Northstreaming – the blog « Northstream

Will the mobile industry be the platform for the next Disney? In 2009 game developer Rovio released the game that would bring them phenomenal international exposure. Angry Birds is unarguably one of the most successful mobile games of the touchscreen era. To date there has been more than 700 million downloads of Angry Birds in total – making it the most downloaded game ever. And breaking the unimaginable billion downloads mark is probably not impossible.

To gain such a widespread popularity so quickly was made possible thanks to the mobile industry’s global platforms (networks, devices and application stores). Rovio promptly seized the opportunity fame brought, and started to include in-game advertisements into the free versions of the game. Much thanks to this, their latest game “Angry Birds Space” was downloaded 10 million times in the first three days.

Rovio has stated that they aim to grow to the size of Disney, and to breed a long standing pop culture icon among the likes of Mickey and Donald. And this game developer is seriously working on it - … building a franchising empire with plush toys, books, clocks, clothing, bedlinen, to mention a few items, and with announced plans to create Angry Birds activity and theme parks. The enraged birdies will also be seen in Disney’s home ground - in an animated TV series and in a feature length movie next year. This move is supported by the purchase of Kombo Animation Studio last summer and a recent acquisition of Futuremark Games Studio.

The game developer is aggressively applying the learnings from (mobile) digital distribution to its expanding franchising business. Rovio is using Amazon as one of their sales channels in order to create a global physical distribution and based on this success they have managed to close contracts with retail giants like Wal-Mart for both digital and in-store channels to distribute their merchandise.

Currently Rovio’s proclaimed value is several billion USD while Disney’s market cap is near 75 billion USD, so there is still quite a gap to close, but time will tell us whether in this mobile era an "entertainment house" would be able to pull it off, and if so, even more interesting is to see how quickly they will achieve this. Instagram mobile social photography network created value of one billion dollars prior to celebrating its second birthday – wouldn’t have been possible without the global mobile ecosystem. Neither would Rovio be where they are today if there wasn’t this huge global mobile platform to feed upon. There is certainly something in Rovio’s attitude, operating and distribution model that could teach lessons to the rest of the telecom industry suffering from lack of growth…

/Suvi

Suvi is a Senior Consultant at Northstream

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11 Apr 2012 | Northstream

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Netopia – It might all be in the network

Follow me onto a short excursion into a peculiar country – characterised by a telco market at the forefront. In 2011 mobile telephony had its tipping point in terms of fixed to mobile conversion, mobile broadband increased by factor 10 in the last 3 years and the workforce is flexible to a degree that one third is working away from a fix location. Now, imagine a person like me who moved to this country 2 years ago and wondered about quite many a things: why are people monologizing out on the open street? Why is mobile telephony so darn cheap in comparison to my home country? And what sense do TV ads make where landline outlets are ripped out of the wall, why would anyone want that? Leap in time back to now … the same person 2 years later, now fairly well integrated, sits at home reading these lines. There is no active fixed line outlet in his wall, he uses his cellphone for both private and work, domestic and international calls. And in the tube to and from work he checks emails, streams videos and music or even surfs. When in Rome do as the Romans do. All that can cause occasional annoyance to him is bad call quality or sluggishly loading videos.

Here, as in most other countries, enigmatic sizable organisms control the mobile life. The services they render are at the foundation of all the person above - and everyone else - long so much for, provided through dedicated networks, full of technology and packed with services. These providers differ. One is the oldest and biggest but not necessarily (and self-admittedly) the best in class in terms of service. The others are chasing the top dog´s market leadership with different strategies. One is the outlawish cheapjack, touting its price leadership ceaselessly, another one branded flashily and the third one seen as a bit more serious whilst not as cheap.

The trophy they are now all after is an elusive creature: customer satisfaction. No one was ever able to spot this one in the crossfire. Still, being the latest object of desire it is now the talk of town, or rather its absence. Studies underpin this famine and we have elaborated on it before (see our blogpost It´s not all in the network). What these studies don’t tell however is an explanation as of why. One would think it matters as the customer is king and such, and wanting to find a remedy calls for approaching the reasons behind. I go by the assumption that the underlying reason is in fact a lack of focus or attention. If you follow me in this and if there are different ways to pay attention then there must be several ways to customer satisfaction. If not all then at least many roads lead to Rome. Common wisdom would list the competitive differentiators as network, value added services, pricing and marketing, probably in that order. And these must all be seen as sources to derive customer satisfaction from.

Something dramatic occurs in the land of the battle: one of the providers whilst massively investing in its network in order to meet the increasing data hunger does something supposedly outdated, namely, launch a marketing campaign pivoting around exactly that fact. Hereby, it seems this provider puts the customer in focus, originating from his needs, flexibility and reliability of mobile services. This move would, elegantly enough, strike 2 out of the 4 customer satisfaction flies at one stroke. The hunt for the elusive creature is on it seems. Who will bring it in you believe? It is maybe so that this initiative suggest that everything could eventually be about the net – given the value it provides to the customer is accentuated and tied back to focusing on the customer and his needs. This could both prove a successful long-lived branding and a viable way out of (or to profit in) commodity hell (see our blogpost To commodity hell and back). Bravo!

Other members of the hunting club, follow this track! Do good and talk about it! After all, it might all be in the network.

/Franz-Josef

Franz-Josef Arnuga is a Consultant at Northstream

Feedback to blog@northstream.se

30 Mar 2012 | Northstream

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Wouldn't it be nice... Apps that appeal...

Smartphones and tablets have indeed different usage patterns associated to them. Statistics from a study looking into usage of a news app indicate “meal bumps”, i.e. peaks of increased usage for either kind of device. Whereas the smartphone is the weapon of choice during the faster-paced meals breakfast and lunch the tablet seems to be the smoother choice from supper on and along the evening – until bed time at least when the little device just comes in more handy again.
So what, you might say, isn´t that pretty self-evident? Fair enough. Nevertheless it sheds light on the rather primordially different requirements posed on apps. As not (yet) owner of a tablet I want to elaborate on what is being expected of an app in terms of it being a smartphone application.

First, a very simple and clean interface is critical for success, and second a somewhat narrowed down set of total functions and options making both setup and usage fool proof. With the smartphone app markets maturing after 3-4 years´ existence users have increasingly higher expectations in terms of usability and relevance. We do not have more time at our disposal, and for those short moments on public transport or cueing for coffee or lunch there is a full range of apps installed on my device fiercely competing for my short attention span.

Those risen expectations make that dumbed down apps will not find users´ acceptance. Fair enough, Angry Birds had some success (…), but shooting grouses fluttering over a screen will not win any future award. Now, you might say, this is a contradiction in itself saying we need simpler yet complex apps. Provenly it is not. Apple has showcased this quadrature of the circle to be possible. No matter if you are a follower of this religion or not, its core dogma is combining a rich set of features with a shockingly high level of simplicity and usability. The call for more Apple like apps is for power in function whilst usage being easy as pie.

Two examples where my need for a smooth smartphone app remained unsatisfied: a) Electronic business cards apps and b) password encryption and storage solutions, like Keypass. Even though there are many of both, cumbersome setup and usage have led at least me to conclude that none of the existing solutions can currently satisfy my requirements. Even though I am able to live without both I think about it as lost chances – for app programmers in unrept profits and for users in not available benefit.

An encouraging example is TED – Ideas Worth Spreading (which is always a great thing no matter how applied). The app allows me to easily bookmark my favourite inspiring clips, maybe because they are too long for a short metro ride to work or just because it is convenient. At home I can watch them on a bigger screen and without time pressure. But I would like to bookmark even clips watched at home on my lean-forward. App vs. desktop 1 – 0. Even better would be to have both integrated (remember the “old” 3-screen notion?). Registering an account at TED I would expect the following: videos bookmarked early in the morning on my way to work appear on my account for follow-up back at home. Integration is the name of the game. This will drive users to the app, make them initially potentially pay for it and eventually use it and spread the word about it.

To conclude in this sense, let me recommend a great app I just found through a review: Zite really is what I call an Apple amongst apps. It is easy to setup (took me 15 seconds to customize it); it is visually appealing, with headlines and pictures in the cover story panel looking as great as never seen on a small smartphone screen. It features this effortless way of using it with an interface that just seems tailor-made for my fingers and intuitions; tapping, swiping, everything works as my intuition suggests at the first approach: tap once to make the menu bars disappear, tap again to make them reappear; swipe left and right to browse between the sections initially set as preferences (arts, politics, etc.). Last but not least, it is functionally rich. By feeding a certain selection from a set of prestigious high-quality newspapers and magazines it makes me feel what no newsfeed so far have managed: this is one app that satisfies my daily needs in terms of news on my smartphone close to exhaustively. This and no less is what every app should aim for. Developers, please be inspired. Service Providers, please be encouraged to facilitate. Users, please make your voices heard. Wouldn’t it be nice?

/ Franz-Josef

Franz-Josef Arnuga is a Consultant at Northstream

Feedback to blog@northstream.se

22 Feb 2012 | Northstream

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To commodity hell and back

Providing products or services that are commodities, meaning things that used to be premium but are no more, is a tricky thing. There once was a company that spent a lot of time thinking about how to stay away from “commodity hell” as they put it. This company offered the same service as many others did. They had no obvious competitive benefits in delivery, sometimes delivering both at a lower standard and at a higher fee than direct competitors. That’s a very challenging spot to be in and certain to put you out of business eventually.

Looking at the mobile operator industry in mature markets today one finds a similarity: they in fact offer a commodity too. A mobile operator’s service is something that people use every day but do not care much about it except when it stops working and when the bill arrives. Telecom operators have become utility companies and offer a service that most people find essential but uninteresting, just like a water or electricity company. There are two reasons this is bad news for operators.

First, offering a commodity means that you’ll have a hard time making people pay premium fees – because there is no premium in the service itself when there are others offering the same thing. Like electricity or consumer banking services. That’s exactly why someone invented the notion of “commodity hell”: once something has become a commodity there is no going back.

Second, offering a commodity also means that customers do not care much who delivers it – because the product or service looks just the same. Electricity isn’t differentiated between suppliers; as long as the bulb lights up when you flicker the switch you’re good. Most mobile operator customers reason the same way: if you can make a call from where you are and browse the web at reasonably high speeds you’re good. Today all operators can make that happen. That means there are few reasons for a customer to stick to their current operator if someone else offers the same thing but at a lower price. The perceived value comes from the device or from services, content and applications not provided by the operators. Customers are therefore not very loyal or engaged which means that they are easily lost to competitors.

Most operators are nevertheless doing financially well because of their oligopoly-like situation (which we covered in the November 2011 blog post “It’s not all in the network”) and because voice and SMS still contributes so much to the overall profit. In their frantic search for new service pricing models, operators should also consider the customer experience. Customer experience is all the things surrounding the service delivery before, during and after sales. That includes things like personalized offers, excellent online self-service, friendly staff and other aspects that make people feel “wow, great service”. Think Starbucks, where people pay more and queue longer to be able to say “wow, great coffee”.

Being “customer centric”, as many claim to be, isn’t the same thing as providing great overall customer experience. Nor is it equal to the quality of the network itself. Customer experience is the sum of the interactions that a customer has with the company and requires a multi-level, cross-functional approach to be fulfilled. In addition to a good network it involves IT, sales, customer service, product development and essentially anyone that ever provides the end-customer with anything.

The beginning to the solution for operators is to acknowledge the importance of customer experience and dedicate resources to it. Like airline Virgin Atlantic – also in a commodity industry – where CEO Steve Ridgway announced that £100 millions will be invested to “retain and enhance […] leadership in customer service and experience”. I’m intrigued to see who the first telecom operator to announce a similar program in 2012 will be.

/ Erik

Erik E. Byström is a Manager at Northstream

Feedback to blog@northstream.se

31 Jan 2012 | Northstream

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Coming soon to a mall near you…

With Christmas and New Year celebrations fresh in mind, I take this opportunity to explore how future location-based services can help with the rather busy and tedious task of ‘Christmas Shopping’ (or any shopping for that matter). In this blog, I will use this as an example to illustrate how mobile location services could be greatly improved to exploit the obvious commercial potential that location-based services can offer to both the mobile user as a consumer and the retailing industry in general.

Like most people living in Western Europe, my Christmas shopping involved a combination of ‘On-line’, ‘High Street’ and ‘Shopping Mall’ purchases; I also had the opportunity to spread the shopping between London and Stockholm. During this period, I experimented with some of the popular mobile phone apps with location services such as Facebook Places, Foursquare and O2 Moments with the hope that these apps would improve my shopping experience in terms of cheap deal offers, item recommendations, assistance etc. As much as the apps helped in keeping me informed of my friends’ locations and of many promotional offers around my location, I found that the apps were too focussed on the social networking experience. What I, as a consumer, really needed from these apps was however not readily available. As a consumer, I needed my digital footprint (mobile and desktop computer generated data such as location, browsing, social networking etc.) to be harnessed and fused to offer intelligent and personalised services that can be used when I embark on my shopping ventures.

So what/how should future location-based services look like to fulfil expectations and exploit mass-market potentials?

Before I proceed with the description, it is important to note the implicit assumption that the user gives the permission for his/her data to be used. A detailed Privacy discussion is beyond the scope of this blog but in general, I find that most people are happy to have their data used provided that the following basic contract is agreed between the user and the service provider:

• That true value is offered in exchange (and agreed upon prior to data collection).
• That the data is collected for a purpose, used for that purpose and then destroyed once it no longer serves the purpose.
• That the user is constantly informed about the data kept about them and the processes applied to it.

It may sound plain and obvious, from both sides of the ‘contract’, but in reality neither implementations nor user perceptions satisfy all the criteria.

Future location-based services must rely on a combination of innovative concepts with far greater flexibility and capabilities than those of a single phone app. The reflections below are not intended to give a full specification but rather touch on some of the key aspects that I think will make a difference. It’s also worth noting that most of the core technologies involved already exist in some form, they just need to be reapplied from a different perspective.

Indoor Location
Using my Christmas shopping example, my mobile should be able to log every store (indoors or outdoors) I walk into (and if it’s a large store such as IKEA, the various sections or aisles that I visit should also be logged). The stores that I visited should have the means to know that I visited them and possibly log the items that I purchased from them at that time (not difficult to achieve if mobile payments are in use).

Digital Activity Tracking
In my example, I browsed various items from different outlets such as Amazon, eBay, Facebook Marketplace etc. I also booked flights to travel to London. For an enhanced service, future location-based services should be able to tap into my digital activity and build a picture of what I could need or where I could be, in a similar way to a top-end personal assistant. The purpose of tracking my digital activity and utilising it in location-based services would be to match my behaviour and movements with relevant retailers in such a way that I don’t feel spammed or intruded upon but instead feel assisted and guided.

Data Fusion
For the entire system to work there needs to be some means of aggregating the data, adapting it and constructing a personalised service. As an example, let’s say that the day before I travelled to London, I visited Stockholm Kravatt (a tie store) but didn’t buy any ties. Future location-based services should be intelligent enough to check for attractive deals (or even broker a deal) at Tie Rack at Heathrow airport and suggest it to me upon arrival.

We will get there!
The system that would enable location-based services will rely on innovative concepts that will make it more than just a social network-based app. Some of the technology heavyweights such as Google and Apple have, in the past, demonstrated their ability to design and market large software ecosystems. To nurture this with enabling technologies and service ideas, there is a countless amount of smaller innovative companies (and we’ve seen many of them) just waiting to get their 15 minutes; So there is no shortage of brains to seize the opportunity. I therefore hope that in the next couple of Christmases, I will be able to rely on my phone to help me find the gifts I want from the most convenient location and at the right price. Industry, please help me out!

/ Landry

Landry Ndikumasabo is a Consultant at Northstream

Feedback to blog@northstream.se

10 Jan 2012 | Northstream

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