Death of Print 2: Sensis and the final days of the phone book.

When did you last use the print edition of a phone directory?

In Australia the first directory was on a single sheet and listed just 44 numbers, now more than 100 years later it’s still in print but looks likely to go the way of the rotary dial phone. Here’s a couple of recent and related events that suggest publisher Sensis needs to prepare for the inevitable:

• Print company PMP’s contract with Sensis for production of Australian White Pages and Yellow Page directories expires on 30 June 2009;
• A new GPY&R Yellow campaign for Yellow Pages announces the release of a handy sized print version for use in the car;
• Google and Telstra subsidiary Sensis announce they have signed a deal to integrate the data from Yellow Pages business listings into Google Maps Australia;
• Total worldwide smart phone shipments hit new peak of 39.9 million in Q3 2008 while in Europe almost 40% are GPS enabled. In Australia, 3m will ship constituting 30% of all mobile phone sales.
• Google announce a new iPhone application that runs a voice translation service which enables users to speak and ask for the name of a service or store near their location and have it sent to their phones.

According to Sensis, its Yellow Pages print version does AUD$1 billion in advertising annually and the Yellow Pages Online a further $100 million. Last year more than nine million print copies of its White Pages were distributed in Australia with Sensis claiming a 99% penetration rate into Australian households. But the events above threaten these brands’ relevance and could convey them to the dustbin of history.

The long decline in landline connections can be linked to falls in use of both print editions. In February Sensis parent Telstra announced, somewhat half heartedly, that it had arrested some of the decline in its fixed line services. In fact, the decline was just 2.1 % against a 2.5 % decline in the previous six months to June, the annual decline still around four or five per cent.

But there maybe something more significant going on with Sensis’ so-called Yellow and White Pages Networks, with both registering significant online declines in viewership this year. Alexa data puts Yellowpages.com.au views of its online edition down a massive 10% for the last quarter and Whitepages.com.au down 3%. This contrasts with White Pages’ claim in March it was number one for business search and Yelllow Pages announcement in November that more 11 million Australians used its service every month.

While competitive intelligence service Hitwise’s latest figures has White Pages with an increased market share of 10.89% for the same period but this is only 0.19% of all use across the entire online market with Google’s Australian operation dominating the market with 8.38%. White Pages is not even a top 20 site in Australia. Similarly, Hitwise has Yellow Pages increase market share by 7.25% for the period for a total share of only 0.11%. Up against Google, Microsoft and Yahoo, it is a minnow.

Sensis’ deal with Google Australia seems to at least acknowledge that its market share is close to a fiction and it needs to better position its brand to take advantage of the much anticipated growth in location-based services coming from the explosion in smart phone use.

By year’s end around three million smart phones will have shipped in Australia, most with built-in GPS such as the iPhone and Nokia Navigator. Portable navigation devices like Mio and TomTom, primarily used in cars, seem already to have been sidelined as carmakers increasingly include it as standard and users opt for more personal technologies. Already Nokia is the third largest provider of mobile navigation across all platforms in Europe. In this scenario, the release of the new Sensis Yellow Pages directory for car use seems both archaic and a folly.

Sensis says 25% of all phone books don’t get recycled but end up as doorstops or propping up computers. Perhaps these users are the only demographic that’s going to find it hard to lose the phone book. Regardless, PMP might want to check its contract when it comes up next year. My feeling is Sensis is losing its way and needs a better strategy that increases relevance, brand visibility and usability for a complete multiplatform environment, otherwise it might see more of its brands (think Trading Post!) analogous to a doorstop.

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IPTV, is it "better TV" or just "more TV"?

TV is dead, long live TV.

Certainly, that's the view of Microsoft founder Bill Gates, when he delivered the keynote address to Microsoft's yearly gathering of its advertising partners from around the world at the company's eighth annual Strategic Account Summit, early this month.

And strangely Gates might be right.

According to Nielsen Media Research what is called prime-time "viewership" for the four biggest broadcast US networks, fell from 40.3 million to 37.6 million people.

What this means is that people seem no longer beholden to network television to determine both the time, programs and place of viewing. Soon it will also be about the the media they use to view TV.

And Gates, who's been catching up on his more visionary outpourings ever since he missed the initial internet bubble, sees a new media landscape dominated by internet protocol TV (IPTV), where people will own single, high-performance wireless devices, download high definition television from anywhere in the world (but using Microsoft middleware) and viewing becomes more social and personalized.

The sorts of macro changes he predicts includes portable computing devices (we're thinking something not unlike Apple's iPhone with huge amounts of storable memory pluggable into home networks), which work anywhere and in any environment on any platform.

"We need to make things more user-centric", said Gates.

He thinks too much of digital media is designed on a per-device basis and he sees that changing, both in terms of the development of single devices that DIFFUSION believes can be used in all environments - home, office, play - as well as in all contexts while running on seamless various Web-based communication platforms.

Gates is obviously an avatar for IPTV, which Microsoft has made significant investments in. Microsoft is working with 16 customers in 15 countries on four continents around the world with nine of those customers commercially deploying IPTV services including AT&T U-verse, BT Vision, T-Home from Deutsche Telecom and Bluewin TV from SwissCom

"There's no way broadcast infrastructure over these next five years will not be viewed as competitive. The end-user experience, and the creativity, the new content that will emerge using the capabilities of this environment will be so much dramatically better, that broadcast TV will not be competitive, " he said.

"In this environment, the ads will be targeted, not just targeted to the neighborhood level, but targeted to the viewer. And more and more as the viewer is coming to a TV set, either through just choosing off a menu, or recognizing voice, or some video type thing, it will actually not just know the household that that viewing is taking place in, but will actually know who the viewers of that show are."

Microsoft demonstrated how IPTV worked at the presentation, including its capacity for virtual tuning, instantaneous recording of up to four programs from a digital EPG, true video on demand, high definition display and recording. They wrapped it in the moniker of "better TV".

Gates made similar bold predictions for the future of gaming, which is already seeing the Xbox combine with a set top box to enable new forms of social gaming.

So what will happen? When will we really see what Gates calls "better TV"?

Most people, in Australia and the rest of the world, still receive traditional broadcast TV. IPTV and on-demand video won’t change typical viewing behavior for some time (only because we're never going to get it real soon) but TV is changing and will continue to change, because the Internet is forcing it to. However, we're more likely to see a more cumulative change, as is being reported by Neilsen, rather than massive, dramatic change.

Certainly Australia hasn't been very exposed to the joy of TiVo and Foxtel's IQ is limited to subscribers and companies like ICTV has struggled, but programming, the product and carefully synced ad placement is something the networks in Australia have already started toying with.

However, three strands of broadcasting will emerge - traditional network broadcasting, subscription TV and narrowcasting using IPTV, the last we believe will become the most dominant. Companies like YouTube and Google Video will embrace IPTV and start to mimic traditional network programming in much the way Pay TV channels do but with more user centric programming. In addition, new companies like Vquence will provide the kinds of advertising solutions which allow narrowcasters to integrate real clickable advertising into programming.

Gates is right when he says that convergence is a key area driver for future television. IPTV will be broadcast across all types of devices but via a single platform (something he's hoping that XBox is a harbinger of). But it's also going to be influenced by digital rights management and the whole IP debate around content ownership. And that's a very fluid area right now, particularly on the heels of YouTube's capitulation to US content owners (the networks and studios). While we're not likely to see a repeat of Napster, we are likely to see IPTV circumventing the four/five channel monopolies in this country.

While there certainly is demand for IPTV services in Australia. In 2005 Australia, the second biggest group of TV downloaders in the world, was responsible for 15.6 per cent of illegal downloads of mainly US content.

But we're not likely to see a commercial IPTV platform in Australia until the kind of broadband networks with fibre to the node and in the home is a reality. And that seems to be what some of the argument between Telstra, the G9, the Australian Government and the ACCC is really about. The reality is we need to be able to get speeds up to 26 megabits per second, when most home systems run at 256 kilobits and therefore unable to support three high definition channels, VOD, VOIP and full internet access.

For the time being we're going to see viewers struggle along with video over the internet (JumpTV or iTunes, for example) and more makeshift offerings from Telstra and Foxtel, who initially promised IPTV in 2005. In the meantime, the traditional networks, both in the US and Australia, will continue to see the kinds of change Neilsen has begun to report.