Content & distribution always beats resolution

This week Australian pay Tv operator Foxtel announced the launch of its IQ4 box. The key selling feature is that it enables 4K resolution of content like sports, documentaries and concerts. An interesting move considering all those around them are growing not based on ‘resolution’, but different business models. The numbers for subscription TV services are already telling this tale with Netflix already well ahead and growing, while Foxtel declines.

Number of Australian subscribers at August 2018 (and % change vs last year):

  • Netflix 9.8m (+30%)
  • Foxtel 5.4m (-3%)
  • Stan 2.0m (+40%)
  • Youtube Premium 1.0m (+40%)
  • Fetch 700k (+40%)
  • Amazon Prime Video 300k (+90%)

When was the last time ‘high resolution’ was the deciding factor to subscribe to any content platform? I can’t remember anyone ever saying;

‘You know, I’d totally sign up to Amazon Prime or Netflix if I could watch it at 4K’.

At best, resolution is a hygiene factor – hardly a reason to buy or switch when it comes to content. Are our eyes really that special?

What is clear though is that there is now a 2 speed economy when it comes to content. It needs to be either all-you-can-eat for one low price (streaming services) or a la carte (such as Apple tv). The mash-up package model is clearly broken.

The overriding point is simple – all screens are now created equal. People care less about how shiny the content looks and more about availability, simplicity and price. This is why iMax theatres are still niche at best. And sport won’t save Foxtel either, as we can expect these two things to happen:

  1. Tech firms like Amazon and Facebook to start hoovering up rights to major global sporting properties. FB already has rights to Major League baseball, La Liga Football in Spain and the World Surf League, to name a few.
  2. Sporting organizations will very soon realise they don’t even need a media partner – they can sell their own advertising and subscriptions directly for more than their broadcast rights deals generate.

While Foxtel have moved a towards streaming, it seems that they still love their historic infrastructure more than the truth of where the market is headed.

When it comes to business strategy in any realm, it pays to be agnostic about the tools and to remember what our audience are really buying.

This year the internet arrives in Australia

We don’t really have the internet in Australia. I mean, sure we are connected to it, but we aren’t even in the top 50 countries for internet speeds. That’s a total travesty for our economic future. Some of the countries with faster internet include Kenya, Lithuania, Slovenia, Moldova and many developing economies. This is the modern day equivalent of having unpaved roads, no electricity or running water. Outside of the three S’s – Search, Social & Streaming, we barely have web services which can turn industries upside down. But some of that is about to change.

Later this year Amazon arrive in Australia and with their cheap capital (free shareholder money they don’t pay dividends on) and serious intent to dominate this new market. We will finally get, at least one part of the internet, other markets have had for years. If you think you’ve seen disruption to industry in Australia, buckle your seat belt, because we are about to see what they other half of the world already have.  We’ll get to know not only what same day delivery feels like, but 2 hour delivery. We’ll get to know how great it feels for that delivery to be free and we’ll get to pay prices which will make our local retailers seem like robber barrens. It will change our consumer and business landscape because it will be an example of possibility.

I was a guest of the award winning podcast Future Sandwich episode aptly titled, Surviving Amazon. Have a listen here, or wherever you get your podcasts.

Also be sure to check my media page for weekly interviews I’m doing on Tv & radio on all things future.

Don’t forget to join me for to celebrate my new book launch The Lessons School Forgot, on June 20th. Free tickets here, see you there! Steve.

A simple Amazon strategy every business can implement

Jeff Bezos Genius

The future is a pesky little thing to predict. Much of it will surprise us no matter how well versed we are in emerging technology. A lot will change 10 years from now in ways we just couldn’t imagine. But, some things won’t change, and it is easy to know what these things are. So much so that this is a key question Amazon leader Jeff Bezos bases large parts of business strategy on:

“What’s not going to change in the next 10 years?…. You can build a business strategy around the things that are stable in time…. In our retail business, we know that our customers want low prices, and I know that’s going to be true 10 years from now. They want fast delivery; they want a vast selection. It’s impossible to imagine a future 10 years from now where a customer comes up and says; ‘Jeff, I love Amazon; I just wish the prices were a little higher’ [or] ‘I love Amazon; I just wish you’d deliver a little more slowly.’ Impossible.”

And it is clear to see that while they use technology to make these things possible, the future is predictable and something Amazon or any business can build their strategy and infrastructure around. Jeff said this 4 years ago at the Amazon Web Services forum. With 40% of that 10 year window expired, and I’d say it’s all still true. Seems he has predicted the future, just by flipping the question.

So the only question remaining for your business or startup is this: What things can you be working on that just won’t change?

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The deception of history

Reading about Craigs list the other day I started thinking about business history and strategy. As entrepreneurs we often get fooled by the deception of history. And it’s easy to see why. All the business books and articles we read on success are based on what someone or some company we respect did. The problem with this is that the world lives in a state of flux, and what worked then, most certainly wont work now. This is where the Craig’s list example comes to the fore.

Craigslist Head office

Would a 3 color page of hyperlinks which looks like the internet did in 1994 work today? Highly unlikely. Craigslist works now, because it worked well then. It had things working in it’s favour like the ‘in crowd’ in the Bay area spreading the word. That it was first to market with an on-line classified. Now these legacy issues become a strategic proposition which is worth maintaining. What it doesn’t mean is that it’s a strategic template worth copying for Startup X. It’s also less likely we’ll get the support needed from the web community or the investors needed.

The same can be said for pretty much any startup with an interesting history.

A social networking site which is set up for alumni of an Ivy League University probably wouldn’t work.

A trading website where auctions are used to develop the perfect market place probably wouldn’t work.

An on-line retailer which aims to sell every book available in the world probably wouldn’t work.

As entrepreneurs, what we are better off understanding is the insights into why things worked, and try and leverage human behavior in developing a strategic direction to launch our business.

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