The Importance of Clustering and How To Do It

Earlier this year I got an invite to a reception at Buckingham Palace as part of the UK Tech Clusters. The discussions around clustering tend to range from the aspirational (let’s working together to teach everyone in the country how to code) to very practical (if we have shared workspaces as part of our remit, why not provide passes to each other). But there needs to be more than this.

I am never a fan of intervention where it is unneeded but I am a fan of creating contrivances which lead to repeated behaviours. Digital Circle has never had the resource to create these contrivances but I think that economic development responsibilities (which lie primarily with DETI, InvestNI and the new SuperCouncils but also, in line with the programme for government, with every government department, agency and ALB), are something that needs intervention in order to be habit-forming.

Interventions do not need to be large but they need to be repeated.

But why are these things important?

The first thing that I would say is that it starts to create economies of scale. The more people sign up to your focused programmes, the more benefits they will bring. No-one likes to present to an almost empty room. Your indigenous SMEs will need people to talk to.

You also start to create networks of scale. This means the companies in the area start to lean on each other for work, for shared projects, for new bids for work. You have to build your indigenous companies until they are something to talk about.

Lastly you start to build reputation of scale. It’s easy to say that the Game of Thrones television series has brought attention to Northern Ireland but equally The Shore, Good Vibrations and The Fall have, perhaps to a lesser extent, created buzz. And this is why foreign direct investment companies are then attracted – they come for the work but through hiring and acqui-hiring, they gain a foothold and an investment in the region.

I was at DETI today and the topic of NORTEL came up. When NORTEL failed, it was at the height (or, depending on your perspective, the lows) of the Internet bubble bursting. But it had been a shrewd investment in retrospect as it ushered in a new software industry in Northern Ireland which led to new start-ups in cyber security, in mobile apps, in fin-tech and in health technology. It was a genuinely excellent investment as these start-ups are all indigenous and sometimes (like Wombat and NYSE Euronext) they lead to something bigger. (Thanks to Eoin McFadden in the Innovation Policy unit for the intelligence and foresight as well as the coffee!)

We’re busy using the power of our clusters to educate kids in coding and design, in 3D modelling and creating interactive experiences because we see that as being the future for a small-population knowledge economy. The difficulty in standing and competing on a global stage can be defeated with smart working, with market trend analysis and with working together to create something bigger.

That’s what clusters are for.

There’s Digital Hubs and digital hubs.

There is an inevitability of a concentration on the digital knowledge economy for Northern Ireland. We have a thriving group of developers and designers in Belfast, a huge amount of ambition in the North West and a heap of activity building in the Southern and Western counties of the province.

Last week I went to the Digital Hub along with Momentum, Belfast City Council, InvestNI and representatives from DCAL and OFMDFM.

We heard the spiel about how it brought some regeneration to the area, that they still have a considerable subvention from the government after 10 years (less than €2m a year, but overall investment has been around €30m since inception and may not include transferred assets).

I also spoke to some of the guys in some of the businesses. They said they wish the Hub was one mile closer to the city centre, that the reason they use bikes and public transport is because they don’t want to bring their cars to that area of town and even the big lads feel a little concerned leaving the Hub with a laptop.

It re-iterates my belief that a city centre location for a Belfast Hub is essential. Not least because Davy Sims put together a map of Digital Media companies in Northern Ireland back in February of 2010 and discovered most were within a square mile in the city centre.


View Belfast Media Square Mile in a larger map

I don’t think we want a straight property play like the Hub in Dublin. We’re a small region with a big ambition so we have to think much more strategically about what goes where. We also need to be 100% joined up. I think I have the support of the Digital Circle steering group in my opinions and in my vision for a digital hub-type infrastructure in Northern Ireland. It’s a big plan, an ambitious plan, even an audacious plan and if it delivers, it will bring the concept to the province as a whole rather than just to a small region.

Anyone fancy going to the Southampton Boat Show in September?

The show is on from the 16-25 September in Southampton, no less. Advance tickets are very reasonable. See here.

Just interested in seeing if other travellers would like to attend as I’d love to make the trip down maybe for one of the weekend days.

Bringing this back into the realm of the day job: I went to the London Boat Show earlier this year and I was struck by one thing: how few of the traders and chandleries in the exhibition stands were prepared for taking payments other than cash. I’d see this sort of market ripe for companies like AirPOS to provide mobile points of sale turning netbooks, tablets and even phones into a point of sale for small businesses.

The first business show that I exhibited at really drilled home the concept:

Don’t give me your business card, give me your credit card.

For smaller items, you just want to buy, for larger items you want it to be shipping to your house just after you get home (or waiting in your office). Having a connected Point of Sale with an online store can make all of the difference. It pains me that so few companies take this on board.

They Make Games

AlienSalvage

Of course, they don’t make any yet, but they will. And I went for the retro Battlezone-type graphics because I have zero skill with Photoshop and Illustrator any more (never mind not having a copy that would run on Snow Leopard) so my varied tweets last night are generally about finding folk who can put together something for me (for a reasonable price).

The aim of the company (as you can tell from the Twitter profile) is to apply game-like experiences in mobile, mhealth and e-learning. I’ve a heap of ideas in this and my next steps will be to start to put together people who will be important to the development of the company.

Alien Salvage will be contributing to the Digital Circle-initiatived BLOC54 collaborative network focussing on the Games Development Industry in Northern Ireland.

Are you FTW! or WTF?

Last Friday I was in the University of Ulster at Coleraine as a guest lecturer for the Interactive Media Arts and Media Studies and Production undegraduate students. The full Keynote presentation is attached. (380K)

The content is mostly around what Digital Circle has done, what it aims to do, the sort of activities we have to manage and some of our aspirations but that’s not all, it’s meant as a primer to the digital content industry for people new to the industry but could equally serve to educate folk unfamiliar with the territory.

In my opinion, this was the best slide in the slidepack, directed at the students themselves.

FTW or WTF

But the slidepack also includes a lot of comments from the local industry – workers and employers – and their best advice to undergraduates who may be joining the workforce in the coming weeks. I’d encourage you to read some of them.

(For folk who don’t have access to Keynote, I include a PDF version here (270K))

Blizzard just made $2M selling a pony

[I originally was going to post this at lategaming.com but it’s more about the economics of internet stuff rather than games related]

It’s a “sparkle pony” to be sure, but in the end it’s just a skin on their pony entity and some attributes. It is one of the few mounts which can work as a ground mount and a flying mount (and therein is the tactical advantage) but really it’s a picture of a sparkly pony.

From TerraNova:

In case anyone thought that virtual item sales weren’t a big deal in the traditional MMO world, this morning Blizzard announced the online sale of a new “celestial steed” for use in WoW. These mounts cost $25 (on top of the retail price plus $15 monthly subscription). So in a world of free games and virtual items selling for a dollar or two, how popular could a $25 sparkly flying pony be?

Well, the queue for their purchase was at least up to over 91,000 people waiting in the queue earlier today. When I took a screen shot, it had fallen to “only” about 85,000.

90,000 X $25 = $2,250,000.

In one day. From one item. In a game that isn’t free to play anyway.

Something tells me we really, really haven’t mapped the extent of the market for fast, frictionless sales of online goods — “objects” that have a low cost of creation and essentially no cost of duplication. Even 90,000+ times.

On the other hand, getting a picture of a sparkly pony from an artist on the Internets is probably going to run you $25 at least anyway and if this one gives you a tactical advantage in a game that you play a lot anyway then it seems like a bloody bargain (I don’t play WoW FTR).

The cost of duplication and use is something that is extremely important here. This is a sure-fire illustration of how the Internets can be used to make money but it’s giving a ‘bad’ message here in a market which is trending towards free (as Chris Anderson would put it). This is a one-off feature in a software environment that has a subscription model. Think how the record companies should be responding to this. Music has a much larger target market obviously and all of the musicians I know would be extremely happy to have 90,000 people queuing up to buy anything, even something priced at $1 (but imagine how happy they would be if it was $10).

It seems ironic that there is still a question over the AppStore with the prices trending towards $1 (if you include flash sales) and that is whether apps have been priced much too low. And I think that in many cases they have been. And we’re likely to see it repeated with the iPad.

But Blizzard is showing here that with a dedicated core of fans, you can make a lot of money in a day selling something that is entirely digital, limited in use, limited in lifespan and only works inside their environment.

Media: Access versus Desire

Dylan Collins highlighted this survey on Business Insider about the media habits of 8-18 year olds.

tv-still-rules

The survey states that linear broadcast television still rules in the average youngster’s media habits. I wonder how much of this is access and availability versus desire and intent.

In 2010, probably most 8-18 year olds have access to at least one television. A vast percentage (71%) will likely have a television in their room. The television will more than likely be ‘on’ but just as we adults are conversant with co-viewing (using a laptop or mobile phone while viewing television), it stands to reason that our kids are doing much the same. The slide on media multitasking illustrates to me that kids are doing other things while watching television.

There’s also a significant trend towards on-demand content whether that’s DVD, Time-shifted TV, online video or video on iPod or cellphone. So while the consumption of Live Tv has decreased, the consumption of produced television media has overall increased – just not through the television necessarily. And I believe this trend will accelerate. A later slide indicates that only in 4% of households is the television off every time there is no-one watching it. A whopping 45% claim the TV is on when no-one is watching.

The other thing I see as significant is that printed media shows a marked skew towards books and away from magazines and newspapers. I believe this is because books represent a much less ephemeral media segment whereas newspapers and magazines have been mostly cannibalised by the internet. For example, a car bomb in Holywood at midnight last night was reported on Twitter for a full hour before it hit the main news web sites, reported on radio and television soon after and it would be unlikely to hit many print news stands this morning.

This survey measured the habits of the young. I’d be interested in viewing the desires and intent of the young with regards to media consumption. Do they want more (and presumably better) TV? Would they be in favour of faster internet? Better coverage for mobile internet? How will their habits change over the next 5 years?

The Co-Viewing Experience

About a year ago I was fortunate enough to meet with Ewan McIntosh while he was Digital Commissioner for Channel 4’s 4IP project. We waxed in the workshop about how many of us commonly pay attention to three screens at once – when we’re watching TV; we have our laptops and mobile phones beside us.

4IP’s remit was daring for the time. The core message I got was “no TV”. This wasn’t about audiences, it was about interactive, it might work alongside something that was TV and it might result in TV, but it wasn’t about TV.

Today I see this (emphasis mine):

Magazines and newspapers aren’t the only media eying big benefits upon the iPad’s arrival: TV is poised to use the device in new ways, including creating interactive, social apps designed to be used while watching live programming.

MTV Networks, for example, is developing a “co-browsing app meant to be used while watching live TV,” said one executive familiar with MTV’s iPad plans. “This means the iPad could be the appendage that makes interactive TV a reality.”

“Fifty-nine percent of people are multitasking when watching TV — that’s something we’ve always known,” said Ms. Frank, referring to recent Nielsen data quantifying a longstanding observation. “This is the next evolution.”

Of course it is.

When I watch TV, I have my laptop open. I’m looking up things, referencing actors, events, checking for the locations mentioned. (Frankly, it’s a little bit tiring.) But most importantly this is content that could be sold or advertised upon – it could be monetised by the television station, provided by the content producer on a platform that offers the content alongside the regular programming.

For example, while I’m watching Wonders of the Solar System with the very smart and cheerful Professor Brian Cox. I’m chatting to friends about the content, I’m following the good Professor on Twitter and I’m thinking about stuff such as:

Screen shot 2010-03-30 at 17.14.34

which ended up being answered by the Professor himself. Insanely cool.

TV shows are set to a timetable, we know ahead of time when they stop or start.And there’s more possibility for peripheral web sites to offer content which is synchronised with broadcast. This idea isn’t terribly new – Nico (who now works at UTV) wrote about it on his blog:

Whatever the future of TV, it is clear that online and social media are going to play an increasing part in how and where we consume broadcast media. Being part of a shared media experience, even if you are on your own, will be the shape of things to come.

There’s an opportunity for local television companies to build a much bigger proposition, to actually deliver on the “360” that is buzzword in television commissioning. It should be about the ‘web site’, it’s about the co-viewing experience.

Local Brand, Global Vision

I would describe myself as probably more curmudgeonly than most especially when it comes to things on the Internets. Arlene is often able to discern if “someone is wrong on the Internet” due to the posture I assume, the faces I pull and the fury of my key tapping. It’s one of those things, there’s an immediacy to making sure there are wrongs righted. Sometimes it is better to withdraw and do something else. And I promise I’ll try to do that next time.

Credit: XKCD
Credit: XKCD

So, How do you brand something locally without it appearing provincial?

I hate URLs from local companies and organisations that have ‘ni’ in the title (it’s not restricted to the Internet either, I hate it when they put (NI) in the name of the limited company too. And no, hate is not a strong word.

But sadly while we seem to be surviving without the need for IPv6 so far (years after my mentor predicted the end of the IPv4 internet), we are fumbling towards a more final end – the end of the dictionary. Internet companies have been using nonsense names for a decade or more now but I loathe the ‘ni’ thing more than I dislike the ‘r’ thing in Flickr, Tumblr and others or the ‘n+1’ thing, like in Rummble or Dribble. It points to a cataclysm of Babelian (should that be Babylonian?) proportions. And don’t get me started on the www.xxxapp.com style names. Entire domains for ‘apps’ seems wrong and it can be abused. For example:

http://apps.ie was registered last year as a domain for all Irish iPhone developers and designers to represent their work. Sadly one company has gone ahead and branded themselves as ‘appsie’ after the fact and registered a whole slew of …..apps.ie URLs. When I brought this up, I was pretty much told to sling my hook. Suffice to say that’s one company off my Christmas card list.

So how do you brand something that’s new? And doesn’t actively step on the toes of wider initiatives to improve things for everyone?

In many cases is means choosing a URL that is almost entirely unlike your company name. In other cases it means adding a prefix such as “visit” or “weare” or “designby” to your company name or being extremely creative with your domain name extensions – witness the growth in popularity of ‘.io’, ‘.us’ and ‘.tv’. And there’s hundreds more options.

But right now I’m left with attempting to brand a local collaboration network which has local remit but global vision. And hoping to reduce the chance that someone will waltz in and hijack the name for their own purposes and undermine the network.