Guardian’s Open Platform (Part 2): Where’s the money?

Guardian’s experiment with open source data has proven one thing quite clear that Public data is a growth media for an ecosystem to form. Public data on open source is a nutrient of a whole new eco-system and allow new things to happen. The key to monetization of the open systems in this case is building user centric apps which have a business model.
The applications build on the Guardian Open source platform is divided into three categories mainly differentiated by span of Guardian’s control and the revenue/revenue share model.

So then where is the money?

Guardian’s open platform gives API and Content Developers 3 tiers of access and 3 separate revenue models to choose from:

BESPOKE: Taking, Reformatting, and content augmentation with same access as that of Guardian. Allows custom access for licensing content and integrating rich applications. The revenue is a combination of sponsorship, media, fees, revenue share and downloads.

APPROVED: This involves taking the full Guardian article content, with an advert. Out of this Guardian keeps the ad revenue and the API developer keeps the rest of the page revenue.

KEYLESS: The API developer takes Guardian’s content and keeps part of the associated revenues. Thus there is free access to headlines,data,tags and meta data. There is no key required and partner keeps associated revenue from the page.

What this means for Guardian is that developers are able to access full content APIs on demand from Guardian with keys approved thus making the platform a place to do business with Guardian and engage its scale. Rapid scalability, reliability and performance are the core requirements.

The technology back end running the open source

To assist the developers, Guardian has the Microapps which is a third framework for integrating 3rd party apps into the Guardian platform. The Microapps helps developers integrate their solutions more easily and readily into the Guardian core and evolve the Guardian open platform to be the commercial future of the partners/developers.

Thus the open source platform would be instrumental for Guardian in terms of
• Moving away from content broadcast, and yet keep the growth engines running
• Partner engagement and open source contributions on journalism, data, software, applications, revenue and ads
• It would also support the developers and partners with data and APIs, scalability, reliability and speed.
Guardians enterprising effort build on open source is pretty much on its way to re-define media and thought behind media.

In times to come, media will need to evolve into a two way communication path and Guardian will be referred as a case study, as a pioneer of new media.

Amen!

Guardian’s Open Platform (Part 1): Coming of Age (Driving Innovation to stay relevant in Media)

RIP, Print Media!

The proliferation of Digital and Social Media and Google have had an adverse impact on the print media by means of replacement.Communication is two way, immediate and Twitter has now added a dash of “conversation streams” to the news and print.

In this context, Guardian’s effort to move from being just a broadcast publisher to a platform and use content , search and open source to build a new business model around news and media is noteworthy. The transition from news and journalism to news, data, video, audio, content partnerships, innovation, conversation, comments, keywords, podcasts, recommendations, hashtags and live blogs is a case study.The bottomline is about Guardian’s evolution to a platform and not just a publisher.

This platform approach is about changing the perspective from “bringing the data and apps from the internet” to “enabling partners to build applications using proprietary content and services for all digital platforms”. The idea is “experimenting in combining the experience and knowledge of a large media network with experience, opinions and expertise of people who want to participate rather than passively receive content and news”.

Guardian’s open platform is thus its suite of services enabling its partners to build applications with Guardian. The platform has three parts to it:
Content API: A service for collecting and selecting content from the Guardian for re-use

Data store: A directory of useful data curated by Guardian editors.The developers can take this content of the newspaper as the raw material for building new businesses. This raw data is useful in profiling demographics and trends and data catalogues,

Politics API: Database of candidates, voting records, constituencies, election results and live data on election day. The data here is again freely available for use and analysis. Developers innovate on this data and develop interesting tools such as the voter power index for the recent British elections which lets the user know his vote’s woth basis his marginality and constituency size.

Thus Guardian has been making interesting use of Public data to make its own media eco-system and allow “open ssource” innovation to take over.The emerging trends point to change in public participation space aroud public data. Public data can create new economies, improve procurement processes and through evolutionary pressure in the marketplace increase the usability and user centricity of applications that access Government services. Guardian is stepping as a facilitator for consumers of these services to provide an environment where Consumers can get better and access to newer things, mediated by the ingenuity of the developers

Part 2: How the open source makes money?

Mobile VAS: Building a sustainable alternate revenue stream

MVAS will drive data revenue/ARPU, but the telecom eco-system must have to look beyond the ABC of Mobile VAS as we know it.

Indian Telecom Market numbers continue to sizzle: Indian added 19.9 million new subscribers in January 2010, which (to give a perspective) is 1.5X the number of subscribers US added in the whole year 2009. It is like adding a whole Canadian wireless market every month. For the year 2009, India added 177 million subs versus 106 million for China. A lot of this growth is powered by the tariff hyper competition and the ARPU have now dropped 30% YOY (INR 155.6 for OND 2009 Quarter versus INR 220 for OND 2008).

Now, with operators having no price differentiation, quality will be the driver for growth. Also this will most likely lead the valuation model to move from subscriber based one to a model based on margins and minutes of usage. With the lowest tariffs in the world, industry analyst have started raising questions on the viability of the business. With MNP round the corner where a subscriber move to another service provider it is unlikely that the tariffs will rise from here. The rapid re-basing in pricing by incumbents will seriously affect and threaten smaller, regional and startup operators, perhaps shortening the period before which industry consolidation inevitably takes place.

Operators are looking at more avenues and revenue streams to augment their Incomes and stay afloat and the M-VAS industry holds a great deal of promise out there. The Indian MVAS industry estimated at more than USD 1 Billion in 2009 is expected to grow at a CAGR of 50% in 2010 and help the Service Providers arrest the fall in their ARPU’s and improve their profit margins. 90% of Operators revenues in India come from Voice and Rentals. Of the balance 5% comes from SMS’s and MVAS accounts for only about 5% of revenue. Clearly for Indian Operators, MVAS is the next revenue opportunity.

MVAS so far has been restricted to Mobile Infotainment. The VAS operators call it ABC in the Indian Context (A for Astrology, B for Bollywood and C for Cricket). In 2009, the most popular mobile value added services were songs and ringtone downloads, mobile games and mobile advertising. With the rise of reality shows, interactive participation in TV and Radio game shows and contests has already gained tremendous popularity. Given India’s demographics where more than 50% of the population is under the age of 30, infotainment is most likely to be the service that will run up the operators ARPU’s in 2010.

However with 3G roll outs around the corner, MVAS will assume greater dimensions than the ABC/Infotainment that it has so far been. It is anticipated that 2G to 3G migration of users in the first year of launch will increase the ARPU by Rs 200 per month per migrating subscriber.

When will Twitter start generating money through the advertising medium?

Twitter is the million dollar baby and the trillion dollar question is “When will Twitter start generating money through the advertising medium?” . Towards this, I reproduce Biz Stone’s (Founder, Twitter) version of commercial usage, revenue generation, and advertising which he had posted on his blog.

Source: Does Twitter Hate Advertising? (Blogger): May 20, 2009

When we speak publicly about how Twitter might become a profitable business, we talk about the idea of commercial usage and then explain that we’re still exploring what that means—that’s true. We also say traditional web banner advertising isn’t interesting to us which is also true. However, to say we are philosophically opposed to any and all advertising is incorrect.For a long time, we’ve said that we think there are interesting opportunities related to commercial usage. Businesses and individuals are getting value out of Twitter and we may be able to enhance that. We’ve just begun exploring in this area—early ideas include account authentication, management tools, and discovery mechanisms. We’ll keep you posted.The idea of taking money to run traditional banner ads on Twitter.com has always been low on our list of interesting ways to generate revenue. However, facilitating connections between businesses and individuals in meaningful and relevant ways is compelling. We’re going to leave the door open for exploration in this area.Do we hate advertising? Of course not. It’s a huge industry filled with creativity and inspiration. There’s also room for new innovation in advertising, marketing, and public relations and Twitter is already part of that. In fact, next month I’ll be attending and speaking at the 56th annual international advertising festival, Cannes Lions 2009. I’ll let you know how it goes.

 

Essentially, Biz Stone speaks about expanding the value in Twitter (related to commercial usage). Twitter is largely exploring the value that it can create and add to individuals and businesses as a meaningful, relevant and compelling way to make monies. Traditional banner ads are dismissed as a low priority activity which is low in the list of “ways to generate revenue”.

e-Commerce: Gaining traction in India

e-Commerce was a non starter in India in the early days. That was before IRCTC stepped in with its online booking. I remember the long painful queues in front of the railway booking counters before the online booking system of IRCTC stepped in. A railway ticket in those days could be booked only by an agent or else, the whole activity of booking a train ticket used to be a half day ordeal in itself. All that changed with the advent of IRCTC train ticket reservation. How easy it was booking a ticket by simply clickinginto the website and doing the needful. The long sweaty queues were now relegated to history.

Led by train and flight reservations online ticketing has been the most successful force in online E-commerce industry. This also supplemented by the fact that today online travel industry constitutes 78% of the total E-commerce industry in India. IRCTC contributes to 1/3rd of the total e-Commerce revenues in India.

The e-Commerce revenues are slated at Rs. 9000 crores and IRCTC contributes Rs.3400 crores in that. 45 million tickets were sold in FY 2008 and it has seen a jump of 100% YOY. However the potential for IRCTC is still higher and it can yet add more revenues to itself. A few steps to increase the online ticketing activity:

1. Reduce additional charges for i-tickets and e-tickets to increase penetration and induce more people into a internet based ticket purchase. This helps since the service is mostly used by agents who charge additional commission apart from charges levied by IRCTC from their customers this again limits the penetration level and if the users are given more payment avenues it could propel many to go for direct transactions.

2. Allow booking of rail cargos and other railway services on a large scale then it can definitely garner more traction in terms of higher transaction size and remove bottlenecks at the same time attracting SME to the fold.

3.Association with commercial banks may help in getting more traction especially if rail cargos and other services are introduced through IRCTC.

The growth today is good, but it could get much better if these simple steps are also taken up. For Railways, it would reduce process costs of maintaining a bulky ticketing department.

The other large player which can simply multiply its value add by online transactions is India Post. It currently delivers 1,575 crore mails every year linking every nook and corner of the country through a network of 1,54,149 post offices and 5,64,701 letter boxes. The government owned services like India post if implements E-commerce in a serious way then India could definitely remove the barriers of E-commerce industry.

VAS: Increasing penetration and revenue

Covering a Linked in Discussion, on Increasing penetration and revenue of VAS services in India.

http://www.linkedin.com/answers/product-management/positioning/PRM_PST/437353-22685324?browseIdx=57&sik=1237453659425&goback=.ach_PRM.abq_6_1237453659425_n_o_PRM

How to Increase penetrations and Revenue for various VAS services?

Given the present scenario, getting a bigger wallet share for VAS services from the consumer seems to be the biggest hurdle? How can the consumer be incited to use various new VAS services that come up? Is tariff discounting or offering Free Try n Buy the only way to let the consumer have a feel of the service?? 

Hi Anoop 

Your Q seems to have generated a healthy round of discussion and here is my take adding to the muddle 

I come from a Marketing related view guided by two basic tenets 

1. Supply and Demand 

Music, H/Bollywood, Games, Ringtones, Singtones, Cricket is what most of the VAS revenue is based up on (Currently). There is a healthy demand for this but supply is manifold leading to commoditization. Hence the need for innovation in VAS! (Think Medicine, Think Train Ticketing/ Think Fitness/ keep thinking..) 

2. The Age old Construct of the 4Ps. 
We have a Product/Service and currently we are trying to push mass usage through Tariff discounting (Pricing Strategy). A few Opinions beforehand have already mentioned Retail Push (Place) and Cross Selling/Up selling and Consumer Education(Promotions). Even more, we have spoken about Profile and Behavioural based Targetting (a very high order mechanism) 

My take on the VAS markets in India : 

1. We need more stakeholders in the ecosystem. Currently it is only the VAS provider and the Operator. Hence the scope in VAS development and deployment remains limited. 

2. The Indian Consumer is averse to Credit Card and Mobile Payments. I am not surprised about VAS ARPU of Rs.25 (as cited by Rahul). 

3. We are limited in content.Games + Music + Entertainment form 36% of VAS applications in US. The next 36% is Books, Utilities, Education, Lifestyle, Productivity, Travel, Fitness, Sports etc. Social Networking as VAS content has also been less exploited. 

Point 1,2,3 (More Stakeholders, Wider content, Paying Mechanisms) lead me to the end of my argument, which i will elucidate with an example: 

How about partnering with VLCC for beauty tips, reserving apointments, reminders etc etc? 
How about partnering with Apollo hospitals to provide a range of services on a VAS platform? 
Tie ups with Local Gyms to disburse mobile services to its members? 
Taxi services and Train/Flight Booking via VAS…. 
The possibilities are endless if you take the unconventional route to VAS and application monetization.The business model would be a win win win design for the consumer – Telco + VAS – Solution provider. 

Would consumers pay? They already do… and a minor addition in terms of taking services mobile will not hurt them if they are hung up on VLCC, Apollo and the likes… 

End points: 
1. Dont invent new needs and delivery mediums, instead tap the consumer needs at the right places and occasions 
2. There is a fundamental need to move away from Telco VAS provider (Duopoly mindset) to a tag along/second fiddle mindset with the solution provider. 

Hope this is somewhat leading to the right direction.

Cashing in on Orkut

2009 should be the watershed years in terms of monetizing of the social networking sites through ads targeted on user specific information. Mark Zuckerberg knows it and Google is doing it. Orkut which is the No 1 networking site in India is tieing up with IPL to create its own brand positioning platforms to lure advertisers. What it offers advertisers is a better opportunity to create engagement and branded pages, groups etc with its users… to create its own buzz. Ultimately at some level it may serve as a online brand building medium with a decent RoI.

“Last year, we built a stronger base of marketers and invested in internet advertising. In 2009, we should make revenues from our social media platform,” says Google India Managing Director Shailesh Rao. Google is banking on converting its vast network of Adwords advertisers to Orkut, where they can place targeted and contextual advisements on various social communities and user profiles, reaching individual customers directly.

According to comScore data, in 2008, Google sites ranked as the top property in India, with nearly 20 million visitors. Orkut registered nearly 10 million visitors, marking a growth of 39 per cent. Orkut Apps, the blog that has become popular for software developers to market their social applications, has also opened new revenue streams for Google. An estimated 45 million internet subscribers drove the online advertising mark

et to Rs 240 crore in 2008, and according to Federation of Indian Chambers of Commerce and Industry (Ficci) estimates, it could touch Rs 2,500 crore by 2011. But a harsher financial outlook in 2009, combined with an expected fall in online advertising, is forcing the networks to focus more on making money from existing subscribers than on adding new users.

The only catch is the belief that a user on social networks is browsing to keep himself updated with his network of friends and to interact with them. Thus he is immune to ads. It is now Google, with its formidable access to users and adv

ertisers and customized solutions, which is going to test the axiom of “immunity to ads on social networks”. Whether it can extend the success of its ad sense and ad words is what we will see happening through this year.