ARPUR: a business performance metric for presence in communication services

The largest share of value in communications services is the value of presence. How can communication services providers measure their performance in capturing this value?

Average Revenue Per User’s Relation (ARPUR) is a practical measure of presence value. ARPUR is Average Revenue Per User (ARPU) divided by some measure of user’s interaction with other users (relations). Such a measure might be the least number of users who account for in total at least 50% of the given user’s communication sessions, time, or revenue. The higher the ARPUR, the more the communication service is creating value through presence.

Persons typically value most highly the presence of family and friends. Limitations of time and attention, which good communication services can help to relax, constrain the number of family and friends that a person can sustain in daily interaction. The value of communication with the family and friends that persons do sustain is typically high and enduring. A good business plan for communication service providers is to capture a large share of this value. ARPUR is a metric of success in doing this.

While not often recognized as such, telephone service is a quintessential presence business. A study in the U.S. in the 1970s found that 50% of residential calls go to a set of five numbers. I think this has been roughly true for personal telephone service in most places throughout the history of telephone service. Creating more value in these relations creates value in this kind of communication service. It’s a presence business.

For contrast, consider an anti-presence communication service: telemarketing. Telemarketing involves mass distribution of information of interest only to a small number of persons. The telemarketer typically does not know any of the persons whom she contacts and does not typically repeatedly contact them. Moreover, most of her contacts probably wish that they did not know that she existed. A good communication service for telemarketing users might have a high ARPU. But its ARPUR would be near zero. It’s not a presence business.

ARPUR might help a new communication service provider steer its business between the imperatives of viral marketing and the long-term value of presence. Viral marketing, like infectious diseases, propagates most rapidly with some highly promiscuous agents. A communication service that wants to succeed virally needs to enable promiscuous agents. On the other hand, promiscuity is inconsistent with large presence value. The business challenge might be to manage change from low initial ARPUR to strongly rising ARPUR.

Suggested analytical exercise: Consider ARPUR for portraiture over the past 500 years. Take the user relation to be the gift of a picture of oneself to another person. What has been the trend in ARPUR? What has been the trend in total portraiture industry revenue? For relevant information on the economic history of the photography business, see Photographs and Telephone Calls in Sense in Communication.

Take-away message for busy communications executives: Get out of the telecom toilet and get your business purring. Stop sniffing ARPU and start making ARPUR!

YouTube and indecency

No nudity, no violence, no profanity — can you [email protected]$%^&* believe this $#^+! YouTube has declared that the Galbi Brother’s Epic 800-Meter Challenge video “may contain content that is inappropriate for some users.” So they want all the sports fans to register before they watch the video (also available without registration here and here).

Indecency is a major communications policy issue. How this issue will play out for online video sharing isn’t clear. Don’t do evil is a good principle both for service providers and users (see truth #6, which extends to users having fun, too).

I sent YouTube a polite email requesting that YouTube reconsider the appropriateness of the Galbi Brothers’ Epic 800-meter Challenge video. That was on Friday, March 3. YouTube hasn’t yet responded to my email.

I think that respect for users implies that YouTube should have some fair process for reviewing “appropriateness” classifications. The same goes for copyright rule enforcement. This isn’t just good business practice — it’s also common decency.

pragmatics for communication service providers

The scholarly field of pragmatics emphasizes the gap between sentence meaning and speaker meaning in communication. Pragmatics emphasizes that circumstantial factors are crucial to interpretation of sentences. What does “look at this” mean? Does “it’s midnight” mean it’s time to go home, or time to party?

Communication service providers might take from pragmatics the importance of conveying not just sentences, but also circumstances of communication. State information in presence indicators might do this. Background noise captured in a mobile phone conversation might do this. A show-and-tell communication device, rather than a camera phone, might do this.

Pragmatics also shows the dominance of interpretation in thinking about communication. The philosopher Paul Grice, a seminal figure in pragmatics, modeled communication as a rational activity conveying meaning based on a cooperative principle and conversational maxims. Examples of Grice’s conversational maxims are “Do not make your contribution more informative than is required” and “Do not say that for which you lack adequate evidence.” Have you seen any violations of these maxims in blogs lately?

Relevance Theory is a more recent development in pragmatics. According to this theory:

the very act of communicating raises precise and predictable expectations of relevance, which are enough on their own to guide the hearer towards the speaker’s meaning.

Relevance Theory argues that the gap between sentence meaning and speaker meaning is larger than Grice supposed. It also includes explicit recognition that bodily processing effort affects choices in communication.

The scholarly field of pragmatics seems to offer nothing in communication outside of meaning, nothing about the production of presence. Developing the pragmatics of presence is up to communications service providers.

With honor to A.E. Housman and the scholarly field of pragmatics, here’s the Galbi Think! Poem-of-the-Month:

Oh, many a peer of England brews
Livelier liquor than the Muse,
And malt does more than Milton can
To justify God’s ways to man.
Ale, man, ale’s the stuff to drink
For fellows whom it hurts to think

you and a brain in a vat

The idea that you are your brain has fascinated intellectuals at least since Descartes. Francis Crick, a co-discoverer of the molecular structure of DNA and a Nobel Laureate, described the “astonishing hypothesis”:

The Astonishing Hypothesis is that “You,” your joys and your sorrows, your memories and your ambitions, your sense of personal identity and free will, are in fact no more than the behavior of a vast assembly of nerve cells and their associated molecules. As Lewis Carroll’s Alice might have phrased: “You’re nothing but a pack of neurons.”

That’s obviously true. The whole of you by weight is mainly water, but you also include some hot air. You might leak out some tainted water, and subsequently be slightly lighter and happier. But lose your brain, and you’re dead.

Neurons evocatively named “mirron neurons” have generated considerable excitement recently in neuroscience. Mirror neurons have the same pattern of discharge when an animal sees an action performed, and when the animal performs the action. V.S. Ramachandran, a leading neuroscientist and an important contributor to the controversial field of neuroesthetics, has declared that “mirror neurons will do for psychology what DNA did for biology.

The film The Matrix popularized the idea of a person as a “brain in a vat”. William Gibson’s novel Neuromancer popularized the idea of “jacking in” — connecting one’s brain directly to an alternative reality. I’ve argued that these ideas obscures much of how a living body makes sense in interacting with things of the world, especially other persons. In a recent essay, Ramachandran seems to take a “brain in a vat” and “jacking in” quite seriously.

Well, at least for awhile. Towards the end of his essay, Ramachandran emphasizes relations between persons:

We are all merely many reflections in a hall of mirrors of a single cosmic reality (Brahman or “paramatman”). If you find all this too much to swallow just consider the that as you grow older and memories start to fade you may have less in common with, and be less “informationally coupled”, to your own youthful self, the chap you once were, than with someone who is now your close personal friend.

So much for simulating a person with a brain in a vat. We’re all in this vat together. Either simulate us all, or forget about it.

oh no, not that modern!

Studying my unsolicited email, I came across this information:

Here are the 10 Most Read Articles on from 2005.

1) Maureen Dowd: What’s a Modern Girl to Do?
Published: October 30, 2005
Burning your bra or padding it. Demanding “Ms.” or flaunting “Mrs.” Splitting the check or letting him pay. …

Another financial possibility occurred to this modern boy. Can you imagine it?

Probably not. The Vagina Monologues, performed in many fine venues around the world. They’re no longer just for Valentine’s Day!

low-production-value narrative and presence

Consider the new Kodak Photo Voice service. As described in a press release:

KODAK Photo Voice is a brand new way to relive memories, empowering two people to simultaneously view a customized slideshow, and to reminisce and react to each picture. Imagine if Grandma could see pictures from her grandson’s first day at school while he narrates every moment of the experience over Skype. Perhaps an old roommate could share detailed photos and recount stories of his new life in London, as his friend back home in California reacts to each picture.

Much of the value in communication comes from sense of presence. The human body naturally combines images and sound in making sense of presence. An external combination of images and sound reduces the bodily cost of making sense of presence.

Unfortunately, I don’t think Kodak Photo Voice is a auspicious type of service for the production of presence. It supports low-production-value, pre-produced visual content (a narrative skeleton) that one person places at the other’s attention. Offering to share one’s photographs of a vacation, relatives, a holiday gathering, etc., is a delicate relational move. Being subject to another’s narrative of their photographs can make one feel virtually non-existent. It can be a tedious, numbing experience where you feel that you are being simply controlled by the obligations of friendship or kin relation.

An auspicious “show-and-tell” communication device would put immediately into the stream of communication images that any participant spontaneously generates while moving about the world and interacting with things of the world. “Camera phones” don’t do this. Neither does Kodak Photo Voice.

Update: For more business insight, see Carnival of Business #4 at Techie Day.

media bias

About Oct. 20, 2005, U.S. Public Broadcasting Service (PBS) stations broadcast a documentary entitled Breaking the Silence: Children’s Stories. Reviewing the documentary, the ombudsman for PBS and the ombudsman for the Corporation for Public Broadcasting (CPB) both expressed concern that the documentary did not fairly document the problem it addressed.

In response to numerous complaints of bias, on Dec. 21 PBS issued a statement that declared, “The producers approached the topic with the open mindedness and commitment to fairness that we require of our journalists.” Enjoy your holiday! No problem here. We hope that you’ll forget about this little documentary and troublemakers like these before the time comes to celebrate the Martin Luther King, Jr. Holiday.

A subsequent letter (pdf) from a media watchdog group to the Inspector General of the Corporation for Public Broadcasting suggests that at least some observers consider the PBS review for bias to have been highly biased. The PBS institutional review also seemed to fail to impress the CPB ombudsman. He subsequently declared, “I found the program to be so totally unbalanced as to fall outside the boundaries of PBS editorial standards on fairness and balance.”

Bias has been a perennial concern with respect to traditional media. Recently, a study of media bias (pdf draft) , forthcoming in a leading economics journal, found empirical evidence of media bias. Some blogs, which make no claim to be unbiased, have sharply criticized the study.

Evaluating media bias is difficult discursively and institutionally. New video distribution networks, along with cheap, powerful, video cameras and desktop video editing software, give everyone a chance to be a video producer. That might help educate persons to evaluate bias more reasonably. I encourage you to consider this unbiased news video reporting on the Galbi brothers’ 800 meter challenge!

radio regulation in low-income countries

About the year 2001, 40% of persons in the world lived in countries where there was less than one fixed-line telephone per hundred persons. Good radio regulation can help to foster rapid development of communication capabilities for many persons around the world.

Björn Wellenius and Isabel Neto of the World Bank recently posted a paper, The Radio Spectrum: Opportunities and Challenges for the Developing World. I hope this important topic gets more attention in development economics.

Update: Check out this very impressive website and book on Wireless Networking in the Developing World.