AR VR & Pokemon Go
One big story this week demonstrated the power of mobile to explode globally, with a big idea. Pokemon Go isn’t that new – it was announced last year - and comes from a company we have covered before. Niantic was once part of Google – who now own around a third - and previously launched 2 very interesting apps. Field Trip runs in the background and notifies you when something interesting is close by – often a Blue Plaque in London or something else historic. It seems Pokemon Go is using the same database of objects as many of the Balls near us seem placed on benches with inscriptions in the ark opposite. Their other app Ingress is a quite complicated game played out across locations and feels like the prototype for Go.
With Go they have delivered a brilliantly thought through game experience that blends the novelty of AR with rich characters from the Pokemon Franchise. Whilst the Nintendo share price has shot up – around 50% up – its connection with game is a little distant; they own a third of the Pokemon company which licensed the game to Niantic.
This game builds upon a number of good attempts to create similar games and a New York studio called AreaCode did some fascinating games pre iPhone. There were also wonderful ARG (Alternative Reality Games) like IloveBees. In this slightly cynical piece they cover some of these predecessors and make the good point that a key factor in the huge success of Go is how the game lets you save and share images across social
The real winners are probably people like Unity who run the game engine that Pokemon Go runs on and is used by around 90% of all the content created for the Samsung Gear. They just raised new investment that values them at $1.5bn.
Games blow up and then lose their appeal – remember Angry Bird and Flappy Bird – and it’s likely that Pokemon Go will follow a similar arc. This is a good look at what AR and VR firms need to do to survive – and Magic Leap – who have raised more money than anyone else in this sector are moving into production.
But Pokemon has taught the wirkd that AR can be great fun and made it easier for the next launches.
Pokemon Go (sort of) builds on our point last week about the importance of the camera and this is smart thinking on SnapChat and Memories as their play to have you use the Snapchat camera rather than the device camera
GAFA - Music & Content
Another core function of the pocket supercomputer is music and we heard a rumour this week that Spotify is about to announce 40m paying subscribers – which given their growth to 100m total active users sounds quite feasible. Their product continues to expand - now they have radio style playlists – not that dissimilar to the Apple approach.
Apple continues to fight back – the new OS10 version of Music seems much improved – but they have a hell of a battle with just 15m paying users. The Tidal acquisition rumours continue and Eddy Cue talks up the importance of content as Apple develop a Taylor Swift documentary and (supposedly) a Dr Dre drama. Whilst Cue won’t comment on Tidal, answering a question on Time Warner he does say;
We're not — at this point, certainly — actively trying to buy any studio.
One of the Apple watchers has a long piece on Apples intentions in Music and is convinced they will win. To do so they need to spend big – but they have so much cash they will hardly notice. Music is an Anchor and as they seek to have everyone upgrade to the iPhone 7, they need music to work for them. And after that Video content.
One of the factors that make GAFA such formidable competitors is that they tend to have different end goals and hence don’t need to subscribe to the same business models as mere mortals. So Apple need Music to drive device upgrades – and could in theory slash the prices. If that kills Spotify, so be it. Collateral Damage.
Amazon take a similar approach with their Video content – the end result they care about is Prime subscribers. And if that hurts Netflix, so what? Ollaterla Damage.
In the last year the number of US Prime customers has grown by 20 million – nearly 50% up to 63 million. So it shouldn’t be that surprising that their Amazon Prime Day sale saw a 60% increase in US sales on last year. Within that they sold 96000 TVs. We imagine similar growth in the UK, but the figures are elusive..
A new Ofcom report looking at TV viewing shows that the time spent watching TV on TV sets is declining – with the biggest fall amongst the young. And the proportion of time spent watching the major channels – the Public Service Broadcasters - has dropped from 77% in 2005 to 71% as VOD and short form video, along with DVDs etc, grows. Lots of great data here and well worth digging into.
Read alongside a recent Boston Consulting Group paper on the future of the US TV industry, it’s clear the consumer shift is real and whilst the implications are still unclear, things are changing. Especially as over half the TVs shipped now are smart TVs.
For brands that means being very careful to think through where your customers are now investing their attention, and focusing your investment accordingly.
The prophets of AdBlocking at Shine have decided to focus their skills on another issue. They have pivoted to ad verification – which given how they saw online advertising as consumer abuse, is something of a change of heart. Maybe their EE trial of adblocking persuaded them that people aren’t that bothered by ads after all. In the US the undoubted scandal of ad fraud is getting more attention with politicians urging the FTC to get involved.
Whilst some of us love the new new thing, a significant chunk stays with old tech if it meets their needs. It seems that most of the worlds Oil Traders relied on Yahoo Messenger for both gossip and trading and now that it’s changing how it operates, they need to find something new. And as Blackberry stop making the Classic the hard core still enslaved by that red light need to find some new tech too. We think that we will see similar behavior with the iPhone 7 – the 6 is good enough for many and the upgrade cycle could slow dramatically.
The William Gibson quote The Future is here. It’s just not evenly distributed continues to be much used in our consulting work. With Messaging in China and ecommerce in India and Africa, we see lots of great thinking that can be applied here in the west. And whilst London is (was?) the financial capital of the world and hence the leader in Fintech, there is much activity around mobile money in Africa and other emerging markets. MPesa is well known, but no less significant. And in Tanzania some 60% of adults have mobile wallets, but only 15% have bank accounts.
Vine seems to be withering. Lots of the key people have left and their traffic is in decline whilst Snapchat – where many of their Disciples have taken their video creative skills - continues to grow. A year ago they were around the same size and now Snapchat is almost twice the size of Vine.
<Plug> The smart people at Tamoco, where I am a board advisor, are raising funds to build out their tech and team so they can continue to lead the market in location. If you are interested in location you should take a look and if you are a potential investor I can get you access to their investor material </Plug>
Finally… Buzzfeed came under some criticism for nicking ideas and they have replied with good evidence that they weren’t. As Faris and others say, Talent Copies and Genius Steals. Ad creators have always taken inspiration from everywhere – take YouTube access away from a typical Creative department and they can’t work.
Nowadays the skill is making an idea work for a specific platform. It’s all about bespoke.
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