Friday, November 18, 2005

What lies beneath churn – Quality

Customer inertia (laziness) limits churn. But I believe quality has a lot to do with it. That is where incumbents have a natural advantage.

Consider these three recent developments, from seamingly completely different sectors.

1. Newspapers have widely reported problems. US circulation is down 2.6%. API is investing $2m to help newspapers into the next decade. However, readership of US newspaper websites is up 11%, outpacing the overall internet. Visitirs are up 15.8% to 47.3m in September, which is a 31.9% penetration. Time spent is is up to 38m08s. Link that to the recent Web 2.0 discussion, to which Nicholas Carr contributed a much quoted article. He describes Wikipedia with words such as unreliable, appalling, garbage. Newspapers on the other hand ‘can employ editors and proofreaders and other unsung protectors of quality work’, he claims.

2. A recent survey among researchers showed that open access publishing is slowly encroaching on traditional journal publishing. However, peer review remains the cornerstone. In other words, scientists, who are infamously inert when it comes to embracing new business models, so far have little reason to switch. Even if proponents of OA archiving never stop defending the green road model.

3. VoIP has taken ages to become a threat to tradional voice calling. Only when Skype mastered the QoS problem could it grow into a serious threat. Now, by the way, BroadVoice is supposed to be the best.

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