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Content in Context helps companies to define the market for their products and services, to identify customers and build the business pipeline, and to develop their content marketing strategies. By working with our clients to design, build and grow their business, our primary focus is to extract commercial value from unique assets, including knowledge, data, know-how, processes and transactional information.

End to #geoblocking proposed in Competition Policy Review

Posted on September 30, 2014 by Content in Context

Australian consumers would benefit from key Recommendations contained in the Competition Policy Review Draft Report released last week – meaning better access to, and cheaper prices for digital content and tech products. In particular:

any remaining prohibitions on parallel imports would be abolished, unless there is a public interest factor in retaining them; and
Intellectual Property licenses would no longer be exempt from the requirements of the Competition and Consumer Act.

Introduction

I don’t propose to cover the whole scope of the Policy Review here – but instead focus on the practice known as geo-blocking, whereby customers in one jurisdiction can be prohibited from buying goods and services from another jurisdiction, simply due to their country of residence. (For example, Australian consumers are currently unable to purchase music downloads from Amazon’s dedicated Australian site, or from any of its international sites; and numerous titles listed on iTunes’ US and UK stores are not available for download via iTunes Australia.)

Context

It is now more than 20 years since the Hilmer Report (which led to the National Competition Policy), and as last week’s Draft Report states, much has changed since then in terms of new technology, market globalisation, the Internet and the digital economy. (Back in the mid-90s, before Amazon, PayPal and eBay, I recall having to buy from overseas via e-mail – including the payment information!)

The Review Panel, under the Chairmanship of Professor Ian Harper is to be commended for the speed of its draft review, and the breadth and depth of its Draft Recommendations, which cover a full range of structural and regulatory reforms. The Review was announced in December 2013, and based on current performance, is on target to deliver its Final Report within 12 months of being launched. (But I don’t expect much to happen by way of legislation until after the next Federal Election in 2016.)

The end of geo-blocking?

Most notable for the purposes of this article is Draft Recommendation 9 – the removal of any remaining prohibitions on parallel imports. Since this is a rather technical aspect of IP law, and because the proposal seeks primarily to benefit consumers, any reforms in this area will require extensive public education initiatives.

For example, some current restrictions on parallel imports may relate to health and safety issues (e.g., electrical items sourced from overseas which are not designed to run on Australian power supplies); others appear to be merely the capricious whims of trade mark owners, copyright holders, IP licensors and their licensees, designed to create artificial market barriers, especially when it comes to product pricing and availability).

So, if consumers and businesses are going to benefit once parallel imports are fully legitimized, they will need help in understanding their rights and obligations under the proposed reform. By way of example, if I can’t download a movie from iTunes Australia, and if this content is not available via any other local online store, can I force Apple to sell it to me if it is available in another iTunes store (and at a truly comparable price)? Can I seek to buy a copy directly from the copyright owner or from the locally licensed distributor, even though neither of them have chosen to make it available in this market?

Shades of Grey?

Parallel imports (also known as “grey market goods”) are not the same as counterfeit or pirated goods – grey goods are authentic and otherwise legitimate products originating in one country that have not been specifically licensed for direct sale or distribution into another market. Given that local consumers can already access many goods from overseas online retailers, and since items bought for personal consumption are generally not caught by the ban on parallel imports, there are already ways to get round these obstacles. (For example, Levis Australia does not import all sizes of its jeans for sale in the domestic market, but a careful search on eBay can usually uncover a retailer in the US willing to ship direct – and probably cheaper than buying locally if available, even allowing for shipping costs).

The bum deal for Aussie consumers

In its Issues Paper released in April this year, the Review Panel highlighted the impact of international price discrimination on Australian consumers, which in my view is a direct consequence of both the ban on parallel imports and restrictive IP licensing practices:

“A further issue in relation to imports is international price discrimination. International price discrimination occurs when sellers charge different prices in different countries and those prices are not based on the different costs of doing business in each country. A recent parliamentary inquiry found that Australian consumers and businesses must often pay much more for their IT products than their counterparts in comparable economies, in some cases paying 50 to 100 per cent more for the same product.” (1)

Noting that price discrimination is not specifically prohibited under Australian competition law, the Issues Paper also acknowledged that consumers and businesses alike already circumvent this “legitimate” trade practice via parallel imports, despite the potential legal and other risks.

Redefining the market

Unsurprisingly, the Draft Report does not recommend a ban on international price discrimination (2), mainly because of the cost and difficulty of enforcement (similar arguments have been made against lowering the GST-free threshold on online imports). And yet the Review Panel is in favour of extra-territorial reach under the Competition Law (making it easier to pursue legal action against off-shore parties). It also suggests redefining the scope of “competition” to include markets for goods and services that are “capable” of being imported or supplied into Australia (Draft Recommendations 20 and 21).

Delivering the desired outcome

Consequently, for Draft Recommendation 9 to have any real impact, it must facilitate consumer and business access to goods (especially technology, software and other digital content) that have not been licensed for direct sale or distribution in Australia, either because the overseas manufacturer chooses not to make it available in the Australian market or because the local licensee/distributor chooses not to supply it (or not at a comparable price). In other words, it should not be more onerous (or expensive) for an Australian customer to acquire legitimate goods from overseas if an off-shore supplier is willing to fulfil local orders direct. (Expect huge resistance from the global tech suppliers – who are probably concerned about the implications for transfer pricing and other international tax issues; and await a backlash from the FMCG sector – where some companies have already been disputing territorial control over sales of instant coffee.)(3)

Related reforms

Along with the repeal of Section 51(3) of the Competition and Consumer Act 2010 (to bring IP licenses within the purview of the Act – Draft Recommendation 8), the Draft Report also proposes a thorough review of Intellectual Property law in light of “new developments in technology and markets” and their impact on competition (Draft Recommendation 7).

The latter recommendation can be linked not only to the practice of geo-blocking, but also to the emergence of the shared economy, aspects of which challenge traditional notions of markets, vertical supply chains, business models, ownership and licensing. Elsewhere, the Draft Report comments on the significance of services like Uber (which has faced industry resistance since launching in Australia).

Conclusion

Most importantly, the Review Panel is keen to ensure Australia has a more relevant (and robust) IP regime that both encourages innovation and enhances market competition. A positive start would be an end to geo-blocking.

Footnotes:

(1) Source: The Australian Government Competition Policy Review – Issues Paper, April 2014, Chapter 2.6 (emphasis added; see also my earlier blog).

(2) It is worth noting that price discrimination is prohibited within the EU.

(3) The full ACCC Decision can be found here. Makes for interesting reading.

NEXT WEEK: What is CSIRO up to?

Understanding the sales people you need…. and when!

Posted on September 23, 2014 by Content in Context

Sales people come in all shapes and sizes. Some sales people are really adept at only one style of selling; others can adapt according to circumstances.

Based on my experiences there are four main types, organised along two axes: Transactional to Relationship-based client conversations; and Tactical or Strategic sales techniques.

The Ambulance Chasers take their cue from personal injury lawyers who literally follow the stretcher into the emergency room. These sales people are almost entirely reactive, and only ever think about the next “chase”. They are less interested in building client relationships, and more focused on how much they can get from a single sale. Such sales people can often be relied upon to achieve short-term sales targets, but they don’t necessarily generate a lot of repeat business. If they develop a good nose for where more opportunities may be found, and if they can engage in more systematic sales planning, they may be able to transition into the Tree Shaker.

Tree Shakers are skilled in tapping into existing networks and markets, and uncovering latent opportunities – at times it’s simply a question of knowing how to harvest the low hanging fruit, at others it’s knowing when to dig deeper into an established client account. These sales people can usually find an extra sale or two when their colleagues might have given up – but beware of Tree Shakers who are really sand baggers, holding back those deals for when they really need them.

A skilled Tree Shaker or even an experienced Ambulance Chaser will know that leveraging industry contacts can help them get to more opportunities – but in order to cultivate deep client relationships that yield returns time after time, or to build long-term pipeline potential, you really need strong Networkers. These sales people play the long game (not always helpful when short-term sales goal need to be met….) because they know that having a strong strategic plan and resilient relationship skills will pay off in the end. Networkers are great at leading by example when it comes to account management and updating the CRM system – but they can infuriate if they become too reliant on too few contacts. (Tip: check their expense reports to see if they are having coffee with the same people every month…)

However, the type of sales people who can leave all others in their wake are the Rainmakers – those that can literally conjure something up out of nothing. At times, the Rainmaker may appear to be totally opportunistic – pulling a rabbit from a hat just when it was needed (again, beware the sand bagger) – but their forte is going into uncharted waters and coming back with the catch of the season; and while their colleagues may resent their skills (or question their methods?), secretly they admire the Rainmaker because they show what can be done in seemingly difficult or untested markets. The downside is that Rainmakers might only have one big deal in them, unless they can build sales momentum and sustain interest in the market – otherwise, they quickly move on.

In reality, every sales person probably needs to demonstrate each of these styles at different times; and like any balanced team, a sales organisation needs to have all four styles on their bench. The real insights are knowing where and when to deploy these different skills, and understanding what the results mean when doing a breakdown of the sales reports.

NEXT WEEK: Revisiting geo-blocking in light of the Competition Policy Review Draft Report

Infographic Resumes: Form over Content?

Posted on September 16, 2014 by Content in Context

I’m old enough to remember when the filofax personal organiser (think PDA for hipsters?) became the must-have accessory in the yuppy culture boom of the early ’80s. (I recall my housemate, a creative at a leading ad agency, dashing around in panic one morning when he couldn’t find his filofax before he left for work – “That’s got my whole life in it!”.)

About the same time, home computers and desktop publishing software came on the market, and everyone became their own graphic designer.

One (thankfully short-lived) outcome when these trends collided was the emergence of the desktop designed resume, that could be printed out and stored in a filofax, including some that folded out to reveal the candidate’s illustrated profile. (I kid you not – I received several of these “cutting edge” CV’s when hiring for graduate-entry roles.)

More recently, there appears to be a fascination for infographic resumes – with a number of online tools available to turn your illustrious career into a poster with apparent ADHD – such as Pinterest, Kinzaa, Vizualize.me, and re.vu, among others.

I have no problem with using infographics to portray data and content in interesting and informative ways. But the problem with many of the resume designs I have seen is that they are either limited to portraying careers in a purely linear and/or statistical fashion; or they overcompensate by using “gimmicks” such as over-stylised graphics, irrelevant iconography and even multiple fonts. Much about these designs reveal a tendency for form over content.

While it’s important to be able to tell a good story, what employers often want to know is: what can you do for them and their clients, now and in the future?

Content Marketing and the “New Hierarchy of Needs”

Posted on September 9, 2014 by Content in Context

Maslow’s theory on the “Hierarchy of Needs” has become shorthand for explaining human behaviour and motivation – primarily in our personal lives, but increasingly in our working lives. At the risk of offering an answer to yet another first world problem, it seems to me that many social media platforms and content marketing solutions are trying to recalibrate Maslow for generating deeper (and sometimes more meaningful) engagement with consumers. So, by way of a simple infographic, I am offering my own theory on the new hierarchy of needs:

When we are looking for a product or service to meet a need, we are usually in “discovery mode” – we are searching for content that helps us by offering suggestions, comparing products and prices, and clarifying the precise need. So, we are either browsing, curious, or looking for assistance.

Having found some possible solutions, we seek reassurance via informed recommendations, peer referrals and published reviews. We may place different weight on this information depending on the source, but we are seeking justification for our reason to buy, or validation for becoming a customer.

If we are happy with our choice, and given the right opportunity and encouragement, we may be willing to tell our friends and anyone else who’s interested via Likes and social media posts and reviews. This is an interesting point in the engagement transaction – going from peer-to-peer sharing, to looking for approval for our decision from the wider community.

Finally, if we are so enamoured with the product, and we enjoy sharing our experiences, we may be flattered into making a lifestyle statement about our preferences; we could become a self-identified “voice of authority” through blogging and endorsements, or we might be willing to be closely identified with a brand as an advocate or champion (the sort of customer beloved of Net Promoter Scores).

The ultimate consumer-turned-champion was, of course Victor Kiam, the customer who liked the product so much, he bought the company….

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