A small sample size, to be sure, but I’ve had three pieces of feedback from colleagues on my social telco comment. The first two were brief but confirmed the comments I made about teenagers and their communication habits:
this is my son…”Why would I get a landline from anyone?”…also reminds of PacBell circa 1995…..why would we offer and fund an internet service when all the services on it are free?
My teenagers do not answer the fixed phone even if it is ringing and they are standing right next to it – they know that it is never for them. I bet they don’t know who our provider is. They do use the broadband, and they do know who we get that from, because they compare speed and contract details with their mates.
That’s an interesting point about broadband. I know of other examples where this is the case, and teenagers are aware of and talk about the broadband provider used at home. I’d guess this is particularly prevalent among avid gamers but also to some extent among consumers of significant amounts of online video.
The third comment is interesting because it indicates the trends are similar even once the transition is made to college:
I have two teenagers.. one in college, one in high school.. Both have had cell phones for several years now. Both text much more than they talk, and both rely on Facebook quite extensively as a sort of ‘virtual mall’ i.e. place to hang out and chat with friends, check out members of the opposite sex, flirt, etc… What I find most surprising and interesting about my kids use of communications media is that they very rarely use email. It is seen as something of their parents generation. Something the college or high school uses for tuition notices or homework, etc. Whereas I would use an email distribution list to announce an event being hosted by a club I belong to, my daughter would create a group in Facebook and invite friends to it (and by extension, friends of friends, etc.) To her this is the normal mode of operation.
So my personal experience resonates strongly with your contention that wireline telcos had better find a way to participate and engage with the younger generation on their terms, or risk being relegated to the role of a broadband access utility. Similarly, MNOs should be working like dogs to make social networking easily and cheaply accessible from handheld devices. Google and Nokia probably ‘get’ this in a way the operators haven’t, so far.
I agree with all of this. And I think the point about email is not to be underestimated. Bizarre as it seems to those of us who are members of Generation X and experienced email for the first time as older teenagers or young adults, it’s already become passé to Generation Y. One to one communication has largely been replaced with many to many communication, and that trend will only continue.
By way of explanation, through the Church I belong to and through my wife’s large family I have frequent access to teenagers and get to observe them and their communication habits at close quarters (and many of them are among my “friends” on Facebook). Some of my observations in this blog are therefore based on that anecdotal evidence as well as on more statistically significant published sources such as surveys.
I wrote this comment this week for publication in Ovum’s Straight Talk Daily publication, and so I’m linking to it in two spots where it can be found in the public domain online:
Ovum’s site – this tends to disappear after a period of time
It encapsulates (with a 700 word limit – more leeway than Twitter but still not enough to really develop an idea) some of the things I’ve been thinking about recently, and really the key themes of this blog going forward. I’ve previously covered telcos and social networking / web 2.0 separately but more and more I’ll be talking about how the two are coming together.
I’ll be expanding on some of the themes in the piece here in future. I’ve already posted on changing communication preferences previously here.
I’ve come across a variety of statistics recently from various surveys about communication preferences, and was tempted each time to do a post. Instead, I’m doing one post on all of them, which should allow for some bigger-picture thinking. In essence, the conclusion you naturally come to when reading these articles is that landline telcos are in for a nasty period of rapid decline in their core business thanks to the communication preferences of the rising generation. But there are things they can do to manage and slow this decline and remain relevant.
The first couple of articles concern the trend for greater use of mobile devices and the decline in the number of landlines:
Both sets of articles, though, are really about the changing communication preferences of the population as a whole, and the impact of that younger group in particular. Those currently aged 15-25 are growing up with a radically different set of communication behaviors and preferences from those embraced by even 25-35 year olds, let alone the older generations. And this will have a massive impact on the landline telcos around the world, which don’t really feature in this picture at all. As the rising generation makes up an ever greater proportion of the total population this impact will only increase.
Mobile substitution happening from the bottom up
First, the increased use of mobile devices and abandonment of landlines. I remember talking to Gavin Patterson, then head of the consumer retail bit of BT, about six or seven years ago, about the challenge of driving growth in his business, and he told me his worst nightmare was a generation of kids growing up never having a relationship with BT. Sadly for him, and other landline telcos around the world, the nightmare is now reality. The CDC survey both articles are based on tells us that 17.5% of households have no landline but do have wireless phones. However, the most striking statistic for me is this one:
Nearly two-thirds of all adults living only with unrelated adult roommates (63.1%) were in households with only wireless telephones. This is the highest prevalence rate among the population subgroups examined.
You’d better believe that that’s mostly college students and those recently graduated from college and still living with roommates, almost all in the 18-25 category. Here’s more detail on the age split overall:
More than one in three adults aged 25-29 years (35.7%) lived in households with only wireless telephones. Approximately 31% of adults aged 18-24 years lived in households with only wireless telephones.
Remember that a good chunk of 18-24 year olds live with their parents and thus technically have landlines in the home even if they don’t ever use them. The question is whether these people will ever return to the habits of their parents as they get older, settle down and have kids of their own. There’s not that much evidence yet to suggest that they will, and there’s not much incentive to either. It used to be that a landline from the phone company was necessary to get broadband but since ‘naked DSL’ is now widely available and cable competitors offer TV/broadband packages without voice that’s no longer the case.
The next question is whether these future households will have landline connections at all – with the increasing availability of 3G and impending availability of 4G wireless options for web access and an increasing preference for web-delivered rather than broadcast/linear video content, I’d question whether these households will need a wireline connection – from a telco or a cable company – at all.
Voice isn’t even a communication option for most young people
Of course, all this assumes that voice is still one of the main modes of communication for young people, but the second set of articles suggests this isn’t the case either. The ReadWriteWeb article cites an eROI study on the communication preferences of high school and college students and includes this chart from the survey:
One caveat: the survey seems to have asked about online communications specifically, but from other surveys I’ve seen and personal experience with teenagers voice would barely make a blip on charts like this even if it was included. But the other key thing is that email – so newfangled when it first entered most people’s lives in the mid- to late-90s – is becoming distinctly passé. Text messaging already enjoys a much higher use rate, and both the combined social networking categories and the combined IM categories in the chart above already add up to the same as email (26%). IM seems to be on the decline with the exception of social networking IM but texting and social networking are now the major components of online communication for most young people. And none of those services is provided by a telco either. Wireless telcos have the best opportunity for capturing some of this spend by creating easy-to-use and low-cost wireless options for using these things on mobile devices, but landline telcos risk being entirely marginalized.
It’s grim reading, all of this, if you’re a landline telco or someone who works with them. Is there anything they can do? Yes, absolutely. They should immediately begin (if they haven’t already) building partnerships with social networks and other online providers to ensure that the necessary interfaces are in place to allow telco services to be linked in to those environments. BT’s acquisition of Ribbit is a great example of an innovative approach to tying online and landline worlds together, and Telecom Italia has also done clever things with Facebook, allowing customers to make calls from within the Facebook site, for example.
Telcos need to offer deep integration both ways between their systems and these online service providers’ systems to allow address book sharing, easy initiation of old-fashioned phone calls and other methods of telco-based communication from within websites and otherwise make the linkages between the two worlds as clear and easy as possible. Telcos have no hope of creating standalone offerings for young people that will generate any kind of real interest, but partnering with the sites where those young people already spend their time is the next best thing. Allow those companies to innovate, and offer them things they can’t easily do as an incentive to partner.
All is not lost – yet. But it’s certainly heading in that direction, and only innovative telcos willing to really rethink the way they engage with teenagers and young adults will have any chance of staving off the steep decline that seems to be on the cards.
This past week or two I’ve been spending some of my spare time building up the professional side of my social networking profile. I’ve been a pretty active Facebook user now for a year or so and have Friendfeed and Twitter accounts that I’ve half-heartedly kept up with too. I’d like to use these tools for work purposes too but was always uneasy about mixing personal and business audiences with these various streams of my output. Either I would cut out all the personal stuff in order to enable me to feel comfortable with my business audience, in which case it would more or less cease to be social networking altogether, or I would continue to limit my business audience for fear of over-sharing the personal.
In the end I decided to start doubling up on profiles – one for my personal life, one for my business life – on these major sites, and so far it’s working well. I now have a business-centric Facebook profile, a business-centric Twitter account, a new account on Friendfeed and work-centric IM accounts with all the major providers (janovum on Yahoo!, Google Talk, AIM, Live/MSN and Skype). My choice of username might eventually be a problem if and when I leave Ovum, but for now it’s easy to remember but most of all has the salient virtue of being available on all these services (have you ever tried picking a username that will be available on all of these, including AIM and Yahoo!? Very difficult).
If you’d like to connect, please feel free to look me up in one of those places – I’ll be happy to “friend” you, add you to a “buddy list” or be followed by or “follow” you. I’d like to make these networks as inclusive and broad as possible, and also hope to make them as interconnected as they can be – I already have Twitter and Friendfeed apps running in my Facebook profile, for example, and Friendfeed itself is pulling in my Tweets, blog posts and shared items from Google Reader.
Some day, I’m hoping that all these services will allow me to be a single individual with multiple profiles for friends, family and work, for example. A while back I heard that Moli offers such split profiles, and I did try that service out, but until it’s used by a lot of other people it’s not all that helpful. But I do believe that splitting the social and business aspects of your life in a single profile will become an increasingly important feature of these sites going forward. It’d certainly be a lot easier than my current approach, which involves using different browsers for different profiles (when I’d much rather live in Firefox in Windows or Safari in Leopard) so that I can stay signed in to each service.
How have you handled this problem? Do you just mix both in a single profile and not worry about mixing business and pleasure? Have you found another approach that works better?
I was asked recently during a call with a client about the prospects for enterprise mobile social networking. My first response was that I thought two other things had to happen before that could become a reality – successful mobile implementations of social networking, and successful uses of social networking in business settings.
Having had the opportunity to think about it some more, I think that initial reaction is still the right one. Only once those two things are well established can the combination of the two really occur in the form of mobile enterprise social networking. And those aren’t insignificant barriers.
Ironically, even though I think the opportunities are far greater in some ways for mobile social networking, enterprise social networking actually seems to be taking off more quickly, in part because there are companies with the right assets to take the job on. Oracle, IBM and others are taking the lead in creating enterprise-grade social networks with the appropriate structure and controls for the business setting. They have the software expertise and the credibility and knowhow in business to make it work, and they are already doing so, both for internal use and for use by customers.
On the mobile side, most of the players only have half the story to tell – the social networking companies have the SN knowhow and the customer base, but not the mobile knowledge or operator relationships to really make things happen. The mobile implementation of Facebook (both the mobile website and the BlackBerry application) is limited at best and doesn’t do a lot of the things you’d want it to in order to be really useful. Mobile operators, who have many of the other pieces needed to make things work, don’t have the credibility as social networking providers in their own right, and so need partnerships with SN specialists to make things work. In time, the two groups will come together in such a way that mobile social networking is enabled in a more mainstream way, but we still have a long way to go.
Only once both of these trends move a lot further down the road does it make much sense to expect mobile enterprise social networking to take off. But that doesn’t mean that the various stakeholders shouldn’t start thinking about how it might work now. Both the Oracles and IBMs and the mobile operators and social networking sites should be actively working out how they will take advantage of this future opportunity today. But that shouldn’t prevent them from staying focused on nearer-term opportunities in both mobile and business flavors of social networking individually.
This great graphic illustrates that, for all that we’ve become a global economy, the world is flat, and so on, there are still very marked differences across the world in the proliferation of social networking, and in the specific platforms which have caught on in different parts of the world.
Google’s Orkut has famously been very popular in Brazil, but it’s interesting to note that Facebook, which is second to MySpace in the US, is ahead of it just across the border in Canada. Factors such as early adoption, language options, tie-in to other products and so on all have an impact, but the result is this huge fragmentation. Given the massive network effects that accrue to a provider once they become big, it’s hard to imagine any single provider ever becoming dominant across large swathes of the world.
I want the following to be product features of something cross-platform, and I want it soon-ish:
Friends list portability.
Proximity-based social networks.
Mesh networking widely built into laptops.
A Network Communicator (that allows for IM, Voice, SMS, Status, Presence, and a platform for commands (like “follow” and “@”). I want this communicator to work the same way on Twitter, Facebook, LinkedIN, my IM client, etc, the way a cell phone just cares about connecting the call, not which network you’re reaching.
Granular, modular grouping of friend data.
At the end of the post, he asked, “What do you want?” I responded as follows in the comments, along the same lines as this post from a while back.
I have been doing some similar thinking and posted on this topic over on my own blog. I think that ultimately what I want is:
one place to input my data, friends’ names, email addresses etc.
one place to check on everyone else’s (ideally the same place as the first)
one tool to communicate with all of those people
The fact that data sent from/to that one place passes through / ends up in other platforms like Facebook/MySpace/Twitter etc. is irrelevant in some ways. I can always go and check it there if I happen to like a particular format or way of presenting it, but I want to have a single place (I use the word “place” – I guess site or even service or application would work too) to manage it all from. Then it’s less about data portability (since my data never moves – at least its home doesn’t) and more about APIs that allow me to plug my data in / feed data out of other services as needed. I think whoever figures out how to do all that will make a lot of money, and destroy advertising revenue streams on the social networking sites in the process. (just think what offline messaging has done to that aspect of Facebook’s site traffic).
It’s an idea I want to expand on some more in future posts. I’m surprised Chris hasn’t had more feedback on the idea yet.
I attended a couple of hours of the Money:Tech conference organised by O’Reilly Media in New York today. Tim O’Reilly himself – originator of the phrase Web 2.0 – was the keynote speaker, and was followed by a chat with Jim Cramer, host of Mad Money, founder of TheStreet.com, etc. etc. The conference was about Web 2.0 and financial services, and O’Reilly started out by talking about Web 2.0 and what it means to him. Ovum certainly has a definition of it, which revolves around four parts – social, business, content and technology models which define Web 2.0 services and sites. However, O’Reilly has a simpler definition, which stays away from specific technologies and services, and is simply this:
Web 2.0 is really about harnessing collective intelligence. It’s about creating a network-effects driven data lock-in with accelerating results to the winners. [I'm paraphrasing based on my notes but that was the gist]
In this way, O’Reilly says, it’s similar to Sun CEO Scott McNealy’s “red-shift” concept – that is, as you start to successfully differentiate yourself in something, your lead over the competition begins to grow ever more quickly. It’s all about creating business models which thrive off network effects – examples, according to O’Reilly, include Google (where the network effects come from the number of links people make), eBay (where the critical mass of buyers and sellers is the biggest barrier to competitive entry), Amazon (where he suggests the reviews are the key network effect) and so on. The value lies in accumulating data which leverages network effects in such a way that it is very hard for competitors to emulate what you have done.
Another major theme at the conference was open source software, and a debate during a panel session focused on whether open source adds or destroys value from a market. There were arguments on both sides, but it’s pretty clear to me that it destroys value for existing players, since it replaces proprietary products priced at a premium with free open source products. At the same time, it creates new opportunities for players which didn’t have the in-house resources to develop their own software, and it reduces the cost of doing business for everyone, which increases liquidity and therefore provides broader benefits.
So, how does all this apply to the OpenSocial program, the Social Graph API and efforts to create data portability? Do these effectively do to value in the Web 2.0 world what open source is doing in the software world? Does Facebook’s value proposition go away? Part of the answer may lie in something else O’Reilly talked about, which is Clayton Christensen’s “law of conservation of attractive profits,” which states:
When attractive profits disappear at one stage in the value chain because a product becomes commoditized, the opportunity to earn attractive profits with proprietary products usually emerges at an adjacent stage.
This would suggest that when open source enters a market, the value flees to the adjacent markets. And when data portability enters the Web 2.0 market, value will flee away from the Facebooks and MySpaces and to – where?
I would argue, as I’ve suggested in other entries, it flows to those best able to make use of the new technology – data portability – to create new services which thrive off it. I think this is the logical conclusion, and it’s another reason why Facebook, MySpace and others need to create value in something other than the information they hold about their users, because that will soon become commoditised and easily duplicated. They need to leverage that data in ways others can’t because of special sauce they themselves have concocted. It’s not clear to me that they have figured this out yet, hence (perhaps) their resistance to full data portability. But they’d better figure it out quick or that value really will go to someone else (and who would bet against Google here?).
I’ve just started reading Googler Brad Fitzpatrick’s essay on the Social Graph problem and his accompanying slides. While I agree with a lot of what he says, I find that one of his big assumptions (as stated in the slides) is
some edges/nodes secret (but most public!)
This remains one of my biggest beefs with social networking – that the assumption is we want everything public. I sound unfairly old when I say this, but I’m just not comfortable with the younger generation’s tendency to put everything in the public domain. I have very separate groups of acquaintances (they’re not all “friends” in either sense) in real life and would like to maintain the same distinction online. I will put some of it in the public domain (like this blog), allow Google’s bots to crawl it and so on, but just as I have a personal blog which isn’t linked to here (or crawled by Google), I want to control access to my information, even to the extent that “most” would be “private” in the sense of being shared with certain people but not everyone. And I think this is a key feature of the endgame of social networking I discussed in an earlier post. I also wonder how Google will participate when some of the data is password protected. I think we still need the current model of providing behind the scenes authorisations for one application to access another to download key data, and I don’t want all that going through Google.
Update: looks like I’m not the only one with this concern. Although this article takes a slightly different tack, the problem it points out is essentially the same – not everyone wants all data tracked and searchable by Google. Having said that, there are ways to put up stop signs respected by the Google search bots, but not everyone knows about them and certainly not everyone would have thought it necessary before the Social Graph API came along.
Google just released the API code for its Social Graph initiative and Plaxo already has an early application which makes use of it. While it’s a bit glitchy, it essentially allows you to create a lifestream from various sources such as Twitter, Facebook, Flickr, Pownce, Google Reader and others. I found that it wouldn’t import my Flickr feed and the Facebook feed is restricted to two elements – notes and posted items – rather than your news feed. But this is an excellent early example of what should become possible over time. And hopefully we can go beyond a lifestream and actually create dynamic profiles based on this information from other sources.
"A Social Telco is an operator which seeks and achieves deep integration between its own core assets and functionality and that of social networks and the broader sphere of web 2.0 services and applications in order to develop new channels for its services and harness greater innovation in the creation of new services."
This post provides a brief introduction to the topic. This blog as a whole provides more detail! The term is my own invention but I hope it may prove useful in describing one of the ways telcos need to evolve to stay relevant to their customers.
