Thursday, October 11, 2007

How to monetize physical traffic

If you take your iPhone out today, it will immediately recognize when you've walked into a Starbucks, by displaying a little green icon that promises to tell you something about your surroundings. It will then let you identify and buy the music playing in the store, using nothing but your phone to pay for and receive the songs.

This is only the beginning of a real blending of the physical and digital worlds. We've taken one more step towards actually living in the internet.

We already live in a world where our personal habits and identifying traits are being tracked, recorded and indexed. Each of us has, with varying levels of anonymity, a dossier compiled in a handful of different databases that knows our spending habits, our consumer brand preferences, how much we earn, where we live, and how many text messages we send in a day.

Some people get uncomfortable about this. But this cataloging is inevitable, won't be reversed, and ultimately leads to greater convenience that far outweighs the risks of compromising that data to would-be hackers or identity thieves. The advent of automobiles suddenly made possible horrific car crashes and potential injury that were unheard of with horse and buggy, but that didn't stop us from driving. And similarly, people won't stop participating in a technologically connected society simply to avoid the risk of having personal data stolen.

But I'm digressing. I want to talk about Starbucks.

As long as you're within the confines of a web browser experience, it's a pretty straightforward task to track your activities, record them, and serve them up as valuable snacks for hungry advertisers. Physical location, however, is one piece of personal data that we don't record very well.


When the technology that Apple and Starbucks concocted to make the iPhone-Starbucks trick becomes widespread, we're looking at some very interesting additional applications. Passive location-based services could introduce services and tools to users that they might not know are available, and could enhance the richness of the experience of simply walking around an urban area. When our locations can trigger localized content to make itself known to us, then we're relieved of the burden of tracking down urgent information on our own.

For instance, if I travel to a new city in a country with a language and alphabet I don't understand, then as things are today, I had better employ some help, or I'll be stranded and lost in no time. Stepping into a train station in Seoul, I'll be lost without a translator or a lucky English translation somewhere. What I'd like to see is the Korail logo pop up reassuringly on the bottom of my phone's screen, prompting me to view current train status, schedules, and fare information, in whatever language I choose. If an announcement is made over the loudspeaker, my phone should receive an electronic version of the announcement's text and provide it to me on my phone, in my language.

Location data could also serve as a password for digital rights management, allowing access to data based upon extremely granular data about a person's physical location:.

For example, sporting event organizers are very protective of the broadcast rights to their content, but if they were able to restrict access to people who were actually in attendance at a particular event, then why not open up the content? Special commentary feeds, audience participation games, extra camera angles and user-requested instant playback could all be served to audiences via their phones.

But most obviously, advertising is the real money-maker for this kind of technology. Advertisers are constantly demanding better ways to target potential consumers, deliver the right message to them, and report on the effectiveness of that message. The advent of ubiquitous location-based data enables unprecedented levels of pinpoint targeting.

Imagine a mother and her teenage daughter walking through a mall. If they're paying attention to their phones, they'd each have access to a host of information on special offers, discounts, sale items, and new launches. But it won't be irritating or irrelevant or intrusive to either of them, because each message will be personally tailored based upon data served to the mall's network via the profiles associated with their phones. Mom won't get the Hot Topic offers, and her daughter won't have to scroll through notes from Anne Taylor. Unless they've both shown through their prior habits that those are their favorite stores, in which case Mom will be notified about the new Skelanimals top she's been considering.

The owner of the local network, in this case the mall, generates revenue from advertisers, whether visitors buy anything or not. For the first time ever, reliable metrics on public space ad message retention become available, and give any owner of a public space a lucrative new source of income. The ability to monetize physical traffic will change the world of commerce dramatically, and bring the 'internet industry' into the brick-and-mortar world.

Thursday, October 4, 2007

Nokia puts its money on location-based services

Yes, future mobile development is going to depend upon location-based services. Nokia certainly thinks so. Enough to spend $8.1 billion on it.

Thursday, May 31, 2007

How the Apple TV Should Work

HD means never having to say you're pixelated.

Since time immemorial, (or at least 1984), Apple's products have appeared to have been transported from some magical alternate universe, where things just work. Tiny details of interface design are pored over until the experience is seamless and hassle-free, the hardware is perfectly understated and simple, and often, such as in the case of the iPod in 2001, Apple products offer a solution to problems we didn't previously realize we even had. But the recent Apple TV has been released into the mortal world with a few feature flaws. And I'd like to see them fixed.

First, here's my brief and woefully oversimplified take on the development of our video habits...

The first phase of video consumption was the broadcast era. Advertising provided eyeballs for marketers and circuses for the masses of viewers, and everyone was mostly happy with the arrangement. There was a limited number of channels, you watched programs when they were scheduled and broadcast, and you watched what your neighbor and the rest of the country watched, because there wasn't a lot of content. If you missed The Honeymooners on Saturday night, brought to you by those generous sponsors at Buick, you were left out of the water cooler conversation on Monday.

After a few decades of this arrangement, content choices expanded with satellite television, with hundreds of cable channels. VCRs became popular, which made it possible to time-shift our video consumption for the first time.

Then, as along came digital video recorders, on-demand video from cable providers, streaming content on the internet, and Netflix. Today there are a lot of different ways to get video content from the world into the home, and a lot of differing standards and rules for the average consumer to learn.

Time shifting of television content, whether through a VCR or a DVR, has never been anything more than an interim step in the development of video distribution. It isn't a mature vision of digital video's potential. Using a set-top TiVo box to record video content is simply a bolt-on workaround to the decades-old arrangement proposed by content distributors that 'You watch the ads, we won't charge for the shows.'

Saving programs for later watching doesn't harm anyone, but when advertisements can be removed from the watching experience, then an imbalance is created, and the result is an economically unsustainable arrangement. Advertisers and content distributors don't get their precious targeted eyeballs, and viewers are annoyed with having to fast-forward through those wasted ads every few minutes as they watch their favorite content. This is clearly not what the future looks like. The traditional model of advertising-based broadcast television will pass, and with it, so will the need for TiVos and other DVRs.

So the broadcast era is over, because it's been killed by time-shifting technologies. But what's next, and how will we get there? There's a genuine chicken-and-egg dilemma involved in adjusting consumer watching behavior to this next phase of video consumption. You need paying viewers to make any service viable to content owners, and you need breadth and quality of video content to make it worthwhile for consumers. Which comes first?

The Apple TV represents, at its best, a shift to the next technological phase of video consumption habits, where the clutter of these different methods is replaced with a single seamless solution.

For the Apple TV to reach its full potential, it will need not simply to augment current methods of video distribution, but to replace them. Instead of being an additional box to tether to a videophile's stack of equipment, it will need to be the only box - a shelf-clearing solution that eliminates the need for DVRs, DVDs, digital cable, and satellite.

What can make this happen?

How It Is
The iTunes Store offers a selection of video files, including movies, TV shows, music videos and podcasts. With the exception of the podcasts, all video files are priced individually, just as music tracks are, and must be purchased outright to be viewed. Video resolution varies greatly.

How It Should Be

1. Subscriptions

First, video must be available on a subscription basis. Currently, Apple TV content from the iTunes Store is purchased on a per-title basis, just like music. But music and video, despite being downloadable files, are very different creatures.

Music lasts. It gains emotional weight depending on the time and life circumstances in which it's played, and becomes more enjoyable as it becomes more familiar. People enjoy building personal libraries of music as a representation of their own personality and taste, and use music as an accompaniment to other activities in life, whether at home, at work, on vacation, or in the car. For these reasons, it makes sense to buy music instead of renting.

But video is different. Video content usually requires undivided attention, can't be consumed simultaneously with many other activities. Most importantly of all, video content becomes progressively less interesting the more it's viewed. DVDs tend to languish on shelves, largely untouched after their first couple of viewings.

So, it is for these reasons that the Apple TV must be linked to a wide variety of content, all freely accessible for a monthly fee. Sure, Apple and the content owners would need to spend some time negotiating the pricing hurdles to make an amicable situation for everyone, but once these issues are resolved, we'd be in a much better place, and the userbase would be allowed to grow. Make tiered subscription levels if you need to, assign premium content status to select content if you need to; that's fine! But don't make me commit to paying a flat fee every time I decide to watch an episode of a program that I might not even like anyway.

2. Resolution
This is the biggest deal-breaker for the Apple TV in its current form, and is the main reason that I haven't bought one yet. There isn't much more to say about this; I know that there are technical challenges to making all content on the iTunes Store available in crystal-clear HD.

But as a consumer, I don't really care. I just know that I don't want pixelated content on my TV. Ever. Any video distribution method that gives me poor-quality video is a step backwards, and I don't have any patience for it.

3. Live content
Steve Jobs recently announced that YouTube content can now be accessed directly through the Apple TV. This is a huge good thing, but we're still talking baby steps. Until live sporting events and news broadcasts can be consumed, in high quality (see point above) then I'm still stuck with a cable box, lest I want to miss out on college football or ESPN 3's live coverage of hotdog-eating contests.

If Apple and the big sports agencies can negotiate the licensing rights to their broadcast content, and if the technical challenges of streaming HD video can be sorted out, then we consumers would have no more need for anything on the shelf under the television but the Apple TV.

Here's a great chance to make the long tail of obscure sporting events into a cash cow. If I want to watch something that isn't widely available, like a minor league baseball game or a sumo wrestling match, I don't even have the option of watching it. There's simply nobody to take my money for it, even if I'm willing to pay. The iTunes Store could be the perfect marketplace for obscure live content, and the Apple TV could be the pipeline by which it gets onto my television.

Sort all of these issues out, and we'd have simplicity, an easy interface, abundant, high-quality and fairly-priced content. And then that happy little world that Apple has been so good at creating for us in the past would be that much closer to reality.

Tuesday, May 29, 2007

Google Maps Gets Serious Upgrades with Street View and GPS

What's it look like in person?

Google has just this morning launched the Street View feature on Google Maps for most of the Bay Area, Las Vegas and New York. This announcement, made at the Where 2.0 Conference in San Jose, is an incredible step forward, and from the few minutes I've spent playing with it, I can attest that the interface is smooth, intuitive and ridiculously cool.

This added functionality is a giant step forward for Google Maps' usefulness, and another glimpse into Google's 'master plan', where even the most minute pieces of information are cataloged and available online. Intangible and insignificant data like a neighborhood's 'feel' are now accessible through a browser. This takes the well-intentioned but poorly-executed goals of the late A9 and does them correctly.

I've just used Street View to check out my neighborhood, and I've just peered into my bathroom window to count the number of bottles on the windowsill. This level of data, as well as license plate numbers and images of pedestrians, will likely raise the ire of many with privacy concerns. But I'm just giddy about the technology. This kind of data certainly wasn't available before this morning...
Three bottles on the shelf.
Although not entirely within the scope of this greater blog, this announcement is relevant to my earlier treatise on the development of Google Maps into a more functional and location-based service.

Additionally, GPS-enabled Google Maps services have been announced for the Blackberry 8800.

Google Maps data has been available on mobile devices for awhile now, but accessing it has been a bit time-intensive, because the user has, until now, been required to determine their location and then enter it into the device. Now the obvious link between Google Maps and GPS data, provided by newer handsets, has been made. This is an expected but laudable development, and one step closer to the location-based social-networking solution I wrote about earlier. The open-API possibilities for further development of mobile applications is now staggering.

Monday, April 23, 2007

How Location-Based Social Networking Should Work

I'm excited about the possibilities of location-based mobile services. By this I mean software services that take advantage of a user's physical location (determined by a GPS transponder in the phone or by geographic information transmitted from the phone to the mobile network) to provide current and pertinent information such as traffic, public transit data, local attractions and restaurant reviews, localized shopping, and, most importantly, localized advertising, all determined by the user's location. The ability to offer an advertiser an audience qualified by their actual current location would be of huge value.

But today, in 2007, most LBS applications suck. They're difficult to use, and require so much time and attention to sign up, set up and use that most casual users will never try. It's a chicken-or-egg dilemma, but without a growing and active userbase, an LBS will never become successful.

The Killer LBS App
Start with Dodgeball. Functionally, it's a good place to begin. It's under the nurturing care of Google, so there are plenty of possibilities for piggybacking onto existing services that already have userbases, like Gmail.

Right now, users of Dodgeball are required to 'check in' actively via SMS. For some phones without GPS functionality, this is the only way it could work. But let's look further forward into the future, and go ahead and add passive GPS-derived check-ins. No more typing "@local bar name" and waiting for a flurry of SMS messages to go out to all of your friends. Instead, just go to the bar, and if you've turned your visibility on, then your friends will know where you are. If they need to be reminded, then just click "Announce My Location", and let your phone's GPS service take care of the rest.

The next step would be to build a mashup of Dodgeball, Google Maps and Gmail Chat, so that all of the big LBS benefits are delivered seamlessly through one solution.

Let's move on to the illustration of what this could look like, to facilitate the explanation:

From a mobile device (or from a desktop, but for the full benefit of the mobile aspect, let's assume we're using a mobile device), the user accesses a list of friends. Each friend's location is being tracked and reported by the GPS component of their mobile device, and their location is logged on the list. An illustration:

By selecting the Map view, the same list of friends can be viewed visually, with each contact's location displayed on a map, as shown here:
And finally, by selecting a friend individually, their profile can be accessed, a call or SMS can be initiated, or directions to their location can be requested:

How Google Money Could Work

This is a follow-up to my previous post about how a web-based personal finance tracking solution could make life easier, as an improvement to the current state of Quicken, which is currently shackled to a desktop application.

I'm very deeply entrenched in Google's suite of online products; I use Gmail and Google Calendar extensively. I use Dodgeball and Google Voice Local Search and Google Earth and Sketchup, etc. I'm also very excited by the future prospects of Google Apps for location-free and collaborative document management. Generally, I find that as Google continues to add functionality and interoperability to their suite of online offerings, my life becomes easier to track and my personal information easier to maintain.

The one exception so far is my personal financial tracking, for which I use Quicken. A web-based version of such software, offered by Google and taking advantage of existing features in their other products, would be a useful way to manage my life.

Calendar products manage time, ensuring that I don't double book my schedule or miss a planned activity. Personal finance programs manage money, ensuring that I don't spend more than I budgeted or miss payment deadlines.

Spending time often means spending money, and many events in my time schedule directly correlate to events in my financial schedule. I schedule my time using one piece of software, and my money using another one. But why not mash them up?

Here's an illustration of what I mean:

How It Is
I call to schedule a haircut for next Thursday evening. After I've confirmed the appointment time, I create an event in Google Calendar, indicating the time and place. Now, if I want a fully accurate view of my upcoming transactions in Quicken, I'll need to remember when I get home a few hours from now that next Thursday, I'll be spending some money on a haircut. Unless I create a calendar event to remind me to enter the transaction (which would be a fantastically redundant waste of time), then I'll just have to remember, because Quicken is installed on my desktop computer at home.

How It Should Be
I call to schedule a haircut for next Thursday evening. After I've confirmed the appointment time, I create an event in Google Calendar, indicating the time, place, and expected cost. The end. It could look something like this:

Thursday, April 12, 2007

Google and pork products

So this one is a small issue, and doesn't cause problems to the user as much as it's just mildly amusing. But I thought I'd bring it up anyway.

Users of Gmail are familiar with the unobstrusive text ads that appear alongside messages. The content of these little snippets is determined based on words contained in email conversations. For instance, if you're emailing back and forth with a friend about your upcoming trip to Cabo San Lucas, deciding when you'll go and where you'll stay, you're likely to see some text ads along the right column advertising Beach Rentals in Cabo or travel sites for booking your flights.

I think this feature is very useful. It's a great value proposition for users, advertisers and Google. Advertisers are guaranteed a receptive target to their message, users aren't bothered with irrelevant ad messages, and Google...well, Google is Google because they always gets paid.

But Gmail has a cannabilism problem. As it scans, looking for keywords to match to web content or ads, it's scanning itself! And the hilarious case in point - the spam folder:

A few times a day, I click on my Spam folder, do a quick scan to make sure nothing legit got tagged, and then I empty it. Gmail's trusty ad keyword searcher, however, dutifully picks up the word Spam and, invariably, every single day, gives Recipes for spam casserole. For spam and eggs. For spam on toast.

It's a return to the Monty Python litany that created the word's tech-based meaning in the first place. I suppose I'd laugh a little less often if this glitch got fixed, but isn't it a glitch all the same?