Terry's MBA 734 Blog

1. Is DoCoMo wise to offer its existing mobile phone rivals access to FeliCa?
2. Is search a winner-take-all business?

I think DoCoMo made a good move in allowing rivals to use FeliCa technology for three reasons. 1) Increased Adoption: When a company limits access to a new technology it isn't accessible by a the larger potential userbase. There may be users that desire to use the FeliCa applications but have extenuating circumstances that prevent them from changing providers. Additionally there would be less visibility (brand recognition) since fewer merchants will want to provide access to a smaller userbase and potential users will use and suggest applications to friends. 2) Additional Revenue Stream: DoCoMo's profit from FeliCa Networks increases the attractiveness of a larger userbase for the new technology as they profit from the fees from other providers. 3) Built-in Timed Exclusivity: DoCoMo has the ability to see which applications are coming up, and can work to implement the better ones prior to any other potential provider.

I don't think that search is a winner take all business as end users can easily switch from one search engine to another. Advertisers know that many users are drawn to portal sites such as Yahoo for their integrated mail and news services. These sites will still be useful for advertising.

Testing the new template

Since the writing of the Electronic Arts Case the Sony Playstation 3 and the Nintendo Wii have been released and both have online gaming capabilities. What’s your assessment of the current online gaming market?

The online gaming market I think is dominated by the XBox 360 (for consoles). They had the early mover advantage due to the PS3 getting their blu-ray technology in order and the Wii focusing on bringing in casual gamers. The XBox 360 has been successful in moving ahead of Sony in part due to the early focus on online gaming. The tie in rate for software also shows a clear advantage for Microsoft as they have ensured that each gamer gets a consistent experience in terms of online gaming. For this generation Sony will seem to be the copy cat in trying to match the standard set by Microsoft in the online gaming arena.

At the time of this case Netflix, founded in 1997, provided DVD rentals ordered online and delivered to customers through the mail in return for a monthly subscription fee. Netflix had worked to reduce cost of key components of this business strategy by negotiating DVD costs, identifying and selecting the content, optimizing delivery, and identifying the right pricing for the subscription. A major competitor emerged in Blockbuster video launching an online service. To combat the competition's local touch and similar service, Netflix has entered the video on demand (VOD) market. We have been asked how Netflix has attempted to update their business model with VOD?

From looking at the Netflix site, all plans include the VOD option to download to PC or watch on a TV via a capable set top device. Set top devices included popular machines such as the XBox 360 and 2 bluray Hi-definition movie players. This added conveniece of instant downloads was not provided by Blockbuster and had the additonal value to Netflix as it increased lock-in of customers who bought set top devices. Reducing turnover was probably the major factor in the company's decision as customer acquisition has been a significant cost as over the life of Netflix marketing has taken up 72% of operating expenses (through 2006).

From the original Napster to today’s bittorrent, peer to peer file sharing networks have worked to provide information content in many formats. (MP3-Audio, AVI- Video, exe/doc/other formats). Though the creators of such content may not have approved this type of file sharing, P2P networks have adapted and managed to circumvent most legal efforts to stop such activity. The question we have been posed as a class is who will win the competitive battle between P2P file sharing networks and iTunes over the long run and why?
I believe that P2P sharing will coexist with paid download systems but if I had to choose one to outlast the other I would choose P2P networks. It is my thought that just as the completely secure computer is one that is never turned on, the only way to ensure that an artist’s CD won’t be converted into an MP3 and pirated across the web is never allow anyone access it. Protection schemes can and have been broken or at least circumvented with enough time and resources. Legal action is slow and has done little to prevent the increase of P2P networks. The record and motion picture industries will continue to face complicated decisions as to how they can reduce the incentive for digital piracy. One option that seems viable is the HULU.com which provides popular TV shows via streaming online for free; using an advertisement supported revenue model.