Archive for the ‘internet’ Category

iCloud – The Triumph of Free (?)

June 11th, 2011

Suppose the currently circulated news about Apple’s soon-to-come iCloud service that artists will get paid whenever someone adds their music to his iCloud account no matter how he obtained this music, there is no reason not to give away your music for free now (as long as it’s available on iTunes, that is). Even if it’s just a fraction of a penny per song, it adds up, and even more so when it’s easy to spread. Musicians now have more power over their destiny (in terms of income) than ever.

The Basics of Spreading Ideas

June 9th, 2011

Once an idea makes it to the TV screen, it’s approved. Otherwise TV wouldn’t spread it, we assume, so we can spread it avoiding the risk of going out on a limb.

But that’s not what we need. To make it really clear: We need to spread ideas that have not been approved yet. Not only is this when innovation happens, it’s also where the money is made.

You are Peter Jackson (so is everyone else)

June 6th, 2011

Yes, the Peter Jackson. How so? Well, first off you might be equally talented but never had the guts to try it. Not necessarily in film, something you care about. But that’s not what I’m talking about today, so should you want to elaborate on this aspect a little more, you might want to read this and this.

The idea to this post came to me when I read some of the comments on Peter Jackson’s Facebook Page after his last update (before they exceeded 100). There was quite a number of people half-heartedly applying as actors for the Hobbit shoot, like “Check out my page and contact my agent.” and I felt like is this how you say “Look me up, I’m on this new thing, it’s called Internet! Can you believe it?!?!” in 2011? Like any other person, or I dare say more than any other person on this planet, he won’t have the time. None of us has.

So please…  even if you (secretly) are Peter Jackson, don’t ask anyone to “come and get it” unless they know (and most people don’t, so there’s a paradox at work here) that you’re the best (if not only) person in the world to deliver this kind of thing. Until then, you’ll have to keep sending your colleterals, applications in whatever form, whatever. Thank you.

Two Kinds of Products, Two Ways of Buying

May 19th, 2011

The other day it occured to me in (almost) any market segment there are two kinds of products with entirely different ways of buying:

  • Mass-produced products: This is everything made “in a factory” in a standardized process which leads to (almost perfectly) identical copies distributed to all retailers.
  • Unique products: These are products that are made “by hand” specifically for you and only you, unique.

The difference between the two is like buying a shoe in a shoe store or from a shoe maker. The first is a finished, tangible, testable, take-it-or-leave-it product. The second is not really a product because it doesn’t exist yet, it’s a service.

The problem is we as consumers buy 99.9% off-the-shelf stuff, and thanks to the Internet this side of the market has become very transparent. Whatever we want, we type it into the search field and within seconds we know about price and availability. And because we do it all the time we have come to believe that this holds true for any product. Which is not the case, of course. How do you compare products that have no been made yet? Obviously you can’t, and the only thing you can do is make guesses by talking to the manufacturers to see how you like them, or talk to people who have bought something there.

So when people are hesitant when it comes to buying products that are not comparable, one of the better things to do when you’re the one making these products is facilitating the exchange of user experience, creating a community of fans and curious people, a go-to place. Do not leave them lost. Help them make a decision they are happy with, whether it’s in your favour or not.

New Problems for Old Economies

April 28th, 2011

In the last post I mentioned that our scarcest resource today is time, and ended on the question why so few people successfully solve the problem of helping us find what we want.

The problem companies with an industrial background now are facing is this is not a repetitive process, something you can manufacture cheaply and sell for a lot. It’s a process which requires you to care about one single topic more than everyone else so you become the go-to person (or company), and you have to accept that you probably can’t repeat this in another area, because you have to sift ever more, so your own time gets ever more scarce as well. But you only have to have a following in one area of demand to have enough leverage to monetize on it.

So here is the wrap-up of the whole axiom:

  • New users take the standard when they joined a (technical) movement for granted.
  • Continuous technical improvement combined with a continuous intake of new users creates an erosion cycle of the perceived quality of service.
  • With more content available, unobtrusive, personalized recommendations play a larger role than new content.
  • These recommendations can only be effictively mirrored in highly complex algorithms or better be done by a real person, someone who cares about the topic.
  • This care or curatorship creates credibility, credibility leads to a following, a following creates leverage, and ultimately leverage creates revenue.
  • New Rules

    April 25th, 2011

    More than ten years into it, formerly major players still haven’t figured out how the Web works and what they can do, especially because they’re asking the wrong questions. The question is not “How can I re-establish the old system, when I had the power, in this new medium and keep it at the same level for a long time to come to make as much money as possible with processes that have been working for me in the last 50 years?” Asking for something like this seems pretty silly, but it’s exactly what big companies do. Why? It’s the people who work there. They want to do the job they’ve been doing ever since, but we don’t need these jobs to be done anymore, at least not in the same fashion.

    What every player, regardless of size or age, needs to admit at first is that not only yesterday, but also today is a sunk cost, because you can’t change it, not at a significant level. So the question becomes “How do the achievements of today (i.e., the latest technical innovation) shift user expectations for tomorrow, and how can I use what I got to satisfy or exceed them?” Example: YouTube today is not what it was 6 years ago. Today’s standards make it very unlikely someone will watch a shaky mobile phone video with your cat chasing the woolen ball over and over and tell all her friends. What we want is high definition video, professionally shot and, even more important, a good story worth our time. We’ve moved beyond the point of boredom and doing stuff only for excitement, because there’s no more scarcity of entertainment for its own sake.

    No, the new scarcity is one that major movie studios could fill if they only decided to abandon their old-fashioned monetization chain. They need to figure out how to get HD video in 3D to my home, so easy, comfortable and cheap that torrent downloads or physical pirate copies are not attractive any more to everybody worldwide. What’s as important: They can help me discover more movies, just like Amazon does. But they could use a different algorithm, and only when I’m logged in. I don’t want a useless recommendation e-mail invade my inbox each day just to make me come back and spend more money.

    Just like the music industry wouldn’t have had to invent iTunes, but Spotify. We have always needed and still need someone to help us discover more of the stuff we already like and buy, and only then do we need someone to actually give it to us, not the other way round.
    The Internet has not ridded us of all scarcities, it just shifted them a lot. The ultimate scarcity is now time, because there is too much to choose from, and people and companies are adding ever more stuff. Today we need someone to help us find the stuff we want. And there’s a reason why there are not many people around trying to solve this problem successfully.

    Digital Natives – Digital Naives

    April 23rd, 2011

    Whatever circumstances you’re born into you assume as being normal, because “that’s the way things are”. When all you know is war, fighting and being on the run determines your image of life and reality. Most of us, who have never personally experienced war or other life threatening crises, assume a life of safety and comfort as being normal, and whatever “soft” revolution that we experience, like having Internet connection in every household, having a mobile phone and so forth, are conceived as normal by the next generation. Just because stuff like this exists.

    And usually “normal” stuff , no matter if it’s war or a computer, is not questioned by the new generation of participants or users. Today’s kids just use Google, YouTube and Facebook like it’s always been around and a somewhat integral part of life, but they don’t really know how it works (technically) or what its purpose is (advertising, not searching). In that sense, the new generation should not be called Digital Natives but Digital Naives.

    What’s a little funny about this whole thing is that it’s the first of the four stages of competence, but one can only advance through all four when he knows that he’s incompetent int he first place. And often this doesn’t happen because of the unawareness of incompetence, because the perceived ability to use a device, service or whatever makes one forget they don’t actually know how it’s done. This paradox is known in the professional world as the starting point of the Dunning-Kruger Effect, and when we take this as a given, big opportunities we haven’t seen before become pretty obvious.

    (Yes, it’s a cliffhanger.)

    To Do What, Exactly? (Part II)

    April 3rd, 2011

    There was some feedback on one of my last posts that made me feel to explain my point a bit more in-depth.

    A legitimate argument was “Touting the process has at least one value for fans: gossip. Even if they’re the nerds everybody else is laughing about. After all, celebrity mags are no more than a collection of illustrated tweets.” And this is true. The point is, what’s the next step in the process of generating revenue? Gossip in and of itself is not monetizable. The problem of a marketer has always been, is and will always be: How do you convert attention into action? Shouting “Hey!” to make people turn their heads is easy, but then what? It’s action that generates revenue. People who buy stuff. If gossip just happens inside a silo it’s no big help, it may even be counterproductive. Trade, be it with physical goods or imphysical ideas, is based on imbalance, on one person having something the other wants to have. When everybody has the same level and quality of information, there’s no (re-)action. Evolution and progress (and also regress) happen at the fringes, not in the center, and a silo is a rectangular shaped fraction of the center with no fringes at all.

    The entire point is in terms of marketing, gossip is only a means, not an end. Celebrities know this, thus they’re attending parties to have photos taken, getting them into a dozen magazines every week which in return raises their value as a product. They’re (in most cases) aware they’re the product they want and need to sell themselves.

    This is different with most bands I know personally. Musicians tend to think that their product is whatever kind of merchandise which speaks for itself. But it doesn’t. Facts never ever speaks for themselves. As Seth Godin says in “All Marketers Are Liars Tell Stories”, it’s a huge difference whether you say “right-wing fundamentalist” or “person with deeply held beliefs”. As I wrote in the original post, it’s way easier for bands to tout the process of making a record (because it’s hardly comparable) than advertising the final product (which is easily comparable), but it’s the result that earns them money partially refinances their investments. If there’s no story about this product that may spread, the product itself won’t spread too. What happens is that within the silo of the before and after fans, they reach 100% market saturation. But outside the silo nothing changes. This is a critical point often ignored. It’s not enough to say “here’s the album we’ve been talking about a month ago…yes…the last update…remember? You liked our status back then…what we’ve been doing in the meantime?…Y’know….er…stuff..” or “Here’s the shirt. Questions? Look at the photo. Front. Back. See? Read the description. Comes in all sizes from S to XXL. Fine. Now, please, click the “BUY” button. Thank you.” This is a heap of crap in mammoth dimension. Why would anyone need to buy this? It’s a piece of black cloth with white paint on it. It’s not a desirable, somewhat fashionable item making the buyer feel better or leveraging their social status. No, it’s a commodity, and commodities are cheap in every aspect.

    There is, as with all disasters, one upside. Limitation creates predictability, and predictability minimizes risk. What’s more, limitation creates urgency as well. So when bands know there are 200 fans, they can ask each of them to invest a tenner for new music, giving the band one week of studio time. Delivery by download. Or when each fan invests 20 bucks, they can get a souvenir, which could be a signed Digipak with awesome design (emphasis on “awesome design”, which means created by an artist, not “someone who knows Photoshop”). When making shirts, they can only have 100 printed in the first batch and sell them for 5 bucks more than the second (of course you want every fan to have a shirt, but some want it more than others, and they are willing to pay extra for the temporal luxury of exclusiveness). If that sounds to commercial, it might be better to not start swimming in this pond at all.

    In the end, the question comes down to whether it’s a serious shot at making it your profession or just doing it as a hobby. The former requires a tough posture, especially towards yourself, and the latter brings up the question if you want the hobby to be self-sustainable or a bottomless pit.

    Touting the Process

    March 27th, 2011

    …is in most cases a lot easier than touting the result. It’s what musicians use social networks for these days, but I can’t make sense of it. Who is it about? Whenever a musician posts or tweets they’re going to the studio, it’s just another version of “Hey, I’m feeling great today.” Good for them. Not good enough for me, because there’s no value for me as a fan and potential buyer. Their well-being doesn’t lead to any interaction. And when the attention span is exactly as long as the time it takes to read a post or tweet, the question that need to be asked is: Is it worth your fan’s time? Not the time it takes to read your news, but the time it takes to start a conversation about it. Related questions are: How can I facilitate engagement? How do I connect? How can I make it sneezable? It’s easier than you think. (Exceptions apply.)

    And the issue has yet another dimension to it. A process is hardly measurable (but that’s our fault, because it’s easier for us to measure outcomes), making it a good means to hide behind. No one’s gonna judge you for this, everyone is waiting for the result. And now, as always, it comes down to whether you’ve raised the bar too high for yourself to exceed expectations. And sometimes, the creators feel that they’ve bitten off more than they could chew, which makes going out there and touting the result a little harder. That’s why musicians are still sending review copies of their records to music magazines. Of course, these mags also serve a top-down connecting function within the tribe, but the top-down evaluation component is a lot more important, because a good review is yet another shield to hide behind: “It’s good because some authority said it’s good.” The problem with this thinking is the authority’s voice today is just one in a million, and it’s heard less every day.

    It’s the Couch

    February 8th, 2011

    I used to say that TV as we know it is not going to exist much longer than 10 or 15 years, which I still don’t want to withdraw — simply because it’s a long time span in which a lot will happen. What I want to focus on instead is why it’s not happening earlier. It’s because of the couch. Yes, you heard me alright, the couch — and what goes with it.

    The couch defines the place you live in as your home. Bed, bathroom, kitchen — these are things you find anywhere you’re staying. The couch makes all the difference. I just realized the other day that the last place I was living in didn’t feel like home — because I never bought a couch. Other associations with the couch are family, togetherness, all deeply rooted within us, and it’s a perfect symbol for comfort, relaxation, and hedonism.

    And if you’re not living in a place where you have a marvelous vista from your living-room, I guess opposite to your couch there’s a TV set. The window to the world. Not only one world, but hundreds of worlds. All of them right in front of you in your zone of maximum comfort, and if you don’t like one, -zap!- there’s another. This is a very different experience from browsing YouTube, even if it’s on your TV set, because the former is not only a programme scheme designed by professionals (which you would have to create yourself on the Web), it also conveys a lot less responsibility in terms of what you are watching, because it’s pure consumption (or not). When you’re the programme director, you have a lot more responsibility for how happy you are with what’s on the screen, because first you have to decide what should be running, and only then you’re back in your consumer role to decide whether you like it or not. That’s a lot more stress to deal with, and we, being lazy humans, don’t favour that.

    That said, the audience dynamics on the Web are entirely different from those towards TV. A successful programme like the German version of “Ramsay’s Kitchen Nightmares” would in my opinion falter on the Web because I think you just can’t build an equally loyal fan base, aside from the fact that financing the show to be broadcast Web-only is close to impossible. But what Christian Rach, the German Gordon Ramsay, could do, is to have a video series of cooking tips on a website, with sponsored links to markets where you could pre-order and pick up your ingredients, or, to keep it low-tech, just see if they’re in stock. And a bazillion of other ways to monetize his popularity, aside from the obvious books  (of which he has published three). But the TV format as it is would not translate to the Web.

    As long as TV is more about the overall experience than what’s on the screen (the same transition cinema has gone through several years ago), it’s not going away anytime soon. Ever bigger screens, 3D display any other gadgetry support this even further, so the battle (if there is one) will be decided elsewhere.