So currently I’m in Kenya and had gone a couple of weekends back to Watamu Bay. Interestingly, of the five of us, one was the Usage and Retention Head of one of my client’s competitors and the other was one of their VAS vendor employees. As all of my discussions with people from the telecom industry, the conversation veered into the business and more specifically, mobile money. Basically, from what I understood was that Safricom’s complete domination in Kenya was because of the death-grip that its mobile money product m-Pesa had on that market. First of all, Kenya is a market that all mobile-money companies salivate of competing in, given the huge uptake in this market. Add the phenomenal domination, it indeed makes it a hard market to crack (However, I understand Airtel’s low cost strategy has exploded ever since MNP has come into picture there, at the expense of Safricom predominantly).
So obviously, my slightly-sloshed brain started trying to figure out how to overcome this thing. And here was what I came up with:
Come up with an offer that for all subscribers migrating from Safricom’s services to yours, their entire m-Pesa balance would be substituted with your mobile money currency without any additional services.
State that in case of any purchases made for which m-Pesa was acceptable, your mobile money will be acceptable as well
The way it would work in the backend would be as follows:
At the point of customer acquisition
You would have a parallel m-Pesa account for your organization (say Yu, for example).
When the customer was acquired, their m-Pesa balance was transferred to your m-Pesa account and then an equivalent amount of m-currency would be transferred to their new accounts (Yu money)
At the time of purchase
The customer would transfer Yu money from his account to your Yu account
You would transfer a similar amount from your m-Pesa account to the merchant’s m-Pesa account. Yu would charge the same rate (or slightly higher if all other tariffs are competitive) to the subscriber as m-Pesa would charge you.
The main disadvantages are:
The initial amount they transfer has to be written off since that is entirely going into Safricom’s pocket since the credit against cash was done before the customer migrated. This can be handled by ensuring a maximum limit upto which migrating customers can match balances.
Most probably, the transaction will be a no-profit, no-loss scenario in case the transaction charges as per Yu match the subscriber charges that m-Pesa imposes
But the advantages?
Customer acquisition increasing voice, SMS, VAS and GPRS and all other sources of revenues
The entire transaction charges are earned as revenue in case the subscriber makes a purchase where Yu Money is accepted (obviously, Yu money will probably have to charge less to be the m-money provider of choice)
It’s a stop-gap arrangement that can last while Yu salesmen go out and get more and more merchants to accept their payments system. They would even have a more-or-less ready-made list of merchants since they would have the list of accounts they would be transferring payments to as part of the proposed plan
But now, that I think of it, this could even work for a third-party provider (something like a forex counter in a bank). You actually you use the app as follows:
Map your account on app installation
When you make a purchase, choose the service provider to whom you need to transfer the money to (e.g. M-Pesa, Yu money, Airtel money, etc.)
Enter the mobile number for the transfer.
Accept the transactional charges for the service.
Done !
Obviously, this would really really work well for a third party service provider if the mobile money market was well fragmented. Mainly because a third-party vendor would charge a higher transaction rate than if it was an intra-service provider money transfer say, Airtel Money to Airtel Money. And so, if the entire m-payment system was dominated in by one operator, say Airtel Money, it would completely lock out the third party provider. Maybe, in Kenya, it’s slightly difficult given m-Pesa’s domination. But what about a country like India? Where a Vodafone subscriber can make a purchase from an Airtel customer (the merchant in this scenario). Possible? What about an Airtel user in India comes to Kenya and makes a purchase from a m-Pesa customer ?
Obviously, there are some kinks on the pricing part. You would need a transaction charge for each permutation of transfer. Further, in what I think is an extremely unlikely scenario, what if the operators allowed cross-network transactions? That makes the entire business unlikely. Thirdly, could there be any legal issues? That was the biggest opposition in this discussion but no one could actually come up with a valid legal point. Then again, none of us were legal experts. There is only one BIG way that say someone like m-Pesa can nullify this idea. That is with slab charging i.e. for less than a million dollars worth of transactions charge KSH X. If it is more than a million dollars worth of transactions, charge KSH Y (which is more than X). Even that can be bypassed by increasing the number of m-pesa accounts you have. Actually, that would in fact hit Safricom since that would crash their ARPUs (Imagine MSISDNs doing nothing but mobile money transactions and from which there are no voice, SMS or any other kind of revenues. I don’t know for sure but maybe, even virtual SIM cards can overcome that obstacle….
Disclaimer: I’m not from the ad world. I am a just a curious observer.
Well, for the past 2 to 3 weeks, I’ve been watching this really dumb ad from TVS for its product Wego. Apparently, it’s something to do with body balance. It’s here:
I want to go through the ad in a bit detail to explain my (and I doubt, unique) thought process:
I swear to God…for the first half of the ad, I didn’t know what the fuck was going on….it took me my second time watching it (Yeah,apparently, there is big media buying purchase for this shit!) to realize that there was a specific pattern of contrast between the music played for the two chicks – one was a Tamil score and the other, a Hindi music score….so the ad was supposed to show a North vs. South thing ? Ok….then, for those who don’t know Tamil, the lyrics mean “Put it like this, put it like that”. So North Indians and South Indians “do things” differently ? Ok….except that both those dumb chicks start sexually assaulting the guys driving the bikes with their dirty dancing…..so this is an ad for condoms ? Oh, and then they get all hyper standing on the seats and start dancing…now, by this time, I’m expecting either 1) One of the chicks will fall off the bike and die a sorry, bloody death in which case, the other gal says “XX chappals, now with super grip” or 2) A voice over cuts talking about the smooth, beautiful roads of Bangalore built by a private construction company.
But, then both bikes stop at the signal and the two “chauffeurs” stand and smile at each other like they remembered their experiences in their own, private “Brokeback Mountain”. And then, cut to a buddha and buddhi (who covers the face of a toy) who are afraid one the chicks would fall. And aforementioned “buddha” says something to the tune of “TVS Vega with body balance” and said buddhi says “oh!” and they all drive away!
OK so seriously, how many products could this ad have been for ? Any and all of the products I mentioned above? What does it say about the bikes ? For guys with idiotic women? For women who apparently can’t dance at home? For the women who have better physical balance and less mental balance? Even the tires of the bike? Or both chicks dying and the ads say “Do not try this ” by the Mumbai police? Doesn’t it look like the ad can be interpreted in way too many ways?
The reason? People try too hard….they try to incorporate too many signals into a single 30-sec spot. For example, the two guys, the buddha and the buddhi were frankly, unnecessary. They did nothing but add too much information into an ad which, by its own, was quite vague. Same with the North and South Indian thing. The contrast was not required unless you want to say “North Indian dancing or South Indian dancing, sab chalta hai Wega pe!” Then, add the buddhi admiring the bikes in the end. Why ? She wants to do a Street Hawk with them, now that she discovers they have body balance? Why two bikes ? To show that they have both black and white color bikes ? Does that have anything to do with the body balance feature? Or were they just trying to say “Since we already spent 50 lakhs on this spot, why don’t we get value for money?” Except that, in this case, it was volume for money (too many signals) instead of value for money (specific focus on one feature). And it’s that specific aspect that this post is about.
Have you ever seen a fashion show? I don’t mean the college ones. I mean the actual Ralph Lauren, Valentino kinda Fashion Week shows. Take a look at the models on the catwalk. They refuse to smile, they refuse to look at anybody in the crowd (they look absolutely straight ahead). Their gait is one that doesn’t serve to really endear them to the crowd. In fact, some of the models are butt ugly. Why? To take the focus off them and onto the clothes. Their blank expressions dampens any kind of signals that may arise from their facial expressions otherwise. Their gait serves only one purpose and that is to demonstrate the flow of the clothes around the body as a person is moving. Its rigidity and predictability cannot be translated to any kind of emotional expression of the self. The models look absolutely stone cold. They are all for all practical purposes, walking mannequins. The make-up and the hairstyles are built to complement the clothes not the body of the model. The body of the model is, in fact, chosen to complement the clothing. Basically, all other signals that may take away attention from the “pure” signal of clothing is dampened (to use an engineering expression). The only time, the models smile and clap is at the end when the designer walks the ramp to receive the accolades from the crowd. Even then, the choreography is so brilliantly executed that it is extremely easy to locate who the focus on the catwalk is.
Similarly, noticed the ambiance every time you enter a movie theater to watch a film? They cut off any ambient lights the moment the film starts. The main reason, of course, is that it reduces the effect of this light on the projection of the film. However, the side-effect is that it blocks out any signals that may distort the experience of watching the film – the people around you in the theater (Where’s that damn hot chick!), the shape of the walls and the pillars, the color of the seats, the color of the walls, the make of the speaker system (OK, that’s my peculiar nosiness!). Hence, your attention is directed on the only thing visible. The screen. Hell, if you want to make out in the dark, the only thing that distracts you is the shining film! And if its distracting you too much, you’re probably not really into it…..you’re probably wondering where that other hot chick is….so here again, there is an instance of blotting out unnecessary signals to divert your focus to what really is important.
There’s a similar expression of this focus in the Apple iPod ads:
Credit: www.ipodhistory.com
So first, lock out the background in a solid single tone colour. That removes basically any redundant signal about where the person is: in a garden, road, skyscraper, tunnel, train, etc. Then block out the person, leaving only a silhouette. That blots out anything perceivable about the person: race, color, religion, hair color, clothing (to a large extent, it merges into the silhouette). That leaves you with two things: the motion of their body and something that’s white. If you notice, the iPod has been actually better detailed than some of the bigger items (the screen is grayed to provide contrast and if you look really really closely, the faint outline of the scroll wheel can also be seen). So the first focal point is the motion of the body: the person is grooving. Obviously, this raises the question: Why? And then that feeds into the second focal point and that’s the iPod. And that completes the picture. It shows people enjoying the product as it was meant to be. In fact, even if your attention is directly attracted to the iPod, it’s a shortcut to the same focus of the ad. There is also an interesting subliminal message if you think about it: no matter who you are, what you wear and where you are, you WILL enjoy grooving to an iPod (Frankly, I don’t think iPod’s marketing people must have thought so much about it. I truly am jobless!)
Honestly, if you look at the other amazing ads, Nike’s brand ads (rather than actual product ads) or Apple’s “Think Different” commercial, unnecessary signals are drastically compressed (Nike’s video removes unnecessary video – it only shows Jordan walking around the stadium and the gym, hence the focus is completely on the voice over which in itself, is completely unhurried and clear. In the Think Different ad, there is only one instantly recognizable person in each frame. It also mutes out any sound associated with the video to remove that signal. The story or the focus lies, once again in the voiceover.). Among Indian ads, the one I really really love was an Airtel ad of the yore:
No matter how many other ads Airtel makes, no matter, how good they are, I don’t they will ever be able to recreate an ad like this again. Now think about the ad. Each frame has just two words. Each clip is only a second or two to enhance THOSE SPECIFIC WORDS in almost poetic fashion. The clips are black and white to blot out any color signals that “corrupt” the purity of the focus. There is no ambient noise, once again, in any of the clips. Even better, you don’t even notice the bloody music, it’s actually “background” music as compared to the Wega one. So you just focus on the text. It displays long enough to register but short enough that you don’t get bored. Then each of these texts weave through long enough for you to understand that it’s an emotion-based thing. And finally, this wreath of emotions culminates into to a single line: “Express yourself”. Perfect. Can you imagine what would happen if they ended up adding a Sachin Tendulkar’s “Nothing official about it” kinda thing or SRK’s overactive jumping around to it? I’m not saying that they suck at acting (They do, though!) But the point is that their star power pulls away attention from the focus of the ad. And if your focus is on the celebrity, you’ve lost the message.
In fact, a poor execution of a celebrity endorsement especially ends up corrupting the signals. For example, if you look at the Nike and the Apple ads, the celebrity don’t talk about the product. They reflect it. In one of Steve Jobs’ speech (when he launched the “Think Different” campaign), he talks about honoring people in the ads. That’s perfect. Nike uses Michael Jordan since MJ is the person who NEEDS a high-quality shoe to further his craft. To further his passion and everything he seeks to achieve. He endorses something that’s a very critical thing for him. SRK can’t do without Dish TV? or a Hyundai i10? Atleast Aamir Khan plays a role of someone else in his endorsements. In all these cases, once again, the message is about the star saying “use this” rather than ” I need it” or “This is me”. I can’t imagine that the former brings the focus to the product/brand/service as much as the latter does. But it’s all in the “Oh! But we paid him! Let’s get our money back by splattering his mug wherever we can!” panic. I’m not saying using celebrity endorsements are bad. God knows there must be some serious correlation between using celebrities for endorsements else they wouldn’t be spending so much money on it! But, there is a difference between rationalization of using a celebrity endorsement and the execution of said endorsement.
Somehow, there seems to be this incredible mixup between quality and quantity. A picture may be equal to a thousand words but is redundant when all you need to say can be done in a hundred. Quality comes through focus not per-display-of-product-per-rupee-spent. It doesn’t come by filling the screen with extras. It come from creating the equivalent of a cat-and-mouse cartoon series where two characters chase around the house for 10 minutes at a time. (That allows people to establish the “what” of the plot beforehand and lets them focus on the “how”). It comes saying “No”.
P.S.- Sometimes, I wish I could do that with my posts. Cut the meandering route to achieve a conclusion. Give me some time
P.S.2- Obviously, the assumption is once you bring in focus on the right things, you still have to have an amazing story ! Else, you’re better off with this B.S.
Caveat: A large part of the latter part of this post on monopoly of telecom service providers has been discussed and dissected to death. Am adding it only from a completeness perspective. I am also using Apple as an example of a different business model rather than as the only company that works on this principle
A large part of my work as a consultant in the telecom domain related to VAS or value added services. This included services and products ranging from dialer tones, missed call alerts to multimedia applications like wallpaper downloads, MMS and the like. These really were the dominant applications during the time (I’m assuming it’s still the same). And for each of these services, the vendor system needed to understand and interact with various telecom systems such as the prepaid billing platform, the switches, the mediation or the SGSN. The main reason being that all this telecom elements were essential for one of two aspects: Service / content delivery and billing. So you always needed to understand the format in which data would be accepted by these systems to process billing (usually as a CDR or a call data record), understand in what scenarios could billing or service delivery fail, etc. Basically, you needed to have extensive domain knowledge in telecom as well.
What Apple done with its iPhone and iTunes products is, basically, is reduce the importance of understanding the telecom infrastructure( the service delivery and billing systems) and focusing more on building the product. Not only has Apple built an eco-system that transferred power from the service providers to the handset manufacturers, it has also transferred power from the telecom domain experts to the IT product developers. Basically, it has brought the control back into the vast IT community of developers. This was something I realized when building my prototype for an LBS-based product (let’s say severe re-working is going on right now). Even though, I already knew how geo-positioning is done, how GPS or triangulation works or what accuracy ranges are allowed, it is all immaterial. Why? Because the iPhone has already all this in-built with its GPS and allows you to extract the location coordinates using a simple API. An API that works just like any other product API. Something which is extremely familiar to all programmers. Even if you’re not designing for the iPhone, other third-party vendors have built similar APIs for Blackberry, Nokia and J2ME devices. This severely reduces the dependence on the network operators. Product developers no longer have to worry whether the service is provisioned on an HLR to deliver the service. Or whether an incorrect configuration on the network side is going to wreck havoc on their revenues. One product that already slipped from the grasp of the telecom operators was ring tones whose revenues fell when handsets started working on standardized formats such as MP3 which could be downloaded from any site on the web.
Further, ITunes allows you to use credit cards to purchase the application. Using a payment gateway. The same way all online transactions are processed. Another familiar platform for any one who has built e-commerce sites. No more worrying about whether the subscriber has been disconnected at the billing system and has, hence not been charged, or incorrect configurations at the mediation, or that a service has not been charged because well, the SMS short code and the rate was not configured in the billing system. Basically, no revenue loss because the telecom operator messed up. Remember: All operators have contracts with the VAS vendors saying that the operators will pay an X% of what they bill. Not X% of what is billable but what is actually billed. So if an incorrect configuration in the telecom operator’s system allows the subscriber to use the service free of charge, even the vendor does not get paid for the same.
However, the pain is not only on the side of the telecom operators alone. Till now in this post, I have not distinguished between the VAS content creator (who makes the content/ owns the copyright of the content) and the VAS content aggregator (who licenses the content from the creator and sells the content to the customer through the telecom service provider. But in the new scenario, aggregators are the online app stores. No longer do the aggregators control the service delivery to subscribers of a specific telecom operator. An Airtel subscriber, need not only extract content from aggregators that Airtel has a tie-up with. He can go to any store online and get the content. This allows content creators to sell their wares on numerous online sites. Hence, the content aggregator has also lost his own somewhat-cushy monopoly over the content creators because of his tie-up with the operator. Even stores owned by handset manufacturers such as Nokia Ovi has to compete with all the other app stores that sells Symbian (the operating system for Nokia handsets ) applications and products. Unless you are Apple of course.
One last way Apple is blowing up this eco-system is basically solving one of the most oft-lamented problems faced by VAS vendors in India. That of service providers have this incredible choke-hold on the entire service delivery mechanism that they pretty much dictate the revenue share % and the other terms and conditions. After all, what’s the point of building an application if you can’t charge the customer or allow him to use it? Some of the apps were available for download on the Internet even before but Apple and iTunes brought it together at such phenomenal scale, that it cut off the legs of the telecom operator monopoly in the USA.
But make no mistake. Service providers do have a few cards up their sleeve as well.
There are still some services like Dialer tunes or Missed Call alerts which are still the dominant VAS services. And these are completely network-dependent. However, other services in the ABC categories (Astrology, Bollywood and Cricket which dominate Value Added Services) such as downloads and periodic updates can soon break out of this monopoly only if there is the requisite proliferation of credit cards and in the future, mobile money products happens.
Service providers still control GPRS Mobile browsing – as per InMobi’s KK at the Mobile Monday Mumbai summit the day before, the Mobile Web is still providing it with its largest ad inventory yet. However, even in the mobile browsing business, the service providers are paid only for the volume of the content and not the value of the content. For example, irrespective of whether you are accessing the scores of the hottest cricket match or you’re visiting an old, dilapated blog that no one ever updates (hint: Z, Alpana, Charsi), the service providers get paid the same amount. They don’t get more money for the cricket website. And obviously, services like ZIP Dial are going to take their pound of flesh by destroying their other premium SMS services (KBC anyone? )
Further, the telecom service providers also have their own stores for downloading content. But these are no longer exclusive. You can’t lock-in a customer to your store. You have to still be price-competitive against the rest of the stores out there. You are just another store.
This is getting to be incredibly interesting given that one of the ways that telecom service providers were planning to shore up their falling ARPUs was through Value added Services. Wonder how the battle will turn in India given our incredible ability to turn every challenge into an opportunity.
Note1: When I say what Apple did, I mean what Apple started and what the general trend of service delivery is. Obviously, there are hundreds of app stores available today, including the Ovi store (Nokia), the Samsung app store (Samsung), Android Market (for Android phones
Note2: Obviously, given Apple’s limited success in India and India’s relatively lower wireless data usage/ Internet usage, this model will take a bit more time to mature before it spreads to the smaller towns. But I think it’s a matter of time
Note3: I am very interested in the rumors around Apple’s next phones which will have an embedded SIM and allow you to choose the carrier long after you have purchased the handset. What happens is that the operator does not provide the SIM but Apple does. The configuration of the network carrier is done through iTunes and is essentially software !
While I’ve talked about apps distributed through handset vs. apps through carriers, never really got into cloud vs. proprietary. Basically, it means that should there even be a more distributor channel for apps which means downloading applications only available through one handset provider or only through one carrier. For the uninitiated, simply put, cloud computing is where the handset sits as an input-output/ communication device while the processing parts are managed by a central server. This would be equivalent to saying that you want to add the numbers 2 and 3. You type “2″, then “3″ and then “Add”. If it’s a cloud infrastructure, all these inputs are sent to a central server (Somewhere in what is called the “cloud”. It doesn’t matter where or what type of server it is. What matters is that it can be accessed and it can perform the required function) through a connection established between the handset and the server. The server looks at the “2″, “3″ and the “add” and then performs a summing operation and returns on the same connection a “5″. The handset receives this and displays it to you. If you think, this is riduculous, you’re right. But only for this level of computation. However, if you wanted to perform some statistical analysis on your handset like a mean, or a variance analysis which your handset can’t support, then this architecture comes to your aid. Leave Math. What about hard core gaming which requires an operating system to talk to? This can’t be done on a plain vanilla handset. But if the only function of the handset required was to receive you input to “jump” or “shoot” on the input side and redraw the pixels on the output side, this can lead to a credible albeit slightly shaky experience.
Where I’m coming from is that migrating to a cloud-type of architecture basically allows you to be carrier and handset agnostic. The only thing that matters is the mode of communication between the handset and the cloud. In my opinion, this is the only significant strategy of adoption of services in India. With handsets like the Nokia 1100 as one of the faster selling phones, applications for the rural market cannot depend on any functionality on the phone itself except for voice and SMS.
The Indian market has already given a thumbs-down to the iPhone frankly, the reason being value for money. Even some of the people I thought to be relatively hip have no reason to have one. And those who do have one invariably have a hacked-out one which basically negates the whole exclusivity thing with Voda and Airtel.
Developer’s point of view:
In the urban areas, the handset market is littered with Nokia, Sony, Motorola and HTC as well. And while, Nokia is the dominant market leader, it doesn’t dominate it enough to ignore all the other manufacturers while developing apps.
From the brilliant App is Crap post by Mark Suster:
- Let’s start with Google’s Android. You’ve just hired your iPhone development team for you app. They’re super busy developing a new version of your product because, guess what, Apple changed it’s terms of service to allow in-app purchasing. So you rush to develop a new monetization strategy which means rebuilding your app. It’s taking time to finish the product because you’re super expensive iPhone developers (they’re in high demand) are not as good as you like (they’re super high in demand). Should you now hire Android developers? Can your iPhone developers be good at both? Do you have enough resource to cover both?
- And that Palm Pre. I heard it’s pretty slick and Sprint seems to be pushing it really hard. I heard they have an App Store. Let’s look into it. Maybe we could ship our app and see how it does?
- Oh, wait. There’s that RIM company with the Blackberry. Should we have an app for that? They have a super relevant and high-end installed base including people like Mark Suster who never gave up his Blackberry since Apple only offers itself on a super sucky network for which their is ZERO bars of coverage at his house in Brentwood. But their browser sucks, their app environment sucks, the developer community isn’t strong. But we need device coverage, right?
- Oh, wait. I need some Microsoft OS coverage. I know Windows CE is dead despite having like a 100-year head start on Google. But Windows is now making a push with Windows 7 Mobile. Maybe we could get an application out early for that before everybody else does?
- And how about Symbian? We’re going to want to develop for all those Europeans, right? And Nokia has the Ovi Store thing, right?
And this is only the developer’s headaches. How do you manage a team making the same product? You can’t re-use classes, you can’t re-use objects and hell, you’re rebuilding the same product from ground-up. I used to fantasize about some kind of universal compiler where you right the code once for one platform and then this universal compiler would actually re-compile this code for all other platforms. But wait a minute? Isn’t that exactly what a cloud architecture does? Keeping the processing of the data, the classes, objects, methods, databases and all that jargon away from the handset? Making it a kind of a black box for the handset so that the OS on the handset (Hell, even the absence of an OS) does not affect the functionality of the application)
Customer’s point of view:
Forget compiling code, using a basic SMS delivery platform a basic handset like a Nokia 1100 could access some pretty advanced functionality since the entire the thing would be processed in the “cloud” of powerful servers. It would be in some sense a “black box” for the handset and hence, the application was handset-independent.
Apple will face a user revolt in the coming years based upon Microsoft, Google and other yet-to-be-formed companies, undercutting their core markets with cheap, stable and open devices. Apple’s legendary comeback ability will be for naught if they don’t deeply examine their anti-competitive nature.
Making great products does not absolve you from technology’s cardinal rule: Don’t be evil.
It also doesn’t save you from Scarface’s cardinal rule: Never get high on your own supply.
Interesting times. While VAS in India has been dominated by ring-back tones and Missed call alert services, the VAS market has not seen the real relevant services being pushed. The real useful ones haven’t yet reached critical mass partially in terms of usability issues and partly in terms of the revenue model. Now, that voice and SMS are really going the commodity way, and data hasn’t picked up fast enough to replace the voice and SMS revenues, now there should a push towards maturing this service/ business model.
Though, i’m a little puzzled about how this is going to work out: Cloud or handset? Handset seems a bit dicey since different handsets, different OS, versions of various types of pain in the ass. Cloud? Medianama talks about that….may work except given that the online processing/ bandwidth will have to be faster than the handset processor to act as a substitute…..
In the previous post, I talked about a different model of content delivery and what are the upfront benefits we see. Now, for the unseen advantages of such a delivery mechanism
1. Pay models – With DTH and Setup boxes, we have been able to create bouquets of channels so that it becomes easier for subscribers to choose specifically which channels they do not want to pay. However, the problem with this is that the creation of bouquets is standardized and may not match what we want to see. For example, in our family, I watch Star World, Star Sports, ESPN, Discovery Travel and Living and Discovery, CNN IBN, VH1. Dad watches Nat Geo, Star Cricket, NDTV, Animal Planet. Mom watches soaps occasionally and Marathi channels while my Granny watches the Tamil language channels. In such a scenario, we end up choosing a large number of bouquets (courtesy the mode of creation of bouquets by the channel providers). This basically makes it more expensive for us to actually choose a DTH connection and hence, we revert to the original cable channel providers. The model I describe can be actually used to create bouquets a content level rather than a bouquet channel. Example, a bouquet that allows me to watch F1 on Star Sports, NBA on ESPN, Engineering Marvels on Nat Geo and Hip Hop Hustle on VH1. That would be a bouquet I would prefer to buy and if the same is cheaper than what I pay, then why not. I could also add Animal Planet wholesale to this bouquet. Actually, rather than a bouquet, I would prefer to call it a shopping cart where I can add and remove channels and programs (“content”) at random.
2. Interactive TV: Not the way that DTH operators define it. Given the previous analogy of a shopping cart, this model would create an Amazon.com for television where I can read other people’s reviews on that program, movie or whatever. I could add discussion forums and stuff on a separate server which I can access prior to acquiescing to content delivery. This is a benefit of delayed watching (asyncronous delivery again)
3. Better targeting of advertising. With the current broadband operations, it is incredibly difficult to clearly identify customer preferences and dislikes. Everyone depended on TRP ratings for the same (which in my understanding is incredibly suspect) for the lack of a better mechanism of rating programs. Advertisers could only take a stab at the demographics of the people “consuming” (watching) the content (programs broadcast). Now, if digital delivery is based based on the IP of the “television” (will come to this later), it is very clear what each “IP” is watching (An IP would pertain to the particular node where this content is being delivered. In the current explanation, that would be the television). Hence, two people watching the same program would have different advertisements displayed based on not just the program that their currently watching, but what they have watched previously as well. It’s a kind of profiling which I will come to in another post.
4. Oops! Did I just make the cable operators extinct? Considering that Airtel and Tata both provide the pipe, the DTH infrastructure and the internet services, the extinction has already been set in motion.
Obviously, there ARE problems in the proposed model. Most of which pertains to the dumb TV. More on that in the next post
Update: Just realized another real brilliant advantage is to create a mini-youtube kind of thing. Not to simply replicate the original one but to give a subscriber multiple points of view of the same action for example in sports. Details are in this post.
It’s a real sad state of affairs when you wildest fantasies include how 3G can change the way media will operate in the distant future.
I always felt telecom was going to be big if for no other reason except how indiscriminately digital pipes can bring all sorts of information into your living room. Anyways, till now this was more from the perspective that you needed a landline to get a broadband connection. So, there was one pipe that came into your house and there was this thing I felt (before I joined my company, I was a novice remember? ).
In IIT, we had three key things (for lack of a better word) that always helped us watch whatever movies we wanted, whatever music we listened to and whatever applications we installed. The first one was a series of FTP servers set up by students all across the campus (Initially, each hostel had its own server but those were banned since stuff on these servers were pirated). The second was this incredible bulletin board / forum called “Bizarre Bazaar” (BB). This was our “content delivery mechanism”. The third was FTP software used to download the application/ movie/ music. This was the “content”.
“Content” entered our hallowed portals like this:
1. Obtain content from wherever i.e. legally purchased DVDs, CDs, ITunes or illegally like BitTorrent, Warez, etc.
2. First kept in an FTP server
3. Announced to whole campus on BB with the FTP server and u/n and pw (if any)
4. We would visit BB and see the new content
5. Download the content on our hard disk
6. Thank the initiator for the content
7. If we had FTP servers, we would copy the same there and then update the initial post with our server ip address as well so that there was less load on the original server
Steps (5) and (6) were interchangeable in order
And that was the “content delivery” mechanism and the FTP server’s owner was the “content provider”. It was the simplest way to get content that you wanted. Please note the stress on the words “you wanted”. Anything else on these servers were never necessary for you and hence, the infrastructure was never “wasted” in sending it to you. This reduced the server utilization time, the utilization of the wireline infra (of IIT) and your PC utilization.
But when, we come back home, we see the exact opposite i.e. broadcasting. Where all the content (whether you “use” it or not) is delivered to your television. All those “pipes” are wasted in their utilization simply because the transmitting station has no idea what you watch and when you watch something. Secondly, television is a synchronous medium i.e. even if wanted to watch it, if you weren’t there, it would be “wasted” transmission. Obviously, nowadays, you have TiVo to reduce this problem but the issue of “wasted” transmission just remains.
I always had this idea that if every consumer gave an operator/ service provider permission to pull a cable into his house ( a pipe if you will), then we could deliver any digital content we would want over that one line. Whether it was Internet, a landline, television, radio…anything ! Obviously, there are still walled gardens to be crossed, but I have never understood why channel operators didn’t simply rent the landline operator’s cable instead of stringing their own cable into the house. I always kinda envisioned (big words I know but I couldn’t find a better word) a single server for all types of content. Where television worked like the IIT infrastructure mentioned above.1. Cable operators (Hathway, CCC, SCV, etc.) obtain licenses to distribute content from the channels (Star TV, NDTV, etc.) – the equivalent of obtaining the content from ITunes, DVDs, Torrents, etc.
2. Rent out server space from the content providers and uploading copies of the same content at all these servers – the equivalent of uploading the content on the FTP servers.
3. Building a simple, elegant user interface so that everytime there was fresh content (example, the next episode of Friends, Boston Legal or a new movie like Inglurious Basterds) on the servers, the same would be intimated to the subscribers when they turned on the television.(equivalent of announcing the content on BB and subsequent visit by the IIT junta to see whether any new content was uploaded)
4. Subscriber requests movie or serials to be streamed / downloaded (Equivalent to downloading the content from the FTP server)
5. Payment made based on the business model chosen (further details down the post)
This kinda model is being used in hotels in China and Japan to deliver paid content (usually adult). No, I did not test whether it worked or not for a simple reason that it was too expensive to watch porn
I can see some major advantages in this model. Let me state the obvious ones first:
1. Better utilization of the content pipe. A lot more content can be pushed down for the same given bandwidth
2. Narrowband technologies instead of broadband technologies. I’m not sure about the impact of power consumption but I can guess it will be less.
3. More asynchronous delivery of content
4. Single pipe multiple comment: A corollary to point of better utilization; this is already prevalent in the currentDTHplatform
So what are the real unforseen advantages in this kind of delivery. That’s all in the next post
(This post does not condone or condemn illegal content – that is irrelevant to the post)
