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When Eldar’s bombshell about Microsoft Nokia Windows Phone talks came online, at about 4AM here, I was about to go to sleep.Well, after reading his op-ed all the sleep was gone.

Still shaking my head and almost refusing to believe this was happening, I went on and shared it here on UV. In a rather emotional way

Now that I had some time to sleep on it and ponder what might be happening if these news about Nokia Microsoft alliance are true, I think it might not be as bad as it seemed at first glance.

So here are some random thoughts about this possible Microsoft/Nokia Windows Phone 7 deal, in no particular order.

It’s not a short term project. Even if Windows Phone OS is much easier to port to the phone hardware then Symbian or Android, it takes some time. A smartphone is not a PC , and you can’t just slap a ready made OS on a standard component hardware and expect it to run out of the box. It will be at least 6 months after the deal is struck for the first Nokia Windows Phone 7 device to ship. And having spent 6 months of company time, a significant amount of money and resources getting new hardware to run the new Windows Phone 7 platform, Nokia will not stop making WP7 devices soon. Unless they completely fail in the market. Which is unlikely – in it’s first iteration, Windows Phone 7 is a really good OS already, and by the time the first Nokia WP7 device ships, technically WP7 will be more or less on par with competing Android and iOS platforms. So we are looking at a full line of Nokia WP7 devices in the next few years.

Unless Nokia completely outsources the whole WP7 smartphone line to some ODM, and only provides minor tweaks, Nokia name and it’s distribution channels for the device. Which is a possibility – Nokia already tried exactly this approach with Microsoft Windows 7 on Booklet 3G. But that was testing a completely new, pretty hot market on the cheap with non-core product. The probability that Nokia will take the same approach for it’s core smartphone offering is pretty low for now. Though I must admit, just yesterday I considered the whole Nokia WP7 device idea simply ridiculous. So you never know what might happen

Nokia/WP7 device is not a strategic project for Nokia. It’s a tactical approach, solving Nokia’s immediate problems, most likely – the access to the U.S. market. With Windows Phone 7 devices and Microsoft backing, Nokia may finally get a foothold with the main U.S. carriers. And, with WP7 smartphones Nokia can start rebuilding it’s brand in the lucrative high-end U.S. smartphone market, where it was completely obliterated these last few years. Then, building on the success of Nokia WP7 devices, Nokia can start pushing their main Meego and Symbian offerings, when/if they are finally able to make them competitive to high end Android and iOS devices.

Nokia OVI services. Not sure how feasible it is for OVI to be ported to WP7 before the launch of first Nokia device, but if the cooperation is successful and continues, I think Microsoft and Nokia can find synergies here. App store will most likely stay with Microsoft, but OVI mail is already outsourced to Yahoo and with the dire straights Yahoo is currently in, migrating OVI mail to Hotmail platform may actually be a good idea. Bing Maps is currently the weakest part of Windows Phone 7, while OVI maps in many ways except local search is still superior to Google Maps. Allowing Nokia to take over maps&navigation will allow Microsoft concentrate on a much more strategic search&local stuff. Then there’s the whole possibility of porting Nokia’s QT to Windows Phone OS, which opens a bunch of new opportunities for them.

If Nokia Windows Phone 7 deal happens, Microsoft is a big winner here, gaining a new huge distribution channel for it’s new OS, that is not available to it’s main competitors – Android and iOS. I know that Microsoft is very strict and limiting on what it allows OEM’s to do with it’s WP7 OS. But getting the worlds #1 smartphone vendor on-board, might be enough of an enticement for Microsoft to relax it’s OEM requirements and allow Nokia’s WP7 devices to stand out from the crowd.

Nokia is definitely having big problems with developing it’s core Symbian/Meego/QT software platforms. Buggy software, huge delays, restructurings, layoffs, etc; are probably only the surface things that we are able to see. But I do not think that these problems are the main reason for the rumored deal. As I said before – I don’t expect first Nokia WP7 device to ship before late summer or fall. And it’s really hard to believe that Nokia will not have it’s first Meego device and significantly updated Symbian devices shipping by then.

Looks like Stephen Elop is really in charge at Nokia. When he took over as CEO, many observers wondered whether he will be able to accomplish much. With unique Finnish Culture, consensus based decision making, entrenched bureaucracies and power groups with direct ties to a largely Finnish board, Nokia is indeed very hard to turn around even for a person in CEO position. There were some signs that the new CEO is already strongly in charge when Nokia announced it’s new streamlined “All QT”strategy. At that reorg one power group that was pushing the next generation Orbit UI Framework and hampering the progress of QT was slapped down hard, and Orbit cancelled, most likely at the insistence of the new management. Now, if Microsoft Nokia deal happens – we won’t have to wonder anymore. It’s such a radical departure from previous Nokia path, it will be obvious that at least for next year or two, Elop has strong support of the board and the power to remake the company as he deems necessary.

Well, now that I had time to think about it and process my first impressions and knee jerk reaction, I’m starting to actually like this new Nokia/Microsoft development. Of course, the devil will be in the execution and they can always screw that up. It’s Nokia after all.

Still, things might be finally changing for the best under the new regime. I hope they really do

Ok Go Explains There Are Lots Of Ways To Make Money If You Can Get Fans

from the everything's-possible dept

Over the last few years, we've covered many of the moves by the band Ok Go -- to build up a fanbase often with the help of amazingly viral videos, ditch their major record label (EMI), and explore new business model opportunities. In the last few days, two different members of Ok Go explained a bit more of the band's thinking in two separate places, and both are worth reading. First up, we have Tim Nordwind, who did an interview with Hypebot, where he explained the band's general view on file sharing:

Obviously we'd love for anyone who has our music to buy a copy. But again, we're realistic enough to know that most music can be found online for free. And trying to block people's access to it isn't good for bands or music. If music is going to be free, then musicians will simply have to find alternative methods to make a living in the music business. People are spending money on music, but it's on the technology to play it. They spend hundreds of dollars on Ipods, but then fill it with 80 gigs of free music. That's ok, but it's just a different world now, and bands must learn to adjust.

Elsewhere in the interview, he talks about the importance of making fans happy and how the band realizes that there are lots of different ways to make money, rather than just selling music directly:

Our videos have opened up many more opportunities for us to make the things we want to make, and to chase our best and wildest ideas. Yes, we need to figure out how to make a living in a world where people don't buy music anymore. But really, we've been doing that for the last ten years. Things like licensing, touring, merch, and also now making videos through corporate sponsorship have all allowed us to keep the lights on and continue making music.

Separately, last Friday, Damian Kulash wrote a nice writeup in the Wall Street Journal all about how bands can, should and will make money going forward. In many ways the piece reminds me a bit of my future of music business models post from earlier this year -- and Kulash even uses many of the same examples in his article (Corey Smith, Amanda Palmer, Josh Freese, etc.). It's a really worthwhile read as well. He starts by pointing out that for a little over half a century, the record labels had the world convinced that the "music" industry really was just the "recorded music" industry:

For a decade, analysts have been hyperventilating about the demise of the music industry. But music isn't going away. We're just moving out of the brief period--a flash in history's pan--when an artist could expect to make a living selling records alone. Music is as old as humanity itself, and just as difficult to define. It's an ephemeral, temporal and subjective experience.

For several decades, though, from about World War II until sometime in the last 10 years, the recording industry managed to successfully and profitably pin it down to a stable, if circular, definition: Music was recordings of music. Records not only made it possible for musicians to connect with listeners anywhere, at any time, but offered a discrete package for commoditization. It was the perfect bottling of lightning: A powerful experience could be packaged in plastic and then bought and sold like any other commercial product.

But, he notes, that time is now gone, thanks in large part to the internet. But that doesn't mean the music business is in trouble. Just the business of selling recorded music. But there's lots of things musicians can sell. He highlights Corey Smith and Smith's ability to make millions by giving away his music for free, and then touring. But he also points out that touring isn't for everyone. He covers how corporate licensing has become a bigger and bigger opportunity for bands that are getting popular. While he doesn't highlight the specific economics of it, what he's really talking about is that if your band is big, you can sell your fan's attention -- which is something Ok Go has done successfully by getting corporate sponsorship of their videos. As he notes, the sponsors provide more money than the record labels with many fewer strings:

These days, money coming from a record label often comes with more embedded creative restrictions than the marketing dollars of other industries. A record label typically measures success in number of records sold. Outside sponsors, by contrast, tend to take a broader view of success. The measuring stick could be mentions in the press, traffic to a website, email addresses collected or views of online videos. Artists have meaningful, direct, and emotional access to our fans, and at a time when capturing the public's attention is increasingly difficult for the army of competing marketers, that access is a big asset.

...

Now when we need funding for a large project, we look for a sponsor. A couple weeks ago, my band held an eight-mile musical street parade through Los Angeles, courtesy of Range Rover. They brought no cars, signage or branding; they just asked that we credit them in the documentation of it. A few weeks earlier, we released a music video made in partnership with Samsung, and in February, one was underwritten by State Farm.

We had complete creative control in the productions. At the end of each clip we thanked the company involved, and genuinely, because we truly are thankful. We got the money we needed to make what we want, our fans enjoyed our videos for free, and our corporate Medicis got what their marketing departments were after: millions of eyes and goodwill from our fans. While most bands struggle to wrestle modest video budgets from labels that see videos as loss leaders, ours wind up making us a profit.

Of course, that only works if you have a big enough fanbase, but that doesn't mean there aren't things that less well known bands can use to make money as well. He talks about an up-and-coming band in LA that doesn't even have a manager that was able make money:

The unsigned and unmanaged Los Angeles band Killola toured last summer and offered deluxe USB packages that included full albums, live recordings and access to two future private online concerts for $40 per piece. Killola grossed $18,000 and wound up in the black for their tour. Mr. Donnelly says, "I can't imagine they'll be ordering their yacht anytime soon, but traditionally bands at that point in their careers aren't even breaking even on tour."

The point, Kulash, notes, is that there's a lot of things a band can sell, focusing on "selling themselves." And, the thing he doesn't mention is that, when you're focusing on selling the overall experience that is "you" as a musician or a band, it's something that can't be freely copied. People can copy the music all they want, but they can't copy you. "You" are a scarce good that can't be "pirated." That's exactly what more and more musicians are figuring out these days, and it's helping to make many more artists profitable. And, no, it doesn't mean that any artist can make money. But it certainly looks like any artist that understands this can do a hell of a lot better than they would have otherwise, if they just relied on the old way of making money in the music business.

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Thursday, December 23, 2010

Online Money Making Opportunities

Ok Go Explains There Are Lots Of Ways To Make Money If You Can Get Fans

from the everything's-possible dept

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