Day: June 13, 2018

A Relevant Blast From The Past…

I had an interesting conversation with a colleague yesterday and the topic was my latest article. And just for the record, this was via his questioning, not me just blithering on, although there are times I can do just that. But I digress.

What the discussion revolved around was, were there any other “big changes” that I thought, or felt were coming forth, that either fell on deaf-ears, as the saying goes, yet seem to be coming to fruition today. And that’s when the discussion went into a myriad of differing topics and scenarios we bandied back-and-forth.

However, there was one topic that seemed to dominate during the latter and that was how – and what – the internet as we now perceive it will change. And how those changes will affect businesses.

My main retort? “Subscription services will be the new “luxury.”

I went on: “Using platforms or devices because they are ‘free’ will be seen as low-budget or low-rent type status in the coming future. An example of this would be: Today it’s the iPhone® or an Apple™ product that shows you can afford to be in the luxury segment. Tomorrow it’ll be something like your email, search engines, and some form of social component which will be provided and hosted via walled gardens. Much like using Apple products or services today are orientated. Let me give you an example…

Think Apple in the very near future offering the ability to both search, (This maybe a derivative of Bing™) email, offer a social component whether they buy an existing one, or just purchase one in a fire sale in the coming future (Think Snapchat™ et al.) and offer exclusive access to this platform that offers no ads, no tracking, no data sharing, and complete exclusivity – but you have to pay to belong.

The social component will more-or-less be the obvious branded, visible luxury marker. Think of a Twitter™ like feature only under say an Apple brand. Same goes for something akin to Facebook™, and so on.”

Remember – the “ads for eyeballs” model would be eliminated – and – the less people who use or subscribe to it, the better. Why? Exclusivity and social peer impressing. Think: “Oh, you use Facebook, Twitter, Google, _______?(fill in the blank) Yeah, I use _________(fill in the blank) that’s why I didn’t see your _______(fill in the blank). Sorry.” The same will go to where one get’s their information. Think: “Oh, you read that on Wikipedia™. Yeah, I don’t use that, I belong to ____________(Fill in subscriber based content provider) so that’s probably why your information differs from mine. I would suggest you need to research a bit more elsewhere before you finalize your conclusions on the matter.” Implying, and rightly so, their information may be no more legitimate than hearsay, which is not what serious people of means do.

As we discussed the merits and other possibilities I asked the following to see how he reacted: “Have you noticed how many content providers are now going whole-hog into the subscription model? And I’m not talking about small sites, I’m talking about sites like Business Insider™, and now Bloomberg™ just to name a few. Think this is just a few one offs via the big boys as they say? Let me add this:

You know my feelings about most IPO’s (for those who don’t, I believe most to be a complete and utter sham, see Domo Technologies™ for further clues ) However, with that said, do you know what one of the fastest growing tech IPO’s that has a real chance at actually being profitable in the very near future business is based on? Hint: This type of business model or service provider was seen as not only dead and buried, but when brought up in polite conversation was seen as something of “not getting tech” along with the current dominance of “ads for eyeballs model. i.e., Facebook et al.

That model? Subscriptions. e.g., Zuora™.”

(Just to be clear: I don’t know this company, or anything else, I’m using them only for example purposes relevant to my topic, nothing more.)

Now some may say (and it’s a fair knee-jerk reaction) that what I’m currently doing is trying to front-run something that is now becoming apparent. Again, it is a fair point for my conversation with my colleague also ventured down this line of questioning. For he’s a very pragmatic person himself and he just doesn’t take what I’m saying as “gospel” just because I’m saying it either. (Actually I feel he’s far smarter than me, but that’s my little secret, and I’m sticking too it, just sayin’.)

The reason why I bring up this point is for when I told him that I addressed precisely this subject and what I saw forthcoming years ago when everyone else saw it as folly his initial reaction was, “Really?” And I couldn’t tell if it was that “really” that implies surprise, or that “really” that implies “sure you did.”

So as to make sure, I said to him I’d find and forward him one of the articles, followed with explaining (once again to make the point) my “over the horizon” analogy. For those unfamiliar with this analogy it’s this: “Sometimes I need to remember as to make sure I’m making my points understood. That when I’m trying to explain what I see over-the-horizon, from where I’m standing. From their perspective, where I’m standing may be over their horizon.”

So on that note I thought I’d post a link to the article I sent him.

The date was: January 18, 2014 Titled, “The Next Segment Of Luxury: Subscription Everything”

With the debate of Net Neutrality now settled into law (as in the ability to charge for higher speeds or access et cetera) my article from over four years ago seems far more relevant today than when I first made it. And as has been more often-than-not the case – this was seen at the time as “not getting tech” via most of “The Valley” aficionado set.

Here’s an excerpt from that aforementioned article. To wit:

“Just one example of how deep and far-reaching the implications of all this goes is this: Why would any advertiser spend a penny of Facebook® or the like for an ad, when one can pay and have sole dominion via a search or subscription model?

Would you rather have full access to a free Wikipedia® if your child has a sudden ailment because it’s free with your service to Google? Or, would you pay to have let’s say Bing® as a paid subscription service if it comes with unlimited access to something like “www.Ask A Real Doctor” because only real doctors are allowed to post or approve text on the site?

Take away the theory that ads will supply the revenue of these platforms by allowing those very advertisers to move funds into what could possibly be the greatest bang for the buck customer interaction or engagement since the start of the web as we now know it, and $1 million dollar valuations seems too much for many of today’s Wall Street darlings let alone $40, $100, $200 Billion, and more.

The term “walled gardens” once attributed with distaste to companies such as Apple® and others might be just as brand centric and sought after as the very devices themselves. The world as we now know it could really change in ways unforeseen in shape and scope as smartphones and tablets themselves revolutionized everything digital. I think the implications are that great. I’m not trying to be hyperbolic. I truly believe the implications are staggering. Whether they turn out to be true is another matter.”

As always, doesn’t mean that I’m going to found correct in the end. No one knows for sure. However, what I will say which I know to be factual is this…

No one contemplated (or at least dared say it publicly) this is where we might be heading in the future.

And here we are.

© 2018 Mark St.Cyr