Beatles on iTunes. Content vs distribution

Today Apple had a little announcement, they will start selling Beatles songs on iTunes. Its among the few Apple announcement that only focusing on adding new content, instead of new features or technology. And it raises the question on content versus distribution.

The ultimate is to have the best content on the best distribution channel(s). But the news of Beatles on iTunes shows how long it can take before adding the best content. Apple is the leading digital distribution platform for music in the world! Every record label, artist and group do everything they can to be selling on iTunes. Specially when you take into consideration how dominant the iPod is for mobile music players, and buy music on iTunes might be the only way to have your favourite artist on your iPod.

And its the same by looking at Spotify for example. Spotify is at its core a free distribution platform, that tries to acquire as much content as possible to attract new listeners (accounts). Which in terms increase the potential for advertisers, potentials subscribing paying premium accounts and finally getting songs sold through the service. A basic but interesting business model:

Expanding content catalog = Attracts more users

The more users = More content owner should want to have their content for new/potential consumers.

Improved reaching to potential customers/consumers = Better chance to turn into paying users.

Still its in some way contradicting. A content service is mostly attractive if the user base it huge. But to get a huge customer base, you need to have great content to attract new users.

It’s the same for us at GamersGate. To attrach new customers we need to have the latest games. But in order to get the latest game we need to constantly increase the user base, so all our partners and potential partners wants to sell their new games at our store. We see a lot of new competitors poping up all around us, but I can only imagine the difficulties for them to build a customer base from scratch. We started with a lot customers from the Paradox Interactive community as our best customers.

One interesting blog post discussing this is from GamesBrief, about Electronic Arts acquisition of mobile publisher Chillingo, the publisher behind Angry Birds. Read this great piece, discussing EAs shifting focus on acquiring user installbase/new distribution instead of new IPs/Development Studios. How EA got the installbase from the great success of Angry Bird through the Crystal system.

Its the same if we look at valuation of sites / companies like Facebook or Zynga. The increadible high valuation of those companies have nothing to do with technology, ONLY numbers of accounts/users. Without Facebooks 500 milion users, then the core service is only okey. Here the content (features/applications) isn’t the big USP attracting new users. When it comes to social medias, (most of the time) the amount of active users is what attracts new users!

Beatles @ iTunes

Beatles @ iTunes

Competitor GOG shuting down?

Big news this Sunday that Good Old Games. com , a competitor to us (GamersGate) have shut down. Everyone on Twitter and game websites are talking about it. This just came out of the blue. While the website (GOG.com) is claiming that the service is down now, it hints that it might not be permanent. Its been hinted that the service will come back in some form, but this is only speculations.

If we analyse GOG, their business model is the same as ours, but they only focus on older games, as the name suggest. Older games, selling for just a couple of bucks, while the margin is quite low is probably something you can’t ONLY build your business on. For us back catalog titles are a good piece of our sales, but new release titles are the biggest by far.

Also some of their unique selling points always promoted is that all games are DRM free and compatible with newer operation systems.  They had a lot older titles we have had problems getting and they have surely spent quite a lot of time making them work for new systems. This process take time and a lot of works, we know!

Somehow its sad if they were to shut the service down, specially for all the customers who have purchased games there. But for us (GG) its an opportunity.

GOG Down

Twitter business model-s

Twitter is really one of the fastest growing phenomenon on the web in recent year, along with Facebook. Becoming a communication standard within basically a year, its on almost every webpage. It have expanded with x millions accounts today. Couldn’t find any numbers but I can only guess. And making expressions like “I just Tweeted this and that” a common expression.

But like most IT start ups, they still haven’t found the right business model to make substitutional revenue from. Google had the same problem in the beginning, but finally developed one which is now one of the standards when it comes to web advertising and marketing (CPC). For Google it came natural, complementing with their basic service. For Twitter its a different ball game.

Discussion online have been when and if Twitter will file for a IPO. Rumors about this have been shot down time and time again by the company. Still, before going public you need a steady revenue stream. As my interest in private stock investment have been increasing lately I am interested to see how they develop and if a IPO opportunity will show it self within a couple of years.

And it looks like Twitter is investigating different business models and which could work for them. Nothing revolutionary. One model is a classic ad-driven model, selling sponsored/promoted Tweets. Also opening for third-party applications to be connected to their service. Another model copies the Free vs Preimum model, such as Spotify. Were everyone get to access and use the service for Free, but if you want to follow special twitter accounts/people, you have to pay a premium fee. Quite a risky model, but could work good for the more confidential business 2 business users.

Its great that they are actively looking at different business model, cause revenue needs to come from somewhere. I can imagine that hosting and running one of the biggest services online isn’t by any means cheap. But at the same time its a tricky question. Ideally you want to follow the Google concept, were the revenue source won’t interfere or distract to much for the regular users. And like Facebook its a social platform, were people come to communicate with friends, follow conversations and news. I mainly use it for getting all news feeds collected in one place. On Google, Adwords/Sponsored Ads works and complements the vital Search function. And people would be furious if a payment requirement were implemented. I think selling premiums have its limited potential, and ads will struggle the same way as one Facebook. Looking forward to see what more business models they will come up with.

And they have also launched a new service for everyone without a Twitter accounts, Fast Follow. Its like the Facebook public setting were everyone can see and follow tweets, by using your cell phone. I think this is one part in their strategy to attract more people and bind them up for a real Twitter account. Get them interested, and when they want to join the conversation, then a registration is needed and you are there. From a business prespection (using Twitter to communicate to potential customers) this is a great idea! If, by some chance, we get the option to talk not only with the ones following our Twitter feed, but others as well through the same medium, its a win-win. Will be interesting to see if this service will be a success or not. Not totally convinced myself.

Recommending new Game Theory site

Scott Steinberg is one of the leading Video Game / Technology journalist. With many news/review sites and a couple of book published, his record speaks for it self. Recently he launched a new great website called Game Theory with Scott Steinberg. Were he and many other industry veterans post analysis, comments and news what is happen in our interesting business. Along with the editorial text he also produces videos were he interview some of the biggest names, from developers to high executives. And in the latest video entry he discussed the changes in the digital distribution / social game market. A really good summary on the state of this part, were I my self work in. Go here and have a look and read.

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Unlearn your MBA

Think there really is some truth to this statement given by David Heinemeier Hansson, the creator of the Ruby on Rails Web development framework at the Entrepreneur Thought Leader Lecture at Stanford (complete lecture below).  Schools and degrees are privilege many of us have to give us a boost for the success later in life, both professional and personal. Many people spend a lot of time and money to give this chance to poor people all around the world. Something many of us take for granted, to go to school. Here in Sweden its free to go to university or collage, while in the US you have to pay ahead for each term. They are discussing adapting this model here as well.

But an education can be many things, not simply an MBA. Its not always easy to get an MBA, but the more people getting them, more pressure to stand out. And often society / business evolves faster than the school text books. So basically, some educations are outdated when the students finish.Personally I felt that my real education started when I ended University.  MBA might be the start, but its not everything. The best teacher is life and learning by your self, by trying.

As David is speaking at the Entrepreneur Thought Leader Lecture he is directed to Entrepreneurs, and being that is not something you can read your way to. Not in my mind at least. I think its just part of you as a person. You might not have it from birth but it can come to you when ever. Many of the biggest Entrepreneurs of today (specially in the IT-era) were drop out. Even if they sort of finished their degrees afterwards. Like Steve Jobs and Bill Clinton. Some times the creating spirit is more important and powerful than your reading mind. Its always good to create a good foundation and basic understanding. But simply a degree won’t take you all the way. Its what you do besides that. I even got a couple of  jobs, not for my degree but because of all the things I did around by education. So I try to recommend everyone I meet to do as much as possible outside of just going to a program / class. Though its hard for many to early find their interested and what they want do and focus on it. And not all areas of work really require this type of thinking and devotion. But if you want to, push yourself to the limits and reach the skies!

100 Million Facebook account hacked and leaked

This is really scary, how some hacker can get access to 100 million accounts on Facebook accounts and share them through torrent sites. Its really bad to do this, people need to feel secure that the things they post online can stay confidential and private. Facebook recently made it official their member number have surpassed 500 Million accounts! A very impressive numbers, and it seems that Facebook will be a platform of its own. A internet within the internet. With all the applications, features and connectivity they offer developers and companies, it must be a horse job to keep everything 100% secured and working. But still, 100 million accounts. From what I have understood, some of the problem arrised  from members not updating or tightening their security settings.

At the same time I feel that people take it to light what they post. And that I mean for online generally. Looking through my own Facebook feeds I see people posting tons of strange things and links. What botther me most are everyone who post pictures of their children. Its okey with 1 or 2, but all the time and constant updates on that their kids are doing. In some way I can understand some who want to post for family and relatives to get a view into the small ones life, but in my mind I would like my children chose them-self when and how they want to be posted. Some for of “Posting ethics and moral” need to be teached. People seems to still be suppriced when they loose a job, or don’t get a job cause the employer Googles the employee and find al lot of strange comments and images posted. Think before you post. It might come back and haunt you.

Starcraft 2 out!

By far, the biggest PC release of the year is now at hand and out. Starcraft 2 is all over the web right now, everyones talking about it and even better, are playing it. I picked up my copy yesterday, and have been playing now for two evenings. Its a blast, but takes time. I can’t recall how long  its been since I played the first Starcraft. And I am also ashamed to admit I didn’t finish the expansion, Brood War. But I got both now on a cool looking USB stick.

One thing I really must point out is the incredible package that is the Collectors Edition. I really feel I got value for my money. Not only the most cool looking Collectors box, but it included:

  • Art Book
  • Soundtrack CD
  • Comic book
  • USB with Starcraft 1 + BroodWar
  • And Starcraft 2 of cause!

So far I have only had time to play about 4-5 missions, and I thing they won’t be getting any shorter going forward. But what I have played so far is really impressive. Of cause its like Starcraft 1 with some new units, graphic and story. But some new features is here as well. Will probably spend many hours playing Starcraft 2. But only Single player, don’t have the time or patience to play multiplayer for a title like this. Althoug I must say that one neat feature for the social part was how the game can create a Friends list for you by simply scaning your Facebook account. Maybe a bit scary, but I believe it works great and we will probably see more similar features in not only games but other softwares and sites.

My Starcraft 2 Collectors Edition unpacked

My Starcraft 2 Collectors Edition unpacked

Stieg Larsson to be the first “Kindle Million author”

Very interesting! I knew that the books were big sellers, and really really good books as well. When I first heard of him was in 2006-7 while working on Gotland. Everyone in the office talked about this damn Stieg Larsson and how his books messed up everyone’s sleep. They simply couldn’t stop reading. So finally I picked up his books (as audiobooks I might add) and started listening. And I was hooked immediately! I had never read (heard) anything similar before, and even when we went travelling to Tokyo, it was hard to stop listen. Also got the whole family hooked as well.

And it seems that the success continues, even increases. The third and final book just recently got release in English and I recall reading somewhere people stood in line outside of book stores in the US when it was released! In the same league as a Harry Potter release.

So it don’t seems like that a big of surprise when reading that Stieg Larsson is the first author to sell a million copies… for the Kindle! The hugely successful e-book reader from Amazon (now rivalled by the iPad) have changed about reading and getting books. And to be the first to sell 1 million copies is something big! The best part is that its a Swedish author! Kindle and similar book platforms are here to stay, and its a privilege to have the biggest seller to be Stieg Larsson. So they made him the first member of their Kindle Million Club. Feels good to be patriotic sometimes! The only sad thing about this Stiegs passing and that he isn’t here to enjoy the success.

I am kindla interested in a Kindle, as a big book consumer myself. I wouldn’t want an iPad for reading, don’t really feel that it is biggest potential. With the screen and everything.

Amazon Kindle

Amazon Kindle

E3 preperation

Right now it a very hectic time at work. Next week some of us from work will go to Los Angeles to attend the E3 convention. As it looks now the schedule is starting to become full, but its in a good way. Many good meeting books with really big companies. Hope to have some reports from E3 with photos next week or next weekend.

It is the first time for me at E3! Last year I would have gone, but smaller sisters only graduate once in life so had no choice. So I am really excited to see what its all about what I have only read and heard about. Just so much to prepare for all the meetings and then the travel half around the world that is… not so fun. But I hope it will be a fun and productive business trip.