Archive for the ‘business idea’ Category

Music is not always bought authentically, especially in India. Piracy is prevalent, be it in selling Hindi movie mp3s, dvds or latest games and other softwares. Why do people buy pirated stuff? The answer is the cost. They feel these are exorbitantly high priced. Yes, obviously true when compared to the pirated stuff. All that these people have done is copy on to the cheapest available CD-R or DVD. Digital rights management won’t work in India. With widespread Internet usage, P2P downloads, and with mobile Internet in future this problem is only going to escalate.

In one of my previous posts, music modes, i had mentioned how buying of music has gone down over the years, from cassettes to audio CDs to mp3s. Very very few people buy Hindi movie songs, but many listen to them on their mobile phones, computers, ipods and other players. Piracy is the killer of music industry.

Five years down the line, say by 2012, as the Strategy Analytics study shows about 40% of the mobile phones would be touch-screen based, like the iphone. The figure could be the more or less the same in India at that time or may be a year later to that. At least 80% of the urban Indians would have a music phone that will be able to download music directly through WiFi or 3G/4G. If a service provider would sell a song at Rs.5/-, there would be few buyers. I think music industry can afford to sell songs at Rs.0.99/- per song for streaming or download, and still make profit.

If the service provider is giving out songs at 99 paise, people would not not mind buying original songs. 99 paise may seem too cheap to sell music. But the sheer number of people downloading the songs will out weigh this low download cost. A different strategy like 10 songs per month only for Rs.30 would also attract lots of customers, still selling at a price of Rs.3 per song. The price tag will be in the range of some audio cassettes. Caller tunes are used by virtually everyone, shelling out Rs.30 per month. This when only the caller listens to the music. Now, paying to listen music yourself would not be all that bad, ain’t?

Moser Baer Hindi movie DVDs are selling at Rs.38/- and CDs at Rs.28/- presently. Selling audio at that price makes sense now, ain’t it? I agree they are selling older movies at that price, and obviously not at the day of release. But even by selling audio at atrociously cheap price music industry can make good profits is my argument. Now is a situation where almost no one is buying Hindi music CDs, so this strategy could change the face of music industry.

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Facebook’s 3rd party applications, orkut’s incremental approach to this, and recently the launch of Google’s OpenSocial to provide APIs to third party application developers to develops ‘social applications’ for social networking sites like LinkedIn, Friendster, Plaxo, MySpace and many more. These social networking sites are amassing millions of net users providing the features enjoyed by a collective group of users, and networking them. This essentially is the essence of these sites, but they have developed the tendency to kill the startup websites wanting to cater to a specific set of users.

If one wishes to start a website providing a platform for netizens of a particular interest, these social networking sites form a roadblock by giving out these privileges. This would curtail the opportunity for web 2.0 application developers, and other budding entrepreneurs. The roadblock is in the from of a mind set of the users in going for another site, when you can get similar stuff all at one place, even though the ‘other’ site may cater your need better.

facebook event

The pic shows Facebook’s press/developer event in San Francisco. Orkut, and MySpace may be excused for it’s not using 3rd party developers (until now) to develop its features but facebook to me is the real culprit, using some smart ebullient web developers to develop the site for its advantage. Zuckerberg, CEO of facebook, says his move is similar to what Microsoft did decades ago. Rightly so. Who was benefited with that? Microsoft or the 3rd party developers? The answer is evident. Bill Gates move propelled him as the world’s richest man for many years. The Sybase story is evident in the development of SQL, now a Microsoft product. Looks like Mark’s the new one in the making.

Google being the dark horse, looks to have tricked Microsoft in their foray to social networking site. Microsoft finally bought 1.6% stake in facebook for an exorbitant sum of $240 million, taking the net worth of facebook to $15 billion. Did Google have any hand in bluffing Microsoft to overpay for facebook? Read it here.

Google’s launch of OpenSocial is to lessen the dent facebook is making with the third party application development strategy in social networking site space. MySpace which initially was reluctant to open its ‘space’ to third party developers has now accepted OpenSocial with open arms, probably realizing it may soon lose out to others if it doesn’t. Google has the strategy of providing a common set of APIs for social applications across multiple websites with OpenSocial. This would attract developers to use these APIs to develop application for any website or blog. Also, an interesting thing Google has come up with is not to make it mandatory to use a server of the application developer, unlike facebook. LinkedIn, Plaxo, Hi5, Ning, and few others have already accepted to allow third party applications in their sites using these common APIs. OpenSocial blog is here.

I agree that the base of over 50 million users, now over a 100 millions users with the use of OpenSocial, is an invaluable asset facebook, or Google provides, which is hard to reach otherwise. But i think the probability of reaching this user base is only a tad bit lesser if you weren’t on facebook, being just another site in the abysmal Internet. No doubt marketing would be easier on facebook or any of these sites but the price one pays for it is not worth. Just by providing a platform, one should not make a fortune over the one who is actually providing the entertainment to the people coming there. You are there because of the entertainer, not the stage, ain’t it?

Social networking sites seems to become a sub-www within the Internet. But unlike ‘nobody owns the Internet’, these sites are owned, and run (if you can say that in real sense) by some ‘one’. The major benefactors of the growth of these sites is only that group of individuals who have a share in the firm, not the third party application developers. This also deprives the third party developers a sense of ‘Identity’. Now, who would know the person starting FSX(Fantasy Stock Exchange) on facebook? But many would know Mark Zuckerberg, and he would be the billionaire, not these application developers.

My solution to this? I would like to see a network of these startups providing a ‘different’ features/services connected together with a common login. The owners of these individual ‘applications’ would get their share depending of the traffic to their application. Obviously the servers would be of the individual developer. Who are game for this? The hype and brand of Google or facebook would make a fortune from these over enthusiastic web developers.

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A great business idea, a cool place to hang out, get in touch with old buddies or make new friends/business contacts. A lot more.

A phenomenon at some US universities, sometime around 2003, for creating a web networking platform for university students, other than the e-mail, a more casual one. Orkut Buyukkokten, a Turkish engineer and Stanford grad, came up with orkut.com while at Google, and Mark Zuckerberg with facebook.com at Harvard. Notably the more popular ones.

Buyukkokten, having developed a similar networking site called InCircle while at Affinity(now called Affinity Cricles) which was only for university students, was accused by Affinity for using the same source code to develop orkut.com while at Google. (some 11 bugs in orkut were same as that in InCircle!!) Google settled the case without disclosing any information.

Zuckerburg is accused of stealing the design, business plan and the source code for developing Facebook from ConnectU.com. Zuckerburg was reportedly hired to do some petty work by the trio Cameron, Tyler Winklevoss, and their business partner Divya Narendra while at Harvard. Zuckerburg, may be having realized the potential of the idea, soon quit that work and in about three months launched Facebook.com. If you’d be thinking Facebook is sued only now because of its popularity, think again! The trio filed a case in as early as august 2004, barely months after facebook’s launch.

Now now now.. Orkut being Google’s own social networking site, Microsoft and Yahoo are struggling to keep with the hot ‘social networking’ era generating millions of dollars in revenues with advertisers going frenzy to put up ads over here. Yahoo! 360 and MSN Spaces failed miserably. Recently Mircosoft bid a whooping 500 million dollars for a mere 5% stake in Facebook. That takes Facebook’s total worth to 10 billion dollars! No wonder Zuckerburg turned down Yahoo’s offer of $1.6bn few months back. Reportedly Zuckerburg turned down Microsoft’s offer as well and seems like he wants to go for an IPO. A billionaire at 23? A cheater? Hacker? Whatever it is, social networking is ‘the thing’ that made him.

From a software developer’s point of view, building a social networking site is not a very hard task. A not so bad, bad server and few good web developers can come up with one. But getting users to it is the trick. Nope, spammers wouldn’t get you there neither will advertising. Well, what gets people is a tough question to answer or probably one with no answer. If there were any conclusive answers Microsoft and Yahoo would not be shelling out billions of dollars, isn’t it? Building a networking site is one thing, getting users to it is another. What’s a social networking site without users, ain’t it?

What’s getting users? A attempt to answer: Ease of use, offers something different, and interesting at the same time (Facebook with 3rd party developers doing this quite well), easier to search your lost friends not just by their mail id (Duh..?). More importantly i think the first one to catch your attention, and the contacts you already have there or the ease of building. That’d need more users! The answer is, Mark is tad luckier than you fellas!

With over 60 million on orkut and something close on facebook, the sites are differentially preferred regionally. More Brazilians and Indians use Orkut, while Americans seem to prefer Myspace and Facebook. What are Chinese on to? Isn’t China the next big market for all the world has to offer? Yeeyoo and Yeskee are a couple of social networking sites making it big in China. Investments in these Chinese social networking sites by VCs are increasing, seeing the global phenomena. Check this out. While Chinese are on Yeeyoo and Yeskee, Japanese seem to prefer Mixi and Koreans are on Cyworld. None of them are happy having users from only a particular region and are looking to expand world over. (with little success huh?)

The concept of networking doesn’t end being social. A-ha.. there’s anti-social networking as well. Check out Isolatr and Snubster for yourself. Then there’s business networking with Ryze and others. This would give you a peek at an ultimate list of social networks.

The concept of social networking is not gonna be ephemeral for sure. Why not soon get these on Mobiles and PDAs? May be soon.

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