Online business continues to grow
Its a story that never seems to get old, but with a few reports published this week looking into different areas of growth of online business, it seems worth the occasional reminder that digital is still growing.
Firstly, the Global entertainment and media outlook from PwC outlines an expected growth of digital's share of all entertainment & media spending from 26% to 33%.
For the UK, PwC forecast a 4.8% increase over the next 4 years to £17.7 billion, with a rise of 11.2% for the online market (the only segment to be forecasted double digit growth.) However, although search advertising has previously been the main driver for the UK's online growth, social media and classified advertising are expected to be the source of the next wave of digital expansion.
Consumer spending on media and entertainment is expected to show slower growth of 2.7%, to hit £32.7bn by 2015, with £9.2bn being spent on accessing online media.
(Figures reported by NMA.co.uk)
Meanwhile, the IMRG Capgemini e-Retail index reported that online consumer spend in May was up 18% on last year to £5.3bn – equating to an average spend of £85 per person, with a total of £27.5 billion spent by consumers this year so far. By omitting travel (with "big ticket" spending in categories such as travel, electrical and home & garden still seeing the impact of the recession), an even more impressive growth of 21.5% is reported.
A similar report from the Office of National Statistics (PDF link) claims that ecommerce now accounts for 9.4% of the total retail market (excluding automotive fuel), up from 7.4% last year and 8.5% in April.
But that's not to say that everything touched by digital turns to gold, as the chief executive of Guardian Media Group announced £33m in losses for last year, as while readership is moving online, revenues aren't following at the same pace, saying that they could run out of cash in three to five years if the business operations did not change.
The group is now committed to a "digital first" strategy, aiming to double digital revenues to nearly £100m by 2016. Editor-in-chief Alan Rusbridger said that an "open" digital philosophy would be embraced, bringing in contributions from beyond the ranks of its own journalists.
The move indicates that the Guardian doesn't believe that the decline in the print edition can be stopped or reversed, with Miller saying that "All newspapers will ultimately exit print, but we’re putting no timeframe on that.", and Rusbridger saying that "Every newspaper is on a journey into some kind of digital future. That doesn't mean getting out of print, but it does require a greater focus of attention, imagination and resource on the various forms that digital future is likely to take."
But rather than abandon the physical product, the newspaper could expect to see a redesign, aiming to be "as relevant at 9am as 9pm" and aiming to emulate "Newsnight not News at Ten."
Top Level Domain Names (the last part of web addresses- ".com", ".org", ".int" etc.) have, until now, been intended to refer to either the geographic location of the web services, or provide information about the sort of services on offer (for example ".gov" indicating a US governmental agency, ".biz" indicating a business, ".mobi" indicating a site for mobile devices etc.)
ICANN – the body that oversees the management of internet names and addresses – have changed the system, allowing "groups" to create top level domains in any language or script.
What this means is that – in theory – large corporations (with $180,000+ to spare) will be able to set up a top level ".google" or ".msn" domain for their own use. What is more likely is that we will see more useful naming systems- so perhaps in a few years, you will get Premiership football updates from "premiership.sport" or "football.news", listen to music from "itunes.music", or find a nearby restaurant at "london.food" or "food.london". (Maybe you will end up finding us at "emergingspaces.media" – unless we can find the cash for "emerging.spaces"…)
ICANN have published a full guide (PDF link) to how the new system will work, and there is a useful 9 things you need to know post over at Mashable.com.
Mobile applications for catch-up TV
An ITV Player Android application has been launched, giving mobile access to ITV's catch-up TV services. Available across all Android 2.2-compatible devices, the app is free, although ITV haven't ruled out micropayments for content in the future.
With similar apps expected for Apple tablets and smartphones later in the year, this follows releases earlier this year of mobile applications for iPlayer and 4OD.
4OD's application is currently free, carrying sponsorship from Heineken, but it is understood that the long term strategy is to provide access for a one-off payment.
iPlayer is free for UK users but also this week, the BBC announced the first stage of a global rollout would begin with Western Europe. (Source: NMA.com) The international iPlayer would be a "different proposition" to the UK version– instead of serving as a catch-up service for broadcast TV content, the iPlayer will be the only way of accessing BBC content, which will be available for a monthly subscription of "less than £6", with a definitive amount yet to be announced.
Disclosure: Heineken is a Starcom MediaVest Group client.
A year since the launch of the iPad, and still no official Facebook iPad app- even though the iPhone app was ready as soon as the App Store opened.
Apparently, not for long though. According to a New York times report, an official Facebook iPad app is understood to be in the final stages of testing- although the official word from Facebook is "nothing to announce now."
But there is some interesting discussion going on around Facebook's future involvement with native apps for iOS devices.
TechCrunch has reported about a project at Facebook going under the codename "Project Spartan", aimed at building a web application in HTML5, targeted at Mobile Safari users. Like the FT app we noted recently, the web app would bypass Apple's App Store, creating a platform that Facebook would be able to build on without having to follow Apple's rules and guidelines.
This highlights some important shifts that are going on with online platforms. As a platform owner, Apple are in control of what goes onto iOS– whether that is the recently announced integration with Twitter in iOS5, or the Apps that are allowed in the App Store.
But Facebook are a software platform– developers can build applications that work within Facebook. For their platform to work effectively across both desktop and mobile devices, they need to have control over it. On the technical front, this means that applications that work within Facebook need to be able to work on all sorts of devices– including ones that can't/won't/don't support technology like Flash (which appears to be the main drive behind the Spartan project.)
Another post over at Techcrunch suggests that Facebook's PR is none too happy about the news being broken, suggesting that Apple aren't aware of what a Facebook platform that bypasses Apple's App Store might be able to offer. Because if Facebook want to develop features like Facebook Credits which allow for payments within Facebook, then they will need to either figure a way to operate within Apple's guidelines (which includes Apple's 30% cut of in-app payments), or find an alternative way of reaching users of Apple's applications.
Perhaps Apple won't mind payments made in Facebook credits (provided Facebook don't directly sell them within the application.) But it seems a safe bet that Facebook won't want to be building all their future plans on assumptions of what Apple might or might not allow– both now and in the future.
But Apple aren't the only ones who can control what goes onto their platform– as a surprising story from the US shows, where the New York Post is apparently blocking iPad users from accessing their website.
Although access to the site is free to web browsers on the desktop and other mobile devices (including the iPhone), iPad users attempting to visit the site (either the homepage, or following links posted elsewhere) will see a message asking them to download the iPad application from the App Store – and pay either a subscription of $6.99/month or $74.99/year to access the content.
Currently, iPad users can still use a browser other than Safari (the iPads default) to access the website– or use an alternative device. We can only assume that this is not a strategic decision in itself, but simply a step towards the implementation of a full paywall strategy and other devices will see similar blocks as soon as alternative applications are in place.
