Category: Research

Emarketer has an excellent summary of different analyst firms’ forecasts of broadband penetration to 2005. It’s a great resource if you need an estimate.

The NY Times reports that Land’s End is selling a lot of custom-made pants. They’re now about 40% of their pants sales.
Mass customization was one of the big promises of ecommerce’s glory days.
Dell is another company that has used the net to create the necessary volume to make build-to-order a reality. Back in the dot-com bubble, I really liked Chipshot, a company that built golf clubs to order. We may never know if the problem was with the business model or simply bad management, but I’m betting on the latter.
This may signal a return to a more realistic view of ecommerce. We should probably be taking another look at customized news pages as well.

Hoover’s Guide nearly wrecked its subscription business, moving from selling individual subs to the in-depth profiles for $195, to requiring a five-seat license for $1995, to selling individual subs at twice the price and with fewer tools for $395. Thanks to ContentBiz for the case study.
Hoover’s came close to letting their lack of software for user authentication keep them from serving their core customers (individual users) in the way they wanted to be served at a price they could afford. Only by recognizing the resistance of their prospects to the new plan and by adapting their plan were they able to save their subscription business from disaster and get away with doubling their price.

The Yankee Group says that there will be 23 million wireless data subscribers by the end of 2003, growing at a compound annual growth rate of 83% to a 2006 total of 129 million. Wireless data revenue will grow from $70 million this year to $5.8 billion in that period.
I don’t know what is meant by “subscribers” in this number, but the revenue per subscriber will be $.25/sub/mo in 2002 and $3.75/sub/mo in 2006. This is a far cry from what SrintPCS and AT&T Mobile are charging for these services right now.
Clearly, a lot of this usage is incidental. I’m sure it includes the $.78 that I spent on SprintPCS Wireless Web access last month in a fit of bored curiousity.
Meanwhile, TMobile is set to release the staggeringly cool Danger Labs’ Hiptop (as the TMobile Sidekick) October 1, for $200 after rebate, and $40 per month for 200 anytime minutes and unlimited web and email. The outstanding design of this gadget and its elegant pricing plan makes this the first mobile Internet service that has a prayer in the market.
I wouldn’t rush to release a wireless-specific application right now, but I would be working hard to make sure my content management system and site design used XML and CSS so that I could deliver one on quick notice once it made sense.

Management consultants KPMG finds that big media companies are spending too much time defending themselves from piracy to make money from digital content. This report is based on interviews with 50 of the biggest.
While two-thirds were optimistic about the prospects for digital media, fifty-seven percent do not even have a process for transforming online intellectual property.
Most of these companies are trying to sell their content in expensive, crippled, proprietary formats that consumers are simply not interested in.
This is costing these companies eight or nine billion dollars per year.
[Warning: KPMG’s site doesn’t work with Mozilla because of the (invisible) proprietary interface junk they’ve added to it. Something to think about when you’re considering hiring a systems integrator.]

Jupiter reports that broadband users have higher incomes than dial-up users. It’s important to remember that the differences are small, and because the group considering broadband has a lower income that those who already have it, the income difference will get smaller over time.

Jupiter is reporting that email is the most popular application of the Net (93% of users), followed by search engines (79%), product information (63%), local information (60%), contests (59%),and news (54%). Newspapers were used by 46%.
It’s encouraging that local news and information rate so highly among Internet users. The broad variety of uses to which people put the Net still amazes me.

Accoring to the Commerce Department, many Americans don’t plan to upgrade to broadband anytime soon. According to the AP, the report (which I can’t find on the Commerce Dept site) is based on data from various third parties:

• Almost all U.S. families live in areas where a high-speed Internet connection is available, but many see no reason to pay extra for it
• Only 10 percent of U.S. households subscribe to high-speed access, lower than the rate in Taiwan, South Korea, Hong Kong or Canada.
• Broadband is too expensive compared to dial-up ($50 vs. $20)
• More than two-thirds of dial-up users don’t plan to upgrade because of the cost.

Commerce thinks that broadband adoption can be increased, but increasing the amount of music, movies and games on the Net, justifying the monopoly rents of the cable co’s and baby Bells. This plays right in to the hands of the intellectual property oligopoly, who are using the promotion of broadband as a reason to force digital rights management on the public.
How about enforcing the Telecommunications Act of 1996 and the Sherman Antitrust Act instead?

Google’s newly redesigned news page raises more questions than it answers.
Google spiders news sites, determines the most important stories algorithmically, and aggregates the stories under a common headline.
According to Nielsen/NetRatings, aggregators still aren’t a huge part of the news business. And it’s easy to see why when looking at Google News. Despite its undeniable coolness, it is editorially flat. There is no point of view and no sense that human beings were involved in its creation. The aggregation process soothes out all the rough edges and we’re left with something that has no point of view.
The strong NetRatings performance of Slate, Fox News and Matt Drudge, despite their small real-world footprint show us how important point of view can be in building an online news audience.

Nine of the top 20 news sites are run by newspaper companies, according to Editor and Publisher, based on stats from Nielsen NetRatings. Here’s what I found in the data they presented:

• Three news sites have average session lengths of more than thirty minutes: NY Times (34:13), Fox News (34:56), and Drudge Report (37:41).
• If you combine Gannett newspapers and USA Today, the unique audience may put Gannett sites in the top 3.
• The top 3 sites (CNN, MSNBC, and Yahoo! News) are better-suited to breaking news than the typical newspaper site.
• Yahoo! News, AOL.com News, and Drudge Report are the only aggregators in the top 20.
• NY Times, Washington Post, LA Times and NY Post (!) are the only single newspapers in the top 20. The other newspaper sites contain all the sites in multi-paper chains.
• AOL/TW sites (CNN, Time, AOL.com News) collectively have 50% more traffic than number two MSNBC.
• Internet Broadcasting Systems, which creates web sites for local TV stations is in the top ten.
• Knight-Ridder is not on the list, apparently humiliated by Belo, Internet Broadcasting Systems, NY Post, and Matt Drudge!
• Associated Press is number nineteen, just squeaking past Drudge Report.

My conclusions: It’s essential to build a reputation for covering breaking news in real time; having a point of view is desireable; the future probably doesn’t belong to aggregators, but partnerships (such as those cultivated by CNN and MSNBC) could be a very important success factor; and daily newpapers are not setting the pace in online news.