Monday, January 24, 2011

Connected TV 2011: impressive speaker line-up forming

It looks like Connected TV 2011 will be an exciting event. So far, we have some very high-profile players make speaker commitments for this full-day, English-language, interactive event in Utrecht, on April 27:
I have also updated this post, containing links to all freely accessible Connected TV related commentaries.

To be sure about what Connected TV is (and what it is not: it's not IPTV, but rather IPTV 2.0 or TV-over-IP):

Consumer perspective:
  • More choice, content discovery
  • On demand
  • True interactivity of broadcast and broadband (not fake interactivity, such as interrupting live TV of VOD)
  • Second screen
Operator perspective:
  • Usage
  • Business model
  • Advertising
  • ARPU
  • Multi screen
  • Content rights
  • Cord cutting

Tuesday, January 11, 2011

Why I am not on Facebook

Zadie Smith contributed an opinion piece in a local newspaper on Facebook. And I couldn't agree more. Meanwhile, greater fools are piling on. Here are her main points:

  • Software by nature isn't objective but reflects the intentions of its designer. Social networks reduce life/people to a database.
  • Social networking contact is by nature very shallow. Facebook encourages people to contact as many 'friends' as they possibly can.
  • Facebook encourages people to give up on their privacy. It encourages you to copy whatever your friends read, or watch, or eat.
  • It encourages people to 'like' as much as they can. Is there anything more stupid than the 'Like' button?
In short, it's all about making choices - not meaningful choices, but buying decisions. Every aspect is designed to aid advertisers to reach their dreamed-of demographic.

Facebook also reflects Mark Zuckerberg, from his favorite color (blue - he is red/green color blind) and 'poking' people (which is what people like he do) to trivia (the 'essence' of friendship).

You won't find Zadie on Facebook, but you will find her via email or Skype.

KPN: forward-integrated network or backward-integrated marketing?

Talking to a friend on the 'telecoms debt' side of the market, a relation between sewer-based FTTH and open access appeared.

There are two assumptions:
  • Telcos have a tendency or desire to become as vertically integrated as they possibly can.
  • There are basically two kinds of telcos: those focusing on networks, and those focusing on services.
Telcos focusing on networks start off by building passive networks. They then do forward integration, by adding active elements and finally may even end up providing services. Example: Reggefiber.

The other kind look at themselves as sales & marketing organisations. They do backward integration by adding active network elements (for control, higher margins) and may end up building passive networks, if the cost thereof is low enough. Example: Tele2. But in a way too: KPN.

The latter point (cost of passive networks) is precisely where sewer-based networks come into play. There's a start-up in the Netherlands that claims it can cut the cost of laying fibre in half. So my friend said: if they could somehow cut the cost in half yet again, building FTTH would become so cheap as to be justified by any sales & marketing driven telco. As a result, open networks would become a thing of the past. Obviously, the sewer poses some tough challenges, so it remains to be seen if this start-up will fly and build its own vertically integrated telco on top of its sewer-based network.

The other interesting question raised by this discussion is: what will Eelco Blok's new strategy be? He is taking over as KPN's CEO later this year, and the question he might want to answer is very fundamental: is KPN a netwok company, with forward integration, or a sales & marketing company with backward integration?

Wednesday, January 05, 2011

Pre-IPO considerations for Facebook, Twitter and Groupon

Silicon Valley valuations are going through the roof. Facebook is at $50bn, Groupon at $6.4bn and Twitter at $3.7bn. I wrote about it myself over here (subs only). For the non-investment souls amongst us, it is good to point out a number of extra considerations, esp. when reference to the Internet Bubble is made:
  • A $50bn value for a 6 year old company remains striking in any case. However, companies such as Facebook and Groupon are pretty healthy businesses, with solid revenue streams and presumably high margins. It must also be remembered that Google reached the $50bn valuation milestone after just a few years (not long after the IPO in 2004). Still, with sales of 'just a few billion', a $50bn valuation is a stretch.
  • Investing requires a rather short-term focus. After all, you can buy and sell stocks at the click of a mouse. As a result, trending is a very important quantity for investors, and is used in several different forms, both in technical analysis and in quantitative analysis. The consequence of all this is that a stock can be given a Buy recommendation, even if its valuation is sharp.
  • Investors with a longer-term focus must weigh the seemingly low entry barrier for social networks and daily deals sites, and the degree to which the company has been able to organise a network effect.
  • Monetisation is another thing to consider. Look at how this affects Twitter (still struggling to find a solid revenue stream) versus Facebook (the stupid Like button is a perfect advertiser tool). Twitter has about one third the number of users that Facebook has, but Facebook's value is more than 13 times Twitter's