Greetings, FFF. An interesting recent development is that Amazon opened its first physical bookstore in Seattle in 2015, with hundreds of more physical stores to open across the country (http://www.vox.com/2015/11/5/9672394/amazon-books-physical-store). Jeff Bezos’ ambition may not be limited to “selling lion’s share of word’s digital contents”, but rather “selling ALL books, printed or digital, through Amazon.” Two more data points: (1) sales of digital books went flat and then started to fall as e-book revenues dropped 11 percent in 2015 alone, according to the Association of American Publishers, (2) sales in (physical) bookstores grew 2.5 percent in 2015, the first uptick since 2007, and the growth rate strengthened to 6.1 percent during the first half of 2016. The number of newly opened bookshops has also been on the rise (https://www.technologyreview.com/s/602780/amazons-next-big-move-take-over-the-mall/).
While we are witnessing much fanfare of Amazon’s dominance in e-publications and retailing, it is important to remember that profit margins of e-books are typically much thinner than their physical counterparts (as you have already pointed out, FFF) and that pure-play web retailing may not be sufficient for Amazon’s (or Jeff Bezos’?) vision of total dominance in the retail world.
Greetings, Paul. To @SLA’s point, the brand of GameStop may provide strategic tailwind for the company to pivot into virtual game retail business. It is worth noting, however, that GameStop does not own any titles as in the case of XBOX and Sony, and therefore may not be able to compete with the virtual stores operated directly by game developers. In addition to negotiating revenue sharing schemes with incumbent game makers, Gamestop could also consider (1) identifying and acquiring game development and exclusive content release rights for selected future titles (i.e., similar to Netflix original), and (2) connecting with and building a vibrant indie game design and retailing community (i.e., similar to the Steam community under Valve) to potentially re-brand itself as both developer and retailer.
To @Alejandro’s point, the term “magazine publisher” may well become a misnomer with regard to the evolving business model of the publishing industry. Going digital typically means offering prior print contents at a heavily discounted price (even with a paywall in place), while unlocking other revenue streams such as programmatic advertising, sponsored contents, data intelligence, and strategic partnerships. It is a bit ironical to see a magazine publisher deriving bulk of its revenue from sources beyond its core competency in content generation and curation. What’s more, the Hubspot HBS case is suggesting yet another extreme: high-quality content for the sake of in-bound marketing and consumer acquisition. It would be interesting to see the strategic evolution of Conde Nast with a new Chief Digital Office and digital-minded CEO in the driver’s seat.
Greetings, Uther the Lightbringer. While it is interesting to see Pearson partnering with IBM Watson to develop intelligent tutoring systems, I am a bit doubtful about whether the volume and quality of Pearson’s textbook-based learning data is at all sufficient for data-hungry machine learning systems such as Watson. Two primary data sourcing strategies in this digital era are (1) micro-tracking user interactions (e.g., Google’s page click signals, Facebook’s “like” and sharing profiles) and (2) collecting end-point sensory data (e.g., IoT smart devices, GE’s digital twins). Since paper textbooks neither track reader interactions nor gather real-time peripheral data, Pearson’s traditional print media may contribute very little machine-compatible data to the intelligent tutoring systems. Digital versions of those textbooks, while more promising on surface, may well be an equally poor data contributor because it is difficult, if not impossible, to link students’ success to their patterns of interactions with the digital media – hence the scarcity of labeled training data for Watson. One recommendation for Pearson as a prerequisite for its ITS is to develop education materials with rich multimedia interactions with students and real-time logging/inferences of user success. I have to say that some of the pedagogical contents at HBS (e.g., digital case studies, interactive FRC tutorials) are worth researching and emulating by Pearson going into the digital learning era.
Greetings, John. Your recommendation for Plexure to “apply some of their skillset to other, more lucrative, opportunities” is an important step towards diversifying its existing advertising-only product portfolio. If we drill down the “skillset” part, however, it seems that the *only* tangible skillset of Plexure is data intelligence in the forms of data visualization and predictive analytics. That fact that Plexure is merely a data processor rather than a data gatherer/owner may also hinder the growth of this young company. If we take a look at some incumbent in the IoT space, Cisco owns data through its fleet of networking and switching devices, and GE gathers data from the “digital twins” of its physical products. In an era where data is the new oil, is taking huge dependency on other data providers a sustainable strategy for Plexure? In this sense, I would also recommend the company to develop data sourcing and inventory capabilities to reduce dependency on its “partners” (who may well become adversaries in the near future).
One of the key missions of Google.org and internet.org (by Facebook) is to enable internet connectivity at every corner of the planet. However, added connectivity may impose a huge energy consumption burden on the underlying networking infrastructure, which are largely developed by telecommunications companies such as Cisco and Huawei. As we anticipate a significant ramp up on connectivity and data transmission intensity on a global scale, does Google have any plans in place to address the environmental and sustainability issues on the infrastructure side?
Thanks Aton for the intriguing take and analysis on the internet giant.
A recent development is the aerospace industry is that supersonic flights may be coming back soon. (http://www.vox.com/energy-and-environment/2016/11/2/13409324/supersonic-flight-concorde). NASA and a significant number of aviation startups are re-experimenting with supersonic planes (the very concept that made Concord bankrupt decades ago), citing drastic improvements in fuel efficiency, drag-reduction technologies, and effective mitigation of the once-disruptive sonic waves. The upside? San Francisco to Tokyo in 4 hours (instead of 11), and New York to London in 3 hours (instead of 8). It would be interesting to see how Boeing reacts to the resurgence of commercial supersonic flights. How would Boeing adjust their sustainability strategy to the evolving competitive landscape of commercial flights?
Thanks CK for your thoughtful research and blogpost.
Fascinating read – thanks Shiv for researching and blogging this! Building on Ldubs’s comment that “somewhat surprising to see what H&M is investing so much into sustainability given their poor track record with overseas sweat shops,” I am curious to know whether H&M is positioning the sustainability initiative as a truly global effort, or more as a zero-sum PR-driven move to uplift their public images in core markets while shifting most of their climate tolls to workplaces/suppliers with adverse working and environmental conditions overseas.
Thanks again for your time and insights, Shiv.
Thanks for the fascinating introduction to Arable, NJG.
Borrowing from the academic research by HBS Professor Sunil Gupta, products and services enabled by big data typically can be evaluated by three Vs: (1) volume, (2) variety, and (3) velocity. From your blogpost, Arable is “streaming” large volume of data in a variety of agricultural settings at a near real-time pace, hence satisfying all the three “V” dimensions characterizing the data intensity of the product. An open question in my mind is whether (and how) the real-time acquisition of sensory data translates to real-time data analytics and decision making? Do their sensors have algorithmic kernels built in, either within the native microchips or in the cloud? In his comment above, Drew saliently pointed to the actionability of data as a key driver for continued success in business and sustainability. I would like to highlight the common “curse” of delayed decision making encountered by many big data companies – i.e., the latency of actionability.
Thanks again for the information and insights, NJG!
Building on Shivika’s comments, I am wondering whether (and how) the Ecoimagination initiative is related to another transformational initiative at GE: the Internet of Things (IoT). In the Silicon Valley, GE has been hiring aggressively for developers and industrial designers to create “digital twins” for a majority of GE’s home appliances. By 2020, an average US household is expected to have 10+ smart devices interconnected and constantly cross-talking. The surge of IoT, if managed inappropriately, would mean millions of energy-intensive and data-hungry devices seeping through every corner of the United States and the world. It would be interesting to see how GE plans to align the Ecoimagination initiative with the development of their army of next-gen smart devices.
Thanks Charlie for your information and insights!