But home entertainment has proved a hard business to crack, and consumers remain tied to their TVs and panoply of set-top devices.
In a new report from BI Intelligence, we examine the distinct scenarios via which mobile devices will wage their battle for the living room, analyze what happens when screens collide and how the new multi-screen living room will actually function, and detail the opportunities being presented to mobile developers, advertisers, and device manufacturers.
Here’s an outline of how mobile devices are waging the battle for the living room:
Substi tution: In a recent in-depth report, we found that mobile video is mostly complementary to traditional TV viewing. Mobile video is additive, creating more opportunities for watching video — whether it’s watching a sitcom on your smartphone during a train commute, or viewing a Netflix movie at home in bed.
- Source: The ability to relay high-quality video (including online video and games) wirelessly places mobile in competition with a whole galaxy of devices. Wireless TV connections are becoming increasingly common, and with them, the ability to bring smartphones and tablets more easily into the mix.
- Selection: When hand-held mini-tablets and smartphones are able to send signals to audiovisual equipment and home theaters, consumers gain more flexibility with a remote control based on a smartphone or tablet. Many apps, with attractive displays and intuitive touch-screen interfaces, are being developed for TV. As Time Warner CEO Jeff Bewkes recently said, competition in the TV int! erface s pace is heating up, and we’re going to see “as many interfaces as you can get.”
- Synchronization: In the US, 85% of U.S. tablet owners use their tablet while watching TV. In order to leverage the second screen as a companion to what’s happening on the TV, media companies must successfully migrate consumers from self-initiated use of the second screen to a programmed experience.
In full, the special report:
- Analyzes what happens when screens collide and how the new multi-screen living room will actually function
- Examines the distinct scenarios via which mobile devices will wage their battle for the living room
- Explores the opportunities for mobile developers, advertisers, and device manufacturers.
- Is full of illustrative charts and data
Smartphones and tablets continue to drive an increasing share of e-commerce traffic.
According to Monetate, mobile accounted for 18 percent of e-commerce traffic in the third quarter, up from 8 percent a year prior.
Smartphones drove a larger share of traffic than tablets, which reflects their increased penetration and perhaps the popularity of “showrooming,” when consumers use their smartphone in-store to compare prices.
Retailers, both online and brick-and-mortar, have to heed consumers’ changing shopping habits. According to IBM, mobile accounted for 16 percent of Black Friday online sales this year, up from 9.8 percent a year ago.
(For more information on mobile commerce, and how brands can win, read our special report.)
What percent of online sales on Black Friday do you think came from Twitter referrals?
How about Facebook?
While you’re pondering those questions, here are some other factoids from a report on Black Friday online sales by IBM:
- The average Black Friday online shopper bought 5.6 items per order. That’s down 13% from last year. It’s also down 40% from Friday, November 16th, a week earlier. Hard to know what to make of that.
- The average shopping “session” length was 6 minutes and 39 seconds. That’s down about 10% from last year. Compare that to the average hellish shopping session in a physical store, and you’ll see why ecommerce is continuing to grow as a percent over overall retail sales.
- The “conversion rate” of online shoppers–the percentage of those who visited the site who actually bought something–was 4.58%. That’s up 9% from last year.
- Mobile devices (smartphones and tablets) accounted for 16% of sales. That’s up from 10% last year.
- Mobile devices accounted for 24% of site traffic. That’s up from 14% last year.
- iPads accounted for 10% of site traffic, up from 5% last year.
- iPhones accounted for 9% of site traffic, up from 5% last year.
- Android phones and tablets accounted for 5.5% of site traffic, up from 4% last year.
The key observations here would seem to be:
- Mobile is ! continui ng to grow rapidly as a percentage of traffic and sales, but it’s not taking over by any means. 6 years into the smartphone era, with smartphones now accounting for more than 55% of U.S. handsets, traffic to mobile sites (including traffic from tablets) is still less than 25% of overall traffic.
- Apple devices continue to crush Android devices in terms of commerce engagement. Android users just don’t seem to do all that much with their gadgets.
And now to social referrals…
It wasn’t long ago that many people were arguing that Facebook was eventually going to be bigger than Google. Word of mouth, after all, is the most powerful form of marketing known to man. And people lived on Facebook, so they would soon be shopping on Facebook. And so forth.
Well, so far, anyway, that ain’t happening.
- Only 0.68% of Black Friday online sales came from Facebook referrals–two-thirds of one percent. That was a decline of 1% from last year.
And how about Twitter?
A couple of years ago, people were excited about Twitter’s potential as a commerce platform, too.
But Twitter’s impact on ecommerce, it seems, is zero.
Not “basically zero.”
- Commerce site traffic from Twitter accounted for exactly 0.00% of Black Friday traffic. That was down from 0.02% last year.
So much for the idea that Twitter or Facebook’s business models are going to have much to do with commerce.
It seems you can’t follow the tech industry today without being bombarded with reports heralding the impending death of television as we know it. While we believe the television model will eventually be disrupted, there’s no evidence of any imminent collapse. Instead, the likely scenario is of a very slow decline, with TV remaining an amazingly large and profitable business for many many years to come.
A new survey from Deloitte indicates viewers are engaging with that model in new ways, with bad implications for the network’s ad sales. When asked how they watched their favorite show, 71% of respondents chose live TV, down from 87% three years ago. Some of the biggest winners? DVR, on demand, and the show’s internet site.
What does it mean? Consumers are wising up that you’re no longer chained to a show’s air date and if you have the patience to wait 30 minutes you can skip all the ads. The real big problem, however, is that these are engaged consumers with intent. In other words, exactly the kind of people advertisers want to be reaching.
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There’s already no shortage of companies with their own “clouds” trying to blow up Amazon’s popular web services.
Now AT&T will too.
On Monday AT&T announced AT&T Cloud Architect, which it describes as “a developer-centric cloud platform providing storage and infrastructure as-a-service.” Sound familiar? It should. That’s what Amazon’s Web Services does, as does Microsoft Azure, IBM’s SmartCloud, Red Hat’s OpenShift and countless others.
AT&T was vague as to when its cloud would be available, saying that it would be turned on sometime in the next few weeks, reports Ars Technica.
The news is significant for another reason. AT&T is choosing OpenStack to build its cloud, making it the first carrier to join the OpenStack consortium. OpenStack is an open-source cloud architecture project based on a collaboration between NASA and hosting company Rackspace. It’s not the only open source cloud architecture, but it is the one that seems to be winning the most support with the most important participants.
Having the cloud industry settle on one architecture is good for enterprise customers. It ensures they won’t get stuck with one cloud vendor. They can move their applications more easily between multiple clouds built with the same technology.
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Two years ago Apple pulled off an impressive feat: Its market cap surged past Microsoft to become the most valuable company in the tech industry.
Who will it be this year? Well, it could be Google. The search company is just $19 billion behind Microsoft. All it would take is Google’s stock going on a tear, and Microsoft’s fading or sitting still.
When (or if) it happens, you know Microsoft CEO Steve Ballmer is going to freak out. Don’t forget, he’s the guy who threw a chair and had a tantrum when Google poached one of his employees.
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Apple’s price to earnings ratio is at a relatively paltry 14 right now, and it’s driving Apple bulls crazy.
The chart below, which shows Apple’s shrinking PE, from Apple analyst Andy Zaky has been passed around for the last week. (At the time Apple’s PE was 13.3.)
What’s wrong with this chart?
Zaky explains: “Now even though Apple’s growth has far and outpaced the growth of Oracle (16.35 P/E), Amazon (96.15 P/E), Google (19.19 P/E), Cisco (15.11), Qualcomm Inc. (20.62), Amgen, Inc (13.53), Comcast (15.11 P/E), IBM (13.95 P/E), Chevron (13.50), Johnson & Johnson (14.94 P/E), Procter & Gamble (15.49 P/E), and AT&T (13.91 P/E), the stock trades at a far lower valuation relative to these top holdings on the NASDAQ-100 and S&P 500. Some of these companies have actually contracted in 2011. Yet, the market values the earnings out of these companies on the order of 4-5 times more in some cases than they value the earnings out of Apple.”
Of course, there’s more than one way to value a stock. If you value it based on trailing free cash flow, it’s arguably priced fairly, says our Henry Blodget.
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Traditionally, only the mammoth Hollywood studios could afford to work with 3D—it’s too expensive to build the necessary, air-conditioned 24 hours a day, server farms. The company behind Despicable Me decided to try something new, and cut the AC.
Illumination Entertainment, the company behind Despicable Me, decided to try something new. Instead of using air-conditioned server farms to render images, the company asked IBM to built a customized server farm using the iDataPlex system, a processing system that cuts down on energy use by 40% compared to traditional server farms.
The iDataPlex has two key advantages: a flexible configuration that doubles the amount of systems that can run in a single IBM rack and the ability to run an ambient temperature room (no costly air-conditioning required). The system has been on the market for over a year, but Illumination is the first studio to use it for animated film.
This doesn’t mean that any scrappy studio with a dream can now produce a high-end 3-D animated film. Illumination used a 330-person team of artists, producers, and support staff to produce 142 terabytes of data. And the rendering farm, which processed up to 500,000 frames per week, was built in conjunction with Mac Guff Ligne, a French digital production studio.
But the iDataPlex gives Illumination a leg up in the graphics rendering process. Illumination Entertainment’s server farm, for example, is the size of four parking spots. That’s half the amount of space the company initially allotted to the farm. “Oftentimes a small studio like Illumination really wants to put their energy behind creating as compelling of content as possible,” explains Steve Canepa, Vice President, Media & Entertainment Industry at IBM. “By minimizing the technological issues associated with building and managing the [rendering] environment, we allow studios to reduce the amount of time, energy, and resources necessary to create an underlying technological platform.”
It’s a compelling idea for studios—even major ones—that want to cut costs and look environmentally conscious at the same time. IBM is already working with a number of other studios to implement similar solutions. Canepa concedes that studios could build similar systems by purchasing off-the-shelf racks and processors, but the iDataPlex’s unique configuration of servers packs a lot of processing power into a small space—and that’s not easy to replicate. Don’t expect these rigs to be appearing in suburban garages anytime soon.
Fast Company empowers innovators to challenge convention and create the future of business.
Dr. Augustine Fou is Digital Consigliere to marketing executives, advising them on digital strategy and Unified Marketing(tm). Dr Fou has over 17 years of in-the-trenches, hands-on experience, which enables him to provide objective, in-depth assessments of their current marketing programs and recommendations for improving business impact and ROI using digital insights.
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