Good blog to follow – headed up by Shiv, ex IDC analyst covering trends in telecom & mobile across India and SEA region.
Was listening to this on one of my long walks, https://overcast.fm/+F-0WRB7Pc, and you get the feeling that the tide is slowly turning towards Netflix. Now some of the most respected people in film absolutely love working with Netflix and the stuff they are excited about shows you how much the game has changed.
They way they market, they way they work with the film makers and the appetite they have to try new things.
With all the stuff going on with Disney and Fox – it is clear what their worry is – it is Netflix. Obviously Disney has more than just movies and shows with the theme parks and all that but the battles for streaming must be the biggest fight they have.
As a user of all these services – HBO, Netflix and some of the local ones, I tend to look at the tech or just how well they all work and bar none – Netflix has no competitor. Right now I am stuck in upcountry Thailand using an LTE wifi hotspot to get connectivity for my laptop, my son’s laptop, and 3 or 4 phones. Guess what streaming service works everytime and even supports both of us using it at the same time? Netflix.
Many times it even works better than videos on FB or YT. Add to that the amount of great original content on it and the local subtitles and there is just no comparison. Of course there is the other battle being fought with all the regional players and the telcos. iFlix so far is easily taking the lead but it is still in another class compared to the depth of content and the technical acquity of Netflix but that makes sense given how long Netflix has been around and how much they have invested.
It will be interesting to see how they giants take the battle to Netflix – that is even if they can find the battlefield.
Now we have Facebook actually shutting LiveRail down. This is what I ultimately expected would happen. Tough industry…
So what I originally feared has happened :: http://techcrunch.com/2016/01/07/facebook-liverail-ad-serving/
Quite a blow to some folks…
Been waiting to see if there was any proper analysis written dissecting the Facebook acquisition of liverail – so far I haven’t seen much.
There is some good notes over at statechery – http://stratechery.com/2014/daily-update-microsoft-phone-wearables-office-facebook-acquires-liverail-google-right-censor/. But I think this is for subscribers only:
This is another very smart and rather obvious acquisition for Facebook: they have the best user data, while video ads are the fastest-growing and most lucrative (on a per-ad basis) digital ad units. LiveRail ties the two together in a very nice, and almost certainly a very profitable bow.
I subscribe to the daily update and the comments part of stratechery – https://stratechery.com/membership/. I don’t comment much but I read all the updates and enjoy them.
So far the general digest of the deal is video is booming and video ads will boom and therefor Facebook should get in on the action. Rumor has it that a huge amount of youtube referral traffic is from Facebook but that Facebook doesn’t capitalize on it well. I am not sure this helps that issue much unless Facebook intends to build a proper video product and keep that action in the stream. If that were the plan then Facebook needs video advertising kit and liverail would obviously be a great fit.
What I am not seeing many people talk about is what happens to the customer centric side of or the b2b/b2b2c side of the liverail business under Facebook? I have no previous experience of integrating a product that one uses to build a consumer product that then is acquired by Facebook. We are not talking about things like Instagram but what liverail is for most people is something they don’t see. Consumer facing products like Spuul, for example, use liverail to power our video advertising. Something that really has nothing to do with Facebook or their goals. So I am curious to see what will eventually happen here. One thought is liverail gets better and due to the money, vision of Facebook they turn the platform into a full-scale offering to compete with google in the video ad space(doubleclick/adx). This would be the vision of Facebook starting to rival google in all things advertising and is not anchored to the Facebook product. Sure maybe user data and such helps here but the idea is I don’t need Facebook when I use liverail but that the product gets better at targeting/profile when Facebook is integrated. This might be cool.
The other idea, not the one I am hoping for, is that liverail starts to inwardly focus on being a tool for Facebook advertisers and becomes less and less the ecosystem play to rival google. I think one has to watch the technology or product direction some to see what happens. For example liverail missed the instream video ad play and is now playing catch up. Google acquired a company to solve this problem cause google is in it to win it. Liverail might also be able to win it with the Facebook backing.
A lot of companies also use liverail to build their own SSP’s in certain regions since this is a niche play but most folks don’t want to recreate the core ad plumbing. Time will tell if Facebook continues to support this use case of liverail.
For now I don’t know how to read the tea leafs here. Liverail must have wanted the exit versus going public. Good for them but now we are down one piece of independent plumbing used to make video ecosystems. This could be bad or possibly under the Facebook umbrella it actually gets more powerful.
Watching and waiting…
I didn’t get to attend the TIA conference but was able to catch up with lots of folks who were in town and went to a nice event by Sequoia.
Say what you will about our current times but Singapore is absolutely hopping right now and is the center of the startup universe for SEA region and India. Love it. So fortunate to be here at this time.
I have many Twitter friends that I sometimes get to meet and Josh would be one of those. We finally got to hang out and chat a bit.
As a writer, he of course decided to spring this on the Internet after we chatted.
Good stuff. As I always tell people – OTT in emerging markets is really just kicking off and has a long ways to go. I wouldn’t profess to know where it all might land, but it’s a crazy hot space regardless.
One comment – that last little quote by iFlix – we all know 1 million is just registered users. Paying subs will be some marginal single digit percentage point of that total number. As I always say – release real stats or none at all.
Good chatting with you Josh – I guess we will keep up the Twitter DM dialogue going till we meet again.
It’s funny how much a lead Yahoo threw away. First there is the global rise of messaging as a platform – remember Yahoo messenger?
Then there is the need to chase the emerging markets opportunity but rather than do it from Silicon Valley – you place the problem with people from the market.
Now google goes and acquires Pie.co to help them with emerging markets software talent. Great move.
Amazes me at times to see how bad Yahoo is blowing it and how they had so many of the pieces needed to compete.
Update to the post::
I said as much in my list below – get ready for the VPN to stop working when it comes to gaming Netflix content libraries.
First, let me start off with a shameless plug for a podcast I was a guest of:
Now that we got that out of the way we can continue on. Also – my shameless plus is so we make this AA’s #1 podcast to ensure I get invited back. 😉
Let me disclose that I work at hooq.tv and used to work at spuul.com . I do have some sense of this world I am talking about. I don’t have a crystal ball and I also think that in the emerging markets it will take years to declare a winner. Years I say!
That being said I think it is important to note some things for the pedestrians:
– In many markets, say Taxis or car booking services, I can agree with the winner take all or winner take most, especially in the USA or China. FYI Om covered this topic well here :: http://www.newyorker.com/tech/elements/in-silicon-valley-now-its-almost-always-winner-takes-all. However in large regional area or emerging markets I am not sure if it is true and it also has to be that pricing almost equalizes. In the case of this specific subject if we are talking about Netflix dominating in India I struggle to see how a company that charges 3x its emerging markets brethren can own the market. Maybe it will own the high end but how would it own the market that does not pay that much for entertainment?
– Let no one kid you. None of these players are currently fighting over a paid customer base – we are all fighting to convert a pirate over to a paying subscriber. That will take years and there are plenty of pirates to share at this moment.
– Local content is a big deal and no one player owns it all nor can sell it all to one OTT player. Also many of the local content players are building or have built their own OTT services.
– There can never be just one service for all. Take me for example. I share my mom’s Netflix account but I buy my own HBO account. I value HBO way more than Netflix and nothing they did last week changed that equation for me.
– Payment models in the emerging markets are hard. For Netflix it very well could be that the only customer they care about has a credit card. That still lives 100’s of millions of customers for companies like HOOQ who think there are others way to take money from users.
– Not only are payment models hard but so are subscription types. Is a monthly recurring subscription going to work in the emerging markets? For some folks it might. For others maybe weekly subscriptions is better? Maybe a subscription tied to a data balance makes more sense. No one knows yet.
– Content rights are super hard. I love seeing all the people baffled as to why they log into Netflix Singapore and it doesn’t look like the USA catalog. Netflix didn’t buy all the rights for Singapore because they know it is a small market. It may not be worth it and chances are some of it is not available. Also, Netflix being a capitalist, sold some of their shows to services in Singapore already so they can’t just take it back. Over time as they grow they will fix this but again Netflix could never own everything you want to see.
– As OTT takes off some of the big players will try to work around Netflix and other services to go direct. One good read on this :: http://bgr.com/2015/11/05/netflix-streaming-time-warner/
– The all powerful VPN. Currently lots of folks are signing up for Netflix Singapore and then using a VPN or anonymous IP to get the USA catalog. All good but keep in mind they way content rights work. They are bought and sold for a region – they are not tied to what credit card you use. Lots of folks talk about Apple TV or iTunes as the model where I can use my use a credit card to buy a show. And I can watch it in Singapore but note I am paying US prices so the content guys don’t care. Apple is not a subscription service and notice it they planned on doing this with TV and backed down. Netflix is getting away with murder right now. Pay Singapore prices but watch a USA catalog. At some point the content owners may ask Netflix to enforce geo specific rule or to simply not support VPN usage. Most content owners ask companies like HOOQ to try to block VPN’s or similar tools. As global content streaming takes off, I expect this to be an ongoing discussion.
– To summarize I would like to say this is going to take time to all play out. As I like to remind my team regularly – it’s a marathon – not a sprint.
I’ll add to this is if I think I missed something.
I haven’t seen much mainstream coverage of this move. We all know Google battled hard to do a non Oracle Java but seems that didn’t work out. Legally I always thought Google was wrong but of course I am not a fan of Oracle and the way they steward Java.
Read this about the latest on Oracle and Android.
If you thought overall Android performance sucks now, I think it does, it sure won’t get any better with issues like this : Google has of course its own Android UI framework. Swing will now sit on every Android phone, using up resources.
I don’t know if this is the final word on the subject or if Google has other ideas but I sure do appreciate Apple’s native stack designed from the ground up for mobile.
I won’t argue the point that Android is huge but this isn’t a good sign of where it is heading.
If anyone has some good opposing links or counters please chime in using the comments.
I was hoping Tim Bray had covered it but not yet.
In our little part of the world the most advanced video advertising market and the market with lots of OTT competition is generally considered to be Australia and New Zealand.
Some of the players :: http://www.nokpis.com/ott-asia/#australia – guessing more are coming as well.
So it is interesting to read an article like this :: http://mumbrella.com.au/svod-catalyst-tv-evolution-278126
For example this is a very good point:
Subscription video services have a monetization model devoid of creativity.
They rely on subscriptions and subscriptions alone to bring in the mullah. It makes it easy to balance the books and has the potential to be quite lucrative in a market like the US where there is a whopping 115 million households that will potentially buy the product.
In comparison, Australia will only have nine million households to market to by 2016.
This means that the maximum revenue potential for the entire SVOD market is roughly $1.1b (based on a $10p/m subscription) in Australia.
But I think this also points to the fact that a large regional player looking at ANZ region as just a piece of the puzzle probably doesn’t care too much about the economics. To me the guys that have to worry about these numbers are the one or two country services. Like Quickflix for example which is already hurdling towards going out of business.
This is the good part though:
I am glad that the TV industry is getting scared.
This invasion of innovation and technology will hopefully spur the industry to evolve.
The SVOD infrastructure seems like the perfect foundation for a new ad funded model that blends the programmatic, targeting and measurement benefits of digital advertising with traditional television.
With a web-augmented and data fueled TV and ad experience the TV industry could have something financially viable on their hands. They could give people the tailored and on-demand content that they desire.
They could banish the Nielsen family and create a robust and reliable TV measurement model.
They could continue to sell us that precious ad space.
If the networks use this opportunity to evolve, the arrival of SVOD services could be the best thing to happen to Australian TV since Kerri-Anne Kennerley.
There is room for some innovation. There is either subscription model or freemium or just free with ads. There are lots of other ideas but generally what happens is the folks that own the content don’t allow the OTT services or the OTT aggregators room to innovate. They are stuck doing the same old thing and having to kowtow to the owners of the content. To me the lack of innovation around the OTT space has to be blamed on the content owners who frown on doing things like download or experimentation around social or payment models. That leaves the content owners needing to be the ones to come up with something cool. Maybe they can use TV to do that or try to take advantage of the what OTT can offer by coming up with something truly innovative.
I am not really holding my breath waiting for it to happen though.
So now I get it. Must say that the tech in Asia headline is quite misleading.
This article explains it better :: http://www.gmanetwork.com/news/story/435673/scitech/technology/smart-allows-purchases-from-apple-itunes-app-store-using-load
Th carrier is creating a virtual credit card via the user’s phone account. So apple sees a credit card still but user doesn’t have one.
Brilliant idea. More carriers should do this.
That being said – apple needs to step up their game. Biggest win for android is being able to modify the payment model.
My old post ::
This is the biggest news in tech if so!
Clearly Ben is on a roll. I don’t agree with all his monologues and tweets but I think this one is pretty good :: http://ben-evans.com/benedictevans/2014/12/9/mobile-platforms-and-technical-debt
People tend to get too religious about their phones, OS’s and all things associated with them. The fanboy thing starts to take over, Xiaomi as an example, but this stuff boils down to pure business. There are ONLY two mobile ecosystems right now. 2. Apple and Google. The China thing is another topic in that the rules are very different. However Apple seems to be doing better with their model in China than Google is. Enter Xiaomi though to see what can happen when one combines some of the essence of both players to make a go. It’s magic and it is working. However it remains to be seen if this is only going to be big in China. For the record it is only happening in China right now. I think Xiaomi will struggle outside of China.
Let’s talk about the impact more once they make bigger waves outside of China.
Microsoft is trying their hardest. Still doesn’t seem to be working. This still applies :: http://www.nokpis.com/2014/10/26/microsoft-is-only-missing-the-apps/
So Ben gets to the essence of all of this. Apple had a vision and Google had another. Take away the marketing, the religious arguments, the open versus closed jargon and what you are left with is two very similar platforms:
One way to look at this is that iOS and Android have been converging – they arrived with more or less the same capabilities despite starting from opposite ends. Apple has given up control where Google has taken it. And of course Google has had to add lots to Android just as Apple had to add lots to iOS (and they’ve generally ‘inspired’ each other on the way), and just as Apple has added cloud services Google has redesigned the user interface (twice, so far).
I am not purporting that the environments are the same or that they arrived at the same point using the same methods. It is just that if one looks closely at the model. Google started open and is starting to lock it down now. Apple started very locked down and is slowly opening. Both stances created some benefits and negatives in the early days and now the resultant evolution has created some benefits and negatives. Google is better at the old fragmentation issues and overall quality has improved. Tool wise I think Apple has a better product for developers though. Apple is making it easier to do some things but their software quality has slipped. That cannot be disputed. http://www.nokpis.com/2015/01/06/thanks-marco/
One could also discuss that Apple makes better hardware since they actually sell their own stuff. Google is still not really in the hardware business. However let’s not get into this.
The part I still find that NO ONE writes about is the difference in the view from the folks grinding out apps everyday and shipping them. How do we ship these apps? Via the App Store and the Play Store. This is where the huge differences are but there is also some evolution there. I would safely say, much to my dismay, that Google has evolved way more than Apple. Where Apple has made great strides for opening up iOS, there is literally no progress in the App Store when it comes to search, discovery or the App Store developer view. We still wait too long for app reviews, there are too many reviewer mistakes and too many features are tied to actually releases. We cannot modify pricing without releases or even update things like images or text without releases. So 3 years in with a stable app I still wait like everyone else to change some copy or update an image. Comical.
With Google a developer can update copy, bits, images and pricing at any point. Or just ship a new app whenever we want. Granted Google has issues with not policing apps enough or letting any app release (pirate or copy app) but they actually have improved some. I still think both Apple and Google should converge stances. Google needs approvals or review for first apps and Apple needs to let people update apps without approvals.
Where I think the big divide is though is around emerging markets. Apple is somewhat behind in that everything one must do around purchases is tied to Apple payments which need credit cards. I can’t use gift cards for subscriptions since everyone always mentions gift cards. I focus on India a lot and the big reason Apple is not as big as Android is about device cost but more importantly the payment problem. Google implements telco billing or at least does not stop us from putting in our own telco billing. With Apple I am stuck with Apple. This has to change for Apple to succeed. I personally think this is the biggest headwind Apple has in some regions – it just can’t function without a credit card backing. If Apple had some sort of regional telco billing I think the flood gates would open around the iOS ecosystem.
All that being said I think Ben ends on an interesting note that is also where emerging and non-emerging markets differ. Messaging:
But the underlying philosophies remain very different – for Apple the device is smart and the cloud is dumb storage, while for Google the cloud is smart and the device is dumb glass. Those assumptions and trade-offs remain very strongly entrenched. Meanwhile, the next phases of smartphones (messaging apps as platforms and watches as a dominant interface?) will test all the assumptions again.