broadstuff

The above chart is my analysis of data from the ITIF and shows the broadband speeds of various countries against the services you can obtain at that speed. As you can see, the UK is hardly a stellar performer at a mean speed of 2.6 Mb/s - and now comes evidence that it ain't even that good..

The deplorable speed of British broadband connections has been revealed in the the latest figures from the Office of National Statistics, which show that 42.3% of broadband connections are slower than 2Mb/sec.

As far back as last year, telecoms regulator Ofcom was claiming "the average headline speed has doubled in a year to reach 4.6Mb/sec".

However, the ONS figures suggest that average is being heavily weighted by a small proportion of truly high-speed connections, such as the 24Mb/sec ADSL2+ broadband offered by ISPs with Local Loop Unbundled services.

More worryingly, the ONS statistics are based on the connection's headline speed, not actual throughput. That means that many more British broadband connections could well dip below the 2Mb/sec barrier when it comes to actual speeds.

We do argue internally as to bandwidth required for SDTV (Standard Definition TV) my view is for a contended line you want 3.5 - 4Mb for a PAL level of quality (Video and US NTSC and levels are lower, c 1.5 - 2.5 Mbps in my view). I have noticed my connection - ostensibly 8Mb/sec - has very seldom got above 1 Mb/sec over the last few weeks. It makes using video quite an issue, and even rich media websites are a pain in the *rse.

The worrying thing for the UK is that video media is one thing we're rather good at - but if we are competing on cart tracks while others have autobahns, we will be left behind.

Bunch of interesting posts on Techmeme today with respect to startup funding, and a few comments:

VC's not wanting to put more money into areas they funded but perceive as now doomed, as reported on ExpertCEO, a new anonymous online community cum Exec agony aunt :

The first post: We are a Series A funded company with tranched financing based in a milestone. The investors want to shut down the company and not provide the second tranche even though the milestone has been met!! They simply do not want to invest in the consumer segment in this economic environment. . .

The second: I am on the board of a company that had signed term sheets from Tier 1 VC's, had one VC back out after the term sheet was signed and then after all the final docs were drawn and signed, had another Tier 1 VC say they want to do more diligence at the very last minute. Has anyone else had experiences like this?

Its a sad fact of life, but its now far better for VC's to hold onto cash to invest in newer businesses once the current situation becomes clearer, rather than put more into companies formed pre-paradigm shift (and to be fair, they have upstream funders reneging as well). It happened in 2001, so expect more of the same, methinks. Big difference this time is they will be named and shamed on these various anonymous sites, which will be an interesting dynamic.

And of course what they really really want are safe bets, as Don Dodge notes:

VCs are still investing but only in high quality companies, with proven revenue models, focused on a growing market segment.

In 2001, biscuit companies were the rage . And if you have an Ad funded Biz model, beware...:

Startups with advertising driven revenue models are being pressed to prove the numbers, show comparables, and really drill down on CPM rates and CPC click through rates. The reality is that there are very few web sites or services that can build a large enough audience to generate $1M in monthly advertising revenues. CPM rates are falling across the board, especially in the social networking area.

Which is picked up on another post there, about traffic on SocNets going up while Ad revenues "fall flat".

As an aside, Techmeme reports that Mapquest (remember them) is firing on all cylinders!

Despite perceptions, MapQuest is actually a more popular mapping destination than Google or Yahoo’s map sites, and the company continues to innovate and push out new features and services

Strewth, I thought they were dead! I stopped using them because they didn't put Tube stations on London maps which makes their maps effectively useless. Just looked again, they still don't - few more cylinders clearly needed on the old 2-stroke methinks.

McKinsey on the growth of the Data Crunching Web and its energy impact:

Companies are performing more complex analyses, customers are demanding real-time access to accounts, and employees are finding new, technology-intensive ways to collaborate. As a result, demand for computing, storage, and networking capacity continues to increase even as the economy slows. To cope, IT departments are adding more computing resources, with the number of servers in data centers in the United States growing by about 10 percent a year. At the same time, the number of data centers is rising even more swiftly in emerging markets such as China and India, where organizations are becoming more complex and automating more operations and where, increasingly, outsourced data operations are located. This inexorable demand for computing resources has led to the steady rise of data center capacity worldwide. The growth shows no sign of ending soon, and typically it only moderates during economic down cycles.

And as they show, the power consumption will be no small contributing factor to the Greenstrain on the planet:



Solution - First address the wastage:

Within one media company, almost a third of the nearly 500 servers we analyzed had utilization rates below 3 percent, and nearly two-thirds were below 10 percent. This company used none of the number of readily available management tools for tracking use. On a global basis, we estimate daily server utilization generally tops out at 5 to 10 percent, wasting both energy and employed capital.

Second, forget about the need for New Green Centres, just sort out what you have first:

When we began our research, we expected to find that building new energy-efficient data centers would offer the best hope of reducing their cost and carbon footprint. New facilities could take advantage of current technologies that make use of natural cooling and of power supplies that produce fewer emissions. However, we also learned that the most dramatic reductions in cost and carbon emissions come from improving the low efficiency of data centers that companies already operate. Through better management of assets, more accountable management, and setting clear goals for reducing energy costs and carbon emissions, most companies can double IT energy efficiency by 2012 and halt the growth of their data centers’ greenhouse gas emissions. Indeed, the greenest data center is the one that you don’t have to build.

Thirdly, stop drinking the Freeconomic Kool Aid and stop lying to yourself about "Data being too cheap to meter"

In many organizations, data centers are treated as buckets waiting to be filled, rather than as scarce and expensive resources. To combat this tendency, companies can adopt true cost of ownership (TCO) accounting when estimating costs for new servers or additional applications and data. Lifetime costs of running applications and operating servers are rarely included in spending decisions by business units, software developers, or IT managers. Building them in upfront can help limit excess demand.

Finally, give the problem and its management to someone who has an overarching view.....

We suggest a new governance model for managing data center needs, with full responsibility and accountability falling to the CIO. Under such a regime, the CIO would have much greater visibility into the data demands of business units and could enforce requirements that energy consumption and facilities costs figure into return-on-investment calculations for new data projects requiring additional servers or software applications. We also suggest that CIOs employ a new metric for measuring progress. With sharpened accountability, the CIO will have greater incentive to seek improvements, such as virtualization and better use of existing facilities.

...because if you leave it to "empowered individuals" they will suboptimise, f*cking up the companies profits and the planet at the same time:

Frequently, managers purchase excess devices to guarantee capacity in the most extreme usage scenarios, creating large amounts of excess capacity. And managers often build facilities with excess floor space and high cooling capacity to meet extreme demands or all expansion contingencies.

Multiplied across an organization, these decisions result in both costs and environmental implications.....Within the organization, managers optimize for their own interests, resulting in the inefficiency observed in most data centers. In many instances, only a single software application runs on a server.

Thats puts the kibosh on a lot of Enterprise 2.0 dreams then, which rely on departmental subversion - nixed cos it ain't Green .

I note that McKinsey did not cloud the issue with Cloud computing either, using the term "virtualisation" which I prefer - because that is really all you are trying to do in creating efficiency - how yu do it is tactics, and it clarifies the issues. In fact, McKisey is suggesting there is a long way to go for exsting companies before they need to consider any form of outsourcing at all

Blockbuster is handing out Set Top Boxes (STBs) ....sez Engadget:

For a "limited time," the outfit will offer the 2Wire-built MediaPoint player for free with the "advance rental of 25 first-run movies, TV shows, foreign or classic films from Blockbuster On-Demand (previously Movielink) for $99." After that, rentals are $1.99 apiece, and a Blockbuster subscription is not required. The unit itself measures 8- x 8- x 1-inch and includes two USB ports, an SD slot, Ethernet / WiFi and an HDMI port, and it should be available at the company's website and in select retail stores very soon.

Ie Box $99 with 25 movies thrown in. The issue they face is that STBs have friction - it usually costs c $99 to supply one (equipment, logistics, transaction etc etc) compared to an Over the Top internet play, and most people already have one (or even two, plus a games console) so yet another is the last thing they want.

Its clearly an attempt to combat Netflix, who have gone for a multiple distribution channel approach, and no doubt is the fastest and easiest play. But in our view, Blockbuster would have been better off with a software player solution like BBC iPlayer and selling a black box to allow people to connect PCs to TVs. Lower cost, lower friction and with Blockbuster's better content portfolio a much smoother play, plus it takes a free ride over existing infrastructure.

There are Lies, Damn Lies, Statistics....and New Media Forecasts. Latest downgrade is to e-Marketer's Online Ads forecast, hot on the heels of its last downgrade just 3 months ago:

In revisions made Tuesday, eMarketer estimates U.S. advertisers will spend $25.7 billion on the Internet next year — about $2.7 billion, or 10 percent less, than a forecast from just three months ago.

The more sobering projections extend through 2012 when eMarketer envisions $37 billion being spent on U.S. online ads. That figure represents a drop of $13 billion, or 26 percent, from the 2012 estimates that eMarketer drew up in August.

Kudos to e-Marketer for shifting their position in a timely fashion, but we see a common pattern in these sort of forecasts (Online Advertising and Anything Mobile are about the worst) - absurd optimism in the early days, followed by downgrades (usually in the year later refresher report, which move the hockey stick down a bit). Its been clearer this time round as events have overtaken the annual "hide the forecast" tradition.

In a related issue, Banner Ads are under pressure - they have suffered from the classic "I know 1/2 of my advertising is working, but I don't know which half" issue, as Adweek notes:

Yet, as digital ad spending swelled by more than 20 percent over the past couple of years and many traditional brands started doing significant business online for the first time, few fretted over how to best measure the brand impact of display ads beyond the occasional Dynamic Logic survey. Now, the heat is on for many publishers, who are seeing campaigns that appear on their sites getting compared to easy-to-evaluate direct-response efforts.

“It’s really the question of brand versus direct response,” said Vivek Shah, group digital president at Time Inc., who recently characterized display advertising as being “under assault.” Said Shah: “In times like this, the balance can tilt towards direct. That’s a challenge for traditional content sites that rely on display ads.”

But that last comment is why I don't think banners will die just yet - Adwords just doesn't get the brand message out there.

It is a dearly held wish in Webland that the TV dies as a media, and all that attention (and resulting Ad dollars) flow into the online economy. Well, don't hold your breath, TV is doing just fine. While we were researching for our work on the Future of Online Video we found that TV viewing had hardly declined at all due to net usage in recent years, and formal confirmation of this comes from a Nielsen report today (reported today on Wired):

As of third quarter 2008, the average person in the U.S. watched approximately 142 hours of TV in one month [up 5 hours on a year ago]. In addition, people who used the Internet were online 27 hours a month, and people who used a mobile phone spent 3 hours a month watching mobile video. Furthermore, the average time a U.S. home used a TV set during the 2007-08 television season was up to 8 hours and 18 minutes per day, a record high since Nielsen started measuring television in the 1950’s

So - 3 / 27 / 142 hours, and assuming the customer value to be roughly equal that equates to roughly 2%, 15%, 83% of attention. Given that US online advertising is close to that (or not, e-Marketer again slashing its 3 months ago slashed estimate another 1/3rd a week ago) its not got far to grow.

However, as well as watching more TV, people are also using the Internet more often – 31% of which is happening simultaneously. I await combined TV/Laptop ads with eager anticipation.

Other key facts from the report include:

- Americans spend more than 6 hours per month watching timeshifted TV, which is more than double the amount of time they watch video online.

- Men are more likely than women to watch video on mobile phones, while women are more likely then men to watch video on the Internet.

- During the third quarter, there was no shortage of online video content with events including the Olympics, Major League baseball games, the political conventions and debates, and the financial crisis. Online video use grew steadily through the quarter.

TV remains the dominant choice for most Americans, yet timeshifting as well as videos on the Internet and on mobile phones, continue to be the trends to watch.

Michael Lewis, who has tweaked Silicon Valley a few times (the New New Thing, Next - The Future just happened) has written an essay on portfolio.com about the impact of privatisation on the banking system (from partners to shareholders) in the 1980's, the resultant Crash then, and how the game theory was distorted from then on. And as he notes, we remembered nothing from then, and were thus doomed to repeat it:

I thought I was writing a period piece about the 1980s in America. Not for a moment did I suspect that the financial 1980s would last two full decades longer or that the difference in degree between Wall Street and ordinary life would swell into a difference in kind. I expected readers of the future to be outraged that back in 1986, the C.E.O. of Salomon Brothers, John Gutfreund, was paid $3.1 million; I expected them to gape in horror when I reported that one of our traders, Howie Rubin, had moved to Merrill Lynch, where he lost $250 million; I assumed they’d be shocked to learn that a Wall Street C.E.O. had only the vaguest idea of the risks his traders were running. What I didn’t expect was that any future reader would look on my experience and say, “How quaint.”

His analysis of the current situation is more chilling - first, this cycle's Enron Moment:

Meredith Whitney with news. Whitney was an obscure analyst of financial firms for Oppenheimer Securities who, on October 31, 2007, ceased to be obscure. On that day, she predicted that Citigroup had so mismanaged its affairs that it would need to slash its dividend or go bust. It’s never entirely clear on any given day what causes what in the stock market, but it was pretty obvious that on October 31, Meredith Whitney caused the market in financial stocks to crash. By the end of the trading day, a woman whom basically no one had ever heard of had shaved $369 billion off the value of financial firms in the market. Four days later, Citigroup’s C.E.O., Chuck Prince, resigned. In January, Citigroup slashed its dividend.

From that moment, Whitney became E.F. Hutton: When she spoke, people listened. Her message was clear. If you want to know what these Wall Street firms are really worth, take a hard look at the crappy assets they bought with huge sums of ­borrowed money, and imagine what they’d fetch in a fire sale. The vast assemblages of highly paid people inside the firms were essentially worth nothing. For better than a year now, Whitney has responded to the claims by bankers and brokers that they had put their problems behind them with this write-down or that capital raise with a claim of her own: You’re wrong. You’re still not facing up to how badly you have mismanaged your business.

And then most damning of all, the way the structure of the banks virtually guarantees misbehaviour as Greedonomics comes to the fore:

John Gutfreund did violence to the Wall Street social order—and got himself dubbed the King of Wall Street—when he turned Salomon Brothers from a private partnership into Wall Street’s first public corporation. He ignored the outrage of Salomon’s retired partners. (“I was disgusted by his materialism,” William Salomon, the son of the firm’s founder, who had made Gutfreund C.E.O. only after he’d promised never to sell the firm, had told me.) He lifted a giant middle finger at the moral disapproval of his fellow Wall Street C.E.O.’s. And he seized the day. He and the other partners not only made a quick killing; they transferred the ultimate financial risk from themselves to their shareholders. It didn’t, in the end, make a great deal of sense for the shareholders. (A share of Salomon Brothers purchased when I arrived on the trading floor, in 1986, at a then market price of $42, would be worth 2.26 shares of Citigroup today—market value: $27.) But it made fantastic sense for the investment bankers.

From that moment, though, the Wall Street firm became a black box. The shareholders who financed the risks had no real understanding of what the risk takers were doing, and as the risk-taking grew ever more complex, their understanding diminished. The moment Salomon Brothers demonstrated the potential gains to be had by the investment bank as public corporation, the psychological foundations of Wall Street shifted from trust to blind faith.

No investment bank owned by its employees would have levered itself 35 to 1 or bought and held $50 billion in mezzanine C.D.O.’s. I doubt any partnership would have sought to game the rating agencies or leap into bed with loan sharks or even allow mezzanine C.D.O.’s to be sold to its customers. The hoped-for short-term gain would not have justified the long-term hit.

So, as messrs Darling & Co tell us about our future and the US prepares to bail out Citibank (rather than clamp the executives in irons as they did for Enron) we would do well to think about how the structure has to be changed so it won't happen again. As he notes about Whitney:

This woman wasn’t saying that Wall Street bankers were corrupt. She was saying they were stupid. These people whose job it was to allocate capital apparently didn’t even know how to manage their own.

So Mr Darling & Mr Brown, before another £ of my taxes are put their way, I want regime change at the banks the money is going into!

Also, I know if this whole thing sinks our small company, we won't see any bailout money coming in. And yet oddly, if they were more prepared to tell us they'd bail us out from failures due to these bank-caused causes, we'd probably be more prepared to spend and thus boost the economy than anything they can do by any fiddling with VAT etc.

(Hat tip to Howard Lindzon for the link)

...or so it would seem from this list of the UK's Top 20 influential bloggers. After the top 7 or so (by and large BBC bred or fed, or ex BBC blogerati - which with their scale is not surprising) it seemed to start to go rather wrong to me (without going into the whose ins and outs, but I thought I could name at least 5 that are more influential / bigger trafficked / more quoted etc than some on this list ....TechCrunch UK for starters) so I looked at the method of calculation:

NowPublic examined statistics in each of these categories from Alexa, Compete, Facebook, Flickr, Google, Quantcast, Technorati, YouTube, and various other blogs and sites, to create a list of the United Kingdom’s most visible and connected individuals. It then narrowed the list to 20 by analyzing and documenting individuals’ presence and popularity in each of these channels, applying a weighted scoring system, determined by the strength of specific traits held in each online community.

And then doubled the score for anyone from the mainstream Meedja organs, it seemed to me

Sadly they didn't go into more detail - how do you rate a Techmeme appearance vs 1,000 Facebook friends for example? Clearly the science of understanding new media influence is in its infancy, in that respect its a very good start and a basis for discussion and argument (no doubt its aim ). But you do get the feeling that its skewed just a tad towards online columnists, despite the evidence that this sort of model's influence is fading - and wtf has putting holiday snaps on Flickr got to do with influence??

Maybe we need a Campaign for Real Blogs (to be sponsored by the namesake for Real Ale, natch)

(From the Broadstuff Bah humbug these grapes are all sour Dept )

Update - to the people who hit the 1 star rating - I'm sorry if my message is unpopular, but the influence algorithms these guys used were demonstrably very poor (hint - just check Alexa and Google links for the top blogs registered here against say TechCrunch UK, Guido Fawkes, or even our blog) and probably give the MSM a feeling of comfort that doesn't exist in reality.

To those who hit the 5 rating, the cheque is in the post

News today in Boomtown that the officially not happening talks about Facebook buying Twitter had broken down:

So why did the deal break down?

Well, as is usually the case, over price–was $500 million worth of Facebook stock actually worth $500 million?–and the typical concerns about integration and costs.

But, more important, it seems, was a feeling among Twitter investors and execs that the start-up should still take a shot at building its revenues–there are none right now–as well as it had done at building its growth.

Will this be Facebook's Google (Yahoo failed to buy Google early on and was eclipsed by its simpler content finding model). There is a parallel between the Facebook "SocNet Portal" and the Twitter "CommsNet"

Afterthought - how would Facebook handle the issue that many Twitterers use nom-de-plumes, whereas Facebook throws you off if you do (and are not famous enough to complain)

Update - VC Nic Brisbourne shows why at that valuation, for stock, a deal would have been hard.

From the FT this morning:

Once strange bedfellows, corporations and rock stars are increasingly acting as co-conspirators, cementing what used to be loose partnerships with lasting tie-ups that help maximise visibility and profit.

The trend has been boosted by the proliferation of television channels, independent film houses and internet "rich media" (with streaming graphics and sound), all of which are constantly on the hunt for unique music.

Not to mention market failure of the traditional ways for musicians to get paid!

Anyways, we put our analytical hats on and realised there wer a number of business models that can be applied here:

Firstly, direct sponsorship - why sponsor a concert when you can tie your brand to a band - Wrigley's Pink Floyd say, or the Colgate White Stripes. I mean, Queen's already done it.....

Secondly, branded song titles - imagine how much better the world could have been with such classics as "I can't get no Satisfaction (without a Camel), or maybe Welcome to the Hotel Hilton

And of course there is in song placement - one can imagine such immortal lyrics as:

- "Walk on the Tuff-Flo Carpet side"
- "Hello Nestle my old friend"

or even

- "Never going to give (insert your product here) up"

...and the opportunities for Rap are boundless

The joy of this latter model is that you can leave little spaces so whichever channel is playing the song can insert the brand of their choice into lyric - the Google Adwords model of Music advertising.