This article has been reposted with permission from the Spark Minute blog.

It seemed that after the advent of Web 2.0 programming technologies, such as AJAX, that there was no more need for downloadable applications since any web page could now be a live application. With webware applications, each action would behave like a desktop application could. No need to reload a page every time you click a button, and more importantly, no need to download and install an application onto your computer.

On first look it appears that webware programs have usurped the need for downloadable applications.

But web-based programs have one very critical limitation. They require you to be on the web to use them. Webware programs can’t run all the time on your computer. They won’t shrink down into your Windows System tray.

As a result of webware’s limitations, there is still a strong market for downloadable applications. Looking at the history of popular downloadable programs, here are the three most successful categories:

• Communications applications – VoIP and video chat programs like Skype and all the instant messenger applications have always been popular. Many Adobe Air applications, e.g., TweetDeck, fall into this category.
• Anti-virus and spyware – Everyone MUST have these programs on their computer. Many people aren’t willing to shell out the bucks for McAfee or Norton, so they opt for one of the free solutions.
• Multimedia applications – Even though you can watch videos and listen to music online, downloadable desktop programs like iTunes and Windows Media Player remain popular.

All three of these categories have stayed consistently successful even with the amazing proliferation of webware applications.

And this is where itiBiti has found its comfortable and successful niche. DISCLAIMER: itiBiti is one of Spark Media Solutions’ clients.

Instead of trying to compete with any one of these categories, itiBiti is actually a mashup of a communication and a multimedia application, two proven and consistently successful categories of downloadable apps.

These downloadable applications succeed in one of the following three ways:

• They maintain a consistent connection with a brand that generates revenue through advertising (e.g., AOL with AOL Instant Messenger or Yahoo! with Yahoo! Messenger).
• They operate under a freemium model. Basic service is free but additional services cost money (e.g., Skype with Skype Out and Anti-Virus software with further scanning abilities).
• They operate a marketplace that sells content (e.g., iTunes with sales of songs, movies, and applications).

Given all these above described options, here’s the combination itiBiti offers:

• Always-on communications (text, voice, and soon video)
• Multimedia content (video, real-time news, web content)
• Branded application (white labeled so anyone can brand the application)

Since so many downloadable applications have failed since the advent of webware, it’s often a common belief that all downloadable applications are doomed. But if you look and realize that there are still many vibrant and highly demanded categories of downloadable apps, it’s easy to realize that there’s still a very strong marketplace. itiBiti aims to build success on a hybrid of already proven downloadable applications.

Want to know more? Interested in getting your brand on the itiBiti platform? Contact Brad Parry (bparry@intertainmentmedia.com).

Ron Fuggetta, CEO of Zuberance, a service that tracks brand advocacy and calculates ROI on that advocacy, just forwarded this really interesting study completed by Comscore and Yahoo! Thought the results were really interesting. Take a look.

Brightcove’s blog today has some interesting findings from an online video research study they did with Tubemogul.

They analyzed Q1 performance in online video from 2009 and 2010 and summarized their findings as such:

• Online video views has grown dramatically: 40 percent for broadcast media networks. 300 percent for web-based media networks. Spike is attributable to newspapers (37% jump) and magazines (70%)
• Online video production has grown dramatically: Newspapers (up 190%), magazines (up 60%), music labels (up 64%), radio (up 62%).
• Engagement levels vary by media type: Average length of viewing stream (in minutes:seconds) by media type broadcast networks (2:53), music labels (1:50), and newspapers (1:41).
• Completion rates vary by media type: Percentage of people by media type who finish watching videos – newspapers (41%), magazines (39%), broadcasters (38%), and music labels (29%).
• Twitter referrals create the highest level of engagement (longest viewing times): Broadcast networks (1:52), magazine publishers (1:23), and music labels (2:33). The exception is newspaper publishers, which see the highest level of engagement from viewers who find their content via Yahoo! (1:20).

Lastly, Brightcove claims that the majority of publishers in their study plan to launch ad-supported mobile video within the next 6-12 months.

I am an extremely avid podcast consumer (see my podcast listening lineup for 2010), and sometime podcast producer. I have completely stopped listening to over-the-air radio, and I now listen to podcasts whenever I can. All except one of my podcasts are free. The podcast I pay for is “Never Not Funny.” It’s a 90-minute podcast. You can get the first 20 minutes for free, or you can pay to get the entire podcast. I like the podcast so much that I pay for the full 90-minute version. To learn more about “Never Not Funny’s” business model, read or listen to my interview with the show producer, Matt Belknap.

Because I pay for the “Never Not Funny” podcast, I make sure that I always watch it (I pay an extra $5 to get the video feed). I’m paying about a dollar per show, but that’s enough to get me invested into the show that I feel compelled to watch it. That’s not the case for any of my other free podcasts.

I feel the same way about watching films I purchase and download from iTunes. Or music I purchase from iTunes. Or listening to music on the paid service MOG for which I also became a paid subscriber ($5/month).

When I pay for content, I’m compelled to consume it before content I can get for free.

But as we all know, even charging a nickel for content can be a barrier for consumption. Some may see this as dealing with two mutually exclusive issues:

• If people pay for content they’ll be compelled to consume it.
• If you charge for content it will be a barrier to consumption.

I see the ability to overtake these conflicting issues is by not scaring people when you charge for content. Instead, get people excited that you’re going to charge for content. And I believe you can do this by creating your own form of scarcity. Give away a portion of content for free that leads people to want to purchase the rest of it.

How do you charge for podcasts?

While iTunes has an app store, a music store, and a movie store, they don’t make it possible for podcasters to sell their podcasts. Podcasts within iTunes must be completely free. That doesn’t mean you can’t sell your podcasts, you just can’t do it completely within the four walls of iTunes. You have to go outside and create a personalized RSS feed that requires a username and password for access. You can manage that through services like Premiumcast (read and listen to my interview with Premiumcast’s founder, Paul Colligan).

Banner ads are becoming smarter. Google has released a new display offering that can adjust the content of a banner ad to dynamically better fit its surroundings.

The customer example used was Ford. Using the Google Content Network, Ford can make one central media buy and the content delivered is altered given the context of website it’s being served on.

The example used was: if the Ford ad triggers on a site that discusses green issues, a banner highlighting Ford’s hybrid vehicles would trigger. Whereas, a technology site discussing the latest gadgets would show a clip from Ford at CES, etc.

The head of the Google Content Network:

“This marries the science of search with the art of display…the ads are very dynamic, and there’s an indefinite number of ads that will get served.”

Another step on the road towards ads with intelligence – in this case with the relevance baked into the network side, and not the consumer side, with both angles being good news for advertisers and consumers.

I love stories of people sidestepping gatekeepers. At WordCamp in San Francisco, Karl Vogel of QuestionCopyright told a great story of how one animator and filmmaker, Nina Paley, chose to distribute her film, Sita Sings the Blues, completely open source. The open source distribution was so complete that she even let other people profit from her film and the character likenesses. You could, if you want, show her film at a theater, charge admission, and keep all the money. Or you could sell products with images of the characters on it and keep all the money.

Unbelievable.

Paley didn’t make a fortune, but she did make money, about $90K in profit.

Except for a music licensing deal that cost her $50K (she had to take out a loan to pay it), Paley didn’t deal with any gatekeepers, or have any additional film distribution expenses beyond site hosting fees. She made her film completely free via an open source platform and made money using these techniques:

Test, don’t take unnecessary risks: Paley first tested the waters to see how interested her audience might be in purchasing a DVD of the film. Getting this feedback let her know how many DVDs to print in the first run.

Make it easy for people to give you support: If you give something away for free, there will be people who will want to tip you or give you a donation. The obvious first step is to post a very visible donation button. Take that one step further and make the donation part of a challenge. Show an actual goal that you want to reach. Paley created a percentage bar to show how close she was getting to paying off her $50K music licensing fee. By providing this information, showing her fans where their money is going, she was giving her audience a reason to give money. People like to donate in such cases. They like to be rewarded by pushing you over a significant milestone.

Sell products: Paley sold everything from her site. Obviously she sold CDs, DVDs, and t-shirts. But because it was an animated feature with iconic characters, she also sold other items such as prints and jewelry. In some cases product makers, such as handbag makers, approached her to put her character designs on their bags. In return but not required, they gave a percentage of their proceeds. Fans like to buy these products because they act as physical containers or tokens that connect the purchaser with the artistry.

Utilize a “Creator Endorsed” badge: Since Paley’s film was completely open source, anyone could sell the movie or related products and not give her any share of the profits. While anyone could sell the product, Paley placed a “Creator Endorsed” badge on sites where proceeds from the sales of items would go directly to her, the artist. Since people want to support the artist, Paley rightly assumed that they’d choose to purchase items from “Creator Endorsed” sites.

This was advice that Vogel offered that I believe can easily be spoofed with a simple copy and paste of the badge. But I guess you can put a qualifier in the open source agreement that you can’t lie that something is endorsed by the artist, when it isn’t.

Encourage commercial activity: Since Paley wants people to see her film, she encouraged people to hold screenings and sell tickets. The people who showed the film were so grateful that they often sent a percentage of the proceeds back to her, or put out a donation bucket at the screening and announced that all donations will be sent back to the artist.

Encourage involvement: Ask viewers to get involved with the film. That can take many different forms. For example, some audience members created subtitles for Paley’s film, and also translated the subtitles in many different languages. You can crowdsource fans for information. Paley asked her fans what products she should sell.

Fans will also surprise you. Some of them remixed the film. One guy created a poster of every single frame of the film. And another person produced a fashion show based on designs from the film.

While making $90K is not an astonishing sum of money. Paley completely avoided the gatekeepers and made some money. So often gatekeepers buy films and all that happens is everyone loses money. Paley only had one risk, a loan of $50K for her licensing fee. After that, most of the revenue that came in turned into profit for Paley.

People don’t mind advertising. In fact they like it when it’s relevant.

What people don’t like is being served an advertisement for something that’s totally un-relevant to them. And until the advertising ecosystem becomes more intelligent and transparent this conundrum isn’t going anywhere.

I’ve been witness to a good example of this myself over the past week, having been served the same ad for stationary swimming pools over 25 times. I live in a condo, have a gym membership, and head to a cottage on the great lakes every summer weekend. There is a 0% chance I’ll be purchasing one of these pools anytime soon, yet the pitches keep rolling in.

The problem is being worked on… Within the mobile space, massive ad network Jumptap is developing tools that allow for customers to reach out and customize what types of ads they want like to see. It’s not a bulletproof cohesive list, but it’s a start. Are you interested in fitness? Sure. What about Chat and Email? Not really. Just toggle the categories on or off and the ads are then tailored to your saved preferences.

What do you think – if you get to choose the ads, would it make for a more engaging experience?

Every single action we take online can be monitored, analyzed, and then used to serve us even more targeted information. Online advertisers have been doing this for years by dropping cookies and tracking our web behavior. But many of us don’t realize that every iota of our actions are being tracked. It isn’t just the websites we click on, but whether we scroll a screen, how long we spend on a page, what links we click on, where we track or hover a mouse, and so much more. Amazon and Netflix have been using filtering technologies for quite some time.

The same organizations that have been helping retail sites target information are doing the same for content sites. Services such as Baynote and Loomia track and digest more than a dozen user behaviors on retail and content sites to serve up more personalized and relevant information.

Known as “session psychology,” many companies are working very hard to make information more and more relevant in hopes to lead to the goal of Web 3.0, a.k.a. the semantic web.

But our focus has constantly been specifically on user behavior. There are so many other factors, not measured by personal behavior, that affect our decision and interest.

On Friday, the LA Times reported that NBC.com has announced that they’ve enlisting the services of a British company called Filter to serve up more targeted personalized video content. Those recommendations will be based initially on the digital breadcrumbs we leave behind as we search, click, and browse across the web. NBC.com Communicator, built on the itiBiti communications engine, is a separate effort.

What’s intriguing about the Filter announcement is how they’re taking into account other factors that have nothing to do with individual behavior. Time of day, day of the week, and location are some of the other factors that come into play in the decision making process. For example, people are more interested in news information in the morning, but want to watch comedy at the end of the day. Comedy viewing also shoots up dramatically at the end of the work week, said Will Rogers, CEO of Rooftop Comedy.

Filter is keeping much of their secret sauce hidden, but they are also taking into account what videos your friends on Facebook are watching as well. This is not a new concept either. Social reading for recommendations is a feature that Loomia uses as well.

Years ago when Napster went legit in its pay a flat fee for all-you-can-eat music, many believed that they hit upon something huge. People have already proven that they don’t like their consumption metered. Phone service and Internet service went in that direction. Later, DVDs-by-mail providers Netflix and Blockbuster did as well. Flat-fee monthly pricing seemed an obviously successful business model for music. But it still hasn’t worked nearly as successfully as iTunes’ $.99 per song own-it-forever model. Why?

People don’t want to pay an ongoing fee for the music they love

You can give people all the music they want for a comically low price (MOG offers a $5/month subscription and Rhapsody just lowered its price to a $10/month subscription) but it’s still not enough. Because once people have the music they love, they don’t want to part with it. And on the onset, these services are saying, to keep the music you love you have to pay us a fee every month to keep it. It’s a concept that rubs a lot of people the wrong way. Still both services allow you to download and purchase the music. But many people think that’s paying double for their music.

If so many agree it’s a great service model, then why aren’t there more subscribers?

I believe there are many issues here.

• The model only leans towards true music enthusiasts who enjoy the experience of discovering music. That doesn’t define the average music consumer.
• People who test the subscription service end up gravitating towards music and artists they already own. They don’t explore and therefore they never see the value of the application.
• Users can’t take the music with them. This will soon change as MOG will be offering a service for iPhone and Android users that allows them to travel with their music library (Watch my video interview with the CEO of MOG on the subject).

Paid-for music more intrinsic to the desktop experience

I suggest that paid-for music could do better if it were more intrinsic to the desktop experience. Apple has successfully made iTunes a necessary desktop application. It’s grown in importance as they’ve add capabilities, content, and features. We’ve all witnessed it go from just handling music, to selling music, to handling video, to video, to selling applications and then managing them (funny how applications took the opposite path).

itiBiti, the white-labeled desktop communications application is going through a similar growth pattern. It offers first and foremost communications, but then it can handle any kind of content. But like iTunes, it’s starting small and growing. With itiBiti’s first release, the NBC Communicator, NBC is offering clips of NBC shows through the application. This is valuable to NBC because it’s giving them a desktop presence. It’s a location play they simply didn’t have before.

Similarly, the music industry could experience the same benefits but in a way they didn’t before. Since itiBiti is advertiser and ecommerce supported, the music industry could subsidize the monthly cost of its paid-for service through itiBiti. It’s a great opportunity for the music industry. Think about the opportunities. Your label is about to release a new album. On the day of release, the desktop application is completely reskinned with your album’s cover and the suggested songs for the day are pushed to that album as well. It’s the first thing people see before they launch their browser.

Just a modest suggestion for the music industry whether paid for or not. What do you think?

Photo credit: Creative Commons attribution to Tony J Case, Great Beyond.

More great news coming out of the itiBiti platform. We’re still in the BETA phase of the lifecycle, and already we’re seeing very positive metrics emerge.

A few of the highlights:

• Over 60% of those consumers directly targeted by brands in a closed environment have downloaded the application
• 64% of the users engage with the application regularly. When compared to other social media applications, this figure is very substantive (e.g., Twitter only sees 1/4 of its potential audience engage)
• Active Consumer Engagement with itiBiti is averaging 2.4 times per day, with an average length of 6.8 minutes

And underscoring this is the fact that no major marketing or brand push initiatives have been undertaken up to this point. All of these figures are coming from organic growth, and early adopters. Consumers are responding & engaging.

More and more brands are seeing the value in customized desktop applications. It’s critical that within a fragmented media arena every opportunity to continue a discussion with consumers is utilized. And in the desktop lies an avenue of untapped merit…

Check out the nbc.com Communicator version of itiBiti