my digital nationalism

looking for Indonesia's significance on the web

Archive for March 2012

The case for (and against) ad funded downloads

leave a comment »

Ad funded downloads is the holy grail of digital music. Well, not really, iTunes is the holy grail of digital music, and Apple is making tons of cash off of it.

Ad funded downloads is the idea that people can download music for free and artists still get paid. How do the artists still get paid? Because brands and businesses will want to pay to put advertising on the download pages, and that payment will become revenue for the artist.

Simple enough. An artist puts up their music to download for free. Millions of people will download the music. Brands will pay for these millions of impressions, which becomes revenue for the artist.

People want music. Artist want money. Brands want people to sell their stuff to.

In theory this looks like a no-brainer.

But this is why I think it won’t work.

It’s like having a band play a show for free, people won’t have to buy tickets for the show. The only catch is, there will be brands there, that could manifest in the form of: the stage will be full of advertisements, or you would have to like a brand on Facebook or tweet something for the brand to watch the show, or you would have an ad running in the backdrop of the band, whatever.

The key is you would have to suffer intrusion from a brand. I can’t imagine that would be an enjoyable show. Also it would be hard to find a decent band willing to compromise their artistic integrity in exchange for cash. Or maybe I think too highly of artists.

At its current form, people have a choice of:

  • buying music they like from the available outlets in whatever form they want, for digital they can go to itunes or amazon or google music or whatever.
  • or if they know how to do it just go to thepiratebay and torrent it for free, no hassle

So there are these 2 extremes. Pay or pirate. Ad funded downloads would appear to appeal to the middle ground, people who dont have money to pay, but don’t want to (or don’t know how to) pirate.

I wonder how big this middle ground is, is it even worth the effort.

The only way I could see this working is if the brand experience is non-intrusive, meaning, the most you could do is sell impressions. Requiring users to click, like, tweet would be a hassle. Just have the brand banner above the link, or you could go the way of filesharing sites where the download link takes 60 seconds to load and in that time display some banner ads. That maybe could work.

Let’s just imagine what it would need to make an ad-funded download site work:

  • The site would require a vast sales and marketing department to get brands and businesses on board. They would need an A&R department to get artists on board.
  • They would need to be able to match brands to bands so the impressions would hit the brands targeted demographic (not that hard actually).
  • The downloads would have to massive enough in order to cover the costs of such an operation while being able to pay the bands a fair share, at least what the current market price is which is $1 per song. Any revenue offer to bands lower than that would be a hard sell to artists.

You could argue that this way we could still monetize traffic that otherwise would be lost by pirating, which justifies paying artists lower than the market price of $1 per download. How low could we go?

Let’s say we are starting an ad funded downloads website. The operating costs are $10,000 a month (to maintain sales and A&R teams as well as servers and bandwidth and maintenance and whatever). We are selling the impressions to brands at $10 CPM which is roughly what the current market rate is. Let’s say from all the music we have on the site we have managed to generate 10 million downloads. 10 million downloads at $10 CPM equals 10,000,000*(10/1000) = $100,000 revenue from brands. Now we take out the operating costs of $10,000 because bills have to be paid right? leaving about $90,000 to share to the artists. At $90,000 that means that we are valuing each download $0.009 cents, less than a penny. Good luck selling that to artists.

Based on this model, if we tweak the numbers, there could be a way we could tweak the CPM cost and artist revenue share so the numbers would be more fair for all parties, but in order for it to work the CPM would have to be an absurd number. The CPM would have to be $1000 for us to be able to pay artist $1 per download which is an impossible sell to brands.

So ad funded downloads to me is something that seems like a great idea, but when put in practice it seems like its impossible to make it work. Or am I taking the wrong approach on this?

I guess I ‘ll just think about it some more.

Advertisements

Written by randomwalls

March 30, 2012 at 8:40 am

Product Idea: Custom Retail Search Engine

leave a comment »

Following up from my last post I’ve been thinking about how to solve the problem in Indonesia of not being able to get quality information on products using search engines fast enough. In order to solve this I’ve tried creating a targeted search engine.

Using google custom search I’ve created a custom search engine targeted at local Indonesian retailers. The idea here is to find what you are looking for fast. So for instance, instead of googling for “beli blackberry gemini” and having to sift through irrelevant search results to get to the retail site, I bypass this process completely by specifically targeting the search to known local retail sites. So I can get to sites that I know are reliable and get information of what I am looking for quick and easy.

So here it goes.

Clicking on the image above will send you to the custom search engine page. I’m sorry I had to go this way, I just couldn’t figure out how to elegantly show the custom search bar on my blog post. Maybe someone out there can help me with this. I guess I’ll google around some more and if I find a solution I’ll go back and fix this.

Here are screenshots for the different search results using the same terms. The search term we use here is “hp nokia”

These are the results from normal google:

 

And these are the search results from my google custom search engine:

 

The results from my targeted search engine are much more focused, showing links directly to retail sites blibli.com, berniaga.com, tokobagus.com, and glodokshop.com. The results from normal google showed links to nokia indonesia’s website, a nokia phone price directory, and a blog post about nokia. If I was looking to purchase something I’d have to go deeper to find the links to the major retail sites.

So there we have it. What do you think?

 

P.S.: Credit to Netty Gritty for the google custom search image I used above. Here is the original post where it came from.

Written by randomwalls

March 28, 2012 at 5:10 am

The online retail experience: US vs. Indonesia

leave a comment »

In this post I want to compare the different online retail experiences in US and in Indonesia.

What I want to do in this experiment is to walkthrough the experience of looking for a specific item on google and in how many clicks can I find the item I am looking for up to checking out and actually purchasing it.

The objective of this post is by comparing the different experiences, maybe we can identify what are the key differences and what can be improved.

What we need is a scenario to start with. Please note that I am not comparing specific online retail sites, I am comparing whole experience starting from the search engine to the retail site.

The scenario here is that I am a guy looking for an 8 GB memory upgrade for my macbook pro.

The US experience

I could simply google “Macbook pro 8 GB memory upgrade”

The search results bring me to several online retail sites linking directly to the item I am looking for, there is also a link to a youtube video showing me how to do the upgrade. After that buying the item is as simply as clicking on the amazon link and checking out.

Of course in real life in the US it would be much easier to just go to Newegg.com for the best price on the internet and free shipping.

The Indonesian experience

What about the Indonesian experience? How would I google it?

Let’s try “beli memory 8 gb macbook pro”

What are the results?

The top link brings me to various postings in kaskus.com of people selling 8 GB macbook pro memory.  The second link under that brings me to the local mac forum, the third, fourth, and fifth link also brings me to forums.

Where are the Indonesian online retail sites? Apparently, I don’t know of any, or google can’t help me find local retail sites that have what I am looking for.

What have we learned from this simple demonstration?

Let’s count the steps it took to get to what we were looking for:

In the US –> 1)search engine, 2)click link to retail site, 3)login/register, 4)checkout, 5) purchase item

In as few as 5 steps I got from search engine to purchasing what I was looking for. It was easy and simple.

The search engine helped me find what I was looking for, I was linked to profesional retail sites that could tell me how much the item would cost and how soon I could have it shipped for how much.

In Indonesia –> 1) search engine, 2)forum post, item is sold out, 3)forum post again, item is still available, 4)contacting person who sells item, 5)haggle for price, 6)price not good, browse through google search results again or maybe try different search terms, 7)and on and on and on.

The search engine linked me to the most popular posts containing the terms I was looking for which are forum posts. Apparently forums have way more traffic than local retail sites explaining why the results are as such. The forum posts were from individual sellers rather than professionally run websites, so I had to go the traditional way of contacting the sellers and haggling for the price, and then we would have to work out how I would pay the seller and how the seller would send me the item, all done the old fashion way.

Conclusion

It is clear that in terms of the online retail experience, the Indonesian experience is still light years away from the US experience. However this is an opportunity . What I think we need to make online retail work in Indonesia are:

1. Have an encyclopedic inventory –> we wouldn’t even need to carry the inventory for real life, we could just link to other international retail sites and convert the item price and shipping price to local currency. What matters is that the information is there and we dont leave users up to dry with no matching search results.

2. Be up there in search engine results. Retail sites have to be able to generate traffic. If search engines can’t help then we have to generate te traffic ourselves by utilizing whatever means are out there, SEO, social media, or even buying keywords. This may be costly

3. Provide great service, have people ready to answer customers questions be it by phone, email, chat. Help people find what they are looking for.

4. Provide an easy alternative for payment. If Indonesians dont use credit cards, give them the alternative to pay by bank transfers. I think bank transfers is still the most popular payment method in online transactions in Indonesia. There is an opportunity here to streamline the bank transfer process.

So there is my take on the online retail experience in Indonesia. A lot of opportunity here and the marketplace is stil wide open.

Written by randomwalls

March 26, 2012 at 8:53 am

Crossing the chasm and Reddit

with 5 comments

Earlier this week I posted about Reddit and posted a comment from a reddit user describing how the early reddit user base started and grew into what it is today.

Why reddit? Here are some stats:

More detailed stats can be found here.

The great thing is, they don’t generate their traffic from ads, they don’t harass users to sign-up, they don’t even offer Facebook or Twitter integration. All their traffic is generated by the community itself.

How the reddit community started and grew into mainstream popularity to me is a textbook example of the crossing the chasm strategy in practice.

What is the crossing the chasm strategy?

Crossing the chasm was first introduced by Geoffrey Moore, a tech marketing thinker and strategist, back in 1991. The main premise of his theory is that when you introduce a new product into the market, where you want to go eventually is have your product accepted by the mainstream market. But in order to do that, there is wide gap (chasm) that we must cross between the early market, the people who first use your products, and the mainstream, which is everybody else. Crossing the chasm offers a strategic framework we can use to help bridge this canyon and bring your product to the mainstream.

The strategic framework offered, in very simplistic terms, is this:

  1. Target point of attack
  2. Assemble an invasion force
  3. Define the battle
  4. Launch the invasion

Let’s go through this point by point

1. Target point of attack

The key here is start small and focus on a niche. When the US invaded europe in WWII hey focused on one point, Normandy, and this is kind of the idea. What you want is to start small and establish a stronghold. When reddit launched back in 2005 they focused on

..techie geeks that were into obscure programming languages. At the time, Reddit was written in Lisp, which was its main claim to fame.

They even first announced the site to a newsgroup dedicated to lisp, comp.lisp.lang. So early in the lifecycle of the product the founders had a clear idea of who they were targetting.

2. Assemble an invasion force

Now this sentence sounds grand, but what it really means is that you have to have the whole product ready, meaning you have the core product working and have everything else that is needed to support the product and make sure it functions as planned. I may add that at this stage it is imperative that the product doesn’t suck.

Reddit had the basic mechanic of up voting and down voting user submissions in place. They had added a new comment feature which facilitated discussion between users. Another key in what they did was the founders where very responsive. Here is an example of how responsive they were:

The founders were very responsive. There used to be a “feedback” link right at the top that would go straight to their GMail accounts. I remember sending kn0thing a couple bug reports; he got back to me within a half hour with “hey, could you give us more details? we’re working on it”, and then a couple hours later was like “It’s fixed. Try now.” Then I’d send him back another e-mail saying “It’s better, but you still don’t handle this case correctly”, and he was like “Oops. Try now.” Back then, spez would edit the live site directly, so changes were immediately available to all users.

This responsiveness allowed them to adress what the users needed directly and gradually improve the product and user experience over time.

3. Define the Battle

The key here is that it is important to early on define who you are and what you want to be. At the time reddit started there was already a number of existing social bookmarking sites that did similar things such as Digg.com and slashdot.

Reddit stayed true to its roots as a place where techie geeks can group together, as opposed to Digg.com which went on to sell out and display ads to drive traffic (the rise and fall of Digg on the internet is in itself an interesting topic I might get into in another time). Even up to this day reddit refuses to show ads on its site, and in the age of social media integration still has no option to integrate with Facebook or Twitter. This consistent and clear cut message of what Reddit was gained them credibility in users eyes and grow a loyal user base and community that drives traffic to the site today.

4. Launch the invasion

According to the crossing the chasm theory at this stage in order to cross to the mainstream we need to dedicate a direct sales force to push our product to the masses, winning sales one person at a time. This is the most expensive way to sell something, but it was thought of as the only way to cross the chasm. I will argue that reddit had none of this. Instead their loyal user base became what other companies dream of having, loyal users who become a loyal sales force, selling the product to everybody they talk to. The product was so cool, people couldn’t but help to talk about it.

Because of these steps, reddit grew from an obscure website nobody knew of to become one of the largest and most influential communities on the internet today. So there we have it, the growth of reddit explained (very simplistically) using the crossing the chasm framework.

Before I go, here is a timeline infographic about Reddit’s growth from Sortable.com. Enjoy!

Reddit History
Sortable’s The Reddit Invasion

Written by randomwalls

March 22, 2012 at 5:41 am

Why don’t we have better retail websites?

leave a comment »

In the states there are amazon and ebay, zappos and newegg. I can find detailed information on whatever I’m looking for, read user reviews, and find the best price fast.

People might argue that in Indonesia the problems as to why online retail hasnt really picked up is:

1. The internet here is really slow
2. Indonesia is a logistics nightmare
3. Indonesians don’t use credit cards
4. People just don’t trust websites to make big purchases

These are problems that, if one could solve, could become the king of online retail in Indonesia. I cant say how big the market is, but I do know it is big, or is gonna be big in the next 5 years.

The current online retail websites we have still suck. Ugly websites to begin with, Not much choice, no way to compare prices, payment is really a hassle.

These are problems waiting to be solved.

Written by randomwalls

March 21, 2012 at 11:53 pm

The early days of Reddit

leave a comment »

Reddit.com , I think, is one of the most interesting communities on the internet.

I can’t remember when I first discovered reddit, maybe around 2005-2006, but I do remember that it changed how I browse the internet. When I got online that means that I would be browsing reddit.

Now I work in digital media and I am interested in how online communities grow and evolve.

While browsing today I found a comment from reddit user nostradaemons that gives insight on how the reddit community started and evolved into what it is today:

Showed up the day Reddit opened (Jul 2005), thought it was kinda interesting but not interesting enough to keep coming back, figured it’d never catch on. Came back for real a couple months later (Oct 2005), and stayed.

At the very beginning, there were no comments or self-posts: it was only links, with voting. And the only people posting those links were spez, kn0thing, PG, and spez’s girlfriend.

The initial userbase was very tech-heavy. The initial announcement went out to comp.lang.lisp, so the initial user population consisted largely of techie geeks that were into obscure programming languages. At the time, Reddit was written in Lisp, which was its main claim to fame.

When I came back in October, comments had been added, which was the “killer feature” that made me decide to stay. The userbase at the time was perhaps in the low hundreds – a popular submission was one that had about 10ish votes, like this one does now. It was small enough that you’d see the same names posting over and over again; you could get a sense of people’s personalities over time from their posts.

Comments were longer, more intellectual, and more in-depth. The culture was actually a lot like Hacker News is now, which makes sense, since a lot of the early Reddit users migrated over to there when it started (I was a first-day user of Hacker News as well).

The founders were very responsive. There used to be a “feedback” link right at the top that would go straight to their GMail accounts. I remember sending kn0thing a couple bug reports; he got back to me within a half hour with “hey, could you give us more details? we’re working on it”, and then a couple hours later was like “It’s fixed. Try now.” Then I’d send him back another e-mail saying “It’s better, but you still don’t handle this case correctly”, and he was like “Oops. Try now.” Back then, spez would edit the live site directly, so changes were immediately available to all users.

For the first couple years, the submission process would try to auto-detect the title of submissions by going out and crawling the page. Presumably they got rid of that when they moved to multiple servers, as it’s hard to manage a stateful interaction like that.

I started seeing pun threads in I think mid-2006; actually, I recall creating some of the first ones I saw. That actually was when the culture of the site started changing, going much more mainstream and much less techie. The userbase was growing by leaps and bounds, and we started getting more funny cat pics on the front page. I think this was right around the time of the Conde Nast acquisition.

There were also plenty of in-jokes, eg. the “Paul Graham Ate Breakfast” meme. That happened because people were complaining that anything written by or relating to Paul Graham got upvoted far beyond what should be fair, and so somebody decided to create a link to prove that point.

The first subreddit was programming.reddit.com. It was created basically out of user revolt. A core group of early users complained loudly and vocally about how the front page was taken over by lolcatz and funny animated gifs and thought-provoking submissions would get buried, and so a couple subreddits (programming and I think science) were created for the intellectual stuff.

Subreddits at the time were admin-created only. IMHO, user-created subreddits saved Reddit; the community was getting far too unwieldy by 2007, and so the only way for it to survive was to fragment. I remember seeing the first user-created subreddits and thinking “finally!”.

I’ve got a bunch of memories of specific Reddit users or events as well, but I think that’s enough for now…

The original post on reddit can be viewed here.

So what then? What lessons can be learned from this? Now that will be the topic of my next post!

 

Written by randomwalls

March 21, 2012 at 3:54 am

Idea vs. Execution

leave a comment »

These days ideas are a dime a dozen.

On the internet, on tv, talking to people, just observing whats going on around you, there is always something that people need that hasn’t been adressed, or has not been adressed well enough.

There is always a problem waiting to be solved.

Sometimes however we get stuck on whether or not an idea is original enough.

Back in college when I was in a band we always got stuck when trying to write music because we felt that we couldn’t be original. Rather than focusing on having fun and doing what we love, we let our doubts beat us down. 

Good artists copy. Great artists steal.

Google wasn’t the first search engine. Facebook wasn’t the first social network. Microsoft did not create the first operating system. Apple did not create the first tablets.

What these companies did is they took an idea they believed in and made it better. It’s not rocket science, but it is harder than it sounds.

Ideas are what they are, they are just ideas. To move from an idea to a finished product requires a lot of hard work, dedication, and willingness to progress. To progress means that we need to be able to acknowledge our faults and move forward. This is the essence of execution. Getting work done, getting it out there, and moving forward.

Ideas are just ideas. Execution is everything.

Written by randomwalls

March 21, 2012 at 1:46 am

Posted in Uncategorized