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Digital disruption: A personal journey to cutting the cable

May 17, 2015 1 comment

We cut the cable recently. After consuming cable TV since the 1990s suddenly the scrolling acres of EPG content are no more – and guess what? We’re saving money and lives are slightly better for it.

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The issue had been bubbling away for some time. Over the past three years out of the 90+ channels Vodafone provided us via the T-Box, I had progressively found my viewing being whittled down to a core of Sky Sports rugby; the occasional movie; news and oddly, the terrestrial TV fodder based around news time.

What had changed over that period? The first crack in our relationship with cable TV was the purchase of Apple TV. I bought the little black box without really having any idea of how we would use it – but encouraged by the enthusiastic comments by a  work colleague.

Our broadband plan of the time wasn’t huge so there was a disincentive to streaming lots of movies but we had fun sharing You Tube clips from our other devices on the big screen. At the time United Video were still receiving Friday and Saturday night visits from us to choose a movie we’d all like. This was a long-standing behaviour that had begun decades earlier with video stores in the towns and cities I lived in in NZ or the UK. Using DVD stores also involved racking up a fair amount in overdue fines when the discs weren’t returned on time. But this was a familiar and well-worn end-of-week ritual for us all.

The second crack in the cable relationship was two poor decisions by our providers. One was Sky TV’s decision not to secure at any cost the rights to screen English Premier League football on Sky Sports in New Zealand, allowing Coliseum Sports to step into the gap adn offer the matches streaming over the internet. Recently Spark entered a joint venture with Coliseum to create Lightbox Sport.

The third issue was the obvious lack of investment by our provider in updating the usability of the dated EPG (Electronic Programme Guide) or any move to provide viewing on demand, rather than via a set schedule or by recording. An issue that was exacerbated when the recording option so often failed by CUTTING OFF THE LAST FIVE MINUTES of the programme (my screaming caps indicate the scars have still not healed).

As a content provider, not delivering the finale of a gripping drama or thriller is pretty much the highest order of epic failure. It was happening too often and from conversations with friends and colleagues – it was happening to everyone, not just us.

However, while Vodafone and Sky were losing us on the content side – Apple TV and Premier League Pass were demanding more data and it was right now that our relationship with Vodafone actually peaked as we doubled our data plan – but the critical point for Vodafone was that it wasn’t solely their content driving our consumption any more.

Fast forward a year from that time and our use of the “DVD store” was practically zero. Tellingly the DVD store was now diversifying about one-third of its floorspace into selling confectionary alongside DVD rentals. It didn’t solve the underlying problem however.

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The agonies of choosing a movie we all like had now moved from the DVD store shelves to the Apple TV movie selector.

The next step change was that our two youngest children were now near teenagers and also accessing and consuming video content – mostly videos about their favourite game at the time, Mindcraft or Pokemon. After a period of constantly exceeding our monthly broadband limit I realised we were at a crossroads. I could attempt to continue with a campaign of curbing video access that had limited success or… Or I could look at the behaviour of my millennial offspring and truly understand what David Bowie meant when he said that one day music would be like running water or electricity. I chose to be swept along in this deluge and cranked up our broadband package to an unlimited usage.

Enter Netflix. Not the emasculated NZ version, which has one-eighth of the content of the US version, but the teeming ocean of more than 1100 content titles of movies, TV series and documentaries all without adverts and all available in HD for $NZ15 a month. Unlimited. On demand. Available on any screen in our house any time we want it. No fixed term contract. BAM!

Our relationship with Vodafone and Sky was over before we knew it. One month into Netflix (plus Lightbox for Vikings) we realised we hadn’t watched cable that much at all. Certainly not enough to justify the $90-odd per month we were playing. The only hook cable had in us (well me) was sport outside of the EPL. For me that means the Crusaders and the All Blacks. But, in the interests of experimentation, I reckoned I could survive until the World Cup in September.

In retrospect we pulled the plug 7 days too soon. We gave back the T Box two days before Cricket World Cup semi final. Our contract still had some time to run and luckily I found I still had access to Sky Go – enabling my sporty son and I to watch the most thrilling game of cricket we’ve ever seen – in between Sky Go’s technical problems that required the equivalent of  a reboot every 20-30 minutes. After I tweeted my displeasure I found my access to SkyGo had gone completely (no doubt coincidence – I don’t think my tweets carry that much punch) and went out and purchased a Freeview box for $89 to watch the final via Prime, and also to add in access to “old style” TV just in case the need arises.

Now a couple of months into internet TV there has been more of a change than just access to a universe of amazing content. We have become very discriminating viewers. Instead of opting for the easy family viewing option of reality TV documentaries (cops; sharks; city dwellers on desert islands…) we watch science documentaries like Cosmos; even venturing into Ted talks on robotics with the boys. There are no adverts to divert our attention so we focus solidly on a good documentary. Sometimes we split off into individual screens for watching, gaming, reading, interacting and we also gather together to watch a shared movie or TV. But our screen time is now active rather than passive. And there’s been one other big change.

For the first time in a long time I have come home to a silent house where people are reading, drawing or playing. Our TV consumption has moved from the hypnotic cycle of programmes and ads to watching specific movies, TV shows and documentaries. Admittedly with compelling series like House of Cards or The Fall my wife and I will binge on two or three episodes at a time. But it is a very different viewing experience from the passive viewing of broadcast TV. A straw poll of family members was unanimous – we feel in control.

For the broadcasters this is a real challenge. Apart from product placement we are immune from TV advertising. In fact we just can’t take the barrage of yelling and flashing images when we take a peak back into broadcast TV via the Freeview box. And “TV events” now come to me only via social media, filtered – just like how I get my news.

Yes I am in the early adopter/early majority camp but this is the first light airs of massive disruption – because there’s a growing movement away from the broadcast nature of TV. And how are the large NZ media companies dealing with this right now? In what has been likened to emulating King Canute they are lawyering up and making fighting noises to maintain the status quo.

But as NBR writer Chris Keall writes: “Global mode services let you skirt old-school exclusive distribution monopolies, not bust copyright. You still pay your money, and content makers still get their slice.

As he reflects, the old model is now fundamentally broken. Which will make for interesting viewing from the consumers’ perspective.

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An experience with Google Glass

September 14, 2013 Leave a comment

I had an experience with some step-change technology recently that reinforced how sometimes your opinion is worthless until you’ve actually tried something.

I’m talking about Google Glass. Last month I had the great privilege of visiting Google’s  Googleplex campus in Mountain View, San Francisco, and found myself wearing a pair of the internet connected eyeware.

Like every other person on the tech-obsessive-geek-scale I had read much and watched as many videos as I could when these glasses were first announced. I had followed Google’s founder and Head of Innovation Sergey Brin as introduced Google Glass through a team sky-diving from a Zeppelin, filming their descent live on the internet using Google Glasses.

I had also looked at the media around the first prototype, bulkier versions and thought – “no way”. And I’d certainly had more than a few water-cooler conversations around the potentially socially-awkward nature of talking to someone else while wearing a pair of glasses behind which you may or may not be searching information on that person or filming them.

“Remember when video cameras first came on phones and everyone was worried you’d be filmed in the changing room”, remarked one male colleague.

“What if you’re standing by a children’s playground wearing one of those? How could you prove you’re just looking at the sports results and not some videophile.”

The whole action of someone’s eye’s flicking upwards and away from you to look at an invisible screen while in conversation just silently screamed as being socially unacceptable.

And to be honest my encounter with Google Glasses at Mountain View couldn’t answer those questions completely. But what I did learn was that as a user the experience was quite amazing and which left me hungering for more. The experience was so positive any previous doubts suddenly vanished into the air like soap bubbles.

The frames are very very light, stylish but robust. I wear glasses everyday and they felt just as comfortable as my frames do.

The right hand frame arm is where the glasses gear is kept and that was barely wider than some designer frames you get on regular glasses.

To fire up Google Glass you simply say “Ok Glass” and suddenly there’s a screen that seems about the size of a widescreen TV hovering at what appears a metre or so away from your eyes, slightly up to the right. When you look up at it the screen it appears to move down into your path of vision.

You can use a number of voice commands to call up maps; Google search; take a picture and other commands to send or share via Google+, Facebook or Twitter. Or you can tap and swipe down with your fingers on the right hand frame.

Sound comes through sound waves going through your cranium, rather than via your ears. It feels a bit weird at first but then is quite natural. And apparently the Project X team at Google have had reports from deaf users that they can now hear things again – an amazing and unexpected spin-off.

You are suddenly hands-free on everything your smartphone can offer you. It really is like the first time you take your hands off the handlebars of a bike – it’s a rush! You act a bit crazy.

After a few minutes it was amazing how comfortable it felt having the internet literally right in your face. I felt like a learner driver – and my New Zealand accent was giving the glasses some pause for thought – but very quickly it had gone from feeling like a sci-fi experience to one of usefulness and joy.

Sergey Brin’s vision right from the start of founding Google was that one day search queries would be irrelevant – the right information would just come straight to you. He believes Google Glass is that vision made manifest. He talks more about the philosophy of Google Glass in this Ted Talk.

I believe there is one set of Google Glasses in New Zealand being worn by an artist somewhere down south. He was given them by Google to aid with sculpture but now apparently uses them in every part of his day. He told them he couldn’t go back to life without them.

If I’d read that before wearing them I probably would’ve scoffed at that remark. Google Glass are definitely the shock of the new – and I guess sometimes you just have to physically experience the new for it to make sense.

Tesla and wireless electricity – a 157th birthday commemoration

July 10, 2013 2 comments

Who knew the internet was envisioned in 1908 – five years after the Wright Brothers flight and the year New Zealand completed its first North Island end-to-end passenger rail service?

Nikola Tesla holds balls of fire

Nikola Tesla – luminary in all respects

In 1908 the Serbian-American physicist and electrical engineer Nikola Tesla in predicted: “It will be possible for a businessman in New York to dictate instructions, and have them instantly appear in type at his office in London… An instrument not bigger than a watch will enable its bearer to hear anywhere… music or song [or] the speech of a political leader… delivered in some other place, however distant.”

Tesla was definitely a man out of his time – a visionary and inventor in the same league of Da Vinci, and today would be his 157th birthday. As well as envisioning the internet Tesla’s list of inventions is incredible – radio (US Supreme Court recognised his precedence over Marconi in 1943); remote controls; alternating current and the AC motor.

So my post today is in honour of this great man who, like Turing, was treated badly by his time. For more on this there’s a great, vitriolic Oatmeal post on on why Tesla was the greatest geek that ever lived.

Nikola Tesla

Nikola Tesla holding a gas-filled phosphor-coated light bulb which was illuminated without wires by an electromagnetic field from the “Tesla Coil”.

But while I am in awe of Tesla’s inventions such as AC and radio – it’s his work in wireless electricity that really really spins my wheels and, because it’s his birthday, I wanted to profile that stream of his genius and where it is today. While Tesla achieved fame his inventions never received the backing to achieve their vision. He died on January 7th, 1943 in the Hotel New Yorker, where he had lived for the last ten years of his life.

As I write at my desk my mind is immediately drawn to the web of of wires that powers the six entertainment devices in our living room and the multiple other electrical things around the house. But mainly the constant, half-starved nature of my smartphones that crave electricity on a daily basis like ultra-marathon runners crave carbs. Imagine a world free of wires and in which devices magically power up without ever having to plug in.

Tesla successfully proved wireless electricity in 1891 – the same year he became an American citizen.

At his lab, Tesla produced streams of electricity 135 feet long. People walking along the street observed sparks jumping between their feet and the ground. Electricity sprang from taps when turned on. Light bulbs within 100 feet of the lab glowed even when turned off. For Tesla I would imagine the vision of our world literally wrapped in wire would have been nightmarish.

While Tesla was famously predicting an unprecedented global industrial revolution from wireless electricity in 1906 – in 2013 the focus is more how this technology can address specific commercial and personal painpoints.

A New Zealand company is leading the world in delivering the vision of a wireless electronic future.

PowerbyProxi is a start-up that’s come out of Auckland University’s engineering department and which has taken some ground-breaking wireless power technology innovations and created business and consumer products. They say wireless power today is a proximity based system – to do things efficiently power can be transmitted over a maximum distance of about 8 inches. So customer benefits and value have to be derived from within that fundamental design envelope.

The company was founded in 2006 by Fady Mishriki and Greg Cross – 101 years after Tesla closed up shop and laid off his staff after losing backing for a 187ft tall tower in New York that would transmit both signals and power without wires to any point on the globe.  The huge magnifying transmitter would turn the earth into a gigantic dynamo which would project its electricity in unlimited amounts anywhere in the world. His financial backer, J P Morgan, infamously pulled the plug on this by declaring: “If anyone can draw on the power, where do we put the meter?” (Source – Tesla society biography)

So fast-forward to 2013 and Power By Proxi has invented a way to wirelessly transfer efficient power in the most difficult places: from a miniaturized receiver inside a AA battery to a mission critical solution in the demanding and hostile environment of a wind turbine control system. The company has worked with customers on over 50 real world projects initially focusing on complex industrial applications.

Power by Proxi

But it also has created the first commercial wireless recharging system capable of 3D power transfer, regardless of how the device is positioned in the recharging unit.

In the US in 2006, Marin Soljacic, a physics professor at the Massachusetts Institute of Technology, sent wireless electricity across a room to light a 60-watt bulb. Soljacic used electromagnetic induction, but with a twist. By tuning the sending and receiving coils in his electromagnetic field to resonate at the same frequency and engage only at that frequency (the way glass will shatter when struck by sound waves of just the right pitch), the current is focused and bypasses everything else, humans included. Resonant coupling, as Soljacic’s process is known, is far more efficient than Tesla’s attempts, and safer too.

Soljacic has a company called WiTricity, and he can now send 3,000 watts across a room—or a garage, since 3,000 watts can charge an electric car. You can see a compelling demo of wireless electricity by WiTricity in this TED talk.

I find it fascinating that a technology demonstrated over a century ago is now being taken seriously by science and business. And today I salute the genius of the 19th Century-born Nikola Tesla who pioneered what seems like such a 21st Century concept.

Flabby finances and fit bodies

April 15, 2013 3 comments

You would think personal finance management – the art of managing your money and achieving goals – would be the easiest thing to provide an online solution for.

That was certainly the thinking three or four years ago when every bank worth its salt started developing online tools that allowed customers to get a rich and useful picture of their overall finances – Kiwibank’s Heaps is an example.

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Heaps! personal finance management

I mean it makes perfect logical sense – every bank has a wealth of transactional information that, when packaged right, can provide a huge amount of insight into where a customer’s money is going and also through automation take out all the hard work of having to manually pull together a budget.

This was the topic of a great cubicle conversation with one of my colleagues this week. D and I have been working together for the past five years on a number of major online projects – including online personal finance management.

Now D is probably one of the fittest and strongest men I know as he puts his body through a regular gym/cross fitness regime every week – and has done so as long as I’ve been working with him. His physical and mental discipline have given him a toned and hard-muscled body that would put most of us to shame. That’s his thing and even through major life interventions such as children, injury, work pressure he has kept at the training and never stopped.

My thing is Aikido. I’ve been training three times a week for as long as D and I have been working together – so it’s a good common bond that can set off some good conversations about the physical and mental sacrifices and rewards you get from long-term, dedication to doing something positive with your body.

And that’s how we got to talking about the similarities between personal finance management and physical body management – whether that be the cross-training gym, the dojo or even an organisation like Weightwatchers or Jenny Craig.

“Never be too rich…”

I don’t think there’s one person I know who wouldn’t have just a little sympathy for Wallace Simpson’s notorious quote that: “One can’t be too rich or too thin”.  By that I mean probably 95% of us would love to be a few kilograms lighter and a few thousand dollars richer. Not obsessively thinner or richer – just in control of both.

The trouble is 95 per cent of people who attempt to lose weight fail. This year it’s estimated in the US  100 million people are dieting trying to achieve the latter part of Mrs Simpson’s edict. It’s a billion dollar industry but for most it is a cyclical pattern of joining a gym or weight-loss program in January and abandonment sometime after.

With trying to get your finances into shape it’s a similar pattern – even with tools that take out all the hard work. Some people do stick at it religiously – but they are the people who were running a budget on a spreadsheet before they got these great online tools.

Finance writer Amanda Morrall says the trick is not to treat personal finances as something separate from the rest of your life. In her latest book Money Matters: Get Your Life and $$$ Sorted, Morrall looks at how average people, with ordinary  jobs, have achieved financial management, and indeed wealth, through actually connecting with their true selves. It’s a powerful insight and a great book that combines solutions with motivating tips to get people living the life they should be living.

A quote in the book has been resounding in my head since reading it. Morrall quotes the Dalai Lama responding to a question about what surprised him most about humanity:

“Man. Because he sacrifices his health in order to make money. Then he sacrifices his money to recuperate his health. And then he is so anxious about the future that he does not enjoy the present; the result being that he does not live in the present or the future; he lives as if he is never going to die; and then dies having never really lived.”

I think that describes too many of us.

Common link

But back to my cubicle conversation with D. After a bit we found a common link between building physical strength and muscle; mastering a martial art; losing weight and keeping it off or spending less than you earn and building wealth. What’s the secret?

I think it’s a mixture of truly understanding what your life’s purpose is and, as Morrall writes, building your life around that. Otherwise you end up risking falling “into the trap of consumption where financial vampires are only too willing to take advantage of your vulnerability and exploit your financial weaknesses”.

Joining a gym or a dojo or a weightloss programme are pretty much in the same vein as opening up a tool like Heaps, Xero or Sorted. They are all capable of enabling a life-changing action – but only if they can be coupled with some internal motivation to make a life-changing action.

True it may only take one small step to begin the journey – and online can be a powerful source of sparks of inspiration – but the first step must be followed by many others heading in the same direction to get somewhere meaningful.

Webstock 2013 – Aza Raskin: “Embrace failure and fail forward”

March 4, 2013 Leave a comment

“The problem is, we don’t understand the problem”

Aza Raskin Webstock Flickr 2013

Aza Raskin at Webstock 2013 (Image from Webstock 2013 Flickr stream)

Former creative head for Firefox and named one of the world’s top 40 designers by Fast Company, Aza Raskin, turns design issues inside out. His programme notes from Webstock claim: “It’s not about thinking outside the box. It’s about finding the right box to think inside. The power of constraints is learning to choose the right problem.”

To make his point he uses the story of  US mechanical engineer Paul MacCready who was the designer of the first human-powered aircraft. MacCready was the eventual winner of a competition set up in 1959 by a British industry magnate, Henry Kremer, who waged £50,000 to anyone who could make a human-powered aircraft. He also offered £100,000 for a successful crossing of the English Channel in such an aircraft. Almost two decades later the prize money was still with Kremer and the wreckages of failed attempts lay abandoned in hangars and garages.

MacCready took up the challenge. As Raskin retells: “He came to the startling realization that people were solving the wrong problem. ‘The problem is,’ he said, ‘that we don’t understand the problem’.”

His insight was that innovators would spend up to a year creating an aircraft based on theory and design, without empirical tests, which would then crash on first flight. Or the pilot would ditch the plane exhausted. The team would then take the learning and go back to the drawing board and wheel out another version a year or so later. MacCready’s Satori-like moment was that they were all solving the wrong problem.

Says Raskin: “He came up with a new problem that he set out to solve: how can you build a plane that could be rebuilt in hours not months.”

Being able to iterate a new version in hours, not months, meant MacCready and team had innovated the design process to a point where six months later, in 1978, his Gossamer Condor flew 2.1km and took the Kremer prize. A year later – 20 years after Kremer set the challenge –  his Gossamer Albatross crossed the Channel.

For Raskin, MacCready’s genius was that he embraced failure and “failed forward” and created a great design because of the necessary constraints, rather than despite them.

“It’s not about thinking outside the box it’s about finding the right box to think inside”, says Raskin. He cites Japanese Haiku; Monet’s constraint of hues; InstagramSnap Chat and the Polish architect who designed a one-metre-wide house between two other buildings as further examples of the genius idea born of strict parameters.

He offers research that has shown thinking there’s an obstacle actually makes humans think more laterally by forcing us out of habitual, safe thinking. Apparently it’s even been proven that a detour on the journey home leads to a greater likelihood of the commuter changing what they will have for dinner that night.

“In problem solving or design, the part where you should spend the most time is at the start rather than on the solution.”

For Raskin constraints are just focused obstacles
1. That preclude reliable already recognised answers
2. That promote novel ones
3. That help you fail forward

Webstock 2013 – Clay Johnson

February 24, 2013 Leave a comment

Clay Johnson

The man who created Obama’s election site, Clay Johnson, kicked things off at Webstock 2013 with a presentation that possibly should’ve been the grande finale.

Clay Johnson at Webstock 2013

Clay Johnson at Webstock 2013 (Image from Webstock 2013 Flickr stream)

Like a surgeon performing Bariatric procedure he carefully laid open the flabby body of media we have today – where the news we get is saccharine and designed to affirm the perceptions of the mass market consumer, rather than challenging.

“MSNBC tells the ‘Left’ what they want to hear. Fox News tells the ‘Right’ what they want to hear.”

It’s an old adage that a society gets the news it deserves and Johnson’s prescription for the consumer was to use a diet analogy and treat news like food. Opinion may taste better than fact-based news in the same way that pizza tastes better than broccoli, but opinion-based news also comes with side-effects you don’t get with green veges. So as with managing food, he advises we need to consciously consume news – rather than unthinkingly graze through the day on the content equivalent of fried potatoes or meat.

He made five recommendations:

  1. Consciously consume – write down content you consume for a week and analyse it to see when you were consuming, what it was and whether it added value.
  2. Schedule your daily social media or TV consumption ‘urges’. “Time is our true non- renewable resource. You can always get more money but not more time.”
  3. Go local with your news consumption – be aware of your local environment. You can influence more at a local level, so understand what’s going on in your backyard.
  4. Be a producer rather than consumer. Take action/react rather than just passively consume. He gave each delegate the challenge of writing 500 words before 8am every day. Johnson said he treats this as if it were gym – stretch and strengthen the mind on a daily basis. Become mentally active in a way that adds to the betterment of humanity.
  5. Enable whole news movement. Support content rather than advertising. “Every click we make is an ethical choice – we vote for more of that.”

Johnson’s presentation left me with two other thoughts that have been ringing in my ears since the conference. The first that in 10 years time people who don’t get computers will be same as people now who can’t read. And there’s a lot of people risk being left behind in this transformation.

Threat to society?

But he also talked to an even more worrisome future state where the sheep-like affirmation-centric behaviour of digital consumers clicking on the advertising links they are given by the likes of Facebook or other online behemoths, slowly transforms the rights and liberties that sustain our society.

Facebook’s business model is to mine personal data and use that for advertising  – as a publicly listed company the pressure from Wall Street to deliver on this logically means Facebook’s hunger for our personal data will only increase. Which, to some, may make them the most dangerous company on earth.

And if you follow this argument of a now global profit-driven organisation reliant on extracting ever more personal details of its members to supply ever more relevant advertising   – well, you can get to quite a dark place. It is dark because it’s about driving consumer behaviour through advertising that is based on very good data about who we are as individuals – but on a global scale.

Now one could argue that advertising has been doing this for decades, based on focus groups and quantitative data from surveys – but there’s never been a platform where one organisation can record whatever intimate details and relationships that members share with friends, in such detail and on a global scale.

We have a choice
Of course, at the end of the day, we all have a choice with our level of engagement in social media. We don’t have to put all our lives in updates and tweets for the world to consume. But Facebook has a decidedly chequered history on privacy issues – graph search is the latest to raise concerns. And the stories of young gay people being outed to their parents because of the often opaque nature of Facebook’s privacy settings calls into question how much “choice” Facebook really allows members.

But Johnson’s underlying message – and a theme that continued throughout Webstock – was that there is the potential of a  positive outcome for society as we as individuals act in a more discerning way. By not blindly consuming, by focusing our attention rather than abdicating it, on an individual basis we can ensure a brighter future – despite the commercial pressures of the internet giants of today.

“A billion people dictating how people communicate and interact is law,” said Johnson.

Our choice is whether we want a future driven by advertising clicks, or  or future driven by betterment of humanity.

Pandora

February 17, 2013 2 comments

In a New York Times article in 2002 David Bowie famously predicted the end to copyright and that “music itself will become like running water or electricity”. I find that to be a truly futuristic and exciting vision for what the early days of the internet promised in terms democratisation and freedom of access.

And the fact that it came from a musician – albeit an already very wealthy one – but one who could see that greater openess for content still supported a business model.

The internet music radio services like Pandora, Spotify, Slacker, TunedIn, Sirius, are creating an absolute incarnation of Bowie’s vision while also showing how the internet can continue evolve into a semantic web Berners Lee envisioned.

I love Pandora for the reasons that everyone else does – it opens up the entirety of human music and curates it to your tastes. To quote Wikipedia: The service plays musical selections of a certain genre based on the user’s artist selection. The user then provides positive or negative feedback for songs chosen by the service, which are taken into account when Pandora selects future songs.

While the service has been offered in the US for 12 years it only reached Australia and New Zealand late last year. But it’s the same deal as US users get – free with ads or US$3.99 (NZ$4.85) per month without ads.

Pandora is accessed via web, 20+ car models and radios or smartphone – and it’s the latter that may be a real challenge to Pandora’s existence despite the fact it has  65 million active users.

The company’s business model is based primarily on ad revenue and its biggest cost is royalty payments. Each time Pandora streams a song, it pays a royalty fee to SoundExchange, a Washington-based trade group that collects royalties and distributes them to recording artists and music publishers. According to BusinessWeek the online music service paid 0.11¢ per song in 2012; that will rise to 0.14¢ in 2015. The royalty board has yet to reset rates for 2016 and beyond.

When Pandora launched it was consumed via desktop or laptop browsers but as in all other digital industries the mobile revolution has turned this on its head with millions of downloads of the Pandora app on iOS or Android. And for Pandora mobile revenues are much less than web. And with an increasing cost line, well you can see the issue. It’s a sobering position to be in as a business when the more customers you get (on mobile) the tighter your margin becomes and you can see where this may head for Pandora.

But there’s no shortage of competition for internet radio dollars. Spotify has 20 million active users

Slacker Radio has just relaunched in the US promising more music choice than Pandora. Slacker is more like traditional radio with human-curated stations, although you can establish your own as well and its revenues are based on advertising or subscriptions. It has 4 million active users with 500,000 being paid subscribers.

And don’t forget Apple, the great change agent in modern musical history. They are also eyeing this space.

And as with iTunes, which gave us easy and cheap access to our favourite music but also generated fair revenue for the artist – this is all great news for music lovers and musicians too. The impact on traditional radio is yet to be understood.