Category Archives: Communications

Communications, Content, Facebook

Facebook’s Sharing Problem

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Last week, Amir Efrati at The Information wrote about the decline in “original sharing” at Facebook. That’s a reference to the more personal type of posts that people might share using the status box on the service, as opposed to sharing links or other less personal information or status messages. The data shared in the article suggests that this original sharing was down 21% year over year in mid-2015, and down around 15% year on year more recently.

The interesting question here is whether this matters, and why. The article suggests that this is the most important type of sharing on Facebook, because these personal posts bring the most engagement. That’s likely true, and I think there’s also an element of FOMO (fear of missing out) associated with knowing what friends are really up to which drives Facebook usage. To the extent that friends are no longer sharing this personal information on Facebook, that reason for using its apps starts to go away.

However, what’s increasingly clear is that Facebook has evolved from a social network to a content hub over the last several years. Yes, it’s a content hub where the content you see is largely driven by what those you’ve deemed “friends” (whether they really are such or not). But increasingly the driver of which specific things you actually see is Facebook’s algorithm, which is driven a lot more by your interests than by your friends per se. And much of the content you’re consuming is likely not those personal videos but articles (perhaps increasingly hosted on Facebook itself), videos (including the recently introduced live videos), and other forms of content which aren’t personal in nature.

That evolution from a social network to a content hub has coincided with a growth in many other forms of more personal communication, most notably messaging. Facebook clearly saw this trend coming several years ago, and acquired Instagram and WhatsApp while also turning Messenger into a standalone product. But it also failed to acquire Snapchat, and faces competition from a number of other products in this area. To the extent that more personal communication is happening outside of the News Feed, Facebook remains a participant in several ways.

But I also wonder if we’re seeing something of a maturing of the Facebook experience. I always come back to a really insightful post written by venture capitalist Fred Wilson back in 2011. In the context of Twitter, he wrote:

“Let’s remember one of the cardinal rules of social media. Out of 100 people, 1% will create the content, 10% will curate the content, and the other 90% will simply consume it.”

In some ways, what’s important about Facebook isn’t that it is seeing lower sharing, but that it ever had such high sharing in the first place. Even at the lower rates of sharing Facebook is seeing today, the Information article says “57% of Facebook users who used the app every week posted something in a given week, the confidential data show. But only 39% of weekly active users posted original content in a given week”. That’s much higher than the numbers cited by Wilson, even if it’s come down a bit recently. I’d also argue that, to the extent that users are sharing URLs or videos rather than personal content, they’re simply shifting into that curation category, and that still benefits Facebook.

The article talks about live video as one of Facebook’s responses to the sharing problem, but I’d argue that Facebook is working on lots of other stuff that can be seen as a response too. I’ve written elsewhere that the Notify app Facebook launched a while back is an example of this. The new Videos tab Facebook is introducing is another example. It’s clear that Facebook has been planning to deal with this issue for some time now.

This gets back to another thing I’ve written about previously, which is the role Facebook plays in our daily lives. From a jobs-to-be-done perspective, I’ve argued that the problem Facebook really solves is killing time. At some point, I suspect Facebook will truly embrace its new status as a content hub and start serving up content that wasn’t even shared by your friends. At that point, the personal sharing will matter less, and what will matter the most is that you care about the content being shared and engage with it.

AT&T, Cable companies, Cablevision, Carriers, CenturyLink, Charter, Comcast, Communications, Content, Cord-cutting, CST, DirecTV, DISH, Earnings, Growth, Presentations, Q3 2014, TV, Verizon, Video

US cable, satellite and telco provider review for Q3 2014

As a counterpoint to the US wireless market trends deck I published last week, today I’m making available a review of some of the major operational metrics and revenue trends for the largest publicly-held cable, satellite and wireline telecoms providers in the US market. This deck focuses on pay TV, broadband and voice telephony services, and shows growth on an annual and quarterly basis as well as total revenues and revenues per user for these services. Some of the key messages are:

  • TV subscribers aren’t shrinking – if looked at annually, to overcome the inherent cyclicality in the market, subscribers are actually growing very slightly
  • Broadband is still growing rapidly, adding several million subscribers each year
  • Voice is shrinking fast, though the rate of decline has slowed recently, as decent cable growth fails to offset the rapid shrinkage among the telcos
  • Pay TV is around a $100 billion a year market, and shows no sign of shrinking despite the shift in viewing habits towards DVR, VoD and online consumption.

I’ve embedded the deck below. You can also see it directly on SlideShare here, where you can find the code to embed it elsewhere or download it as a PDF. As with the wireless trends deck, the data behind these slides is available as a paid service from Jackdaw Research. Please contact me if you are interested in this option.

Big picture, Communications, Comscore, Content

Communications and content drive consumer tech

I have a chart I often use in my presentations to clients, which encapsulates my perspective on the consumer technology market:

Comms and ContentThe point of the diagram is that, although much of the money and almost all the attention in consumer technology is centered on devices, devices are just a means to an end. What really drives consumer purchasing in this market isn’t hardware for its own sake but the ability to engage in communications and consume (and to a lesser extent create and share) content 1.

Comscore today released an in-depth report featuring many of its statistics on the mobile app market, and it’s full of interesting charts and data points. But given the framework I outlined above, I was particularly intrigued by the charts showing the most used apps by age group, based on share of time spent on mobile apps. ComScore presents this in four separate charts, but I’ve compiled that data into one chart for an easier overview:

Comscore app time spentWhat’s striking to me is that virtually all of these apps can be described as either content or communications (I see Facebook as a blend of the two categories, and it’s therefore interesting that it comes out on top by some margin). The only possible exception is Google Maps, which is arguably a form of content but sits outside my usual categories. The apps that make up the list vary considerably by age group, but the broad categories are similar. Among 18-24 year olds, messaging apps are disproportionately used, with Snapchat and Kik making their only appearances in the top 10 in this group, while with older age groups Gmail and Yahoo Mail creep in. Interestingly, games make an appearance in the top 10 among the two older age groups but not the two younger ones. Other than gaming, however, the top content apps are the same in all four age groups: Pandora on top, followed by YouTube and Netflix, in that order (Netflix drops out of the top 10 in the oldest age group):

Comscore three major content apps

Another fascinating feature of the data is somewhat counter-intuitive: the older you get, the less concentrated your app usage is in the top 10 apps. Comscore refers to this briefly in its report, characterizing it as a greater emphasis on fun and entertainment among younger users, while older users spend more time on productivity tasks as well, but I’m not sure it’s that simple. Still, it’s a very clear trend:

Comscore top 10 apps as share of time spent in apps

The other fascinating thing to think about is that very few of the apps in the top lists are monetized directly from users. Users spend hundreds of dollars on the devices they use these apps on, but very few of them spend money on these apps. Netflix is the highest-paid app/service on the list, but essentially all the others at least offer a free tier and many of them are entirely free to users, funded by advertising. As such, even though communications and content drive purchasing in consumer technology, they don’t drive much of the consumer revenue in this space.

Notes:

  1. To be clear, my definition of content includes video, music, gaming, news, weather, books and so on, and my definition of communications includes audio, text, video and other forms. ↩