Ged Carroll

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  • Jamster & consumption

    Jamster

    Jamster the ringtone, logos and java games company most famous for its crazy frog ringtone TV adverts has been all over the media this week with the success in the UK charts of a single based on the ringtone.According to the Financial Times on Saturday the company has sold about 11 million Crazy Frog ringtones across Europe at about 3GBP a time. Lets be generous and allow them a cost of transcation of about 0.15GBP, giving a potential pre-tax profit of about 31.5 million GBP. This doesn’t take into account the cost of making the ads, online advertising, business infrastructure etc.

    Now in the UK according to anonymous sources quoted by media gossip newsletter Holy Moly, they have spent about 30 million GBP on TV advertising. Given the amount of times that I see the adverts when I go to the gym, I suspect that this number is not far off the mark. So, the frog is not as profitable as it would first seem. In addition, the adverts do not drive traffic to the Jamster website where they can cross promote other products, but flash up a short code number that you SMS for your ringtone.

    Where it gets really interesting according to the same sources is that from the a TV advertising point of view is that the ringtone adverts are apparently driving down the cost of TV ads. Understandably advertisers generally don’t want to appear in the slot after a Crazy Frog ad as a large proportion of the audience will have channel surfed off until the programme is back on, this means that the TV channels finding it harder to sell on these slots. The big mystery is why they haven’t told Jamster to get lost yet? More wireless related posts here.

    Class and consumption

    The New York Times has run a very interesting article on class and consumption in the US. When the Jones’ wear jeans talks about how technology, low inflation and consumer credit has levelled the playing field for the consumption of luxury goods and that the rich are more likely to be diffferentiated by the personal services they consume like plastic surgery, a nanny and a personal chef.

    Key take outs:

    • With the demise of the community and the rise of mass media, people are less likely to be bothered about keeping up the Jones’ (ie their local community) and more bothered about getting their fair share of what the rich have
    • Consumption is patchy, people may shop for discount brands but still like Starbucks coffee, iPods and designer jeans
    • About half of Americans now have a cell phone (there is about 176 million cellphones in the US), the cost of a cellphone has fallen to about an eighth of what it was a decade ago
    • Department store prices have fallen by about 10 per cent in the last decade
    • The new hot segment in the car market is ‘sub-luxury’ cars (like the BMW 1 series and the Audi A3)
    • American consumer debt is about 750 billion USD, up about six-fold over the past 20 years
    • I found it interesting that the article made a big play about how marketers are having to move from income and gender (socio demographic) segmentation to lifestyle and interests. (Are US marketers way behind the UK in this respect? I would have thought that the likes of P&G would have led the way rather than followed?)

    Finally a quote from a spokesperson from Godiva – the chocolate firm: “People want to participate in our brand because we are an affordable luxury,” said Gene Dunkin, president of Godiva North America, a unit of the Campbell Soup Company. “For under $1 to $350, with an incredible luxury package, we give the perception of a very expensive product.”

    renaissance chambara says that it goes to show the old maxim that perception is reality.

  • Inflection Point

    Over at his weekly column for PBS, Bob Cringely has written about four developments that he feels will have a major impact on the way that technology will develop over time, creating an inflection point in their respective spaces.

    The inflection point

    Yahoo!’s new music service is seen by Cringely as a statement of intent to push forward music by subscription and defeat all current players. Indeed, its 6.99 USD subcription rate hand an immediate effect on Wall Street, adversely affecting the share prices of Apple, Napster and Real Networks.

    Microsoft’s forthcoming XBox 360 was seen as a statement of intent against some of its closest PC partners (Dell, HP etc) by providing a home computing device that can surf the web, pick up mail, do VoIP, potentially provide a platform for video on demand and play games. Given that the margins are so tight in the PC industry anyway and Dell is the only one that consistently makes money selling Windows PCs this could proved to be very interesting.

    Cringely, returned to an area of previous speculation on Apple providing a film by download model similar to the iTMS model.

    Finally he speculated that Google’s Web Accelerator was an audious land grab that would shake the industry to its foundations creating an inflection point. Speeding up web pages would mean that every ISP and web page creator would be a content provider or customer for Google. That the service would turn PCs into thin-clients lengthening the useful life of the home PC and reducing sales. Further that it would be a staggering tour-de-force of technology. What surprised me about the Google part of his article is that Cringely thought an improvement of only double what consumers have now would be enough to shift the balance of power. In his book Accidential Empires and similar works by other authors, a 10x factor is usually required to differentate the killer products from the ‘better mouse traps’. I guess time will tell.

  • PSP + more news

    PSP

    The PSP has fired the imagination of grass roots developers already, which bodes well for its competition from Gizmondo – the Tiger and Microsoft-backed alternative. Nintendo’s DS doesn’t make claims to be any form of ‘convergence device’, but an honest mobile games console which focuses on playability rather than speeds and feeds. iPSP allows you to synch music with iTunes, carry your iPhoto library around with you and back up game data on to your Macintosh. Whilst Sony would probably not approve of this close linkage between the PSP and Apple’s iLife suite, it will not harm sales of the device amongst generation iPod.

    Expect sales of PSP movies and Sony Connect sales to be on the low side as PSP early adopters rip from their DVD and MP3 collections instead. Sony’s best option as with games is to go for exclusive movie and music content for the PSP.

    Folksonomy

    Folksonomy seems to have caught the imagination of both News.com and Charles Arthur’s contribution of netimperative. Yahoo’s purchase of Flickr is seen not only as a way of getting hold of a great info-imaging service, but also of harnessing a grassroots approach to creating true contextual searching.

    Mobile TV

    According to the Global Telecoms Business top five stories newsletter that NTL and O2 have announced which TV channels will be available to the 350 test subjects during their six month-long trial in Oxford. The 16 channels involved come from BSkyB, Chart Show TV, Discovery Networks Europe, Shorts International and Turner Broadcasting.

    Customised Nike sneakers

    In New York, Nike has extended their design your own trainer programme to billboard signs that you can manipulate via phoning a free phone number. Your specification can be shared via an SMS message. There is still no option to allow people like Jonah Peretti have Sweat Shop sewn on his set of trainers.

    8vo: On The Outside

    Finally ‘8vo: On the Outside’ is going to be launched. Written and designed by Mark Holt and Hamish Muir, based on their work designing for the likes of the famous Hacienda nightclub and changing and its influence in the emergent typographically-led design movement in the UK during the late 80s and through the 90s.

  • How We Got Here

    Over at R/C Towers we have been a bit quiet being all bookish, reading Al Qaeda by Jason Burke, When Genius Failed by Roger Lowenstein and a preview PDF of Andy Kessler’s forthcoming book How We Got Here.

    Through a former work colleague of mine, I managed to get an invitation to a lecture run by The Policy Exchange, a UK think-tank. The lecture was given by Jason Burke on the subject of Islamic terrorism. I found the lecture enlightening as it highlighted the fragmented, loosely connected, fluid nature of Islamic extremism. The credibility of Mr Burke’s lecture was heightened by the amount of ‘FCO and Home Office’ staffers in attendance. Burke’s book expands on the themes of his lecture and goes into much more detail. He writes in a clear and concise style that gets a lot of information over very quickly. One of the big takeouts is the long term difficulty in achieving victory in the war on terror by hard measures alone.

    The collapse of Long-Term Capital Management was something I was only vaguely aware of, as I was too focused on keeping up with the latest technology news starting my PR career representing TMT clients. When Genius Failed documents how arrogance, dogma and market conditions almost tore apart the world’s stock markets. It is a very easy read and tells the story of the hard and soft issues behind the collapse. The collapse affected some of the biggest names in Wall Street economics including Robert Merton and Myron Scholes, both of whom were responsible for the Black-Scholes model used by investors to calculate the ‘true value’ of a share or other financial instrument.

    (In a six-degrees of separation sort of way, one of my friends had met Myron Scholes when they went for an interview at Salomon Bros many years ago. The meeting went badly, Scholes was described to me as very arrogant and opinionated. Though in When Genius Fails he comes across as one of the more human characters.)

    Finally, How We Got Here tells the story of how the technology sector and the market economy got were it went today. Written by financier, perfect-market advocate and writer Andy Kessler, he traces the technology sector from the steam engine, patents from when they were awarded by royal warrant and stocks and shares from the privateering ways of Sir Francis Drake. Whilst you may not agree with Kessler’s views on economics (he famously riled Wired magazines readership with an op-ed advocating getting rid of the US Postal Service), he writes in an intelligent, accessible and humorous fashion. I would go as far as to put his forthcoming book as essential reading for anybody looking to work with modern technology companies alongside Accidental Empires by Robert X Cringely and Steven Levy’s Hackers.

  • America’s Secret War

    I recently finished reading America’s Secret War: inside the hidden worldwide struggle between the United States and its enemies, George Friedman’s book on the war on terror as George Bush calls the fight against Al Qaeda. America’s Secret War is interesting for a number of reasons. It discusses the war in a dispassionate manner, it slices rather more neatly than the media has ever been able to splitting the facts and propaganda from each other. Most importantly, in my mind it highlights a war that was not about oil or weapons of mass destruction, but a very expensive ‘Kirby Cleaner’ pitch. Years ago in an effort to make money, I considered selling these overpriced vacuum cleaners (even more overpriced than a Dyson). Anyway a key part of the sales person from Kirby is when they do a demonstration with a machine and show you what it is capable of (think HSN or QVC-type demos in your own living room).

    According to Friedman, the invasion of Iraq was part of an effort by the Americans to persuade the Saudi’s to get serious on terrorism. A demonstration of regime change through ‘shock and awe’ to show what happens to rogue regimes.

    George Friedman is a respected and very credible geopolitical pundit and heads up Stratfor.

    Who is Stratfor?

    Stratfor is an organisation which provides analysis of global and regional political and socio-economic issues to companies, organisations and government agencies. It has a client base made up of a wide range of blue-chip companies including the usual suspects in the energy sector, defence contractors, management consultancies and the media.