Only slightly bent

I’ve recently begun studying the world of advertising in some detail, and contrary to what one might think, it’s a fascinating subject (then again, I find every other subject fascinating so YMMV). And the more I get into it, the more I feel like a paradox studying advertising. Why’s that? Because I don’t “do” ads, and actually go to great lengths to avoid them:

• I have a “No ads, please” sign on my mailbox, saving me from having to wade through the ton of the printed ad material I would otherwise get and from carrying all that paper to the recycling point every year. I probably save a tree or two in the process also.
• I don’t have a TV, so no television spots reach me. With whatever television shows I watch, I remove/skip ads one way or another.
• I employ the best ad-blockers around on my browser to save me from at least 99% of Internet advertisements.
• I don’t listen to the radio, thus saving myself from all radio ads

In essence, the only ads I’m exposed to are newspaper ads, outdoor ads and the ones shown before a movie at a theater.

Yet, I use and love services like Google and many other ad-supported Internet services. In essence, that makes me a freeloader. If everyone in the Internet did what I did, a lot of the free stuff that’s around just wouldn’t be possible. So shame on me, right?

Well, no. At least I won’t be the one to take that attitude So why am I doing all this to block advertisements? There’s one very simple reason that I think justifies it all – most ads suck and are of no value to me. I am happy to receive and pay attention to either smart, good advertisements or targeted advertisements on travel deals and other stuff that I actually care about. For one, I like the Amazon recommendation system.

What I don’t want is to be barraged with low-budget, idiotic, condescending, undistinguished, dishonest, unintellectual, irrelevant, boring, misleading and plain stupid ads – features which too many ads around here exhibit. So I blame the advertisers for not targeting me well enough, instead assuming the same $hit goes down well for all of us. I’ve got news for you: it doesn’t.

It’s a well-known fact that things are expensive in Finland. From food to clothes to cars, we pay extensive premiums on the goods we buy. Just looking at EU-wide price tags that are now common in clothes, the price for Finland is always the most expensive one, save for Norway occasionally topping us. But I had no idea about the ludicrous extra charges tacked on immaterial goods for the privilege of having them delivered to Finland..

I wanted to get an upgrade to my Adobe Acrobat software, so the natural point to start is the Adobe webpage and their webstore. Despite their somewhat slowly working site, I quickly located the product, full with upgrade options and all. There is also an option to download it off the net. Not only is it convenient, but means that delivery costs this way are identical to everywhere in the world – and, thus, the price also would be identical. Or so one would like to think.

Not so. From their Finnish web store I’d have to pay 228eur for the upgrade download. From the US store, I get a download or a box shipped to me for $159 – that’s about 123eur, over a hundred euros less than from the Finnish store!! So by having a US address one would get an immediate discount of 46%. Plus the address, of course, isn’t even used for anything if you’re downloading the product…

I completely fail to see the logic of this pricing. Why are Finns always double-punished with a) prices of everything being higher here AND b) the usable income being lower? It’s nuts and unfair and unlike when shipping fresh fruit from halfway across the world, in this case there is zero logical reasoning for it.

If someone is wondering why their product XYZ is not selling well in Finland, try taking a look at your pricing. Then compare it to the purchasing power here and do some elementary math.

Continuing the theme from the previous post somewhat, let’s take a quick look into one aspect of the future of television: downloadable episodes. In this post, I consider just the financial side of things; on the technological side, it has been semi-proven that widescale deployment of IP-TV / VoD services is not possible without P2P distribution – something that adds an interesting twist to the delivery side, but more about that later.

Let’s assume that in the future, even more so than now, people want to see their favorite TV episodes wherever, whenever, so on-demand delivery over the Internet of all their broadcast content is made possible by the TV companies. The question is: how much should an episode cost? Nothing? A buck apiece?

To answer that, we need to take a look at how much money is currently being made by the TV companies by advertising.

A 30-second spot goes for around half a million dollars in most popular TV series. As there are 18 minutes of ads per one hour of programming, we can assume the broadcasters take in about 9 million dollars per hour per channel. Not bad. When you divide that by the viewership – say 22 million, which was the season average for Desperate Housewives – you get a per-viewer advertising revenue of about 40 cents.

People don’t exactly love ads, right? So if you wanted to offer those episodes for online download without any ads, a price like 50 cents apiece would cover not only the loss from advertising revenue but also cover the hardware and connectivity costs. 50 cents per episode is something that a consumer might well be willing to pay to be able watch an episode online while being saved from ads altogether.

On the other hand, it’s been shown that consumers prefer free ad-supported online video to paid ad-free content – which brings about an amazing opportunity as video ads online can be targeted far, far better than on broadcast television, making ads much more valuable both to advertisers and to the consumers. As recording episodes and skipping ads on broadcast TV is already trivial with the TiVos of the world, the episode that is placed for download can be completely DRM- and usage restriction-free; just require registration and create a personalized episode for users based on their profile. Plus people would certainly be no less willing to watch ads that are more relevant to them.

It’s such a clear-cut win-win case that it’s difficult to understand why it’s not being adopted. We need to get rid of the DRM-infested, low-quality content that is offered now and offer consumers high-quality (even offering HDTV-quality episodes, something relatively few people around the world can receive otherwise), freely downloadable episodes created on-the-fly with personalized advertising.

It’d be beautiful. I mean everybody wins, so what could go wrong? I welcome any credible refutations to this business model so it could be developed further.

Now, we all know that broadcast TV is dead or dying, right? No? Well for the sake of argument, let’s assume it is – for me personally, it’s been dead for years as I haven’t owned a TV in quite a while. Contrary to what one might think, that fact doesn’t prevent watching movies or TV series – quite the contrary. It delivers me from having to face the world of force-fed, crappy, unpersonalized and generally useless advertisements that tend to dominate the airways these days.

Amazingly, people often get this puzzled expression when they hear I don’t own a TV – a question that usually follows is “So what do you do then?” Invariably I’m like “ehh, excuse me?” as I just don’t get the question. As if there is nothing else in the world to do than watch TV. Instead, what I find amazing is where these people find the time to watch television as much as they do, almost 3 hours a day on average in Finland.

Anyway, the future of TV is on-demand or time-shifted; the line between the two is one drawn in water. What comes to consumption, the number one problem with video on demand is the vast amount of content – there is too much to choose from. People are inherently lazy and they rarely really know what they want – usually it’s just something that is just “good enough” to keep one entertained for a while – so the act of selection becomes too difficult from the vast ocean of media. Cutting down the selection is one area where broadcast excels, as you have to choose from one of the ongoing programs. We all know youtube.com and BitTorrent and other P2P services and what you can do with those. The best content I usually see on YouTube comes via friends’ recommendations. The salvation of VoD would be personalized recommendations done right.

You may wonder what this has to do with anything. The thing is that I recently discovered the Brightcove catalog. I’m planning on sifting through that to find the personally interesting content around and then place it on a dedicated page for others to enjoy also; hopefully that and similar services allow me to create some kind of a personal, automatically updated online video vault. Of course, the video quality (i.e. image quality) on the Internet still leaves a lot to be desired, but it’s constantly improving. Like my personal vault, it’ll hopefully get there eventually.

Meanwhile, enjoy the Sony BMG Top music videos thing below:

Winter is here

It’s somewhat unusual these days for the southern Finland to get any kind of permanent snow this early in the year – but this year we got snow a few days ago and some of it is still hanging around with more promised over the weekend. It’s very unlikely that this snow will last the entire winter, but so far I like it. Makes things a bit lighter; every spring one realizes that the worst thing about the winter is not that it’s cold, but that it’s dark. With the sun setting around 4pm now, there’s precious little daylight left in the following few months – so any additional light, virtual or not, is more than welcome.

Are they lazy or just incompetent?

How difficult can it be to add a simple DNS entry so that address.com would also work in addition to www.address.com? I mean who needs the www there anyway? Nobody, that’s who. In Finland, Posti has got theirs working, but annoyingly many companies haven’t – try accessing the Bank of Finland via bof.fi and you get nowhere. www.bof.fi, on the other hand, works fine. Webmasters, get your site’s basic accessability in shape!

“3G services” taking off in Finland?

A couple of days ago, Elisa was bragging on the “incredible rise” in use of 3G services. The irony of the situation is not in the service usage numbers themselves (which, quite frankly, are not all that impressive), but the fact that the “3G services” Matti Vikkula quoted as being the most popular are not 3G services at all! Do services like e-mail, news, weather, maps and all that sound familiar to anyone? Perhaps we’ve seen them in the Internet? TV was the only quoted service that can be considered a “3G service” in any way – and even that’s a stretch.

I think operators and others working in the industry should take a closer look at the Telco 2.0 Manifesto.

Last week, on the evening with the first fall storm entering Finland, we visited Ravintola Nokka. Most renowned for the emphasis they place on organically and locally (locally as in Finland) grown quality ingredients, I’ve always liked their philosophy but never got around to eating there before now.

Nokka is located in an old, renovated warehouse facing a harbor – the setting is quite romantic and rich in atmosphere with thick red brick walls and heavy wooden support pillars. On the outside, the entrance is “decorated” with a giant steel propeller. The picture on the right here taken during the summer, but IMO the atmosphere of the place works best during winter as the dimly lit dining room is perfect for a candlelight dinner.

To start with, we took the house appertizers that consisted of calvados, black currant liqueur and cranberry juice – it served as a good starting point by being cool and fresh and not too strong. Together with the excellent house bread it served as a good “pre-starter”. As on this occasion it was a stormy and chilly weather outside, we decided to start with a warm soup; the Crayfish Soup seasoned with Champagne served with Cold Smoked Salmon Tartar (12eur) was poured elegantly over the salmon tartar at the table. The strong-tasting salmon tartar complemented perfectly the more tame but wonderfully creamy soup. There are few things that warm you up better on a cold night than a hot, full-flavored soup.

For the main courses, I wasn’t feeling too adventurous and went with what felt like a safe choice – Pork Sirloin from Paija farm with Beef Fillet Mignon (28eur). The beef was exquisite and perfectly cooked (without asking me how I wanted it cooked) – the pork was perhaps a little bit on the dry side, but still one of the better porks I’ve tasted. Sarita on the other hand had Braised Reindeer Knuckle with Game Stock served with Turnips (30eur) and she really loved the succulent meat with strong game taste. As neither of us are (yet?) big fans of red wine, we chose a white wine for the meal despite it being heavy on meat. Because of this, we went with Mas de Carol, aged in charred oak barrels – having a bit stronger taste helped it complement the food well, even with part of it being strong game meat.

With dessert, we both went with Apple flamed with Calvados served with Cinnamon scented Ice Cream (12eur) that rounded up the fine meal perfectly. A simple dish that brought out the natural apple taste – the cinnamon ice cream was also quite gently “cinnamonized” which was good.

Overall a near-perfect dinner with excellent food and a great atmosphere and setting – while not cheap, the price/quality ratio was right on. The service was efficient and discreet from start to finish – highlighting Nokka’s dedication to their local suppliers, each dish came with a short story on where the ingredients came from and what they were; while some may feel that’s information one doesn’t need to know,I considered it interesting and a nice touch. 5- out of 5.

Sorry for the lack of photos from the inside – the low-light atmosphere made taking good-quality photos impossible without attracting too much attention with tripods and all.