iTunes = 85% of Indie Digital Revenues…

It Gets Crazier: iTunes = 85% of Indie Digital Revenues…
by paul resnikoff
Monday, March 28, 2011

Last week, global independent trade group AIM stumbled upon a stunningly lopsided stat. Namely, that iTunes, Amazon, and Spotify collectively accounted for 94.4 percent of indie digital revenues, worldwide. The rest – specifically, 51 stores – were simply squeezed into the periphery.

But it gets even crazier. Because after digging a bit deeper, it turns out that iTunes is easily the biggest of those three. Perhaps that was totally obvious, though Apple makes up nearly 85 percent of digital indie revenue, worldwide, and that includes aggregated downloads, subscription, and streaming sources. And, it also leaves both Amazon and Spotify with paltry shares of roughly 5-6 percent each.

The following is a breakdown of the top 14 digital providers, as counted by AIM and submitted to the British government as part of the Hargreaves Review. The providers themselves aren’t labeled, though we confirmed that iTunes is the biggest chunk – and it makes sense. (see link)

And so what? In some senses, this makes it a whole lot easier for independents – and everyone else, for that matter – to plan their digital distribution strategies. But it also makes them beholden to Apple’s percentage demands and rules, including those related to consumer data-sharing.

/pr. Written while listening to Zoo Brazil.

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ROI of social media can be an intangible

March 15, 2011

What’s It Cost?
ROI of social media can be an intangible

There’s Facebook, Second Life, Myspace, LinkedIn, YouTube, Twitter and now Jumo. There are many smaller social networking platforms. When it comes to deploying assets, where to be in cyberspace is a tough decision.

Catholic Relief Services (CRS) in Baltimore is going through the evaluation process. CRS is one of Facebook’s 500 million active users, and also tweets on Twitter and posts videos to YouTube. CRS has a Myspace profile with 3,288 “friends,” although it is not seeing a lot of activity there and managers are trying to decide what to do with it. Deleting it is a serious option.

“We, like many other nonprofits, struggle to accurately measure the financial ROI (return on investment) of our efforts,” said Laura Durington, online community manager at the CRS. “We look at Facebook Insights, Google Analytics and we look at source code reports in our online fundraising program. But, it only gives us part of the picture. Still, I would argue, although it’s more of a hunch, that we are getting something important out of these efforts.”

According to an Idealware study, “The Nonprofit Social Media Decision Guide,” CRS isn’t the only organization considering cutting back on Myspace. The Portland, Maine nonprofit technology group surveyed 460 nonprofit employees, held six telephone focus groups, and a case study collection in which 273 staff members provided details of which social media channels they are using and who they are targeting.

As you might expect, since 2008 Facebook has seen a huge increase in popularity and there has been a substantial decline in Myspace nonprofit users. Many nonprofits aren’t investing much time in it and are seeing decreasing benefits.

Myspace cut its staff in half in January, letting go 500 employees. The decision came after the social media website was revamped in October 2010 to run with fewer people. MySpace had 54.4 million unique U.S. visitors in November, down 15 percent from a year ago.

Julie Somogyi, director of integrated marketing and communications for the Girl Scouts of the Greater Chicago area, believes the organization needs to focus on the social media websites where their girls and volunteers are virtually congregating. “Even though we did have some initial interaction with Myspace a couple of years ago, we began investing our time more heavily in Facebook, Twitter and LinkedIn in the past two years because those are the most active sites within our key demographics,” she said.

According to Andrea Berry, Idealware’s director of partnerships and learning and coauthor of the study, nonprofits are using social media websites for public interest, although the idea of fundraising is always in the back of their minds. “A lot of nonprofits are struggling to use it as a fundraising tool but use it as a way to reach out to new people, potential supporters, engage current supporters and reinforce their brand for key people in their area like the press,” she said.
More than 30 percent of people surveyed who use Facebook and Twitter said they know that these social media sites are reaching new supporters for their organization and more than 75 percent responded saying they think Facebook and Twitter are reaching new supporters. The numbers jumped to 80 percent for sites such as Facebook, Twitter, video sharing sites and blogs for nonprofit managers who responded they think that these sites are enhancing their relationship with their audience.

“It’s a good way to reach an untapped audience,” Durington said. “When we started we weren’t sure what to expect three years ago. Every article about it said this is going to be this huge boom for fundraising but very quickly most nonprofits found that not to be the case.”

CRS uses Google Analytics, but it’s still hard to see the absolute correlation for the Facebook donations because the tracking gets lost and it becomes a “grey area.” They also spend more time promoting and encouraging people to go to their own website rather than the organization’s Facebook page, although, the Facebook page is becoming a place where people can go to build and engage in an educated community, Durington said.

“Our commenter’s seem to be very educated about global issues,” she said. “We have witnessed a lot of some interesting dialogue, not just between us and them but also with each other.”
It’s an interesting experiment to see what people are talking about. CRS’s goal is to boost traffic to their website and have Facebook be a referral point. Durington said that the people going from the Facebook page to their website is in the single-digit percentage but it is equal to the number of referrals they get from Google.

Facebook isn’t as reliable as a website but it’s starting to be a place were people look for information. “A website is always going to be number one. You shouldn’t be using a Facebook instead of a website,” Berry said.

ROI for nonprofits is hard to calculate, said Thomas A. McLaughlin, vice president of consulting services for the Nonprofit Finance Fund and contributing editor for The NonProfit Times. One way to see if there is anything happening is to look at the overall fundraising of operations. “In reality, even assuming that organizations have record keeping for this, its almost likely the best we could hope is to calculate a marginal interest on fundraising costs and attribute it to social media if that’s the only thing that’s changed,” he said.

Another reason ROI is so hard to determine is it doesn’t translate to mean the same thing for nonprofits. “ROI is popular for for-profit businesses and doesn’t transfer easily to the nonprofit world,” McLaughlin said. “There is no such thing as an investment in the nonprofit world like there is for for-profits. It would be more of a cost.”

One cost expense would be if an organization hired an employee solely to work on social media campaigns or trying to break down the time of an employee who works on overall fundraising campaigns. “If organizations can somehow isolate the employees’ times in various elements of fundraising, social media will be one of those elements,” McLaughlin said. “If you get lucky enough, some organizations might track what that employee spends their time on. In those cases you might be able to strike some approximation on dollars and time spent on social media.”

For the Girls Scouts of Greater Chicago and Northwest Indiana, instead of having one person designated exclusively to social media, they include the social media responsibilities in three marketing team members’ job descriptions.

Maria Wynne, CEO of the Girl Scouts of the Greater Chicago area, thinks its important to have a place to go on the Internet for all ages, which is why the Girl Scouts just launched their new website, http://www.worldsstrongestgirl.org for girls 13 and younger. “It’s a place for girls where they can express themselves that is safe, with anonymity and the latitude to be imaginary about a story or tell something that is very concrete,” Wynne said.

The website is animated with cartoon-like characters that represent badges. Girls can click on a badge and write a story or create their own badge. “The younger girls are very much about something that interacts and engages them,” she said.

For girls who are 13 and older, they want to network and talk with people online. One of the reasons why they created the website was to give the younger girls an entry point for interacting with the Girls Scouts online with an activity that isn’t threatening.

“The financial value of those communications is secondary and although some decline in the program and marketing print budget has been realized, the intangibles are a bit more difficult to quantify,” Somogyi said. “For example, when girls use social media to reach out to their friends and family members to ask them if they would like to order Girl Scout cookies, there is a financial advantage to the girl and her troop because they have reached more customers, and to the council as a whole because proceeds from the Girl Scout cookie program support how we can best support our membership locally.”

On the Girl Scouts’ Facebook page, girls and volunteers are connecting and even creating their own Facebook pages for their capstone projects and other programs that the Girl Scouts participate in. The Girl Scouts are also on Twitter and LinkedIn. “I think it’s the way people expect entities to participate in the virtual world today,” Wynne said. “Along with having a presence, it is for many the practical way of sharing information.”

For example, Wynne has seen new leaders and volunteers ask for advice on their Facebook page and almost immediately there are 10 responses from other members of the Facebook group. “It’s a mentoring and networking tool for best practices and a way for people to ask for help in the volunteer community,” she said.

Justin Perkins, director of nonprofit strategy for Care2.com, has been working with nonprofits for five years with online marketing and donor improvements. He was inspired three years ago to make the ROI in social media calculating tool when Facebook Causes launched to help nonprofits decide if this would be worth their time and money.

“There was initial skepticism that there was a vital business model there (Facebook),” Perkins said. “Before investing time, it was ideal to come up with a tool to look before you leap.”

The calculator was created using typical metrics that nonprofits use to measure online success like how many employees or volunteers are working on a social media campaign, how many hours a week they spend on it, how many “friends” they recruit, how many of those “friends” sign up for an e-mail list and ultimately how many become donors.

The calculator allows nonprofits to plug in their information or number goals in a four-step process to see their potential ROI. It can be found on http://www.frogloop.com/social-networks-calculator

Perkins believes nonprofits that started using social media had a sort of “gold rush mentality” but they need to figure out if it will actually be promising for them in the end. “What’s the actual cost? What’s the opportunity cost if we do this at the expense of something else? What is something else we could be doing to have a higher ROI,” he said are some questions that nonprofits need be asking themselves when using social media. NPT

Holy social media, Batman! Video rentals come to Facebook

Posted by JP Mangalindan, Writer-Reporter
March 8, 2011 2:44 PM

Facebook users can now watch The Dark Knight right on the website. It won’t be the last time content providers come to where the users are.

Would you watch movies on Facebook? That’s what Warner Brothers, a division of Time Warner (parent company of Fortune), wants to know by offering up The Dark Knight for viewing on the movie’s Facebook fan page. 3.9 million fans have already “Liked” it and they and other Facebook users can rent it for 48 hours for 30 Facebook Credits, the equivalent of $3. There are some caveats though: it’s only available in the United States, only streams in Standard Definition, and sharing remains limited to posting the activity to the NewsFeed, “Liking,” or Tweeting it. Pretty barebones at this point, considering the wealth of features Facebook currently offers.

But the move is less notable for what it’s lacking and more for what it means for content programming going forward. Recently, Warner Brothers also dabbled with other unorthodox distribution methods, by creating iPad, iPhone, and iPod apps specifically for The Dark Knight and Inception. Not an ideal solution — who wants to download an iOS app for each and every movie? –but it does show that the studio wants to reach as many markets as possible. Its movie apps reach 35 worldwide markets, more than the 23 that iTunes covers. With Facebook, Warner Brothers has the potential to one day reach some 600 million users in more than 200 countries, from Jordan and Senegal to Botswana and Martinique. In doing so, it becomes the first studio to offer movie content within a social network. No outside links or shuttling to third-party web sites.

It might all sound pretty strange at first. Because when users signed up for Facebook, they envisioned using it for connecting with friends and acquaintances, and in some cases, people they’re dying to date. Watching movies probably didn’t register. After all, there are better, dedicated services like Netflix to handle that, right?

But the more you think about it, the more it makes sense. Facebook’s userbase spends an average of 55 minutes a day, 6.5 hours a week, or 1.2 days a month on the site, a significant chunk of time only rivaled by email usage, and one that will grow even further as Facebook matures and introduces more time-sucking features. Rather than force Facebookers to leave the network to some external service or site, a huge barrier of entry in and of itself, content providers are bringing programming to where the users are.

“It’s a great opportunity to bring a shared viewing experience back to folks who have gotten geographically dispersed,” says David Raycroft, VP of Product Strategy for Milyoni, the social commerce platform used for the Dark Knight-Facebook viewing and ecommerce app. Development of such projects can take as little as three days, though in this case, The Dark Knight app took 30 days to develop.

While it’s a solid first step — the user interface is simple and responsive — it also raises several thorny issues. Once the whole trend of Facebook movie streaming takes off, and I firmly believe it will eventually, there’s the issue of fragmentation. Will users be forced to seek out movie fan pages to watch that particular flick? How will they know when a particular new movie becomes available for viewing?

A content streaming hub will become vital as more studios bring content over to the social network, not only to aggregate and highlight content in one central location, but also to update users. Of course, in doing so, it brings Facebook one step closer to being even more integral to your daily life, which, if you’re Mark Zuckerberg, is a good thing.

Will Social Media Change the Insurance Industry?

by Gloria Vogel
In recent weeks we have all observed the power of new social media to facilitate change. From protests in Egypt to current clashes in Libya, the power of new media is now readily apparent. So the question to ask is whether or not the insurance industry is ready for these newer forms of social communication? How will social media transform the insurance industry?

While social media itself is undergoing rapid change, current attention has focused on Facebook, Twitter, Youtube, and LinkedIn as the leaders in the field. In a quick check of major insurers, many firms have already established a presence on those sites, primarily to distribute announcements from press releases and provide some background description of their firms, or to facilitate recruiting. Traders, employees, and others have made some comments on those company pages. But, the insurance industry has not yet effectively used social media to market its products, to handle claims, or to better communicate with and engage its customers and employees.

Insurers do not readily embrace change, so the slow response to date is not a surprise. But social media is quickly evolving and it has the potential to significantly alter the way insurance business is conducted in the areas of marketing, underwriting, and claims.

What if the industry shifted more of its marketing to social media?

Insurers typically market products through independent or captive agents, brokers, or directly to consumers. Most direct marketing is done via standard postal mail or phone solicitations, with some Internet commerce. The roadblocks to quick adoption of social media in insurance marketing concern the notion that the brokers/agents currently control the business and maintain the customer relationships; that the products are too complex to be readily saleable in a social media format; and that the open communication associated with social media does not effectively protect privacy. Moreover, many agents/brokers view social media as a threat that could eliminate their middleman status, and this could hinder progress in industry adoption.

However, marketing costs account for significant charges to first year sales, especially for life insurance products. If expenses could be brought down, then insurers could reap additional profits from those sales. The cost of maintaining an agency force is high, while the direct cost associated with social media is significantly lower. In a marketplace that demands efficiency, that difference in cost could be meaningful.

To date, most consumers use the Internet to learn about products and to scout out companies, and then seek the advice of agents/brokers to actually purchase their policies. This is especially true for more complex life insurance products or commercial casualty coverages, rather than for straightforward standard auto insurance policies. However, with social media, consumers can receive rapid response to their questions, buyers can quickly make price comparisons between companies, and consumers can get immediate feedback from existing policyholders concerning levels of satisfaction. As such, social media has the potential to transform insurance marketing into new cost structures and methods for product distribution. Notably, with social media, consumers will be more likely to purchase a policy if someone they know recommends it, rather than receiving the recommendation from a cold calling insurance representative, so the need to satisfy consumers will become paramount. With younger generations reliant upon social media as their favored form of communication, the future will most likely include more direct selling to end-user customers via these new distribution methods.

The critical elements that social media would appear to offer include: speed of response (text messaging), trust of provider (recommendation by friends), open communication (opinion of existing policyholders), and ease of sale completion (via smartphone apps). The benefits would be savings in time and cost. Some insurers would be expected to have business models that allow for this kind of dramatic change, while others will naturally be slow to adopt.

Application of social media to other insurance functions

Underwriting also has potential to benefit from use of social media. Social media enables underwriters to learn more about their policyholders than ever before, leading to better pricing and better policing of claims. Just as recruiters currently check social media to learn about unsavory habits of applicants, underwriters could learn more about their customers from social media. Community relationships and sharing of knowledge could also help solve problems associated with risk assessment, especially with respect to global issues of climate or other environmental threats, pandemics, emerging risks, etc.

The web already allows consumers to download claim forms and file claims electronically. Social media combined with new smartphone apps could enable claimants to file claims immediately after an event. Photos could be taken on the spot and claims submitted quickly. Payments could be credited directly to an account for immediate use by the claimant. Social media could also serve as a good tool for fraud detection.

The biggest potential drawback in using social media for insurance transactions involves the issues of privacy, risk, and control. Policyholders don’t want their individual information to be widely distributed. Also, companies don’t want to have negative comments posted on their social media pages about their poor claims processing or competitively more expensive products, so reputational risk is likely higher with use of social media. Nonetheless, change is constant, and it is only a matter of time until the insurance industry begins to use social media as a tool to more effectively conduct business. Cost pressures and focus on younger consumers will force its eventual adoption.