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Technolog: Swift vs Apple, Aus govt votes to block sites and Netflix makes it moot

6:47PM | Sunday, 28 June

Last week was significant for the media industry, with a hiccup in the launch of Apple Music resolved and Netflix demonstrating that providing customers with what they want trumps government legislation defending traditional, restricted practices. The media companies arguing that it is only Apple and Netflix that will gain from the new order rings slightly hollow when you consider that they could have done all of this themselves a long time ago.   Apple keeps Taylor Swift happy after she lectures them on music economics This week saw a major backdown by Apple over its decision not to pay music companies and artists during their planned three month free trial of Apple Music. The reversal is credited to a blog post written by Taylor Swift on Tumblr in which she explains why she was pulling her album, “1989”, off the Apple Music service.   This was not about her, she explained, but “about the new artist or band that has just released their first single and will not be paid for its success. This is about the young songwriter who just got his or her first cut and thought that the royalties from that would get them out of debt.”   It is not clear from Apple’s change of heart whether they were more swayed by Swift’s pulling of her album or the possibility of what must be a tiny number of people being seriously impacted by not having revenues that they wouldn’t have earned if Apple wasn’t launching this service.   Irrespective of whether Apple didn’t understand the logic in the argument either, keeping Taylor Swift happy was probably worth paying a premium for, if for no other reason than to distinguish themselves from Spotify, who couldn’t manage to keep her happy.   Australia keeps media companies happy by introducing ineffective site blocking legislation In more media news, the power of media companies was felt in Australia, where the government passed an amendment to the Copyright Act, which will allow rights holders to seek to block websites that are deemed to be pirating their content.   Critics have pointed out numerous problems with the bill, with the primary issue being that it is trivial to circumvent using a VPN connection. As detailed before in response to Voltage Pictures’ action over the illegal downloading of the Dallas Buyers Club movie, VPN technology is being increasingly adopted to mask BitTorrent downloads and so generally will get around any blocks that the internet service provider puts in place.   Interestingly, VPNs are also increasingly popular to gain access to US content on services that a user is actually paying for, especially Netflix.   The weakness of the government’s move has led people to consider whether they will allow the blocking of companies that provide VPN services, and even block VPN itself. But Australian Communications Minister Malcolm Turnbull has stated that VPN has legitimate uses and there were no plans to block this type of service. Netflix keeps consumers happy by actually giving them what they want Another element to the “locking the stable door after the horse has bolted” Australian Government legislation, was the report that Netflix had signed up over 1 million users in Australia since its launch April this year. This compares to the 300,000 users of all of its rivals combined.   If proof were needed that Australians (and indeed consumers globally) would actually pay for content if it was provided in a convenient and affordable way, this has to be it.   There is still a disparity between the content provided in Australia compared to the US, but this is likely to diminish over time as Netflix renegotiates global distribution rights.   Until then, there is always the option of paying for Netflix and using a VPN.   David Glance is Director of UWA Centre for Software Practice at University of Western Australia. This article was originally published on The Conversation. Read the original article.

How this entrepreneur signed up over 250,000 people to his underwear subscription service

6:53AM | Thursday, 4 June

Subscription services are becoming more popular in Australia but that doesn’t mean it’s easy to build up a loyal following, according to the founder of an online retailer with more than 250,000 subscribers.   DailyJocks specialises in men’s underwear and swimwear and is on track to turn over $2.5 million this year, up from $1.5 million the previous year.   Founder Nicholas Egonidis says the business’s subscription service – which ships new underwear to subscribers’ doors each month – was a result of a lot of hard work, patience and trial and error.   In particular, Egonidis says social media has been critical to the subscription service’s success.   “For me, that was priceless – getting people’s ongoing feedback really shaped what we were doing,” he says.   “What people need to accept is social media might start free but it’s never free if you want a really big response. Companies need to make it part of their marketing budget and be prepared to spend money on advertising.”   Subscription services are taking off in Australia as consumers become accustomed to the likes of Spotify and Netflix.   Egonidis says this represents an unprecedented opportunity for entrepreneurs – and not just in the content space.   “It’s a win-win for the customer but also the retailer or company,” he says.   “For the customer often it will offer value, so they may be paying less if they’re a regular customer. But it also offers convenience – there’s a lot of convenience delivery services on subscription. And then for a business it’s a great model because you can forecast a lot more easily if you know how many customers you’ve got.”   DailyJocks launched its subscription service in 2012, signing up 2000 users within the first month.   Egonidis says he has learnt a lot since then, encouraging other entrepreneurs looking to leverage a subscription model to find a good web developer and look beyond the Australian market.   “It can also be a cash flow intensive model too, especially if you’re having to pre-purchase significant amounts of stock for customers if they haven’t paid for it yet,” he says.   “It’s definitely something businesses need to factor in. You need to be able to grow sustainably because fast growth without the cash flow or margins can be very difficult as I found initially.”   Do you know more on this story or have a tip of your own? Raising capital or launching a startup? Let us know. Follow StartupSmart on Facebook, Twitter, and LinkedIn.

Streams meet as Presto and Quickflix merge content

5:17AM | Thursday, 14 May

The Australian streaming space is about to undergo its next major shake-up, with Seven Network and Foxtel-owned streaming service Presto announcing it will merge content with Perth-based rival Quickflix.   The Australian Securities Exchange-listed Quickflix, whose investors include Nine Entertainment Co, went into a trading halt on Wednesday, but this morning announced to shareholders it had entered an agreement with Presto to distribute its movie and TV content.   The agreement enables Quickflix customers to access Presto’s content that includes popular HBO shows like Game of Thrones.   Quickflix will be an affiliate reseller for Presto to reach new subscription streaming customers, according to the announcement, including those who still want to rent and buy DVDs through its DVD subscription service.   The Australian streaming space has heated to fever pitch since the entry of US giant Netflix in March, with Quickflix, Presto and Nine Entertainment Co and Fairfax Media-owned Stan all vying for market share.   Although it was at one time a market leader, Quickflix has struggled to make ground against its competition in the last 12 months despite its founder and chief executive Stephen Langsford telling SmartCompany last June Quickflix was in the box seat to lead the movie streaming pack in Australia.   “Streaming is taking off and this agreement will significantly bolster our content offering for existing and future Quickflix customers whilst improving our overall operating economics,” said Langsford in a statement this morning.   “After a review of prospective partners, it was obvious that Presto has the most impressive line-up of subscription streaming movie and TV content and we are delighted to be able to deliver this to our existing and future customers through the Quickflix experience.”   The agreement is subject to due diligence and funding arrangements.   This article originally appeared on SmartCompany.   Do you know more on this story or have a tip of your own? Raising capital or launching a startup? Let us know. Follow StartupSmart on Facebook, Twitter, and LinkedIn.

Budget 2015: ‘Netflix tax’ “brain-dead” and “a bloody nightmare” says Freelancer founder Matt Barrie

5:09PM | Wednesday, 13 May

The 2015 federal budget fails to make a distinction between small businesses and startups, which is stopping the latter from reaching their potential and creating the jobs of the future, according to the founder and chief executive of Freelancer.   Speaking to StartupSmart this morning, Matt Barrie said Australia’s commodities will diminish in the near future and it was worrying to see a “gaping hole” in the budget where there should have been a vision for a digital future.   “Government does not know the difference between the word startup and SME at all,” he says.   “Every time there is a discussion about startups it morphs into SMEs, and that’s why we don’t see anything major happen… but I can’t think of a greater industry for producing multiples than technology. The fact a 20-year-old can start a company worth $20 billion in a decade is mind-blowing.”   While the announcement that Australia will likely have a crowdsourced equity funding scheme before the end of the 2015-2016 financial year is welcomed by Barrie, he still has his reservations as little detail has been released.   “This actually has real potential to change the way the technology industry gets financed, which is desperately needed in this country,” he says.   “The problem is the way government implements things – it looks at what everyone else is doing and implements something worse. This is exactly what they did with the employee share scheme program. There are some pretty amazing things happening in the US and UK around this and I’m worried Australia is going to come along and cap something that is too low or restrictive in some way.”   Barrie said it didn’t make sense that people can walk into a casino and blow their money on the pokies but not make a considered investment in a high-risk startup with potentially very high returns.   “You can go into any casino in this country and bet your entire life savings, but for some reason we think there should be a cap in what people should be investing in what will have a huge impact on wealth in this country.”   The Freelancer chief also took aim at the government’s so-called ‘Netflix tax’, which will come into effect from July 2017 as long as all states and territories support the measure.   “Basically it is a tax on Australians using the internet, which I think is pretty brain-dead,” Barrie says.   “I know Australia is not alone here in how this operates, but the problem is it’s a bloody nightmare. My company and all the other companies like us are going to have to end up filing tax returns in every single country. It also looks like Australia is, in the wording, going to go even further than they did in Europe.”   Meanwhile, other startup founders and VCs have raised concerns that the federal budget contains few measures to encourage or educate potential entrepreneurs.   Rui Rodrigues, managing partner at Tank Stream Ventures, told StartupSmart until the government makes a long-term commitment to the tech startup sector Australia won’t be able to reap any meaningful benefits.   “Overall, it’s positive that the government has mentioned startups twice in the budget but specific incentives are still lacking or aren’t applicable to the sector, so in the end it’s difficult to look at the glass half full with this budget,” he says.   The chief executive of the Australian Computer Society, Andrew Johnson, says many initiatives in the budget were supportive but it was worrying not to see a significant focus on STEM skills.   “In today’s globally connected digital world, our education and training systems need to place a far higher priority on the science, technology, engineering and maths skills, including information and communication technology skills,” he says.   “We need to work collaboratively as a nation to shape a workforce that has the skills, competencies and attributes needed to prosper and create jobs in a digitally connected, fast moving world.”   Meanwhile Yasser El-Ansary, the chief executive of the Private Equity & Venture Capital Association Limited, said the government still has a lot more work to do when it comes to pivoting the economy away from the mining and resources industry.   “Many of our competitors around the world are putting in place policies that are targeted at attracting our best and brightest entrepreneurs away from Australia,” he said.   “We need to get on with the job of laying down a long-term bi-partisan strategy for innovation. The budget has not provided more detail on the proposed investment mandate for the new Medical Research Future Fund, so there is still considerable uncertainty about how the research outcomes will be translated and commercialised into economic gains for Australia.”   Do you know more on this story or have a tip of your own? Raising capital or launching a startup? Let us know. Follow StartupSmart on Facebook, Twitter, and LinkedIn.

Mobile and full-stack creators set to power the new age of content

4:41AM | Wednesday, 22 April

“Full stack creators” are the future of entertainment as the number of mobile devices is expected to reach six billion by 2019, according to Lowercase Capital managing director Matt Mazzeo.   Lowercase Capital is a venture capital firm based in the United States which focuses on seed-funding and has invested in the likes of Uber, Twitter, Kickstarter and Stripe.   Speaking at Slush Down Under, a part of the Connected Expo in Melbourne on Wednesday, Mazzeo says there’s a huge opportunity for entrepreneurs to create technology that will attract the attention of those billions of mobile users.   “Machines are helping us define what makes great content in ways that were never possible before,” he says.   “It’s no longer OK to just put your content to the world and let it fly. You’ve have to control the entire process now. You have to be fluent in creation to distribution, to the analytics behind them.”   Thanks to the commoditization of cloud technologies and dropping bandwidth costs, Mazzeo says full stack creators like Netflix and live-streaming apps Periscope and Meerkat are reframing the entertainment industry.   “Netflix has a ton of data and insight into exactly what you consume,” he says.   “They know you like Kevin Spacey. They know you binge watch political dramas. They know exactly who’s watching and measure success based on that. Not necessarily based on ratings coming from a third party. They don’t even report the views on this content. They can measure it by a totally different metric that’s important to them.   “Subscriber growth. Churn. Retention numbers. And it's working, their growth is astronomical.   “For those that think Netflix is a replacement for HBO you’re soon going to realise that this is actually a very different type of company that is trying to build a global platform for content.”   Mazzeo doesn’t see Periscope and Meerkat as competitors, rather two startups heralding the arrival of the next great innovation: the ability at the touch of a button to broadcast to the entire globe.   “I think we’re at the precipice of global moments,” he says.   “In the US there was a moment with Kennedy and Nixon where that presidential debate was totally floored by the fact that television had come along and Kennedy was just better on stage. I think the next generation of politicians, of leaders and entertainers, of explorers will have a moment with live streaming.   “That idea of connectivity in the moment and transportation through this device that we all have in our pocket that connects us all in a far more global way.   “Imagine all six billion connected handsets watching Elon Musk hit Mars. I think that moment is not out of the realm of possibility today.”   Do you know more on this story or have a tip of your own? Raising capital or launching a startup? Let us know. Follow StartupSmart on Facebook, Twitter, and LinkedIn.

What you need to know about Australia’s changing media landscape

4:59AM | Wednesday, 15 April

Australians multi-task whilst watching TV: Various studies show our eyes are no longer glued just on TV but on two or more other devices simultaneously. This new behaviour is what’s causing brands, advertisers and other stakeholders to change priorities in terms of ad spending.   In the September 2014 report of the Commercial Economic Advisory Service of Australia (CEASA), it was revealed that digital advertising took 37% of the total $6.2 billion advertising market spend in Australia for the first six months of 2014. Meanwhile, free-to-air (FTA) TV is fixed at 27% whilst the remaining slice of the pie was split between all the other advertising media.   Now that subscription video on demand (SVOD) services like Netflix are here, we are expecting TV and cable viewership to further decline – it may not be drastic, but it will surely happen one way or the other. The increasing number of commercials in between TV shows is what’s driving viewers to SVOD where there are fewer ads. TV is just no longer the ‘place to be’ for brands and advertisers looking to reach big audiences.   So if you are looking to build brand awareness through advertising, here’s what you need to know about our changing media landscape:   Mobile ad spending to hit $US101.37 billion in 2016 and will become the biggest digital ad market worldwide. (Source: eMarketer). This, of course, has to do with the soaring number of consumers adopting mobile devices, currently sitting at about 2-3 devices per person. This makes mobile advertising a no-brainer. To get your mobile edge, you can send time-sensitive service alerts and notifications, create seasonal engagement programs (e.g. holiday specials, weekly offers), deliver coupons via SMS, use QR codes, deliver targeted messages using geo-location data, use in-app advertising, experiment with call-only ads, and so on. It’s really important to invest in a mobile responsive design for your website to make this work. And also, don’t forget to offer mobile payment options. Social media advertising, together with mobile advertising, is among the top priorities this year of marketers globally including Australia. (Source: 2015 State of Marketing Report from Salesforce). Social media is where your potential customers are spending a lot of their time. This makes social media advertising a real, tangible driver of leads and sales. Create more social ads like sponsored posts, display ads, sponsored InMail, and so on. Take advantage of their targeting features for more efficiency in advertising. Other strategies you can use are to beta test your paid social ads, rotate ads frequently, use small samples to A/B test your social ads, and make sure you are tracking your results. 70% of marketers recently surveyed are spending 10% to 50% of their online ad budget on retargeting and 69% planning to increase that figure over the next months. (Source: AdRoll). Add to this the fact that 74% of marketers believe retargeting campaigns have increased their online conversions, and 55% have seen an increase in mobile conversions. Retargeting works because you are putting your brand and offer to people who have previously signified interest in your business. It influences purchase decisions and optimises sales conversion. So how can you drive top of mind awareness with people actively looking for your products and services? You can do search retargeting (searched for your business keywords) and site targeting (visited your website). AdRoll (the leading supplier of retargeting media across social media) recommends that advertisers should pay attention to the different retargeting time windows for every product. Example, people shopping for travel should be retargeted immediately whilst people shopping for luxury goods should be retargeted later. Around 70% of people working in the CBD of Sydney, Melbourne or Brisbane have noticed public transport advertising in the last week, including ads inside or on the side of buses, trains, ferries and trams, at stations, on platforms or in shelters. Around 65% of Adelaide’s CBD workers and 60% of Perth’s reported seeing public transport ads in the past week. (Source: Roy Morgan, released 10 March 2015). This tells us outdoor or out-of-home advertising is still effective, especially if combined with other forms of advertising like a TVC or social media advertising. Warc suggests an outdoor campaign can be significantly boosted by linking the creative displayed to the trigger moments of a TV commercial or video pre-roll. This, they say, increases consumers' long-term memory measure by an average of 42%.   Keep these figures in mind when you’re planning for your next marketing move. But don’t think traditional advertising is dead – not at all. It still serves it purpose, albeit not in the way it used to be and the trend is that audiences are moving away from commercial TV. What brands and advertisers need to do to succeed in this ever-changing landscape is to tweak their budgets and follow where their customers are hanging out. Plan carefully to get the best return on your investment.   Since starting her outsourced national marketing consultancy Marketing Angels in 2000, Michelle Gamble has helped hundreds of SMEs get smarter marketing. Michelle helps businesses find more effective ways to grow their brands and businesses.   This article was originally published at SmartCompany.

Unfazed by court cases, downloaders continue, but turn to hiding their tracks

4:01AM | Tuesday, 14 April

The assault on illegal downloaders by the movie industry last week was put forward as a form of making a highly visible example of a few individuals in an attempt to change public behaviour. Sadly for the likes of Voltage Pictures, it doesn’t seem to have worked.   Four episodes of the fifth season of Game of Thrones were leaked onto the Internet and have been downloaded millions of times. Countries in which downloaders have previously been targeted by Voltage Pictures, and others, were in the top 10 of downloading countries, namely, the US, Canada, and Australia.   At the same time, the top 10 most downloaded movies this week featured Furious 7 at number 1. That film has made a $610 million in profit so far. If illegal downloading is making a dent in the sales of this movie, it would be hard to tell.   What has happened as a result of the Dallas Buyers Club LLC court action against ISPs in Australia has been a substantial increase in the use of VPN technology in Australia to hide the user’s IP address that could identify them in any future legal action.   This is exceptionally good news for the VPN providers and not so good news for people wanting to target downloaders, or indeed for the Government.   In a recent survey, 16% of Australians surveyed had used a VPN to protect their privacy. This would have increased significantly after that point as one VPN provider, TorGuard showed a large spike in usage from Australia immediately after the Dallas Buyers Club LLC court case judgement was announced.   Using a VPN protects users who are downloading because their Internet address appears as if it belongs to a service in another country. A movie company wanting to track down the owner of the IP address would find the VPN company. VPN companies have so far resisted giving up customer names and limit the time that they keep access logs for. Any content owner seeking information from a VPN provider would have to go through a significant number of hurdles to get access to the person using the service. Finally, the VPN company is likely to be based in a different country to the servers that are being used and even to the customer themselves, creating further legal hurdles.   The use of VPN software has a couple of other benefits for the consumer. Most of the VPN providers will allow their customers the ability to choose which country they connect with. This means that a vpn user can get around “geo-blocking that prevents non-US users from accessing services like HBO Now and the US Netflix.   Theoretically, Australians would have been able to sign up for a free trial month of HBO Now through Apple iTunes and watch Game of Thrones relatively easily. The other side effect of the increased use in VPN technology is that its use makes the Australian Government’s data retention bill less useful as the only bit of metadata the ISP will see is that a VPN connection was made to a provider. Everything that happens after that point will be hidden from the ISP.   It could be argued that this is actually a relatively good thing from an individual’s privacy perspective and may actually make people more aware generally of security issues on the Internet.   From the ISP’s perspective, the use of VPNs by their customers is not necessarily a bad thing because it would reduce the information that they are required to keep and reduce the chance that they will be dragged to court each time a copyright owner wants to pursue infringers.   The response by downloaders to move behind the protection of VPNs was a reasonably predictable response and it seemed at best, naive of companies to believe, that when faced with millions of downloaders, sending letters to even several thousand people would have any effect on the behaviour of the group as a whole. The other mistake that people have made is to treat downloaders as a homogeneous group. There are a range of reasons why people download and these different motivations will come with different levels of determination to carry on despite the risks.   This article was originally published on The Conversation. Read the original article.

The four reasons this is a magical time for entrepreneurs: Matt Barrie

3:15AM | Wednesday, 25 March

We are living in a “magical time” for entrepreneurs according to Matt Barrie, founder of Freelancer.com, and SmartCompany advisory board member.   Speaking at yesterday’s Creative Innovation Conference in Melbourne, Barrie said we are living in a period of “unprecedented growth” powered by the internet. He outlined four global macro trends that he says have led to “a remarkable period of disruption”. 1.  Software is eating the world   Marc Andreessen, co-founder of Netscape, famously said software is eating the world. “Every business is waking up to realise it’s a software business,” Barrie said.   He says the world’s biggest book company, Amazon, is a software company, the world’s biggest video service, Netflix, is a software company.   2.  Most of the world’s population are yet to use the internet   Barrie says there are tremendous opportunities for growth as more and more of the world’s population gets online.   “There are 4 billion people not yet online,” Barrie said. “There as twice as many people on the internet in China as the entire population of the United States.”   Facebook and Google are working hard to enable more and more people to access the internet while simultaneously, Barrie says, every industry is now being digitised.   For digital businesses like Freelancer, this means increasing numbers of clients. “We are in the early stages of replicating a country in software,” he said. “We have a population the size of Belgium”.   3.  Distribution is unprecedented   Technology adoption speed is increasing as distribution gets faster and faster, according to Barrie.   Facebook went from zero to a billion users in eight years, the Apple iPhone got to 40 million units in two years, and the iPad ramped even faster.   “Consumers are adopting faster and faster but distribution is also occurring faster and faster,” Barrie said.   Technology enables “distribution fire hoses” to reach the potential clients more and more quickly.   4.  Stuff is free, stuff is cheap   Barrie says it’s cheaper than ever to build a business.   “The great thing about this is everything you need to build a business is free …  if it’s not free it’s virtually free,” Barrie said.   He cites tools such as Google docs, MailChimp and Canva as all providing free or close-to-free business services.   “You can start a business off the back of a credit card,” Barrie said.   For example, RetailMeNot was built with $30 in one weekend, bootstrapped to $30 million in revenue and then sold to WhaleShark for $90 million five years later. Now, RetailMeNot is listed in the United States and has a market capitalisation of several billion dollars. The original founders were clever enough to retain shares.   All these factors mean that businesses can succeed at a quicker pace than ever before, Barrie says.   “It took Apple eight years to reach $1 billion in revenue, Google five years, companies are doing this faster and faster,” he says.         This article originally appeared at SmartCompany.

Netflix launches in Australia: are free trials a good strategy for your startup?

3:41AM | Tuesday, 24 March

Netflix has officially launched in Australia, offering users a one-month free trial to scoop up customers amongst fierce competition, including Australian rivals Presto and Stan, in the on-demand streaming space.   However, is giving away your product or service for free – even if it is only for a limited time – a good idea for Australian startups?   Niki Scevak, managing director and co-founder of Blackbird Ventures, told StartupSmart a free trial is “nearly a universally good idea” when dealing with content or an information-based product.   “People’s willingness to pay goes way up when they’ve experienced the product,” he said.   “People have a very hard time evaluating it from the outside … that’s why a free trial is a very good idea. Obviously informational goods have near-zero marginal cost – Netflix has some cost in content delivery fees and bandwidth – but where it is rather miniscule or minor you’re not going to go out of business for giving your product away for free in the first 30 days.”   Scevak says while different models will work best for different businesses, bundling different options together or having different pricing tiers is something founders should actively consider.   “When you bundle products together, the willingness to pay goes up because there’s probably a thing you want on Foxtel or the movie channels and you’re willing to pay a little bit of money for the other stuff,” he said.   “Looking at bundled products, Netflix is obviously a great example of that.”   However, Scevak also points out that the Netflix launch has another lesson for startups – how to scale rapidly while not losing control of the business.   “As Netflix gets bigger they become more vulnerable to the content owners upping their prices and throwing their weight around,” he said.   “Things like House of Cards and their own initiatives become more important. As you get bigger, if you’re distributing other people’s products, you probably need to build your own products as you scale – otherwise all the negotiating power goes to the people you are distributing.”   Adding Australia and New Zealand brings the number of countries and territories in Netflix’s stable to 50.   Follow StartupSmart on Facebook, Twitter, and LinkedIn.

Netflix undercuts competition by $1 a month

3:22PM | Monday, 23 March

Netflix will charge $8.99 a month for its standard service when it launches across Australia on Tuesday, undercutting rivals Presto and Stan by $1.   Neflix’s move to undercut its Australian rivals comes as competition reaches fever pitch in Australia’s streaming market, with a slew of services vying to secure viewers.   The company officially announced its Australian pricing structure on Monday morning after details were leaked on Reddit and Imgur on Sunday night.   Netflix will offer its single-stream standard definition plan for $8.99 a month, a dollar cheaper than rival Foxtel and Seven Network’s Presto and Fairfax and Nine Entertainment’s Stan, which both offer their entry-level plans at $9.99 a month. The fee will allow users to stream all Netflix content on one device.   The three-tier pricing structure also allows users to choose to stream content on two devices for $11.99, or on four devices in ultra-high definition for a $14.99 "family" plan. Meanwhile, Telstra today announced it will offer its T-Box customers a free six-month subscription to Presto. The service will be available unmetered through Telstra’s fixed home broadband, meaning users can watch shows without it affecting their monthly data allowance.   Presto’s offering is headlined by US comedy Modern Family, alongside popular TV shows Homeland, Sons of Anarchy, The Newsroom and Girls.   Netflix is meanwhile pushing House of Cards and Orange is the New Black, and Stan has Breaking Bad spinoff Better Call Saul as its meal ticket.   All three services are also offering 30-day free trials to new members. Telsyte managing director Foad Fadaghi told SmartCompany it will be the battle for content – not pricing – that will make the difference in the streaming wars.   “It will be about getting new content and killer programs that entice people to first run with the service and then stay with it,” says Fadaghi.   “The biggest challenge will be churn. It will be easy to get trial members and easy to have one [or] two hook shows,” he says, believing users will mix and match content to suit their interests from different providers.   “Users might get Better Call Saul on Stan, use Netflix for House of Cards, and have a Foxtel subscription for subscription for sport.”   “We think it will be a fragmented marketplace and it will remain that way,” he says. Fadaghi believes Netflix’s pricing will have the biggest impact on Foxtel’s multi-pack premium offerings.   “It’s very likely people will look at $25 a month for content [with Foxtel] and put that side by side with $15 with Netflix,” he says.   “Foxtel’s premium pricing will face the biggest threat, given consumers now have more choice,” he adds.   SmartCompany contacted Netflix and Presto but did not receive a response prior to publication.   This story originally appeared on SmartCompany.

THE NEWS WRAP: Ashton Kutcher launches new venture capital fund

3:30PM | Sunday, 15 March

Ashton Kutcher and his business partner Guy Oseary are launching a new venture capital fund called Sound Ventures.   TechCrunch reports the fund will be stage-agnostic, allowing the pair to invest in later-stage startups.   Kutcher has previously invested in companies such as Uber, Spotify and Airbnb through his first fund A-Grade Investments.   The actor and tech investor was in Australia last month for the Tech My Way conference, where he speculated that virtual and augmented reality, biotechnology and artificial intelligence were the next big things in tech. Controversial app developer slams critics An Aussie app developer who promised to give thousands of dollars to charity and was exposed for not handing over the money has hit back in a rambling Facebook post.   Belle Gibson, the founder of The Whole Pantry, solicited donations from around 200,000 people for various causes and said she would give away a quarter of her company’s profits – however, an investigation by The Age found no such contributions were ever made.   Now the entrepreneur has hit back, according to Fairfax, writing in a Facebook post that those who were speaking to the media about her were bullying “myself and my family”.   “I know the work my company and it’s [sic] contents did changed [sic] hundreds of thousands for the better,” she said. YouTube could be considering a subscription model for premium content YouTube could soon have its own paid video on demand service, according to The Verge.   The company is exploring the concept as a means to improve its bottom line and allow popular content producers to access a higher percentage of ad revenue.   The rumours come from an unnamed executive at a company that partners with YouTube to produce video content.   Competition between streaming providers has heated up in the past 12 months, with Netflix confirming it is launching in Australia on March 24 and taking on local companies Quickflix and EzyFlix. Overnight The Dow Jones Industrial Average is down 145.91 points, falling 0.82% overnight to 17,749.31. The Aussie dollar is currently trading at around 76.23 US cents.   Follow StartupSmart on Facebook, Twitter, and LinkedIn.

Will Australians accessing American Netflix jump ship when the service launches Down Under?

3:05AM | Wednesday, 4 March

Streaming giant Netflix will launch in Australia on March 24, however, thousands of locals already have access to the company’s American service thanks to browser plug-ins and VPNs.   The exact number of Australians bypassing Netflix’s geo-block is unknown, but it is estimated that more than 200,000 people are accessing the American service.   These figures come from data collected by Pocketbook, which found Netflix was the second most popular paid content media company in Australia despite having not launched locally.   Foxtel has the largest market share, while Quickflix – which in 2012 had around 110,000 users – came in at third place. The number of Australians accessing Netflix via a VPN must therefore be somewhere in between, according to the Pocketbook survey.   However, will these users jump ship to the Australian service once it launches at the end of this month?   StartupSmart spoke to more than 10 people this morning who access the American Netflix service from Australia, and not a single one said they would be changing over on March 24. The reasons were primarily due to pricing and the availability of content.   “It’s much easier to access content and I feel better than I would if I was pirating them directly, even though it still exists in a legal grey area,” one person said.   “I almost certainly won’t change to the Australian one because I know they’re going to have an absolute dearth of content.”   Another person who uses a VPN service pointed out that price was a major sticking point.   “I think I will stay because I find using the VPN so convenient,” they said.   “The idea that I would have less content or pay more for a very slight amount of convenience doesn’t matter much to me. I’m pretty happy with the price I pay for American Netflix.”   Netflix Australia has not yet revealed the exact cost of the service. It has previously confirmed it would operate on a three-tier pricing plan: standard definition video, high-definition and 4K ultra-HD.   While most of the original programs to be released in Australia later this year will be available at the same time as in America, the timing of the Australian launch means locals have been missing out on the popular drama series House of Cards.   In addition, Netflix is refusing to say whether season three of Orange is the New Black will be available to Australians at the same time as America.   A spokesperson for Netflix told StartupSmart the company does not offer comment on the number of VPN users in Australia because they are just “speculation”.   “The use of VPN is against Netflix terms of service in countries we do not operate in and we abide to industry guidelines to prevent this happening,” he said.   “We are confident that when we launch here, members will enjoy the Netflix service we are bringing to Australia.”   In January, Torrent Freak reported that Netflix was cracking down on subscribers who were using VPN services to bypass the company’s geo-location restrictions.   Follow StartupSmart on Facebook, Twitter, and LinkedIn.

On-demand streaming space competition just heated up

2:49PM | Tuesday, 17 February

With the launch of streaming service Stan, and Netflix set to hit Australian shores at the end of March, consumers are more spoilt for choice when it comes to subscription content than ever before.   However, customer acquisition, internet speeds, data allowances and increasing competition from other providers are all factors which existing and future on-demand platforms will have to overcome in order to gain a foothold in the local market.   Andrew Julian,product lead at Gyde, told StartupSmart 2015 is going to be a “very interesting and great year” for consumers of on-demand films and television.   “Competition is always great for the consumer and we’ve been underserved in Australia for such a long time now,” he says.   “There’s no question competition is really going to benefit the consumer. It’s also important to understand that the services differ between what’s called subscription video on demand (SVOD) and transaction video on demand (TVOD)… our view is that many more services and not just content are moving towards a subscription model.”   However, just because consumers are welcoming on-demand video streaming platforms with open arms, does not mean these services won’t have to overcome obstacles in order to launch – and eventually scale – in the Australian market.   Chief executive and co-founder of on-demand streaming service EzyFlix, Craig White, told StartupSmart content rights acquisition is the first major barrier to entry faced by on-demand TV and movie streaming startups.   “This isn’t in and of itself for the faint-hearted and you have to prove your business model and case to the content rights holders before you can entertain a second meeting,” he says.   “Then it gets to chequebook time to acquire content that is going to be meaningfully competitive or differentiated. The more people that enter [the space] the more difficult it is to build your business case and get past that first hurdle.”   Issues surrounding infrastructure – such as Wi-Fi speeds and data limits – are also significant, according to White.   “We hope over time the internet will get faster, the NBN will roll out, and data plans will become more competitive,” he says.   “There is a lot of investment that streaming companies need to do to overcome those barriers that aren’t controllable like internet speed and the like.”   Ultimately, White predicts the majority of Australians will have a “staple” on-demand video service – the frontrunner of which will likely be Netflix – in addition to other platforms that cover the rest of their consumer habits.   “They are going to move in and out of the different services and what will anchor them to one or another will be what’s core to their entertainment needs,” he says.   “The first challenge in all that is going to be education because consumers don’t yet know for the most part what differentiates the services and it’s going to be intuitive. In our case the focus is on the new release movies which are the lifeblood of entertainment.”   Follow StartupSmart on Facebook, Twitter, and LinkedIn.

THE NEWS WRAP: Amazon to make films for the big screen

1:40PM | Monday, 19 January

Amazon Studios has announced it is going to produce full-length feature films for the big screen before making them available for streaming online.   The Verge reports Amazon plans to make up to 12 movies a year beginning in 2016.   The films will be available to its Prime subscribers in the US four to eight weeks after they are released in cinemas.   The news follows a number of streaming services jostling for market share in the US and Australia.   On-demand video service Netflix will launch in Australia and New Zealand in March this year – set to compete with already locally established streaming services Quickflix and EzyFlix. Rubikloud raises $7 million to help retailers tap into big data Canadian startup Rubikloud has raised $7 million in Series A funding to help retailers leverage big data in order to boost sales.   The round was led by TOM Group and Ule, along with Access Industries and a number of private investors.   Rubikloud allows customers to analyse data in real time, and says the funding will be used to expand its workforce and customer reach in America and China.   Co-founder and chief executive Kerry Liu said in a statement retailers are “waking up” to the fact that the future of retail will be data-driven.   “If they don’t understand their customer across all their channels, they will become obsolete or lose their brand recognition and loyalty,” she says. Venture capitalists gave $48.3 billion to US startups in 2014 Venture capital has reached its highest point in the US since the peak of the dot-com boom in 2000, according to Bloomberg.   American startups received $48.3 billion in venture capital in 2014, an increase of 61% from the previous year. Last year saw startups receive more than double the $20.4 billion invested in US tech companies in 2009.   Last year saw the most funding pumped into US startups since 2000, when venture capitalists poured $105 billion into the tech industry just before the dot-com bust. Overnight The Dow Jones Industrial Average is up 190.86%, rising 1.10 points to 17,511.57. The Aussie dollar is currently trading at $US82 cents.   Follow StartupSmart on Facebook, Twitter, and LinkedIn.

THE NEWS WRAP: Nvidia hopes to drive auto market with new platforms

1:30PM | Monday, 5 January

Chipmaker Nvidia has unveiled new platforms for in-car infotainment and self-driving cars at a press conference ahead of the International CES trade show in Las Vegas.   TechCrunch reports Nvidia has unveiled an in-car entertainment system called Drive CX that can power 16.6 megapixels across multiple displays, along with an image processing platform for self-driving cars called Drive PX.   The new systems are built on the company’s new X1 processor, which can power up to four full HD screens or two 4K resolution screens, along with speech and image recognition. Netflix-approved TVs are on the way Netflix is set to rollout “Netflix Recommended” logo for selected internet-connected smart TVs, with brands including Sony, LG Electronics, Sharp, Vizio and Roku signing up for the program.   According to Re/Code, Netflix says it will grant the certification to televisions that deliver “consumer benefits including turning the TV on instantly, faster app launch and faster resume of video playback”. LG updates its G Flex phone LG has announced an upgrade of its flexible G Flex Android smartphone at its pre-CES press conference.   As with its predecessor, the banana-shaped G-Flex 2 features a self-healing coating on the back that is resistant to scratches, and flexes back to its original shape when bent.   It includes a 403 pixel-per-inch 5.5-inch OLED display, powered by a 64-bit 2GHz octa-core Snapdragon 810 processor, and will initially be released in South Korea later this month. Overnight The Dow Jones Industrial Average is down 1.73% to 17524.1. The Aussie dollar is up to US80.97 cents.

THE NEWS WRAP: Netflix rules out offline viewing

12:32PM | Wednesday, 17 December

A Netflix executive has ruled out offering customers the ability to view popular television shows and films offline.   “It’s never going to happen,” Netflix’s director of corporate communications and technology Cliff Edwards told TechRadar.   The statement has shot down hopes the popular video streaming service would allow customers to download videos to watch offline in a similar fashion to music streaming service Spotify.   Instead, Edwards argues better Wi-Fi coverage – particularly on public transport – is a more suitable long-term solution as opposed to offline viewing.   Last month Netflix confirmed it would expand into Australia and New Zealand in March 2015. The company has more than 50 million members worldwide.   Leaked emails reveal Snapchat acquisitions   Emails leaked during the Sony Pictures hack have revealed multimillion-dollar acquisitions made by Snapchat, as well as the startup’s plans to include a music feature.   TechCrunch reports that emails leaked between Sony Entertainment chief executive Michael Lynton and Snapchat board member Mitch Lansky reveal the picture and video-sharing app acquired QR scanning startup Scan.me for $14 million in cash, $3 million in restricted stock units and $33 million in Class B common Snapchat stock.   Other emails reveal Snapchat reportedly paid $10 million in cash and $20 million in stock and bonuses for startup AddLive.   Dating startup Zoosk puts IPO plans on hold   Online dating platform Zoosk has backed away from its IPO plans and will revisit its options at a later date, according to TechCrunch.   The company launched in 2007 and filed for a $100 million IPO in April.   The news comes at the same time as a leadership reshuffle, with chief financial officer Kelly Steckelberg replacing cofounder Shayan Zadeh as chief executive. Zadeh will be taking up a position on the company’s board.   According to IBIS World, the dating services market is work $113 million in Australia.   Overnight The Dow Jones Industrial Average is up 312.33 points or 1.83% to 17,381.2. The Aussie dollar is currently trading at US81 cents.   Follow StartupSmart on Facebook, Twitter, and LinkedIn.

Blocking piracy websites is bad for Australia’s digital future

11:07AM | Tuesday, 25 November

  Rumours are flying that the government will introduce legislation before Christmas aimed at blocking certain websites, such as The Pirate Bay and Kickass Torrents, as part of a range of efforts to reduce copyright infringement in Australia.   Although the details are unclear at this stage, it looks like the law will allow copyright owners such as movie distributors and record labels to seek a court order to block sites that facilitate peer-to-peer file sharing, providing access to copied content.   This looks like a good idea, and it’s certainly a less intrusive approach than “extended authorisation liability”, the last copyright reform which the government proposed in July and then hurriedly dropped in the face of almost universal condemnation.   The problem is that website blocking always fails.   The technical problems with website blocking are the most obvious. Basically, you can block at the domain name level, or at the level of the internet address.   Blocking domain names means that the content owner convinces a court to tell internet service providers (ISPs) to drop problematic domain names from their name servers. This means that when a copyright scofflaw like, well, me, tries to get access to The Pirate Bay nothing happens. The domain name doesn’t resolve correctly, and so it’s like the site doesn’t exist.   There are some good policy reasons to be troubled about this type of action — essentially it breaks the guarantee of internet connectivity — but even if the government ignores that principle, the bigger problem is that it just doesn’t work.   The Pirate Bay will just change its domain name, forcing a constant game of Whack-A-Mole for the content companies and the courts. In any event, I can still get access to The Pirate Bay by getting a virtual private network (VPN) or change my domain name system (DNS) lookup server. (It sounds complicated, but trust me, every 15-year old will know how to do this if the government introduces domain name blocking.) Blocking is a technical nightmare Blocking websites at the internet address level is trickier. This involves stopping all traffic from a given IP (internet protocol) number or a given block.   The problem with this type of action is that it inevitably catches and stops some innocent content. For networking reasons numerous websites can share the same IP number or address block, and so shutting down one IP address can wipe out other sites that are completely fine.   Back in 2013, the Australian Securities and Investment Commission (ASIC) applied a little-used section of the Telecommunications Act to block three websites that were hosting investment scams. ASIC ended up with egg on its face when the block also wiped out Australian access to around 250,000 innocent websites that happened to be hosted on the same address.   The other really serious technical problem is that you actually can’t block many of the places where infringing content is hosted. When I download a movie using BitTorrent (a peer-to-peer file transfer protocol), a huge swarm of computers from all over the internet is responsible for sending me bits and pieces of the movie file.   Although a court could order ISPs to block sites like The Pirate Bay that aggregate the initial seed for the torrent files, there is no way to block all the computers that eventually provide me with the movie.   So all in all, blocking is a technical nightmare. However, these problems pale compared with the policy problem of how you write a law that catches only the “bad guys”.   The law can’t just block sites that host infringing content, because sites such as The Pirate Bay actually don’t host infringing content. But if you draft the law to catch sites like this which help me find movie torrents, then you’re going to shut down Google.   Beyond Google – who will never let a law like this get through – a poorly drafted law will inevitably be used to threaten Australia’s nascent cloud computing industry, because cloud storage is where a large number of infringing files are found these days.   So, once again, we’ll have laws that favour US content industries at the expense of Australia’s digital future.   At best, blocking laws might be slightly effective to reduce the access to overseas movie streaming sites. Maybe. This should make Foxtel and Australian market newcomer Netflix happy because a small number of people will buy a subscription because they can no longer get programs like Game of Thrones free on the internet.   But after a while you have to ask whether it’s worth spending the amount of time, money, and effort that the government keeps expending to keep the copyright lobby happy.   Dan Hunter does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations.   This article was originally published on The Conversation. Read the original article.

Meet the startup trying to create the Spotify for media content

11:38AM | Thursday, 20 November

Australian startup inkl is the latest attempt to solve one of the media industry’s biggest problems – how to make people pay for online content.   Take, for example, the content paywall that surrounds Fairfax mastheads The Sydney Morning Herald and The Age. According to inkl founder and chief executive officer Gautam Mishra, who as former director of Strategy at Fairfax built that paywall, it converts just 2% of readers to paying customers.   “And that’s widely seen as one of the best paywalls in the world,” Mishra says.   “It’s ahead of most publications. The question that needs to be worked out is what to do with that other 98%.”   So Mishra founded inkl, a web platform that will soon be available as an iOS and Android app, that gives users access to content from some of the world’s major news publishers in one place. A $15 per month subscription fee gives unlimited access to inkl’s catalogue of news content, in the same way Netflix or Spotify do for the music and entertainment industries. For those that don’t want to subscribe, they can access content for 10 cents per article. Inkl keeps a portion of the revenue generated and shares the rest with the publishers.   Inkl launched on Wednesday with content from seven of the world’s major news publications including The Guardian (Australia, UK and US editions), The Sydney Morning Herald, the South China Morning Post, Los Angeles Times, Chicago Tribune, the Washington Post and Indian business publication Livemint. More partners will be announced in the coming weeks.   Mishra says 10 years ago the music and entertainment industries were struggling to get people to pay for content too, but the launch of the Netflix, Spotify and similar platforms changed that.   “I think we need to build the same model for news,” he says.   “There’s about 200 million people using news sources globally, and there’s probably only 2-3 million paying for news online.”   Mishra bootstrapped the startup from its creation at the beginning of the year, up until August when he received seed investment led by North Base Media, a media focused investment firm co-founded by former managing editor of The Wall Street Journal, and former executive editor of the Washington Post, Marcus Brauchli. Mishra was not willing to disclose the amount of seedfunding inkl has raised.   “A really important part of inkl’s purpose is to help ensure that high quality journalism continues to be financially sustainable,” he says.   “As the trend towards mobile news consumption continues, publishers need innovative business partners who can help them find new ways to grow revenue. inkl generates 50 or even 100 times as much revenue per page as most readers earn from mobile ads, and still delivers a very cost effective solution for readers.”   inkl isn’t the only startup trying to solve media’s big problem. Last month, the New York Times invested in Dutch startup Blendle, which allows individual articles to be purchased for a price set by the publishers, between 10 euro cents and 30 euro cents for news articles, and up to 80 cents for longer features. Mishra says it inkl is avoiding that magazine style content, instead preferring to focus on news articles that are best consumed on mobile devices.   “(Blendle) is an amazing business and we really like them and their model, but ultimately it’s being setting up to do something a little different,” he says.   “They’ve taken the view that the value in journalism is largely around print products in a digital medium. They’ve got a web interface and a virtual kiosk for picking articles. That sort of experience is fantastic for evening use, when people are using tablets and other devices.   “We’re really focused on your morning and daily news.”   Follow StartupSmart on Facebook, Twitter, and LinkedIn.

How these six new technology predictions fared in 2014: Control Shift

11:03AM | Thursday, 13 November

Futurologists are a common feature at business conferences.   Unfortunately, many aren’t held accountable to how their predictions pan out. We’re all still waiting for our flying cars, clean reliable fusion power plants and 3D holograms.   In November last year, I picked six new technologies that were likely to make an impact in 2014. So how did they fare?   Here’s what happened:   1. Curved and flexible displays   This first pick came with a caveat:   “Unfortunately, getting devices with a curved or flexible screen produced on a production line designed for flat screen devices has turned out to have been far more difficult than it initially seemed… As a result, you’re unlikely to see these devices outside South Korea in the immediate future.”   Sure enough, at the International CES in Las Vegas, Samsung demonstrated curved-screen TVs as the centrepiece of its display. In January, LG launched the G Flex curved-screen smartphone in Australia.   Meanwhile more recently, at its Unpacked 2014 Episode 2 event alongside the IFA trade show, Samsung unveiled a new curved-edge smartphone called the Galaxy Note Edge.   As predicted, there have been issues putting flexible and curved glass into mass production. However, LG Display appears to have come up with a solution: Using plastic instead of glass in a new display technology called P-OLED (Plastic-Organic Light Emitting Diode).   The thin, flexible display technology helped it to create a round-screen Android Gear smartwatch called the G Watch R, along with a smartphone that has a display that runs right to the edge screen.   The company expects smartphones and tablets that are designed to bend (and fold flat after being bent) to begin appearing next year, with rollable tablets, foldable-screen laptops and flexible TVs coming sometime in 2017.   2. Smart TVs   Whether it’s smart TVs that run apps out of the box, set-top boxes or HDMI thumb sticks (such as Google ChromeCast), 2014 was a massive year on the smart TV front.   The year kicked off at CES with LG reviving the Palm Pilot operating system (webOS) for its smart TVs and Panasonic partnering with Mozilla to put Firefox OS on its TVs.   Not to be outdone, in June Google announced Android TV, a new platform for smart TV apps and content. Last month, it announced the first set-top box to use the platform, known as the Nexus Player. Also from Google, a little device known as the ChromeCast finally reached Australia in May.   Amazon saw the action and said “me too”, releasing its version of the ChromeCast in October and a set-top box called Fire TV in April.   So what will people watch on all these smart devices? The best news is that streaming video service Netflix is set to launch in Australia.   It seems the humble “idiot box” has never been smarter than it was in 2014.   3. Smartwatches   Apple Watch was announced this year. Need I say any more?   Even putting Apple Watch aside, 2014 was a huge year for smartwatches. Google also announced its smartwatch platform, known as Android Wear, which in turn powers devices from a range of companies including Sony, LG, Samsung, Motorola and others.   These devices are all packed with a range of apps and features – and they’ll even tell you what the time is.   4. Augmented reality glasses   Google Glass got a limited public release this year with a range of fashionable frames and prescription lenses. Sony released the software development kit for its Google Glass clone.   But the real big mover was a related technology called virtual reality. Jaws dropped when Facebook paid $2 billion for virtual reality device maker Oculus. Last month, Samsung announced the first consumer device based on the technology, known as Gear VR.   You could say 2014 was the year augmented reality and virtual reality became a reality for consumers.   5. Home automation   Google kicked off the year by launching its home automation push with the $3.2 billion takeover of smart thermostat maker Nest. The tech giant encouraged other businesses, including Australian smart-light maker LiFX, to build new devices that connected to Nest.   Apple responded in June by launching HomeKit as part of iOS 8. The technology makes it easy for third-party device makers to allow their devices to be controlled with iPhones and iPads.   6. Low-end smartphones   This is a topic I’ve touched on over the past couple of weeks. The short version is we’re reaching a saturation point in the smartphone market, while low-cost vendors such as Xiaomi are booming in China.   The great news for consumers is, even with the Australia tax, buying an affordable smartphone has never been more affordable.   Throughout the year, a range of devices (including the Moto E and Moto G, the Kogan Agora 4G and the Microsoft Lumia 635 and 530) hit the local market. Each boasted features once the preserve of high-end devices and – best of all – prices well under $300 outright.   Conclusion   Forget about waiting for that flying car.   From smartwatches to smart TVs and low-end smartphones to home automation, the six technologies on the future gadget form guide ran a strong race in 2014.   When some of this technology will make it into the average person’s home is another question.   This story originally appeared on SmartCompany.

We need to put high-growth tech companies on the G20 agenda

11:49PM | Tuesday, 11 November

The world was a very different place in December 1999 when the first G20 met in Berlin. Steve Jobs had just taken back the reins at Apple, but Facebook, Google, Twitter and the dot-com bust were figments of imagination. When government and central banking leaders meet in Brisbane this week, they will have a very different set of concerns, as well as a different set of levers to achieve the goal of “stable and sustainable world growth that benefits all".   The path of least resistance is to make small adjustments in an effort to re-balance and re-ignite growth. Instead, they should be considering how to stimulate and harness the power of digital disruption to create companies that can grow fast and create jobs we can not even imagine.   The continued growth of the start-up culture and the “overnight” success of new businesses such as Uber, AirBnb and Dropbox demonstrate the economies of tomorrow are being shaped by companies which have became global players overnight. Rather than focusing on a few adjustments to re-stabilise the world’s economy, the G20 leaders need to understand the impact of digital disruptions on nations and industries. All will be impacted; none will be spared.   Deloitte Digital’s latest report, “Harnessing the bang”, identifies some of the impacts of this “digital disruption” to existing companies. It notes that 13 industries comprising 65% of the Australian economy are facing significant disruption by 2017. Google, for example, has revolutionised advertising, Amazon has re-invented the book publishing industry, streaming services like Netflix have changed the movie and entertainment sector, and internet banking has changed financial services.   It’s clear this is a worldwide phenomenon, not just one facing Australia. Digital disruption belongs on the G20 agenda.   Threat or opportunity?   As ancient Chinese wisdom says, every threat contains the seeds of opportunity. The democratisation of markets brought about by the rise of technology represents boundless opportunities for companies that are innovative.   Henry Ford heard people say they wanted to travel faster, but instead of breeding a faster horse, he used new technology to create a motorised vehicle – and a manufacturing industry no one had imagined. Automobiles disrupted traditional modes of transportation and required workers to have new manufacturing skills. New companies were born and new hard infrastructure required: roads, bridges.   The same is happening with digital technology. The digital products and services require new skills, will generate new companies and need a different kind of infrastructure to support them (broadband internet, global paths to market, venture funding etc.)   Australia has some great start-up success stories: Atlassian provides software to the software makers all over the world, and Canva is reaching 1,000,000 customers. Both are carving a global path to success in their particular industries.   The G20 Global Café in Brisbane will showcase several more companies that are digital disruptors of traditional industries, are already going global and have the potential to grow big.   Some are concerned that tech companies don’t create jobs – they underestimate the impact that tech start-ups have on wealth and job creation. The IPOs of Google, Facebook and Twitter together created nearly 4,000 millionaires.   As for job growth, high-tech companies create a disproportionate share of high-value jobs. Between 2002 and 2008, for example, 6% of UK businesses with the highest growth rates created 50% of the new jobs. Professor Enrico Moretti, an economics professor at UC Berkeley, notes that for every job a tech company creates, five new jobs are created in other sectors – a multiplier effect three times higher than for extractive or traditional manufacturing industries.   The focus should be start up, then grow up   So it’s pretty simple: entrepreneurs whose businesses use digital technology to develop or deliver products and services that customers need and want will grow the fastest, create the most jobs and have the highest probability of success. This in turn has numerous economic benefits for countries that encourage and foster an entrepreneurial mindset and a high-tech-friendly environment.   Smart governments that have already figured this out are beginning to provide resources and support their start-up ecosystems. From science, technology, engineering and maths (STEM) and entrepreneurial education, through to direct government funding at the venture capital stage, they are placing a premium on developing more high-growth technology companies, teaching CEOs how to start and grow companies, and removing the barriers to growth.   So what does Australia, in particular, need to do to create the environment in which our digital disruptors can quickly become high-growth, global players? It’s pretty simple:   Encourage more people to start companies and make jobs, not just take a job. Teach people the entrepreneurial mindset and support those who see opportunities and want to start and grow companies. Provide more funding for research and education, especially in science, technology, engineering and maths (STEM). Revamp systems that support the commercialisation of research with the goal of developing more technology companies. Support the development of an ecosystem that provides entrepreneurs with what they need to grow companies: access to knowledge, talent, money and space. Have a workforce ready and able to work in companies that make widespread use of technology. Help existing businesses adapt to the world of digital disruption.   The Australian government is beginning to understand that the future must include high-growth technology companies, as well as mining, gas and agriculture. It is beginning to engage with bodies such as StartupAUS (of which I am a board member). We are hopeful that the Department of Industry’s Entrepreneurs Infrastructure Program and additional programs will spur the development of more venture capital and more disruptive technology companies in Australia.   The G20 countries need to understand the power of digital disruption and develop economic and financial policies that actually capitalise on that disruption. Creative destruction of old industries is the norm; the internet is an accelerant to the pace of disruption. Innovation, digital disruption and entrepreneurship are not passing fads – they are the solution to the economic problems we are experiencing. Countries that understand this and develop polices and programs to support it will benefit the whole world.   This article originally appeared on The Conversation. Photo: Peter Dasilva/EPA/AAP   Follow StartupSmart on Facebook, Twitter, and LinkedIn.

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