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On March 25 Apple announced an upcoming slew of new subscription services it’s launching through Apple News +, Apple Card, Apple Arcade and Apple TV +. But the company’s new, deeper dive into news, television and video games — formerly the purview of other companies — doesn’t mean it’s now competing for subscribers against the likes of Netflix, Disney or the New York Times.
That’s because when you compare subscriber totals, the company that Steve Jobs built has already won that battle.
Instead, Apple is going head-to-head with Google, Amazon and Facebook, battling it out for ownership of customers and their attention spans, plus the accompanying data that comes along with that. So, the question is, what should we think about Apple’s decision to insert itself into the cultural zeitgeist, setting off a kind of battle of the digital titans?
Personally, I’ve chosen to see this as "the battle for the "digital iron throne," an obvious reference to the upcoming, April 14, final season opener of the monstrously popular (assuming you like dragons) Game of Thrones and the "iron throne" that all GoT parties are vying for (with a side of White Walkers thrown in).
Here’s how I’ve calculated who will win that war (the one with Apple and Google, not with Khaleesi and Cersei.)
Why scale matters
When it comes to audiences and data, scale matters more than anything. In this sense, Apple, Google and Facebook are in a league by themselves. There are 700 million iPhone users worldwide and 1.3 billion Apple device users, total. Google has 1.4 billion Android users and 1.8 billion monthly YouTube users. And the biggest of the bunch, Facebook, has 2.3 billion media access units (MAUs).
By comparison, Netflix has only 148 million subscribers. Spotify has 191 million active users globally, less than half of whom are premium subscribers. And the New York Times website gets 282.2 million visitors per month, though only 4 million are paid subscribers. Most of the companies competing for a share of our attention and data, then, have an audience that’s a mere 10 percent (or less) of the size of Apple’s, Google’s or Facebook’s.
Even Amazon has only 310 million active customers. "Amazon," however, has the distinct advantage of being synonymous with commerce. Almost 50 percent of all online purchases in the United States are made on Amazon. So the data and insight that Jeff Bezos’s company can draw from these interactions is unmatched by that of any company other than Apple, Google and Facebook.
All of which begs the question: Is the battle for users and the data that comes with them a zero sum game? A Game of Thrones-style fight to the death? Given GoT‘s upcoming fight to the finish, I’ve assigned each digital titan a house or character and made aprediction as to who will win the digital throne.
Odds to win the throne: 0 percent
Amazon is perhaps the easiest company to characterize. With its ownership of and focus on commerce, it is the Golden Company — a 10,000 person strong army of mercenaries that makes its first appearance in the upcoming season.
After losing most of her army in the Battle of the Goldroad, Cersei Lannister has recruited the Golden Company to join her fight against the White Walkers and the armies of Daenerys Targaryen (a.k.a. the aforementioned Khaleesi) and Jon Snow. Like Cersei, many smaller retailers will recruit Amazon to help them compete against larger “big box” retailers. The mutual understanding is that these ruthless mercenaries will fight with you until the money runs out. Once that’s gone, you’re on your own.
So, with money and a powerful army of marketplaces, ad networks, and web services, why did I give Amazon a 0 percent chance at the throne? Mainly because it doesn’t seem to have any interest in that win. For Amazon, power comes through money (commerce), not some arbitrary title or crown.
Takeaway: While competition may be a rarity for Amazon, most entrepreneurs are competing, and doing so in a market where they aren’t the biggest kid on the block. Focusing on the strengths where you have competitive advantage is always a good place to start. Staying neutral (or on friendly terms) with bigger companies in adjacent markets can also help you shore up your own defenses while you grow.
Odds to win the throne: 10 percent
If you own social, then, in the GoT world, that means you’re Littlefinger (admittedly now deceased) or Varys. I think Facebook is more like Littlefinger. It has an extensive network and troves of information that have been collected through both direct means and less ethical means. The information that Facebook has it’s used to help itself and those partners that provide it benefits. Apple has also used information to punish those it’s perceived as a threat.
So, how are Facebook’s chances looking for the digital throne? Not so good. Like Sansa and Arya, people are growing tired of the manipulation and games (in this case the manipulation by Facebook). No wonder Arya took it out on Littlefinger.
In that regard, Mark Zuckerberg’s company will likely miss out on the throne through attrition, as younger users continue to abandon the platform for other outlets.
Takeaway: Don’t be deceitful or dishonest in your business dealings. Beyond that, maintaining transparency in your agreements with clients and freely exchanging information with those you do business with can be extremely valuable in nurturing your relationships with those that enable your business and the clients/customers you serve.
Odds to win the throne: 40 percent
For Google, it came down to the Lannisters vs. the White Walkers.
Google is a fearsome competitor. It takes 37 percent of all digital ad spend, controls over 67 percent of all searches and its Android OS is on 81.7 percent of all mobile phones worldwide. Facing off against Google is terrifying, so I went with the White Walkers.
The White Walkers grow in strength by raising the dead to join their army. With its Android OS, Google has done something similar. In 2008, Apple, RIM (Blackberry) and Nokia were battling it out for dominance, each with its own mobile OS. Then Google released Android, which gave life to many other brands by lowering the barrier to entry into the smartphone race. Companies like Samsung, Huawei, Xiaomi, LG and Sony, which likely would have been dead in the smartphone market without Google’s help, were reanimated.
On top of that, Google has data. It has the ability to target you through its search and advertising networks. And, of course, it has have tons of cash, almost $110 billion. But, it has one major weakness in its quest for the digital throne: it just doesn’t "get" people.
Evidence? Google continues to struggle with social. This inability to make connections and create communities of loyal “soldiers” will continue to hurt the company, leaving room for advertising and search competitors to make a play, as the nature of how we find and purchase products changes.
Takeaway: In today’s evolving world of automation and AI, it can be very attractive to focus on your product/service and the efficiency with which you can deliver it. But it’s important to keep in mind that people aren’t buying your product or service. They are buying what your product or service can do for them. It’s a subtle, but important distinction. I can take the subway or a car, or walk or skateboard to work. All will get me there. But only one will make me feel like a kid again.
Odds to win the throne: 50 percent
Apple owns cool. It was the original “pirate” brand. It was also nearly defunct before emerging from the ashes with the return of Steve Jobs. Apple is Daenerys Targaryen, who had a similar trajectory, coming to power only after emerging from a fire with her three (then-baby) dragons. And this is where I deviate from the GoT plotline a bit…
Some might say that the Night King did a little moonlighting for The Golden Company and killed Apple’s third dragon with a spear named Alexa. So, I am giving Apple a fourth dragon egg that it has been trying to hatch for a long time.
Which brings me back to Apple’s recent announcement.
Conclusion: Apple’s new "dragon" is culture.
Apple knows better than most that to stay in demand, you have to be part of the cultural conversation. Recently, the company has fallen behind brands like Nike, YouTube and Instagram. We’ve seen the negative impact this loss of cool has had on iPhone sales, as well. Apple’s announcement is not only meant to add new revenue streams, but also to place Apple squarely in the center of culture. CEO Tim Cook said this indirectly in his keynote announcing Apple News+, Apple Arcade and Apple TV+.
Takeaway: Never underestimate the power of inspired storytelling. The most powerful stories a company can tell are those that seek cultural and emotional connections with the company’s audience. Understanding your customer at an emotional, not just behavioral, level facilitates this type of storytelling.
Apple’s announcement might as well have said, “Bring us your undead hordes, your mercenaries and your misinformed masses. We’ll take take them all on and win. Because we understand one thing that the rest of you do not: that people matter.”
I’m buying into that. Because the more you can inspire and recruit people to your cause, the more fiercely loyal they will be. So, here’s to Apple, a.k.a. Daenerys Targaryen, my projected winners, respectively, for those coveted digital and iron thrones.
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April 3, 2019 at 11:03AM