Dec
16
Noah: the Rainbow Sign?
Filed Under B2B, Blog, Industry Analysis, internet, mobile content, online advertising, Publishing, Search, social media, Uncategorized | 1 Comment
“God gave Noah the rainbow sign – he said, there’s no more water, its the Fire next time”
Marco Rodzynek and his colleagues at Noah Advisors are to be congratulated. The 650 attendees at the Park Lane Hilton in London yesterday had a treat: an event just as good as last years’ inaugural, genuinely Pan-European, full of investment opportunities at a wide variety of levels and concentrated around the winning world of internet services, where at last Europeans are beginning to work at scale, and respond to the needs of some very specific European cultures. I cannot attempt to sum up 35 presentations, and a panel of 6 fascinating angel investors, but here are a few lines and figures that hit me hard:
- “global roaming is about to be a reality – this is the end of the Roaming Empires”
- “the future of broadcasting is event – driven – everything else goes downloadable or otherwise playable on demand”
- “local advertising will become almost wholly transactional”
- “online advertising cpm in Asia is now under £1.00 – here is a market that collapsed before it started”
- “WPP is not an advertising agency – we see ourselves as a data, analytics and marketing company” Mark Read
- “the entire music industry in all formats and delivery modes is now smaller than the Apps business”
- Apps will grow from $4.6 billion in 2009 to $20billion in 2015 (GetJar)
- The secret of ticketing is to get people to optimize opportunity – if they book and then decide not to go then they can sell back through us – SeatWave
- Conduit is the largest B2B Apps player – it creates and manages Apps for “publishers” of all types. Its a SaaS service with 200 million users, 260,000 client publishers and in 2009 was acquiring 1 million new users a day. Recently moved distribution from Google to Microsoft.
- Trovit is now a major player in web classified advertising, aggregating 80 million listings in homes, jobs, cars etc (Why did we ever do Fish4?) It has 35 million unique users per month and ebitda is now up to 3 m EUR.
- Ticketing is an area for hugely increased penetration in future. “Over 50% of the market is still conventional in approach – yet this is a simple business where you are just trading a barcode” SeatWave
- Wonga also points to microfinance as a growth industry. Its a £60 billion pa sector dominated by banks. Wonga do loans of £1 to £1000, cash in the borrowers bank account within 15 minutes of approval, repayment in 11 days. They reject 70% of applicants, so risk information systems are vital. They will flourish as long as they are cheaper than late overdraft fees from banks – who charge UK consumers £3.2 billion per year for exceeding overdraft limits!
- German publishers have been better than anyone else in Europe in terms of network migration. Burda was a founder of Tomorrows World Group (dating, holiday booking, car sales etc): von Holtzbrinck is the owner of Parship, the leader in the dating market.
- Dating is great, and very special in Germany (high levels of profiling, security and psychological testing). There are 4000 services in Europe, and they are expected to consolidate by 75 % in the next 5 years.
- Compare Parship and ElitePartner (Tomorrow Focus Group), the German market leaders in dating. Parship has 56 million EUR in revenue, after 10 years and 11 million sophisticated German singles as members. Tomorrow Focus claims that it is close to Parship in size, which means that some 45% of its total revenues are dating. Total revenues for Tomorrow Focus are 120 million EUR, forecast to rise to 250 m in 2015. Ebitda is currently 12million EUR, rising to 30-40 million in 2015. Scout24 Group is smaller than either in these sectors.
- DACH really is now an expression of a marketplace which makes sense to these players.
- Spotify now has 750 000 users. Like LoveFilm, this is an increasingly cloud-based business, delivering services licence to every and all devices that the users want to play them upon. It say that “it does not compete with downloads – it just grows the market”. (But perhaps one day they will be the market!)
- Softonic “claims to be the largest neutral marketplace for apps software”. It has 130 000 reviewed programs and has done 1 billion downloads this year. It has 80 million unique users per month, is growing at 65 % pa and has operating margins of 50%.
- Only 5% of apps are used within 20 days of download.
- There are 1 billion internet users and 4 billion mobile phone users – guess where the information market is going?
- Amiando was bought by Xing: the future of B2B social network players is going to be events management.
- The sort of classified services we expect on our mobile platforms: take a photo of a car registration plate – and see if that car is for sale of if there are some available like it. Same for Homes? (Probably won’t work so well with partners!)
- 3D will be slow – but augmented reality will be everywhere next year.
- Travel sites – European commission on air tickets is 5% average – on accommodation it is 15-20 %: so we have less Expedias and more hotel booking agencies.
- Bigpoint leads the games arena: 160 million registered players, 25 languages, 1 million concurrent active users, 60 games at any one time, 250 000 new registrations per day, 10% of users create 80% of revenues.
- Growth is in non-specialist area – the Zynga/Playfish market where Bigpoint have their Rama series.
- GetJar’s claim to be the world’s largest Open app store (yes, you can use Flash!) backed by $100 million revenues per month. Company and founder moved from Lithuania to Silicon Valley (who says we cannot do “big” in Europe?). App developers pay no fees for being in the store, and users can use any billing systems. Angry Birds was the fastest ever app launch!
Take away a percentage for hyperbole, and a bit more for overselling, and you will still find that Marco is right: these are buoyant markets in Europe, showing aggressive growth and interesting investment possibilities. With some distinguished exceptions, they are not related to European publishing or broadcasting, and their growth cycles are not limited by print or broadcast relationships. Something new happened in the middle of the last decade and now it is happening again. Noah and its conference do us all a service by getting the vital essence of these changes onto a stage.
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