We have been all iPhone all the time the last few weeks, so I vow that this is my last post on the iPhone for the month week day - definitely for the day.

This morning, Apple announced it had sold 1M iPhones, a substantial increase over the 270K they sold in its first weekend in June 2007. However, with a launch in over 21 countries, and some stores still not sold out of iPhones (in case you’re up for a drive the Cambridgeside Galleria has the 8Gb, and the 16Gb in B&W) it makes one wonder if Apple really met their expectations. Clearly - selling nearly 17% of the now total installed base is a win for Apple and iPhone lust continues but was 1M enough? I guess we’ll have to see how things shake out once the inventory is replenished - because not all stores suffered the same fate of the Cambridgeside Galleria.

One area that Apple unequivocally succeeded was with the Apps store. The services that will really set Apple apart experienced over 10M downloads. The large numbers of downloads is a clear indication that users have been clamoring to personalize their experience. As the store continues to grow and offer more applications to the international audience, downloads will thrive.

One App of particular note is the Remote application that finally ushers in an era where Apple offer unique communications between its device and services. While one doesn’t need a Mac to enjoy controlling iTunes it simply demonstrates the power Apple can wield when it so desires to fully integrate an ecosystem. If we thought Apple was tough to defeat before, imagine if they can further expound on these capabilities? Perhaps talk of the halo effect need to be revisited again.

2.0 is all about comparative advantage and nothing more. Adam Smith would be proud.

In this whole 2.0 world, I just can’t keep things straight. Was I born at 1.0 or 0.1? And where am I today? Am I in my 3.0s or just 1.9.2? Because I’d say that it looks like my 4.0s or my 5.0s are on the horizon, and I definitely feel like I’ve learned lessons from my 2.0s. And what will version 2.1.7b be like when we get there?

Unless I’m in the world of technology…which feels the need to 2.0 everything. Whatever you were doing is 1.0 and whatever you will be doing is 2.0. So according to the recent Advertising 2.0 conference, I’m destined to do tomorrow what I’ve been doing for years, which is going to conferences and looking for cellular signal. Or looking for a way to cram a day’s worth of work into the 30 minutes between sessions.

The biggest take-away from Advertising 2.0 is that, no matter what happens, the best that digital advertising can do is to grow its comparative advantage against other media. This is a difficult concept to grasp, but it’s very important. Everyone looks at Google, and they think that digital advertising is the land of milk and honey where riches abound.

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I spent a few days last week at Advertising 2.0 New York. As if virtually every advertising-related event isn’t in New York City. In my previous job, I found myself traveling the globe on a regular basis, but now that I work in digital media, it’s a trip to New York every couple of weeks.

The program was interesting, and the speakers were strong, but I found myself sitting in yet-another-basement-cum-theater-wishing-for-cellular-signal. This appears to be par for the course in New York. Theaters below ground. Poor signal. BlackBerry blackout.

The thing that amazes me about the digital advertising business is its relative size (small) and its relative impact (large). Even more interesting is the role that advertising agencies play in the process. Everyone gets paid along the way, and it’s expected that either you’re managing the client, or you’re a line-item in the budget.

So here are a few trends that appear to be surfacing:

1. Widgets are the new Flash. I’ve long said that “tapas” is Spanish for “starvation” and that “flash” is English for “a make-work project for graphic designers.” So as we send Flash sites on a brief vacation, we’re now employing graphic designers and out-of-work (as if there’s such a thing) AJAX programmers to develop advertising widgets. It’s supposed to be a really big thing because Microsoft valued Facebook at $15 billion even though everyone is losing money in social networking…including advertisers.
2. TV is important, though there’s a new generation that’s going to make their money in TV by not hoping to make their money in TV. Crazy as it may seem, the best way to get a date is to have a date. So there are all sorts of people hoping to break into television (and who will make their money in television) but who don’t appear to want to make their money in television. I still can’t figure this one out, but then again, I just watched Grey’s Anatomy for the first time (with the sound off) the other week. We have these neighbors who invite us over but who don’t turn off the television when we arrive. After 20 minutes, I start drinking Scotch in the hopes that I won’t be distracted by the flashing images.
3. Internet video is important, but “the business model” is different. As in “non existent” or “money-losing.” As in “the business model for internet video is a ‘money-losing proposition for all involved.’”
4. The canoe is small, but there’s room for others. Perhaps IPTV and satellite (which already has a small watercraft of their own design) could participate in paddling, portage or navigation. Everyone agrees that there needs to be a single set of standards for digital advertising on network-delivered television.
5. Social networks are important but nobody knows what to do with them. Agencies are willing to help. This is the perpetual pitch from the agencies. This stuff is new. Nobody has any idea why we’re talking about it. And we’re willing to help…for a fee.

And that’s the news that’s fit to print from Advertising 2.0. Thanks again to Victor Harwood, the team at Digital Hollywood. And Advertising Age for putting on an excellent show.

A few days ago I posted the requirements I deemed necessary to upgrade to a 3G iPhone. While the good folks at Apple decided to ignore all of my requests they did one thing that superceded all my other demands - dropped the price in half. For $200 I can get a new iPhone with 3G and GPS that I didn’t think would alone justify my need to upgrade. I will stifle my disappointment over the still 2Mp camera and unknown inclusion/exclusions of bluetooth stereo while I fork over my $200.

Another group that will be equally, if not more so compelled to now buy are consumers who had been sitting on the fence because of cost. In an informal poll I conducted earlier with one friend who has been lusting after the iPhone since he first drooled over mine some months ago I learned that the fence sitters will soone be resting more comfortably on the Apple side. While this is a small sample size (I promise, our surveys are more statistically relevant) the steep price decline will do wonders for Apple’s ability to further penetrate the broader market. Now all we need is a sub $1,000 iMac and Macbook!

And one other thing - does anyone want an iPod Touch anymore?

The question has been posed - will digital replace Blu-ray? Yankee Group’s take in Will Blu-ray’s Victory be Short Lived? concluded the impact will be minimal on sell-through but massive on the rental market - if only a company could solve the puzzle of hardware and service integration.

With today’s launch of the Roku-Netflix set-top box we are left to wonder if  the days of aimlessly perusing the aisles of Blockbuster - hoping to spy a film that piques a modicum of interest and is in stock are behind us? Further questions also abound - such as  how will we burn the calories we walked off en route to the mailbox to pick up our DVDs if we no longer need to leave our couch? 

On a more serious note, the offering begs the question - can Netflix succeed where so so so many others have failed (see Akimbo, MovieBeam with a slate of others on the verge of qualifying for failure status)? As I have stated in the past, if anyone can make hay in this market it will be Netflix and their first offering seems to heed the market conditions wisely:

1. Free Content! Time and again hardware manufacturers have failed by because they wanted to charge for hardware and content - a failed value proposition for nearly all consumers. 
2. Hardware Price. Alternatives cost well above the $99 price point. By foregoing a hard drive and other unnecessary features the box becomes an impulse purchase decision.
3. The Power of Netflix. Netflix has a core of zealots who the company can market the box to - allowing them a built in user base that other hardware has not yet offered.

Gushing aside, there remains a few chinks in the Netflix chain or armor which the company will need to hammer out:

1. More Blockbuster Content (no pun intended). Netflix will need to expand its offerings of video content beyond much of the older archived content generally available on the service. This will make users that find securing new release DVDs challenging prime subjects for the hardware and greatley expand the total addressable market.
2. HD. The next question that will be posed is “what about hd?” I would even content that the blogosphere is already abuzz with such pressing matters. Netflix will need to determine an HD strategy in short order to make users with those supersized HD sets happy.

Overall, this seems an important first step to introduce a complementary digital download service to a wider audience. It offers Netflix an opportunity to offset some of its shipping costs and provides an advantage over rival Blockbuster. For Roku it allows them to promote their brand name and potentially open the market up for its other products. For the competitors it provides insight into how the hardware can compete - some will add a hard drive, some will offer DMA functionality, others will compete on form factor. It is important that there will be room for differentiation and competition - that is, until the service launches on the XBox 360 or the PS3 (which may not happen but would make all the sense in the world).

In the process of our trying to blaze a trail to an Anywhere future of ubiquitous connectivity, I often look for inspiration from others who have followed their own dreams and made a mark on the world. So I was happy to find an interview with just such a person online recently.

To set up what this person has achieved, try to name a US company that only released 8 products in the last 15 years, yet had every single one of those 8 products generate at least $350 million in revenue. Said another way, this company has never had a single product fail during the last 15 years in an industry where such failures are expected routinely.

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Everyone loves hyperbole…or at least extreme positions and tales of gloom and doom: The sky is falling, and the world is coming to an end.

This week, we’re publishing a report called The High Water Mark for Interactive Cable. We’ll also be discussing this report and its findings in a webinar tomorrow.

It’s a far cry from Chicken Little, and we’re definitely not going to say that internet video is going to take over television. Given the negative margins to date, there are many questions that need answers such as business models, distribution and revenues.

And even as internet video taps into the flow of linear television advertising dollars, these are neither the ad budgets nor the types of television that we’re talking about.

Herein lies the difference: when we talk about targeted, digitally-inserted advertising, that’s Below-the-line (BTL) measured performance marketing. But when we talk about large audiences and linear schedules, that’s Above-the-line (ATL) advertising. Apples and oranges.

Meanwhile, there’s linear television, on-demand programming, and interactive video. These are very different things.

So when we say that this is the “high-water mark” for interactive cable, that doesn’t mean that we’re all in behind internet video as the future of television. Tune in tomorrow to learn more.

As the media and technology industries collide, we find ourselves using two sets of terminology to describe a common experience. To the technology industry, networks are anywhere and to media companies, content is everywhere. Technologists talk about users, programmers about viewers and audience, and marketers about consumers.

A few days ago, Emily Green posted on Media’s Anywhere Future and brought up a couple of ideas worthy of further discussion. In an anywhere (and everywhere) media environment, we talk often about brands as static entities: marketers that invest in advertising as part of a way to build an abstract concept that we call “brand.” Emily talks about brands in this way in her post, and she alludes to something that she calls a “threaded media experience.” She’s dead-on with the idea, and the media industry is abubble with the discussion of what they call cross platform. Advertisers refer to this same thing as cross media.

I’d like to take this a step further to say that technology is driving brands and media in co-opetition to define and monetize the cross-platform media experience. Read the rest of this entry »

For over a year I’ve been saying that in mature markets, broadband has become a utility. And in fact it’s been over ten years since I first observed, as the Internet bloomed around us, that the provision of network access itself would ultimately be no more interesting or remarkable – but at the same time no less imperative – than electricity. I finally know I’m right; in a recent editorial no less than The New York Times opined, “Broadband service is no longer a luxury.”

[By the way, someone asked me recently what I thought a recession would do to the pace of growth in communications and media activities in the U.S. Admittedly oversimplifying, I remarked, “In the battle for the unemployed consumer’s bill-paying resources, I’d rather be broadband than HBO.” Premium cable doesn’t help you find a job. But seriously, in the face of tightening household resources, the preservation of spend will go to the bundled triple-play offering – clearly providing the consumer with value that prevents them from sacrificing “John Adams” for craigslist.]

Tracking broadband’s ubiquity is the growing presence of digital displays. They pop up in new locations every day: taxis, elevators, malls and more. At Yankee Group’s Mobile Internet World event last fall, Sir Tim Berners-Lee called this phenomenon ‘pixel wallpaper.’

So what do you get when you combine ubiquitous broadband and ubiquitous pixels? If the network has the right intelligence, we’ll get Anywhere Media – experiences that travel with us, manifesting themselves appropriately on the displays and devices around us.

In a discussion hosted recently by The Boston Globe in preparation for the 20th anniversary of their annual Globe 100 listing of Massachusetts businesses, I was asked what trends might power the region’s economic growth over the next 20 years. This one, I believe, is huge — the emergence of threaded media experiences that provide some sort of continuity of consumption for consumers. I used to call it “agile content;” thinking the focus should be on how the content itself learns how to manifest itself appropriately on different devices. But from a content owner’s perspective, there will have to be some emphasis on how to create the integrated experiences that string discrete media encounters into a longer exposure. It will be critical to maintaining media’s value to brands, and it will be a big shift from the job of keeping the 20th-century family from leaving the sofa during the commercial break…

Wondering about the jobs of the future in New England, or anywhere else that the Anywhere Network is emerging? The need for cognitive scientists, creative interactive writers and producers, and design experts will be as big as the shift ahead to Anywhere Media.

The “iPod tax” meme just won’t die. Today, over at TechMeme I picked up a story on the Guardian UK website about the UK music industry lobby’s desire for an iPod tax. Here’s the money quote, from the original article: “Enormous value is derived by those technology companies and manufacturers who enable consumers to copy. UK creators and rights owners are legally entitled to share in this value - as they hold the exclusive right to reproduce their music - but are currently excluded from the value chain.” This is a song (so to speak) we have heard before. Instead of thinking about how to grow markets, connect with customers and expand the addressable audience for paid music that fans would actually like to buy, UK record companies would rather just confiscate someone else’s money. They genuinely believe they are, to use their words, “entitled” to it. Elsewhere,  I note that another research firm has reported that Amazon’s MP3 store does not appear to be taking share from Apple, which roughly agrees with our own findings. In other words: yes, it is possible to grow the pie, rather than whinge about how you deserve a slice of someone else’s. As we noted in our research note, “Warner Music Chairman Edgar Bronfman is Crazy–Like a Fox” (available to YG subscribers), at least one US music publisher agrees that “entitlement” is not a useful strategy any longer. Our unsolicited advice to the UK MBG: get a life.