Benjamin Bloom - thoughts and analysis of digital strategy, cloud based marketing solutions, and consumer experiences.
Apple's identity (account and Touch ID) stategy comes into focus here in this Chart via BusinessInsider.
The meta-battle is now:
# of exclusive SKUs, Total SKUs, and ease of purchase. Apple might have the digital content piece (apps, movies etc) but Amazon and Paypal have the physical (and second-hand) universe on lockdown.
TouchID certainly is going to help with ease of purchase, and the rest of the battle is: how can we get consumers to buy ____ with Apple.
Nick Bilton writes, "Internet Pirates Will Always Win" and provokes some interesting ideas: is preventing piracy just a game of whack-a-mole? Certainly, in the current paradigm, it can seem that way.
I wrote to colleagues in 2007, when Razorfish was in discusions with NewCo (the nascent NBC/Fox JV that would become Hulu) that fighting the desire of content to be easily available (even if not free) was not a viable business strategy.
Then, as now, this is a matter of ideology, because the people with the biggest ideas about content are rarely in charge of setting its price or licensing terms.
But in the multi-channel world, with connected devices now a threatening alternative to STB-connected distribution, content players should not forget the power of an engaged audience. They are a monetizable asset, and even if watching for a far lower prixce, creating a low-price tier with identifiable audience members can produce email opt-ins, social discussions, merchandise/DVD/other revenue, and tune-in for other programs.
Mr. Bilton quotes Holmes Wilson, co-director of Fight for the Future, in the article:
The hit HBO show "Game of Thrones" is a quintessential example of this. The show is sometimes downloaded illegally more times each week than it is watched on cable television. But even if HBO put the shows online, the price it could charge would still pale in comparison to the money it makes through cable operators. Mr. Wilson believes that the big media companies don?t really want to solve the piracy problem. "
"If every TV show was offered at a fair price to everyone in the world, there would definitely be much less copyright infringement," he said. "But because of the monopoly power of the cable companies and content creators, they might actually make less money."
Mr. Holmes is not wrong about the exciting power dynamic in play - it certainly could be empowering to do something the "man" doesn't want you to do. Nevertheless, exercising our inner Che Guevara is neither an effective mechanism of revolution against the industry nor a stricly pleasurable experience (corrupt and low quality BitTorrrent downloads mostly waste our time, if not our money). Wouldn't a low-price on-demand stream or download just be...easier?
It's myopic to think that adding many more low-revenue streams is going to lose money; it certainly will if the HBO/HBO Go are your only revenue source. The MSOs and the premium TV providers have to work together to create experiences and tiers whose scope is beyond the cable system, and where even if the price is lower, the experience is better than piracy, which is, after all, a pain in the butt. But I'm just an idealist, I know.
Instagram's acquisition by Facebook illustrates how the tension between identity networks, and behavior networks will play out in the marketplace, and how it may not benefit users directly. This divide pits sites like Pinterest and Instagram vs. Facebook, Twitter, Path, and others.
Identity networks, like Facebook and Linkedin, focus on You and managing connections to pieces of identity, and while you may have have wide-ranging conversations within such networks around content, which are key to communicating your identity, the profile remains the anchor point to an identity you care about. Facebook deserves credit for making this idea popular and easy to understand - forcing Google and Microsoft to change in many ways.
Facebook's Connect and Open Graph initiatives show how crucial the concept of identity is to the Facebook model- the advertising Facebook sees in the future isn't customized by cookie pools, it's customized based on the open graph. It's not limited to Less and less of the meaning that users derive from being Facebook users will come from using Facebook.com and more and more will come from experiences enabled by the Facebook Platform. Facebook, as it extends the platform, is admitting that it cannot innovate fast enough at the edge to keep every user fully engaged - what they want is to have that user identified and authenticated, pulling their behavior into the Facebook ecosystem.
Thus, the edge of the platform, powered by identity, is where new user behaviors will emerge. These emergent groups of connections, I call Behavior Networks. They have several important properties.
Behavior networks remain rooted in one style of behaving, and are key to a very specific context or action. Instagram and Pinterest are in this category. While relying to varying degrees on your identity (on Facebook, Twitter, etc) your identity on these sites defines your behavior - if you never publish anything, you don't exist. No matter how many instgram photos you take, that's all the network says about you.
Test yourself, when was the last time you deleted an Instagram photo? When was the last time you deleted a Facebook post? I've done many of those things on Facebook, but I never worry about Instgram.
The real-time web is perfect for behavior networks. All that matters is what you are doing- your behavior is your only identity but it doesn't live forever.
For these reasons, these behavior networks represent a challenge for marketers. Extending engagement beyond the behavior network - site traffic, conversions and so on - will be used to prove that the marketer's participation had some value. And this will require functionality a behavior network operator will be loathe to construct. All ROI metrics will come down to this: did the users engage further? Did they pin stuff and their friends bought it? The ROI analysis will require a channel linked to identity. So as marketers we face the dilemma of proving the value of engagement beyond behavior networks, and these are uncertain times indeed.
My next two posts on this topic will deal with:
Peter Kafka of all things D wrote The Apple in The Room in 2006 (also re-posted it this morning on Twitter), but with the rise of social media, it’s become more and more true. Companies have an end around CES.
Some have lamented the departure of Microsoft from the show. If anything, Microsoft’s departure as the anchor of CES shows its decline but also how far behind the curve MS really can be.
Since companies create their own media channels, they have much more flexibility about when and how they communicate product news- both big and small. An age of real time and more transparent corporate comms also means companies can publish and shape a message all year long, at will.
The article's points about the smart devices, really the Internet of Things trend, have changed the important players. Meaningful, differentiating innovation – the kinds of WOW I WANT THAT features consumers want – happen so frequently outside the pavilion or dates of the show.
CES used to be an event for the journalists to carry the message to consumers. But now consumers don't need the journalists (not exclusively, anyway) to tell them what is cool this year. Also, important industry announcements are increasingly coming at places like TC Disrupt and the Launch conference. So yes, CES failed to keep pace with the industry but I am not sure it had a chance against the tide.
My experience at SXSW last year was very different from the previous year. In 2010, it felt like being at the center of the universe and the cusp of very important trends. At SXSW 2011, we saw more or less the continuation of the same trends, but the Interactive festival has gotten so crazy, so big, so commercial, I wonder if the big brand dollars that have flocked to the event have sapped it of some of the weirdness that made it great.
And trade shows have been replaced by Brand Shows: the biggest games like World of Warcraft and Call of Duty are now so large they have their own conferences. These events are media channels, concentrated pockets of support for the product, hungry for news. The attendees are motivated and they want to BUY STUFF. They are powerful message multipliers. The scale and style of these kids of gatherings will vary by brand but if you have that, why wait for CES?
Nice wrap up on SAI, from a Quora post about how apple uses its massive cash resources:
When new component technologies (touchscreens, chips, LED displays) first come out, they are very expensive to produce, and building a factory that can produce them in mass quantities is even more expensive. Oftentimes, the upfront capital expenditure can be so huge and the margins are small enough (and shrink over time as the component is rapidly commoditized) that the companies who would build these factories cannot raise sufficient investment capital to cover the costs.
...
Apple is not just crushing its rivals through superiority in design, Steve Jobs's deep experience in hardware mass production (early Apple, NeXT) has been brought to bear in creating an unrivaled exclusive supply chain of advanced technology literally years ahead of anyone else on the planet. If it feels like new Apple products appear futuristic, it is because Apple really is sending back technology from the future.
Reminds me of the Clarke's Third Law:
Any sufficiently advanced technology is indistinguishable from magic. -[Wikipedia]
I'm glad that brand sare on borad with the idea that there can be a "not right now" relationship with a consumer- many marketers may only care about their explicit conversion metrcis. That's encouraging. But our real task is this: identifying the entertainment and information consumers want, and instead of standing in the way, creating the opportuntuiy for dialogue about what they might need, on their schedule.
AdKeeper Button Lets Viewers Keep, Share Ads 03/04/2011:
Volvo plans to become one of the first brands to launch an online display ad campaign with an AdKeeper button. Clicking on the "K" in the ad will allow consumers to keep the ad for future viewing when convenient, as well as share with others through social media sites like Facebook or Twitter, or email.
By painting Apple as a new untouchable in the CE industry, has Dave Morgan taken the liberty to show us that the consumer experience trumps just about everything else? After a decade of losing Apple vs. IBM comparisons (in which I, as a boy, defended Apple to the ends of the earth, aided by my weekly infusion of MacWEEK) can Apple have a further decade of dominance? Eerily familiar to descriptions of IBM in the 1960s or 70s.
Apple: The First Trillion-Dollar Company? 01/13/2011:
Apple is out-innovating and out-executing the entire market. No other company is delivering better consumer electronics products with better content and communications experiences to the market, and iterating them constantly, than Apple.? Not only that, but no one else is delivering consumer electronic products and related software and content at the scale, and with the degree of customer service, that Apple is today. Not Sony. Not Samsung. Not LG. Not Google. No one.
The business of video on demand was possible and eminently doable in 1994-95. Most of the cable companies buried their heads in the sand. IBM was content selling servers, having lost the DOS vs. Windows battle (or even OS2/Warp!) Yet we didn't see it for more than a decade in most US Cable households.
Great products and ideas die, all the time. I personally never owned a mac clone, but some of those machines were really insipiring piecves of machinery. Gil Amelio couldn;t save Apple, but Jobs did. He rebooted the company.
And that's why the powerhouse that Apple has become, can't last forever. What IBM has build doesn't rely on one person, ditto to GE, Comcast, Verizon. Apple has a lockup on the fringe, but it can't take the mass. The mass just won't tolerate it.
David Pogue suggests this morning that CES was a sideshow of Apple copycats. His money quote from an industry insider:
“These companies are like 6-year-olds on a soccer team,” one company representative told me. “The ball goes over here, and they all run after it in a blob. ‘Tablet!’ ‘Tablet!’ ‘Tablet!’ ”
The innovation, however, is moving to the cloud- the services on top of the devices. That will keep shiny, new things on our TVs for now. See InsideFacebook's The Best Facebook-Integrated Devices from CES 2011.
But it can't last longer than Steve Jobs. Even as Steve keeps the fanboys cheering (and even some day clicking the "like" button) he hasn't build anything that can outlive him.
Well, maybe, just maybe, it's fixing the news business! (via Fake Steve Jobs)
The news business has descended into the gutter in a pathetic attempt to stay alive. It’s been a horrible race to the bottom. This is turn has polluted our politics, and now we’re seeing the result of it.
Fortunately for the world, we’re going to change all that, with iPad and the apps model. But that’s a story for another day.
How much does it cost to buck the system? The Wikileaks drama exposes these costs, as Zeynep Tufekci argues in the Atlantic (Wikileaks Exposes Internet's Dissent Tax, not Nerd Supremacy). In a public sphere, the state is accountable for our claims to free speech rights. But in the public sphere of the internet, which is really "quasi-public" to the extent that it is hosted on privately owned computers and networks, enforcing free speech claims is a matter iof power and influence, rather than rights.
This money, power, and influence, required in order to maintain speech outside the approval of the mainstream, is a tax on dissent.
My favorite part:
What the Wikileaks furor shows us is that a dissent tax is emerging on the Internet. As a dissident content provider, you might have to fight your DNS provider. You might need to fund large-scale hosting resources while others can use similar capacity on commercial servers for a few hundred dollars a year. Fund-raising infrastructure that is open to pretty much everyone else, including the KKK, may not be available. This does not mean that Wikileaks cannot get hosted, as it is already well-known and big, but what about smaller, less-famous, less established, less well-off efforts? Will they even get off the ground?
We obey both private "terms of service" and public "laws" with very different schemes for collecting and acting upon the will of the "governed." This is as troubling as it is intractable- if we're not going to stop using Facebook (as the failed "opt-out day showed) what is our recourse for a transgression? What is our mechanism for governing?
The dilemma facing any private organization operating in the quasi-public sphere is this: When in conflict, should the company choose its own self interest over the claims of its customers or other constituents? The libertairian view would be that the customer's relationship with a firm is expressed through contracts, and thus the terms of service become all the more important, regardless of the perfuctory acceptance and incomprehensible language usually involved.
Participatory mass media have consequences. The increasing share of our private lives that are mediated by privately owned platforms, threatens our freedom. This is not merely because these communications are usually trivial to rather than substantive. We treat Facebook as though it is replaceable, and on the mean, we have conversations of relatively low value. However, the outlier dioscussions, where the value of any given conversation rises (say, a Wikileaks fan page on Facebook), that run counter to the requests of the state or the operator of the quasi-public, yet wish to take advantage of the same frictionless communications, are ultimately at the whim of the operator.
So we should be interested in the ability of the masses to force change in largely private institutions governing the public sphere. Do these organizations conduct themselves in transparent ways? Do they see themselves through the eves of the constituent? Do they fear illegitimacy and crave the affirmative consent of the community?
The institutions which consciously choose to live by such a combination of rules and maxims, without the coersion of the state, form the businesses most likely to attract the copnsumers of the future.
We must admit that the conduct of many of our institutions, who do not live by such principles, often find themselves subject repeatedly to regulation and in the absence of effective oversight, to public outcry that results in significant value destruction. BP. Enron. WorldCom. Lehman Brothers. The revelation that wikileaks is holding a trwasure trove of documents that reveal the executive operations and attitudes of Bank of America, and the idea that BofA holds little interest in seeing such information released, is not about the power of Anonymous, or WikiLeaks, or any Nerd Hacker Politics. The simple fact remains that it is no longer easy to keep secrets, but it is harder still to operate a financial institution that exploits the masses a nickel and a dime at a time and transforms that exploitation into "wealth" for the few, because it is clear that transparent discussion of such a scheme would prompt outrage. We shall see what WuikiLeaks can provoke.
More than an advertising and marketing technology, the social channels which comprise this "quasi-public" sphere present the opportunity to encourage private entities to change their business, change their governance, and otherwise comport themselves in with decency in public. This is the frontier of social business design, and it's going to be a compelling trend in 2011.
Over at SAI, the chart of the day suggests that ChromeOS is a jab at Windwows (duh) and that Google needs the OS to succeed because it is the best hope to kill a weaker Microsoft. Despite Microsoft's attempts to break out of the doldrums, and the extreme diversification of their product offerings (many of which never stood a chance of working)- Windows remains the cash cow for the giant.
If I were Google, I wouldn't try to win the war against Windows under current conditions; I would need more things to fall into place.
Android users are wising up to the Google Platform, and applications for Android are proliferating. Windows Phone 7, how are you feeling?
Bing is getting better, has differentiated itself and is integrating with Facebook more obviously (the future of social search is very scary for any company that does not follow Bing's lead)- that's got to be scary for Google.
ChromeOS apps would all be web apps, and the value proposition would have to involve the cloud, and applications that are enhanced by always on-data networks. WiFi in the current sense just will not cut it. You know what would? 3G/4G wireless connectivity built in.
ChromeOS laptops might be a miserable failure like the Nexus one, but if Google sold them at a loss, they'd exact a far more painful loss on Microsoft. With onerous license fees from the essential connectivity, Google has to own the key patents in order to reduce its costs. This illuminates why Google may be fighting so hard against Apple and RIM for Nortel's 3G/4G patents.
When yo sign into Google Apps, use email, docs, spreadsheets, watch Youtube videos in the Chrome browser, and android apps all day, getting served advertising by Doubleclick until you remotely program your Google TV from your android phone and watch The Office when it's convenient for you...that's when Microsoft dies. And with the exception of GoogleTV, I haven't named one thing above that sucks.
To do the same thing on Windows/microsoft/Bing/MSN/Xbox, you're making some compromises along the way, for sure. It's not a done deal, but it's for all the marbles.
Interesting article in Bloomberg Business week about John Sculley's new book in which he discusses his tenure after leaving Pepsi and becoming CEO of Apple.
This bit confirms what I have long said about Steve Jobs: that he's really good at saying NO, but that is OK because he is a genius. If he were also wrong, it would be disaster. As culley putrs it:
Q:That drives some people a little bit crazy. Did it drive you crazy?
A: It's O.K. to be driven a little crazy by someone who is so consistently right.
Reading The dirty little secret about Google Android, I've been enjoying the insightful analysis of how Apple's decision to free the device from the restrictions of the carrier were key to the identity of the device, and seem more in keeping with what Google originally promised with the Nexus One.
Unfortunately, the Nexus One flopped. The non-Apple customers buy their wireless devices and service very differently. Mass-market phones, even smart phones, need marketing spend behind them, and those campaigns are linked to carrier restrictions and modifications which compromise the "open" vision. The upshot, according to the article:
the consequence of not putting any walls around your product is that both the good guys and the bad guys can do anything they want with it. And for Android, that means that it’s being manipulated, modified, and maimed by companies that care more about preserving their old business models than empowering people with the next great wave of computing devices.
I think this rolls back into the S-Curve of technology adoption.
[credit: Wikipedia]
As the market matures and a it becomes a mass market product, smart phones and apps become both more standardized and more understandable for the average community. We see and hear idiotic advertisements exhorting us to be "twin texting turbos" with the Droid 2. And this is great for Verizon's bottom line, for marketers and developers launching Android apps, and for mobile web content growth. But it basically sucks for the innovators who want to be able to get a great device and move from carrier to carrier in the US market.
Other perspectives: Nic Brisbourne of DFJEsprit writes
[T]he longevity of the app paradigm versus open web standards will depend in large measure on who wins the hardware battle. Open standards at the software level probably will probably only prevail if hardware manufacturers with a PC mindset prevail over those with a preference for closed ecosystems...
Unfortunately, the principles of openness have been interpreted to mean an open app ecosystem, and haven't changed the economics of the closed carrier/device model in the US. Google wants a big market for Android apps and as many users as possible, and that motivation is at cross-purposes with the open-ness that geeks want.
“If you boat a lot, you're known as a boating enthusiast. I like to boat, but I just don't want to ever be referred to as a 'boating enthusiast'. I hope they call me 'a guy who likes to boat'.”- Mitch Hedberg
I read that Microsoft's new KIN Windows 7 phones, are "aimed at 15- to 30-year-olds who are social-networking enthusiasts." Ew. Never mind targeting teen interests in Glee, Justin Beiber, WWE, college, funny videos, or body spray - who describes a product this way even in a press junket? Presumably they left the research out, or they'd have realized that 31% of their target demographic already plans to buy an iPhone.
It's shocking, really. After so many years of getting it wrong you'd think someone could just do the opposite of all that and make a serious score! Microsoft has been making mobile products longer than Apple has been making the iMac- it just so happens that few of Microsoft's products were very good. When aQuantive was bought by Microsoft in 2007, my Razorfish colleagues and I collectively worried that we'd lose our Blackberry devices in favor of Windows Mobile "smartphones." The worry was well-deserved; those who received them were usually miserable.
Microsoft proved unable to create the kind of extensible platform on its mobile devices that has made Windows dominant in the corporation and in the home. While Windows may be too entrenched to be dislodged from either, it's stunning what Steve Jobs has been able to do in his return to Apple.
And now, with the prominence of the iPod/iPhone/iPad as a platform, Apple's role as a "gatekeeper" to the platform is drawing a wave of anti-Jobs sentiment, centered around the perception that Apple is a draconian gatekeeper of its own platform.
Maybe so. Is that so bad? Isn't it better than the sludge that Windows Mobile is? (I have not tried out Windows 7 Mobile so I reserve judgement for now). I believe that the power Steve Jobs wields most effectively is the power of No. And what Microsoft, by trying to pack everything into every product it ships, has always been shackled to Yes, And... (well, their version of Yes, anyway).
No, that is too hard to use
No, that looks like crap
No, that feature sucks
No, that app doesn't belong in the app store
No, we don't talk to the press
No, I don't answer emails (actually I think Steve Jobs responding to email of late is like the ultimate blog/twitter account)
After all that NO, it's clear that the most important thing to Apple is to make awesome products that people love. It's not ego, or even greed (except by association- great products cost $$$). But Apple has transformed itself from a manufacturer of niche PCs that a few people love, to a mass-market CE company that makes products for millions more. The masses expect Apple to stand behind every product decision and to contuniue to uphold exacting quality and usability standards.
Is that democratic? Surely not- Steve Jobs is an admired autocrat. He's a sort of a benign autocrat, which isn't all that bad (see also the original Thirteen Colonies and "Salutary Neglect") Strong, determined leaders in the autocratic model don't much care for input from you, or me, or anyone else. If they stopped to ask what we wanted, we might choose the wrong thing.
As in the 1700s, this was all more or less OK until the colonists got wind of the the autocrat's real priorities- the intolerable acts were ones that benefited the sovereign else at the expense of the colonists. Enter the rebellion.
Are we net beneficiaries of Steve Jobs' power of No or are we on the brink of Apple's decisions benefitting the company more than the base of users, developers, and accessory manufacturers?
Apple's power comes from protecting the user experience. Whether you see that experience as stifled by an evil dictator or shaped by divine will is really about YOU not about Apple. With the user at the center, the design decisions of an otherwise evil monarch are altruistic. Right vs. left, republican vs. democrat- this is an interpretive exercise rather than a factual one.
Apple is facing an onslaught of ad-driven solutions, particularly if it releases always-on wifi and allows multiple apps to run simultaneously. A successful ad model could be important to keeping developers afloat. But the key to that monetization of the audience is the data about the audience, and strategically Apple needs this piece- to be the sole provider of such data and kill AdMob.
So Apple 's development process might be reduced to:
No matter how many applications Steve Jobs or his employees arbitrarily deny from the app store, if people just love the damn thing, they'll think he's Jesus.
I enjoyed Caroline McCarthy's questions about Foursquare's sustainability.
But let's not limit the definition of success to the Foursquare product as it stands-the API is where the real action is.
Venue and advertiser innovation will drive the platform's success, as with Twitter. Businesses and marketers can leverage the Foursquare platform to create engaging experiences wherever people gather, and they don't need to wait for Foursquare to make this a default behavior.
Marketers are dipping their toes in to the water of location-based social networking, using the game elements of Foursquare to enhance their marketing programs, but few are creating brand-relavent and ongoing experiences that add value for the user.
As users tune out broadcast messages, marketers will turn instead to memorable, high-ROI experiences in the real world that leverage Foursquare, or Yelp/Facebook checkins, or Gowalla, or the application we are all going to be using tomorrow. Each of these is just another doorway to reach today's hyperconnected audience- and all their Foursquare friends.
In his Buzzmachine blog, Jeff Jarvis writes about a Continental Airlines choice of transparency over secrecy after flights were cancelled:
Continental is practicing operational transparency. It opened up information is already has to us, the customers, so we can be informed and empowered. This way, I’m not cursing the airline and its employees. I’m well aware that our flight might be canceled and that’s entirely out of Continental’s control, so I wouldn’t blame them. But every time this has happened in the past, I hated being in the dark; I hated being lied to by airlines; I simply want more information. And now an airline is giving it to me. Bravo for Continental.
Operational transparency is only possible when someone has sat down and calculated the benefit of the true information vs. the costs of its absence. Good on Continental in this case, and we should all look to say more when there is no serious competitive disadvantage to secrecy- hiding behind “approved messaging” will just keep your customers from taking your side.
I did a lot of work at Columbia on the mobile workforce, seeing labor in firms as units dividing their time between mutliple employers on an engagement basis. The endgame there seemed to be the end of the traditional labor force. I even suggested ata conference last month that it would be interesting to create a real-time job index- jobs that need to be done in the next X hours or Y minutes. Not sure we're there yet.
Reading a post on Please Feed The Animals, the post title speculates that perhaps there are Fewer Advertising Jobs, But Greater Opportunity. The post links to a great WSJ article on freelance employment in the downturn.
I think the data are interesting to think about there. The ultra-mobile (where mobility is also lateral between firms) workforce is a chaotic place to be, and strategically, I think this robs many firms of the opportunity to differentiate through talent acquisition. Perhaps this really doesn't matter as much as it once did, and a firm having access to a network of talented freelancers is the talent differentiator these days.
I wonder: is this is a long term spike that will re-make the firm, or perhaps just an example of how firms cut way past the fat in their layoffs, and are burdened with cost structures that don't make sense anymore? Could agencies have fixed that instead of laying people off?
David Carr writes in today's NYT that "We need an iTunes for news" and I'm finding myself thinking very hard about what actually might help the struggling newspaper biz (bad news from Fitch ratings came out the other day, and it looks like the Seattle P-I is on the brink).
Is it just "variable pricing" which Carr argues has allowed the music business to stick around, though perhaps not to thrive? What the music business still hasn't really learned, is how to combat piracy by adding value in the distribution part of the business. Apple figured the out- the device and the store are, for many many people, a top notch experience (I know there are people who prefer eMusic or other services) but the emphasis Apple placed on delivering value rather than delivering "content" is what gave Apple's iPod such dominance.
So can newspapers just turn around and create an iTunes-like store, charging for the convenience of reading the paper on an enormous iPod touch or the Kindle? I think the issue is not exclusively supply-side. That is, newspapers don't have to deal with precisely the same intransigence as the music business with respect to digital- they already (largely) give the product away for free online. When the NYTimes pulled the plug on TimesSelect, it looked like they were screwed.
I posted these thoughts to the nextNY list in December:
People need to get okay with not-free news. The reporting of news organizations is indispensable, and high in value. While the music business has the advantage of live performance and merchandise revenue- which do not suffer from the free copying problem- news has no such cash cow.
We'll need news to recover from this serious free-rider problem. A tip jar? Maybe tying to distribution on a device, or just making the pricing more flexible, or making it just a whole lot cheaper and also easier to pay would be a step in the right direction. I'm not convinced- just getting people back to paying for distribution seems weak. They will somehow need to be non-free even if not subscription only, either.
One of Fred Wilson's recent posts mentions Time Oreilly's three rules:
I believe that in a similar way, newspapers "create more value than [they] extract" but this has created a mis-pricing problem: users believe they were paying for distribution, distribution became "free" via the web, but the value created only grew; we have not figured out how to recapture that. Wish I knew the answer to that one.
In a recent article I wrote for the Headlight blog, I wrote about data portability, but I was largely describing a world we're not quite living in yet.
What will happen first among a lot of services is that we will have lots of innovation, and many solutions to the same problem. The strong solutions, and the solutions created by smart people, will coalesce into standards that arer adopted for the future.
We are at the point where the IETF isn't the standars body people are looking to now- instead of data communications standards, the battleground is at the application level. Creating web applications with good interfaces is now a totally democratized effort. his will mean chaos, probably for a while. Competing standards. Facebook vs. Google. Social graphs vs. brute force indexing. But eventually there will be shakeout. It sure took a long time for the HD-DVD vs Blu-Ray wars to be over, buit that's what we are in for. the only thing that is encouraging aboutt his on a web servicrews level is that from a cash perspective it is easier for a user to make a choice among competing web services (typically because they are free).
But the subsequent shakeout shows us that even if the service is free, user attention and effort which goes into the serivce has value. Users in a community create value for each other; they are paying for this servie one way or another. It is at this point, ewith userr value locked up somehwre, that the questiuon of portable data becomes important. What now?
