About Frédéric Filloux

http://

Posts by Frédéric Filloux:

Social Network — It’s just the beginning

By 2011, 50% of the online adult population in the US and 84% of the teens will use a social network each month, says the research firm eMarketer. Currently, 70% of the young Americans visit a social network once a month. Whatever the margin of error, the figures shows the potential of such network. It implicitly emphasis the issue of the valuation of personal data.

> see a summary of eMarketer

Facebook is actually the most visible part of a immense industry which its the direct marketing, which has elevated the data-mining to an art. In the following story, MIT’s Technology Review outlines the modus operandi of one them, Acxiom Corporation.

> story in the TR

Three years ago, Fortune magazine ran a detailed, and rather frightening, but great story about Acxiom, the company you don’t know, but who knows you.

> see the Fortune story

Aside of the advertising frenzy, one of the key development of those social networks will be their foray into news. No doubt they will become one of the next major news channel.

>see this story about the LinkedIn news that will be rolled out next year.

The French press if officially a charity business

Is this a new sign of the ultimate decrepitude of the press sector in France ?
The five professional organizations representing all categories of print media has received the the permission by the French government to launch the Association Presse & Pluralisme. Its main characteristics is to offer tax deductibles to its generous contributors. What is seen as equity in a normal free economy is viewed as grant in the French system.
> story in Le Figaro

Copyright, Interface and Dynamic Value

Last week, n°1 private European TV network, TF1, announced it was suing both the French version of YouTube and its competitor DailyMotion. Claim : €100m for
the first, €40m for the second. Before firing up its lawsuit, TF1 took the precaution of removing from its own video-sharing site all dubious video (for sure, no one is immune).

By this action, TF1 wants to protect is juicy TV series. Heroes, TF1 said, has been viewed 80,000 times on both video sharing sites, and the network estimates the loss in advertising revenue at €66,000 per episode ; the company states also that for 100 illegal viewings of the platform, it looses 20 download on its video on demand service.
Sounds widely optimistic.

In France, managing the convergence between culture and digital access is a special issue in which the repression has been elevated at the level of a national principle.

Three weeks ago, a report suggested to intensify the pressure on the internet access providers to prevent file-sharing ; the report, commissioned by President Sarkozy, was produced by Denis Olivennes, the CEO of the biggest seller of books and records on the country, called Fnac. Basically, it’s like asking Monsanto to defend organic food. Fnac — like everybody else — has not evolved significantly toward the digital era. Funnily, “Fnac” was, last october, the most searched terms on Google France, which sounds as a major failure in terms of brand awareness – especially for an url that is simply “fnac.com” (please, fire the communication director!).

No wonder why the main recommendation of the report is to increase the use of the stick.

This view failed to grasp three factors :

- The all digital food-chain abhor vacuum. Once it decided he want something – wether it is a song, a TV serie, a videoclip -, it finds a way, like nature. Tools emerge, they are diverted. Take the Bit Torrent protocol for instance. It was originally designed to facilitate the transfer or huge computer files among Linux programmers. It is now the most used tool for illegal downloading, and Hollywood is considering using it for legal offering of movies. I checked Mr Olivennes report : there is NOT a single reference to the Bit Torrent protocol.

- Interface is key. More than ever. For the exploitation of a cultural good, the question is not killing piracy but rather to maximize the amount of money that can be drawn from it. The response lies much more in Apple strategy (since 2001 : 100 million Ipod sold and 3 billion songs downloaded) that Mr. Olivennes government operated baton. The poorer is the availability and the quality of the interface, the bigger the illegal downloading will be.

- The very notion of value is a fluctuating one. And it’s not only a question of supply and demand. The value of a good varies dynamically upon the way it is made available to the public. By extension, the “free” notion, describe as an “illusion” and a “lie” by President Sarkozy as he was introducing the Olivennes Report last month, should not be such a scarecrow. It’s part of the dynamic pricing system of the intellectual property. Without this “free” evil, a large part of the internet economy would not exist today, and many software widely used would not have found their way to a marketable existence. Ignoring such fact is a blunder.

PS : One example of the significance of the interface : last week, as I was working on the Monday Note, I purchased a law book on Amazon even though it is was legally available for free on the Internet – simply because reading 300 page on a book is a much better experience than on a screen interface ; I paid €15 for a music album on iTunes – because the buying interface is great and time is money; but at the same time I illegally downloaded a TV series on the painstaking Bit Torrent stuff because it’s not available on any paid interface. The value I granted for a product fluctuated from 100% to zero simply because of the access conditions.

Further readings in intellectual property issues :

The excellent report written by Andrew Gowers, former editor of The Financial Times now at Lehman Brothers. This report ruffle many feathers on some copyright related issues.

> see the full report here
One of the greatest thinker on the evolution of the intellectual property is Stanford professor Lawrence Lessig, the inventor of the Creative Common license (the variable Copyright). The Economist profiled him last week.

> story here
A summary of the lawsuit : TF1 vs. YouTube & DailyMotion
> story in the weekly Le Point(in French)
>The Olivennes Report (in French) carried by Le Monde

The history of the mobile phone, chapter 2.0

If you had any doubt on the potential of the cellular phone as the main platform for the future, consider this: there are about 1.5 billion television sets currently in use in the world ; in the meantime, 1 billion people are connected to the internet. How many cell phone users ? 3 billion. In some western cities, equipment rate is well above 120% on average, and some emerging countries are enthusiastically bypassing the old fashion land line infrastructure to go directly to the cellular network. In Japan, coupons are sent though mobile phones ; in Estonia, parking fees are paid remotely by phone.
Now, let’s zoom in a well documented country like the United States (let aside the poor quality of the US cellular network compared to the GSM which is far better in Europe — and outstanding in Nordic countries). On each customer, US carriers like AT&T, Verizon, Sprint Nextel, get an average of $40-50 for the basic monthly plans, plus $30-40 for web browsing. A business generating $70-90 per month, that’s a lot. Especially for a sector which was still in infancy twenty years ago. Compared to cellular generated cash-cow, newspaper industry looks like a mom and pop grocery store : even the very successful online version of the Wall Street Journal brings about only $11 per reader and per month (50/50 between subscription fees and ads). This eight times less than the cellular industry.

For Google, Yahoo and Microsoft, the next big profit frontier is organizing streams of advertising on our mobile phones. Not all cell phones of course. A large group of talkers — those who have a professional use of their device — will still be willing to pay. But a vast crowd — the young, the low yield users — will agree to trade a free call in exchange of ads and services. In the coming years, we’ll see the emergence of incredibly sophisticated ads-flow. They will be the result of a massive convergence : the ability to serve an ad tailored for :
a) the context ; b)the profile of the viewer ; c) its social network, d) what he does and where he does it.
The first item is already under way with Google Ad Sense which serves a banner in accordance with the content of the web page. That’s sounds almost trivial compared to the next steps, when advertisers will be able to target us individually, geographically and on a time sensitive manner.

Achieving the noble purpose of saturating our synapses with messages requires a large dissemination of some key technologies. Hence Google and the Open Handset Alliace, a collection of thirty brands involved in the cell business (handsets manufacturers – Samsung, but not Nokia or Apple -, mobiles operators – no French one -, hardware companies, internet software or services companies…). Put together, those players represent a fair market share. Within less than a year, they will create a range of services we never thought of. The first iteration of Android, the main software, is already spectacular – Iphone will have hard time to preserve its edge.

On this version 2.0 on the cellphone industry, one company will be the main money collector : Google. The Mountain View giant will do it the usual way, one cent at a time, but he scale will be immense. Actually about thee times the pool of internet users + roughly half of the average bill of each mobile phone users. A lot of money.

> See a preliminary demo of the Android platform which will be at the heart of the Open handset platform. The video is rather compelling (even though, Google’s chief Sergey Brin and Android main architect Steve Horowitz are not competing in the best actor category). See here.

> Why the clash seems unavoidable between the cellular phone operators and the Google bandwagon. Story in Bloomberg

Business Journalism is becoming mainstream

Two web sites share more or less the same punch line : “When business news meet pop culture”. These are : WallStrip.com, with its hilarious videos of most talked-about companies on the stock market (this site was recently acquired by CBS) and MainStreet.com for whom “the point is to make finance fun”. To achieve this, its owner TheStreet.com, hired a young editor known for her writing in Forbes about billionnaires.

> Mainstreet.com will hit the web early 2008

> see WallStrip.com (I lenjoyed the parody of the Sopranos to recount the story of

some high-flying garbage management company).

Did Facebook stole some code ?

As we speak, some court-appointed forensic computers experts are poring over Facebook creator Mark Zuckerberg’s old hard drives to detect a possible intellectual property theft. Three Harvard grads filed a lawsuit accusing Zuckerberg to actually have build Facebook on their idea : in 2002, the three guys had dreamed of a social network called ConnectU. They began the work and asked Zuckerberg to finish the code. Instead, they claimed, he stole the code, built Facebook and, one day, open it up to the general public (you, me — well, not me. Yet). Nice script, uh ?

> read the full story, from the creation of Facebook to the current lawsuit in “02138″

the magazine of Harvard alumni.

> and here are all the court documents Zuckerberg is trying to have removed.