Segmentation in social networks

Social networks are popping up everywhere and for different age groups. Recent the UK consumer group Which? published a survey grading the various social networks. Bebo, Facebook and Saga Zone came out as the best three. The top ten, including MySpace, show segmentation, according to age groups, but also to globalisation.

In the UK segmentation in age can be distinguished. MySpace is aiming at the segment of older teenagers and early twens. Bebo and Facebook and is aiming at a target group from 20 onwards. Now also the age group of silver surfers has its own social network in the Saga Zone, a site still at its infancy.

Of course the global internet has had from the beginning a segmentation in sites with regard to age. The site Habbo Hotel is a typical hangout for teenagers. LinkedIn and Xing have been the social network for professionals. And in several countries, like in the Netherlands, there is a network for seniors. From the beginning they have not been typified as social networks, but functioned like them, even to the point of organising physical meeting like Xing and Seniornet do in the Netherlands.

But the social networks have also another interesting aspect, the globalisation. Social networks like Facebook and My Space as well as LinkedIn and Xing aim at the whole world. Yet Bebo and Saga Zone are typically active in the UK. Also in the Netherlands there is a social network for young professionals, Hyves, which is not limited to the Netherlands, but has most of its subscribers there. Of course language is one of the factors as well as a limited national outlook. I can imagine that Saga Zone will do it better in the UK, as the target group looks for contacts in its own country. Yet Facebook is internationally oriented and has a global target group. I guess it will be very hard to set up a European social network as this geographical region is fragmented by languages.

Recently Ofcom, the UK telecom watchdog, released a study saying the UK social network participants spent more time on social networking than their European counterparts, devoting 5,3 hours a month and visiting them 23 times, roughly 14 minutes per visit. Yet people are getting cautious about participating in social networks. According to a survey by the UK Information Commissioner's Office (ICO) no less than 71 per cent of 14- to 21-year-olds did not want their future employers to see their profiles on social networking sites; only 40 per cent realised that their online activities could be traced indefinitely. Also security of the network such as identity theft is an issue before subscribing.

Blog Posting Number: 670

Tags: social network

Mindtrek 2007 (5)

The Finnish gaming industry

On Thursday morning there was a session especially for the Dutch delegation (see photograph by Cai Melakoski) on mobile games. The organisers of the trip of the Dutch delegation, Hans Sleurink of Media Update and myself, had requested this special session with the following brief: (a) overview of the state of art of the Finnish gaming industry; (3) a mobile game developer, which turned out to be Nokia; (3) mobile game development for education; the delegation got an encore with a presentation of mobile gaming education.

Mr KooPee Hiltunen started his presentation with a reference to a recent report about the Finnish gaming industry (please register to read the full report). Here is the summary:
From an industry of a few companies in the late 1990s, the industry has, since the mid 2000s, become an integral part of the Finnish content export industry. According to a study published by Neogames in 2006, the growth rate in 2004-2005 measured both by net sales and employment effect was 50%(Publication of the Finnish Gaming Industri, Finnish Game Companies 2006/Neogames). The growth rate for 2006-2007 is, based on this study with a smaller sampling (11 companies), estimated to be approximately 20% in both sectors.
In 2005, the annual net sales of the gaming industry were estimated to be approximately EUR 65 million and involved the employment of approximately 1,000 people. There is no aggregate figure for 2006 but simply in light of this study we have reason to claim that the above mentioned figures grew in 2006 and the growth seems to continue at approximately a 20% rate in 2007.
According to our estimate, the 2006 net sales of the Finnish gaming industry was EUR 70-80 million and involved the employment of 1,200-1,300 people. In a gaming industry culture export report compiled by Neogames for the ministry, the 2012 vision includes the following figures:
- Employment 2,500-3,500 people.
- According to our estimate, this is the structural employment of the gaming industry in Finland. In addition, the Finnish gaming industry is likely to employ approximately 1,000 people in international subcontracting companies. In addition, a considerable number of Finnish gaming industry professionals also work abroad.
- Net sales EUR 500-700 million of which 90% from abroad
- Net value of sales EUR 1.3-1.5 billion. The figure takes into consideration unit sales but not the indirect employment effect of the industry or the skirt industries.
- 50-60 gaming companies. The industry becomes centralised.
- Average company size approximately 50 people (now approximately 10 people).

In an earlier study, the strong development of the Finnish gaming industry was estimated to be based on four factors:
- technological and content know-how of the companies
- excellent price-quality ratio of gaming production
- delivery reliability
- international growth in the mobile entertainment sector.

In light of this study, the above mentioned issues have remained strong competitive factors.

The study also confirmed the finding that the dependency of the Finnish gaming industry on mobile operations is no longer true. For instance Max Payne (Remedy), FlatOut and FlatOut II (Bugbear) and Habbo Hotel (Sulake) prove that the front extends to PC and console games as well. This side also shows signs of new implementations in utilising digital distribution.

Mobile game operators are, however, still strongly represented and in the mobile sector in particular the technological lead gained in the late 1990s seems to be important especially as the number of mobile devices increases and, in order to be successful, a single game must be developed for several hundred different handsets both in the European and US markets.

An interesting growing trend is in handheld devices. Both PSP and to a wider extent DS seem to interest new players. It remains to be seen whether it is possible to build a solid business only on these devices.

So what are the game developers doing, Mr KooPee Hiltunen (see photograph) asked himself. Four years ago 75 percent of the game company employees – many former Nokia employees) - were in mobile games, using Finland with 5,3 million inhabitants as a testing ground stimulated by education and Nokia. But it is no longer mobile anymore. Mobile has become complex due to the fragmentation in handsets. Only big firms can handle the porting to this range of devices. Besides mobile gaming did not get the push from N-Gage as expected. The Nokia effect faded away. Mobile is no longer the entry platform; when needed, companies subcontract porting to big companies as they can build porting production streets for the diversity of mobile phones. Big companies of 160 employees are Digital Chocalate, owned by Trip Hawkins, or Mr Goodliving and Universum. The small companies do the concepting, while subcontracting the technical development.

There are many similarities between Finland and the Netherlands. Both countries have a relative small amount of in inhabitants with Finland 5,3 million people and the Netherlands with 17,2 million inhabitants. Both countries have a minority language. Both countries work cost efficient as the standard costs of living are high. Both markets are small and can be exploited as test markets; so companies have to go global immediately. The Finnish gaming industry is reliable as it is not overpromising or underdelivering.

Blog Posting Number: 886

Tags: games, game industry games, game industry

Secondlife.nl

In the past four years more than 364.000 Dutch inhabitants have registered with Secondlife.com. Three months ago Secondlife.nl was started. The Netherlands is now ranked fifth with 6,5 percent of total users. Compared to the worldwide figures: 5,6 million registered users, of which 1,7 million were active in the last 60 days. They spent 2 million US dollars per 24 hours.

Stats of April 18, 2007-05-10
Registered members in Secondlife.nl: 43.624
Average daily visitors to ‘0031’: 1500
Square meters bought on ‘0031’’: 111.776
Euro exchanged for Linden dollars: 35.000

The Dutch platform is also known as ‘0031’ referring to the international telephone access code for The Netherlands. It attracts on some days 1500 visitors; a company of temporary labour forces, Randstad, attracts some 186 visitors a day. Dutch companies and institutes are profiling themselves, mainly for marketing reasons. Big companies like banks amongst others the heavy battled ABN AMRO (no acquisition battle yet in Secondlife!) but also municipalities like Zoetermeer are present in this virtual world as well as the Free University. But also small and medium enterprises participate and have bought more than 11.000 square metres, if only to experiment. Also the association of Dutch nature monuments is active on ‘0031’; it offers a space to relax.

In the meantime a debate has started on the marketing blog Marketingfacts whether Secondlife is the next Internet hype. Reactions flooded in. Comments range from: Secondlife is an imitation of Habbo Hotel to Secondlife is a way for marketers to do the same as always and still be modern. Others think that Secondlife is a nice way to learn and only the beginning of something greater.

(I still do not understand why I should register for Secondlife.nl, when I can meet Dutch people all day. Do they have a virtual way to escape this 16,5 million inhabitants plot in the real world; then they start crowding together again. I guess that it is the same social habit of people with mobiles. If you do not use your mobile, you are socially dead. Would it be that Secondlife is there to see and to be seen; if you are not registered, you are virtually dead. It is not the ctivity, but the registration.)

Secondlife is a nice link to the virtual world and more attention will be paid to that in the coming years. In The Netherlands a Platform Virtual Worlds has been started to distribute knowledge about the development and application of virtual world and three dimensional internet. The technical universities of Delft and Twente, the Free University Amsterdam, the economic Erasmus University Rotterdam are partners as well as the companies ING, ABN AMRO, Philips and IBM. The platform will have its own website, where research results will be published.

Blog Posting Number: 749

Tags: virtual world, Secondlife

Cross country for cross-media (10)

I had not expected anyone busy with print in cross-media. Coming from print publishing, I was eager to hear what could be said about print and digital media. At CMID07 Mikael Malanin of the Helsinki University of Technology presented a paper named New paradigms of print.

In his paper Mikael observes that traditionally digital media have been associated with print media. A new reverse paradigm is to associate print media to digital. Another paradigm in media products is the community generated content.

The paradigms are not really new. In the nineties we have particularly seen the publishers coming up with extensions of their existing print products such newspapers and magazines. It was basically for marketing purposes that publishers went into internet. Usually they saw internet as a potential cannibalism mechanism for their print title. By now publishers have changed this narrow view and exploring editorial concepts as well as marketing concepts. Not all concepts are successful; for example, internet is not becoming the newspaper boy who delivers the pdf newspaper file in great numbers. But most newspapers and magazine publishers have digital extensions to their print product.

So far one cannot speak either of a replacement of the print product by a digital product. Only in a few cases magazine publishers had to change from print into digital edition; the Dutch publisher of Elle magazine changed over from a print to a digital product. So far the great revolution from print to digital has not come around. And given cross-media, analogue products like newspapers and magazines might stay in place until digital paper can compete with analogue paper.

Print products in association with digital products or services have been around since the end of the nineties. I saw as a Europrix2001 jury member one of the Finnish entries of 2001, www.sooda.com, which was definitely a cross-media product. Sooda is a dynamic and innovative online community for young people about 12 to 19 years old. Sooda is full of interactive services, new visual experiences and unconventional content. In summer 2000 Sooda grew into a cross-media product, when a printed school diary was published and turned out to be a hit. The other Finnish hit Habbo Hotel publishes in Finland a diary. In the meantime is it not uncommon that internet sites get printed products. Books are produced from blogs. Magazines are created around a website like recently the magazine RTL GP was created for the fans of Formula 1 in The Netherlands, who follow closely the race website of the broadcasting station RTL.

While the digital counterparts of printed products can usually be categorised as extensions, the printed products yielded from digital sites are often serving a community. This can be Grand Prix Formula 1 lovers (like me), but also a community of bird watchers. Internet, Mikael remarks, has proved to be an effective medium for creating and maintaining of online communities, which operate in the virtual space and are not dependent on geographical boundaries.

These virtual communities are often the proper environment to start new services with community generated content. In an enthusiastic community there are always community members to generate content, given that they have proper online facilities. The mechanics of such a community are most likely that there are 100 percent unique visitors of which 10 percent regular lurkers and 1 percent participating members, who will be part of a community generating content such as blog contributions and video and articles for the printed edition.

The conclusion can be that print is not yet dead.

Blog Posting Number: 715

Tags: cross-media, print, digital paper, community generated content