Category: News (page 61 of 1505)

Editor’s note: In this guest post, serial entrepreneur Nova Spivack gives Twitter some suggestions for how to make money. Spivack’s latest startup, Bottlenose, is looking at new ways to mine the Tweet stream.

I’ve been puzzling over Twitter’s recent tactical moves around their API, Ubermedia and Tweetdeck, for a few months now, and it just doesn’t add up. In fact I think Twitter’s current strategy may take them in a direction where they end up missing out on their biggest potential win.

If Twitter continues to go down the media company path, without incorporating their API into the plan, that could not only force a large part of their ecosystem to go elsewhere, but it could deprive them of a much larger potential infrastructure revenue opportunity, and could even end up costing them the company.

After all, Silicon Valley is littered with the  burned out wreckage of once-great media companies that failed create and keep third-party app ecosystems: AOL, Friendster, MySpace, Yahoo – to name a few. It’s very hard to maintain leadership as an online media company without an ecosystem of outside apps increasing reach, innovation, and stickiness.

In light of this, I’ve been exploring an alternate path for Twitter that leverages their API in a much bigger way, and this path appears to be a better strategy. According to my own experimental revenue  projections for Twitter, this alternative path is not only a good tactical move, but it’s a good business move because it increases Twitter’s reach, number of active users, and revenues massively.

This path fulfills the promise of Twitter as an infrastructure, without sacrificing the media company play. A media company + an infrastructure is a much stronger strategic position to be in than either on their own.

Another side-effect of this proposal is that it eliminates the need for Twitter to buy Tweetdeck, or Ubermedia. It makes the wholediscussion about the risk of Tweetdeck and Ubermedia to Twitter completely irrelevant, a non-issue, and will save Twitter $50 million in unnecessary acquisition costs.

It also eliminates the tension between Twitter and their ecosystem of third-party client apps. And it returns more revenues to everyone, especially Twitter. In the end, this could make Twitter a much bigger and more important company, and would certainly lock in their dominance of global realtime messaging and advertising.

To understand my proposal, first, what is Twitter really? Well, if history is any indication, it’s a messaging infrastructure for the Web. Let’s shelve the question of whether it’s the optimal messaging infrasture (it’s not, by a long-shot), but it works well enough for the moment.

Twitter’s APIs are a big piece of how Twitter grew so quickly: Twitter surged because of third-party developers pumping data in and out of Twitter via these APIs in all manner of apps and services, which massively extend the reach, innovation, and impact of Twitter.

Instead of abandoning their DNA and clamping down on API use and competing with their own ecosystem, my analysis shows that Twitter would do far better through a combined strategy.

In the combined strategy Twitter would continue to have a destination portal and their own official apps, but would also actively encourage – and monetize – an ecosystem of third-party apps on their APIs, including client apps that effectively competed with their destination. This competition would however not harm Twitter, it would make the ecosystem even bigger, and would deliver very significant incremental revenues to Twitter as well.

The key to the combined strategy is a new way for Twitter to monetize their API’s. Let’s call this the “freemium API” option. Here’s how it works conceptually:

Twitter would change their API terms to give third-party apps two choices: Either use the API for free but accept in-stream ads from Twitter, or pay a very nominal fee per tweet (around $0.1 per thousand tweets in or out of the API, a 10 cent CPM). Apps that opt to pay for the premium API could easily monetize with their own ads or subscriptions to more than compensate for the 10 cent CPM to Twitter, and would make money on the delta. Even if you think that’s too high, Twitter could cut that in half and still make money.

Here’s the model in a little more detail:

1. Third-party apps that don’t mind carrying Twitter’s ads could use the free API. They would be able to run their own ads outside the stream, but not inside the stream in their apps – only Twitter’s ads could appear inside the stream for the free API. These ads would come from Twitter and could even be personalized or targeted per user or topic.
2. Third-party apps that either don’t want ads at all, or don’t want Twitter’s ads, could use the premium API, pay the fee, monetize, and make money on the spread. They could monetize with their own ads or through subscription models or commerce or whatever they want. In this option, third-party apps would not be allowed to inject their own ads into the outgoing stream; instead they could display their own ads interleaved within the stream, in their user-interfaces, but these ads would not be pushed out to Twitter, they would only appear for their own users. This way Twitter would not be flooded with ads.

By launching this freemium API model, in addition to their existing portal business and their official client apps, Twitter would be able to monetize their entire ecosystem, including every third-party app. The beauty is: Twitter gets paid no matter where a user enters their network or views content; Twitter makes money from 100% of all tweets and views. It’s a vastly more scalable business model than just being a destination or media company and trying to own 100% of the user-experience.

As an experiment, I’ve run the numbers and they look good; See for yourself. Of course these numbers are based on anecdotal data, such as a rumor I heard from a credible source that Twitter’s actual revenues this year are closer to $75mm. It could add another $20 million off the bat with a freemium API strategy.

My projections simplify matters in several dimensions for the sake of convenience in sketching out the scenarios, and perhaps have growth rate and audience share assumptions that are debatable – but regardless, even if we were to tweak the model a bit, the conclusion is the same: Twitter would have a bigger audience and greater revenue growth if they included the Freemium API model and made it a priority.

Interestingly, Twitter currently licenses all of its bulk data through a third-party company, Gnip. Gnip prices their data at $0.0001/tweet or $0.1/1K tweets – exactly what I proposed in my model. Instead of that money going to Twitter, some or all of it is presently going to Gnip. This makes very little sense to me.

Why would Twitter give away their API – their platform – to an outside company, especially when at its root Twitter is an API? I think it would ultimately make more sense to take that in-house, and if I were Gnip I would be worried about that. Perhaps Gnip is an acquisition target by Twitter in the future? In fact, Gnip is a much bigger potential threat for a company like Twitter than Tweetdeck or Ubermedia are, in my opinion.

So far we’ve analyzed what happens if Twitter DOES take the strategy of offering a freemium API. But what happens if they DON’T? Either of two sub-optimal outcomes:

• If Twitter allows 3^rd party clients but does not monetize the API in any way – then eventually 3^rd party clients will take significant market share away from them. This is the problem they are facing with Tweetdeck and Ubermedia currently.
• If Twitter tries to stop (A) by blocking or clamping down on 3^rd party clients – it won’t work. First of all this will cause existing 3^rd party client apps to leave the Twitter network, taking large portions of high-value power-users with them. There are numerous stealth projects now underway to create alternative networks to Twitter, and sooner or later one of these will succeed. More importantly, if Twitter blocks use of their API they will cut themselves off from being a platform and infrastructure, making them vulnerable to attack by competing services (like Facebook or Google) that might be more developer friendly and that take more of a platform approach.

The conclusion of this is that it is clear, to me at least, that if Twitter turns its back on their platform and API DNA, they are missing out on what may be their most important tactical opportunity.

Being a platform and having thousands of 3^rd party apps will increase their reach, massively increase adoption and engagement, and create a much more powerful and sticky network-effect. In short, killing their own ecosystem to save their portal business would be cutting off their nose to save their face.

So what should Twitter do? Simple. They should not buy Tweetdeck or Ubermedia. There is no need to worry about Ubermedia or anyone else. They should not clamp down on their API or try to block third-party client apps.

Twitter could solve all these problems, and double the value of their business, in an instant by simply launching a freemium API, along the lines of what I’ve proposed here.

If Twitter simply embraced their API roots instead of turning against them, all their “frenemies” would become friends again, and Twitter could focus on building the best realtime ad network and messaging infrastructure in the world, instead of competing with their own channel partners.

If Twitter doesn’t do this, then mark my words, they will eventually lose their dominant role, as well as all the goodwill they currently have. And they will force the market to come up with competing solutions.

At the end of the day, without an ecosystem, Twitter’s network effect will fall apart pretty quickly. If Twitter loses their ecosystem by competing with it, they will end up in the graveyard of once-great Internet companies. I personally would not like to see that happen.

I would like to see Twitter function as an infrastructure, not merely a media company. It’s better for Twitter, it’s better for their ecosystem, and it’s better for the world. But if they fail to do that, I’ll happily embrace better solutions when they emerge.

Drama network also ringing up major double-digit demo games through first nine telecasts

By Mike Reynolds, Multichannel News — Broadcasting Cable, 4/22/2011 11:42:57 AM

TNT remains hot with the 2011 NBA playoffs. After its opening tripleheader produced a 36% audience advance, the drama network continued apace through its first nine postseason telecasts.

For the games through April 20, TNT has dunked a 33% rise in U.S. household rating to a 2.8 average from a 2.1 at the same stage of the 2010 postseason. According to Nielsen data, TNT’s nine telecasts played in 3.2 million homes, 32% more than 2.43 million last year, translating into 4.37 million watchers, up 36% from a 3.21 million average in the 2010 pro hoops playoffs.

On the demo side of the court, TNT has posted up significant amelioration: 39% to 1.51 million persons 18 to 34; 41% to 2.55 million persons 18 to 49; 37% to 2.24 million adults 25 to 54; 37% to 1.08 million guys 18 to 34; 41% to 1.84 million males 18 to 49; and 38% to 1.59 million men 25 to 54.

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By Michael Liedtke, The Associated Press
–
21 hours ago

The New York Times Co.’s first-quarter earnings fell 58 per cent as a decline in print advertising revenue outweighed an increase in digital advertising revenue.

Quarterly declines in print ad revenue at the Times Co. and other publishers narrowed through most of last year. But the Times Co.’s latest results suggest the improvement may be stalling.

The company said Thursday that it earned $5.4 million, or 4 cents per share, during the three months ending March 27. That compared with net income of $12.8 million, or 8 cents per share, a year ago. The latest earnings matched the average estimate of analysts polled by FactSet.

After stripping out one-time items in both quarters, such as severance payments and tax-related adjustments, this year’s performance looked even worse: earnings of 2 cents per share, compared with 11 cents a year ago.

Revenue fell 4 per cent to $567 million, about $7 million below analysts’ projections.

Times Co. shares fell 20 cents, or 2.2 per cent, to close Thursday at $8.92.

The Times Co.’s print ad revenue dropped 7.5 per cent in the first quarter compared with a year ago; the decline was 7 per cent in the fourth quarter.

Print advertising remains the major source of revenue for most newspapers, even as their publishers focus on expanding offerings on the Web and mobile devices to draw digital advertising.

The New York Times newspaper is seeking additional digital revenue by charging readers for full access to its website and mobile services. The new fees, which range from $15 to $35 every four weeks, started in Canada on March 17 and expanded to the rest of the world on March 28, the day after the first quarter ended.

The Times Co. said Thursday that it has attracted more than 100,000 subscribers so far. The company said those numbers exceeded expectations but cautioned it was too early to estimate how many it will retain after their promotional periods expire. Times Co. CEO Janet Robinson said the fees have also attracted more print subscribers because they get online access for free; she didn’t provide specifics during a conference call Thursday.

Ken Doctor, a newspaper industry analyst at Outsell Inc., said the initial response to the Times’ new digital fees is encouraging, even though he believes most people may have been lured by sharp discounts. “Just getting all those people to click on something showing they are willing to pay is meaningful,” he said.

Publishers have experienced strong growth in their digital ad revenue. But the gains haven’t been nearly enough to offset the deterioration of print advertising, where rates generally have been 10 times higher than digital ads.

Publishers are hoping digital ad rates will improve eventually, especially if people keep buying tablet computers such as Apple Inc.’s iPad. Publishers believe readers will spend more time with newspapers on tablets than they do on a desktop computer, giving them the leverage to charge advertisers higher rates on tablets.

For now, the gap between print advertising losses and digital ad gains remains substantial.

Digital ad revenue at the Times Co., for instance, totalled $83.6 million, an increase of 4.5 per cent, or $3.6 million, from last year. But the 7.5 per cent drop in print advertising translated into about $17 million less than last year. That left the Times Co.’s print advertising at $215 million in the first quarter. By contrast, print ad revenue totalled more than $460 million in the same period five years ago.

Executives said the decline worsened in March because advertisers got more worried about consumer spending because of higher gas prices. Japan’s massive earthquake and nuclear plant crisis also contributed to broader economic uncertainty.

Although executives said the trends have been better in April than March, it seems unlikely to lead to higher ad revenue in the current quarter. The Times Co. said ad revenue this month is down about 4 per cent from last year. Ad revenue in March fell 9 per cent.

Like other publishers, the Times Co. has been raising its subscription and newsstand prices in recent years to help offset losses in print advertising. Those price increases have caused the Times Co.’s circulation revenue to surpass its print advertising revenue in some recent quarters, an industry rarity. It happened again in the first quarter. Circulation revenue was $228 million, about 6 per cent more than print ad revenue.

But the higher prices have driven away some readers. The Times Co.’s first-quarter circulation revenue declined 4 per cent because fewer newspapers were sold. Robinson said The New York Times’ weekday circulation averaged 905,000, a 4 per cent drop from last year, while Sunday circulation averaged 1.3 million, a 3 per cent drop.

Copyright © 2011 The Canadian Press. All rights reserved.

In an effort to determine benchmarks for online marketing practices and organization structures, a new study surveyed 426 senior marketing executives in lodging and destination organizations. The study, “2011 Travel Industry Benchmarking: Marketing ROI, Opportunities, and Challenges in Online and Social Media Channels for Destination and Marketing Firms,” is written by Cornell Professor Rohit Verma, executive director of the Center for Hospitality Research (CHR), and Ken McGill, executive vice president of research for Vantage Strategy. The report is available at no charge from the CHR at www.hotelschool.cornell.edu/research.

“Each year well over 700 marketing executives gather for TravelCom, which is a high level marketing conference that was held this year in Las Vegas,” said Verma. “One major theme this year was online marketing, but we realized that there was no overall knowledge of where the industry stands in this area. This study provides those benchmarks.”

Using an internet-based survey, Verma and McGill polled senior marketers regarding budget levels, marketing strategies, and organizational structures. They found both a wide range of expenditure levels on online marketing and considerable diversity in organizational structures.

For social media campaigns, about 80 percent of the marketers said that they produced Twitter campaigns and social media promotions in-house, but such functions as search engine optimization and pay-per-click advertising are largely outsourced. Accommodation firms are more likely to outsource all social media functions, including pay-per-call, Twitter campaigns, and pay-per-click management. Destination marketers, on the other hand, generally handle more functions in-house.

Two-thirds of the entire sample said their 2010 e-commerce budgets had increased with respect to 2009. Sixty percent of accommodation marketers anticipated a further increase in 2011, and 71 percent of the destination marketers said their 2011 budgets would increase.

Thanks to the support of the CHR partners listed below, all publications posted on the center’s website are available free of charge, at www.chr.cornell.edu.

Having tweaked its App Store chart algorithms to take account of usage as well as downloads, Apple has sprung another surprise on iOS developers this week by starting to reject apps that use “incentivised app download” platforms, while at the same time suggesting its own iAd mobile advertising network may be a more suitable method.

These services, run by startups including Tapjoy and Flurry, are used most heavily in iOS social games, where players are offered virtual currency or items that they’d otherwise have to pay for, in exchange for downloading another app or game. The developer of the latter pays a per-install fee to the middleman, which then shares those revenues with the developers of apps hosting the offers.

These kind of incentives have been standard practice in the social games industry for some time, although not without controversies – in Tapjoy’s former incarnation of Offerpal, it was one of the companies at the centre of tech blog TechCrunch’s “ScamVille” campaign against offers that signed people up to premium-rate subscriptions.

In recent months, incentivised app downloads have been increasingly popular for iOS developers who want to push their apps up the App Store charts. Now Apple has cracked down on the practice, with Tapjoy claiming that in rejecting updates to several apps using these services, Apple has cited clause 3.10 in its developer licence, which stipulates that developers must not “attempt to manipulate or cheat the user reviews or chart ranking in the App Store with fake or paid reviews, or any other inappropriate methods”.

“It seems there may be a new interpretation of the existing 3.10 clause, which is a bit surprising, as Tapjoy, AdMob, iAd, Flurry, W3i and others all power various forms of app install advertising,” says Tapjoy in a statement, before going on to suggest that the ban is due to “misconceptions” around the pay-per-install model.

“We believe there are significant benefits to the advertiser (only pay for what you get), the publisher (monetise users who otherwise wouldn’t pay), and perhaps most importantly to the users, who not only get to discover new, exciting applications, but receive what is essentially a coupon for ad-funded virtual currency inside one of their favorite apps.”

Tapjoy, its rivals and key developer clients are seeking meetings with Apple’s senior developer relations executives to establish what the new interpretation of clause 3.10 is, and whether Apple will be flexible on it. It may seem like a lost cause, but there have been previous cases – a proposed ban on using certain kinds of game middleware for example – where Apple has backed down in the face of developer protest.

One incentive not to do so in this case may be the fact that Apple has an inhouse service that offers an alternative to offer networks: iAd. The company’s mobile ad network was originally pitched as a way for top-tier brands to launch slick interactive adverts within iOS apps, but it also has an offshoot called iAd for Developers.

“The iAd for Developers program is a great way for developers to promote their paid or free apps to millions of iPhone and iPod touch users around the world,” explains its official website. “Using this unique, cost-effective advertising program, you can reach the right audience to drive more downloads of your iOS 4 app. Getting started is easy. You only need to create the banner ads and we do the rest to get your iAd up and running.”

The perceived ban on incentivised download networks may be seen in a new light by developers who have received emails this week from Apple’s iAd sales team, referring explicitly to the App Store chart algorithm changes, if not to the crackdown on offers specifically.

Apps Blog has seen one email sent to a developer from an iAd sales exec, which reads: “I am sure you have been reading about how the ecosystem of how you get ranked is seemingly changing, and it seems as though there is more of a focus of engagement and quality which is something I would like to discuss with you. Driving these quality users and new unique users to your platform will certainly help with driving ranking, but also help on actually having people use the application for what it is intended.”

Killing incentivised app download networks while promoting iAd for Developers may well spark further criticism from developers, but with Apple due to announce its latest quarterly financials tonight, analyst questions in the ensuing conference call may yield further information on Apple’s interpretation of clause 3.10.