People in tech and media have been saying that ‘content is king’ for a long time – perhaps since the VHS/Betamax battle of the early 1980s, and perhaps longer. Content and access to content was a strategic lever for technology. I’m not sure how much this is true anymore. Music and books don’t matter much to tech anymore, and TV probably won’t matter much either.
Most obviously, subscription streaming has more or less ended the strategic importance of music to tech companies. In the past, any music you bought for your iPod had DRM and could only be played on Apple device
.. Even if you’d just encoded your own CDs (or downloaded pirated tracks, but in either case without DRM), physically transferring them to a different device with different software was a barrier. Your music library kept you on a device. With streaming these issues mostly go away. All the major services are cross-device (even Apple’s), and if you do switch to a different service you’re not giving up tracks you’ve paid money for, just a list of your favourites. Switching became easy.
.. Since music no longer stops people from switching between platforms, it’s gone from being a moat
.. Ebooks, like music, do not seem to create any moat for any broader platform strategy.
.. whenever I talk to music people or book people, very quickly the conversation becomes a music industry conversation or a book industry conversation. What matters for music are artists and touring and labels and so on, and what matters for books are writers and publishers and rights and Amazon’s bargaining power in books and so on. These aren’t tech conversations. The big tech platform companies rolled into these industries and changed everything, but then moved on to bigger things.
.. Tech needed content to make their devices viable, but having got the content (by any means necessary), and with it of course completely resetting the dynamics of the industry, tech outgrew music and books and moved on to bigger opportunities.
.. the shows that are watched mainly because they’re broadcast at 8pm on Saturday will suffer, and so will the channels that are watched because they’re high up on the program guide.
.. Amazon clearly is using content for platform leverage – as something else to speed up the Prime flywheel. Prime has become a third pillar to Amazon’s business, next to logistics and the ecommerce platform, and Amazon is always looking for ways to add more perceived value to it, preferably with no marginal cost – TV content that it owns outright is exactly that.
.. Unlike a Taylor Swift or Kanye West exclusive, this is more than just marketing – it’s something you lose altogether if you give up something else that’s not directed related. Cancel the subscription delivery service and you lose access to all Amazon TV shows.
.. For Google and Facebook, there’s no subscription to cancel – there’s no binary (renew/don’t renew, cancel/don’t cancel) decision you might take that would cut off your access to that great TV show. You don’t close your Facebook account – you just go there less. You might stop paying for the Youtube TV service, but that won’t cut off your access to any other part of Google
.. Buy an Android instead and you lose access to the (hypothetical) great Apple television service. This is why people argue that Apple should buy Netflix.
.. Part of ‘content is king’ was the idea that (at least in theory) content companies can withhold access to their libraries entirely, and in the past one might have presumed that that meant they had the power to kill any new service at birth. In reality, rights-holders have always had too strong a need for short-term revenue to forgo broad distribution, and few of them individually had a strong enough brand to extract a fee that was high enough to justify exclusivity
.. The reason Apple TV, Chromecast, FireTV and everything else feel so anti-climactic is that getting onto the TV was a red herring – the device is the phone and the network is the internet. The smartphone is the sun and everything else orbits it. Internet advertising will be bigger than TV advertising this year, and Apple’s revenue is larger than the entire global pay TV industry.
.. This is also why tech companies are even thinking about commissioning their own premium shows today – they are now so big that the budgets involved in buying or creating TV look a lot less daunting than they once did.
Cars and second order consequences
Over a million people are killed in car accidents every year around the world
.. it was easy to predict mass car ownership but hard to predict Wal-mart, and the broader consequences of the move to electric and autonomy will come in some very widely-spread industries, in complex interlocked ways.
.. Roughly half of US spending on car maintenance goes on things that are directly attributable to the internal combustion engine, and much of that spending will just go away. In the longer term, this change might affect the lifespan of a vehicle:
.. Car crashes kill 35k people a year in the USA, but tobacco kills 500k.
.. Most estimates suggest that charging a fully electric fleet would lead to 10-20% more electricity demand. However, a lot depends on when they’re charged: if they’re charged off-peak this might not need more total generating capacity
.. In the USA in 2015, there were 13m collisions of which 1.7m caused injuries; 2.4m people were injured and 35k people were killed. Something over 90% of all accidents are now caused by driver error, and a third of fatal accidents in the USA involved alcohol. Looking beyond deaths and injuries themselves, there is also a huge economic effect to these accidents: the US government estimates a cost of $240bn a year across property damage itself, medical and emergency services, legal, lost work and congestion (for comparison, US car sales in 2016 were around $600bn)
.. if you have no collisions then eventually you can remove many of the safety features in today’s vehicles, all of which add cost and weight and constrain the overall design – no more airbags or crumple zones, perhaps.
.. How much more quickly do you get to school in the morning if you drive at the same speed but don’t have to stop at every stop sign just in case there’s someone there?
.. it has been estimated that 14% of the incorporated land of LA county is used for parking.
.. A study in Oakland, in the San Francisco Bay Area, found that parking requirements pushed up construction costs per apartment by 18%.
.. If you remove the cost of the human driver from an on-demand trip, the cost goes down by perhaps three quarters. If you can also remove or reduce the cost of the insurance, once the accident rate has fallen, it goes down even further.
.. it displaces demand from public transport – though the cost of a bus driver is also large part of the cost of the trip, and those drivers might not be needed either, so buses might also be cheaper
.. Does your robotaxi automatically drop you off at a bus stop on the edge of high-traffic areas, unless you pay a congestion charge?
.. one needs to start thinking much more generally, not just about cars, trucks and roads but cities, land use and real-estate. In fact, one needs to think about cities. Cars have remade cities over the past century, and if cars are now going to change entirely, cities will change too.
.. How do cities change if some or all of their parking space, especially in town centres, is now available for new needs, or dumped on the market, or moved to completely different places? Where are you willing to live if ‘access to public transport’ is ‘anywhere’ and there are no traffic jams on your commute? Does an hour-long commute with no traffic and no need to watch the road feel better or worse than a half-hour commute stuck in near-stationary traffic staring at the car in front?
.. What happens to rural pubs if you don’t have to worry about drink-driving anymore?
.. every AV will be watching everything that goes on around it – even the things that are not related to driving. An autonomous car is a moving panopticon. They might not be saving and uploading every part of that data. But they could be.
By implication, in 2030 or so, police investigating a crime won’t just get copies of the CCTV from surrounding properties, but get copies of the sensor data from every car that happened to be passing, and then run facial recognition scans against known offenders. Or, perhaps, just ask if any car in the area thought it saw something suspicious.
Benedict Evans: From mobile first to mobile native
A couple of years ago internet companies moved from having a mobile team and a mobile strategy to what they called ‘mobile first’. Instead of building a product and deciding how and if it would work on mobile, new things are build for mobile by default, and don’t necessarily make their way back to the desktop.
.. What happens if you just forget about the PC altogether? But also, what happens if you forget about featurephones? What happens if you presume all of the sophistication that a modern smartphone has and a PC does not, and if you also presume that, with 650m iPhones in use and 2.5bn smartphones in total, you can build a big company without thinking about the low end anymore?
The Facebook of ecommerce
That particular story is perfectly well written, but it’s read because it’s in that magazine and that magazine is bought because it’s on the rack, and now people don’t come to stories like that anymore. And equally, that particular product is bought because it was ranged and placed at eye level, and now it’s not going to be being bought like that either. Today, those stories get their traffic, very often, from Facebook ..
.. Amazon is great at selling you what’s on the table in the front of the bookshop, and at selling one copy a year of a million or so obscure titles, but it’s not very good at showing you what’s on the shelves at the back of the bookshop. It’s not so good at selling the mid-list – things that you didn’t know existed, or didn’t know you wanted, before you saw them. It does have a recommendation product, but it’s not clear how well it works, and indeed an interesting question for Amazon is how far it can grow before running into categories for which its commodity merchandising model doesn’t work so well.
.. we’ve now reached the point that it’s not clear that there is anything that cannot be bought online. But actually, the real barrier now is often not touching it, but knowing about it.
.. Without that, we’ll have more of the polarisation one can often see in ecommerce today, between bestsellers on one hand and the long tail on the other with the middle squeezed.
.. So, someone needs to do the demand generation – to tell you there’s something you might want.