As the web moves from a village - 60,000 blogger in 2002 - to a megacity - where will the structure be found? Where is the value? Fast is working on that problem through behavioral search. I would like to add to that the core human organizational design.
Many of us agree that in a world of infinite content, that the value will no longer be in the mass market but in the niches in the Long Tail.
Our intuition tells us that it is in the niches where the scarcity and hence value lies - attention, attraction and hence energy. If this is true, then how do we find the right niche and unleash this power? What is the best filter?
I think that our best filter is our small circle of trust. It has both the power and the reach. I believe that this “circle of trust” is defined by our biology and not by software. Real “friends” are not an infinite resource but exist only in small numbers that fit the “Magic” or “Dunbar Numbers” that in turn fit the Fibonacci sequence.
So here is the data - based on the early part of the Fibonacci sequence and where I have assumed that the Circle of influence may be to the Power of 4.
So a circle of 8 - the ideal Trusted Space - can attract, affect and influence 4,096 people. If I have 144 in my circle we can reach just over 400 million others. BUT my bet is that just as the reach goes up, the gravitational pull goes down.
2 - 16
3 - 82
5 - 625
8 - 4,096
13 - 28,561
34 - 1,336,336
55 - 9,150, 625
89 - 62, 742,241
144 - 429, 981, 696
Notice anything? As we look at the sequence we see a Pareto or power curve - it’s the Long Tail.
So what do I also “see”?
I think that there are two power curves here. One is reach and the other is power or gravity.
The greatest gravitational pull is at 2 - the most effective reach is 144. There is likely a “sweet spot” along the curve where reach and pull are best found in concert. My bet is that it is in using the circles of 8 - 13 - 34. You can reach more than a million people with 34 and you can really attract 4,096 powerfully at 4.
If my intuition is correct, then the full power of social software might be revealed as we explore these numbers and their meaning. Does this not put a new face on marketing? Does it tell us how we will find and attach to content in a universe of infinite content? Does this say something about how to organize anything?
I am a historian by training - can you help by testing this and also by drawing it?
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While the keynotes from FASTforward ‘08 featured topics and elements of the ‘new’ Digital Natives, now there’s a whole new category: Long-tail natives of Social Work-net-ing
Read Lauie Parker’s experience journey, over the several-year evolution of P&G’s Long-Tail-of-Research via the Innocentive research collaboration model: Profiles in Innovation.
An issue for a lowly graduate student…grad students don’t exactly have the time or the resources to actually try the chemistry that is needed to demonstrate solutions to synthetic problems…. my first submitted solution…although I didn’t win…I received helpful critique and encouragement in the review of my solution.
How’d I become aware of this piece? Via the ‘draw’ of their recently-improved-format newsletter: Inside Innovation, delivered straight to my inbox.
Let’s just say that their overall design progression has been positive (but then I don’t rely on ‘opinion’, I look at the data).
Innocentive: July 2001
Innocentive: 2003-2007
Innocentive: Today
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Sam Walton’s wife’s deal with Sam when they got married was that he could do whatever he wanted - he wanted to be a retailer - but she would never live in a community that had more than 10,000 people. So his constraint was to build an epochal retail system but in the boonies. Look at what he accomplished with this as a restraint! He also found on his path that being in the boonies also gave him a defence against the huge competitors such as Kmart and Sears. No one took someone who worked in the boonies seriously. That is until it was too late!
My point is that, no matter what you think of WalMart now, that we are predjudiced about the boonies. Smart people in all fields - not the least in Social Media - tend to have a big city bias. We too often over look the boonies and those that live and work there - how could they affect us? We all know that you have to be in the big city to know what is really going on. Of course that is why Warren Buffett is the richest man in the world!
My story today is about a man that you likely have never heard of - who lives and works in a small town that you also may never have heard of. We can never know today if he may become the Sam Walton or the Warren Buffett of media, but my bet is that if he does not then someone like him will be.
My bet is that at the heart of the real social media revolution is that if we do indeed move to a networked world then small communities will be able to stand toe to toe with the big cities.
Meet Brian Hurlburt who lives in Yarmouth Nova Scotia a small port on the southern tip of the province where the high speed ferry comes in from Portland. Brian owns a runs a Web “Something” (Yarmouthcounty.com) that tells the aggregated story of everything that happens in Yarmouth. I call it a web “something” because it is more than a web site - it is closer to the old style of really local newspaper that you might see in a western.
Until Brian, everyone had ignored Yarmouth. The fact that the domain was available told Brian that no one cared. The Province did not care - Yarmouth is off the radar in Halifax. Tourists from the US got off the ferry and drive through town and onto other more exotic places that were better known. (Nothing is really exotic in Atlantic Canada but you know what I mean) The B & B’s were all separated and isolated and could not get their message out. So were all the social groups such as Church groups. Small business struggled to get noticed and worried about maybe a WalMart coming to town. The social capital of Yarmouth was draining away. At some point, it would no longer be a community at all.
So who is Brian Hulrburt? Is he some flash young techhie? No Brian is a regular guy who knew next to nothing about the web. Everything he now knows about how the web works he has learned by trial and error. All the fears that a church or a B & B may have about the web - he has experienced himself.
Fear is the great barrier that we all have of the new. So how Brian learned and how he is - an open and vulnerable man - is an important key to his success in bringing so many parts of his community together online. He can describe what has to be done in language and in a tone that does not judge or appear mysterious.
He also did not try and monetize the site until it was ready. He had faith that if he was able to reach a critical mass that the money would come. So he also did not carry a lot of costs himself. He could not afford to have costs involved that would force him to force the economics before the time was right.
Is this not the Craigslist model?
What he has been able to do is to aggregate the life of Yarmouth online. Aggregation in a safe and trusted place is going to be one of the key value creation processes in a world of infinite content. By not pushing the economics he has built the trust and now “owns” the space.
The underlying metrics are also emerging that will drive an economic model that benefits not just Brian but all those who inhabit the site.
In 2007 the site had 100,000 visits. Not hits, over 1 1/2 million of those, but real visits. Because of the power of aggregation, all those that live on the site have now access to al this traffic that they could never have reached on their own. The local paper reaches about 20-30,000. So Brian is reaching more and at a fraction of the cost of the paper. He also enables a growing interaction between all parties which is not possible in a paper.
This is more than Google Local or Craigslist - this is a personal aggregation that includes a filtering that is part Brian and part the client. It can therefore be trusted more than a simple mechanical aggregation. It will over time therefore have more value than a simple algorithm.
A growing part of what Brian can now offer his family of clients is the kind of measurement that conventional advertising cannot. Brian is becoming expert in analytics.
Here I think is part of the core of the new economic model. Mass Marketing needed a mass market as there was so much leakage. With no precision possible, as in WWII, only area bombing was possible. So what could a small place do like Yarmouth. Their feeble sums of money wouldn’t even be noise in the larger scheme of trying to get noticed. What Brian can offer is precision - the Long Tail in action. A B & B can see exactly who it is reaching online and can adjust to get a better focus and hence result.
This will kill the mass media alternatives. Niche + precision = high return.
For me the lessons that I have gained from looking at Brian are these:
Niche is where the energy is - the Value will be on the right hand side of the Long Tail
Aggregation around niche is where the value is - the more personal the better
Precision about what happens in the aggregated niche is what drives the economics and the return
Power will shift from the large and diffused to the small and concentrated
I asked Brian “where is it going?” He replied by saying that “The web is changing the world. It is helping us help each other again. We can take charge of our own lives again. I want to be part of this.”
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Yesterday Hillary Clinton made a come back to win 3 of the 4 contested primaries but Barack Obama was able to close early gaps to gain significant delegates and keep his lead in the pledged delegate count. There has been a lot written on the organizational strength of the Barrack Obama campaign. Part of this comes from some creative use of the new web, both on public sites and within the organization. One of the tools they are using is Central Desktop, a collaboration platform for business teams. Yesterday, I spoke with Isaac Garcia, CEO of Central Desktop, on the day of the Texas primary on what the Obama campaign was doing in Texas and what they did in California. Prior to our conversation I read his Central Desktop blog post, “Barack Obama and The Long Tail of Politics.” It spoke well to the general issues of the long tail, but I wanted to know what they actually did with the software, and Issac filled me in and took me to the Obama Texas site to see some stuff while it was still up. I was very impressed.
Howard Dean made effective use of meetup.com to organize meetings and his web site to gather donations in his 2004 campaign. Many other politicians have since used their web sites to gather donations. Some, such as Mitt Romney, have even employed tools such as salesforce.com to manage the donation process. Almost all campaigns also started blogs in 2004. The Obama campaign has gone a step further and uses web 2.0 tools to help train and organize their volunteer supporters, allow volunteers to rapidly update information and, in some cases, provide web 2.0 tools to help manage their volunteer efforts. The core staff has also used these tools within the campaign.
Central Desktop is an on demand collaboration platform that is wiki-based and designed for the business user. A political campaign is also a business, as well as a movement, and is really a rapidly growing startup that has huge collaboration and communication needs. I will write about the details of Central Desktop in a follow on post but want to focus on its use within the Obama campaign in this piece.
The use of Central Desktop started in the California campaign where the Obama people faced the task of developing and managing a field operation in a geographically massive and diverse state. According to Issac, the conventional wisdom was that you could really only campaign in California effectively through TV and direct mail. No one had tried to build a field operation from the grass roots up in California since Bobby Kennedy. Several volunteers started using Central Desktop to coordinate their internal efforts. It worked well so they decided to open it up to more volunteers as they hired and then organized a field operation that enlisted 6,000 precinct captain volunteers.
They set up MyPrecinct pubic workspaces for selected precinct captains. This allowed them to manage their efforts with task assignment, calendaring, documents, lists of key information, and other workspace tools. These spaces were separate form the main web site. They allowed the precinct captains to manage and organize themselves, reducing the burden on the central staff and on the central web site staff. It also reflected the more decentralized operational mode of the campaign. One of the main themes is increased participation in the political process, and this allowed for increased participation in the workings of the campaign. While Obama did not win in California, he did manage to close the gap and gain significant delegates.
As the Obama campaign moved on to Texas, Central Desktop came with them. Since this campaign was still current at the time of the interview with Issac, I was able to see much more about what was going on. Here the main focus was to the use the tool to quickly train precinct captains on their job and provide the information they need. The wiki based tool allowed for rapid content development in the few weeks leading up to the Texas campaign and then maintenance and updates by volunteers. Central Desktop has many permission levels so the content could not be spammed or trashed as sometimes happens in public wikis.
New or prospective precinct captains can go the Precinct Captain Learning Center, a separate application from the main web site. I put the link in but I am not sure how long it will be up. You are first greeted by these choices on the home page:
1. “Apply to be a Precinct captain - not yet a Precinct captain - click here to sign up”
2. “Get Started - First time visiting the site - Start here” - the page starts with - “From the entire Obama for America community in Texas– staff, volunteers, and supporters — we sincerely thank you for stepping up and taking responsibility for a piece of this movement… (then it goes on after more welcoming) - Time is precious — click here to get started now!” You go to a clear and detailed list of steps to take. - Step One - learn your role, Step Two - Call 20 voters using MyPrecinct (with many quick guides on effective calls), Step Three: Recruit Help (with more guidance).
3. “New Features in the MyPrecinct calling tool” - this section has screen shots and explanations. It showed you how to do data entry. The precinct voters are already entered and when you want to update the results of a call - you click on edit data giving you wiki editing rights. You also get rolled up data on your efforts. In addition, there was also a My Precinct Team feature where you can meet other precinct captains through their contact information for further collaboration.
4. “Find Your Early Voting Location” - here the wiki format is useful in up dating information
There are also many links in the side bars under training & tutorials, help (FAQs, contact your organizer), and resource center (issues, fact check, office locator, etc.). Underneath the four main sections above were three links with graphics:
Share Your Story - people can write about how they got involved in the campaign in a blog format
Office locator - with maps - the wiki tool helped with the updates
The Texas Two-Step - clearly written explanation of the hybrid primary voting and caucus process that explained in a way that I had not heard in the media.
This was all done in a few weeks and allowed for more effective participation but a campaign that is attempting to bring new people into the process and make them effective. The campaign sates on its main web site, “I’m asking you to believe. Not just in my ability to bring real change in Washington… I’m asking you to believe in yours.” It is nice to see the campaign use participatory web 2.0 tools to further enable people in this process. I hope that whoever gets elected will try to engage more people in the political process through tools such as these.
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I have a sister-in-law who just turned 50 who has been until recently remarkably (and determinedly) resistant to online activities. She has basically not ever used the Internet for anything but email, and even that sparingly. Part of her reluctance and resistance is lack of familiarity (beginner’s embarrassment) and the other equally strong aspect has been her clear sense of how online can encroach on or steal time from what many will call "real life".
That there are forms of emergent social isolation and alienation, and addictive behaviours, that have developed as the online world has grwon and spread is irrefutable … just as the number(s) and types (s) of connections and interactions have multiplied and led to interesting behaviours and outcomes.
Back to my sister in law. She is also a very good cook (let’s say amateur gourmet chef) and a talented amateur photographer. As she has grown in her capabilities with a digital camera, she has also gotten more familiar with online environments. Bit by bit, her attitude has been changing. Recently she discovered StumbleUpon, and has almost become an evangelist, taking time out from conversations to show people who visit the interesting things that one can stumble upon just by clicking once. It was also interesting to see her and her girlfriends’ initial reaction to finding people they knew on Facebook.
Slowly and surely, more and more people will use services and tools on the Internet as it weaves its way into and throughout our lives. And as that happens, people will notice more and more the smooth sides and sharp edges of ways this spreading and weaving will impact the ways we live and work .. as will whatever the Cloud becomes.
"2008 is the year that sees Microsoft’s ambitions challenged" is a line halfway through the movie posted below. Eerily prescient, no?
What also seems certain is that even if Microsoft does not acquire Yahoo !, other acquisitions and mergers (and the concomitant convergence and integration) are sure to happen over the next decade
Maybe EPIC 2015 (originally released as EPIC 2014 in 2004 by Robin Sloan and Matt Thompson) does not seem so weird or impossible today ?
Today I’d like to offer readers an example of new tools and web services operating in social networks that in my opinion make the concepts and observations in the report come alive. The example involves people using search, content, collaboration and sharing, which are all central elements of the ecosystems of commerce and culture in which we will all be living, working and consuming.
There’s a small company up here in Vancouver, British Columbia (the warm and beautiful part of the Great White North of North America) that develops social networking platforms and customized elearning solutions. The Donat Group is also creating a social music initiative (Project Opus), a part of which involves Mixxmaker, a web service that helps music lovers build playlists collaboratively. Building playlists collaboratively creates a "Social Object", offering people a means of co-creating value around music they like and want to share with others they know.
We all know that the music industry is in real turmoil, and is searching frantically for new business logic and new business models. The major participants have all been under pressure from free downloads, and the price of music is under pressure as never before. Where will additional value, and eventually revenue, come from ?
He also wrote about ‘who’ is involved in the co-creation of this new form of value … or in other words how the market for value associated with songs is being broken up and then co-created anew. Doing this around a playlist that is built in collaboration with others also helps mightily in creating connections and trust, and lays a foundation for putting the dynamics of word-of-mouth marketing into dynamic operation.
It’s important to note here that David and his colleagues at Project Opus and Mixxmaker put a lot of work into staying within the bounds of Fair Use, an all-important consideration when exploring new paradigms for creating (or co-creating in this case) potentially new economic value.
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Once people start building today’s equivalent of albums together with their friends, the changes to the ways music is distributed and acquired will continue to diversify away from purchasing CDs, as David has noted. But people will still want that unusual album cover from the old vinyl days, or the most recent YouTube video clip of a given band’s performance, or a series of photos from Flickr (carrying the appropriate Creative Commons license, to be sure) to add to their own personal collection of digital artefacts about that kind of music, that band, that group of friends .. and so on.
It’s a pity, really, that this fun and easy-to-use capability exists only as a Facebook application at the moment. I seem to be observing a rapidly-growing trend of people turning down invitations to add another Facebook application to their Facebook profile (I am one of those people). While supposedly Mark Zuckerberg is aware of the growing dissatisfaction .. and you’d think the Beacon fiasco was notice enough … it’s hard to shake the sense that Facebook and its partner applications are all really just looking for ways to maximize page views and ad impression.
That, for me, does not fall into the category of decentralized co-creation of value, no matter how you spin it.
But .. I suspect that in the coming months and years we’ll see many more examples of applications and services like Mixxmaker that let and / or help people co-create online things that they care about and enjoy.
It may be that the serious jargon of the term "collective intelligence" will put some (or many) off, but increasingly it seems to be becoming clear that the interactive social construction of knowledge put to use in response to constantly dynamic markets is demanding some new business logic, new points of friction with which to fashion transaction and new ways of designing and managing the work that leads to the creation of economic value.
Most forwarding-thinking businesses are starting to realize that they need to come to terms with the open Internet environment. This means making some radical changes in how they think about markets, how they structure their own enterprises and how they treat customers.
[ Snip … ]
On the Internet, people have acquired considerable powers of their own. They have developed their own sustainable micro-cultures. They can create their own commons to carry on conversations among peers and develop new forms of reliable “collective intelligence.”
This bottom-up knowledge empowers ordinary individuals to approach market transactions on a more equal footing with sellers, who have historically had greater market power and knowledge. The commoners are able to capture more of the knowledge they create, and use it to their own advantage. Indeed, the commons can be regarded as a source of cutting-edge R&D for companies, as MIT professor Eric von Hippel has shown in his book, Democratizing Innovation.
The phrase that the conference used to describe this phenomenon is “decentralized co-creation of value.” It means that the market is not the sole source of value-creation; dispersed online communities are now sources of value that businesses must collaborate with in order to generate value.
The commons stands on a more equal footing with the market. Instead of all “value” coming from centralized players like corporations, increasingly, value is coming from the “ends” of the Internet – the periphery, where new ideas and innovations first materialize. Value comes from individuals, and groups of individuals, operating in the free space of the commons, where overhead is low to nonexistent, and creativity is not regimented to service prearranged market niches. Thanks to the Internet, social niches are becoming “staging areas” for viable niche markets, a phenomenon also known as the “Long Tail.”
All of these developments create a real crunch for traditional large corporations because large companies like to have extreme control. That’s how they deliver predictable results to investors and protect their brand reputation. But on the Internet, control and predictability are not viable strategies. In fact, they are counter-productive.
Value is generated by having less control. Customers won’t trust a company that tries to use digital rights management or bullying tactics to assert too much control. In a sense, companies are not just competing against other companies, but against the freedoms of the commons.
The challenge for businesses, then, is to develop new sorts of “open business” models that can respect the social dynamics of the Internet, while still monetizing certain forms of value (e.g., selling advertising to the Web users who like your site). Companies have to realize that brands are forms of socially created value; brands are not simply the result of advertising and image campaigns. Online communities create and promote a brand every bit as much as mass media.
One of the most fascinating parts of the report is about the next generation of computing, often known as “The Cloud.” Bill Coleman, the entrepreneur who started BEA Systems and recently started the Cassatt Corporation, describes the Cloud as the convergence of voice, data and video in a networked system that also combines computing, telecommunications and the Internet. You plug your computing appliance into The Cloud – and all your data and stuff is “there,” not on your personal computer.
Everyone at the conference agreed that the current trends in economics and technology will make The Cloud inevitable. Software and hardware will become commodity products, computing will become a service provided by very large utilities, and a handful of these Cloud providers will eventually put the telephone service industry, the cable industry and Internet service providers out of business.
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I have been for some time been calling the emergent organizing principle that I believe underpins the necessary new business logic and models, derived from social-interaction-driven market niches, "wirearchy" - a dynamic two-way flow of power and authority based on knowledge, trust, credibility and a focus on results, enabled by interconnected people and technology.
I am heartened this report has come out (emerged, let’s say) from a group of bright and aware people at the Aspen Institute. I suspect that it makes those of us who feel something big and different is going on bit by byte, link by link … a bit less iconoclastic.
I’m not so certain that there’s as much of a User Revolution going on as there’s a deeper embracing of reality and the adoption of “no BS” policies in personal agendas. The media has encouraged people to become more aware and involved, and they have.
Taking a quick look at the Dove campaign for real beauty, I was reminded by their self-esteem fund of the recent uproar of body image and social pressures across talk shows when Jennifer Love Hewitt was pictured by the tabloids and called ‘fat’ across the blogosphere, when she’s a size 2 (never mind she’s reportedly pregnant — as if pregnancy isn’t even all-the-more difficult for body-image-conscious women to cope with). This is clearly a relevant social topic to be aligned to, not just because it’s popular, but because of it’s potential to damage the social fabric — real lives.
In looking at social-issue alignment/advertising, there has always been some corporate efforts toward social issues, but Dial took on a topic to a much deeper perspective when it wasn’t expected, and leveraged it to their advantage. Clearly, many brands establish their identity based on certain social alignments: REI evolved as a buying coop among serious outdoor enthusiasts (members still get annual refunds for their own purchases), Ben & Jerry leveraged their commitment of social investing of profits including creating specific products, Seventh Generation has deep sustainability commitments for all their products. As of late, not having a sound green position can put brands at a disadvantage (including even raised floor architectures).
The public is taking a no-nonsense approach to being marketed “to” and reversing the trend to being treated like trained monkeys. Clearly e-Loan had to take on an entire industry to allow consumers the right to their own credit score information. e-Loan’s business model and entire advertising campaign capitalizes on the flip of this power base. But what happens when the innovative brainchild of the e-Loan concept sells his creation and goes to the next problem? He applies a little 2.0 and comes up with another lending model to bypass the large lenders altogether — by capitalizing on both the long tail of consumers and average people with money to invest.
I close with a quote I came across illustrating the shift recognized by others: “Marketing 2.0 is as much about paying attention as getting attention.” [Sigh…] Wasn’t that the goal of Saturn’s business model over 2 decades ago?
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Hulu.com is an important experiment for how TV will shift from being available only when the broadcaster schedules it to when we want it - Having it My Way!
(From the NYT) Hulu is the new-media creation of two old-media rivals, NBC, which is owned by General Electric, and Fox, owned by the News Corporation. Since March, when the broadcasters announced their joint effort to bring free, ad-supported television shows to the Web, critics have pounced, predicting the venture would be doomed by diverging agendas, technical challenges and an all-powerful enemy: YouTube.
Skeptical bloggers even slapped Hulu with a derisive moniker: “Clown Co.”
Now the defense is ready to present its case.
Today, Hulu, now an independent company with more than a hundred employees and its own offices in Los Angeles, will begin privately testing its new service with select users at Hulu.com. It will also begin sending its videos to the sites of five distribution partners, Microsoft, AOL, MySpace, Yahoo and Comcast.
Hulu is presenting select episodes of some 90 television shows, including new and old programs from NBC (“The Office,” “The A-Team”), Fox (“24” and “The Simpsons”) and an assortment of smaller broadcasters like USA Networks. It has also added two new partners, Metro-Goldwyn-Mayer, which distributes programs like “Chapelle’s Show” and “Reno 911,” and Sony Pictures Television, which will make selections in its archives like “I Dream of Jeannie,” available on Hulu.com.
All the shows are viewable inside a Web browser and festooned with advertisements.
However Hulu works out - they are on a track that is clear - people want video as they ant their music:
Easy to find
Available in chunks
Available ON THE WEB - when they want it and usable on a variety of platforms such as an iPod and a 50inch HD LCD screen
Who pays and how will still be settled.
Also what I think Hulu has missed is the value of creating community around a show - this is Hugh’s great insight about Social Objects - it is the Conversation around the object that is more important than the object.
3. The Blue Monster wine is also part of the “Smarter Wine” conversation. The main thesis is that it’s not the wine per se that is interesting, it’s the conversations that happen around the wine that is interesting. And that is true for all social objects. People matter. Objects don’t.
The advertising money is shifting to the web - so will the content - it will go there faster than we imagine. For the laws of exponetial growth are in force. I think that the Tipping point is here:
I think that Broadcast TV is now in the Titanic Mode - It is large and feels unsinkable - BUT - the ship has grazed the ice - at the moment no one feels anything - but the wound is fatal and it is only a matter of time before the ship sinks.
The Iceberg is the weight of money that is leaving conventional media and going to the web. My forecast is that 2008 will be the year - 2008 will be the year where the web/digital will become where the ad money will go - the work for all providers of all types of content then will be to reset their universe.
Today most people in TV and radio see the web as a growing and important channel. In 2008, the smart people will see the web as the primary channel and that their old channel is now the supporting channel. Of course most will not see this and they will be lucky to find a life boat.
You think I exaggerate? Here is Chris Anderson on the “Music Industry” I quote him in full:
At a speech last week I was asked a question that has come up every day since the Radiohead (and Madonna, NIN, Prince, etc, etc) announcement: What’s going to happen to the music industry?
To which I answered “Which music industry?” You don’t mean just the one that sells CDs, do you? Because it’s a big mistake to equate the major labels and their plastic disc business with the industry as a whole. Indeed, when you stand back and look at all of music, things don’t look so bad at all.
Indeed, it appears that every single part of the music industry except the sale of compact discs is up.
And, if you include the iPod in the music industry, as I’d argue a fair-minded analysis would: UP, UP, UP! (+31% this year)
Only CDs are down (-18%). They’re around 60% of the industry not including the MP3 players, but just around 25% if you do include them.
So the problem with the music labels is not that music is an industry in decline, but that they have a too-narrow view of what business they’re in. Madonna’s switch from a label to a concert promoter should be a clue. This quote from an excellent article (it’s worth reading it all) in Entertainment Weekly says it all:
”Soon a lot of these companies won’t define themselves as record companies,” says Steve Greenberg, the former head of Columbia Records who now runs the independent record company S-Curve. ”They’ll define themselves as artist development companies. If you’re involved in an entire career with an artist, then everyone’s interests can be aligned.”
I think most music will soon be free, as artists give away the product as marketing for their performances and licensing, and as a celebrity accelerant that creates more opportunities to make money than just from the sale of a record.
And for those who say that this avenue is only available to artists at the head of the curve, such as Madonna and Radiohead, I’d point out that the other group poorly served by the labels are those at the bottom of the curve, the many thousands of bands who fall below the radar of the hit-driven majors. I’d argue that they, too, have nothing to lose by letting their music go free, nothing to lose but the prospect of becoming indentured to companies stuck in last century’s model of monetizing music.
Most people see TV and Radio like the people who make CD’s. All the forces that are turning the music industry upside down are coming to TV and Radio - for after all - a video and an audio file are the same as music - they are in reality all digital now.
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