Welcome to another dose of Tech Week-ness, hope it's been a great week for you. There's certainly not been a shortage of tech stories, but there are two biggies that i was keen to address.
The first story i wanted to write about in this end of week wrap up is of course, Facebook.
What a difference 15 months makes ey?! At the end of January 2012, Facebook had IPO’d and it was revealed that the company had 425m mobile users, about half of its overall user base, no way of making revenue from them and a CEO who admitted in IPO papers, it had no real strategy of how to start doing so, but assured the listening world that Facebook would be a mobile company. Wall St. stuttered; share prices dropped; all hope was lost. Or so you might have thought at the time. Fast-forward to today, a mere 15 months later and Facebook has announced that 41% of its total ad revenues are coming from mobile. Astonishing. Well done Mr Zuckerberg.
Having surpassed analysts’ expectations, Facebook’s share were given a boost when trading opened again. Like many in the mobile sector, Facebook is relying on mobile advertising to bring home the bacon and with such a great performance, it could be a very significant foundation to help bridge the $20bn gap in the US, identified by Mary Meeker in her last report, between time spent on mobile vs. ad spend across mobile.
Facebook has said that a lot of the hard work it’s done has been around targeting. Naturally. With mobile advertising, relevance is key. On desktop, we hear of all-too-familiar stories of irrelevant ads cropping up in the sidebar on Facebook. I’m preaching to the choir here, but we know that the screen real estate is so much more valuable on mobile. In order for mobile advertising to have significant return on investment, it has to be relevant. Make no mistake that Facebook is watching everything you post about, it’s learning and it’s listening. This is the trade off we have for the fact it’s free and we accept that on the conditions that what Facebook is actually coming back with is useful, it is relevant. By the end of the year Facebook will have over half of its ad revenue coming from mobile and if that’s anything like previous figures, that will be well over $500m. Not too shabby for a company that little over a year ago had no real mobile revenue strategy.
The second story from this week i wanted to write about was Google and it's latest living-room gadget.
Earlier this week, Google held an event where everyone expected the company to launch a new Nexus tablet….it didn’t disappoint. Google unveiled the latest Nexus 7 tablet, with one of the highest resolution screens on the market today. However, unusually for a tablet launch, something else potentially stole the show and indeed a lot of headlines. The Chromecast, is Google’s new TV streaming device that plugs directly in to a HDMI port, it’s only a couple of inches in size, costs almost $40 and comes with three months of Netflix free. Bargain.
Considering that other players in the ‘streaming box living room war’, like Apple TV or Roku, cost about $100, it seems like you’re definitely getting your money’s worth with Chromecast. I’m really looking forward to getting my hands on one. Why wouldn’t you for $40?! Well perhaps there are a couple of reasons why, but first let’s look at why it exists.
The living room and indeed people’s viewing habits are unrecognisable from just 10 years ago. With the development of things like PVRs such as Sky+, we’re no longer bound by TV schedules. You can set something up to record an entire season, fast-forward through ads, pause etc. People became free to watch things when they wanted, how they wanted. The acceleration of internet speeds has meant that instead of waiting an age for something like BBC iPlayer to buffer so you can watch something on catch up, now with fibre, you can watch it instantly. Hell 10 years ago there was no iPlayer, your TV didn’t connect to the internet, “what’s an iPad?”
While in some case Sky has pushed some innovation, such as Sky+ and more recently with the likes of Sky Go, ultimately it’s almost become one of the dinosaurs of broadcast. People’s viewing habits have changed drastically. So much so that life-long Sky customers are starting to realise just how little they perhaps watch the thousands of channels they have. They start asking, “why on Earth am I paying almost £100 a month, for something I rarely use?”
Sky still has the pull of football. It’s always had football, this is it’s killer service. If it wasn’t for the football, how many people would cancel their subscription? Movies? You can get most of the new releases on rental services like BlinkBox (Tesco owned), LoveFilm (Amazon owned) or Netflix. The same goes for TV series, if you’re that determined you could even set up a VPN and watch stuff like Hulu. People are watching a lot of content across the internet, TV and the internet have become intrinsically intertwined, which is exactly why Google has launched Chromecast and do so at a ridiculously low price.
Don’t get me wrong, the Chromecast looks like it definitely has it’s downsides – it can’t play downloaded content, only streamed, and it’s pretty selective about where you can stream from right now. For now though, Google has put the proverbial cat among the pigeons and even with Sky’s launch of the Now TV set-top box costing £10 for on demand viewing, it still needs a subscription and I’ll bet that the way Sky delivers content right now, will have completely changed in five years time. Will we even need a Sky box? Let’s wait and see.
Tune in next week for another roundup. Have a great weekend!