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On Agencies’ Minds May 30, 2003

Posted by David Card in Uncategorized.
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Just back from a short trip talking to a handful of agency clients. Two unrelated but interesting themes recurred: WiFi and Hispanic audiences.

WiFi. The near-term action in WiFi is in tapping into tech company marketing dollars. Consumer impact is 18 months away. Both enterprise and home networking deployment will be sooner than consumer hotspots. Consumer hotspot equipment sales looks scarily like routers in 1998-9 – lots of failures could easily create a huge gray market for used equipment within 36 months. Follow Jupiter’s research here.

Online Hispanics. 50% of US Hispanic households were online by year-end 2002, which is about the same percentage as for African American households. See our Market Forecast Report The number of Hispanic households will nearly double in the same time period, growing from 4.5 million in 2001 to eight million in 2007. The current number of Asian-American online households is 2.3 million; this will increase to 3.6 million by 2007. Preliminary traffic analysis suggests that online Hispanics behave much like everyone else, but due to the paucity of Spanish-language sites this may be a chicken and egg problem. Good panel data is tough to come by.

AOL and Microsoft May 30, 2003

Posted by David Card in Uncategorized.
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Jupiter’s official position on the topic is here. I’ll just add a little color.

What matters, in addition to the cash for AOL’s debt service, is, in order of importance:

1. If there had been a real deal on IM, that would have been Number One. But Gates said “no timeframe.” My rule on software deals is that the following three things must occur for a “deal” to be meaningful: a) the deal is exclusive, b) money changes hands (it did in this case), c) product ships.

2. Because there’s no real IM deal, DRM becomes important, but those same rules apply. If and when products ship, media companies will have to evaluate DRM offerings from MSFT and from Sony. But that’s the current situation. This announcement doesn’t unbalance any equations. No impact for 12-18 months.

3. IE remains AOL’s browser for Windows, as I have been predicting since late
1999 , (after changing my 1998 tune.)

Jupiter predicts that, contrary to earlier predictions, AOL will continue to license Microsoft browser technology. It will use Netscape as leverage against Microsoft.

I caught my breath, and prepared to eat some crow, when the Gecko-based Mac product actually shipped and worked. But now it looks like my prediction will hold for years to come.

All this “fate of Netscape” talk is inside baseball for the press and for nerds. Netscape has been dead for years. Communicator is a good product for AOL, as is the Mac browser implementation. AOL can do that kind of thing with minimal engineering resources and zero marketing resources.

Much of the heat, if little of the light, comes from perspective. Bedfellows matter more in software than they do in media, where everyone is promiscuous and joint ventures among competing oligopolies are SOP. Remember Time Warner Entertainment? Liberty Media? Rainbow Media? Disney/Hearst/ESPN? Scripps/Tribune/Food Network? Gannett/Knight Ridder/Tribune/Careerbuilder? etc. etc. etc.

RealNetworks’ future is totally dependent on its success as a media company, something the company has acknowledged for about 6 months. Real has minimal exposure from whatever AOL ends up doing, and what AOL ends up doing is also 18 months away, anyway. If Real continues to execute on RealOne as it has to-date, media companies who have partnerships or have invested in its technology are safe. Right now, Real is the best multimedia content distribution partner in town.

Secret Plan for IM? May 26, 2003

Posted by David Card in Uncategorized.
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In the last graf of a NYTimes story on IM, an AOL exec reveals AOL intends to capitalize on the large number of its customers online simultaneously, for example, by setting up an online dating service to let singles interact directly, eventually with video and sound. Such uses, however, will depend on AOL’s ability to do what the current conditions prohibit: adding video without relinquishing the competitive advantage of its large, closed network.

If well-integrated and easy to use, that would be a logical service to tie into a paid personals offering. Wonder whether AOL personals partner Match.com will be part of the party?

Nerdzone Product Placement May 18, 2003

Posted by David Card in Uncategorized.
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Matrix Reloaded product placement (that I noticed)

– Cadillac (CTS & Escalades, and they wrecked them all. This is not like the futuristic Lexus in AI where the car was a prototype – the Caddies are in the Matrix, ie, in an imaginary “Today”.)
– Ducati (oh so very cool motorcycle)
– Samsung (actually, I didn’t notice the brand, though I noticed the phone. I read about the brand. It’s an ugly, overlarge phone. They spent big $ to keep Nokia – who had a cool phone in the original Matrix – out. Apparently, however, there are fan sites. )

The truck was cooler than the cars; the Ducati looked good; the phone looked silly. And most of them were imaginary.

X-Men 2 product placement (that I noticed):

– Mazda RX-8 (with a knowing wink, and it’s a cool looking car)
– Dr. Pepper (another funny moment)
– Miller Genuine Draft (hmmm, all the placements were in scenes with Wolverine…)

They all worked for me.

I Love the Economist Too May 18, 2003

Posted by David Card in Uncategorized.
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I love the Economist, too, Rob . But it’s a weekly, and feels like it, even online. And it’s a British weekly, even if it loves American Capitalism.

Don’t cancel your Wall St. Journal subscription. It’s still the best (and best-written) daily of any kind in the universe. Get ’em both. It’s good for the industry.

Grey Lady Vs Internet Part XXXVII May 11, 2003

Posted by David Card in Uncategorized.
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The New York Times continues its quixotic battle against the Internet. It contrasts Barry Diller’s digital shopping successes with Nick Negroponte’s predictions of the Internet as a new medium. Its case is based on a) the Internet’s lack of impact on old media companies, and b) the failure of new forms to emerge.

Apparently the Times doesn’t think that two of the top three Internet players – Yahoo and MSN – are media companies without old media ownership, and has missed the wrenching impact of the fact AOL bought Time Warner, not the other way around. Perhaps the Times didn’t see what CNET and Internet.com did to Ziff-Davis, IDG, and CMP. Hey, I don’t read newspapers, the trade press, or TV Guide in print anymore, do you? And though I think file sharing’s effect on music is overstated, the Times does not.

The Times has forgotten that Matt Drudge broke the Lewinsky story. It plays down blogging and other reader-commentary/creation tools’ impact on journalism. It seems to miss the importance of fantasy sports, online gaming, online porn, and at-work news watchers. Of the potential power of having the world’s greatest library searchable and available to just about anyone.

Only in the 16th graf of a 19-paragraph story does the Times acknowledge the Internet has had an impact on people’s daily lives:

So the promised wonders of new media may yet arrive. In the meantime, the Internet has changed daily life in ways most people could not have imagined in 1994. People manage their lives and relationships via e-mail and instant messaging, and second-graders are skilled Google searchers.

This is not a new medium?

It’s All-American AOL May 9, 2003

Posted by David Card in Uncategorized.
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Why MSN, Earthlink, Yahoo, etc., etc., etc., can still learn a thing or two from the tired, old, creaky master. This brilliant – if cloying – combination of motherhood, apple pie, and NASCAR is just perfect. “Project Video Connect: We’re Here Until They’re Home” – beautiful.

A La Carte Cable Pricing May 9, 2003

Posted by David Card in Uncategorized.
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Very thoughtful & thought-provoking piece in the Journal. A la carte pricing would more likely force out niche networks and raise your bill, rather than give you more choice, given current industry dynamics. Another argument for aggregating online paid content vs going it alone. See our Jupiter Report.

As Usual, Nick Rules May 8, 2003

Posted by David Card in Uncategorized.
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Now, that’s product placement!

B-Week Puffs Painfully May 8, 2003

Posted by David Card in Uncategorized.
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Businessweek gushes about the re-birth of “E-biz.” There’s just one big monkey wrench:

The biggest challenge, though, is cultural. Corporations learned in the early days of e-business that costly new systems by themselves accomplish little. They can sow confusion and resentment among employees who figure they did just fine the old way. To get a true e-bang for the buck, companies must redesign their business processes — a fancy way to describe teaching old dogs new tricks — to take advantage of the new capabilities.

Business Process Re-Engineering will revolutionize business!!!! Where have I heard that before?

The story is riddled with contradictions. It predicts that movies will be Napster’d, and cites file-sharing as evidence the music industry has been hammered. Yet it sketches another potential monkey wrench: Court decisions on music-file sharing could squelch the growth of online entertainment.

It also glories in business trade, and productivity gains, then segues into Sound like gilded promises from the late ’90s? No doubt. But in 2003, business and consumers alike are far better positioned than they were a half-decade ago to profit from the Internet. Why? The Net is far more powerful, thanks largely to broadband — the Internet on steroids…Already, speedy connections are transforming behavior, as consumers treat the Web like phone service or electric power — always there.

What th-? What does consumer broadband have to do with productivity??? Who edits this stuff?