Friday - July 7, 2000

IP - The P.O. Box of the Future

According to The Washington Post:

"The Internet of the future will give me a magical number, VeriSign chief executive Stratton Sclavos said, to unify my fragmented digital self.

The number will be an Internet address linking all my phone numbers, e-mail addresses, Websites and portable computing devices. As I move around in the real world, so will my digital identity, making it easier for people to communicate with me and for me to access my devices.

'Instead of a phone number, you get an IP [Internet protocol] address,' said Sclavos. 'And that IP address is actually associated with every device you own...'"

Click here for the full story. 

UK Media Companies Must Have Allies and Strong Content to Survive
For most UK media players, break-even is at least five years away -- which is forcing content owners to redefine their online business models and form new retail partnerships, according to a report from Forrester Research.

"Today's business models based on percentages of revenues generated from clickthrough sales will only give media sites a maximum retail revenue of £32 million this year," Rebecca Ulph, analyst at Forrester's UK Research Centre comments. "And even accounting for ad revenues, UK content owners will still be left with a deficit of £450 million against increasingly high operating costs and marketing expenditure. However, a disproportionate share of eCommerce is available to those companies which can make transactive media work.

"To achieve this, media companies must develop ultimate destinations -- sites which provide a one-stop shop for all the information and product needs for a given interest group. These will be achieved through partnerships with retailers with the same target audience and strategy."

Few offline brands are equipped to create ultimate destinations alone. Online, some media companies will bring several of their brands together to exploit a range of content, while some ultimate destinations require content from diverse owners. Forrester advises all ultimate destinations to partner with retailers that complement their content strengths, and demonstrate a dedication to long term co-operation. Both parties must be prepared to co-brand and co-develop where necessary and operating jointly will reduce the cost of participation for both players, reducing time to break-even.

Two of the most significant online retail sectors -- general groceries and leisure travel -- will not retail easily through media sites. Successful retail products fall into two major categories -- those suitable for retailing through 'stealth shopping' and 'guided choice'. Products suited to stealth shopping are homogenous and relatively cheap. Stealth shopping therefore happens most efficiently through exclusive partnerships, as just one retailer in each product area is necessary. Frequently changing exclusive promotions must be part of any such partnership. Guided choice retail opportunities are made obvious and present users with explicit help through the purchase decision. Multiple retail partnerships will provide this choice, although content players may have to settle for smaller revenue deals if multiple competitors are partnered with.

"Stealth products such as books, music and accessories will generate the most revenue for media companies through ultimate destinations," Ulph continues. "These products are the best fit for retail through content and are significant online retail sectors as a whole, generating over £400 million for media companies by 2005. They retail most effectively through stealth shopping; guided choice goods generate under £100 million. However, in many cases, guided choice will have to be offered for comprehensiveness -- for instance a young men's ultimate destination would be incomplete without all the latest consumer electronics."

For the Report "UK Media's Retail Revolution", Forrester interviewed 26 executives from key media and retail companies and drew on information from a survey of 57 commercial Web sites.

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