Tuesday, November 11, 2008
The downward spiral: marketing consumer tech on Guam
This Thursday we debut a new weekly segment on technology, written and hosted by my good friend John Davis. JD's quite the technophile and he's very excited to do it, so it's going to be great. I'm very excited for him and for the company and I can't wait to see what he's got cooking for giving people a glimpse into really using products, devices and services in their lives. The hypercompetitive, accelerated nature of the subject matter makes his a very challenging responsibility.
That said, I'm ascending my soap box here away from my employer to chime in with my own $0.02 on the state of consumer tech on Guam. It is, in a word and in my opinion, horrid.
When telecommunications really started taking off locally for home consumers - to be understood as the period following 2001, encapsulating Internet-based platforms requiring hardware products exclusive of the normative PC and modem - it opened up a whole new world of possibilities…and headaches. Let's consider several platforms that should be big-time moneymakers but have sadly been relegated to the ranks of loss-leaders:
Digital video recorders - MCV, following heavy investment and the injection of some mainland heavy-hitters on their executive team, had the vision to empower local audiences with time-shifted television programming. This, they hoped, would ride on Tivo's coattails and create new behavior patterns for enjoying shows. After more than three years, you wouldn't know such service is available on Guam. (To be fair, in today's world where iTunes and Hulu have rewritten the rules on watching TV and every major network has developed some sort of digital distribution model for their programming, the DVR's dominant days are well behind us.) Friends on the inside tell me that aside from a sizable number of freebie accounts used to demo the service, the paid subscriber pool is extremely shallow.
Digital TV - more recently DTV has been the Next Big Thing as we head towards system convergence next February and ultimately towards high-definition programming. Will HDTV really change the world if customers only see the purchase of a $1,700 set with an extra $90 every month on their cable bill during an economy under duress? Not likely. Again, I know lots of people that have been testing the respective DTV systems of MCV and GTA (including my parents, who by virtue of circuitous karma are running both), but I'm hard pressed to find six residents that have such service as paying customers.
Blackberrys - one of GTA TeleGuam's landmark moves in 2006 was introducing the island's first Blackberry service. Research in Motion's signature platform serves as the quintessential commodity exhibiting Metcalfe's Law - that the value of a network increases exponentially as nodes are added to it. That critical aspect was ignored in sales efforts and as such not impressed upon local consumers, who then drew their own conclusions, seeing the BB as just another high-priced mobile phone. The introduction of the former Guamcell as a BB distributor helped drive down pricing, but didn't ramp up proper promotion. The Blackberry's redeeming application, the proprietary Blackberry Messenger, now has less value with Google, Yahoo!, MSN and other third-parties releasing their own IM clients over a wide range of mobile OSes. And likewise less attractive these days is the BB's other cool feature, push e-mail, with services like MobileMe chipping away at its share. Oddly touted even less locally is the ability to surf the Web as it was meant to be accessed, with pages seamlessly displayed with HTML, CSS and JavaScript; not limited to feature-reduced WAP shells of their desktop equivalents.
User-generated content - at KUAM, we're certainly not innocent of having committed the sin of omission. When we revamped our user-generated content initiative, bridging our popular Familiar Faces and Citizen Correspondence platforms under a single umbrella, the established national YouNewsTV network, we were stoked to give people the chance to upload their own video and images. Sadly, it's been relegated to a handful of clips, coming from the States. And this didn't surprise me at all. I predicted us having a poor local response to our new product offering because of the fact that the requisite tools like video cameras either aren't affordably available out here, or the unwashed masses just aren't technically savvy enough. I knew that if we didn't help to put gear in people's hands and show them how to use it, we'd handicap our success.
iPods and iPhones are the rare exception, having achieved local presence mainly for the sexiness factor that accompanies anything Apple spits out these days, but driven no doubt by big-budget national marketing campaigns. Products like Slingbox and Chumby have never taken off, with only a scant handful of people locally using the former and no one I know of even being aware of the latter.
Giving out freebies, samples, comp accounts, etc. to the right people in positions of influence does grow a network. But local history tells us that the taste-test model when coupled with an ill-constructed marketing message can kill a potential customer base. The majority of those who would avail of services as paying customers already get it for free, so you've effectively enabled the marketing faux pas of cannibalization - achieving presence in people's homes, but without the critical subscription revenue.
Penetration-without-profit is a dangerous road to hoe.
The problem as I see it stems from a gross mispromotion not of technology itself, but of the applications of technology. Local companies are very good at creating awareness about a product…they just don't put forth an effective enough effort to let people know what they can do with it. No one's without guilt here - culpability lies with telecommunications interests, consumer stores and media companies (including my own).
It always comes down to hyping the sizzle rather than the steak. Don't naively create more buzz for the devices themselves, which in the grand scheme of things (and with Apple being the only exception) are largely inconsequential. Don't make the mistake of showing off the means to an end, when it's the end itself that deserves the limelight. Give away the razors to sell the razor blades.
That said, I'm ascending my soap box here away from my employer to chime in with my own $0.02 on the state of consumer tech on Guam. It is, in a word and in my opinion, horrid.
When telecommunications really started taking off locally for home consumers - to be understood as the period following 2001, encapsulating Internet-based platforms requiring hardware products exclusive of the normative PC and modem - it opened up a whole new world of possibilities…and headaches. Let's consider several platforms that should be big-time moneymakers but have sadly been relegated to the ranks of loss-leaders:
Digital video recorders - MCV, following heavy investment and the injection of some mainland heavy-hitters on their executive team, had the vision to empower local audiences with time-shifted television programming. This, they hoped, would ride on Tivo's coattails and create new behavior patterns for enjoying shows. After more than three years, you wouldn't know such service is available on Guam. (To be fair, in today's world where iTunes and Hulu have rewritten the rules on watching TV and every major network has developed some sort of digital distribution model for their programming, the DVR's dominant days are well behind us.) Friends on the inside tell me that aside from a sizable number of freebie accounts used to demo the service, the paid subscriber pool is extremely shallow.
Digital TV - more recently DTV has been the Next Big Thing as we head towards system convergence next February and ultimately towards high-definition programming. Will HDTV really change the world if customers only see the purchase of a $1,700 set with an extra $90 every month on their cable bill during an economy under duress? Not likely. Again, I know lots of people that have been testing the respective DTV systems of MCV and GTA (including my parents, who by virtue of circuitous karma are running both), but I'm hard pressed to find six residents that have such service as paying customers.
Blackberrys - one of GTA TeleGuam's landmark moves in 2006 was introducing the island's first Blackberry service. Research in Motion's signature platform serves as the quintessential commodity exhibiting Metcalfe's Law - that the value of a network increases exponentially as nodes are added to it. That critical aspect was ignored in sales efforts and as such not impressed upon local consumers, who then drew their own conclusions, seeing the BB as just another high-priced mobile phone. The introduction of the former Guamcell as a BB distributor helped drive down pricing, but didn't ramp up proper promotion. The Blackberry's redeeming application, the proprietary Blackberry Messenger, now has less value with Google, Yahoo!, MSN and other third-parties releasing their own IM clients over a wide range of mobile OSes. And likewise less attractive these days is the BB's other cool feature, push e-mail, with services like MobileMe chipping away at its share. Oddly touted even less locally is the ability to surf the Web as it was meant to be accessed, with pages seamlessly displayed with HTML, CSS and JavaScript; not limited to feature-reduced WAP shells of their desktop equivalents.
User-generated content - at KUAM, we're certainly not innocent of having committed the sin of omission. When we revamped our user-generated content initiative, bridging our popular Familiar Faces and Citizen Correspondence platforms under a single umbrella, the established national YouNewsTV network, we were stoked to give people the chance to upload their own video and images. Sadly, it's been relegated to a handful of clips, coming from the States. And this didn't surprise me at all. I predicted us having a poor local response to our new product offering because of the fact that the requisite tools like video cameras either aren't affordably available out here, or the unwashed masses just aren't technically savvy enough. I knew that if we didn't help to put gear in people's hands and show them how to use it, we'd handicap our success.
iPods and iPhones are the rare exception, having achieved local presence mainly for the sexiness factor that accompanies anything Apple spits out these days, but driven no doubt by big-budget national marketing campaigns. Products like Slingbox and Chumby have never taken off, with only a scant handful of people locally using the former and no one I know of even being aware of the latter.
Giving out freebies, samples, comp accounts, etc. to the right people in positions of influence does grow a network. But local history tells us that the taste-test model when coupled with an ill-constructed marketing message can kill a potential customer base. The majority of those who would avail of services as paying customers already get it for free, so you've effectively enabled the marketing faux pas of cannibalization - achieving presence in people's homes, but without the critical subscription revenue.
Penetration-without-profit is a dangerous road to hoe.
The problem as I see it stems from a gross mispromotion not of technology itself, but of the applications of technology. Local companies are very good at creating awareness about a product…they just don't put forth an effective enough effort to let people know what they can do with it. No one's without guilt here - culpability lies with telecommunications interests, consumer stores and media companies (including my own).
It always comes down to hyping the sizzle rather than the steak. Don't naively create more buzz for the devices themselves, which in the grand scheme of things (and with Apple being the only exception) are largely inconsequential. Don't make the mistake of showing off the means to an end, when it's the end itself that deserves the limelight. Give away the razors to sell the razor blades.
If we've learned anything from the iPhone, it's that the hardware device is a commercial gateway into a near-infinite universe of products and services.
The end result as it stands is a somewhat fractured microeconomy filled with underprepared marketers making haphazard pitches to misinformed and ultimately unconcerned consumers. The landscape of living the digital lifestyle in my hometown has proven overall to be more post-modern than utopian.
And that, my friends, from the perspective of running a sustainable business, is VERY scary.
And that, my friends, from the perspective of running a sustainable business, is VERY scary.
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Great post, Jas. Talk about a good summary of the poor state of GUAM-TECH. You got me going to the point that I had to write a response.
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