DmitryDIGIT's Profile

Thank you Caroline, interesting post, but I see a couple of issues here. They are: cannibalization of Guggenheim Museum revenues by VR, copyright issues and sustainable business model for VR component.
First of all, this is a great public good to have Guggenheim Museum available at a click of your mouse inside your VR, but on the other side, Guggenheim Museum earns its revenues from ticket sales. It needs these revenues to maintain its collections. Ticket prices are averaged $15-20 per adult. If you start to show its arts online in VR, I’m afraid its revenues will decline and Guggenheim Museum is going to suffer.
Secondly, Guggenheim Museum should somehow to figure out how to deal with copyright issues. In computer environment all its arts could be easily copied and counterfeited. In the normal museum setting you can’t even make a photo of the arts, but here you can have them in a very good quality.
Thirdly, both Guggenheim Museum and Google should find a sustainable business model for VR component, otherwise it’s going to be a disaster (for Guggenheim Museum of course, not for Google). I think it’s possible to make some exhibit some collections separately for additional charge, start to charge viewers ($2-5 instead of $15-20), do geographical discrimination and so forth).
In sum, therefore, I believe that VR is a great direction in museum development, but it should be implemented with caution.

Thank you Daniel, it’s interesting who is capturing more value here, NYT or Google? Stepping into Google platform, NYT creates a powerful partnership, but the down side is that it becomes a provider of Google product to its audience. Of course NYT customers will satisfy their informational needs first with Google cardboard, but after that they will pursue other needs (events, theatre, cinema, travel, games, etc). That’s going to be almost all Google’s revenues as soon as Google provides this platform for NYT. So, this is a very arguable decision: it definitely expands NYT horizons, but makes it dependant on Google product.
To eliminate this effect, I would definitely go for another VR platforms (Oculus Rift, Hive, Samsung Gear, etc) to create competition among various VR platforms for NYT audience. What do you think?

Cathy, you’re right, with constant production costs going down, it doesn’t make sense for Google to target to a premium markets with premium version of VR set. This is a typical example of first mover revenues, captured by Google. When the costs of competitors will go down, I think Google will distribute Cardboard for free – just to attract customers on their Cardboard platform. So far Google decided to produce Cardboard sets itself to maximize the captured value.

Thank you Kathy, it is really an interesting post. Art is a tough area for computer technologies. Art is all about artistic vision and mastery. I wonder if computers that can learn from great artists can create an artificial vision and learn this mastery and not just blindly copy their style. 20 years ago many were sure that computer will never be able to express human emotions, feelings and vision. Right now you see more and more computer programs making arts, judging it and even competing with human artists. Looks like very soon we all going to see human arts and artificial arts. And who knows what is going to be better.
Another aspect, as you mentioned in the beginning, the market for arts is quite narrow, especially for high arts. 3% of the population is a very small niche and it’s really a luxury good. I wonder with intervention of computers is it going to change for the mass market? We have seen many successful examples in haute couture (Armani, Ralf Lauren and such).
Finally, promotion is very important in arts. I noticed many masterpieces were well promoted, thus cost well, while other masterpieces were not promoted at all and cost cheaper. I think promotion is a value creation mechanism in arts.

Thank you for the post Caroline. When you speak about insurance, it’s all about managing risks. Here we see another excellent example how modern technologies can add value to even such an established business like insurance. I believe that data analysis can significantly improve financial models for insurance companies on a micro level, thus add significant value to the business.
On the other hand, this is a perfect economic incentive for people to live healthier lives. Many societies tried to do that for a long time. Here we have a single company helping government to fix healthcare problems, by making people to live a healthy lifestyle. I think it’s going to be a disruptive technology in insurance, because as soon as people are going to be rewarded for being healthy, they will start doing that, because it comes alone with their needs. I believe that every person wants to live a healthy and long live. What company will you choose the one that rewards you for your health and charges a lower premium, or the one that is indifferent about you and charges you a higher premium? The answer is obvious.
As soon as John Hancock implements this scheme, it will get a significant market share. Others had to implement similar practices as well. That’s why it’s going to be successful.

Hi Daniel , thank you for the post. The idea of performing this kind of data analysis is very good. Although, it’s all about implementation as always.
It’s interesting how HP manages to distinguish if it’s not a fake traffic (that can be easily created with bots or even competitors). I think they should have some software in place that detects and busts fake traffic.
Another issue with data analysis is that HP has a data only on the articles from their source and not most popular issues. This way they can easily miss the reader’s interests and go to the wrong direction. One way of escaping it is to have a user generated content section on their site. This way they will be able to see their readers interests more in depth.
Another issue is performance metrics implementation in creative organization. Talented people don’t like metrics and never perform on them, but do perform without these metrics.
I don’t believe that this is going to be a sustainable competitive advantage. The idea itself is easy to replicate on the other media platforms. It’s all about how to manage this idea and what decisions to take.

Thank you Carolin, Wikipedia is really a great example of crowdsourcing. Theoretically there should be 2-3 competing digital encyclopedias, but it so happened that it’s only Wikipedia. This is a unique situation. If Wikipedia learns how to capture value to monetize it – that is going to be a quantum leap. It is a monopolist in the world of electronic encyclopedias, but the irony is that it doesn’t know how to use its monopolistic power. It’s basically a platform that creates value by having a massive data on everything. The data is user-generated, that means it doesn’t cost anything to the company to get this content. The opposite side of a free content – that it might be not quite correct. Many Wikipedia articles contain errors, so you better be prepared for that.

UGC – user generated content – a way of crowdsourcing. It appeared in early 2000 with emergence of internet. The essence is that the crowd generates the content for you. It was supposed to be disruptive, but appeared to be not. The proportion of UGC in media is less than 20% combined. The most famous example – BuzzFeed. I think UGC mostly didn’t work out because media have not figured out the feasible business model to operate.

Thank you Bonnie, as an ice-cream lover, I liked this blog.
It might seem great idea, great promotion and so on. But if you think about it for a minute, you quickly understand all the shortcomings of this method. Apart from 3 challenges you’ve mentioned, think about who will take place in such a contest – yes, very narrow range of people – sample that will be not representative of all population. What does it mean – yes, you will get a distorted picture. It’s interesting to see how much their sales grew after campaign.
Having said that, I believe that crowdsourcing should be used in marketing and even in creating new flavor purposes. It’s just a matter of the right way of using it. In this particular case it could be used first to analyze the crowd tastes and preferences, then developing new flavors by means of crowdsourcing (like Tonqal) and making focus groups using the crowds, but selecting samples randomly to be representative.

Thank you Kunal, but frankly speaking, I don’t believe UPS is a viable competitor to Amazon for the following reasons:
1)UPS doesn’t have technology and expertise to become a marketplace for goods. It only has expertise in delivering these goods.
2)UPS platform is very limited to shipping goods, while Amazon platform is integrating buying and selling goods along with their shipping.
3)Amazon is rapidly developing and diversifying its business, while UPS is not.
4)Amazon is twice the size of UPS in revenues, thus acquisition of Amazon will be problematic for UPS.
In sum, therefore, for the reasons above, I believe that Amazon is way superior than UPS as the marketplace and very soon will be as the shipping company. Then Amazon might take on UPS.

Thank you Boris, I think that’s a logical step in evolution of Valve. They have created the top games on the market and needed to monetize their success by creating a platform for games distribution. So far it looks it works well, but I suspect Apple, Google and Microsoft will compete with Valve in game distribution. They all have similar platforms that create value by distributing video games. By that time Valve will need to develop some locking mechanisms to lock up its users or develop some other competitive advantages. Global video games market in 2016 is estimated at almost $100 bln. 30% of it is a huge value capture and a very attractive piece of pie for competitors.

Thank you Robert, that’s a good one. Netflix executives showed a good understanding of industry trends over time. The trend today is further convergence of media production with telecoms. Most recent acquisitions of Time Warner Cable and DirecTV by AT&T, AOL and AwesomenessTV by Verizon and such are the best examples. Telecoms are becoming more and more providers of the content to the users, thus vertically integrating content production adds more value to their value chain.
In this light Netflix shift towards content production looks absolutely reasonable. With its multiple distribution channels and content production Netflix will be a valuable asset with a time.

Thank you for the post YY, Amazon is definitely a role model for e-commerce business. It’s ability to not only develop their core business, but also launch other lines of business is really fascinating. I believe they have a great future based on the current trends in the industry.
They started with the “old media” – books, the good that was rapidly moving towards digital and literally disappearing, and were able to develop the core competence of e-commerce to project it on the other goods sold in the Internet. Right now the sales of goods and services are rapidly migrating to the Internet and very soon will substitute even supermarkets and convenience stores. If Walmart, Target, CostCo and such don’t restructure their business towards the e-commerce, they will lose customers and thus revenues.
Amazon is really good in value creation, may be not so good in value capture so far, but this is a matter of time. After the migration occurs, the company that has a platform between sellers and user and buyers, will have it all.

Thanks Kathy, you’ll be surprised, but the most money in media has always been in tabloid-like publications and programs. The percentage of population, interested in “what color was the dress” is really stunning. On the contrary, less than 15% prefer to consume high-quality information. That’s why intellectual publications have always been a very niche product.
I see BuzzFeed as the tabloid of the future, with sophisticated IT platform that allows to deliver highly customized content along with advertising and additional services to the mass audience. And its audience is really huge – now they don’t need to buy this content, it’s free!

Thank you Michelle, The New York Times has always been so called General interest publication, which means it covered a very broad range of information, starting from breaking news and ending up high quality journalist investigations. Unfortunately the most recent trend in the industry is that content is becoming more and more customized and localized (even with globalization). With this trend NYT had to change its model and so far it’s one of the most successful publishing houses on the market. I think they have consciously decided to position themselves as a niche product of high quality – like Cartier of newspapers and looks like their calculations work fine. Their revenues are growing (most publications are declining), even though the structure of the revenues is changing dramatically. They are good in capturing value through additional online services, but I’m sure with a time they will have to make a huge change in their business model.
Most recently all media is converging into media content generating platforms. And most successful media companies are already there. If 10 years ago newspapers generate their own content, magazines generated their own content and it was different, TV channels generated their content and it was video content, radio stations generated another audio content and online media generated online content, right now all these outlets are converging into single content generating platforms that generate one content and transfer it into different media. This is the way the NYT should go if it wants to stay competitive with other media. I believe that paid subscriptions model will work for a number of years, but it’s not sustainable, because it has to compete with online media that are free of charge and way faster in news coverage than publications. In order to succeed the NYT should converge into multimedia content generating platform and let it be high-quality content generating platform.