Month: March 2009

Indian Internet's Three Million Pageview Conundrum

For many years we have been trying very hard to unlock the potential in India's internet market. Beyond all the hype, the fact is that we have made little headway in realizing that dream. Even with the stellar growth numbers quoted year after year by IAMAI and other industry bodies, most individual internet properties seem to have a lot of trouble in growing, organically, beyond the three million page views in a day line in the sand.

The 3MM number is part pulled out of the hat and part anecdotal. It is the upper limit I have seen in standalone properties over the years, after which growth is really sluggish, unless considerable amount of money is spent in SEM to draw in the crowds. It may, of course, get bumped up by a million in the next couple of years, but the point I am making is that it is way too low to be even a hint of what is possible.

And the 3MM is a number that has vexed me for a while now, in trying to understand what will get it to up the ante in that number with the products that are there. And it is only recently it struck me that there is nothing wrong with the products per-se. They are all fine and in cases even too good for the audience to even appreciate them. The problem is with the language. The Indian internet is overwhelmingly English, while India is not.

Yes, the promise of local language internet has been there for a long time, but we have done little towards it. Most of the content there now is at best translations of existing English news content (since that is most readily available in a digitized form) or online versions of the few local language media houses that has aimed to go online with it. This is the classic chicken-and-egg problem in Indian vernacular internet.

Where this hooks up with the 3MM problem is at the point where new users who do not form part of the English internet demographic have nowhere to go and have nothing much to do other than follow on the casual, language-independent routes of internet usage in porn and social networking.

The conundrum, as mentioned in the title, is this: all the money that is being spent in Indian internet is spent in the 3MM band properties that target the Indian English internet. The growth in subscriber numbers are not going to see an equivalent growth in the 3MM properties, because they have little to offer beyond the usual for them. This is why the significant volume of investment that has gone into the English internet (citing the potential of the billion-strong populace) has seen little returns on that investment.

One of the things I am aiming to work towards with FrontierNxt is to fix this mismatch. It is going to be a long and arduous journey, using tools and methods that are far from what I have been used to in a market place that we all know little about.

Filed under: Misc

Remembrance of Things Past: Media's Reaction To Its Own Demise

There is sheer and absolute panic in the media markets these days. We have industry veterans advocating a switch in online content distribution from the free model to the subscription model like it is a panacea for all ailments and everyone is rushing about trying to increase rack rates. To all this hectic activity, there is only thing I can say: stop, take a deep breath and try and think long term than short term.

It is rather ironic to see all this activity at this very stage. For years the media has sat on its haunches while the internet and other factors steadily changed the way information is created, distributed and consumed in the world. Now, after the horse has bolted (and also taken barn along with it), they think effecting the above-mentioned changes will somehow magically set things right.

Let me break it for everyone, it just won’t do much to help things.

I have previously written at length on the matter and I will link to it than repeat myself:

Such seismic shifts in creation, distribution and consumption don’t happen overnight. They happen right under our noses, in plain daylight and the industry leaders would have seen it if they had cared enough to observe and adapt. In looking to milk money out of the consumers of content, most of the leadership wind up asking the wrong question “how do we charge?” than asking the right question of “why would the user pay?”

The content business is broken beyond redemption in two ways, which will mean that the fancy dreams of being able to charge won’t work out. It costs just way too much at this point in time to create non-unique content. To make matters even worse, creating unique content is not only even more expensive, but it is also something that very few have the talent or capability to pull off at this point in time. Traditional media has over time specialized in non-unique content, but when it comes to unique content it is the new publishers (bloggers and others) who have excelled in it.

Thus, for the media companies to try and attempt doing specialized unique content will mean they will get their cost structure, which is already tied up in a big knot, tied up into an even bigger knot. It is nothing short of a conundrum. To improve coverage, they need to cover less to trade quantity for quality. But doing that will make them irrelevant in the current news scenario. And we still have not answered the question regarding why would the user pay for any of this content anyway?

But it is not all gloom and doom alone out there. There are people in leadership positions who are trying to address the problem before it gets entirely out of control and wipes a significant part of the industry out. In his recent memo, detailing Hearst’s 100-day plan, Steven Swartz (president of Hearst Newspapers) points out that the issue is not one of audience, but of a flawed business model and rampant inefficiency. You should read the memo in full, it is a very interesting read.

Another interesting development is the move by NYTCo to go hyperlocal (something I’d suggested earlier) with the local blogs, though I think that would have been a better fit there. It would have also saved the company quite a bit of time they would now spend learning what has already learnt. The ‘we-will-do-it-inhouse-because-we-can’ has led to a lot of strategic faux pas previously in the media, getting the companies invested way too deep into areas they have no business getting into at that level. We will have to wait and watch how this plays out.

In conclusion, this is the deal. That what has taken years to get to this stage won’t get fixed overnight and desperation is really a bad guiding principle to make any kind of changes. Most of the hectic activity we are seeing now don’t have any long-term view or strategy. If these measures were to not succeed (which is very likely, in my opinion), it will end up wiping out even the few strengths these companies are left with. Hopefully, they know something that I don’t.

Filed under: Misc

The awful practice of cross-pollinating status updates

If there is one thing that has gone awfully wrong with the open APIs for pushing and pulling data into various online communities, it is the horrible practice of plugging one thought stream through the API into another in an automated manner.

What exactly is a thought stream? Well, thought streams are more frequently updated status messages. They have been around for years known as custom status messages on instant messengers, which got spun around, made over and turned into a superstar product by the guys at Twitter. These days, status messages are there in every online networking product — be it Linkedin, Facebook, Orkut, Hi5.

Which is all fine. A few more wisecracks a day does not really make the world a better or suckier place. What does make it suckier is that cross-pollination of these messages often lead to broken conversation threads, misplaced context and other byproducts of the law of unintended consequences.

In real life this is how it happens: You can plug in your Twitter stream to update your Facebook status message. But your replies to the Facebook status message remains within Facebook. So you post a message to Twitter, this gets replicated on Facebook. Someone replies to that update on Facebook, but unless you are a Facebook maniac (a dying breed, if you ask me, these days), odds are that you won't see the response till much later.

Killing the conversation: The primary issue this cross pollination creates is that it breaks the conversation. While the tiny updates are the core functionality of Twitter, it is not the case with the larger networking sites like LinkedIn and Facebook. When you plug in the updates from one product into another, it is hard to know, at face value, where that update originated from, leading to instances where the message origin and message response belong to different networks. The end result? Death of the conversation.

Context breakage: Secondly, different networks have different contexts attached to them. My Twitter stream is a whole lot more casual than my LinkedIn activity stream, which is the same, I think, with most people. The fact is that, eventually, the same messaging does not work with different groups and communities. Plugging one into another can have disastrous consequences. What maybe kosher on one network, vis-a-vis, the audience, may not be acceptable on another. With cross pollination, it is hard to know what exactly is seen by whom.

Network latency, throttling issues: Third and last, when you cross-pollinate, you are also introducing network latency and throttling into the equation. Different networks allow for injection and extraction data under the terms that make sense to them, which may not be the same as pushing out and pulling in updates as fast as possible. As a result, your updates maybe throttled at the other network's end, resulting in only a handful of your updates showing up there.

Filed under: Misc

Six reasons why Facebook is losing its way

I would have loved to have summed it up rather simply as that Facebook is story of accidental success. Zuck started the product to have some fun, and incredibly, five years down the line, the fun has not ended. But, it is not all fun and games and even with its astounding growth, the fact is that Facebook is struggling to find a clear direction in which it should head and it also having trouble finding enough revenues to offset its ever-increasing burn rate.

Facebook has zero value when it is not public: This makes for a world of a difference when you are trying to introduce a set of services on the platform that goes beyond its primary use case. Platforms that are primarily meant for public (restricted, yes, but public still) consumption never fare too well in the private world. This is the reason why you don't see social networking in your email inbox (sorry, Xobini is NOT social networking) and the reason why your online banking service does not have a 'social' aspect to it. The simple reason is that it is counterintuitive.

Facebook's main use is for people to be able to connect with each other, in an environment that allows you to pick and choose the audience. You can use Facebook without any connections, but that would also send the value derived out of using the product spiraling downward. In effect, the main use case for Facebook and the extended world it is trying to embrace work at cross purposes. Facebook is a network that functions on the basis of exclusion, while the newer things it is attempting works best on the basis of inclusion.
Mixing up identity with connections: Mixing your identity with the connections you make is a fairly subtle but significant mistake that all of us make. Who I am on Facebook is not my identity (though, poking thrice a day can say a lot about who you are), but it certainly gives me a dashboard on the state of my personal connections. With the new features, Facebook is trying to sew together my identity with my Facebook account. Other than the earlier mentioned counterintuitive problem, it also has a problem of profiling based on a restricted context which will always give you an inaccurate picture.
Context, not connections, drive content discovery: One of the major thrust areas for Facebook is peer-to-peer discovery of almost everything, which conveniently ignores some major points. 1) Friends are not always your peers. Friends are sometimes just friends. 2) The converse also is true in the case that your peers are not always your friends. Content discovery is almost always best done when it led by context (event, topic, theme), than by relationships (remember email forwards?). This is why half of the suggested content you see from your friends on Facebook is junk. You have much better luck with content discovery on Delicious, Digg and Reddit.
Context is often required to be non-shared and private: One of the reasons why you freely consume so much of content on the internet is because the context in which you would have found them are not public. If your Google search history could have been shared on Facebook it would have an immediate effect on what and why you would search for things. Man is often known for the thoughts he expresses, not for how the thought was formed.
The 80:20 art of network maintenance: Every network has a crucial dipping point where the effort that you put into maintaining your network starts to become more than the value you derive out of being a part of the network. After a point, it is hard work to have a clear idea of who gets to see what you do on Facebook and maintaining that alone is a huge chore. On a platform like Google, even if you don't share there is no core value erosion, on Facebook if you don't share or participate the network immediately becomes useless to you and vice versa.

This is the reason why I have held that social networks have an average of three years being at the peak, by that time everyone you know and their dog is on the same network and the last thing you need is to have parallel virtual universe that reflects the real life network you are part of. Basically, this is the point where the whole network effect starts to break down. And this is what eventually marks the death of every social network.
First, just be a good social network: Yes, it is a great thing to have BHAG, but that is only possible when you have done well in your primary context. Facebook needs to nail the primary need of being an easy-to-use and uncomplicated social network first before it gets into anything. Somewhere along the way the company has gotten into nooks and crannies it has no business being in. In fulfilling that need, it may not wind up being valued at $15 billion again, but it certainly will keep the company and users happy in the longer run.

Filed under: Misc