GetGlue is making the right moves

Posted by Stephanie Sutton on September 29, 2011

Media check-in apps have blown up in the past few months. Services like GetGlue and Miso have been partnering with content owners and distributors to offer consumers who check in to shows special stickers, or even discounts at their online stores. Both Miso and GetGlue have partnered with DirecTV to allow users to check in directly through the receiver, offering a more integrated and social TV viewing experience.

While these services have been partnering mostly with content owners and distributors, GetGlue has branched out. This summer GetGlue partnered with Entertainment Weekly and HTC to offer consumers who checked in to a list of summer movies a chance to win free movie passes. This month, GetGlue has once again partnered with Entertainment Weekly to promote check-ins to new fall TV show premieres. But this time around Gap is involved and is offering consumers who check in to these shows a 40% discount on one in-store item.

Though partnering with content owners and distributors, such as HBO and Showtime, has been successful for GetGlue, this new Gap partnership could set a trend and generate further check-ins and partnerships, as well as bring in new consumers. Social networkers enjoy talking about the content they’re consuming—according to Interpret’s New Media Measure™, 30% of social networkers who’ve updated their status in the past month have commented about a movie or TV show they were watching.

We will have to wait and see exactly how well this campaign performs, but it is likely to succeed. Not only can it generate greater traffic to both the GetGlue site/app and Gap stores, it can also generate a whole new audience for TV series, which is of extreme value to the networks. With the proper incentive—like a large discount at a national retail store—even more consumers can be prompted to not only check-in to the service, but also watch new television programming. Similar partnerships are likely to be encouraged by the networks, so it will be no surprise when GetGlue offers another similar promotion.

And now, off to find what show I’ll check in to so I can get my 40% discount.

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Interpret Announces inchartsdata.com

Posted by Josh Bell on September 27, 2011

We’re very excited to announce inchartsdata.com, our online store for new media data, reports and trends. Read our press release here or better yet, visit the store here and see why we’re excited. If you’re looking for any particular data, hit us up in the comments or email sales@interpretllc.com.

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How will consumers react to the new Netflix/Qwikster?

Posted by Stephanie Sutton on September 23, 2011

Reed Hastings’ announcement on Sunday that Netflix would be splitting into a DVD by mail only service named Qwikster and a streaming only service (whose name would remain Netflix) came as quite a shock. In his blog post, Hastings apologized for not stating the reasons behind the latest price increase—which was in part to not let the streaming side of the business fall by the wayside—when it was originally announced.

As I mentioned in my last Netflix post, the price increase was very negatively received because it came with no content expansion. Unlike the previous price increase, which was preceded by a new studio deal and followed by a new network deal, this recent one was shortly preceded by the removal of Sony movies and followed by the non-renewal of the Starz deal. Despite this, I still had hopes that Netflix would succeed. The details revealed from the Starz negotiations, where Netflix was planning on paying over $300 million per year for their content, offered a dim light of hope: Netflix was understanding the true cost behind providing its subscribers the best streaming content.

However with this split of services, Netflix just might have placed itself in the perfect position to lose even more customers. Whereas with the previous price increases many customers did not alter or delete their subscriptions, this might change now that the services have been split in two with two different bills. I started out with the 3 disc subscription a few years ago. It wasn’t until this last price hike where I scaled the subscription back to 2 discs. But now that two different companies will be billing me—Netflix and Qwikster—I’m wondering whether it’s still worth having both services. Though there are no price changes, the inconvenience of having two different bills, two different databases, two different sets of recommendations might be what drives subscribers to pick one over the other, or perhaps even drop both.

According to Interpret’s New Media Measure™, 54% of the movies and TV shows seen in the past 3 months by Netflix consumers were seen on DVDs or Blu-ray Discs. Though disc consumption still remains a primary component of the Netflix experience, this is the one that will suffer most. As consumers rely more heavily on the Internet for their entertainment consumption, the online disc rental market will continue to be negatively affected. Will Andy Reindich, the new Qwikster CEO, dedicate as many efforts to the DVD side of business as Hastings has to streaming? For how long will the Qwikster business model be viable?

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Facebook’s New Subscribe Feature and Friends List

Posted by Stephanie Sutton on September 15, 2011

Facebook yesterday launched a new feature that allows users to subscribe to non-friends’ public updates, as well as customize the updates of current friends they want displaying on their news feeds. The profiles will now display the number of people subscribed to it and the number of subscriptions that person has, similar to the Twitter profiles.

On Tuesday Facebook announced the Friends List application update which now automatically puts friends into specific groups—family, work, school, city—though the members of each group can see who else is in it. This is in line with the Google Plus circles, where users can automatically put new connections into a specific circle, however the members of each circle remain private to others.

Though these actions appear to be reactive to the threats presented by its competitors (I use this term loosely) Twitter and Google Plus, the updates are in line with its users activities. According to Interpret’s New Media Measure™, 34% of active Facebook users keep up with friends’ activities by watching a feed or status update and 23% view photos or videos of people other than their friends.

While I am worried about how my current friends lists will be affected and who might decide to subscribe to my page, the new updates are ones that in the end could benefit the user experience. That is, once they become less complex and their impacts on privacy are better understood/more transparent. How do you think consumers will respond to these subscriptions? Will you subscribe to non-friends?

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Cell Phone Selection-Why Some People Prefer “Dumb” Phones

Posted by Thomas Houston on September 14, 2011

This week’s Data Point of the Week examines the main concerns consumers have when purchasing phones. These reasons are segmented by the specific type of phone purchased to glean some understanding on why phone owners purchased app-heavy smartphones, middle-ground messaging phones, or bare-bones basic phones. The range of factors for each of the three major phone types included in our New Media Measure survey present interesting and defining characteristics for each type.

Smartphone owners—who represent 38% of the cell phone owning population—prefer phones that maximize the internet capability of their phones. The ability to browse and access mobile internet is very important to smartphone owners. The other top reasons are most typically embodied in the Apple vs. Android battle: users generally strongly prefer one operating system, and the brand of phone is almost always correlated with the operating system. It seems to be a point of pride for smartphone owners to take up the flag in defense of their phone/operating system—unless they need to use the internet.

The messaging phone market is geared heavily toward high-volume text-messagers so it comes as no surprise that the keyboard is the most cited reason for purchase. As almost any text-messager can attest, a good keyboard is critically important. A bad keyboard can ruin a phone, and in the era of two-year phone contracts, can make for very frustrating experiences. We can also see that messaging phone owners rate the importance of their service provider highly. They can run up absurd text, voice, and data bills, so it makes sense that they would rate service providers that won’t penalize their overactive phone usage.

Many may laugh at those who own basic phones, the low-end stalwarts that may still carry a look of 2003-2004 vintage, but 42% of cell phone owners still own these basic phones. To these folks, a phone provides simple utility—phone calls (they apparently actually still use phones for this), a couple texts, and maybe the odd game of Snake while waiting for an oil change. Value and stability are the themes here. The promotion on the phone (often free for these types of phones) indicates owners prefer deals, while battery life suggests owners want reliability.

Each phone type presents a very different portrait of their user, but each also seem to have a typical representation as well. It will be interesting to see if ownership reasons shift as companies have already begun producing dumbed down smartphones to transition users away from cheaper phones. Will basic phone owners go for cheap phones? Or will they revel in the skeletal cell phone features and the accompanying feathery bill each month?

For all the latest data check out our inchartsdata site or find us on twitter @interpretllc.

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Digital Gaming Downloads-Who’s in the Lead?

Posted by Thomas Houston on August 19, 2011

Given the recent dust up over Battlefield 3 being limited exclusively to EA’s own Origin download and distribution service, I felt we should take a quick look at the rise of the digital download market. As an industry, digital game distribution has grown 17% in the last year according to our New Media Measure data. More gamers are forsaking retail stores for the convenience of downloading games right from their console or PC. Speaking from personal experience, the last 4-5 games I have purchased have all been acquired digitally. If gaming will no longer come in a case or a box with a disc, and instead through the internet, what will be the most utilized sources for acquiring games?

Digital Distribution Game Sources

Looking at the data, console downloads are highly popular if for no other reason than console gamers being more prevalent than PC gamers. Full AAA title downloads for console games are still limited in availability and seem to lag initial release by up to 6 months, but Add-on and downloadable content has become a multi-million dollar industry for digital sales.

Big Fish Games and Pogo are the representatives from the casual gaming segment and a surprising reminder of just how relevant and financially potent casual gaming actually is. The fact that downloads have such a presence considering that most are played in-browser is a testament to the popularity of casual gaming. The acquisition of Popcap games by EA for $750M is further evidence of that.

A big battle seems to be shaping up between Steam and EA’s Origin service, as the two companies have been sniping at each other for quite some time. After years of trial and error, Steam has become the king of digital PC gaming. Ingratiating itself to gamers with high quality games and absurd bi-annual sales, Steam is the PC paragon. However, EA’s Origin service may soon take a chunk of the PC download market. After many incarnations of similar services, EA rebranded its former download service to more directly compete with Steam.

In its New Media Measure debut, Origin pulled a solid 4%, and I expect this number to rise significantly in the coming year. As far as distribution services go, I believe gamers will follow the games-whether Steam, Origin, or elsewhere. The power of the Battlefield 3 brand should plant a flag for Origin and the newest Star Wars MMO, The Old Republic, is garnering a lot of buzz as well. By making these big brand titles cornerstones for Origin, EA has a solid 1-2 punch to establish its’ service as a major competitor.

Let’s not forget that EA is copying the exact formula Valve used many years ago with to launch Steam. Limiting gamers to their proprietary system and capitalizing on demand for Half Life 2, Valve was able to forge an estimated near-billion dollar dollar digital distribution platform. The strength of the EA brand and the excitement for upcoming blockbusters gives Origin an excellent platform to start from in trying to capture market from Steam.

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A Closer Look at Spotify

Posted by Josh Bell on August 18, 2011

I recently wrote a report which examined the likelihood of streaming and cloud services replacing the CD and possibly even the MP3. While I discuss Pandora and other services in the report, I wanted to give a more detailed opinion of Spotify based on my own personal experience with it.

Admittedly, my first impression was, “how the hell do I use this thing?” I was dragging music over to the “Play Queue” but I couldn’t figure out why the songs weren’t shuffling (despite clicking the “shuffle” button). Eventually I realized that I had to create a playlist, and then when I played the playlist, the songs would be shuffled in the queue.

Truth be told, I have a ton of minor nitpicks with the software; for example, why do some songs have an image of a link of a chain, or a musical note, etc. – what do these mean? Something should show up when I hold my mouse over them. When I have an artist’s complete discography open and I click on one song, or highlight one album and click play, does it put every single song by the artist in my queue? And why can’t I delete songs from my queue?

I could go on (and I have), but there are two issues I have with Spotify that are more germane to my streaming music report. The first is the social networking functionality. Unless I connect Spotify with Facebook, giving it access to what appears to be all my information, even when I’m not using Spotify (something I’m not willing to do at this point), it is almost impossible to find friends who are using Spotify. To find a person, you have to type “spotify:user:USERNAME” in the Search field – pretty intuitive, right? If you do add people, you can see their playlists, top artists and tracks; however, you can’t see who is following you. Unless I’m missing out by not connecting Spotify and Facebook, I would say there appears to be a lot of functionality left to be implemented.

The other issue that I touch on in my report is the advertising. I’ve been listening mostly to “indie” rock, though I have tried the occasional rap or dance album. However, most of the ads I hear for music are for contemporary Country artists, perhaps my least favorite genre of music. Spotify knows what I’m listening to – can’t the ads be more geared towards my listening habits?

Granted, it could be they don’t have enough volume of ads to do this yet. I’ve heard the same ads a few times, and only once have I heard an ad for something that is even close to what I would listen to. But for the advertising to be effective, they need to use their own data to ensure the ad is something I might be interested in. Yes, I realize I could upgrade to a paid subscription and avoid the ads – but why would I pay for something I’m not 100% happy with in the first place?

Despite my complaints, the music selection is pretty stellar, and I’ve been listening to Spotify as often as possible to discover new artists. But to really improve the discovery process, Spotify will need to further develop its advertising and social networking capabilities.

Do you use Spotify? Please share your thoughts in the comments.

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Mobile Device Convergence or How Apple Came to Rule the World

Posted by Thomas Houston on August 10, 2011

Today’s data point of the week (with brand-spanking new Q2 data!) captures an important movement in consumer technology. If it wasn’t already obvious, the multitude of available gadgets that have performed single functions are hitting e-waste collection bins in favor of smaller devices that are more competent in a vast number of functions. Technological advances have downsized so many tasks that a simple cell phone can be the hub of multi-billion dollar commerce.

There are several interesting takeaways from this slide. The first is that device functions have completely converged. When consumers are asked to choose what two devices they would and/or do carry when limited to only two, cell phones are the clear winner. It’s not even close. Of every possible device to choose from, the modern cell phone can literally perform every function. The list of standard features on modern phones is expansive: communications, cameras, e-readers, internet browsers, gaming, and video recording. If you have even a mid-range cell phone, you have one of the most advanced pieces of human creativity and engineering at your fingertips.

Another thing to note is that tablet PC’s have eviscerated the once fledgling netbook market. Since the introduction of the iPad in April 2010, netbooks have fallen 10% in choice, while the ownership of tablets is already twice that of the netbook. Laptops remain the second device preferred within the context of this question, but I think tablet computers are still gaining momentum and the battle will be much closer in the future.

The last takeaway is the prominence of Apple in every category on this list. Just yesterday they briefly overtook Exxon-Mobil as the largest market cap in the world and this chart demonstrates exactly why. For every category on the list, Apple is a dominant market player. The iPod revolutionized the MP3 player market nearly a decade ago, reinvented smartphones with iPhones, created an entirely new market for tablet computers (which as noted earlier, destroyed netbooks), have huge demand for their Macbook laptops, and really tore in to demand for digital cameras by providing similarly powerful cameras in iPhones.

By being at the forefront of mobile device convergence, Apple has captured a massive amount of consumer interest and become the most powerful force in consumer technology. As someone who likes, but not loves, Apple products, it’s nothing but awe-inspiring to see how absolutely unbeatable Apple looks right now.

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The Nintendo 3DS: An Early Warning of Things to Come?

Posted by Matthew Mates on July 29, 2011

In February of 2011 Interpret LLC released the Interpretations Report “Nintendo 3DS: Fighting for Pocket Share,” in which it was suggested that Nintendo will be challenged by the rise of mobile gaming on phones and tablets alike.  Months later, Nintendo acknowledged the shortcomings of its device by reporting an operating loss and re-pricing the 3DS.  On the heels of this announcement, it seems like a good time to further examine why the handheld console did not meet expectations.   

For the first time since Nintendo started reporting quarter earnings in 2003, the Japanese company suffered its first quarterly loss.  In conjunction with this announcement, Nintendo also revealed that it would be dropping the price of its recently released Nintendo 3DS from $249.99 to $169.99, which indicates disappointing sales for its newest handheld device.  From its release, the 3DS has received criticism for its three hour battery life, limited titles, and its peculiar price point compared to the $130 DS Lite. Although these are some big issues for consumers, the 3DS faces a more exogenous problem.  Over the past year the handheld gaming market has changed, and Nintendo is no longer competing only with Sony for their share of the market; now, the accessibility and enthusiastic adoption of games on other mobile platforms, such as tablets and smartphones, are further impacting the marketplace.

Results from Interpret’s New Media Measure™ supports this trend of a fragmenting market and reinforces the notion that non-traditional mobile platforms with gaming capabilities are posing a considerable threat to game-centric devices.  According to New Media Measure™, active use of iPad, iPod Touch, and smartphones has substantially increased over the past year: iPad – 0.9% to 2.6%, iPod Touch – 6.0% to 7.3%, and Smartphones – 7.8% to 8.3%.  During the same time period, active users of the Nintendo DS and Nintendo DSi have decreased from 9.5% to 7.8%— a percent change of -19%.  Additionally, devices like the PSP and PSPgo have exhibited similar declines: 12.2% to 11.8%.  While this data provides a glimpse at the current mobile gaming market, to tell the full story we must take a look at how Nintendo DS gamers are reacting to the changing mobile gaming landscape.

According to the data, among those who currently own a Nintendo DS or DSi, active use of the devices  for gaming has declined from 46.6% in Q2 of 2010 to 41.3% in Q1 of 2011, while active gaming use of iPads has increased from 1.8% to 5.2%, iPod Touch from 12.6% to 15.6%, and smartphones from 14.2% to 17.6%.  It seems that Nintendo handheld owners have been putting aside their DS devices to use other mobile gaming platforms.

The mobile gaming environment has become increasingly competitive in recent years with the introduction of more mobile gaming devices, and as more gamers embrace non-traditional mobile gaming devices such as tablets and smartphones, the fight will only get more difficult for manufacturers.  Nintendo is already experiencing the realities of the market, so it will be interesting to see how they react.  Perhaps Microsoft was wise in staying out of the handheld gaming market, as their COO Dennis Durkin stated, it’s “a very crowded market and a very, very red ocean right now with a lot of change happening.”  When the waters clear, we will see which platforms and manufacturers are left in the sea.

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What Is an Effective Method of Combating Piracy?

Posted by Matthew Mates on July 20, 2011

Almost a year ago, in an attempt to protect their property by preventing the creation and circulation of illegal copies, the producers of The Hurt Locker filed a lawsuit against 5,000 IP addresses suspected of downloading and distributing the film on BitTorrent.  Recently, this number was increased to nearly 25,000, making it the largest lawsuit of this type, beating the previous record of approximately 23,000, set by a suit targeting alleged pirates who downloaded The Expendables. Most recently, the Hollywood studios and the four major ISPs have agreed start cracking down on pirates with a combination of warnings, reduced bandwidth, and possible denial of service.  Even with these efforts, most would agree there is no way to completely eliminate piracy and that these efforts can only be used to curb it.  But, I wonder if these threats and lawsuits are the most efficient way to deter illicit downloading or if there are other, more effective methods.

To try and answer this question, I must first turn to New Media MeasureTM to obtain a clear picture of current digital media consumption.  Over the past year, there has been a steady decline in the use of torrent hosting sites, such as BitTorrent, to download movies and TV, as user rates declined from 3.5% in Q1 2010 to 3.2% in Q1 2011.  Similarly, the use of file sharing applications, such as Limewire and Morpheus, decreased from 2.6% to 1.9% over the same time period.  If individuals are starting to stray away from the unsavory ways of illegal downloading, what is the reason?

The answer: streaming media.  The adoption of streaming services such as Netflix and Hulu has grown substantially over the past year and has provided an easy alternative to downloading.  On average, the number of TV shows streamed during a three month period has grown from 7.6 to 9.6, and the number of movies streamed has increased from 5.9 to 7.4 from Q1 2010 to Q1 2011.  This growth in streaming media coincides with the decline of illegal downloading, suggesting that more accessible streaming services may be a considerable option when attempting to reduce piracy.

The combination of these publicized lawsuits and the newest agreement between ISPs and the MPAA are a major deterrent to illegal downloading, and perhaps they will continue to tip the scales in favor of legal services.   However, to further encourage the process, movie studios need to keep moving forward with expanding access to content via online streaming by making more titles available sooner and by reducing licensing fees so more services can host content; otherwise, individuals will continue to find work-arounds for overpriced services and unavailable content.  If consumers can stream the media they want at a reasonable price, more times than not they are willing to pay for it.

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