Jim Louderback

October 26, 2011

The TV WAR of the Century

“There’s battle lines being drawn.
Nobody’s right if everybody’s wrong.
Young people speaking their minds,
Getting so much resistance from behind…”

– Buffalo Springfield

tvwar2We’re in the middle of a yet another huge platform war for future of internet video and TV. There are four players with different and often opposing viewpoints, each with a shot at success. The story over the next three years will be which one will provide a winning service to enable viewing across every glowing rectangle in our lives – from the smallest smart phones to the biggest smart TV. Below are the four platforms, ranked by my own current likelihood of their success – along with some of the interesting quirks and challenges that remain.

GOOGLE: With Android, Google TV and YouTube, Google wants to be everywhere. Android already leads the smart phone race, with 550,000 devices activated every day. They’re trailing in the tablet space, although sales figures compared to the iPad are eerily similar to the early days of Android phones. And even though GoogleTV has been a flop, the company is angling to have Android become the dominant operating system for Smart TVs – with GoogleTV coming along for the ride. That market’s wide open, as Yahoo’s early efforts falter, and none of the other contenders (Flingo, Boxee) separating themselves from the pack. And with YouTube providing a unique and desirable library of content, Google has a lever to use to aid adoption. To date, however, Google has opted for Youtube ubiquity vs. scarcity – and I don’t see that changing.

Speaking of GoogleTV, the next version (due out real soon now) should make it easier to navigate, discover and consume video. They’ve already taken a big step forward by embracing the Android marketplace, and allowing a wide variety of apps to load-in and be useful. I’m hoping that they take less of a one-size-fits-all approach, and focus more on integrating the web video into the already-existing TV experience in most people’s homes. And they better make it work with a standard remote control – only the geeks want a full-on keyboard in their living room. Finally, they need to bring the cost down to $99 or less – and focus on AppleTV and Roku, not the “TV PC”.

APPLE: The company currently has a dominant position in tablets, and owns significant smartphone mindshare and marketshare. AppleTV to date has been disappointing. The company has sold millions of the set top box, but as the smarts move into the TV, Apple has yet to enter the market. There’s little doubt that it will, though. But video is different from music : We’ll listen to our favorite songs over and over again, but most videos are viewed once, shared and then forgotten. Apple needs a rental or subscription service to truly compete with the other three here.

AMAZON: The company has no smartphone or TV presence, but is poised to disrupt the tablet world this fall with the Kindle Fire. At less than half the price of other iPad and Android tablets – with a 10” model on the way in early 2012 – and with both a rental and streaming video service Amazon presents an interesting challenge to both Apple and Google. The company is clearly betting that the tablet will be the dominant video consumption device of the future, and is looking to lock its customers into Amazon Instant Video (rental) and Prime Instant Video (subscription service). Interestingly, while the company’s Kindle book-reading software works across competing devices, their VOD services do not support Apple IOS.

MICROSOFT: With 50 million XBOX 360s sitting in front of TV sets around the world, Microsoft has the potential to be a major player here. The company is working to build a single interface across its smart-phone, PC platforms – called Metro. They are also rolling out the Zune video services across all of those devices, along with the XBOX360 as well. The Xbox currently has the broadest collection of traditional TV sources, with broader support for TV Everywhere than the other platforms. Unfortunately Microsoft does not make web-original video available to the Xbox, which limits its usefulness. And the lack of a Windows-based tablet to rival the iPad or Android devices, along with the poor performance of Windows phones put Microsoft behind both Apple and Google. But the Xbox 360 is such a strong device, with such great market penetration, that it’s impossible to count the company out.

It’s early, but Google is in the lead, with Apple nipping at their heels. If the Kindle Fire is as big a success as I think, Amazon may well challenge for the lead. As an aside, I predict that the Fire will be the best selling electronics product this holiday season.

And Microsoft? Unless Windows 8 and the Windows phone become runaway successes, it will be difficult for them to turn their 360 installed base into a dominant platform. But that’s just my early handicapping – there’s a lot of race yet to be run.

February 24, 2009

How Microsoft Really Murdered Vista

Filed under: Commentary — Tags: , , , , , , — Jim @ 11:54 pm

A few days ago I posted an analysis of how internet video is exposing a third dimension to the standard reach and frequency of traditional advertising. Not every product can be sold on reach and frequency alone – these days, in many cases, it’s more important to build a deep and lasting relationship with a relatively smaller number of core consumers. These fans are called a number of things – brand ambassadors, net promoters, brand evangelists. Whatever they are called, it’s important that any product or service have as many of these as possible – they end up recommending the product or service to their friends and family.

Back before the social Internet, those brand ambassadors were good. On a strong day, they probably touched 4 or 5 people with their love of your product. But now, with the amplification effect of social networks like Twitter, Facebook, Friend Feed and MySpace, a single ambassador can touch – and thus influence – hundreds. The average Facebook user has nearly that many friends, and true connectors have many times that.

Shortly after my post, I was chatting about reach and frequency with my old friend and former boss Jason Young, CEO of Ziff Davis Media. He took it further than I did, saying that reach and frequency were dead. We started thinking about egregious examples of brands that killed themselves by neglecting their core. It didn’t take long to hit on one train wreck we both witnessed firsthand – the nearly irreparable damage to Windows caused by Vista.

Jason and I had a front row seat to the launch of both Windows 95, XP and Vista. When Microsoft launched Windows 95, they had a team of evangelists and their job was to convince the opinion leaders and tech enthusiasts that Windows 95 was the way to go. Well known venture capitalist Rick Segal was on that team, back then (I still remember him trolling Comdex in a bright green/yellow Windows shirt, handing out goodies). The company spent millions promoting the benefits of Windows 95 in computer magazines, including the ones that Jason and I worked for.

Fast forward to Vista. When Microsoft prepared to launch Vista, they ignored the tech press entirely. Almost all of the company’s marketing budget went to a broad, consumer campaign designed to convince the rank and file computer users that Vista was exactly right for them. The messaging focused on feel-good platitudes rather than the significant technology advances inside the product. Microsoft opted for reach, and frequency, instead of going deep on the core set of technology influences and users. They didn’t just ignore them – they actually insulted them with messaging that was so generic and vanilla it could have been used to sell cat food.

Microsoft forgot that computers are still pretty alien to most people. Even today, most computer users have that “go to guy (or gal)” who gives them advice and tells them what to buy and how to fix it. All during the long campaign selling Vista, Microsoft ignored the go to folks, and they, in turn, were unconvinced about Vista’s benefits.

So when early problems arrived, as they always do, the tech core didn’t make excuses, they pounced. Hell hath no fury like a techie scorned. Vista, suddenly, was being denigrated by the same group that helped make Windows 95 and XP such a success.

Microsoft’s response was late, and equally as tone deaf. Instead of focusing on the core technology inside Vista, and instead of turning key technology influencers into brand ambassadors, they teamed Bill Gates up with Jerry Seinfeld in a vignette about shoes. When that failed, they turned to a broad campaign designed to blunt Apple’s brilliant “I’m a Mac” ads. That, too, failed. Microsoft continued to go for mass reach and frequency with a message that meant nothing – instead of trying to turn the influencers into advocates.

So here we are today. Windows 7 is coming out at the end of the year. Microsoft can redeem itself – but will it? Early indications are that the deep messaging, designed to turn the core into Windows advocates, has already been slashed. Right now, Windows 7 has good buzz. Even notorious Mac fan and ultra-connected geek influencer Kevin Rose has waxed enthusiastically about the beta.

But it’ll take more than just a few geeks to turn the tide. Microsoft needs a prolonged, in depth communication plan to reach the core – and to leverage their influence. I hope they wise up. Because without a deep campaign to turn a large fraction of the tech influencers into brand ambassadors, all the reach and frequency in the world will just lead to more failure.

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