Author Archives: Content in Context

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About Content in Context

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.

Radio comes of age in the social media era

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About a year ago, I posted a blog on “Steam Internet” which included some ideas about the importance of radio as a communications platform – even in the age of social media.

Among the individual responses I received, a former colleague recalled how he grew up with radio, and how it was a significant presence in his life as a source of news and entertainment – it kept him company while revising for exams, and allowed him to “share” songs with this friends (via personalised mixtapes). He commented that a pharmaceutical company in Indonesia uses radio as a mainstream outreach channel – because it is relatively cheap, it offers targeted demographics, and it provides access to a large-scale, mass market.

He went on: “Radio is probably still the most effective medium to reach out to large audiences – it is targeted, it is always ON, it is always entertaining, it has loyal followers, and it does not require the listener to have an expensive receiver. More importantly, radio traditionally reached a far larger percentage of the population than what the Internet does today, especially in large developing markets.”

Consumer interest in and demand for audio content is recognised by today’s media industry – hence the growth of podcasting, audio platforms like SoundCloud, streaming services such as Spotify and Pandora, and radio apps like TuneIn – not to mention the growth in Internet radio, digital stations and web-streaming broadcasts.

I tend to agree that radio, after more than 100 years, still offers “new” opportunities for reaching an audience, even Gen Y – but as with any content strategy, it pays to get the model right by:

1. Having great content (plus engaging presenters and skilled producers)
2. Enabling access (broadcasting via any platform, anywhere, any time)
3. Cultivating a strong programming culture (i.e., scheduling and curating a logical flow of information, and across multiple platforms)
4. Encouraging audience participation – radio thrives on giving people a voice, either through phone-in sections, community-made programming, or connecting via “traditional” media such as SMS and Twitter

Radio is also very local (despite global access/reach via apps like SoundCloud Radio) and is usually subject to broadcast regulation. I’ve been involved with a community radio station over the past 3 years, and it has made me aware that audience diversity can be a challenge for broadcasters (how to cater for smaller, minority audiences?), but at the same time many people feel unconnected to mainstream media, such that radio is actually their preferred platform to engage with the world.

Acknowledgment My thanks to Rudy J. Rahardjo for his input to this article.

CRM systems and the KISS Principle

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I’ve recently been working on CRM implementation projects, and I am astounded at the level of complexity that some systems have managed to impose on the organisations that deploy them. Paradoxically, the complexity is usually the result of either data models that are far too rigid, or data entry standards that are far too flexible – so that users have to find “work arounds” or create a whole new business operating model to accommodate their CRM….

For example, changing some data labels can be impossible (e.g., “Client” may have different applications, but the system only recognizes one type), and I have seen a client name entered in multiple ways within the same database: J.P.Morgan, JPMorgan, J P Morgan, J. P. Morgan.

When working with such CRM platforms, I’m frequently reminded of the KISS Principle (Keep It Simple, Stupid) as being the preferred approach to systems design, or as the architect Heinrich Tessenow eloquently put it:

“The simplest form is not always the best, but the best is always simple.”

Has streaming killed the video store?

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In the era of Quickflix and internet TV services, why would anyone continue to patronise a bricks and mortar DVD shop? Well I, for one, am a  regular customer of my local independent video store, and here’s why:

First, choice. Clearly, they don’t have every film or TV series ever made, but there’s more than enough to discover during my lifetime. And they stock loads of titles not yet available to stream or download in Australia. (See previous blog on geo-blocking – and at the time of writing, Netflix is not available in Australia.)

Second, they have a great international selection, and their catalogue is not dominated by the latest Hollywood blockbusters. They have a particularly good section of art-house titles, as well as all-time classics, mainstream comedy and big-name dramas.

Third, it’s cheaper. There’s a minimal sign-up cost, no monthly subscription fees, and on average, the nightly cost of a DVD rental can be far less than alternative services. Plus, with most of their DVD’s, you get the bonus material not always available via streaming.

Fourth, it’s quicker. I know this sounds counter-intuitive, but with the slow internet speeds in Australia, it actually takes me less time to walk the few blocks to the video store and back than it does to download a full-length film.

Fifth, the staff make informed recommendations. OK, recommender engines are getting more and more sophisticated, but many still seem to be based on what people bought/downloaded, and not so much on what they actually watched, and really liked. But the video store staff are very knowledgeable about films, and having watched a lot, they can usually offer some personal suggestions based on what I have previously enjoyed.

Finally, the local DVD store is something of a community service, and for that alone I will continue to support it.

10 Obstacles to Startup Funding in Australia

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The increasingly popular Lean Startup Melbourne kicked off 2014 with a session on Melbourne’s Startup Ecosystem. And while the tag of World’s Most Livable City is a draw card for attracting startup talent, the apparent lack of institutional investor interest in the startup movement is creating a barrier to funding options.

The Panel: Susan, Brendan, Leni - Chair: Indi Photo by @marksmithers via Twitter

The Panel: Susan, Brendan, Leni – Chair: Indi
Photo by @marksmithers via Twitter

After the traditional beer’n’pizza, an audience of around 300 people was first treated to a couple of lightning talks: Scott Handsaker’s presentation on Melbourne’s startup infrastructure was a great survey of the networking events, meet-up groups, co-working spaces, incubators, tech co-founders, angels and media resources. It also confirmed what everyone already knew, that the local startup community is thriving, and represents a positive force for change and innovation especially in the SME space (which is traditionally seen as the backbone of Australia’s economy). This was followed by Simon Moro’s guide to offshoring/outsourcing development and coding projects – including many helpful and practical tips.

Then came the main event, a panel discussion chaired by Indi from OutTrippin featuring serial entrepreneurs and startup gurus Susan Wu, Leni Mayo and Brendan Lewis. (For a brief but succinct write-up, see my fellow blogger Chris Chinchilla’s account.)

The main takeaways for me were:

1. Strong local infrastructure, but not yet as robust or scalable as Silicon Valley, London or even Dublin (Melbourne ranks #18 in the world)
2. Great community enthusiasm, but not clear what the role of government is or should be (e.g., should public money be used to “pick winners”?)
3. An established coterie of successful angels and VCs, but total lack of interest in the sector by institutional investors (e.g., still focused on investing only for profit, not in changing market behaviours)

In fact, the conspicuous absence of institutional investors at this type of event simply underlines why they actually represent a barrier to funding options for local startups. Here are 10 reasons why I believe instos have not engaged with the local startup community:

  1. They don’t understand the technology – this is not a new complaint; I have heard many entrepreneurs and corporate advisers bemoan the lack of appreciation for new technology developed locally.
  2. Not made here – conversely, there is suspicion about successful technology from overseas that is not yet proven in Australia (which is a challenge for local licensees seeking to develop local market opportunities).
  3. Preference for asset-based lending – partly influenced by regulatory attitudes, banks and other lenders prefer to lend against secured assets, such as plant, equipment or the family home. However, many startups and young entrepreneurs don’t own such assets (or their businesses are designed to be less capital-intensive). Instead, especially in the early stages, they would like to see funding based on cashflow lending linked to their current and future revenues (which are increasingly subscription and annuity based).
  4. Don’t understand the business models – with new technology come new business models, which traditional lenders and investors struggle to get their heads around. Traditional lending criteria are tied to traditional business concepts.
  5. Restrictive investment criteria – post-GFC, banks are more risk averse, and the regulators are also stifling investment product innovation with more stringent risk and regulatory capital management. In addition, institutional operating costs are eating into investor and lender margins, and local investment banking is diminishing, especially as foreign banks continue to scale back their local presence or exit altogether.
  6. Lack of a credible second board for smaller listings – if you don’t want, or cannot justify the cost of a full IPO on the ASX, then your options for raising wider shareholder capital are limited to platforms like ASSOB or NSX, neither of which have quite the same profile as London’s AIM or Hong Kong’s GEM.
  7. Restrictive crowd-funding options – yes, there are active crowd-funding platforms available in Australia (e.g., Pozible), but in most cases the “investor” has to be rewarded by tangible products and services (which has stymied some crowd-funding efforts by local film-makers), otherwise the financial market regulators might come knocking on your door. (This may change, if/when VentureCrowd begins to launch.)
  8. Tax structures can favour equities – without getting all technical, the use of franking credits by Australian companies offers considerable benefits to their shareholders via relevant tax concessions. As such, this makes equities (especially highly liquid stock) attractive to institutional and retail investors, and therefore inhibits the use of alternative funding options.
  9. Limited corporate bond market – most corporate bonds in Australia are bought by institutional investors, and despite various attempts to stimulate demand among retail investors, the vast majority of individual investors can only access these bonds via managed funds (which carry manager fees and other administrative costs), or more complex financial instruments such as hybrid securities. The institutional market itself is not especially liquid (there is limited trading activity), and if the federal government scales back public borrowing, this reduces the availability of treasury benchmarks for corporate bonds.
  10. Lack of loan syndication – it is common in many overseas capital markets to establish small syndicates of institutional investors to participate in corporate lending opportunities. This can help spread the risk for lenders, and diversify the funding base for borrowers. However, because of the loan sizes, and the highly concentrated banking market, there is little need or demand for loan syndication among Australian banks.

Until there is a better way to fund local startups beyond the initial rounds of angel and VC money, Australian entrepreneurs will continue to beat a path to Silicon Valley to raise capital. The irony is, a lot of Australia’s $1.6tn in assets under management are allocated to US money managers to invest back in Australia – in my opinion, this is an expensive boomerang. Instead, we need to build better dialogue (and more direct dealings) between the local startup community and our institutional lenders and investors.