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 f@$%^&* 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