similar security lapses in commercial software, the Heartbleed saga is going to concentrate the minds of open source community on how to tighten peer review and audit version updates.

Most open source projects are staffed by small groups of time poor volunteers, making auditing and quality control harder. That key parts of the internet and computer industries rely on these underfunded, and often unappreciated groups is a weakness for the entire sector.

No technological change is simple or without problems and securing information is one of the great challenges of today’s tech revolution and Heartbleed is a strong reminder of that, hopefully we’ll learn some lessons about building robust systems.

Apr 062014
Times change and business poitical and state empires fall

A regular topic of this blog has been the rise of the internet empires that want to lock users into their kingdoms.

On the edges of these empires things can get ugly as the competing groups fight for supremacy and to capture users.

In these wars, no-one was capable of getting uglier that Steve Jobs.

Which makes Steve Jobs’ declaration that 2011 would be a year of Holy War with Google unsurprising.

The statement typical Jobsian hyperbole, but we should under estimate just how serious Apple’s staff would take such a statement.

Apple’s intention to wage ‘holy war’ illustrates just how high the stakes as the online empires try to capture users.

Those Holy Wars and the reason they are being fought is something all of us should keep in mind when we’re asked to choose between Apple, Google or Microsoft.