Nobody needs Apple’s streaming service except Apple itself

Streaming

If you want to listen to streaming music, there are plenty of services to choose from. Spotify, Deezer and Rdio are probably the most well-known ones, but even the big Internet giants such as Amazon and Google have their own offerings. And now there is Tidal as well.

Typical for this business is that these services are all more or less the same. Minor differences in regards to user interface, features, pricing and the size of the available music catalog exist. But overall, what users get from the various players is pretty similar: Millions of songs and albums on demand, accessible across various types of devices either for free with certain limitations (and annoying ads) or at a price point of around 10 USD/Euro per month.

Traditionally, every new streaming service that launches does add very little value. But at least it can be considered a good thing from a competition point of view, since customers usually win if the number of companies that are courting them increases. However, the situation with Apple’s upcoming revamp of Beats Music, which the company acquired last year and which is designed to become the strategical successor of iTunes, is different.

Apple’s upcoming streaming service looks to be toxic to the ecosystem of digital music consumption. Nobody needs it. Ok, that’s the same as with any new streaming service. But the big issue is that Apple actively tries to sabotage other streaming services by trying to convince labels and artists to end support for free tiers and to get exclusive deals that no other service would benefit from. As media reports have indicated, antitrust officials in the U.S. and Europe are now looking closer at the company’s practices.

Apple behaves in an unacceptable way. Because iTunes music sales are decreasing, the company feels it needs to take over the streaming segment. But since it is late to the party, differentiation is so tricky and Apple’s track record with providing a user friendly iTunes software is not a great one, the chosen strategy appears to be to use the existing relations with the music industry heavy hitters to force the competition to weaken their products. Because only then Apple’s upcoming streaming service can shine.

But with its aggressive lobbying, Apple could have harmed its own position. Unsurprisingly, Spotify has decided to fight back. According to The Verge, the Swedish company has criticized Apple’s App store revenue share. Like other providers of digital goods, Spotify has to hand over a 30 percent cut of subscription revenue it generates through the iOS app to Apple. That obviously creates an unfair competitive advantage for Apple’s planned streaming service. For each 10 Euro charged to users of Spotify and Apple’s streaming service, only 7 Euro would end up at Spotify, but the full amount would go to Apple. One does not need to be an expert in antitrust law to see the issue.

Apple might frame its stance against the free tier as a support of the artists and music industry as a whole. But considering how iTunes actually destroyed the music industry, one should not rely too much on Apple’s expressed sympathies for the musicians. Apple does not care about what is good for music. It is my personal opinion but I see Spotify’s Daniel Ek as more authentic when it comes to the intention to support musicians. He started Spotify to end piracy, which might actually have worked (nowadays, who still downloads MP3 illegally?). What has Apple actually done for music, except promoting U2? I am not referring here to the consumer – the iPod and iTunes were certainly big deals from a consumer point of view when they arrived. But the iPod also thrived because of piracy. Apple simply created a great gadget to listen to all the music that people had downloaded through filesharing platforms.

If Apple wants to put its weight behind a music streaming service, so be it. But it should not act plain evil and hostile towards the competitor’s customers. A company with cash reserves of $178 billion can afford to not behave like a bully.

(Photo: Flickr/Per-Olof Forsberg, CC BY 2.0)

Do you make a lot of predictions that turn out to be wrong? Then be afraid of Staked

If you have opinions about the future, the Internet is a great place to make predictions: Most people won’t remember predictions that turn out to be incorrect (except maybe if you are an industry heavyweight). But if a bold forecast comes true, the person who made it can proudly (or subtly) refer to it and gain reputation points. Believe me, as someone who has been writing about tech since 2007, I know how this game works.

But a new app might make it much harder to come up with a host of failed predictions and yet to gain a lot of respect for the lucky few that match the facts. A very interesting app. So interesting that I had to write a dedicated post about it. Continue Reading

Facebook Messenger embraces cannibalization, lets users skip the time sink called “news feed”

Messenger

Facebook just launched Messenger for Web Browsers. Just open messenger.com from your Desktop browser and start chatting.

This is a remarkable move.

First, it confirms the assumption that the company’s focus on its news feed-centric core product is the past. Second, and this is the really astonishing part, Facebook is completely cannibalizing its core product facebook.com. Because every user who just wants to write or read some messages can now head to messenger.com, avoiding a major source of procrastination.

Companies who are willing to cannibalize their own products with something new are rare. Apple did it a couple of times. Steve Jobs famously said: “If you don’t cannibalize yourself, someone else will”.

With Messenger for Web Browsers, Mark Zuckerberg follows that philosophy. Messenger is said to have more than 500 million active users on smartphones. Millions of users who could not really let go of the time sink called news feed when messaging through Facebook from their desktop computers and notebooks will be very thankful, I am sure. Bosses at companies have a reason to celebrate, too.

For the core product facebook.com and the news feed, this almost certainly will mean a decrease in user activity. But for a product that is roughly a decade old, this is totally ok.

Estonia’s innovative and ambitious e-residency project takes an important step

Last year the small European country of Estonia did something unique: It has started to offer a virtual residency to people from all around the world at no costs (other than an administration fee during registration) – no matter whether they have any actual connection to the country. The e-residency gives access to a broad selection of e-government services – the same which actual Estonians use as well. The only major differences are that an e-resident cannot vote, does not receive the right to physically live in Estonia and does not get an Estonian passport.

I have been planning to become an e-resident since the launch of the initiative. However, until today, the application process involved a visit to a Police and Border Guard Office in Estonia. While this would be a great opportunity to visit the Baltic country in the Northeast of Europe, it has not really fitted into my travel schedule.

As of tomorrow, the requirement of showing up in Estonia to obtain an e-residency disappears. Today I received an email announcing that a visit to most Estonian embassies and consular offices around the world is now sufficient for the application. The date April 1 might not be the perfect choice for a news like that, but I am pretty sure this is no April Fool’s joke. Continue Reading

Forget Apple Pay, the peer-to-peer payment revolution is here

PaymentsApple’s decision to work together with credit card companies instead of trying to disrupt them turned out to be a smart, at least in the short term. However, while Apple Pay captures a lot of the attention and excitement, another big payment revolution is happening right now: peer-to-peer payments.

This term simply means real-time direct bank transfers between two parties, enabled by an easy-to-use mobile app. In the U.S., this segment is booming. The most successful player in this field so far is said to be Paypal-owned Venmo, which is “killing cash” (according to Bloomberg) especially for younger users. At the end of last year, Snapchat launched its own competitor Snapcash. A bit earlier, Square released Square Cash, and just last week Facebook announced the rollout of a money transfer feature for Messenger. Even Google allows for direct payments through Gmail – for Americans and since a couple of weeks ago even for users in the U.K. Continue Reading

Foursquare and the Art of Unexpected Gestures

Unexpected gestures of thankfulness and appreciation shown by companies to their users or customers are – at least in the Internet industry – a neglected instrument to create loyalty and brand ambassadors. Thus when it happens, it becomes even more powerful. Here is a good example:

The other day I found a mail by Foursquare in my inbox, titled “Your thank you gift”. In the mail the location recommendation service thanked me for having written 137 tips. “Tips” are small comments about locations. In my approximately 6 years as Foursquare user I have been writing the occasional tip. Apparently exactly 137 of them.

After the initial thank you note, the mail informed me that I would receive a complimentary $10 gift card that I can redeem at 40 major retailers (Amazon, Starbucks etc). Continue Reading

Let’s hope that Number26 can stir up Europe’s complacent banking sector

Number26

Most traditional banks have failed to create exciting e-banking and mobile banking solutions. Because of that I was very interested when Number26, a new “mobile first” banking startup from Berlin, announced its upcoming launch last year. I covered the news in German and made sure to sign up for early access. Very recently, the company opened its closed beta period for customers in Germany and Austria – and I received my invite code by mail.

So what’s my first impression? Well, Number26 for sure presents itself as a full-flegded banking account including all the major features which are needed for that purpose. The service claims to offer “Europe’s most modern bank account”. Especially thanks to the intuitive and easy to use mobile app, this could be the truth already in this early stage. Of course the traditional banks’ failure to delight customers means the bar is not very high.

Feature's that should be common in every banking app - but aren't.

Feature’s that should be common in every banking app – but aren’t.

What makes Number26 stand out is a combination of the state-of-the-art look & feel and usability optimized for smartphone usage, analytics features to help customers manage their finances, as well as the cost structure. Currently neither the banking account nor the MasterCard debit card come with any fees. ATM withdrawals are free (except ATM-imposed fees), and there is no foreign transaction fee. These conditions make the service especially attractive for travelers. I actually opened my account while in the U.S., which felt kinda cool. It’s the first bank account I ever opened while not being physically present in the bank’s country.

The process of opening a banking account can be completed online. Number26 uses the services of another quite young startup, IDnow, which allows for identity verification via Webcam. I had to show my national ID or passport and answer some questions. After that my registration was completed. The overall procedure took about 10 minutes.

I expect Number26 to have an impact on the banking landscape in Germany and Europe – the latter assuming that the Berlin-based startup will expand to the rest of the continent. In Germany, the only serious competitor I am aware of is DKB, which has similar customer-friendly terms, but comes across as more conservative. So there is lots of room for Number26 to grow and to capture the hearts of tech-savvy mobile users.

One challenge that Number26 will face is the European Union’s plan to cap interchange fees for card payments. The startup’s current revenue model is based on a commission it receives from MasterCard each time a Number26 customer pays somewhere with the card. If the E.U. forces banks and MasterCard to dramatically cut the fees that retailers pay to them for card transactions, then MasterCard will have to cut or completely cancel the commission it offers card resellers such as Number26. The actual implementation of the fee cap could still be many months away. But when it happens, the company will have to come up with new revenue streams. Apart from that there of course is no guarantee yet that the commission alone is sufficient to create a profitable banking endeavor anyway.

Nevertheless, right now Number26 is a very welcome addition to the rusty European banking sector. Let’s see if the company can stir up this industry.

Facebook tells WhatsApp users to download Chrome – because everything goes mobile anyway

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WhatsApp just released a browser client for notebook and desktop users. But the Facebook-owned company made some strange choices: In order to use the browser version which simply mirrors the WhatsApp apps’ content in real time, one’s smartphone on which WhatsApp is installed needs to be connected to the Internet. Also, WhatsApp users that run the app on an iPhone cannot use the new client. According to WhatsApp the reason are “Apple platform limitations”. But the weirdest thing is that for the moment, WhatsApp Web only is compatible with Google’s Chrome browser. If you access https://web.whatsapp.com with Safari oder Firefox, you are being prompted to download Chrome.

This is a type of behaviour that we, as far as I know, have only seen from one major company before: Google itself. For example, Google’s new mail interface Inbox was initially only available for Chrome.

But WhatsApp belongs to Facebook. Facebook and Google can be considered major competitors. Over the past years, both companies had various smaller and bigger fights. Even though Google’s latest social experiment Google+ – which has an estimated couple of million active users a month – does not cause Facebook any headache, both companies are competing over user’s attention and advertising Dollars. Therefore seeing Facebook actively promoting the competitor’s browser strikes me as pretty exceptional.

Now, there apparently are some technical reasons for why WhatsApp went with Chrome. As the messaging service told GigaOm, Google Chrome’s push notification system “is ideal for the product”. The blogger and developer Andre Garzia points out that WhatsApp makes use of a non-web standard API of Chrome. Since I am not a developer I can only guess about why WhatsApp made its choices. But this guess actually is not hard: Probably Chrome allowed for a comparatively easy, smooth implementation which meant less work for WhatsApp. Going the easy way might not usually be the best business philosophy. But in this case, WhatsApp and its owner Facebook simply think pragmatically:

Mobile

The stationary web that is accessed through PCs is rapidly becoming less relevant. Mobile is where the action happens. The majority of Facebook’s revenue is generated on mobile devices. That trend will only accelerate. WhatsApp likely felt some pressure to offer a web version – but not enough to invest heavy engineering resources in this endeavor. So the company opted for an easy “alibi” solution (instead of developing native clients for Windows and Mac OS X). It’s unclear whether iPhones and other browsers than Chrome will be supported one day. That probably depends on the feedback and traction WhatsApp Web receives.

But no matter how much easier the work on WhatsApp Web became for the company by choosing Chrome as the initially only supported browser: Would all this be worth it if it means pushing the competition’s browser?

Not in a scenario in which browsers on desktop machines and notebooks lead to competitive advantages. But since the mobile web is taking over, and since mobile is dominated by native apps, Facebook most likely does not see any harm in getting some more users to download Chrome. Maybe it even wants Chrome to gain in an overall shrinking browser market, because of Google’s willingness to  embrace non-standard, developer friendly APIs.

In any case it really is the boldest way of telling your competition how little of a threat you think it is: by actively pushing your competition’s product. Google better not feels flattered.

Prepare to use Facebook Messenger to chat with businesses

MessengerSignificantly more than a billion people – probably soon more likely close to 2 billion people – are sending billions of smartphone messages every day, using one of the many popular chat apps. But at least for those services that are most popular outside of Asia, such as WhatsApp and Facebook Messenger, there is one thing missing: The possibility to send text messages to companies, service providers, restaurants or stores.

For everybody who does not enjoy wasting time on the phone waiting to speak to an agent or staff member, a feature to quickly type and send questions or provide feedback from a smartphone to all kinds of businesses that consumers interact with on a regular basis would be a huge simplification. In fact, it is being done already, to some extent at least, by Asian chat apps like WeChat and Line (that offer company accounts that users can interact with). Recently, the infamously struggeling U.S social network company Path released an app called Path Talk, which includes business-to-consumer (B2C) communication.

Personally I cannot wait to see businesses participating in the messaging frenzy. It could be a win-win-win situation. Users skip waiting on the phone and paying calling fees, businesses increase customer satisfaction and in turn sales, and messaging apps would tap into a new source of revenue with dedicated, sophisticated business accounts. Also, with smart algorithms working in the background, many repetitive customer inquiries could probably be automatized.

Well, good news – at least for those who agree with my assessment: According to the German IT news site heise online, Facebook Manager David Marcus mentioned on stage at the DLD conference in Munich that the company thinks about offering companies a chance to communicate with users via Messenger. He has said something similar in an interview with Wired in October, so the remarks at DLD can be seen as a confirmation. Marcus also explained the different positioning of Messenger and Facebook-owned WhatsApp: WhatsApp will remain a simple and better alternative to the SMS, whereas Messenger which had been separated from Facebook’s main app last year, is going to become more interactive and feature-rich.

I think both strategies make a lot of sense. I expect Facebook to launch some kind of platform for Messenger that will introduce (freemium or paid) business accounts. Possibly at the F8 Developer conference in March.

From a user perspective, this is how I would like it to work: A separate tab for chats with businesses that I have interacted with. A feature to see businesses in my proximity that are available for chat, as well as a search tool for businesses by name and location. Simple and useful.

In Sweden, the beginning of the end of linear TV is here

TV

When one wants to understand how technology trends and people’s usage patterns will develop within the near future, there are some regions of the world that are especially helpful indicators. The U.S. should be mentioned of course, since this is where most of the companies and ideas that shape the technology world are coming from. Southeast Asia and China are also interesting to observe. Emoji, messaging apps/platforms, phablets and selfie sticks are some of the more recent trends that either originated in Asia or that were at least picked up by users there first. A third region that I personally find worthy having a closer look at is Sweden (where I am officially based).

If we ignore the fact that Swedes still praise and use the teletext, the country’s population is quite tech-savvy, curious and has often been among the first to adopt new kind of digital solutions. The Scandinavians flocked to social networks already in the late 1990s, partly thanks to progressive broadband expansion. They used legal music streaming services before everyone else (Spotify was founded in Sweden). Sweden also is closer than most societies to abandon cash.

Because of Sweden’s “tradition” to be at the forefront of technology adoption, recent news about a massive decline in traditional TV consumption might be an indicator of what is going to happen elsewhere within the near future: The yearly report by the Swedish media research company MMS about citizen’s TV consumption shows a significant decline of minutes spent with linear TV (PDF). The industry publication Resumé points out that despite major live events such as the Olympic Games and the Football Worldcup, the daily average time watching TV declined with more than 10 minutes within the most important viewership groups.

10 minutes less linear TV a day on average might itself not sound too dramatic considering that the daily averages still reach up too almost 200 minutes a day during winter months. However, according to people from the industry, this shift is massive compared to the past. Resumé quotes media agency executive Patrick Wallin saying that in 25 years working in the sector he has never experienced a dramatic change like this. “The expectations of the end of TV were exaggerated for a while, but now the technological platforms have advanced and the consumers have completely new possibilities”, said Wallin to Resumé. “2014 was no good year”, another agency executive told Resumé.

Instead of linear TV, Swedes increasingly watch on-demand content, which is provided by various subscription services such as Netflix and HBO Nordic, but also by the major TV stations that have created quite advanced on-demand services. Half a year ago, a million households in Sweden were said to subscribe to at least one streaming service for video. In a country of less than 10 million people, that might come down to 20 percent of the population having access to a paid video streaming flatrate.

It is true that for a long time, the upcoming shift from linear to on-demand TV did not materialize, which might have increased linear TV proponent’s hope that it maybe never will happen. But judging from how Resumé and the consulted experts comment on the latest audience statistic, at least in Sweden the fundamental shift is happening right now. And if it happens in one developed country, there is no reason to believe that other equally mature markets will be different.

(Photo:  Flickr/Robert Couse-Baker, CC BY 2.0)