Tag Archives: Business model

March 2, 2015 · 1:55 pm

Misplaced Problem Solving

A new week and another bit of news that has me shaking my head.  Today it comes from the folks at thePlatform which is a widely used video streaming service.  thePlatform announced that it has been working on a feature to defeat ad blockers and they have something that protects against ad blockers, making it easier to get ads onto new devices with minimal client work.

Diagram of Unicast Streaming

(Photo credit: Wikipedia)

I like thePlatform and have worked with them so please don’t misconstrue what follows as anything but me trying to a little wider perspective.  I’ve written before about the challenge of ad blockers for the ad-supported digital community.  To quote one article on the subject:

There are stats out there that say nearly 28% of users have some sort of ad blocker installed, a percentage that has spiraled by nearly 70% in a year. Ads that are blocked, combined with all the other ads that aren’t seen because of viewability issues, makes for pretty bad business.

Indeed.   In this case, thePlatform is looking out for the businesses that support their services.  I applaud them for that even though it’s a misplaced solution that doesn’t cure the underlying problem.  It’s fine to defeat some of the ad blockers for a short time and to help your clients with generating advertising revenue.  However, when you have 70% annual growth in something that runs counter to your business model, maybe the answer is to examine why people are using ad blockers in the first place.

Ad blocking is most popular with younger users – 41% of American internet users aged between 18 and 29 used ad blocking software, rising to 54% when only young men are counted.  Those are the prime years for developing habitual customers.  Yet rather than figuring out how to get product messages across without being annoying and intrusive the industry is figuring out how to thwart customers’ technology.  “We’ve been extremely diligent about making sure that ad blockers can’t find patterns in our URLs they can block on” says thePlatform’s CTO.  Hmmm…

I believe in the ad-supported business model.  I also believe that you can’t force-feed consumers.  Defeating ad blockers is a band-aid and a misplaced one at that.  We need to focus on how to make ads that don’t tax computer resources and crash web browsers.  We need to respect privacy, which is another reason people install blockers.  We need to stop producing band-aids and focus on real solutions.

That’s my opinion.  Yours?

Leave a comment

Filed under digital media, Reality checks, Thinking Aloud

Tagged as , , , , , , ,

February 4, 2015 · 11:33 am

It’s Not A Business

Every once is a while someone tells me that they have a great idea for a business. Usually it involves a solution to some problem they’ve been experiencing or maybe it’s a better way to do something. Most of the time what they’ve come up with is, in fact, a pretty good idea. That doesn’t make it a business.

BusinessModel

 (Photo credit: Wikipedia)

Part of what I do with my clients is work on their business models. In some cases we’ve turned their existing model on its head because the way they’ve addressed the problem makes no sense as a business even if the solution is viable. In other cases we’ve had to change the solution itself to make it appealing to investors or, more importantly, to consumers. The important thing is to solve the problem but to do so in a way that assures a return on the time and resources needed to do so.  A business!

What questions do we ask? First, we identify the core problem we’re solving and figure out if there are, in fact, enough people experiencing the same pain that the business isn’t a one-hit wonder. We figure out how much it will cost to produce the solution and then how much the market will pay for the solution. This gets tricky because inevitably the founders think their product is worth a lot more than the marketplace does.

We figure out if the business is seasonal. We look into the universality of its appeal across geography.  We discuss other dependencies – is it tied to weather or some other factor that is completely out of our control.  Did you ever notice how many people who plow your driveway also are in the landscaping business?  That’s eliminating the seasonality to an extent.

When I was figuring out what to do with my life after leaving the corporate world I had a series of honest discussions with myself about a few ideas I had.  I came to the conclusion that most were not “A+” business ideas even though every one of them addressed a need and were a good idea.  Not every good idea is a business, and not every business is based on a great idea.  We don’t need to invent the mousetrap; we just need to make it better and more profitable.  That takes time, common sense, and maybe even some help (hint hint).  You in?

 

Leave a comment

Filed under Consulting

Tagged as , , , ,

October 16, 2013 · 8:44 am

The Early Warning System Is Going Off

There’s always a scene in movies about some epic disaster during which an early warning system goes off.  A young scientist believes a comet will hit the Earth but the older scientists tell him he’s nuts.  A tsunami monitor goes off when there are calm seas and the woman watching it disregards the information.  You know the drill.  As the audience, we know that disaster is coming but those who have the information are blissfully unaware until disaster strikes.millennials-broadcast

I thought of that as I read a couple of articles the other day.  The first is from the good folks at Poynter who reported on some research the NY Times did.  Quite an eye-catching headline:

Thirty-four percent of millennials surveyed watch mostly online video or no broadcast television, new research from The New York Times says.

Now granted, the study was among 4,000 current users of online video so one could argue, like the woman watching the calm sea, that the sample is skewed.  The again, given the high percentage of young folks that are online video watchers, I’d listen.  After all, cord cutting is no longer dismissed as the rantings of some early adopter lunatics.  There are numbers that prove it’s for real, especially since we’re not talking about “cord-nevers” – young people who never had cable TV – just a broadband connection for streaming.  As one report had it:

While 3.2 million new U.S. households were set up in the last three years, the paid-TV industry only added 250,000 subscriptions in that same period.

Not so good.  And if that’s not a loud enough alarm, here comes the near-miss fireball from out of the sky that gets everyone’s attention, courtesy of our neighbors in the Great White North:

The Canadian government will soon require cable and satellite television providers to make it easier for customers to buy only the channels they want rather than pay for bundles, the country’s industry minister said on Sunday.

“We don’t think it’s right for Canadians to have to pay for bundled television channels that they don’t watch. We want to unbundle television channels and allow Canadians to pick and pay the specific television channels that they want”

Sound familiar?  It should, since it’s the same fight that’s been brewing here for several years and which intensifies each time your cable or satellite bill goes up.  Cable executive are rightly scared that their penetration into the household base will fall, making subscriber revenues drop and ad sales impossible.

Young people tuning out in droves.  The fundamental business model under attack.  Have we reached the end of the TV world?  Not yet.  But in my mind the early warning systems are howling.  What do you think?

Enhanced by Zemanta

1 Comment

Filed under digital media, Reality checks

Tagged as , , , , ,