The ever industrious Rudy de Waele and his team are staging the next version of Mobile 2.0 Europe in beautiful Barclona on 16/17 June 2011. Last year’s version was awesome but this year they seem to have upped the ante significantly again. Staged in Telefonica’s mindblowing R&D centre Diagonal 00 (just look at the picture, for heaven’s sake!) and boasting a speaker line-up that should everybody get going!
It’s a developer conference, so none (or little) of the usual preaching but you will get more hands-on workshops on everything from app store marketing to HTML5 development. And all this in summery Barcelona! Go on, sign up here!
And if all that is not enough, here’s a selection of the people that will speak with you, work with you, talk to you (a full speaker list is here):
- Peter Vesterbacka, Rovio (yes, he, the Mighty Eagle of the “Angry Birds” guys)
- Daniel Gurrola, Orange
- Sanyu Kirulata, Blackberry
- Reimund Schmaid, Nuance
- Carlos Domingo, Telefonica I+D
- Jose Valles, BlueVia (Telefonica)
- Lucas Allen Buick, Synthetic (they of “Hipstamatic” fame)
- Matthias Sala, Gbanga
- Andy Goodman, Fjord
- Caroline Drucker, Soundcloud
- Vincent Hoogsteder, Distimo
- Andreas Constantinou, Vision Mobile
- Tom Hume, Future Platforms
- John Roberts, Quostodian
- Yes, and yours truly will also be there
See you in the sun very soon!
Every now and again, war breaks out on the web. Or, rather, a full-on discourse of learned scholars on the world at large or, in our case, mobile in particular. This week saw one such blog fights and, no, I am not talking about Wikileaks. The formidable Robert Scoble (he of recent European ignorance but, hey, he is American after all… ) and Tomi Ahonen (Rat-Hat of Forum Oxford and a certain [but not blind!] Nokia-fandom but, hey, he might live in HK but he is a Fin… ) brought it on about the fall or not of Nokia.
It started with one of Tomi’s long, long posts on “Some Symbian Sanity” to which Scoble responded “Why Nokia is Still Doomed“. Because he referenced Tomi, he – if you know him, you’d say “of course” – responded with another long post defending Nokia’s smartphone strategy and execution. You should think Tomi has the harder corner to fight, right?
Let me briefly summarise the warring parties’ viewpoints. I will then offer my own take on this to decide who’s right.
Scoble first, he, never shy for words, delivered a swift and damning verdict on Nokia: Illustrated ventured Eastwards again to LeWeb last week and took stock of Europe’s smartphone pulse.he reckons that Nokia is dead because none of his friends has one or, if they do, they don’t like it. People pile up in Apple stores and wax lyrical about the apps they find on the iPhone and iPod Touch. Nokia is arrogant rather than cognisant of its shortfalls and he has not recently heard of a strategy. The people (and/or Scoble’s friends) love iPhone. Case closed.
Tomi’s Original and Scoble Riposte
It’s always a little more difficult to summarise Tomi’s posts as he doesn’t do quick ones. Who knows him is aware that he is a big fan of numbers, of big numbers, in fact. And this is why he hangs on to Nokia: because, you know, their numbers are big! His original post goes – very, very simplified – like this: he sets off to compare Apple with Porsche (as opposed to, say VW). He didn’t reference my recent post on this (tut, tut, Tomi) but the gist is the same: Nokia doesn’t only do Porsche, it does everything from VW Polo (or Chevy Matiz, Kia something or other) to Bentley (well, maybe that not anymore unless you count Vertu in). Its competitor is therefore not Ferrari but Toyota or – in the mobile world – not Appele but Samsung.
He then dives into Nokia’s strategy. And this is when it goes a little, well, foggy. Symbian being miles ahead (yes), Symbian kicking a** today with the N8 (erm, no), Apple’s original (sic!) iOS failing when it comes to phone features (well, yes, maybe, but who is using the “original” iOS today? Or the original Symbian for that matter?). And then he goes on to run the numbers. Now, according to him (and I didn’t check the numbers) Nokia + Japan = 45% smartphone market share for Symbian in 2009 (down a whopping 11% even by his count from 2006). Now, here’s where the questions start (more later). Then onwards to the mass market (more later). And, Tomi (being the very smart man and learned scholar he is) recognises Symbian might be a bit old and clunky and (rightly and unsurprisingly) pits MeeGo against this: new, open, Linux-based, etc. A winner, right? (more later). Therefore, Tomi heralds Nokia as being the perfect example in moving from “dumbphone” to smartphone.
Following Scoble’s burst of opinion as per above, Tomi reverted with more (as he does). I’ll skip through most of it. However, one point he raises is that the US is only 8% of the global market (true). It is though higher on smartphone consumption and (one language, one currency and all) provides a cool launchpad in a rich (yes, still) market. And Nokia is the Robbie Williams of the mobile world when it comes to the US: never managed to break it! He goes on to answer the “Nokia’s not cool” argument and refers to eco-friendly. Well, Tomi, that’s a little lame. Face it: Nokia lost its cool. Period. No argument! Apps? Yes, I know Ovi is catching up but, come on, the app store changed the bloody ecosystem (Nokia had about 4 iterations pre-Ovi who all miserably failed; Apple provided the paradigm-shift – face it).
Who is right?
The weird thing is that they both are (or, more controversially, neither is)!
And here’s why (hint: Tomi did get it right but then got carried away on the Finnish ticket): Tomi nailed it in his first post when he compared Apple to Porsche. Apple is not (or not yet?) competing with the Volkswagens and Toyotas of the mobile world. Now: in the automotive world, Porsche failed with the big coup (but, let’s remember, only just!). Apple might yet pull it off. The starting point is not dissimilar: super-high margins, a very comfortable lead in the luxury segment and loads of cash. Porsche over-reached (driven by a perhaps over-zealous ruler). Apple might, well…
Scoble looks at the US first and foremost. And it is – in spite of the many struggles – a formidable market still. And Apple made one of the most impressive market entries of all time! Now, will it be equally easy to capture China, India, Brazil, Russia, Indonesia, etc? I doubt it. Does Scoble see this? No.
As to Tomi: you may want to count in the likes of Foxconn in the more formidable competitors of the mighty Finns. But that aside, yes, it’s mainly Samsung today. As a matter of fact, we need to start looking at handset (and OS) segments a little differently. Symbian might be a smartphone platform in the old definition but it does not (usually) stack up against Apple’s iOS or the slicker iterations of Google’s Android in the new world. This is why Nokia keeps losing market share in the high end rapidly (and loses market capitalization equally fast) and why Apple’s market cap is at an all time high! Will it win the war? No, not necessarily. And Nokia still has a shot. But the N8 was too little too late: hardware specs don’t count, the user experience does. And Nokia lost it on that front (compared to its up-market rivals).
So, folks, just re-read my post on Volkswagen and Porsche, will you? And settle your little tiff…
Yesterday, I had the pleasure of delivering a talk at the Social Gaming Summit in London (which was fun even though it was at Chelsea FC…). Given that the audience was fairly clued up on all things social, I was focusing a little more on the mobile side of things – highlighting market sizes, roll-out speeds and platform risks (and opportunities!).
Here’s the deck, I hope you enjoy it:
I have been dealing with movie and TV licenses for longer than I care to remember, and the pattern (with few exceptions) always was the same: the licensor comes to you saying that, because they are offering you (the publisher) a well-known movie/TV/entertainment property that everyone and their dog are fans of, you should pay them a healthy amount of money (either up-front or as a minimum guarantee against revenues) for them to grant you that license. This means that the publisher starts at a point of significant loss: a six-figure guarantee (and I’ve seen larger ones, too), six-figure production costs and little mitigating the risk that the title might totally tank.
However, in the “old” world (scil. pre-app stores “as made famous by the iPhone”), people considered themselves to be lucky to get their hands on a well-known property as it would at least guarantee one thing, and that was “deck placement”, namely a good coverage across those coveted feature slots on carrier decks around the world. If you had the distribution network and delivered the package, you had a decent chance of making your money back (this even worked with a rotten game that was based on a movie license for a hilariously successful movie).
All new in the App Store World
Enter the “new” world of OS-driven app stores. The formidable Jeremy Laws published estimates of how movie & TV-license-based games were faring on the Apple App Store, and the results are – though not horrendous – humbling indeed. Only a good half dozen titles broke into the top 20 (by sales) in all of 2010. Not a single one ranked in the top 150 (!) of the top-grossing category. The average revenue was estimated by him to hit $1.3m. Now, don’t let yourself be blinded by this 7-figure amount: top-tier movie titles don’t often come cheap and the games behind them need to be reasonably faithful to the blueprint the movie gives you. Otherwise, the IP owner will not approve the game and the revenues will be, well, non-existent. Add to that a revenue share that the IP owner will earn even if the aforementioned guarantees are being settled, it slims down the margins fairly dangerously.
IP Doesn’t Pull as It Used to, or Does It?
The big news is however that the old formula big license + some sort of game = exposure does obviously no longer work (at least not in the same semi-automated way as was the case). With decent relationships into Apple, a good game for a good movie might still get a feature slot somewhere. However, the fact that none of the titles sampled in the above blog post were anywhere close to the top-grossing list shows that the pulling power has greatly diminished. How’s that?
Movie studios and TV production houses (and not only them: sports clubs are good at that, too) traditionally view a license as secondary exploitation of their intellectual property. The rule of thumb for a movie was that the box office should recoup the production costs and the secondary exploitation (DVD, TV rights, merchandise and, well, licenses) would provide for the profits. It is very much an analogue approach in which a scarce good is and will remain scarce unless its producer will (can?) change that scarcity. It does not translate well to the fluidity of a digital environment (with, normally, many more alternatives to access and consume media). It worked in old-world mobile because that ecosystem functioned very similar to a vertical supply chain. No more.
Game publishers suffer (or at least some of them) suffer from a similar perception issue: we have always done it that way… Well then…
A License is a Brand Extension
However, the huge differentiator is the ability to use (and exploit) the interactivity digital media offer and use it as a marketing and promotional channel. Now, a simple adaptation of the movie’s theme into a (traditional) game will not cut this. But more innovative approaches that utilise the ability to communicate with fans opens so many more doors to a) maximise the core proposition (selling cinema tickets, DVDs, digital downloads and such like) and bind people to the brand for longer (which is a potentially huge win for the cyclical movie business).
So, Jeremy’s charts “only” show us that only a few (if any) of the IP owners (and, arguably, publishers) “got” that so far. The opportunities for such an approach are huge.
What anyone who speaks to rights owners over licensing movie and TV properties should do though is take a copy of that chart for your negotiations. And then tell them how they should really treat it: it is a brand extension that leverages the core IP rather than a meagre spin-off license! Seen this way, there is significant opportunity for studios to secure their primary revenue streams and build a new rapport to their audiences. In particular the latter surely is of a value that exceeds six-figure guarantees anyhow.
So I guess we have to thank the iPhone again for breaking open yet another paradigm. And it was time for that, too!