Business

Changes to business digitisation brings

Vodafone Appeases Content Suppliers with Marketing
There has been much rumblings of discontent from content suppliers to the mobile phone industry, and, as the globally dominant brand, Vodafone have been taking a lot of the flack.
With sales soaring through the roof, you’d think all would be cream cakes and Earl Grey tea in Mobile Land, but trouble’s been a-brewing concerning the split of income from subscribers for the content.
In a world where content providers are used to calling the shots about product pricing – and the mobile companies are used to a similar position of dominance – an uneasy truce has been maintained, with the best spilt available being 50/50.
Clearly dissatisfied with their lot, content providers have been making long whining noises in the direction of Vodafone. They want more money but – not surprisingly – Vodafone aren’t to keen to dish it out.
Feeling the pressure, Vodafone have tried to placate their grumbling partners in the short term by dishing out a sizzling barbeque of buzzwords, liberally doused with PR doublespeak.
We’re not sure if their partners are going to have much of an appetite for what’s on offer – if they can make sense of it – but it seems that Vodafone are offering to spend more on marketing mobile games (without altering their percentage split of the income.)
The extra promotion will clearly be good news for content providers, but the more cynical amongst us will be quick to point out that Vodafone will clearly benefit from the extra publicity too.
It looks like Tim Harrison, Head of Games at Vodafone Group Services, had been smoking pure Moroccan Buzzword when he came out with this piece of baffling industry-speak: “Having pre-agreed, pan-regional marketing and distribution capacity will allow us to run multi-territory co-marketing more easily, improve efficiencies for our partners and benefit the industry as a whole.”
Vodafone will be rolling out their grandly titled ‘Marketing and Distribution Plan’ by the end of April, with the remaining Vodafone Operating Companies and partner markets enjoying “maximised marketing and distribution efficiencies” by the end of Q3 2005.
Vodafone
Vodafone press release
13 April, 2005
Mobile Games Industry Attracts £183m Of Venture Capital Funding In 2004
New figures by media researchers, Screen Digest, has shown that the mobile games market has scooped up £327m worth of funding since September 1999, 56% of which was raised during 2004.
A hefty chunk part of this investment has been driven by private equity houses as the mobile games market begins to realise its lucrative potential.
Between 2002 and 2004 mobile game company fund-raising soared from £23m (US$43.5m/€33.5m), with investors scrambling to secure an interest in the market.
UK companies attracting investment included Digital Bridges and Atatio, with Jamdat and MFORMA leading the way in the US.
The growth of multimedia/web-enabled phones has supercharged consumer spending on downloadable mobile games, with sales growing from £380m (US$719m/€554m)in 2003 to £778m (US$1.4bnm/€1,134m) in 2004.
What people in expensive suits call “merger and acquisition activity” has also shown a dramatic increase over the past 12 months, with Screen Digest’s research highlighting the exponential growth in game developer transactions – from just two transactions in 2002, to four in 2003, rising massively to 19 in 2004.
Screen Digest’s Chief Analyst, Ben Keen explains, “Once the top developers have been acquired, there is likely to be a trend towards consolidation at the publishing/aggregation level to achieve greater ‘scale’ in the marketplace. We believe that once again it will be the private equity houses that will emerge as the driving force behind any sector ‘roll-ups’.”
Evidence of the mobile games market’s strength is highlighted by growing activity in the financial community and the increased involvement of the traditional games publishers.
The recent creation of dedicated mobile publishing divisions by a number of computer and video games companies (most notably Electronic Arts) provides further evidence that the mobile games market has finally come of age.
Screen Digest
12 April, 2005
Police Hard Drive Sold On eBay Stuffed With Secrets
A hard drive, containing confidential data belonging to the Brandenburg police in Germany, was auctioned over eBay and bought by a student from the city of Potsdam for €20 (us$25/£14) according to a report by Spiegel, a leading weekly German newspaper.
The 20GB hard drive contained sensitive information detailing internal alarm plans on how the Police should handle “specific incidences” like hostage and kidnapping situations.
The drive also contained tactical orders and analysis of political security situations, along with contact names in the ‘crisis management group.’
This strictly confidential material should only be available to top level intelligence staff, the head of police, and the executive group around the Minister of Interior Schönbohm.
Schönbohm immediately banged tables loudly and initiated an investigation to discover how the hard drive ended up being sold over eBay and whether the information was leaked as a criminal act or some sort of inside blunder/employee theft (our money’s on the latter).
This cock up by the Brandenburg Police is not the first time a hard drive sold over eBay has set security bells ringing.
Last year, mobile security specialists Pointsec bought a load of hard drives off Internet auctions like eBay to find out how much sensitive company information they could unearth (and publicise their expertise in the bargain, natch).
Not surprisingly, they discovered that they were able to read 7 out of 10 of the hard drives, with their first purchase revealing the access and login codes to a major financial services group.
Peter Larsson, CEO of Pointsec Mobile Technologies, adopted an earnest face and commented, “Even when companies or individuals believe they have wiped the hard drive clean, it is blatantly clear how easy it is to retrieve sensitive information from them both during their current lifetime and beyond it.”
He added that this week’s exposure of leaked and highly critical information from the Brandenburg police in Germany “reinforces how important it is to never let mobile devices or hard drives leave the office without being adequately protected with encryption and strong password protection – even after they have been discarded.”
Pointsec sagely recommends that unencrypted drives should be re-formatted to within an inch of their lives before disposal (well, at least eight times) or professional “wipe-clean” software used.
Of course, if your drive contains nuclear secrets or damning photos of your late night encounter with an armadillo in stockings, the only way to absolutely guarantee the destruction of the data would be to torch it. And then take a hammer to it. And then stamp on it. And then…..
Out-law.com (via The Register)
8 April, 2005
BookSurge, Print-On-Demand Book Company, Signs With Amazon
Online retail giant Amazon.com has scooped up the ‘printing fulfillment’ company BookSurge, which maintains a catalogue of thousands of book titles available for users to print on demand.
“Print-on-demand has changed the economics of small-quantity printing, making it possible for books with low and uncertain demand to be profitably produced,” Greg Greeley, vice president of media products for Amazon.com, said in a written statement.
The move seems to reflect Amazon’s continued efforts to add new revenue streams and fight off competition from online rivals such as eBay and Overstock.com. Amazon has already been forced to lower prices to keep customers wandering off elsewhere.
Despite generating twice the revenue of its main rival eBay, Amazon is lumbered with the hefty financial drain of maintaining and operating its warehouses throughout the world – because eBay sells a service not a product, it manages to be three times more profitable than Amazon with only half its revenue.
Amazon’s deal with BookSurge gives the company the ability to offer a new product without adding any further burden on distribution network.
The company will now offer (cue: North American accent) “inventory-free book fulfillment” to publishers through BookSurge Publisher Services and to authors through BookSurge Publishing.
Print-on-demand allows booksellers to offer titles with limited appeal, without the hassle of having to keep stock which may not get sold.
Additionally, retailers, wholesalers and distributors will be able to leverage the BookSurge Direct wholesale platform.
“BookSurge makes it possible to print books that appeal to targeted audiences, whether it’s one copy or one thousand,” Greeley said. “Our new relationship with BookSurge will provide Amazon customers an ever-expanding selection of titles that are not available through other channels. Thanks to print-on-demand, ‘out of print’ is out of date.”
This latest move continues Amazon.com’s trend toward the world of e-books and other downloadable products, building on its 2001 eBook deal with Adobe Systems that added nearly 2,000 e-books to its catalogue.
Although e-books are still a small part of the current online book market sector, significant growth is expected by publishing companies and online retailers.
Internet portal Yahoo already has an e-book sales deal with four major publishing houses and Amazon are clearly looking to get their size nines wedged into this door of opportunity.
Amazon
BookSurge
6 April, 2005
UK Net Advertising Spending Beats Radio For First Time:
Cappuccino-supping Hoxtonites will be cheered by new figures showing that online advertising spending grew by a thumping 60% in 2004, edging ahead of radio in terms of market share for the first time.
The report, from the Interactive Advertising Bureau and PriceWaterhouseCoopers, declared 2004 to be “a coming of age year” for online ad expenditure.
The amount spent on the Internet sector in 2004 topped £653.3m (US$224.8m/€953.6m), an increase of 60% on 2003 (£407.8m), with new spending driven by increased broadband availability, consumer confidence and creative marketing campaigns.
The new figures push the sector’s annual market share to 3.9% for the year (up from 2.6% in 2003), overtaking radio’s 3.8% share for 2004.
The Internet sector looks to record further gains, with spending for the second half of last year reaching a record-setting figure of £373.9m (US$701m/€545.8) representing a 4.3% half-year market share.
The press remained the top dog of advertising spending, claiming a 41.5% market share for the year, ahead of TV (23.9%), direct mail (14.6%), directories (6.4%), outdoor (5.0%) and cinema (0.9%).
Online spending went against the overall general advertising trend, with total UK spend rising just 5.8% in 2004 to £16.9bn (US$31.7bn/€24.7bn) in 2004, based on figures from the Advertising Association and WARC.
Guy Phillipson, chief executive of the IAB, said: “There’s a massive cultural shift going on, forcing a change in consumer and advertiser behaviour. The triple crown of cheap broadband, cheaper technology and ever more compelling content is driving consumers to the Internet and pulling advertisers online.”
The report went on to assert that the online industry is now ahead of its targets to overtake the market size of Outdoor advertising by November 2007, adding that online ad revenues are now more than four times bigger than they were at the height of the dotcom boom in 2000.
“The audiences are there – more marketers need to wake up to the brand building and direct sale benefits of the Internet as a maturing medium.” enthused Phillipson.
Interactive Advertising Bureau
PricewaterhouseCoopers
5 April, 2005
Napster Live, Music TV Series To Broadcast On UK’s Channel 4
Napster UK has teamed up with Channel 4 to broadcast a short series of live TV music shows, creating the first national terrestrial television programme to be run by a digital music service.
Napster UK has announced the deal to broadcast the predictably titled “Napster Live”, which will take the form of six 11 minute programmes featuring “established and emerging acts”.
Each episode will serve up an exclusive performance of two songs by a featured artist, along with an interview, biography and the all-important competition spot.
The programmes are being put together by independent television production company Blaze TV (who also knock out the weekly music show CD:UK).
Included in Channel 4’s ‘T4 Youth and Music’ programming, the first show will be screened at midnight on Saturday April 16 and feature rock band Garbage.
Other acts so far confirmed for Napster Live on Channel 4 include MOBO-winning UK R&B artist Estelle and UK rockers The Subways.
Napster Live already exists on the Napster digital music service as audio-only recordings, but the TV show will showcase a new format produced exclusively for Napster and Channel 4 by Blaze TV. Music from the TV show will be made available online at a later date on the Napster UK service.
“We’re incredibly excited to be teaming up with Napster on what feels like a truly unique and exciting proposition for 4Music,” frothed Neil McCallum, Commissioning Editor, T4, Youth & Music. “The bands booked are exactly the sorts of artists we’ve been supporting and this allows us to capitalise on bringing even more live music to a wider, up-for-it audience.”
“To extend the Napster experience to television is the logical next step in the UK roll out of the biggest brand in digital music,” purred Leanne Sharman, Napster vice-president and UK general manager.
Building up to a crescendo of mutual backslapping, Sharman added: “Channel 4 has a deserved reputation for groundbreaking and forward-looking programming as well as championing live music, so we’re delighted to make our TV debut on their platform. Napster is also extremely fortunate to have a partner like Blaze TV whose production skills, expertise and contact book have proven invaluable in creating this series.”
Not one to miss out on the quote frenzy, Conor McAnally, Blaze TV director of programmes, offered this insight: “In a world where the production and consumption of music are changing so drastically and so rapidly we are delighted to be involved with the market leader in music digital downloading and to have been given the opportunity to create exciting new programming for Channel 4 whose commitment to music, and especially new music, is unparalleled in the UK”.
Although eleven minute pop music programmes are hardly going to change the face of modern TV, Napster’s move reflects the inevitable convergence between online and terrestrial TV, with download charts already hitting the mainstream.
The series will be broadcast every Saturday night on Channel 4 from April 16, 2005 for six weeks.
Napster UK
Channel 4
4 April, 2005
R.E.M. On-Demand Music Channel Launched By HomeChoice
Video Networks, providers of the HomeChoice entertainment and communications service, has announced the addition of a brand new R.E.M. video-on-demand (VoD) channel to its platform.
HomeChoice customers keen to keep on losing their religion will gain exclusive access to the channel – which has been entirely designed and built in-house – from 31st March 2005.
Earlier this year also saw the re-release of nine of R.E.M.’s most successful albums including Green, Out of Time and Automatic for the People. The launch of the R.E.M. channel ties in with the band’s UK tour.
The V:MX R.E.M. channel is being trumpeted as the first artist specific video-on-demand package in the world and will sit within HomeChoice’s suite of V:MX music channels, which feature a library of over 3,000 music videos.
The R.E.M. channel will offer a R.E.M. videography (a what?!), featuring the nine re-released R.E.M. albums.
Sofa reclining HomeChoice customers will be able to access music videos – and associated live and documentary footage – by selecting the appropriate album cover using their remote control.
The functionality of the HomeChoice service will let customers create their own R.E.M. play list from the music videos on the channel and optionally purchase downloadable tracks by SMS.
While useful, this isn’t quite as slick as it sounds: if a viewer hears a track they want to buy, they have to click on the onscreen information button which will provide a number to text. A code is then sent back to them which they can enter when they log onto the Internet to download the music track. When we spoke to HomeChoice, they told us they were working on a more integrated way of getting pay-for content to their customers.
Naturally, there’s the usual ring tone guff provided for those who like to display their ‘individuality’ with irritating phone noises, with the channel offering 10 R.E.M. true tones of their most popular tracks, purchasable via SMS for £3 (US$5.60 /€4.40) each.
The R.E.M. channel will also include four competitions throughout the life of the channel, with prizes including an MP3 player pre-loaded with R.E.M. tracks, a pair of VIP tickets to R.E.M.’s concert in Hyde Park in July plus several R.E.M. goody bags.
The deal is what ghastly corporate types would call a “synergetic win win situation”, with Video Networks telling us that “no money has changed hands as both parties have brought certain elements to the channel and will then be sharing the revenue from the downloads and ring tones.” This would make sense, Warners/R.E.M. are providing a lot of content, and HomeChoice/Video Networks are providing a lot of design, programming and, of course, bandwidth. Video Networks have 34 people working in their in-house design studio and within the TV product team.
Roger Lynch, Chairman and Chief Executive, Video Networks Ltd said: “The addition of this on-demand channel is not only a true coup for R.E.M. fans but also ensures Video Networks continues to offer the most innovative music content on TV in the world today.”
The R.E.M. music channel will be automatically available to all shiny, happy customers who currently subscribe to the HomeChoice music package.
The negotiations for the deal with Warner Music have been underway since the beginning of 2005, brokered by a Video Networks BizDev person, who joined them from the music business. The service launches on 31st March 2005 and is available for a total of 16 weeks.
Home Choice
Video Networks
R.E.M. official site
4 April, 2005
2GB Gmail Inbox From Google
A year after its launch, Google has doubled the capacity of its Gmail service and added new features.
Those lucky souls invited to have an account now get a whopping great 2GB of storage, with the ability to send up to 10MB of attachments in a single message with free POP access – with Google promising further increases in the pipeline.
“Since we introduced Gmail, people have had a lot of places to store e-mail, but some of our heavier users have been approaching their limits, and have been wondering what is going to happen,” says Georges Harik, Gmail’s product management director. “So, starting today, we are going to give people more and more space continuously and indefinitely.”
“Our plan is to continue growing your storage beyond 2GB by giving more space as we are able to do so. We know that email will only become more important in people’s lives, and we want Gmail to keep up with our users and their needs.”
The move comes hot on the heels of last week’s decision by Yahoo to increase the size of its free account to 1GB. Both Yahoo and Hotmail can offer up to 2GB of storage as well, but users must fork out for the privilege.
The company has announced no immediate plans to increase Gmail’s 10MB limit on attachment sizes, and there’s no prospect of subscribers being able to turn their in-box storage into a full-featured virtual external hard disk.
Google is, however, aware that some crafty Gmail subscribers are using the service for this purpose, mailing files to themselves as a way of storing them online.
Google seems cool about it too, with Harik saying, “We want our users to understand that we have a plan and that we are anticipating their needs, and that nothing strange is going to happen with Gmail down the line.”
Google is also testing phishing protection on the accounts, serving up a warning when it detects a dodgy looking email.
Gmail’s arrival on the scene a year ago sent up a rocket up the backsides of the Web mail market, whose main players had been providing minimal inbox storage for their free services.
At the time, Yahoo only offered a paltry 4MB of in-box with Microsoft providing even less at 2MB.
Since then, most major Web mail providers have reacted to Gmail’s generous inbox quotas with Microsoft and Yahoo both now offering 250MB for their free services. Yahoo plans to begin offering 1GB starting in late April.
Curiously, Gmail is still technically in a beta phase, and is not generally available – the only way users can obtain a Gmail account is by invitation from an existing user (each current user has 50 invitations to give).
Google also randomly offers Gmail accounts via its main Google.com Web page.
Google have yet to clarify whether Gmail accounts would ever be totally open, with Harik cryptically commenting, “We keep looking for ways to make it more broadly available to people who want to use it”.
While Gmail is totally free to use, it’s financed by text ads that are served up to users with each message they open. The fact that the ads are based on each message’s text caused an outcry, but Google insist that text scanning is automated and without nosey human intervention.
Google Gmail
Gmail new features list
1 April, 2005
Viacom Outdoor, Tube Trial For Digital Advertising Screens
The London Underground is to show digital advertising on its escalators for the first time, as part of a trial being handled by Viacom Outdoor.
Viacom, the current holder of London Underground’s outdoor advertising contract, will be trialing the display screens, (snappily entitled Digital Escalator Panels (D-EPs), on the side of the busiest escalators on the network at Tottenham Court Road station.
We spoke to the staff at London Underground and understand that tests will be carried out over the next five days. The screens will intially be mounted at the top of the escalator, but they are very concerned that the screen could initially attract too much attention from the public, causing a blockage at this very busy station.
The 66 video panels will blast out moving images and text, although LU has stated that they will not display TV or film advertising on safety grounds “for fear of distracting travellers”. Seeing as some adverts are better than TV shows, we’re not quite sure how they work that one out.
The screens also have the ability to link up, making the transfer of images from screen to screen possible. What is displayed and when will be controlled centrally at Viacom’s North London office.
Advertisers will be offered the option of time-specific advertising (such as theatres using evening slots, or fast-food at lunchtimes) although there is no prospect of retina scanning being used to provide personally targeted advertising, a la Minority Report.
Viacom is flogging five- and 10-second slots and has already scooped up seven clients for the service.
The trial is due to start within months, and if successful will be rolled out at other locations across the network.
Jon Lewen, Viacom Outdoor’s digital account director, was on hand to provide the required buzzword-peppered statement: “We are committed to exploring new and innovative ways to capture and captivate London Underground users. DE-Ps will both enhance the consumer’s experience of advertising on the Tube and offer revolutionary new creative opportunities for our clients to connect with this audience in a more creative and tactical fashion.”
With London Underground’s recent statement about introducing mobile phone coverage at tube stations, we wonder how long it will be before some bright spark suggests bombarding long-suffering tube passengers (sorry, ‘customers’) with interactive videoscreen/Bluetooth advertising.
Viacom
London Underground
1 April, 2005
Legend of Mir 3 Gamer Killed After Selling Virtual Sword
In a shocking example of virtual life crashing into real life, a Shanghai online game player stabbed his gaming pal in the chest multiple times after he learned that he had stolen approximately US$870 (£462/€671) from the sale of a powerful “dragon sabre”, jointly owned by both players.
The “dragon sabre” sword didn’t actually exist in real life – it was an artifact used in the popular online fantasy game, “Legend of Mir 3”, featuring heroes and villains, sorcerers and warriors, many of whom wield enormous swords.
Qiu Chengwei, 41, stabbed competitor Zhu Caoyuan repeatedly in the chest after learning that he had sold his “dragon sabre.”
Chengwei and a friend jointly won their weapon last February, and lent it to Zhu who then sold it for 7,200 yuan (£464/US$872/€673), according to the China Daily.
Qui went to the police to report the “theft” but we can only assume the desk sergeant couldn’t get his head around the notion of something that doesn’t exist being stolen. If you get our drift.
Still fuming, Chengwei popped around to have a word with Caoyuan who didn’t convince with his promises to pay him for the sword.
Eventually, Chengwei lost patience and let rip with a real-life knife that was most definitely sharp and very pointy, killing Caoyuan with stab wounds to the chest.
Chengwei gave himself up to police and has already pleaded guilty to intentional injury.
No verdict has yet been announced.
This tragic incident highlights the problems online gamers are having protecting their online property, with some experts suggesting that cyber armour and swords in games should be deemed as private property as they cost players both money and time.
But some legal experts aren’t impressed: “The ‘assets’ of one player could mean nothing to others as they are by nature just data created by game providers,” a lawyer for a Shanghai-based Internet game company was quoted as saying.
However, online game companies in Shanghai – the city with the most players – are planning to set up a dispute system where aggrieved players can find recourse.
Shang Jiangang, a lawyer with the newly established Shanghai Online Game Association, commented that “the association has drafted some measures to facilitate the settlement of disputes over virtual assets”, adding, “once any cyberweapon stealing occurs, players can report to the operator, which will then sort it out according to the circumstances.”
31 March, 2005