As Cisco expands further into relatively unfamiliar markets and solutions, I believe it is fair to ask whether the company is overextended and playing a high-stakes game well beyond the confines of its comfort zone.
Has it reached a point where its zealous pursuit of continuous growth has taken it into foreign markets where it possesses neither the cultural sensitivity nor the language skills to flourish? Does Cisco have a mandate to be in these places?
I’m not talking about geographies, and I’m not asking these questions rhetorically.
I don’t think the jury, as represented by the abstraction of the marketplace (with its less-abstract buyers and sellers) will be able to return a definitive verdict for a while. For Cisco, these new markets are works in progress.
One of the many new businesses Cisco has launched involves its EoS online social-entertainment platform, which Cisco believes it can grow into a major technological enabler (and a billion-dollar business) for beleaguered entertainment companies — purveyors of music and movies, respectively, but also potentially professional sports leagues — trying to brand and monetize their artists and properties.
Toward that end, Cisco Systems announced today an expansion of an existing relationship with Warner Music Group (WMG) Corp., the world’s third-largest music company. As a result of the deal, Cisco will allow Warner Music Group to use the web-based Eos platform as a fulcrum on which the recording company will design and develop customized, interactive sites — replete with social-networking features — for a growing number of its musical artists and their fans.
Today’s announcements builds upon an existing relationship the two companies announced at the Consumer Electronics Show (CES) in January.
Neither company has provided a wealth statistical data on how the relationship is faring commercially, nor on what sort of financial arrangement Cisco has with Warner Music. It isn’t clear, for example, whether or to what degree Cisco shares in advertising revenue or in revenue generated from music and merchandise sales that occur on the sites.
PaidContent.org reports that WMG has seen scaling in traffic per site and in the number of sites built on Cisco Eos. The major label sees four potential revenue streams: an enhanced site experience, ticketing with enhanced experience, subscriptions, and advertising/sponsorships.
It’s very early yet, for Cisco Eos and for its partnership with Warner Music. As mentioned above, Cisco Eos was announced in January, and Warner remains Cisco’s only Eos account. Nonetheless, Dan Scheinman, senior VP and general manager of Cisco’s Media Solutions Group, says his company plans to announce partnerships with other entertainment concerns in the months ahead.
With that in mind, Jennifer Martinez at GigaOm believes Cisco’s incursion into media and entertainment will put it on a collision course with MySpace, which is trying to position itself — at least partly — as a venue for interactive music and entertainment communities.
Cisco, however, refutes the notion that it will compete with MySpace, Facebook, or with other social-networking sites. We’ll see how it plays out.
To be sure, there are many unanswered questions connected with Cisco’s EoS.