Johnny B Goode is 50 years old today ..

The iconic Chuck Berry song Johnny B Goode is 50 years old today ..

This vintage video is great! .. enjoy ..

Flixwagon, citizen journalism, Mobile Web 2.0

flixwagon.JPG

Continuing the theme as per my last post about grassroots political movements let by Mobile / Web 2.0 ..

My friend Xen Mendelsohn recently joined an exciting Israeli start-up called Flixwagon which has the strapline Life is a journey – broadcast it live

Flixwagon have introduced new technology that enable any 3G/WiFi user to broadcast live video from the mobile to the web by installing a small application on the mobile phone.

I have since been following flixwagon through posts from Xen which include a recent post called Walking the dog which Xen compares live video streaming to blogging and says

“What would happen if everyone, anywhere, could have their own live television station from a mobile phone? So I could broadcast something as banal as my walk with the dog, or citizens could go live in conflict zones?”

And rephrases to contrast with blogging

What would happen if everyone, anywhere, could have their own blog/online news site on the internet? So I could cover something as banal as my walk with the dog, or citizens could go live in conflict zones?

This whole idea of capturing content at the point of inspiration has been a driver for Mobile Web 2.0. In my book Mobile Web 2.0, I talked about the concept of ‘capturing content at the point of inspiration’ as being a big driver for Mobile Web 2.0. I also covered the same topic in a recent post called Mobile multimedia twitter .

The ideas are interesting even more so that live streaming is accomplished by companies like Flixwagon without a network upgrade / IMS.

Recently, MTV also used Flixwagon in it’s coverage of super Tuesday in an example of citizen’s journalism, Citizen Journalism.

Armed with Nokia N95 devices and Flixwagon, MTV’s street team went out to cover Super Tuesday from a first voters’ point of view using laptops and mobile devices. All videos were broadcasted to MTV’s website and every 30 minutes, edited snippets were broadcasted on TV. As the stats below show, the initiative was a success and gained a lot of traction.

As the penetration numbers of 3G/WiFi mobile increase globally, and fixed rate price plans become commonplace – as does the tendency to share content within a closed community – a trend which Nokia calls circular entertainment , citizen journalism may well be the next big thing.

Here are some stats from MTV re the Flixwagon initiative ..

What do Operators charge per location hit/request?

Hello

We have discussed this question a few times before.

Currently, What do Mobile Operators charge per location hit/request?

Thanks for your help kind rgds Ajit

The decline and fall of traditional media and its grassroots impact on politics

The first time I came to live in England a few years ago, it was a cultural shock.

Not for the people but for the newspapers. Let me explain ..

If you were born outside England(as I was in India), you often have a quaint notion of England. In my case, it was based largely on reading Enid Blyton as a child and watching programs like To the manor born , Yes Minister and others. So, the impression of England is often polite, kind, cultured, dignified and with a sense of fairplay and a sense of humour.

However, when I first came here, I was shocked by the coverage in the tabloids especially the right leaning conservative press such as the Daily express , Daily mail and the Sun .

Hence, a few months later, when my landlord asked me ‘How do I like it here?’ – I said – it is different from what I expected. When I read the newspapers, the coverage seems so vicious and acrimonious. Not what I had expected.

He then smiled and gave me a piece of advice which I have followed ever since.

- Ignore the right leaning newspapers(The daily mail and daily express).

- Treat the left leaning newspapers with some skepticism(since they have an agenda)

- Read the Sun only till page 3 :)

- And read ALL your news from the Financial times or the Economist

Years later, now that I am a British citizen (and proud to be one!) as I reflect on that advice, it was an accurate portrayal of the many positive experiences I have had here.

In other words, the people are a lot better than their newspapers.

But why so?

Since my talk at the European Union on Web 2.0 , I have been following the impact of grassroots campaigning especially with the use of the Web so effectively by Barrack Obama in the forthcoming American elections.

There is a shift away from the power of big media – towards the people.

This can be only a good thing.

When Tony Blair stepped down as the British prime minister, he called the media feral

More recently, two major British newspapers apologized to the parents of Madeline Mc Cann for the outright lies they had published.

Indeed the traditional media is growing more rabid and vicious because they have to compete to gain a share of the attention in an era increasingly dominated by the Web.

I think this is a reflection of the shift of power away from the newspapers to the Web.

Apparently, (I can’t confirm this), the daily telegraph is the only newspaper in the UK which is profitable. The telegraph has an elderly audience – which probably explains its profitability.

This article from the Guardian paints a more accurate picture where it indicates that a majority of the young people no longer rely on the newspapers to get their information.

This can only be a good thing. It is a little unsettling to see media barons like Rupert Murdoch direct their newspapers to ‘support’ a political party .

The decline of traditional media and consequently in the death of the symbiotic relationship between media and the politicians can only benefit people and lead to the emergence of grassroots leaders who don’t need the backing of big media or big business.

This may not happen immediately but may well happen sooner than we think.

As a libertarian, I find this very appealing.

Orange tries to do a Blyk but I dont think it will work ..

Orange, the Operator behind the MVNO Blyk, is trying to now do a similar model itself. However, I dont think it will work. The issue is not Mobile advertising, subsidised content per-se, the issue is – the creation of an entire ecosystem to deliver the service including permissions, user experience, personalization etc etc.

For instance

The trial, which will be operated via the operator’s mobile portal, Orange World, will see 800,000 of Orange’s 15.6 million customers given the option to download a variety of music, from four different genres – urban, pop, rock and dance – to their mobile handsets for free, or a discounted rate. Orange will make over 500 tracks available on the service.

The problem is: how many people will share their music preferences with their Operator on an ongoing basis?

So, realistically only players that try to influence a substantial element of the ecosystem have a chance of working. That includes Blyk, Android, iPhone and others – but not if you retrofit the model on existsing systems

Factors driving open mobile ecosystems ..

Hello

I seek feedback on this concept.

As I have mentioned before, I am working on a new book Open Mobile Ecosystems co-authored with Anna Gatti and Mauro Del Rio and contributions from Dr Andreas Constantinou

Here is an elevator pitch for the book

I have been talking of OpenGardens for a few years now, and these are the factors I see which are driving openness in the Mobile Data Industry today.

Question is:

a) What do you think of them and

b) Have I missed any?

Thanks for your feedback

So, here is the elevator pitch

The Mobile Internet has always held potential – but so far, it has not been fulfilled. While the Internet and the Web continue to grow and evolve into a vibrant ecosystem, the Mobile environment remained fragmented and closed.

To fulfil its true potential, the Mobile ecosystem has to mirror the open ethos of the Web. The good news is – recent developments give cause for hope. In many instances, these are driven from the Web rather than from Mobile. While open systems themselves are timeless and inevitable, their practical manifestation to the Mobile Internet is driven by a few key recent developments. Hence, this book represents our selective viewpoint about these developments

There are three major interrelated developments that are impacting the openness on mobile networks at different levels of the stack:

a) Open source on mobile devices at the software/operating system layer

b) The deployment of the full Web on mobile devices at the application later and

c) Social networking at the services layer

This book will focus on these three aspects above. We will see their individual (and combined) impact in creating an open ecosystem on the Mobile Internet. Hence, this book presents a specific viewpoint. We have chosen to focus on these three developments because we believe that they are most likely to impact the Mobile Internet as it stands today.

We can further break these down into emphasis on the following developments:

a) Webkit implementations

b) Mobile Ajax(full web browsers) including DOM extensions/browser extensions and devices APIs(Application programming interfaces)

c) Privacy and security for the Mobile Web

d) Microformats

e) The iPhone

f) Android

g) Linux on mobile devices

h) Open social networks

i) Offline browsing

While Open Mobile covers a wide scope (such as mobile payments, mobile advertising, location based services, mobile content, mobile search, mobile social networking, digital convergence and others .. ), it is always within the context/viewpoint of the factors listed above.

So, what do you think? Are the factors and subfactors correct?

Thanks for your feedback

A WiMax breakthrough in India – very interesting ..

One of the world’s largest wimax deployments is in India .. very interresting ..

source: businss week/rediff link above

>>>>

India is about to become the frontier for high-speed, mobile Internet connections. On March 4, India’s Tata Communications, an emerging broadband player, announced the countrywide rollout of a commercial WiMax network, the largest anywhere in the world of the high-speed, wireless broadband technology.

Already 10 Indian cities and 5,000 retail and business customers use the product, and by next year Tata will offer service in 115 cities nationwide. The folks at Tata can hardly contain their excitement. “WiMax is not experimental, it’s oven-hot,” says Tata’s Prateek Pashine, in charge of the company’s broadband and retail business.

* Inside the Tata group empire

Of course WiMax is not new. Most everyone in the industry has been talking about it for years. Intel chairman Craig Barrett has been propagating its virtues in pilot projects across the world, including India and Africa.

Powered by Intel chips

Sprint will be rolling out a WiMax network in Washington next month, and in other US cities next year. Until now the most advanced use of WiMax has been in Japan and Korea, where Japanese carrier KDDI and Korea Telecom offer extensive WiMax networks.

However the Japanese and Korean services are not available nationwide – KDDI will have its major rollout only in 2009 – and most people use them as supplements to the wired services.

* Tata unveils the world’s cheapest car

It’s in emerging economies like India, where there is little connectivity and where mobile usage is soaring because of the difficulty in getting broadband wires to homes and offices, that WiMax is likely to see its full potential as a commercially viable technology.

Intel, whose silicon chips power WiMax, has been pushing for this technology for some years and its executives are practically salivating at the thought of the successful rollout in India.

“The more countries and telcos that get behind this technology the better,” says R. Sivakumar, chief executive of Intel South Asia. Predicting that the new technology will make other types of Internet access obsolete, he boasts “Tata will set the cat among the pigeons.”

* Tata: Master of the gentle approach

Tata Communications has been working on setting this up for a couple of years, and successfully completed field trials last December. It has used the technology from Telsima, a Sunnyvale (Calif.) maker of WiMax base-stations and the leading WiMax tech provider in the world.

For now, the technology will be restricted to fixed wireless, but Tata plans to make it mobile by midyear. The company has invested about $100 million in the project, which will increase to $500 million over the next four years as it begins to near its goal of having 50 million subscribers in India.

The world is watching

Global tech analysts are will be watching carefully. Though WiMax is prevalent in Korea, the Korean service is a slightly different version, says Bertrand Bidaud, a communications analyst with Gartner in Singapore. It’s a Korea-specific pre-WiMax technology called WiBRO.

But the Indian market is where the conditions for a WiMax deployment are the best, he says, because of limited fixed lines. That means Tata has fewer hurdles to overcome. And as WiMax scales up fast, it will give service providers greater flexibility and costs will drop equally rapidly.

Learning from Tata’s Nano

“If it doesn’t succeed in India, it will be difficult (for it to succeed) anywhere else, and Bharti, Tata has been virtually asleep, with a limited subscriber base for its limited product. In fact, even with as many as seven broadband providers in the market, the total Indian subscriber base is just 3.2 million and there is no clear market leader.

But with the WiMax rollout Tata can gain a leadership position and add “a few thousand subscribers a day,” says Alok Sharma, chief executive of Telsima. Tata is, of course, going for the heavy-billing corporate customer – a target audience that is beginning to make big investments in technology.

Temple service via WiMax

But also important is the ordinary Indian retail customer who can watch movies via WiMax and enjoy Tata’s other unique offerings. For instance, users can take in an early morning worship service at the famous Balaji temple in South India.

The temple permitted Tata to install cameras so that Hindu devotees from around the world could watch the proceedings in the temple around the clock. To get connected initially, users will simply have to go to a store, buy a router, install it, and then they become instantly connected. It will be as easy as buying apples, Tata executives promise.

The Tata rollout is a chance for India to become cutting-edge in mobile Internet services, say WiMax boosters. For India, which “always used last year’s fashion to dress itself up,” says Sharma, it is a chance to launch a brand new. fourth-generation technology that the world can follow. “India is becoming the knowledge centre of the world; it should take the lead in this,” he adds.

<<<

Portio research trend: 2008 will be the year that the worldwide mobile industry becomes a one Trillion US Dollar industry

Portio research trend: 2008 will be the year that the worldwide mobile industry becomes a one Trillion US Dollar industry

This is interesting, for a few reasons.

It says Trillion $ THIS year(2008) so not a forecast.

It also makes some predictions and data about near term trends(2008 to 2011 – data non voice and non SMS)

Qs is: Is it correct?

I am focussing on the statement

But that still leaves more than USD 161 billion from data services in 2008, rising to over USD 251 by 2011

I have a few qs

As I understand it, this is non SMS, non voice. Mature mobile markets like Japan and Korea will not contribute to the jump.

a) Does any one else have any validation of the 161B 2008 figure? What do other analysts say? This is no longer a ‘forecast’ since its already 2008. So, it must be a number that we can verify within a small margin

b) Whats the breakdown of the 2008 number in industry terms(again this must be known or may be imvestigated by other analysts)

c) What do we expect to cause the jump from 161B to 251B? This is a rapid jump of 55% in 3 years. If this is true, my three candidates are China, India and HSDPA.

My presonal view is

a) I don’t understand the 161B figure yet

b) I don’t expect a rapid growth to 251B but I expect that China, India and HSDPA will be the main factors for growth

c) I also expect a more gradual rate of growth for mobile data driven by Nokia, Apple and Google devices overall

thoughts/views??

kind rgds

Ajit

Open Mobile business models – the impact of free, open and fremium on the Mobile Data Industry

NOTE: I am tracking developments/links in this space at the end of this blog. These include both development of Open Mobiles as well as development of more closed handsets(in the belief that both will co-exist). If you can add any insights, please do so. You can email me at ajit.jaokar at futuretext.com

Introduction

I started writing this article on a day when yet another component became ‘open’. Unexpectedly, it was ‘search’ – driven by Yahoo open search and ironically for once, the company talking most about openness (Google) – was not doing the opening!

Open is a big buzzword now – Both on the Internet and the Mobile internet

And that makes a change from the early days of this blog – which has been all about openness in the mobile data industry. At that time, openness was a strange word. While the technology has always existed – the business reality was based on hope!

Much has changed over the past few years and it is time to look at Open 2.0 – to use a much maligned suffix.

Synopsis

This is a long article – even by my standards :) -and the links I have referred to on this blog are also comprehensive. It draws from many sources and refers to ‘free/fremium’ business models originally discussed by Chris Andersen at Wired magazine

Further, I expect that there may be an addendum. The overall ideas are discussed in my forthcoming book Open Mobile Ecosystems co-authored with Anna Gatti and Mauro Del Rio and contributions from Dr Andreas Constantinou

This article covers

a) The meaning of ‘Open’ in context of the mobile ecosystem

b) The disruption in business models

c) The emergence of new business models which arise from open ecosystems.

d) Ultimately, we hope to cover the impact on Operators and other players etc and new models they can adopt

e) Free/Fremium business models and their applicability to the mobile data industry.

I have also invited some feedback from people whose views I respect in the industry – to complement my own thinking. So, all feedback welcome.

What is Open? – Defining Open from a customer standpoint

Firstly, let us talk about what we mean by openness. This is not as easy as it might seem. For instance, depending on the context both MySpace and facebook could be deemed ‘open’ (or not!). The same applies to Apple/iPhone.

For the lack of a better definition, we can define openness from a customer standpoint as -

‘The freedom of choice for the customer and the removal of commercial and technological barriers that hamper free communication between people’.

This customer oriented definition of openness is universal since benefits to the customer is the common factor for all businesses.

If we break this down into its component parts, then we get

a) The customer is the main driver

b) She should not be patronised

c) She has choice

d) She expects interoperability(systems to talk to each other) and will not like business models which are meant to serve the vendor at the expense of interoperability(for instance region coded DVDs)

e) She owns her own data (Data portability)

By extension,

a) Openness is about services that are driven by communication (and not consumption)

b) Open systems are not synonymous with ‘free’

c) Openness is disruptive and will lead to new business models which affect incumbents and create new winners, losers and partners

d) Creators of platforms which benefit ALL players in the value chain are the winners in an open ecosystem as opposed to closed platforms like the traditional Operator portals

e) Open is not synonymous with open source – in the sense that commercially restrictive business models can still be built around a system that is created using open source.

f) Having said that, Open source is an important part of open systems(as we shall see below)

g) The Web is a driver for open systems and the adoption of the Web, Web standards and Web business models on the Mobile Internet is a catalyst for Open systems

h) Privacy, Identity, security, reputation and revocation will be an important part of the open ecosystem – especially on Mobile devices.

i) ‘Choice for the customer’ means ‘low barriers to entry for third parties’. This is controversial for many people i.e. why should we allow third parties on ‘our’ network? Won’t that affect our profits? We address this question below through the discussion about innovation at the edge of the network.

j) Open systems in general lead to innovation. To understand this, we have to appreciate the ‘edge of the network’ thinking which we also discuss below.

The inevitability of openness

When I talk of Open Mobile Ecosystems – people often respond by framing the problem in terms of ‘On portal – Off portal’(On Deck/Off Deck). This is very limited and it ignores the real issues – for instance choice for the customer, Low barriers of entry for third parties etc

But firstly, why talk of Open Mobile ecosystems? Why not continue with the mechanisms that have worked before?

There are many reasons. Here are a few

a) Customer choice – This is the biggest reason. Customers have a choice and increasingly these choices will increase. The customers will go with what serves them best. These choices extend at the network level(Wimax vs. HSDPA) to devices(open devices vs. closed devices) to services(access to any service – not just ‘on deck’)

b) Market opportunity – Openness can lead to new market opportunities – see the discussion on Mobhappy about the opening up by Verizon potentially driven by opportunities like Amazon Kindle.

c) Openness reflects the way we live I recently asked this to a vendor – Do all your friends and family have subscriptions from the same Mobile Operator? OR Do all your friends have buy devices from the same vendor? – Obviously not. Then why do we base business models and strategies on such ideas?

d) The consumption based Mobile Content model is levelling off out and user generated content may play an important part in future content mix: Again, on first glance, this sounds unlikely. But look again. One of the market leaders in supplying / managing content for Operator portals is Mobile Streams.

However, in a trading statement in Jan 2008, Mobile Streams said: Growth in downloads from operator portals was largely flat

And again in the same statement

The Company expects in 2008 to see the continued gradual opening up of the Mobile Internet around the world as companies such as Apple and Google continue to strengthen their global mobile presence.

I expect others like motricity whose business also depends on Operator portal strategies, will also suffer from the same woes. The market has changed and all players will need to react to these changes.

Nor is it an isolated trend.

BMI Forecasted Ringtone Market Down 8% in 2007 (BMI is an American performing right organization that represents more than 375,000 songwriters, composers and music publishers in all genres of music.). And Nokia predicts 25% of entertainment by 2012 will be created and consumed within peer communities

and again YouTube showed a surge of 18% in traffic in the two months since the writers’ strike began

All these trends are collectively pointing to a significant shift in content/media – and they all affect existing business models and partnerships – especially when they are based on consumption based content(i.e. non user generated content) and will get even faster with developments like the deployment of Google Gears on Mobile devices

e) The rate of change is accelerating Just a few years ago, no one talked of ‘off portal’, fixed rate pricing and so on. Today, no one wants to deny that they support fixed rate pricing! The rate of change is faster than anyone predicted.

e) Google and iPhone .. are changing business models .. for instance the iPhone changes the Operator billing relationship through iTunes. Both Google and Apple are unifying the fragmented value chain. Both have their roots in the Web/PC world. Both are developer friendly and have potential to create a viable ecosystem

f) Customer education – AOL learned this recently. In the early days, there is always the perception of the ‘Big bad world’ out there. However, once customers are educated and familiar with technology, they want to explore. In other words, wander out of the walled garden

g) The Mobile Web As the Mobile Web adopts the full web standards (like CSS, Javascript etc), the Web and the Mobile Web become synonymous. This means applications(like Widgets) can be deployed both across the Web and the Mobile Web.

Options to openness

The end goal of Open systems to create interoperable systems. There are other ways to create interoperable systems. A large vendor/ monopoly is one way (Microsoft on the Web, DoCoMo in Japan etc). Government mandates is another way(South Korea and also China).

A preferable way(which we are seeing in the West) is a mixture of Open source and Open standards. Specifically we are seeing the emergence of light weight standards like FOAF and microformats – which are open. Unlike standards driven by the bigger standardization bodies or industry consortia, we are seeing standards created by passionate and knowledgeable individuals Dan Brickley for FOAF and then subsequently adopted by industry players(like Google for Android, Nokia, Yahoo etc)

This is the future as I see it – both for the web and the mobile web.

The question then arises:

a) What are the dominant business models which will prevail in an open ecosystem

b) How should incumbents adapt to the new open ecosystem? How will their business models change?

These are the questions we seek to address in this document

Contra viewpoints

Before we proceed further, here is a contra perspective. One could argue, and indeed some still do, that they don’t need third parties at all(developers). They can do it ‘their way’ all by themselves .. works for Sinatra .. but not for others I suspect :)

In addition, the results of opening up an ecosystem may be unpredictable. Look at facebook. Do we honestly need so many facebook applications? Do they add value?

One could also argue that a closed system provides a better end user experience. This is a well known argument but it tends to favour services where the customer is merely consuming content(not creating it as in the Web 2.0 world).

Then there is the security argument(open systems are more susceptible to risks and threats). And finally the unknown business model argument – for instance Long tail services may work on the Web but they cannot work on the telecoms network where the upfront investment is a lot higher.

Perspectives and benefits of open systems

Before we address Open business models, let us look at Openness from different perspectives i.e. customer, developer and ecosystem

Customer

a) The ability to access any content (note this does not mean for free)

b) The ability to communicate with anyone – whether the person is on their network or not

c) A choice of services – not just services from the provider

Developers

a) A viable off deck ecosystem

b) Open device connectivity – also called the Carterphone principle

c) Transparent pricing(ideally fixed price billing) for both national and roaming scenarios

d) Access to device APIs(subject to security ),

e) Easy availability of technical information, SDKs etc

f) Equal access to third party application in relation to the provider’s application s

g) Unrestricted access to content and applications including via side loading

h) A commercially viable certification mechanism(or ideally a certificate mechanism that is light weight and user driven. For more on this, see this post from Denis at wapreview.

Ecosystem

In this section, I am referring to existing blogs.

Open source and open standards: Open source vs. Open Standards – complementing or competing?

Edge of the network innovation – Smart nodes and dumb pipes:

The rise of the stupid networks 2.0

Open Web business models

Open and closed coexist – but the rate of open systems far exceeds closed systems

So, where is this all going to commercially? To seek answers we have to look at both the Internet and the Mobile Internet. There are two forces: The Internet(and the Web) with it’s free, ad driven and open model on one hand and the Mobile data industry on the other hand

While the Mobile data industry is not used to many such revolutions / paradigm shifts; the Internet is. And the rule of thumb is – new ecosystems emerge but old ecosystems also co-exist. In the early 90s, with the advent of relational databases like Oracle, everyone expected the mainframes to be ‘replaced’. It is coming up to 2010 now and no one talks of replacing mainfames even after Y2K. So, the revolution will be bloodless. But that does not belittle the fact that relational databases are underlying a very large segment of computing today.

It is the rate of growth rather than the segment itself which is the critical factor – and there the incumbents DO stand to lose.

Secondly, hardware costs decrease but software and services costs increase.

Let’s look at an example: Sony NR21M Laptop – Laptop for the Home and Office costs £499.99. The windows Vista edition that goes on it costs £287.4985. That’s 73%. Dixons sells ‘optional Coverplan Support’ (3 Years £189.00, 4 Years £209.00, 5 Years £259.00).If you add other software(Antivirus – £50) then quickly costs of services and software add up.

Hence, I see a range of options. An unlocked phone(sold with supporting ‘coverplans’) on one hand – to a completely locked down phone(with remote monitoring and support) and a range of options in between.

This is not speculative. There is some analyst research to back it up. When I asked Dean Bubley of Disruptive Analysis about this – he said: “Disruptive Analysis expects the handset market to continue to feature both

‘operator-locked’ and fully-open devices. For example, by 2012, there will be about 250m smartphones capable of supporting non-operator competitive VoIPo3G, plus another 50m mobile broadband enabled laptops. Conversely, there will be over 600m 3G phones in use which mobile operators have restricted or ‘closed’ in some fashion.”

Taxonomy of Free .. Fremium et al – Chris Anderson and Wired

The underlying question for the Web is: How can you make money in an era of abundance as opposed to an era of scarcity. This is made worse with Mobile devices where there are significant infrastructure costs. By that we mean, Web based companies can afford to take risks, try new services since the cost of new services are low. Not so with Mobile ecosystems.

The march 2008 issue of wired has a fascinating article from Chris Anderson called ‘Free’ . (By the way the whole issue is fascinating with two other articles – one on autism and the other about how Kissinger and Nixon tried to bluff the soviets by ‘pretending’ to launch a nuclear war – only governments can be that stupid!)

However .. back to the topic on hand ..

This article explores the taxonomy of free .. and here are some insights from that article.

Traditional economics is oriented towards scarcity … (Economics is the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses as per wikipedia definition of economics ) This definition breaks down in an era of abundance since there is no scarcity.

The web is all about scale and it is not about the inputs(costs of servers) but rather about the outputs(what can be done with the inputs. Practically everything that web technology touches starts on the way to free. Technology has always had a deflationary effect but the rate of ‘free’ has increased with the web. Almost free is not the same as free. The moment we charge even a penny to the customer then you are in a different business from ‘free’

A taxonomy of free business models on the Web include(as per Chris Andersen)

Fremium – basic version is free. Advanced version is not. The difference is – it is the whole version(not a sample) and the belief is 10% of the paying userbase will pay the remaining 90%

Advertising This is well covered and so I am not discussing it in detail here. We will discuss the advertising business model in subsequent blogs.

Cross subsidies I discussed this in a blog long ago called Salt, pepper and social networking and also JP Rangaswami referred to it as the Prince business model . Any digital product that entices you to pay for another (often non digital) product is free. Money is charged for the non digital product(like concerts).

Zero marginal costs – Things that can be distributed without any marginal costs to anyone. Digital music is the best example of this between digital reproduction and p2p distribution – the production and distribution costs are zero.

Labour exchange – users do something for the provider in return for free content. This is the original ‘Web 2.0’ business model and the information the users provide becomes the metadata for the content. It enriches the data and hence provides value to the provider. The best example of this is flickr. See my blog – Communities are not Web 2.0 because talk is cheap

Gift economy – The best example of this is wikipedia.

Besides this, there are two other examples: The attention economy and the Reputation economy – both of these are separate topics in themselves.

Open mobile business models

How does this work in the Mobile Data Industry? Here are some thoughts and I shall continue to expand this idea more

a) The Web is all about scale. Contrary to the numbers, mobile networks are mainly sub national i.e. there are more than one in a country. Other than SMS, no other service has critical mass. So, the Mobile data industry lacks scale (and hence advertising model suffers)

b) The Web is all about ‘Free’ but mobile has significant investments. So, the free model(which is also tied to the idea of Long Tail i.e. many low cost, low risk services that can be experimentally deployed)

c) You cannot charge money for a service on mobile which the Web provides for free(the woes of IMS are a classic example)

We will continue to explore these ideas .. but here are some thoughts

a) The deployment of mobile services takes longer because the network is tightly coupled to services. A decoupling of the network and the services will drive applications

b) If innovation shifts to the edge of the network, then where is the edge of the network? The two beneficiaries are the device and the browser.

c) How do the free business models apply to the mobile data industry. How do the ‘non free’ business models apply to the Mobile Data Industry? This is a topic of discussion.

d) Convenience(one click), Identity, reputation, Attention etc are all beneficial business models on the open Internet. How will they play out?

The platform strategy is a true disruptor. Amazon does it with web services, facebook does it with facebook APIs. Google does it with open social. Even Yahoo has joined the game with open search. All these diverse initiatives have one thing in common – they are designed to attract a large numbers of developers / third parties. The telecom industry took the first steps in this direction with web services/network abstraction/Parlay – but little has happened – and I suspect it may be too late now

Conclusions

Open systems and their impact is inevitable. It is clear that recreating existing business models will not work. Savvy companies like Nokia, Google, Opera and Apple are leading the way in this space. Encouraging, I see many operators also looking to embrace this model.

The question we must always ask ourselves is – In an era of abundance, what are the new scarcities? Comments and thoughts welcome at ajit.jaokar at futuretext.com . I will continue to update this.

updates and addendums

I will update this section with relevent links and developmemts which I am tracking

a) Anything but anarchy in the uk – This is a positive development. what is really needed in addition to the revenue model is a ‘GSM like ‘ coopreartion on interoperability/interconnectivity for Mobile Data. If THAT happens, I will be truly encouraged. IPX network is an initiative from the GSMA in that direction – but I am not aware of specifics / status

b) GSMA ipx networks

iMode – another one bites the dust ..

e-plus drops imode. I have said this many times before.

Let us not look to the east for inspiration. The Mobile Web / Mobile data industry is taking off in a big way in the West – but not as a copy of the East.

Here, we will never have the monopoly of DoCoMo or the government standardization of the Korean government.

If interconnectivity and interoperability are the key goals – then they will be achieved in Europe and America through open standards and the adoption of Web standards creating a synergy between the Web and the Mobile web.

There is simply no other way to achieve critical mass as far as I can see – and without critical mass – the industry will forever be tied to voice and SMS. Applications will never gain critical mass no matter how good they are.