April 2023 - Page 5 of 12

Behavioural Finance: Focus on Intrinsic Value

INTRODUCTION

The volume of research in the field of Behavioural Finance has grown over the recent years. The field merges the concepts of finance, economics and psychology to understand the human behaviour in the financial markets, to form winning investment strategies.

THE CONCEPT OF BEHAVIOURAL FINANCE

Behavioural finance is the study of the influence of psychology on the behaviour of financial practitioners and the subsequent effect on markets. Principal objective of an investment is to make money. We usually assume that investors always act in a manner that maximizes their return rationally. The Efficient Market Hypothesis (EMH), the central proposition of finance for the last thirty five years rests on assumption of rationality. But it has been proved that people are ruled as much by emotion as by cold logic and selfishness. While the emotions such as fear and greed often play an important role in poor decisions, there are other causes like cognitive biases, heuristics (shortcuts) that take investors to incorrectly analyse new information about a stock or currency and thus overreact or under react. Behavioural Finance is the study of how these mental errors and emotions can cause stocks or currency to be overvalued or undervalued, and to create investment strategies that gives a winning edge over the others investors.

I would like to bring out the behaviour pattern of a rational investor. This rational investor is assumed to act rationally in following ways:

o Makes decisions to maximize the expected utility.

o Fully informed with unbiased information.

o Absence of any distortion of judgement based on emotions.

It is to be kept in mind that risk resides not only in the price movements of dollars, gold, oil, commodities, companies and bonds. It also lurks inside us – in the way we misinterpret information, fool ourselves into thinking we know more than we do, and overreact to market swings. Information is useless if we misinterpret it or let emotions sway our judgement. Human beings are irrational about investing. Correct behaviour patterns are absolutely essential to successful investing – so to be financially successful one has to overcome these tendencies. if we can recognise these destructive urges, we can avoid them. Behavioural Finance combines the disciplines of economics and psychology specifically to study this phenomenon.

THE CONCEPT OF BUBBLES IN STOCK MARKET

A speculative bubble occurs when actions by market participants’ results in stock prices to deviate from their fundamental valuation over a prolonged period of time. Speculative bubbles are difficult to explain by rational trading behaviour, and theories have been put forward to explain market psychology through behavioural finance1. They propose that when significant proportion of trading activity in the market is characterized by positive feedback behaviour, it may result in asset prices to shift away from their fundamental valuation. This price deviation encourages rational investors to trade in the same direction.

Speculative trades are based upon investors’ private information held today, and are designed to provide investors with higher returns in the next period when that private information is fully revealed to the market. This implies a positive correlation in returns as market incorporate the information into prices. Trades due to portfolio rebalancing, or hedging, is not information based, and occurs when a trader may increase (or decrease) his stock holding by buying (or selling) a portion of his stock holding. This will be accomplished by increasing (or decreasing) the stock price to induce the opposite side of the trade.

FOCUS ON INTRINSIC VALUE

What are the implications for corporate managers? It is believed that such market deviations make it even more important for the executives of a company to understand the intrinsic value of its shares. This knowledge allows it to exploit any deviations, if and when they occur, to time the implementation of strategic decisions more successfully. Here are some examples of how corporate managers can take advantage of market deviations:

o Issuing additional share capital when the stock market attaches too high a value to the company’s shares relative to their intrinsic value.

o Repurchasing shares when the market under-prices them relative to their intrinsic value.

o Paying for acquisitions with shares instead of cash when the market overprices them relative to their intrinsic value.

Two things must be kept in mind as regards this aspect of market deviations.

Firstly, these decisions must be grounded in a strong business strategy driven by the goal of creating shareholder value.

Secondly, managers should be cautious of analyses claiming to highlight market deviations. Furthermore, the deviations should be significant in both size and duration. Provided that a company’s share price eventually returns to its intrinsic value in the long run, managers would benefit from using a discounted-cash-flow approach for strategic decisions.

It can thus be summarized that for strategic business decisions, the evidence strongly suggests that the market reflects intrinsic value.

INVESTING IRRATIONALITIES

Often turbulence in the market isn’t linked to any perceivable event but to investor psychology. A fair amount of portfolio losses can be traced back to investor choices and reasons for making them. I would like to point out some of the ways by which investors unthinkingly inflict problems on themselves :

Herding

This is a cardinal sin in investing and this tendency to follow the crowd and depend on the direction of others is exactly how problems in the stock market arise. There are two actions that are caused by herd mentality:

o Panic buying

o Panic selling

Holding Out for a rare treat

Some investors, praying for a reversal for their stocks, hold onto them, other investors, settling for limited profit, sell stock that has great long-term potential. One of the big ironies of the investing world is that most investors are risk averse when chasing gains but become risk lovers when trying to avoid a loss.

If we are shifting our non-risk capital into high-risk investments, we are contradicting every rule of prudence to which the stock market ascribes and asking for further problems.

ISSUES

One of the most important issues in Behavioural Finance is whether the assumptions of investor rationality are realistic or not.

The concept can be explained with the help of an example. Let’s assume that Mr. X invests and manages his portfolio in an efficient market. Here only seconds are available for a response to the news. There are a great number of factors that affect the decision of Mr. X. Further, these factors can affect each other. How can Mr. X draw the right judgements when the information is updated very frequently? Probably Mr. X works on a computer, through out the day, on which a utility function program is installed for his work. Every decision Mr. X is based on the calculation given by his computer. As soon as the portfolio is rebalanced, the computers utility function program analyses new alternatives. This process goes on and on over the course of the day. Obviously, Mr X does not show any joy, when he wins and no panic when he looses. Can a human brain behave like this? We know that a human brain can master only seven pieces of information at any one time.

So, how could one possibly absorb all the relevant information and process it correctly? People use simplifying heuristics (shortcuts) in order to control the complexity of information received. Psychological research has shown that the human brain often uses shortcuts to solve complex problems. These heuristics are rules or strategies for information processing, which help to find a quick, but not necessary optimal, solution. Once the information is simplified to manageable level, people use judgement heuristics. These shortcuts are needed to resolve the decision making as quickly as possible. Heuristics are also used to arrive at a quick judgement, they can, however, also systematically distort judgement in certain situations.

SIMPLIFICATION BIAS

The first step in reducing complexity is to simplify the decision. However it also adds the risk of arriving at a non-rational conclusion, unless one is careful.

MENTAL ACCOUNTING

People focus on one account (say purchase of share x) in particular when weighing things, relationship with other commitments or accounts (say purchase of share y) are usually ignored. I would like to explain this with the help of an illustration. For instance, Company A produces bathing costumes, and company B produces raincoats. Both companies are new, extremely efficient and innovating, so that purchasing shares in these companies would be a profitable proposition. A financial gain, however depends to a large extent on the whether in both cases, Company A will produce huge profits if the weather is fine, while Company B will make a loss, even though this is kept to a minimum, thanks to its efficient management. The situation is reversed in the case of bad weather. With mental accounting, either investment is risky when seen in isolation. But if we take into account the mutual effect of the uncertainty factor, i.e. the weather, then a combination of both shares become a lucrative, and at the same time secure investment.

AVAILABILITY CONSTRAINT

Not everybody has same degree of information. Some people prefer to see business news on CNBC TV 18, NDTV PROFIT. But others may like to see the serials on STAR PLUS. Obviously the first one may have more information, as compared to second.

REPRESENTATIVENESS

This is one of the mental shortcuts that make it hard for investors to correctly analyse new information. It helps the brain organise and quickly process large stock of data, but can cause investors to overreact to old information. For example, if a company is repeatedly giving losses, investors will become disillusioned with this past data, and thus may overreact to past information by ignoring valid signs of recovery. Thus, the stock of the company is undervalued because of this bias.

CHLALLENGES

Under the paradigm of traditional financial economics, decision makers are considered to be rational and utility maximizing. The assumption of rational expectations is simply an assumption – an assumption that could turn out not to be true.

Behavioural Finance has the potential to be a valuable supplement to the traditional financial theories in making investment decisions. The following fundamentals of behavioural finance give us a glimpse of the pitfalls to be avoided. These are the challenges which need to be overcome and addressed.

1. Hubris hypothesis: it is the tendency to be over optimistic. It results from psychological biases. The investor gets swayed by the momentum generated in the markets in recent past.

2. Sheep theory: it is a phenomenon where all the investors are running in the same direction. They follow the herd – not voluntarily, but to avoid being trampled.

3. Loss aversion: it says that investors take more risk when threatened with a loss. Thus mental penalty associated with a given loss is greater than the mental reward from a gain of the same size.

4. Anchoring: this causes investors to under react to new information. This can lead to investors to expect a company’s earning to be in line with historical trends, leading to possible under reaction to trend changes.

5. Framing: this states that the way people behave depends on their way decision problems are framed. Even the same problem framed in different ways can cause people to make different choices.

6. Overconfidence: this is what leads people to think that they know more than they do. It leads investors to overestimate their predictive skills and believe they can time the market.

RELEVANCE TO INDIAN STOCK MARKETS

Behavioural finance holds definite clues and appears apt in the current IPO craze as regards Indian markets are concerned. The herd mentality is evident in the scramble for shares. As the positive information of excess subscriptions comes, more investors enter the bandwagon. When Prices of the stocks start soaring, everyone one is thinking of the same thing: I am going to sell on listing and book the profits. Can money making be so simple? Is life and the financial markets so predictable? One will see investors selling the stocks as soon as they get the allotments. Herd mentality will be at work with people trying to sell faster than the neighbour, thus eroding stock values at a faster rate. Greed thus becomes the graveyard. One needs to understand that there are no shortcuts to earning money. One has to work hard and have patience.

It is believed that perfect application of Behavioural finance can make an Indian investor successful, making fewer mistakes. Even if we learn to identify some common psychological and cognitive errors that plague even the wisest investment professional, it may be enough. To put it in Simple words, economic theory starts with a flawed basic premise that the investor is a rational being who will always act to maximise his financial gain. Yet, we are not rational beings, we are human beings.

In stock markets, behavioural finance can help explain situations such as why we hold on to stocks that are crashing, foolishly sell stocks that are rising, ridiculously overvalue stocks, jump in late and never find our right price to buy and sell stocks.

Let’s take the example of the recent discovery of gas by Reliance industries. The stock starts spurting as everyone starts buying on this news. Newspapers start flashing stories as to the size of such a discovery.

But let us analyse the situation without becoming a prey to mental heuristics. Gas has been discovered but the same needs to be drilled which takes a lot of time and money. What is the quality of the gas? How many wells would be needed for drilling? How much time will it take? How much money would be required and what are the plans to finance the same? How easy it is going to be to extract the same? These are all important and pertinent questions. In this time lag there are so many uncertainties the company will have to go through, before the profits are reaped. However, analysts have started predicting the future profitability of Reliance and on such hopes investors start buying the stock at rising prices.

This is how mental heuristics work when the brain takes a shortcut in processing information and does not process the full information and its implications. Thus behavioural finance has a pivotal role to play in Indian Capital market.

CONCLUSION

Knowing the heuristics shall help the investors to which they are susceptible and this will help them in neutralizing to some extent the distortions in the perception and assimilation of information. This will in turn, help the investor to take a rational decision and get a cutting edge over the other not-so-rational investors.

More research on behavioural finance should take place not only in asset pricing but also in areas like project appraisal & investment decisions and other areas of corporate finance, so that managers can avoid the decision traps. Psychology and irrational behaviour matter on financial markets. Behavioural finance is relevant in many ways. It educates investors about how to avoid biases, designing long and short term strategies to exploit biases; and being aware that decision-makers in financial markets are human beings with biases. We also need to realize that an implicit assumption of behavioural finance is that their findings at individual level are scalable to market level.

The New Eldorado: Video Streaming and Streaming Video Content Production

This newish technology, which provides a continuous stream of data, is awesome for many reasons. From the consumer’s perspective, it implies saving time since one does not have to download a file first, and then consume it. Also, members of the public do not have to manage vast quantities of data and space on their computer’s hard drive or external disks anymore, since there is no data to download and save as such. From the content producers’ perspective, streaming also offers great opportunities: with internet videos and webcasts of live events, there is no file to download, therefore it is hard for most users to save content and distribute it illegally.

Streaming is a relatively recent development, because broadband connection had to run fast enough to show the data in real time. If there is an interruption due to congestion on the internet, for example, the audio or video will drop out or the screen will go blank. To minimise the problem, computers store a “buffer” of data that has already been received. If there is a drop-out, the buffer goes down for a while but the video is not interrupted. Streaming has become very common thanks to the popularity of internet radio stations and various audio and video on-demand services, including Spotify, Soundcloud, Last.fm, YouTube and the BBC’s iPlayer. While streaming initially made its mark in the music sector, with music streaming revenues generating $3.3 billion at the end of 2014[1], streaming is currently making phenomenal headway in the video distribution and consumption space.

The video streaming market today: beyond distribution and into content creation

Video streaming: the technical bit

Video streaming technology has come a long way: the most influential group, of course, are the streaming technology providers themselves, who choose which technologies and services to integrate into their platforms. These include Apple, which provides QuickTime as well as the HTML5-based technology to reach iOS devices; Adobe with Flash; and Microsoft with Windows Media and Silverlight. In the early days of streaming, the most relevant playback platforms were Windows and Macintosh computers.

While Apple and Microsoft still hold tremendous leverage, computer platforms tend to be more open than mobile devices, while the latter comprise the fastest growing segment of streaming media viewers. Because Apple owns both a very popular platform (iDevices) and operating system (iOS), it retains absolute power to control standards adopted by Apple devices. Other mobile influencers tend to be split between hardware vendors – like LG, Samsung, Motorola, Nokia and HTC – and mobile operating system providers like Google (Android) and Microsoft (Windows Phone).

Streaming media delivery providers such as online video platforms (“OVPs”) (which are productized-services that enable users to upload, convert, store and play back video content on the internet, often via a structured, scalable solution that can be monetized) and such as user-generated-content sites (“UGC sites”), also influence streaming technology adoption. For example, though Microsoft introduced Silverlight in 2007, it wasn’t supported by any OVP until 2010, stunting its adoption. In contrast, OVPs like Brightcove and Kaltura, and UGC sites such as YouTube and Vimeo were among the first to support the iPad and HTML5, accelerating their adoption.

While there are dozens of providers in both markets, the key OVPs include Brightcove, Kaltura, Ooyala, Sorenson Media, Powerstream and ClickstreamTV, while the most notable UGC sites are YouTube, Vimeo, DailyMotion, Viddler and Metacafe. On the video live-streaming front as well, technology has made significant strides. Specialised OVPs such as Ustream and Livestream offer instant broadcasting of user-generated live videos with a live chat window running alongside the video player, giving users an opportunity to not only watch events as they unfold but comment on them, too[2].

YouTube made a video live streaming service available to its users too. And now, the icing on the cake: video streaming distributors and providers. The description of this whole ecosystem of video streaming would, indeed, not be complete without mentioning the providers of on-demand internet streaming media also called streaming video on-demand services (“SVoD services”). From 2011, the press began blogging about the most popular streaming media services that would bring high-quality commercial content streamed to the TV sets, smartphones and computers of the masses[3].

Netflix, Amazon Video on Demand (now rebranded Amazon Instant Video and Amazon Prime), Hulu Plus and Vudu came out on top (“SVoD providers”).

Replicating the successful business model of music streaming in the video streaming sphere: it’s all about scale, baby

SVoD providers have it so good: not only can they benefit from the great strides made by streaming media technology since the mid-noughties, but they can also educate themselves faster thanks to, and avoid the pitfalls which threatened, their predecessors, i.e. streaming music on demand providers such as Spotify, Deezer, Pandora, Rdio, Grooveshark and Beats (the “SMoD providers”).

While SMoD providers typically charge USD4.99 per month for an access plan to their services, and up to USDD9.99 per month for a premium plan, SVoD providers start their monthly subscription plans at USD7.99 with a maximum price of USD11.99 per month for SVoD services on up to 4 screens per household. Fearless Netflix even got a lot of flak, in April 2014, for hiking up its new subscriber fees globally by USD1 to USD2 a month[4]. If we quickly do the maths, we can forecast that there is more money to be made in SVoD services, than in SMoD services, provided that these services are scaled up.

And scaled up they are: on 23 April 2014, Amazon announced a licensing agreement that gives Amazon Prime members exclusive access to highly-sought after HBO’s library of original content, hence undoubtedly increasing the appeal of becoming an Amazon Prime’s subscriber. On 24 April 2014, competitor Netflix announced that it had contracted with three small cable companies to provide subscribers access to its content via TiVo DVRs, while on 28 April 2014 it announced a deal with Verizon to provide Netflix subscribers high-speed online access to streaming content, the second such deal Netflix has made with an Internet service provider (“ISP”).

As the technology industry – and to a degree the entertainment sector – function very much on a “winner take all” economic model, streaming content is an evolving battlefield teeming with opportunities and risks, in which companies assert their dominance and grow their market share. There are some clear winners, in the SVoD services’ sector, such as Netflix which, in the first quarter of 2014, added 2.25 million streaming subscribers in the US and a total of 4 million worldwide. It now has 35.7 million US subscribers and more than 48 million globally, in line with its long-term goal of 60 to 90 million domestic subscribers. It all makes sense from the consumer’s standpoint too: streaming is converting the most valuable downloaders (of music and video content) into subscribers and in doing so is reducing their monthly spending from USD20 or USD30 to USD9.99 on average.

By the end of 2014, music streaming revenues accounted for USD 3.3 billion, up 37% from 2013. In comparison, online and TV-based video streaming services combined to pull in a revenue of USD 7.34 billion in 2013, a figure that PriceWaterhouseCoopers (“PwC”) says will rise to USD 11.47 billion in 2016, before reaching USD 17.03 billion in 2018. That rise will be driven primarily by subscription video services such as Netflix and Hulu, PwC says, rather than by through-TV subscriptions.

The leap into content creation and production

What is interesting is that SVoD providers are going beyond what SMoD providers have ever done: they are entering the content production sphere, in order to enrich their catalogues and offerings; to expand their networks of, and reach to, high-powered executives, producers and movie-stars as well as to assert their newly-acquired status and clout. Online streaming video services such as Netflix and Hulu will make more money per year than the US movie box office by 2017, according to a new report release by PwC.

The report projects that streaming services will be the biggest contributor to the American filmed entertainment industry in four years, as the revenue generated by TV and subscription video on-demand providers reaches almost $14 billion, $1.6 billion more than the amount earned from the traditional cinema box office. Therefore, SVoD providers have, and will keep on having, a lot of disposable cash to invest.

How to better invest this available income than in producing high-quality video content, to enrich one’s catalogue and products offering? The main area streaming services will have an impact on the traditional box office, the PwC report says, is in release dates. At the moment, most movies are given months in theaters before they slowly make their way to streaming services. PwC says the strength of companies such as Netflix is expected to put pressure on the industry to make this transition faster, offering filmed entertainment to consumers earlier.

More importantly, SVoD providers keep on expanding their content inventories. Netflix already has USD 7.1 billion in existing obligations for original and licensed content, and it recently contracted for an original Spanish-language series; a new series from Mitch Hurwitz (the creator of much-loved Arrested Development); a third season of House of Cards and a final season of AMC’s The Killing. Indeed, the economic returns of House of Cards, the test case, were as successful as the critical reviews. Netflix’s new strategy fortified its existing revenue model-acquiring and retaining subscribers-and even opened up new revenue streams such as content licensing or even a branded channel with traditional distributors. Netflix spent roughly USD 100 million to produce the first season of House of Cards plus additional marketing investments, including advertising buys for primetime TV spots and high-profile billboards. If House of Cards brought in half a million new Netflix subscribers, with the same average life span as current subscribers (an estimated 25 months), the show would have just about broken even in two years. The real test was the lifetime value of these new customers.

What if many or most turned out to be opportunistic viewers who ended up canceling their subscriptions a few months after watching House of Cards? Then the breakeven opportunity looked vastly different. For example, if the average customer life span was closer to four months, then Netflix would have needed more than three million new subscribers for the project to breakeven-essentially, a 43 percent increase over its current average acquisition rate. Needless to say, this debate is now closed and, in addition to its string of series, very successful Netflix has brokered many recent theatrical deals – it plans to release the sequel to Ang Lee’s Crouching Tiger, Hidden Dragon day-and-date online and in Inmax theatres, and has struck an exclusive four-picture deal with Adam Sandler – which have supposedly enraged many in the business.

Speaking at a keynote in Cannes’s MIPCOM in November 2014, Netflix chief content officer Ted Sarandos insisted that the company was only looking to modernize a theatrical distribution model that “is pretty antiquated for the on-demand audiences we are looking to serve”. Netflix, he said, is not looking to kill windowing but rather to “restore choice and options” for viewers by moving to day-and-date releases. Not only that, but Sarandos said Netflix would be expanding into more niche genres, including the financing of documentaries and art-house films. Hence, the marketing stunt with teaming up with mega movie star Leonardo di Caprio on the release of documentary Virunga focusing on the fight against poaching endangered gorillas in the Democratic Republic of Congo. The documentary was released simultaneously on Netflix and in theaters in New York and Los Angeles on 7 November 2014. Amazon Prime’s tally in content creation and production is also impressive, most notably thanks to its decision to engage Woody Allen to write and direct a series for its SVoD services in January 2015 and its competitive force in TV by landing two Golden Globe trophies for best comedy for its critically praised Transparent and actor for series star Jeffrey Tambor also in January 2015.

So the future is more than bright, for SVoD providers, but what are the threats to their growing supremacy and market share?

A sorry state of affair for SVoD providers and traditional video distributors: counterfeiting in the video streaming market

A tentative expansion to international territories? A false alarm

Initially, the major threat to the rise and scaling up of SVoD services worldwide came from the reluctance, by several European countries to accommodate and “psychologically adapt” to the business model offered by the likes of Netflix.

The French, in particular, were a headache: In the own words of then French Minister of Culture Aurelie Filipetti, “(the French) are absolutely not going to close the door to (Netflix), but they need to get used to the differences with the French market and how they can participate constructively.” France has some of the world’s toughest rules for protecting its home-grown film and music industries, and none of these will make it easy for a foreign service like Netflix to make a serious dent in the market. The company, which eventually started offering SVoD services in France around November 2014, faces higher taxes than it is used to, including 20 percent VAT, as well as obligatory investment quotas from its profits. Indeed, SVoD services based in France with annual earnings of more than 10 million euros are required to hand over 15 percent of their revenues to the European film industry and 12 percent to French filmmakers.

Meanwhile, France insists that 40 percent of mainstream broadcasters’ content must be in French, while existing SVoD providers – including Canal Plus’ “Infinity” and Wild Bunch’s “Filmo TV” – are currently forced to wait 36 months after a film’s cinema release before they can stream that content online. These rules – the so-called “Cultural Exception” – mean that France retains a healthy film and music industry despite fierce competition from the Anglo-Saxon world. And while some commentators have said this model is outdated as ever-increasing numbers of people get their audiovisual entertainment online rather than from more traditional TV and radio media, France is nevertheless continuing to do all it can to protect its homegrown industries.

As mentioned above, despite these hurdles, Netflix eventually started offering SVoD services in France, the toughest foreign market to enter as of yet, during the fourth quarter of 2014. At MIPCOM 2014, Netflix chief content officer Sarandos went on record for saying that viewer behaviour, in Germany and France, was “on par with our successful launches elsewhere in the world” and that Netflix prison dramedy ‘Orange is the new black’ was the most watched show on the SVoD service in all of the six new European territories. Sarandos added that the viewing mix in Europe – about 70 percent television series and 30 percent feature films – was also similar to that on Netflix services around the world. Therefore, the major threat to SVoD providers, and their more traditional video distributors, lies elsewhere.

The culprits: illegal video streaming programs and providers

While the illegal downloading of music has decreased compared to previous measurements (about a quarter of people who use music streaming services still download music illegally, compared to 32 percent in September 2014), 35 percent of people who use SVoD services are still downloading movies and TV series illegally. This is according to the study Trends in Digital Entertainment, from January 2015, which is conducted by GfK and appears once per quarter. Some illegal SVoD providers are alive and kicking such as Time4popcorn. They offer SVoD services to members of the public, on the internet, without having paid proper and agreed licensing royalties to the owners of the rights in the video content which is being streamed on their channels.

One of these illegal SVoD providers was Aereo.com, which filed for Chapter 11 reorganization proceedings in November 2014. In June 2014, the US Federal Supreme Court handed down a decision in ABC v Aereo. Aereo, a TV-over-the-internet service, had introduced a disruptive business model, using thousands of very small antennas stored in a warehouse, to live stream broadcast signals which they had encoded into packets, directly into the home of users. It was sued by the broadcasters (originally including 21st Century Fox, CBS, NBC and ABC) for infringement of their copyright in public performance. Aereo defended its actions claiming that all it did was to provide a device to watch a programme that was already available. The Supreme Court decided in favor of the broadcasters, ruling that Aereo and its cloud-based technology was too similar to a traditional cable company to say that its service did not infringe. The failed watch-TV-on-the-Internet startup Aereo.com may come back though, since TiVo bought its trademarks, domain names and customer list at auction, for the bargain price of USD1 million in March 2015. TiVo could be looking into offering an Aereo-like service but one that is licensed by TV networks[5].

During the AIPPI Congress in September 2014, Elizabeth Valentina, Vice President Content Protection for Fox Entertainment Group, (speaking on her own behalf as Fox was still litigating the case), pointed out that Aereo’s business model involved the streaming of broadcast content obtained without permission, authorisation or license, and for which service Aereo were charging their subscribers. This business model was harming that of the broadcasters and content owners, by devaluing their content, interfering with exclusive deals for content to be delivered over the internet and to mobile devices, as well as diverting eyeballs from TV advertising revenue. It was a harm clearly recognised by Judge Nathan at first instance, in the broadcasters’ motion for a preliminary injunction. During the same congress, Sanna Wolk (Associate Professor at University of Uppsala, Sweden and co-chair of AIPPI’s copyright committee) compared the US position with that adopted in the EU where the CJEU in March 2013 ruled that online near-live streaming by the UK Company, TV Catchup, was an unauthorised “communication to the public” within the meaning of Article 3(1) of Directive 2001/29 (InfoSoc Directive) and therefore an actionable infringement of copyright. The CJEU concluded that as TV Catchup was making the works in the original “terrestrial” TV broadcast available over the internet, and hence using different technical means to retransmit the broadcast, this retransmission was a “communication” within the meaning of the Article 3(1). Furthermore in the circumstances the court did not have to consider whether communication was to a “new public”, as the new transmission required an individual and separate authorisation from the copyright owners. While full-blown litigation seems the obvious and mostly-used response to copyright infringement and counterfeiting in video streaming services, it is debatable as to whether an ardent battle against streaming video piracy is worth it. Indeed, drawing on the experience from the inconclusive fight, led by the music industry, against illegal downloads of music tracks offered by peer-to-peer websites in the early noughties, it may be worth biting the bullet and exploring non-legal avenues to this endemic and crippling infringement.

For example, Popcorn Time, dubbed the “Netflix for pirates” was recently on the run. Time4Popcorn.eu, one of the most popular iterations of the illegal movie site, has had its URL suspended by European regulators in October 2014, effectively turning off the lights for a site that had attracted millions of users in just a few months.

The European ID Registry knocked Time4Popcorn.eu offline due to suspicion that the page was registered with inaccurate administrator contact details. The site’s developers, rather than provide accurate contact information, simply relocated to Time4Popcorn.com. With more and more court decisions forcing ISPs to block access to certain websites in the territories that they cover, the best legal approach seems to request an injunction, in key territories, for ISPs to block end users access to the websites of illegal SVoD providers.

What’s in the stars for video streaming players and traditional feature film and sitcom producers?

In the short term, I think that traditional players in the TV and film industries, including Hollywood major studios, are going to start feeling the pain, as revenues are derailed by the economic and creative successes of legal and illegal SVoD providers alike. As a result, traditional feature film and TV series producers will have to up their game, focusing their financial and creative efforts on solely “block-buster” material projects. It is going to become even more difficult for independent and young directors and producers to finance their content creation processes, in the future.

In the long term, there will be a leap towards more high-quality content being produced (with stronger plots, bankable stars and exceedingly talented writers, directors and actors included in the content creation mix) by both traditional and SVoD content providers: Darwinism will be in the works, with the survival of only the fittest. Major film studios and distributors will have to adapt or die because video streaming is here to stay and will eventually scale up even more due to easier accessibility and affordability on major consumers’ territories, better wifi connections (in particular, due to the generalisation of optical fibre), a wider spectrum of devices on which to watch and stream videos (smartphones, tablets, PCs, TV screens, etc.) and changing habits towards culture consumption (such as, the reluctance to pay to watch movies, an inability to stay in front of a movie screen for around 2 hours for younger generations of consumers and the growth of cocooning).

All in all, the advent of SVoD services and the choice in various SVoD providers is a boon for consumers, as they are spoiled for choice in order to consume only high-quality content; will be able to avoid watching tiring and mandatory advertisements which are crippling TV shows, especially on US TV channels; and will be more in control over the devices on which they wish to consume TV series and feature film content.

The law and its actors (i.e. lawyers, judges, legislators) should accompany this change in consumption habits and video market offering, by being flexible and pragmatic, while protecting, enforcing and defending the rights of content owners and creators to stimulate the creation and production of the highest quality content in a competitive environment.

[1] “What the numbers tell us about streaming in 2014” by Mark Mulligan, Music Industry Blog, 16 October 2014.

[2] “Occupy video showcases live streaming” by Jennifer Preston, The New York Times, 11 December 2011.

[3] “5 of the Best Streaming Media Services Compared”, Christina Warren, Mashable, 14 February 2011.

[4] “What the Netflix price increase means in the current streaming content market”, Tom Caporaso, Money for Lunch, 30 April 2014.

[5] “TiVo buys Aereo Assets at Auction. Is a legal Aereo coming?”, Forbes, 1 March 2015.

How to Make a Great Living Working Mainly From Home As a Professional Voice Actor

The internet has completely changed the fortunes of professional voiceovers – for the better. These days, we can forget driving round radio stations and recording studios in the desperate hope of finding the odd suitable advert script in the production department’s “in-tray” to record; dismiss to the past a day lost travelling to the city to audition for a single line of a TV advert voiceover where you rarely hear back. Your client base can now be based in an area bigger than your region or even your country. In fact, there are clients all round the world who may feel your voice is perfect for their projects.

You don’t need to physically meet the clients, or even use their recording studios. You can record in your own “home studio” and send them broadcast quality audio files via a file transfer service such as WeTransfer.com. Sometimes clients will want to direct you over your headphones while you record the script, using Skype, ipDTL, ISDN, or one of many other systems available that are quite inexpensive and reliant on just a decent internet connection. But usually, you’re left on your own to record the script sent to you with instructions as to timing, voice style, pauses etc., then you’re expected to edit out your mistakes, optimise the levels and to then simply send the file (s) in the technical format requested. You then wait for any retakes required, then you can send in your invoice; job done.

Over the years, I’ve done a lot of full time “staff” jobs in my time working for both the BBC and ITV as producer, director, and I even ran a TV channel once. (Granada Men and Motors if you’re interested, and I gave Richard Hammond his first TV job for my sins!) But for the last 10 years, I have been a full-time freelance voiceover, and apart from a handful of trips to London studios each month, I work from my little studio at home and have never earned so much money in my life, for doing such little “work”. I’m totally independent and I don’t have an agent, so regularly I have to work on the “Search Engine Optimisation ” of my websites, and email or call potential new customers and expand my client base, but if you don’t want to do that, then choose the agent route. They’ll do all this for a % of your fee. Both ways are valid. It’s just that I like to be in full control of my success, but, hey, we’re all different.

There are so many uses for voiceovers, and there is honestly plenty of work out there for voice styles of all types and ages. As well as the obvious TV and radio commercials, the easy low hanging fruit comes from recording corporate promo videos or museum narrations. They may be deadly boring to record, and you need to look up the odd Polish word or acronym, but it’s quite an art to sound enthused about a grommet manufacturing plant in Gdansk! Also, there are telephone prompts for various organisations that regularly need renewing, saying things like: “your call IS important to us… !” and so on.

Also, don’t forget awards ceremony voiceovers that are either recorded or you do them live, so you can adlib when a winner doesn’t tip up… or when a winner literally tips up on the edge of the stage. But the real fun to be had is acting in video games. My voice is now on many video games and trailers playing a wide variety of characters. The top-end games still insist on the voice actors being physically in the studio, and that’s after a rigorous auditioning process.

But for every high profile game, there are hundreds of projects lower down in the pecking order, that still pay decent money and once you record a few samples of your character(s), the games studio just ask you do 3 takes of each line and you just send them one big wav file for them to select the best takes and chop up into smaller files for the coding. It really is quite easy money, as many of the lower end games feature stereotypical character voices and accents that are not hard to manage to any actor worth their salt, and the recording can be much fun to do, especially if you have to do a barrel load of “non-vocal” takes of random mumbling or “dying” sounds and fight grunts.

You won’t just get clients from English-speaking countries. English is an international language, and every country has companies and organisations where videos would need an English soundtrack version as well as one recorded in the home language. You may just get sent a Word or PDF document and asked to record it in the style of one of your showreels. Or you may need to record the English version in the style of a video they provide to you with the original language. Don’t worry if you don’t speak the original language, you’ll be able to get the timing and mood required from watching this, and that’s all you need.

In the week of writing, I’ve recorded such sessions from Germany, Spain, Denmark, Italy and UAE. You’ll get a link to view the “foreign” language version on Vimeo or YouTube, to ascertain the timings and the style of the VO. Then you’ll get a script which should sync approximately to the non-English version. If you can offer a full syncing service as well, where you’d chop up your VO on a video timeline to exactly match the non-English paragraphs, fine, but usually they do this detailed editing at their end.

It is perfectly possible to create a good business over about 6- 12 months from scratch. Life is very flexible, and you’d look to your email “in-box” for your daily income. You’d build up your client base to an extent that statistically you KNOW that each morning there’ll be a good day’s work in the offing, even if you have closed off all jobs the night before. The best thing about being a VO is the variety. Doing silly voices, characters for video games, audio books and training video scripts where you learn so much, plus commercials where every split-second counts, means no two days or indeed jobs are the same.

So are you already an actor or actress? Do you already “do” voices? That’s fine. Recording voiceovers is very similar in that you get into a character voice and stay in character. That character may be of a certain age from a certain part of the world with a certain social status, etc. etc. It’s your job to look at the script and think of the character in your head, even down to what they look like and what they would be wearing.

Many of the scripts may not really be characters as such, but “narrator” voices, but even here, you still need to create a type of person that you are playing. If you are given a script for, say, the tourist board of Romania aimed at future visitors, you imagine you are a professor at the University of Bucharest, proud of your country and its history. You have written many books about Romania and enjoy walking and cycling in the forests at weekends. There… have you a picture in your head?

You may have an industrial safety video to provide the voiceover for. So you imagine that you are the head of health and safety who has just taken to hospital a person seriously injured after ignoring the safety rules at the factory. You want to stop others having to go through the same trauma. You now have the passion and the fire in your belly and this will come across in the words that you read.

Yes – you are giving performances. A different one for every script that you are given, but they are still performances, and you need to be able to snap into one of many characters very quickly and sustain the feeling, the voice, the stance, the reason why you are speaking.

Of course, you could attend acting classes to understand all this much more fully, but you need to crack this technique yourself first. If you playback your recordings and it sounds like you are merely reading a script, then you must tackle this problem as soon as possible. Often I am asked to record TV or radio commercials where I need to sound enthusiastic. In real life, I may not care at all about the silly product that is being featured, but I would SOUND like I really genuinely cared!

So how do you learn this technique? Well, it’s all down to the melody of the “song” in the voice, the timing of the words, the words that are emphasised, the little gaps, the breathing, the slight imperfections that make speech sounds natural and not merely read off a script. The best way to “get” this performance technique is to find a recording of a professional experienced voiceover which you admire, ideally with a voice style similar to your own. Then transcribe the voiceover or find the script. Play a few words and pause. Now you read the script yourself – repeat the way the words are said, find the “tune” of the words, the way they go up and down, the pauses, the words that are emphasized – every little nuance. Now play the next section and repeat till the end. Go back to the start and do this again, mimicking the voiceover as closely as you can.

Now forget the recording and YOU read the script again and record yourself. Are you now communicating the energy, passion, the feeling, the character of the original voiceover? If not, try to picture the original voiceover – what would they be dressed in? Would they be holding the product they are enthusing about delivering to a TV camera, or musing out of an open window on a summer’s day? Get the picture.

The idea is that you “get inside the head” of the original voiceover; after all they got the lucrative gig to voice that national commercial and you didn’t. So, you’d copy them as best you can, do this for other voiceovers and actors that you admire and then with the knowledge in your head, and the ability to use “mental pre-sets” to snap into various characters, you then develop a personal style of your own and you’ll get to know your strengths and weaknesses in vocal acting.

1) STUDIO & SET UP

Buy the best microphone you can afford – but it needs to be right for your voice. You need to go to a well stocked audio or music shop in a city, try some out in your price range and record your voice using a top of the range “pop” filter hoop on each… essential for every voice artist. Ask for playback through decent HiFi speakers in a quiet room. Don’t just listen through headphones live, that won’t give you any useful feedback to the quality of the microphones you are testing.

So what are you listening for on playback? Well, you need a microphone that picks out all the “nice” harmonics in your voice and diminishes the “bad” elements. I personally use a Neumann U87 and Neumann TLM 103, as they seem to suit my deep bass voice. It gives my voice resonance and authority while keeping top end (treble) clarity. Years ago, when testing microphones, I found Electovoice microphones made my voice muffled for some reason, and AKG ones were thin and lifeless when recording my voice. Yet I know VO people who love these and other microphones, so you have to see what is right for your own voice and the way you use the microphone.

You’ll find USB microphones at really good prices, (like the Rode NT or the Audio Technica AT2020) but I suggest you avoid these. For the best quality, you really need a traditional large condenser microphone with an XLR audio socket, not a USB digital socket. There are boring technical reasons why this is the case, feel free to Google if you really need to know! As a rule of thumb, you’d be looking to spend at least £500 / $650 on a microphone, and you may be lucky and find a cared for used one on the net for a big discount on the new price. In the microphone shop, you’d also buy a good quality pop filter (double filter ones are usually the best) and a quality anglepoise type mike stand so you can position the microphone exactly right, plus a cage or sprung mount for the microphone so it doesn’t pick up vibrations from the desk.

The microphone needs to plug in using a thick quality screened XLR cable into very good quality preamp such as a Focusrite Scarlett or Steinberg UR22 that then plugs into a USB port of a computer. (Note this is not the same as a “USB” microphone plugged in direct; this route just described gives better quality) Aim for total silence in both the microphone and recording chain and also the room or voice booth you are recording in. Unless you want to just record “shouty” hard-sell scripts, there will be occasions where the slightest small bit of interference or hum will ruin what is called the “noise floor” of your recording. Once you have found a quiet room, the walls and ceiling need to be treated with foam acoustic tiles. This has to done to create a “dead” recording zone with no acoustic reflections. Until you can afford professional acoustic tiles, it’s amazing how old duvets on the walls and ceiling plus thick carpet do the trick.

You may not want to record your audio directly on your computer. I don’t, apart from quick demos. I prefer to plug my microphone into a stand-alone solid-state recorder, one of my trusty old Marantz PMD 661 machines. It gives me more flexibility to pop the SD card out to edit the audio on train journeys, and I like the confidence that the stand-alone recorder with its whisper quiet and high-quality pre-amp is doing its job 100% of the time and that no computer programs are interfering.

So, what about the location where you are going to record your voiceovers? At home, ideally, you’d have a big room or even a garage with a professional voice booth built in, but they are very expensive, at least £3,000 / $4,000. These booths are very heavy, and they get delivered in a huge box in a kit form. They are basically a big box that you step inside via a door and there is usually a triple glazed window. Inside will be a desk and chair plus your screen microphone, keyboard and mouse.

If you can’t afford or have the space for a voice booth, you’d probably start with a small room that you’d adapt. Remember you want the nasty noisy computer with its fans OUTSIDE the room you are in, next door with wires and appropriate USB amplifiers leading to your keyboard, mouse and screen in front of your microphone set up. Or if you have a soundproofed cupboard that offers ventilation for the computer, that could work as well. If you can afford it, buy a “Silent PC” or one with SSD memory rather than spinning hard disks that make a pesky whirring noise. The audio output leads also need to come to your amp and loudspeakers and audio meters (ideally sensitive professional PPM meters) in your studio that will have a headphone socket for directed sessions by phone or Skype, or any of the systems like ipDTL that are very high quality “record at their end” set ups.

On the computer, you’ll need audio editing software, (I use Adobe Audition) Skype, Word, PDF reader and that’s about it, apart from the email system that you’ll use to receive jobs.

2) WEBSITE

Then you’ll need a superb website with very good SEO built in. If you don’t know what you’re doing, hire a pro who does. It needs to look clean, professional and with lots of voice samples that can be downloaded as mp3 files. As well as a main “greatest hits” showreel, you’ll need showreels for subjects and voice styles, such as “Corporate”, “Training”, “Hard sell”, “Soft sell” etc. Look at my own site if you like for examples of the very many styles you’ll need. ( http://www.theenglishvoiceover.com ) Variety is very important. If you are a client looking to record a medical script and you have showreels from two great quality voices, one is reading a medical script with complex medical terms and one a furniture store commercial, who would you choose? So, yes, do a “Medical showreel”. Good at a “forlorn, arty” sound? Record a showreel. Great at a Santa voice? Go for it.

3) ONCE SET UP… HOW TO BE SUCCESFUL

No, you don’t really need an agent, unless you have a guaranteed excellent hard-working one who wants you and believes in you. For the last couple of years I have earned a healthy full-time income without one, unless you count freelance sites like Voices.com, Voice123.com, Envato, etc. who take a cut; no, you just need to network. Email production companies, studios, ad agencies, make some calls, audition for everything that’s suitable and soon one great job leads to another and your empire will grow. For me, it was about a year to build up slowly a great client base which is at a size so I know it is statistically realistic to get some good jobs sent each and every day, 7 days a week. You’d create a “rate card” – usually longer scripts are charged more.

Broadcast use is charged more than non-broadcast. In an day, you may be sent a variety of small scripts, and they may be low budget projects, but still add up to $300 / $400 for the day. Other days, as well some small scripts will come some more lucrative projects with broadcast use. Last month I recorded a set of TV commercials for a $250 “session” or recording fee. Then I was contacted to be told they were to be used on air in Australia and was offered a further $2000 for the usage there. Yes, extra money for absolutely no extra work on my part, and I wouldn’t have known if they had been used elsewhere! Such is the crazy world of the voiceover.

4) YOU NEED TO BE PROFESSIONAL AND RESPOND FAST

The world of media is a fast moving one. Most of the people who will hire you will be production companies who have their own clients they want to look efficient to. So, you need to respond fast to any communication and ideally record speedily too. This is so very, very important. I know for a fact that many of my regular clients use me, not because I am the absolute best voice for the job or even the cheapest, but they KNOW that they will get a fast turnaround so they can add the voiceover to their video and impress their client.

You have got be absolutely dedicated in this. I personally make myself available 06:30 – 22:00 UK time, 7 days a week. No, that’s not working all the time, (in total, we’re talking 6 hours max of actual work) but that’s to catch all the countries working hours, that when you should be checking emails and texts. Ideally you’d be near or in your studio so as soon as an urgent job comes in, you’d fly in front of the microphone, scan the script and instructions and hit record. You’d get it recorded and uploaded right away. If you’re not near your studio, respond right away and give a realistic time when you CAN deliver. Make it sound that you’re in the middle of a big TV commercial session or something, not that you’re collecting the laundry… you get the picture! UNDER promise and OVER deliver, every time. Clients always love voiceovers going the extra mile. For short scripts I often give 3 takes in different styles so they can choose the best, unless they give strict instructions to the contrary.

5) A TYPICAL JOB

You’ll get an email from a client who has found your website and likes your samples. If they haven’t given this detail with the script you need to ask them the following:

1) STYLE What voice style do you want… is there a showreel you like?

2) PACE What speed? Does it need to fit into 2m25s for example?

3) CHALLENGING WORDS How do you pronounce certain words or acronyms? Ideally they’d send you an audio file saying challenging words very slowly and also at normal speed. Don’t just rely on forvo.com, or howjsay.com. For non-English words, Google Translate gives you a good idea sometimes if you click the right language, but don’t rely on it! For unusual non-English company names, you may find a video on YouTube that mentioned how to say the word you are looking for.

4) FILE TYPE What file type do they need? WAV? AIF? mp3? What data and bit rate? For example, even though most modern digital recorders capture at 32bit 48KHz, San Francisco’s Voice Bunny insists on files that are WAV but 16 bit and 44.1KHz. ACX or Audible audio books need files that are mp3 files, 192Kb/sec and normalised to -3dB, plus with 0.5 second mute at the head (start).

After you have all the information, you’d record, peaking between “4” and “6” on your calibrated PPM meters or equivalent if you are using VU meters.

5) FILE EDITING & PROCESSING

You can’t send the raw audio to the client, although some studios insist as they want to deal with waveforms without any processing. At the very least you need to delete your mistakes, after all you’re a professional that doesn’t make mistakes, aren’t you?! Here’s the order I personally process files. I can do this very quickly as I have keyboard presets on Adobe Audition, which saves so much time. (Use ALT + K if you have Audition!)

– Open the waveform

– Chop off the rubbish at the start and end

– Cut out mistakes. A good technique during recording is to leave a 5 second or so gap when you mess up. You won’t be wasting this time, you’d be re-reading the script to ensure you don’t flub, or you can sip some water. When you see the waveform later, you’ll instantly see the gaps that need attention. Don’t listen to people who say you need to play back up to the mistake and “punch in record”, this technique takes too long and is unreliable if you get the timing slightly wrong.

– Deal with “spikes” – these are nasty sounds that show up as high lines on the waveform. They can be treated with an electronic pop filter or if too bad, it may need a retake.

– Add 0.5 second of silence at the start of the file. Add 2 seconds at the end of the file.

– Deal with breaths. A natural sounding read will usually be fine with breaths left in, but for a fast reading commercial, you may need to spend time carefully cutting out breaths in a desperate attempt to save milliseconds!

– I normalise the waveform to 100%, then add light limiting – 9Db – to give the waveform a “haircut”, then “Normalise” the file to -3Db, before saving.

Never ever attach files to emails, even small ones add up to clog your send box. It’s far more professional to email a link from a file transfer service. If your client does not ask for specific file types, send a 32 bit wav and a small email copy which is useful in case the production company need to email it to their clients. If you use WeTransfer, for a small fee the “splash page” where the download link is can be an advert for your services!

7) FEEDBACK

I recommend that you offer “unlimited” retakes, like I do. In other words, if the client wants any changes, you don’t penalise them in any way. For no extra charge, you will re-record the sections required or even the whole lot if they want it. In my experience, unless you really haven’t understood the brief you’d been given, most people will be fully happy first time or just want a few retakes in the style and speed of the original that they can “patch” over the original recording.

8) INVOICING

It’s rude and desperate to send invoices right away; it’s usually good form to wait a few days at least! Unless you are happy with your own accounts system, I recommend Xero, the system that I use. It’s great because it’s a cloud-based system, no installation, so you can reconcile your accounts on your phone, tablet or any computer anywhere. You can set up multiple currencies in PayPal, a must for an international voiceover. My Xero is set up with GB Pounds, US Dollars, Canadian Dollars, Australian Dollars and Euros. It works out currency conversions as well. But the killer application is that the system securely “sniffs” your bank and PayPal accounts once a day so you don’t have to enter anything. You just need to match your invoices with the payments that Xero has sniffed out and everything is fine. As Xero is cloud based, your accountant can log in as well, so you don’t need to waste time doing the yearly account submission with a carrier bag of invoices or receipts as you’ve already done it all!

9) GROWING THE BUSINESS

Update your website once a month at least, keeping in mind SEO. Pepper your site with varieties of of words that are similar to “voiceover” or “voice actor”, such as commentator, audio recordings, audio studio, audio talent, etc. Don’t forget featuring keywords of your specialties such as “medical voiceovers, medical narration, pharmaceutical narration, etc. Ensure the “id” and “Alt tag” of your photos and illustrations isn’t some random number but something that search engines can read.

Each day do at least 20 minutes of marketing, even if you are busy. Find new production companies and look up their websites then email them with a short, professional message offering your services. Target a country per week if you like. Mandy.com have a superb international directory of production companies that is free to access. LinkedIn is great too if you use it properly. Ask these sorts of people to join your network: Production managers, Creative Directors, Producers, any video production company, audio production companies, etc. Don’t forget that when they accept your invite, you will be sent an email. Don’t ignore this as you’ll get a link (in small blue writing – don’t miss it!) saying “Send a message”. This is gold-dust as you can send a direct message including your contact details without buying any “in-mails” from LinkedIn.

Consider signing up to voiceover websites where clients post auditions and you send in your best shot. These so called “pay to play” sites have had loads of criticism, but usually from voiceovers who don’t use the sites properly, and therefore don’t get much work from them. Some sites you pay a subscription and then they also take a % of the fee, but they offer a voiceover access to some very high profile clients. The most professional and active sites are in my opinion: voices.com; voice123.com, the voicerealm.com then voicebunny.com, and bodalgo.com. Don’t forget the general freelance sites where you can post your voiceover services… People Per Hour, UpWork etc. Fiverr is also a great money spinner, but don’t sell VO’s for just one $5 gig, that’s crazy… use the Fiverr package options to include loads of perceived “extras” that people will generally need anyway, such as fast delivery, wav file and so on. Using this technique my actual minimum fee on Fiverr is $50 which is worth reading something for!

What Are the Best Tips to Get Certified on "CCT Routing and Switching?"

The “CCT Routing and Switching” qualification is a way of confirming your skills with Cisco networking equipment. This type of equipment is widely used in industry and business. Cisco Certified Technicians have the basic skills to diagnose, repair, restore, and replace Cisco networking and system devices at customer sites. Technicians work with the Cisco Technical Assistance Centre (TAC) to resolve support incidents. Cisco authorized training is available online and can be completed in multiple short sessions, enabling Technicians to stay productive whilst working in the field. Cisco Certified Technician (CCT) certification is available in several technology tracks, so that Cisco Support Technicians can expand their area of expertise across various technologies, such as Data Centres and TelePresence. The first certification to start with is Cisco Certified Technician Routing and Switching (CCT-RS).

The CCT-RS certification (through the 640-692 RSTECH exam) focuses on the skills required for onsite support and maintenance of Cisco routers, switches, and operating environments. Technicians in this area must be able to: identify Cisco router and switch models, accessories, cabling, and interfaces; understand the Cisco IOS software operating modes and identify commonly found software; and be able to use the Cisco Command Line Interface (CLI) to connect and service products. Achieving CCT Routing and Switching certification is considered the best foundation for supporting other Cisco devices and systems, and for going on to qualify for other advanced Cisco certifications.

The first tip is to buy this book:

“CCT Routing and Switching (CCT-RS) Secrets To Acing The Exam and Successful (sic) Finding And Landing Your Next CCT Routing and Switching (CCT-RS) Certified Job” (ISBN 148615980X 9781486159802).

This book costs US$33.82 on Amazon. To prepare for the exam, this book tells you:

• What you need to know about the CCT Routing and Switching (CCT-RS) Certification and exam

• Preparation tips for passing the CCT-RS certification exam, and exams in general

• Taking tests

The book contains several suggestions on how to prepare for an interview. It covers non-technical aspects – how to find a job, write a resume, behaviour in job interviews, etc.

To land the job, it gives you insights on:

• Typical CCT-RS careers

• Finding opportunities – the best places to find them

• Writing unbeatable resumes and cover letters

• Acing the interview

• What to expect from recruiters

Secondly, you should absorb self-study materials available on the Cisco Learning Network:

Cisco has officially available self-study on-line courses that you study in your own time. The CCT-RS one is called “Cisco Certified Technician Supporting Cisco Routing and Switching Network Devices (RSTECH)”. It costs US$299. This buys you a year’s subscription and during the year you can review the six-hour course as often as you want.

These are some Cisco-recommended study supplements. They are not designed to serve as a complete self-study program. You can find “640-692 RSTECH Exam Topics” on the Cisco website: http://www.cisco.com/web/learning/exams/list/rstech.html#~Topics

Look for these in particular:

• Identify Cisco Equipment and Related Hardware

• Describe Cisco IOS Software Operation

• General Networking Knowledge

• Service-related Knowledge

Interview with Joe Farcht, Author of "Building Personal Leadership"

Interview with Joe Farcht

author of Building Personal Leadership: Inspirational Tools & Techniques for Work and Life

Genesis Publishing (2007)

ISBN 1600371655

Reviewed by Cherie Fisher for Reader Views (6/07)

Today, Tyler R. Tichelaar of Reader Views is delighted to be joined by Joe Farcht, author of “Building Personal Leadership.” Joe Farcht’s new book focuses on the progressive development of personal productivity, personal leadership, business leadership, and overcoming the barriers to success. Joe Farcht has earned a BSEE degree, MBA, is an Air Force Lt. Col. (Retired) Vietnam veteran and fighter pilot, is certified as a Master Personnel and Executive Coach, is an expert in the Myers-Briggs Personality Typing, and a 13 year successful business owner.

Tyler: Thank you, Joe, for joining me today to discuss your new book. To begin, will you tell us a little bit about the idea of progression in “Building Personal Leadership”—is it a matter of developing the individual leader first so he or she can then develop the employees?

Joe: Tyler, you hit the nail right on the head. First you develop personal leadership and then you can lead other people. Employees observe their supervisor very carefully and judge them by their actions. What they say is largely disregarded. The greatest problems arise when an employee detects discrepancies between what the boss says and what he or she does. 75% of employees quit their jobs because of their immediate supervisor. Getting your act together as a leader of yourself first is the key to becoming a great supervisor of people. Think about it! The success of a leader is totally dependent upon the success of the people who work for them. If you don’t develop and grow your own skills, how can you help your employees grow and develop? Only if you are building your own personal leadership skills can you help others and assure your own continuing success.

Tyler: Joe, I understand your book focuses on many factors affecting the effectiveness and productivity of people including the motivation of employees. Having been a manager myself, I know money is not the only thing that motivates an employee. What other factors do you find are motivators for employees?

Joe: Tyler, that is a great question. I have done tons of study on the subject and teach it at the University. I have found that most motivational theories are in agreement on what motivates employees. Anyone who studies Maslow, Herzberg, Kovach, and others will find some very startling agreement. While motivation for each person is unique to that person, some generalities can be found in the population. The need for achievement is one of those motivators. Achievement can be found in stretch goals, learning through striving for new results, and doing something you have never done before. Closely associated with achievement is the motivation derived from recognition, appreciation, and increased self-esteem (doing great work and being / feeling valuable as a person). Achievement and recognition are powerful for the general population. However, if you are under 30 years of age and making less than $30,000, you will probably be motivated by money or money equivalents like promotion. One last word on motivation, get to know each individual personally. What are their goals, aspirations, hobbies, interests, and motivators? Then integrate what you know about the general population with the specifics of each person and you will become a great motivator of employees. By the way, this works with children, spouses, significant others, and friends.

Tyler: I’d like to go back a minute and comment on the primary reason you mentioned people leave their jobs—their immediate supervisors. Having been in middle-management myself, I know how difficult it can be to motivate your employees when the people higher up the ladder are uninterested in motivating, encouraging or rewarding you, which puts you in a position where you feel powerless to help yourself or reward and motivate your own employees. What suggestions would you have for people in such middle-management situations?

Joe: My whole purpose for living is to help people like you described to understand that they are not powerless to help themselves and that no matter what the work environment, they are able to encourage, coach, and motivate the people who work for them. You see, we have a choice. We can shrink from challenges, become powerless, or we can choose to lead by example, set ourselves apart, and be the leader we were meant to be. Middle managers who develop themselves into leaders are upbeat, guided by inner values, and care for each person who works for them no matter what the work environment. I wrote my book to help middle managers become leaders, model the right attitudes and behaviors, and overcome the shortcomings found in many organizations. I was one of those middle managers at one time. I was positive but found that my values and the organization’s values were too different to remain employed in that company. I was faced with taking a job I could do in my sleep or be downsized. I took downsizing. It was the best decision I ever made. It allowed me to create a wonderful and rewarding life.

Tyler: That’s a fantastic observation, Joe–that you have to make sure your personal values and the organization’s values are similar. But is it really that easy? What advice would you give to the many people who probably feel trapped working in jobs they dislike for companies they dislike simply because they feel they can’t leave if they want to pay the mortgage or feed their families? How can these people become their own leaders out of such quagmires?

Joe: Feeling probably trapped is a choice. It is based on fear and will drain the energy right out of a person. Everything is a choice. We choose to feel trapped. We choose to fear not being able to pay the bills or feed the family. We choose to slog on each and every day without the courage to choose something else. We choose limitations that keep us from using more of our potential and greatness. I’m going to be a little in everyone’s face and say that you can choose change. If you want a better life, well then make that choice and plan how you can accomplish that plan. You see, if you do the things you have always done, then you will get more of what you have always gotten. You must choose to learn, grow, and become something more. Like Oprah Winfrey, you need to hold a larger vision of yourself than you presently have. Ok, so here is what you do. Choose to buy my book. Turn to page one. Read the article called, “Back to the Basics.” Highlight insightful ideas you have. Take the best idea and start practicing it in your work and life. Do that for all 337 pages and your life will be transformed in a year and you will be prepared to make that leap to a better job, better life, and the joy and happiness you deserve. Oh, by the way, Amazon.com has the book used for $8.50. Is that too much to invest in your future?

Tyler: Your book also spends time on time management. What do you think are the biggest obstacles to getting people to manage their time properly?

Joe: The Habit Trap! We grow up amongst role models who have poor time management skills. Business cultures reinforce inefficient methods of working. People don’t know any better because no one is coaching them to improve because no one knows better ways of working. Everyone is trapped in in-effective and in-efficient ways of working and living. If a person is lucky they find a great book or resource that provides exceptional techniques to use your time more effectively and productively. If you are even luckier, your boss discovers and enrolls you in a development program that provides transformational attitude and time management skill development. If you are even luckier, your boss is a master at time management and coaches you to mirror his or her level of success. It is in his or her best interest to do that.

Tyler: Your examples then range from self-motivation to having a very supportive and motivating environment. Can an employee become his or her own personal leader, motivating himself to do a good job even if it seems like no one higher up cares? Can that one person turn that organization around?

Joe: Every person can develop personal leadership attitudes, skills, and competencies leading to self-motivation no matter what their circumstances. There are hundreds of examples of individuals overcoming adversity to achieve great things. Les Brown and Oprah Winfrey come to mind. Developing and exercising effective personal leadership attitudes and skills will set you apart from higher ups, peers, and others. It insulates you from the negative forces that would pull you down to their levels. Great personal leaders understand that their every thought and action is a choice and they choose the higher paths in their work and life. They don’t depend on the approval or caring of others. They recognize the source of their power is from within. They have so much to give and they give abundantly. Can one person turn the organization around? The answer is yes and no. Yes, you can if you are the top executive in the organization and you are smart about organizational and cultural change. No, if you are a middle manager bucking top leaders who have self-serving agendas. Middle managers will try but find their efforts very frustrating, deflating, a huge energy drain, and that they are not making any progress. In some cases there may be value clashes and the only option is to leave the company and find a more compatible place to work.

Tyler: I have heard it said that no one comes to work with the intention to do a bad job, yet we constantly see examples of poor customer service or employees who just don’t seem to care. What can a manager do to turn that situation around?

Joe: Tyler, I like this question. The manager can’t do anything! It is a top leadership problem and the top leader in the organization must make the changes to motivate managers and front line employees to provide the exceptional service that is desired. I recently had a one-on-one conversation with Dan Cathy, President and COO of Chick-fil-A, and what I learned will make you stand up and applaud. Dan Cathy has traveled to the top of his family owned corporate ladder but discovered that the answers to continuing success were not there. They rested with the front line employee serving the customer. Dan Cathy now spends considerable time sculpting, training, and leading front line employees to providing exceptional service to customers. In this way, Dan Cathy will ensure the continuing success of Chick-fil-A. You see, customer service and motivated employees start with the top leadership of an organization.

Tyler: That’s a great example, Joe. In “Building Personal Leadership” you emphasize the importance of setting goals and creating the attitudes and competencies for exercising effective personal leadership. However, I know lots of people have difficulty just figuring out what it is they want out of their personal lives and their jobs. What advice do you have for these people?

Joe: Oh, that is a great question! Let me explore how we get to this point in our lives and then I’ll provide some advice. We grow up in imperfect situations with mostly well meaning but imperfect parents, teachers trying to do their best in crowded classrooms, the influence of friends trying to find themselves, relatives who have their own problems and blemishes, and in neighborhoods that don’t support becoming all that a person can become. We develop limiting beliefs, attitudes, and habits of behaviors that severely limit what we can accomplish. So people know they have more to offer, but they feel lost and unable to contribute like they would like to. Often they become victims and don’t take responsibility for where they are in their lives. That said, now here is the answer. Understand that you had little control of your life until now. Today is the moment of decision. The life you live today is a result of your choices in the past. The life you live tomorrow is a result of the decisions you make and actions you take today. Decide today that you need to let go of old beliefs and ineffective conditioning in the past by learning new things, developing new habits, and changing into a new person. One new step each day. That is all it takes. Little changes each day and over time you will make big leaps in your leadership, success, and the results you enjoy. A great resource to start that journey of change is my book “Building Personal Leadership.”

Tyler: Your book was created from weekly emails and monthly newsletters you send to participants of your leadership development programs. Would you describe for us a little bit of the writing and organizational process that was involved in constructing the book?

Joe: I took hundreds of articles, threw them up into the air, and they magically fell into like piles. Well, ok, it didn’t happen quite like that. I did sort through them at a rather high level of organization and found four major themes of my writing. Then I hired a person to organize them into chapters with similar information. They were all combined into the book, which was then edited. My work then was to dive into the details, content, and all the supporting sections of the book. I learned a lot that will be incorporated into my next book. Just a comment, as I use my book in the leadership development process of my participants, I am always inspired by the content. There is something special about the content. Read it and you will experience the same special feeling.

Tyler: Do you see the book as evolving then into future editions—or you mentioned your next book—what will that be about?

Joe: I really love using my intuition and experiences to write for the several thousand people who receive my weekly messages. I have enough material since my book “Building Personal Leadership” to compile another book of similar organization and content. For sure my next book will be about personal leadership but exactly what form or the title, well, I’m looking to learn from the marketing of this book and to be inspired with the approach that might reach out to even more people. You see, there is nothing more important to me than helping people become more effective leaders in order to create the lives of their dreams. That is my purpose for living. Unleashing more of the unlimited potential and greatness that we all possess is my mission. Personal Leadership is everything!

Tyler: Do you have any thoughts about how email has changed the workplace, both from an employee and a management perspective?

Joe: That is an interesting question. I think a book could be written on the subject. From the employee’s perspective, they now use e-mail to communicate with other colleagues sitting next to each other in separate cubicles. It is also being used to keep historical records for a variety of purposes including their own protection (CYA). I also know employees who are teaching people to communicate with them via e-mail so they can manage their time better and keep focused on the important tasks they need to complete. From the management perspective, some managers work from home and send out literally hundreds of messages asking for information, following up on assignments, and in some cases micromanaging their subordinates. Using e-mail for these purposes can be good but I know some managers who get stressed out and write caustic and damaging e-mails causing great stress and unhealthy emotions among employees. Considering e-mail more globally, I think it is revolutionizing how we communicate and work. There is less personal contact, more computer face time, work done at home and traveling anywhere in the world, whole books are written through e-mail, new markets have emerged, and communication is timelier. The world has changed. What a glorious time to be alive. Our work and lives are filled with opportunity. Those who learn how to use e-mail and other technologies first and who seize the opportunities will win. E-mail is here to stay but like any communication tool, you need to know when to use it and how to use it to be effective.

Tyler: Thanks, Joe, I have to agree with you that because of new technology like the internet and e-mail, communication has improved and consequently, this time is one of the best to be alive. Could you tell us now a little bit about why you felt the need to write “Building Personal Leadership”?

Joe: I had many recipients of my articles and newsletters comment on the value and the inspiration they received when they read my weekly communications. During a networking meeting, a colleague suggested that I form them into a book. It took a couple of weeks for the idea to take hold and so I decided to do it! Now, I’m delighted with the book and I have plans to form an even more powerful book to become a resource to those courageous people who want to build their personal leadership attitudes, skills, and competencies. Change one life, change the world. Change many lives and change the Universe forever.

Tyler: And what do you feel sets “Building Personal Leadership” apart from all the other books out there about leadership and business management?

Joe: “Building Personal Leadership” contains hundreds of “in the trenches” tools and techniques for working smarter and creating the life you dream about. Each one is presented in a short one-minute or less reading with a call to action. Implement the tools and techniques in your work and life and I guarantee you will experience greater material rewards, happiness, and joy. It is uniquely organized and presented to capture and keep your interest. The index provides a complete guide to explore those particular tools and techniques in which you have an interest. If you want to go far in your life, then you must take this book along on your journey.

Tyler: Joe, would you be so kind as to share just one of those tools or techniques, or a success story in the workplace that resulted from using a tool from “Building Personal Leadership”?

Joe: I like stories. I was asked to work with a VP of Procurement of a food manufacturing company. He worked with the company for 17 years and did great work. However, his subordinate wouldn’t talk to him and he was having communication problems with the CFO. The executive team was very concerned with his dysfunctional behaviors and problems. In working together we learned he was an Introvert, Sensing, Thinking, and Judging type personality (ISTJ Myers-Briggs Type) with some really rough attitudes and habits. His emotional intelligence was very low showing the effects of the stress and problems he had but could not understand or manage. I used a leadership development program that lasted about 16 weeks with meetings of two hours each for 12 meetings. He had lessons to complete between meetings, extensive coaching during our meetings, and practiced the new skills and competencies we explored together. All those skills and competencies are recorded in my book.

As a result, his employee started to talk with him again, he initiated reconciliation with the CFO, and made other dramatic work life changes. His wife and family started reporting a new happier husband and father. Everyone could see him smiling more and he was happier. So I thought, I’ll administer the emotional intelligence assessment again and see if there were any changes. His emotional intelligence improved by three sigma (from the lower 5% of the population to the top 15% of the population). The story continues. He has been promoted and I just saw him and he is still smiling. This story is consistently repeated with the people I work with. The tools and techniques found in the book Building Personal Leadership simply work. YES! That’s why I live!

Tyler: That’s wonderful, Joe. I can tell from such an example that you really care about people and that they are the main reason why you wrote your book. Thank you so much for joining me today. Before we go, will you tell our readers your website address and where they can get more information about your book and your email newsletters?

Joe: My web site is [http://www.leadershipadvantageinc.com] and you can learn more about my services, products there. More detailed information about my book can be found at [http://www.leadershipadvantageinc.com/personal_leadership.html]. You may subscribe to the weekly emails and monthly newsletters at [http://www.building-leadership.com] and after subscribing and receiving a confirmation e-mail, just click on the link to activate your subscription. My blog can be found at [http://www.farcht.com/blog] and you may explore leadership articles at my article site found at http://www.leadership-e-article.com. It has been a pleasure to answer your questions and explore the subject of Building Personal Leadership with your audience. I appreciate your great questions and I extend to you a heart felt Thank You.

Tyler: Likewise, Joe. I’ve been very pleased to speak to you and to hear good practical advice that I know from personal experience will be effective in the workplace. Good luck with “Building Personal Relationships” as well as your next book.

Wireless Wishlist for 2008

It seems like every time you turn around there is a new wireless gadget making its way into our every day lives. Modern day society has managed to completely free itself from wired electronic devices – so much so that it is now possible to live and work from almost anywhere on the planet.

With Christmas just around the corner, and 2008 fast approaching, we thought it would be fun to put together a short list of some very cool wireless devices that you may find making their way to your wireless “wish list”.

Our top five wireless wish list choices for the new year are:

#1 – Wireless VoIP Skype Phone

1984 witnessed the breakup of the ATT monopoly and the cost of a telephone call has been dropping ever since. Little did we know that the internet would provide the most cost-effective means of making a call. On the cutting edge of free and dirt cheap long distance calling is Skype.

Skype is the internet application that has allowed millions of people from across the globe to call one another right from their desktop PC. Now you can make free or or very inexpensive calls using Skype using only a wireless Wi-Fi connection. Skype has indeed gone mobile. The Netgear SPH-200D Cordless Phone with Skype takes all the hassle out making a Skype call. No need to install any software, or even turn on your PC.

Simply plug the Cordless Base Station into your internet router and begin speaking with friends, family and business associates via the internet from wherever you are. The SPH-200D can even replace your land line phone. Just plug the base station into any active phone jack and it becomes a traditional cordless phone as well.

#2 – Kindle Wireless Book Reader

For the busy traveler who hates to lug books on business trips – the new wireless Kindle Book Reader by Amazon. Kindle has brought new meaning to the term “wireless book”.

The Kindle is like no other electronic reader on the market. It is designed to be read comfortably at any angle for long periods of time – without the eyestrain that often results from staring at a computer screen. This device is completely mobile and is very simple to use. No PC syncing is needed.

The Kindle uses the same 3G network as advanced cell phones, delivering complete contents of books wirelessly through Amazon’s own network: Amazon Whispernet. (In other words, you’ll never need to locate a Wi-Fi hotspot.)

With the Kindle, all you need to do is just think of a book, magazine or newspaper you would like to read, and Kindle will do the rest. In a matter of seconds, Kindle will wirelessly download and display your selection’s entire contents on its paperback-sized screen. Kindle allows users to download and read the beginning of books for free. All newspaper subscriptions start with a risk-free two-week trial.

Will the Kindle ever replace the tried and true paperback? Maybe not. But with the ability to have 200 books stored at any one time, it sure saves space on a long business trip!

#3 – Wireless Internet Radio

For those that love their radio but cannot seem to find a decent local station: The Wi-Fi internet radio.

The Tangent Quattro internet radio integrates WiFi radio with distinctive Danish styling. Housed inside a MDF wood cabinet with real walnut veneer, the Quattro has the highest quality audio among WiFi radios.

This handy little radio allows you to search over 5000 Internet radio stations – by location AND genre. Listen to anything from Jazz in Taiwan to news from Germany. You can also use the Quattro to wirelessly stream music and audio from your computer (PC and Mac), or connect your MP3 player to the audio-in and use the radio as a stand alone speaker.

Unlike satellite radio, there are NO monthly subscription fees. You don’t even have to turn on your computer to use it. Wirelessly connect to any Broadband wireless (WiFi) network and listen to your heart’s content.

#4 – Wireless GPS Navigator

If you have ever experienced being completely lost without a gas station in sight, it may be time to pick up a wireless GPS navigational device.

Today’s GPS devices will not only help you navigate anywhere in the U.S. and Canada, they will also provide travel tips, and even store your favorite MP3s and photos! Our choice in this category is the Garmin nüvi 350.

The Garmin nüvi 350 revolutionizes what one would expect from a GPS navigation device – or any device for that matter!

The Garmin 350 is one of the most popular, portable and reliable GPS devices around. Wherever you go – in your car or on foot – this wireless marvel offers extremely accurate position data, thanks to a high-sensitivity integrated GPS receiver by SiRF and WAAS-enabled, 12-satellite reception.

It comes equipped with detailed maps of the U.S., Canada and Puerto Rico. The device is touch-screen controlled, and comes with a unique “text-to-speech” feature which calls out turns by street name. It is also compatible with Garmin’s GTM 10 FM TMC traffic receiver, allowing users to avoid traffic tie-ups by simply pushing a button that will calculate a new route instantly.

We predict that these types of wireless devices will be everywhere in a few years. Then we will wonder how we got along without them.

#5 – Wireless Indoor Remote Control Power Outlet

Finally, for the “lazy” in all of us: the

SVAT WRC100 Wireless Indoor Remote Control Power Outlet.

This technologically advanced wireless electronic remote switch can control virtually everything in your house with just the push of a button. Control lamps, radios, or other electrical devices from up to 100 feet away, even through walls and floors, with this radio frequency wireless remote control.

The receiver plugs directly into any three-prong outlet, and provides a remote switched three-prong outlet to allow radio frequency on & off control for a wide variety of electrical devices. The control unit, with keychain, is more than small enough to fit into your pocket, but its signal will work up to 100 feet away from the receiver even from inside your car.

Ideal for those hard-to-reach plug-ins like holiday lights and computer outlets. The kids left the television on and you don’t feel like getting out of a comfortable chair to turn it off? Just one handy button and you’re in charge.

Easy Plug & Play Installation: Plug receiver into wall outlet. Plug device to be controlled into receiver. That’s it you’re done! No wiring is necessary! There you have it, our top picks for your wireless wish list for this holiday season and for 2008. Be sure to include at least one wireless gadget on list this year!

Personal Finance Technology Trends For 2012

Hello and here’s wishing all of you the best of health, wealth, peace of mind and success with your financial goals in 2012.

I thought I’d start the year off with some trends; especially in technology, that might help you better meet your personal financial goals, because there are a host of personal finance services and applications, or apps as they’re called, that are going to change the way we Americans invest, bank, track our finances, shop, get coupons and so on.

Some of these apps use the web, but increasingly, many are available on mobile devices because more than a third of all American adults now carry “smartphones” with amazing amounts of display using processors that are as powerful as the ones in your laptop.

In fact, if you’re like many of my clients who’ve been holding out against the invasion of technology you might want to reconsider your decision in 2012. This might just be the year to allow the benefits of these innovations to help you gain better control over your finances.

Maybe now’s just the time to stop using a pen to write checks, paper to track your expenses, and scissors to clip coupons, to let technology streamline this process for you a little, and in so doing, to add to your savings and bottom line. Because, let’s face it, your best coupon deals or hotel and airfare discounts no longer come as inserts or advertisements in your newspaper but go to those who use the Internet.

So here are a few ideas for you to reflect on and consider opening yourself up to, and while I encourage you to listen to these with an open mind, adopt only those that you are 100% comfortable with, knowing full well that you could always revert to paper and pen if this turns out to not be your cup of tea, so here are some new ways to think:

1. Think “Mobile Money” How does that sound? Well, here’s the lowdown. With technology where it’s at today, you can now wave your smartphone in front of an intelligent device to make all sorts of payments, and this trend appears to be really catching on because it helps retailers, mass transit operators and others sell more while cutting down costs. With mobile money, your smartphone is securely linked to your bank or credit card account and saves you the hassle of carrying a card, swiping it, getting a bill, signing it, and so on: and it saves the seller money too. Moreover, I suspect merchants and service providers, such as Google Wallet, are going to make this more attractive by offering promotions and discounts to folks that adopt this mobile payment technology, much like they offered incentives in the early days of the Internet.

2. Think: Person to Person Payments. Remember how, when you’re at a restaurant with friends and it’s time to split the bill, you either ask for separate bills or fumble for cash to pay your share of the bill. Well, how about just clicking your smartphones against each other and you’re done? Companies like American Express, Mastercard, Visa and PayPal now offer a host of services that let you easily transfer money between friends using verified bank or credit card accounts. This makes sending money across the street, neighborhood or country faster, easier and less expensive, and remember, you are ALWAYS the bearer of any expense your bank or credit card company incurs in all the transactions you make, so if this technology reduces costs, chances are, some of these savings will flow through to you too.

3. Think: Money Management. There are new web sites that have also turned into apps on your smart phone, such as Manilla.com which I mentioned a few weeks ago in my interview with Terry Savage, and Pageonce which help you manage bills, payments, subscriptions, coupons and more; for free! So you never have to worry about a missed payment, late fees, trips to the post office, stamps, missed deals where you could’ve used a coupon to save big, and so on. What’s more, many of these services genuinely have an environmentally friendly agenda and want to help replace paper clutter with electronic account statements. Other, more specialized sites such as savvymoney.com help customers manage their debt: credit card payments, mortgages, car loans, and automatically give you tips on when to refinance or make extra payments to reduce your overall interest expenses, and so on. Others like betterment.com are designed to simplify investing and finally there is mint.com, whose CEO I interviewed about a year ago which was the first site like this out of the gate. And it’s a good site to bring all of your financial accounts together. So, with an open mind, check them out and sign up for the ones that make sense to you. And remember, you can always opt out if you don’t like ’em.

Now, before I go further, I want to stress that I am not recommending these specific sites or validating what they offer but merely citing examples of technology advances in personal finance that are worth exploring further.

4. Think: Personalized Deals. We all heard about the promise of personalization, and while this has happened to some extent with the Internet, it hadn’t quite panned out in the personal finance space, until now. In fact, to understand personalization, consider trying this experiment. Take your laptop over to a friend’s house and type in the same search phrase: say, “top 10 deals in Miami” in google.com or any other search engine: your friend on his computer and you on your laptop using your friend’s Internet connection while sitting right next to him, I am almost 100% certain that your search results will differ because search engines personalize search results to your browsing history. The good news is that with smartphones and location-based services, stores can now know when you walk into them, what your purchase history and profiles is, and entice you with special offers just for you: personalized discounts and on the spot deals to customers willing to opt into these programs. And frankly, for the most part, you have little personal information to lose that you haven’t already lost by simply using the Internet, Facebook, email, search engines or smartphones at home!

I know it sounds a little scary: like an Orwellian universe, but it’s not as bad as all that. YOU have the right to opt in or opt out of any of these services.

5. And Finally, Think: Social commerce. The Internet spawns strange terms like this one, but what the heck! Apps now let you borrow or even legally take money from individuals across the world: who might want to give you a loan where they believe in you more than a bank, help you out in a crisis, lend you money to do up a kitchen or bathroom, or simply invest in a brilliant idea: private individuals reaching out to each other and opening their wallets in what’s called social commerce without borders. Check out sites like weemba.com or kickstarter.com if you have an idea you think others may want to fund. It’s actually pretty cool to think that banks will no longer control what you can and cannot do, financially. I love the free markets.

But don’t think large banks and corporations aren’t watching all of this very closely and actively stepping in where they sense success: so in 2012 you will likely see a lot more happening in the space of personal finance technology… and as we kick off the new year, I urge you to try and “get with it” if you like, and explore ways of saving time and money by using technology to your advantage.

Web Hosting and Attention-Grabbing Facebook Mobile Marketing

Web Hosting and Attention-Grabbing Facebook Marketing

What works with social media for business owners?

Facebook Mobile for Business

To begin with, the majority of websites and blogs are created using WordPress. So, the security of your Word Press website or blog is crucial.

Two very cool security plug-ins for bloggers who use WordPress are available. Imagine this scenario. One day you wake up and your blog has been hacked and every single article had disappeared. Thank God for backups. It could be absolutely disastrous if someone were able to hack into your WordPress site. SecureWP and WSDSecurity are two plug-ins that can be used collaboratively and they give you increased security for your WordPress blog.

Password generator generates super secure passwords that no one can guess. If you have an administrator that has full access to your account, you need to be sure to generate extremely secure passwords.

A lot of hackers use systems that are smart. They go to a WordPress blog and look at the source code so that they can tell which version of WordPress your blog is running. These plug-ins eliminate the version of WordPress from your source code. Hackers try to exploit challenges of your version of WordPress, so by eliminating the version of WordPress from your code, it is extremely difficult for automated attacks to target your blog.

When you try and login to WordPress with the incorrect password, it generates a response. These automated systems look for those responses in an attempt to hack your blog. These plug-ins remove that response completely. Instead they jingle or blink the login screen so you, as the user, know you have the wrong password, but a machine or a software tool would not know that, therefore, automated hacking attempts are reduced.

Facebook Marketing on a Mobile Platform

Four hundred and eighty-eight million people are using Facebook mobile every month. That is bigger than the entire population of the United States. Additionally, three hundred million pictures are uploaded to Facebook every single day. Close to a billion members take pictures and upload them to Facebook using their smart phone. People have Facebook on their smart phone and check Facebook when they are in a line waiting for a coffee, stuck in traffic, and doing it almost everywhere, this makes mobile users very important to Facebook. Half of the nearly billion Facebook users use Facebook through their mobile device and they are actually twice as active than non-mobile users.

People have a tendency to never leave their house without their mobile device. This is wonderful news for business owners! The more you as a business owner can get your message in front of those users who are in constant contact with their circle of friends, the better. Marketing has shifted from trying to get your message in front of people during certain times to becoming an intricate part of their social experience. Ads are coming in through their news feed and users don’t even know that what they are looking at are ads. Facebook’s mobile ad click-through rate is an astounding four times higher than Twitter!

Facebook, Instagram and Cameras

In the past, Facebook’s weak spot was mobile. They were behind the eight ball for developing a robust app so with the purchase of Instagram, Facebook took the lead in this market. It shows the marketplace that Facebook is serious about mobile. Instagram is solely a mobile app. You have to view photos through a Instagram partner, but Facebook might be rolling out an Instagram.com profile where users can share their photos through the web. It could be a whole new social network like Pinterest.

Steve Jobs was a mentor for Mark Zuckerberg and Facebook is rumored to come out with their own smart phone. They could be taking a leaf out of Apple’s book and be working on a whole new market in the smart phone industry. It would be a whole new developer marketplace that is perfectly feasible. At some point, there will be more mobile phone subscriptions than there are people on the planet. The whole world is in your hand with a smart phone. You can check your e-mail, check in with friends, view the news, use apps to do just about anything. It is only going to grow and it is a wonderful thing for connecting people among the world. The Facebook mobile app is still relatively limited. For example, you can’t share with the app. So, many people are using Safari to view Facebook on their smart phone and accessing the social media network that way. Facebook might very well venture into the hardware market in the near future to further capture market share within the prominently growing mobile marketplace.

Facebook Page Manager App

Facebook page manager is a great way to manage multiple pages. You can have access to your page on the fly, post content and quickly reply to comments and moderate them. Its very helpful for business owners and entrepreneurs. The latest update to the Facebook iOS and Android apps will now let you tag your friends in status posts and comments. The feature, which has long been available on the Facebook website, can be activated by typing “@” followed by the name of the friend you want to tag in your comment or status update. You can use this feature on the iPhone, iPod Touch, iPad or any Android device running the latest version of the Facebook app. The biggest feature that is still missing, however, in the Facebook mobile app is share. This means half a billion people per day are not able to share something on their mobile device.

Marketing Tips for Businesses

Mobile users should be engaged and treated differently. It is all about content. Mobile users default to the news feed so the more you can be an effective producer of content the better.

Shorter posts are better – 160 characters or less
Be entertaining
Make use of photos
Ask questions that are short and sweet
Include a call to action such as “like” or “add your comment” or “click here”.

Local Businesses and Facebook Mobile Marketing

For the longest time, people could setup a check-in deal. Offers are only available if you have a place page. But if you do not have a place page and can’t setup an offer, you can instead periodically post a status update, for example, “Are you reading this on your mobile phone, come in for a free latte.” Every single member of your staff should know all the ins-and-outs of what your company is doing on social media. Offer a coupon on-the-spot if people check-in. Encourage visitors to take a photograph of themselves in your store and post it on Facebook. It can go a long way and get people excited if they see their friends at the store.

Facebook and the Future of Marketing

There have been a lot of changes with Facebook since it went public. Some of the changes include “promoted posts” and it is more difficult to get into the news feed. Edgerank is the algorithm that all content passes through on Facebook. Content passes through the Edgerank filter, and that is how it is determined what content will show in the news feed. Ultimately, Facebook is saying that they are only going to display your content on average to sixteen percent of your fans. There are, however, some tools that can increase your visibility on Facebook.

Ads
Friends Lists
Interest Lists
Sponsored Stories
Promoted Posts
Reach Generator guarantees up to seventy-five percent of your content

As a marketer, you can do some split testing and allocate a budget to see which will work well for you:

Either a sponsored story which is a post made on your fan page that is turned into an ad
Promoted posts which will be visible to mobile users and is given more visibility in the news feed, which is what people look at on their mobile device.

There are some creative ways around this. Fan pages like George Takei (an actor) is a page that has a phenomenal following and has a very high engagement rate. Study fan pages that are successful and watch their page to see how these brands are achieving fan engagement. People on Facebook want to know that there is a real human being behind the brand.

Business owners have put an enormous investment into creating a fan base. People have expressed concern and frustration resulting from Facebook now requesting more investment to get your content visible to more than sixteen percent. Next to every single post on Facebook, you are given the option to pay for your post to be more visible. The large denominator problem is when companies have a huge fan base, so if that person is not regularly interacting with the fan page, they will not see the content. It can get very pricey to promote a post, sometimes from three hundred to five hundred dollars per post.

Why would you use a Promoted Post on Facebook?

If you have a webinar or special event coming up a promoted post could be a good option. Some companies have been able to double their reach, increase engagement with promoted posts. If a page has a low number of fans or has plated or a low engagement rate such as less than two percent, you might want to play with promoted posts to see if it is a worthy advantage. You can better reach the mobile users with a promoted post.

Web Hosting Tips for Facebook Visibility

If you are like the majority of business owners, you have a website or blog that serves as your ultimate destination for visitors. Some people call it their “money site”. A Facebook fan page for your business can funnel visitors to your website or blog, where hopefully that visitor will perform the MDA (most desired action) such as joining your e-mail list or purchasing a product. So, as a business owner, it is imperative to keep a professional looking website or blog online. This can be done with a web hosting account through a reputable hosting firm that offers tools such as WordPress, Joomla, or Drupal content management systems for creating an engaging web presence.

So You Want to Start a VOIP Business in Uganda?

I have recently been reviewing the business model for a company that is dealing in VOIP. For the uninitiated, VOIP stands for Voice Over Internet Protocol(VOIP). It is basically a technology/ies that allows telephone calls to be made over the internet rather than over traditional telephone lines.

I set out my simple and straight forward observations.

First the cons (of course)

1. Internet stability.

Internet in Uganda can be very unreliable and where it is reliable it is very expensive. Now this is very critical as to make calls over the internet you need VERY RELIABLE internet and so this is the starting point for anyone looking to invest in this sector. It is however not uncommon for an ISP to charge $1400 per month for 64 kbps. That’s not a lot of bandwidth as a typical telephone call requires about 8kbps at any time and so 64kbps supports only about 8 simultaneous conversations or less depending on internet conditions. The good news of course is that this is changing with fibre optic cables being laid all the time and so internet costs reduce. My best advice, use ADSL and shared bandwidth. UTL does a good job here, with a great value and generally reliable product if you can get the telephone line.

2. Competition

VOIP prides itself in being cheaper than the traditional telephone companies and many a VOIP provider will give you rates that are much cheaper than the networks. That was until recently. Many telecom providers in Uganda for example Orange have great international calling bundles that give the VOIP provider a run for their money. The VOIP provider is therefore having to compete with the telecom companies in offering customers international calling services. You have to therefore be prepared to look at your financials closely and constantly lest you fall into losses so do yourself a favour, get a good accountant!

3. The Exchange rate

The Uganda shilling is depreciating against the dollar and this may continue to be the case. In 2006 for example the rate was Shs 1,700 to the dollar. In 2011 at the time of writing, it is Shs 2800. For VOIP,this is critical as the main purchase is “digital airtime” from international VOIP providers. This is purchased in dollars and as such the prices charged to customers need to factor in the exchange rate, in addition to ensuring remaining competitive against the BIG BAD WOLVES (I mean the telecom companies).

4. Technology know how

VOIP is a specialised sector and so it of course requires someone with interest but this is not such a significant matter as employing an IT person will help reduce the entreprenuers need to worry about this.

5. Start up capital

From my rough estimates, a typical VOIP business (say a phone shop to support 6 phone booths) can ideally start up business from as little as UGX 8.7m. This should cover; rent at 500k per month (including 2 month deposit bringing it to 1.5m), internet installation and subscription; 700k, purchase of the VOIP and computer equipment; 1.975m, furniture/ fittings; 1m an inverter; 2m, legal and related costs; 700k and signage(to advertise); 500k.

From my analysis, a VOIP business on its own is however not profitable and therefore it is ESSENTIAL to also have an internet cafe running side by side. The costs of the internet cafe side plus the VOIP side stripping out the shared start up costs like rent and inverter will be 20,383,275. I have written about an internet cafe set up costs separately in the article on the internet cafe. The total start up cost is therefore about Shs 20m

AND NOW THE PROS

1. Profitability and quick return on capital

Like the rest of Africa, In Uganda there are tremendous growth opportunities in the ICT/ communications sector and per Uganda Investment Authority, this is one of their key sectors for investment. Call traffic continually increases as Ugandans enjoy higher incomes. Despite the biting inflation, there is a continual increase in call traffic. VOIP is not being left behind and assuming ICT sector growths averaging 25% per year turnover averaging Shs 53m would not be an exaggeration. On the basis of my knowledge of this sector, I set out a summary profitability picture as well as the return on capital (this includes a diversified model which includes an internet cafe). All estimates are in UGX. The exchange rate to the USD is about 1 USD = Shs 2,700.

Gross profit

1.Revenue- calls: 65,520,000. Assuming 7 days a week at 180k per day.

2.Revenue- internet: 13,884,000. Assuming Shs 290k per week from 4 computers and multi purpose maching.

3.Cost of sales: -49,140,000. Assuming it is 75% of revenue for calls on basis of exchange rate and reseller margin.

4.credit transfer cost: -1,228,500. Assuming 2.5% of cost of sales

5.Franchise fee: – 655,200. 1% of revenue-calls.

Gross profit: 28,380,300

Overheads

Rent: Shs 4,800,000

Internet: Shs 3,840,000

Staff costs:Shs 6,000,000

Other overheads: Shs. 1,800,000

Total overheads: 16,440,000

Net Profit: 11,940,300

Capital investment: 20,383,275

Return on Investment: 1.71 years.

2. Return on capital

On the basis of the above profit picture therefore, this business should be able to have a return on capital of 1.71 years. A word of caution here. The model above assumes full capacity growth and so may not necessarily reflect a start up business in say its first few months. In addition the model assumes the internet cafe and call shop will run side by side and concurrently. I have done a separate analysis of the VOIP model on its own and from my analysis it will take 90 years to get a return on your capital! In Uganda, there is therefore no alternative for a VOIP investor but to integrate the call shop and the VOIP services.

3. Diversified services

Despite the fierce competition, a VOIP business can survive by being diverse. Many VOIP providers do not only provide low cost international calls. They also provide other related services like cheap calls on your internet enabled phone, a foreign number(for example USA) even while in Uganda and use of VOIP in homes/offices. Some like http://www.telebm.com provide a special Uganda rate. In addition many integrate an internet cafe within their models as well as selling telephones and accessories. The diverisifed services spread the over head costs and enable continued profitability. In the profitability analysis above, I assume this business is diverse offering both VOIP and internet cafe services.

4. Franchise model.

The beauty about a VOIP business is that it is very scalable meaning you can keep on expanding to other towns, other urban centres, other countries. The typical VOIP provider will give you a software management system which can be accessed anywhere on the internet (after all since calls are made over the internet, call logs are likewise internet based). This gives a key advantage of remote monitoring for the business owner. You don’t have to necessarily worry about revenue as you can remotely monitor the sales(calls) on a real time basis because the call logs display calls(and costs) as they occur. The model can therefore be replicated by having you the business owner setting up agents who also get access to your system. I believe this is the model that http://www.mafudian.co.uk a Ugandan VOIP company is promoting.

SUMMARISING AND THE FINAL WORD

First the numbers

On the basis of my analysis:

* Capital investment(internet and VOIP equipment) (A): Shs 20,383,275

* Revenue per year: Shs 79,404,000

* Profit per year (after all expenses (B) is Shs 11,940,300

* Return on capital(years to get capital back)(A/B) is 1.71 years

Now the basics you must get right before investing.

* Internet stability and reliability. Get a good ISP who supports VOIP

* Diversification of services. Don’t only do the VOIP services, consider an internet cafe, multipurpose machine, WIFI hot spots or even selling cell phones and related accessories.

* Location, Location, Location. This business best thrives in an urban setting with heavy traffic particularly of business users.

* Get an IT person, VOIP can be tricky to continuously configure.

FINAL WORD, YES OR NO?

This is not an easy sector to invest in with internet stability as well as the fierce competition with local telecom companies who now offer some good international calling bundles. Furthermore the exchange rates are continually changing due to the falling shilling hence potentially eating into the profit. I know many VOIP businesses that have failed and so to invest in it you need to have not only technology know how but like looking at the financial numbers as the margins can be very tight! A business which has taken off can however enjoy a significant amount of turnover and diversifying and expansion through franchising seem to hold the key to success.

Month: April 2023