Nokia’s mobile music initiative

According to the news, Nokia is negotiating with Sony BMG, EMI and Warner Music to partner with all major record labels. The company aims to distribute their content through the new Comes With Music service. Earlier Nokia have already made contract with Universal. Idea is to let owners of Nokia phones equipped with the service to download music freely for a year. Nokia is apparently offering to pay about USD 80 $ per phone to the record labels to get the deal.

Downloaded music is DRM protected and can be listened with Nokia devices only. Transferring the content to other devices is either difficult or most probably impossible. This strategic restriction increases customer’s cost of change, if she or he wants to buy a phone by competing manufacturer. It is very important part of the concept.

If (big if) Nokia gets a significant amount of music service customers, it could lower the threath of substitutes and industry competition. And if the device is a source of one sort of media, why not use it for other content too. However, I’m not yet going to change my iPod, as Apple has also increased my cost of change to do that…

Picture above used under CC licence, credits to TCM Hitchhiker.

Delayed payment suggested against online advertising fraud

Quite often it is discussed how online advertisers can cope with click fraud or affiliate fraud, because it is not too easy to separate the good clicks from the bad ones. The first creates value for the advertiser and the latter only takes it. There is always someone trying fraud as all the revenue created by fraud clicks turn basically to pure profits.

Benjamin G. Edelman, assistant professor in Harvard Business School suggests that delaying payment is a working tool against online advertising fraud.

“Delaying payment distinguishes the rule-breaking affiliates from the good ones who are actually helpful. Rule breakers know that the longer they have to wait, the more likely they are to get caught. The more likely they are to get caught, the less likely they are to get paid… So just by paying more slowly, it seems to be possible to reduce the number of bad affiliates and thereby reduce waste and increase profit.“

Just by delaying the payments, the advertisers would lose also customers who are following the rules. For them Edelman suggests to pay bonus and interest for waiting.

Read full interview by Martha Lagace from HBS Working Knowledge and download the working paper Optimal Deterrence when Judgment-Proof Agents Are Paid In Arrears—With an Application to Online Advertising Fraud as a pdf here.

Photo above used under CC license, credits Tracy O.

Funny MSN-Yahoo coincidence

Yahoo released better than expected growth projections yesterday. Market analyst quoted by FT.com comments the financial outlook and future operative plans saying, This could be too little, too late. According to CNET’s sources Yahoo and Microsoft are in informal talks with each other. It seems to quite common to think that Yahoo’s press release is – if not only, but at least partly – an attempt to raise Microsoft’s bid.

One funny detail I noticed today in Messenger for Mac page. On the left side of the page (see pic below) “Karen Walker” sents “David Jaffe” a memorandum called “M&A Prospects”. “David” seems to have a yahoo.com mail address, but the page doesn’t reveal is “Karen” from MSN… Ok, it is just a coincidence, but funny one.

Period of effortless profits

I found professor Robert G. Picard’s latest post in his blog The Media Business very interesting. Mr. Picard argues that recession of traditional media is actually not a new sudden thing but a result of process that has lasted for decades. He underlines that we are in an era where new competition has ended a long period of undemanding operating conditions and has removed effortless profits that traditional commercial media enjoyed for a half century.

I find the post as a good analysis why many established publishers are having a hard headache these days. It is also very good reminder that we can be blind to incremental market change especially when we’re almost too profitable. I think that most of the companies have performed in depth market analysis according to Michael E. Porter’s model without finding anything really alerting changes in the operating environment. It is just very difficult to notice the change when everything is seemingly going well.

Mr. Picard concludes the post saying: Things will never be the way they were. So get over it. Move on. Discover and embrace new ways of operating and new opportunities to prosper and grow.

The whole post can be read here.

Kites and balloons

Less than a month ago you could see snowboarding in Istanbul. Now it is a spring already. Here is a few pics from a beautiful and warm spring day we had today by the sea.

Picture of man with balloons taken by Clara Llamas. More pics from Istanbul here.

Mobility and communities

Mikolas posted very interesting comment about the future of online communities. On his view the future is mobile. I agree totally with him. But will the transfer to mobile communities happen first in North American and European markets or somewhere else? Maybe we are so stuck to the fixed line internet that it takes us much more time to adopt the new habits.

In some developing countries the mobile communication infrastructure is far more developed than the traditional fixed line. For instance there were only 50 million land lines in use in India, which has a population of 1.1 billion (2005). Number of mobile phones were about 170 million (2006). China, India, Indonesia, Bangladesh and Pakistan have population of about 3 billion people. I think that the consumers in that region will access internet through their mobile devices and they might also be the first mass market for the mobile communities.

It is quite interesting that about four out of ten mobile phones sold in that area are manufactured by Nokia. The company announced that it wants to be more than just a hardware manufacturer, when launching its Ovi service. If there is any brand loyalty within the Asian customers, there may be few hundred million Asian mobile users carrying a Nokia phone. Because of that FT.com says that the company is on Heaven’s Door.

Photo above used under CC licence, credits to juicyrai.

Yipee! Week of high level soap opera

Oh boy, the media and media consumers have had a great fun past days! A lot of ink and bits have been used. Yes, I mean the new episodes in high level soap opera.

Episode 1: Finnish PM fights in the court against his ex-girlfirend and a book publisher about a book written by his ex. The PM narrowly lost the case and is going to appeal to higher court. Yipee!, there will be a sequence.

Episode 2. Only a few days later PM introduces from his new girfriend in a gala party. And you can guess – Yipee! - he is in the headlines again.

Episode 3: Previous Minister of Culture’s private life has always been under a loop, as she is also the Miss Finland 1991. Couple months ago she and her husband sold their house and announced divorce after being married not more than a year. But today – Yipee! – they told that they’re going to continue their marriage.

Episode 4: A dancer claimed that the Minister of Foreign Affairs sent about 200 sms messages to her within a short period of time. Yipee! She let us understand that the messages were not only about foreign politics. Yesterday the minister confirmed that he really sent those messages. Traditional kiss and tell trick as Pasi Kivioja blogs (in Finnish).

Let’s turn to a foreign channel; what happens in the USA? Oh, New York governor – Yipee! – admitted being a customer of a… It is a global phenomena.

At least politics seem to have a lot of colour, entertainment and drama! All of the stories above have a lot of public interest and are worth for some of the ink and bits used. But, I’m a bit worried. Neither for the politicians who are an endless source of entertainment nor the media who writes about them. It is media’s work, being silent wouldn’t be normal in our society. I’m worried that more important issues seem to disappear under gossips even in more serious newspapers.

Could this seemingly harmless entertainment also increase public attendance in the next local or national elections? I believe that has no effect to direction or another. People may come more passive as they soon can’t separate when watching afternoon soap opera and when politics. Well, maybe this is a proof that we just don’t have too much to worry about in domestic politics. Or maybe we just didn’t notice the important issues this week.

Picture above, the Parliament House in Helsinki, source www.eduskunta.fi.

Kiva – Microcredit for good

I just read a fascinating article about Kiva from the Fortune Magazine (No. 4, 2008, Europe Edition). Kiva is a community based online microcredit service targeted to the entrepreneurs of developing countries. The service is established by Matt and Jessica Flannery.

The process is easy: 1) Lender picks someone who needs a loan, 2) Kiva’s local field partners deliver the loan, 3) Partner collects repayments and provides business updates at Kiva, and 4) Funds are returned to the lender who can either withdraw them or re-loan the money.

According the site there is 0.1% default rate based on the past performance. Kiva has recognized three different risk categories: Entrepreneur risk, Field partner risk and Country risk.

Below is just a couple examples about the lenders. Read more from the site.

Mrs. Tep Sinat, 25, is a mother of three children. She stays at home, cooks food and looks after the children. Her husband, Mr. Socheat, 29, is a blacksmith, who earns approximately $6 a day of profit. Now this couple aims to get a loan from Kiva to purchase a power plant to assist in blacksmithing. Need for $700.

Mr. Ndiaye will strengthen his working capital by buying products from wholesalers to stock his neighborhood shop. He started off with his own money and demand is becoming stronger stronger, which is why he needs this loan. He is a serious and hard-working young man. Need for $700.

I think Kiva is an excellent proof how online communities can collect lot of people around some issue to do good. Gerald Coniel said in his Amsterdam ICMA General Meeting presentation that previously [in the history] vast amounts of people gathered together only to kill each other. Now we gather around online communities either to just have fun and spend time or doing something good like people using Kiva are doing.

Kiva is also noticed in the media. According to the site they are experiencing record traffic because lot of publicity they’ve got. One source of publicity is interview of former US president Bill Clinton.

Marketing via Bluetooth. Or is it spam?

Today I went for a cup of coffee in a shopping mall nearby. Just after sitting down at the table my mobile asked Receive a message via bluetooth from ‘Mustapörssi’? The file was sent apparently from a Finnish home electronics retailer ‘Mustapörssi‘ as I was sitting about 15 metres from their nearest shop. I decided to accept the transfer.

The downloaded file was called offer.jpg and as the name suggests it was a simple ad (see left) offering a 10 € discount from a digital set top box. Well it was fun to get such, but there is a few issues that should be considered.

• The message could have been sent by anyone nearby as you can name your phone freely. So the offer could have been a hoax too. This time I was sitting so close to the shop that I trusted that the sender is who it claims to be.
• The file could have been also a mobile virus too. So, I was a bit stupid to accept the transfer in the first place.
• Commercially the ad was not for me as I don’t own a television. On the other hand, that ad could have triggered me to purchase a brand new full HD flat screen in addition to the 59€ set top box. Ok, I admit: the ad was targeted me too.
• This is most probably made automatic. Still, if the shop wants to empty its set top box inventory, are there any better means to reach the potential customers sitting only 15 metres from the shop door? Posters or flyers maybe? Or shouting?
• I don’t know how many keeps their bluetooth visible, but I think this type of advertising will not reach too wide audience. Only some engineers like me maybe?
• Or if you just walk on by the shop, it may take some time before you notice the mobile’s file transfer query. Then you probably are already out of the transmitter’s range.

For me it was the first one like this. After thinking about the risk of viruses or not truly knowing who is the real sender, it might be the last one to be downloaded. This type of advertising from anonymous sender will probably be called bluetooth spam or mobile spam.

Playlist since June 2007

I decided to erase my iTunes’ most played list, just because I want to follow how my music listening behaviour changes. The previous Top 50 list was formed based on the songs listened after June 2007. I have a collection of 2800 songs by 130 artists.

Most played song was Riitti by Finnish rock band CMX – Cloaca Maxima. At Top 50 there were amazing 18 CMX songs. And the most listened album was their Talvikuningas (i.e Winter King) that was published autumn 2007. They’ve been my favourite since early 1990’s and will be part of the most played list after this weekend too.

John Lennon’s Working Class Hero was the second most played song. Even though Lennon and Beatles has stayed in my playlist since the days of cassettes and vinyls, this time I have to thank Green Day that I bought the original one. Green Day made a cover version for Amnesty International’s campaign to alleviate the crisis in Darfur. My playlist consisted three songs by The Beatles: While My Guitar Gently Wheeps, Strawberry Fields Forever and Glass Onion.

Sielun Veljet’s song Rakkaudesta was the 6th most played song, after CMX and John Lennon. Other mentionable are Keith Bush’s Wuthering Heights, Sigur Rós‘ whole Hvarf / Heim album, Finnish rock band Apulanta and finally R.E.M.’s songs Undertow and Losing My Religion.

In conclusion, I’ve been listening surprisingly lot of Finnish music since last June. It is fun to see what happens after moving away from the country. Maybe no other than Finnish music then…?

Photos: Cassette, credits for yourbartender and John Lennon from Wikipedia