Breaking Down Apple’s Special Event (9/12/17) – Part 5

5. iPhone

During his keynote, Tim Cook declared that the iPhone X “will set the path for technology for the next decade”. He’s embellishing.

While both the iPhone 8 and iPhone X have features that will be critical to the technology of the next decade – wireless charging, augmented reality applications and facial recognition/tracking – they aren’t the first.

He should have reserved that line for use if Apple ever releases augmented reality glasses –  which I hope they would call “iGlasses”.

All things considered, I would give the Apple Special Event on 9/12/17 a grade of “B”; good, but not what I would have expected of the world’s most valuable company.

 

Breaking Down Apple’s Special Event (9/12/17) – Part 3 & 4

I will be releasing my “Breakdown of Apple’s Special Event (9/12/17)” as a series of articles. Part 5 will cover iPhone. Enjoy!

3. WATCH

WATCH Series 3 has cellular! I have historically been an WATCH hater but not anymore; I knew that the vision for the product was to have cellular capability so I refused to buy hardware that didn’t support it.

So how did Apple enable cellular on WATCH? According to Chief Operating Officer, Jeff Williams, cellular was enabled by two space efficient innovations: embedded SIM (eSIM) and display-integrated antennas. These innovations allowed the casing of WATCH to remain unchanged from Series 2, except for a minimal depth increase of 0.25 mm.

WATCH Series 3 is a game-changer. I believe that the improved hardware will push WATCH into the early majority phase of its lifecycle. Increased demand will attract developers to create even more attractive apps, leading to an aggregation cycle that will be near impossible for any smartwatch, or watch for that matter, to compete with.

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4. tv

tv can now support 4K and HDR. 4K is an image resolution; it defines the level of detail displayed in an image. HDR (High Dynamic Range) is a colour resolution, it defines the level of detail displayed in the colours within an image. For example, both sides of the image below feature the same image resolution but the left side has dramatically better colour resolution.

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The tv 4K alone will not allow you to watch 4K HDR content; you still need a 4K HDR display – typically priced upward of $1000. Even then, the only 4K HDR content you will get for free are Apple’s aerial screensavers and your own photos and videos – as long as they were shot on devices with 4K HDR resolution. Additional content will require subscriptions or iTunes purchases and a home internet package that will support the increased data of 4K HDR content.

Breaking Down Apple’s Special Event (9/12/17) – Part 1 & 2

I will be releasing my “Breakdown of Apple’s Special Event (9/12/17)” as a series of articles. Part 3 will cover the WATCH. Enjoy!

Over 10 years have passed since Steve Jobs first unveiled the iPhone on January 9, 2007. He was one of the great characters, and that was one of the great product launches, of all-time. Apple will never be the same without him.

That said, Apple is still Apple. To quote Jobs himself:

There’s lots of ways to be as a person. And some people express their deep appreciation in different ways. But one of the ways that I believe people express their appreciation to the rest of humanity is to make something wonderful and put it out there….So we need to be true to who we are, and remember what’s really important to us. That’s what’s going to keep Apple, Apple; if we keep us, us.

Last Tuesday, Apple kept being Apple; they made wonderful things and put them out there. Here’s a breakdown of what was announced:

1. Apple Park

The event was the opening of the Steve Jobs Theatre, the first building to be unveiled at the new Apple Park. Many have been quick to criticize Apple for spending approximately $5 billion on the new campus, but I am not one of them. Apple has been the source of a lot of good in the world – both directly, through their products and services, and indirectly, through what they have enabled artists and developers to create.  They deserve a beautiful and inspiring place to work that reinforces everything that makes Apple, Apple.

2. Retail

Apple’s Senior Vice President of Retail, Angela Ahrendts, emphasized that Apple’s flagship stores will increasingly become more like “town squares” – featuring public outdoor spaces in addition to indoor forums. Apple will not officially rebrand its “Stores” as “Town Squares” (What would they call Apple Town Square?). Truthfully, most Apple Stores will remain relatively unchanged from the first, which revolutionized tech retail in 2001.

Too Far Taylor

As I’m sure you’ve heard, Taylor Swift has started publicly promoting the release of her 6th studio album, reputation. In the process, she and her team have employed quite a few creative strategies to better sell her brand. Their most interesting development, in my opinion, is TAYLOR SWIFT TIXSM.

Taylor Swift is committed to getting tickets into the hands of fans…NOT scalpers or bots. So she’s collaborating with Ticketmaster #VerifiedFan to create an exclusive program to help YOU get the best access to tickets in North America, in a really fun way.

In recent years, scalpers have increasingly been using computer programs (bots) to sell out tour dates in seconds. They then sell those tickets on secondary markets for multiple times their face-value, profiting on the spread between their purchase and resale prices. Ultimately, the tickets end up in the hands of the fans but not before they have grossly overpaid for them. Obviously, this is an issue from a consumer prospective but it is an even bigger issue for artists and their investors. Sure, there is the ethical issue that scalpers are realizing the majority of the profit on an artist’s performance, but the real issues are multiple layers deeper. For the sake of brevity I won’t take you all the way down the rabbit hole but just think about this: if you didn’t have to pay $500 per ticket to sit in the nosebleeds at an artist’s show, but instead could pay $100 to sit in the lower bowl, would you be more willing to pay $15 for their record? How about $50 for their T-shirt?

10 months ago, Ticketmaster launched its VerifiedFan program. I used it to get tickets to an Ed Sheeran show in July. It works…for now. Essentially, Ticketmaster uses the personal information you provide when registering for your account to verify that you are a human and not a bot. It doesn’t stop a human scalper from signing up, getting VerifiedFan tickets and then flipping them on the secondary market. Fortunately for fans, this is a lot more work to get a lot fewer tickets if you are a scalper accustomed to purchasing tens or hundreds of tickets through a bot.

The innovative aspect of Taylor Swift Tix is the development of a way to ensure that the most enthusiastic fans receive priority tickets. That is an idea that I can get behind. Unfortunately, Taylor and her team got greedy in the execution.

After your registration is complete, you’ll officially join the line and unlock access to the Taylor Swift Tix portal. The portal will serve as your main destination to participate in boost activities. Activity boosts will come in all shapes and sizes. Watch the latest music video, purchase the album, post photos and engage on social media. Check the Taylor Swift Tix portal for the newest boosts and activities you can do everyday. When you participate, you may boost your opportunity to unlock ticket access in your selected city. Your standing may change as more fans join and participate in activities. You can participate in boost activities at the start of registration and continue until we lock the line on Nov 28.

If you register for Taylor Swift Tix (which I did, purely for research purposes of course…) you’ll notice that “boosts” are ranked based on their impact to your place in line for tickets:

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The greed lies in the “High” row. Boosts from album pre-orders are arbitrarily limited to 13 – Taylor’s birthdate and favourite number – and there are NO LIMITS on boosts for merchandise or album purchases. Since there are no monetary limits on the most impactful boosts, there exists a scenario where fans engage in an vicious cycle of spending until the November 28th deadline. Remember, there is no defined amount of money that a fan can spend to guarantee themselves tickets; that depends on how much money the other fans in their city are spending.

To make matters worse, tour dates, ticket sale dates, ticket costs and ticket limits have not yet been announced. Until they are, fans are spending an unbound amount of money to put themselves at the front of the line for an unknown number of tickets, at an unknown cost to be purchased at an unknown date for a show sometime in the future. What!?

In the existing system it is possible that a family could spend $400 on boost activities thinking that they will receive 4 tickets, each valued at $200. That equates to a cost of $300 per ticket. Taylor and her team could then set a ticket limit of 2 per account and announce that the cheapest ticket is $400. Now, 2 of the family members don’t have tickets and the remaining 2 tickets are valued at $600. In an even crueler world, they are going to be on vacation the day of the show. Now, they either sink the $400 they spent on boost activities or they purchase the tickets and sell them to friends or on the secondary market for at least $600 each to break-even. Neither of those options stop someone from reselling for a profit or ensure whoever gets the tickets is a fan.

The point is, this program is flawed. The good news is that it isn’t too late to improve it. Here’s what I would do:

  1. Tour dates, ticket sale dates, ticket costs and ticket limits need to be released.
  2. A monetary limit on merchandise boosts and a quantity limit on album boosts, regardless of type, need to be applied. I estimate appropriate limits to be 1 album purchase and around $100 in merchandise per ticket.
  3. A Taylor Swift Tix resale portal should be set up for verified fans. If a verified fan needs to sell their tickets, they can sell to another verified fan for face-value.
  4. Returns/refunds should be made available to those who would like to change how much they have already spent on boost activities given the new information.

This is a lot of work and expense. As a result, I don’t expect any of these changes to be implemented for the North American tour. However, if they are made for the world tour, which I am assuming will be announced shortly, we would have a much more equitable system and Taylor would still realize more revenue from each fan than she has in the past.

I give Taylor and her team a lot of credit for a solid idea and a lot of good work building out the infrastructure for Taylor Swift Tix. Unfortunately, it only takes a few bad decisions to derail a lot of good work.

Aside: I have already written too much for this week but it is curious that streaming was omitted as a boost activity; think about why that might be. Maybe I’ll publish my thoughts in a future post…

Why All Pro Sports Should Be Like the NFL

The 2016-2017 NHL season ended last night when the Pittsburgh Penguins defeated the Nashville Predators by a score of 2-0 to take the Stanley Cup Final in 6 games. Had the series gone to 7 games, the NHL season would have wrapped-up on June 14 – 246 days after it began.

The purpose of this post is not to criticize any league for the length of their season, nor is it to suggest ways that seasons could be shortened, but rather it is to emphasize how efficient the NFL is at generating value. Take a look at the stats for the 2016-2017 seasons of the “Big 4”:

Big 4

With just 16 regular season games per team and a total season duration of just 5 months, the average NFL team is over 4.5 times more valuable than the average NHL team, and almost 2 times more valuable than the average NBA or MLB team according to Forbes. Clearly the marketing department at the NFL has found a wining formula. Everyone else should be taking notes.

 

Why Do We Suck At E-Commerce For Services?

I read an article today about Inkbay, a Swedish online tattoo research and booking service. It’s a cool idea and I wish the founder, Fredrik Glimskär luck but I couldn’t help but wonder why his service is necessary.

We’re generally, pretty good at e-commerce in North America. Most products can be, and are, purchased over the internet – through the vendor’s website or Amazon. But, comparatively, we suck at selling small services over the internet. I understand that the value in e-commerce is reduced for a lot of services – you can’t send a tattoo over the internet – but I still think we can do better.

If I were to research where to get my next tattoo, I would start where anyone would start to research anything – Google. After a quick search of “tattoo shops near me”, I get this page…

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To this point, I think the experience is perfectly designed – I love being able to filter the results by rating and dynamically update the list when I move my view on the map – but I don’t want to have to leave Google to access all the information I need to make my choice. I also need to filter by price and product/service information – in this case, the designs the shop offers. That is the deficiency of current e-commerce for services.

What if when I clicked on “Two Trolls Tattoo Den” the map on the right is replaced with a gallery of all the designs the shop offers. I could select the one I wanted, specify where on my body I wanted it and what size I wanted it to be. Then, an approximate price would be displayed. If I agreed with that price, I could schedule an appointment or access the shop’s contact information to ask more questions. All of this could be done in one place.

Although I have never been to experience it for myself, there is one mobile app that dominates life in China – WeChat. What began as a social media and messaging app has evolved to include an e-commerce service that, to my knowledge, is very similar to what I described in my previous thought experiment. WeChat’s success has Facebook and Google working to replicate that experience in the North American market but clearly, they haven’t yet. While Google is ahead of Facebook in consumer research tools, Facebook does seem to have the edge on payments. When you visit a business’s Facebook page you may be able to buy things from the “Shop” section in the page’s left column but not many people know this feature exists, never mind use it.

The core competency of a small business is their products or services, which aren’t typically web development and marketing. That’s why so many of their websites are useless. Instead of pointing consumers to these terrible websites, I think it would be brilliant if Google and Facebook developed pages for businesses on their platforms. They could charge for the service and maintenance and then use the pages to improve their own e-commerce solutions, very much in the way I laid it out in my thought experiment. It would save us consumers a lot of time and effort, and save the internet from a lot of bad webpages!

 

 

Why We Subscribe

Many journalism outlets with subscription businesses let users read at least one free article per day so that they still rank high in search results, driving traffic to their site and attracting advertising revenue.

However, after blocking visitors to their site via Google from reading articles for free in February, the Wall Street Journal saw a fourfold increase in the rate of visitors buying subscriptions. I don’t think everyone else will be following in the Journal’s footsteps though, as traffic from Google dropped 44 percent as a result.

Executives at the Journal are arguing that Google’s algorithms, which prioritize free content, are unjustly penalizing them for attracting more subscribers. It seems highly hypocritical to me that the Wall Street Journal is criticizing Google for its method of prioritizing search results when they prioritize their own readers – visitors from Facebook and other social media outlets are still able to read full articles for free. Google provides a service, directing traffic to their site, if the Wall Street Journal is unhappy with the rules of that service they can always pay to have their content appear higher in the search results.

I don’t think that this strategy will be successful in the long term. The subscribers that the Journal has added through this experiment have likely joined through resentment and not excitement – that isn’t sustainable. People continually subscribe to things for one of two reasons – they either need something or they feel something. No one needs to subscribe to a journalism outlet so they must do so because they feel, or want to feel, a part of it. Forcing readers to subscribe to view content may work at first but it won’t keep them coming back, only content and a sense of community that cannot be found anywhere else will.

No one subscribes to the Wall Street Journal or the New York Times or the Washington Post – an organization is just an abstraction – they subscribe to the people that give them meaning. That’s why the existing subscription model doesn’t make much sense to me. Why do I have to subscribe to the whole Wall Street Journal? Sure, that can be an option but what if I just want to subscribe to a single column or blog? I don’t want to pay for the ability to access content that I will never consume. I am willing to bet that if the Wall Street Journal got creative with their business model they would attract more subscribers than they have by eliminating free content.