The majority of cable providers are still offering non-HD channel guides and listings. All else equal, this stuff makes a huge difference, given how much TV people watch:
[Comcast] says its X1 video platform – an Internet-based system designed to make channel navigation far simpler and intuitive than past cable boxes – as the main reason it was able to halt the video defections.
via New set-top box helps Comcast halt defections – SFGate.
Finally got around to reading this article. It’s a good one that talks about the long game of free vs. paid. In short, you know with free apps, they have to sell your data or show you ads to make money. But with paid apps, it’s harder to achieve the scale of free apps. So how do you negotiate this?
“The future of sustainable app development is to give away as much value as possible and empower those who receive more value to pay more for it.”
Without a huge behavior change in the market, the sad reality is that there’s no good end game in sight:
While we wait for that innovation, users might need to adapt to a new way to think about investing time in software. “Whether it’s in advertising, selling your data, or losing the service altogether, ” Day One founder Mayne says, “I think users are starting to see the cost of choosing free apps and services.”
via Consumers pay the hidden costs for the ‘free’ app ecosystem | The Verge.
Interesting that LegalZoom is going this route:
LegalZoom has agreed to sell a majority stake, worth more than $200 million to private equity firm Permira Advisors. The deal means that the company will likely withdraw its previously submitted IPO prospectus
via LegalZoom sells majority stake to PE buyer for $200M+, withdraws IPO | PandoDaily.
We knew this was where Facebook was going with this when they partnered with Datalogix. Oh, and don’t feel like you should give Facebook all the credit for this. This model was most likely inspired by ad agencies or big brands that knew this was possible. There are already top 100 sites doing this sort of stuff.
Facebook’s Vice President Of Ads Product Marketing Brian Boland tells me “This has never been done at this scale, to link digital exposure to in-store sales for anyone with a CRM system.” Previously, Facebook had been privately testing the measurement tool with a select few advertisers, but now it’s available to any advertiser that buys directly from Facebook’s managed sales team.
via Facebook’s New Offline Sales Measurement Trick Could Make Ad Clicks Obsolete | TechCrunch.
A semi long read on the economics of content. Consolidation will be a likely reality but that won’t necessarily solve the monetization problem.
Content economics, part 4: scale | Felix Salmon.
over a period of several months, Groupon launched a coordinated and focused price-cutting attack in the U.S. After maintaining take rates of 43 percent and 44 percent respectively on North American local and travel deals in the first two quarters of 2012, those cuts of revenue dropped to 38 percent in the third quarter, and then 32 percent in the fourth, according to a recent Morgan Stanley research report, as Groupon looked to increase the amount of deals in its fledgling deals marketplace, and to steal business from LivingSocial.
via The Risky Groupon Initiative That Beat Back LivingSocial – Jason Del Rey – Commerce – AllThingsD.
Good postmortem of what happened at ShoeDazzle when they brought in an ecommerce vet who had no experience with subscription commerce. He failed to understand that the business was inherently different enough where he ran it into a ground:
When Bill Strauss took the reins of ShoeDazzle, he deemed its 10 million members insufficient and set about trying to bring in millions more by jettisoning membership and opening the site to anyone. What he didn’t understand was that those initial existing members loved the brand — they were not only acting as brand ambassadors to spread awareness of the site, but were also likely to continue buying over time. Compared to cultivated members, customers are less loyal, more fickle, and harder to please.
Further, the typical retail metric of cost of customer acquisition is less relevant than customer lifetime value. It may cost more to acquire a quality customer, but she will produce a greater return with higher value/more frequent purchases, longer retention, and brand advocacy. A subscription business model requires a longer-term view on metrics.
via What ShoeDazzle taught us about subscription commerce — Tech News and Analysis.
In the first 3 years, these public SaaS companies spend between 80 to 120% of their revenue in sales and marketing (using venture dollars or other forms of capital to finance the business). By year 5, that ratio has fallen to about 50% where it remains for the life of the business.
Despite the divergent revenue ramps, the marketing and sales spend patterns for these companies resemble each other strongly and serve as good benchmarks for high-growth SaaS startups.
via The Sales and Marketing Spend Strategies of Billion Dollar SaaS Companies.
TLDR: Spend 80-120% of return in sales and marketing in first 3 years. By year 5, it should go down to 50% and stay there.
And also very important:
At the same time, CBS rejected demands that it give up the opportunity to sell separately its content to digital outlets like Amazon and Netflix, insuring another bountiful revenue stream, likely to be worth hundreds of millions a year.
via Bold Play by CBS Fortifies Broadcasters – NYTimes.com.