I am delighted to announce that I have joined charity : water as VP of Product. I’m incredibly thankful for joining such a talented team. In 2012 alone, charity : water raised $33 million and funded more than 2,000 water projects, giving more than 700,000 people clean water around the world. I can’t wait to help bring clean water to 800 million more people. If you haven’t done so already, you can still join my birthday campaign for a few more days and also be part of this!
Thanks to my managers Steve Parkis, Cadir Lee, John Osvald and Roy Sehgal for their guidance and support during these years. Thanks to all my incredibly talented colleagues who made every day, even the challenging ones, enjoyable. Thanks to Mark Pincus for creating a company from a unique vision with meritocracy at its heart. I can’t think of a better company to have developed my career, it has been an amazing professional and personal experience. Thank you.
Just as messaging apps are starting to get traction in the US, a couple of interesting data points have been shared recently:
- The CTIA, a wireless industry trade association, announced that the number of sent messages went down for the first time ever in the US.
- Informa recently published a research note stating that the number of IP-based messages had overtaken traditional text messages worldwide
Services like Kik, Viber or WhatsApp are definitely gaining users popularity in the US. The question is whether or not they can survive in the long run. While their engagement is very high, the difficulty of utility apps is finding ways to monetize.
In Asian markets, Kakao Talk and Line have monetized by becoming a distribution platform and selling stickers. Will that work in the US market? Even if it does, it looks like Facebook Messenger has a clear advantage since it does not necessarily need to be ROI positive as a standalone app, just as a way to keep users on Facebook.
About five years ago I asked Reed Hastings, Netflix’s CEO, why they didn’t also rent videogames. His answer was very clear: Netflix was in the movie business, not the DVD mailing business. While in the short term they could be missing some revenue, focus was clearly the right strategy in the long-term.
In July 2011, the company announced a new pricing model that caused a major uproar. After a couple of years, it seems that Reed Hastings was right again.
Yesterday I listened to a pretty unique sermon at my local Church. John Ortberg, the pastor at Menlo Park Presbyterian Church, chose to show a video of him running on a treadmill to represent our relentless, neverending pursuit of “it”. “It” are those targets that we expect will solve our lives and fill us with happiness. e.g. a house, $1M, a partner, a new job, a sports car. Unfortunately, once we reach “it” we immediately discover another new target. He used many quotes of Ecclesiastes, one of my favorite books. I encourage you to spend the next 15 minutes watching the video.
Unfortunately life sounds too much like a social game sometimes. Having worked on them for a while I can tell you that most games have an infinite number of levels. Choose the one you play wisely and enjoy it.
The International Federation of the Phonographic Industry (IFPI) just published its annual Digital Music report. In 2012 the industry saw its first year of growth (+0.3%) since 1999. There are a couple of other interesting data points:
- Digital revenues increased by an estimated 9 per cent to US$5.6 billion in 2012, now accounting for around 34 per cent of global industry revenues.
- Download sales increased in volume by 12 per cent globally in 2012 and represent around 70 per cent of overall digital music revenues.
- The number of people paying to use subscription services leapt 44 per cent in 2012 to 20 million. Subscription revenues are expected to account for more than 10 per cent of digital revenues for the first time in 2012.
- Digital channels account for the majority of record companies’ income in an increasing number of markets including India, Norway, Sweden and the US.
The report also keeps calling out piracy as the main barrier to growth, yet there hasn’t been a significant milestone in this area that could explain the growth in the industry in 2012. What has been driving the growth is companies getting closer to a value proposition for users that is better and more convenient than piracy at an acceptable cost: digital subscriptions with unlimited streaming and a gigantic music catalog. In Sweden, home of Spotify and the Pirate Bay, almost 50% of internet users used a subscription service in 2012. Subscriptions are disrupting piracy.
What this industry needs is more carrots, less sticks.
Mobile apps are optimized to deliver instantaneous location-based value for users on the go. When tablets started growing, companies started treating them differently from smartphones. The assumption was that its use was mostly at home. Harvard Business Review has now published a study that included this terrific piece of information:
Mobile doesn’t always mean on the go. New data show that 68% of consumers’ smartphone use happens at home.
The article was focused on the implications of this for ecommerce. Today I would like you to think of what this means for your product. Can you deliver local, immediate experiences for the 32% of people on the go and broader, deeper experiences for the other 68%?
I’ll point out some of the highlights:
- 1.1B Global Mobile 3G Subscribers, 37% Growth, Q4 – @ Only 18% of Mobile Subscribers. Impressive 29% of USA Adults Own Tablet / eReader,Up from 2% Less Than Three Years Ago. Despite Tremendous Ramp So Far,Smartphone User Adoption Has Huge Upside.
- Global Mobile Traffic Growing Rapidly to 10% of Internet Traffic
- Rapidly Growing Mobile Internet Usage SurpassedMore Highly Monetized Desktop Internet Usage in May, 2012, in India
- eCPMs 5x Lower on Mobile than Desktop
- ARPU (Average Revenue per User) 1.7-5x Lower on Mobile than Desktop
It seems that monetizing mobile went from being an opportunity to a necessity for survival.