by Jon Husband
January 30, 2008 at 8:29 am · Filed under
2.0 Design Thinking, Artisanal Economy, Business Model, Change, Chris Anderson, Community, Culture, Economics, Emergent, Facebook, Long Tail, Relationships, Social Media, Social Networking, Social Objects, Trusted Space, Web 2.0, Web Advertising
A few days ago I wrote a post and linked to an Aspen Institute report titled The Rise of Collective Intelligence – Decentralized Co-Creation of Value as a New Paradigm of Commerce and Culture.
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 ?
David Gratton is the founder of the Donat Group, Project Opus and Mixxmaker. David recently wrote a post about why the digital packaging around music, especially as a social object, can and will be of value. Mainly, being able to search for, locate, aggregate and acquire various elements about a song or an artist that someone likes will help create meaning and in turn value.
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.
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Tags: Aspen Institute, Decentralized Co-creation of Value, Donat Group, Project Opus, Mixxmaker, Facebook
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by Jon Husband
January 26, 2008 at 11:02 pm · Filed under
Business Model, Change, Charles Handy, Cloud Computing, Conferences, Dead Paradigms, Economics, Emergent, Enterprise 2.0, Long Tail, Open Source, Relationships, Social Computing, Social Networking, User Revolution, Web 2.0, Wisdom of Crowds
Here below is an excerpt from and a link to a report just published by the recent Aspen Institute’s Communications and Society program.
In a previous post I mentioned a growing awareness of the impact of the interconnected digital infrastructure and digital natives on the Enterprise 2.0 market. The publication of this Aspen Institute report is to me just one more piece of evidence that it’s real and growing … and it’s a credible source (though not quite a tangible case study 
David Bollier reports from his OnTheCommons blog about "The Rise of Collective Intelligence: Decentralized Co-Creation of Value as a New Paradigm in Commerce and Culture” (pdf) published by the Aspen Institute.
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.
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The Rise Of Collective Intelligence
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.
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Tags: Collective intelligence, new business logic, new business models, ROII, Return On Investment in Interaction, cloud computing, co-creating value, decentralization, wirearchy, hierarchy
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by Paula Thornton
December 18, 2007 at 11:18 am · Filed under
2.0 Design Thinking, Long Tail, Social Networking, User Revolution, Web 2.0
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?
by Rob Paterson
October 29, 2007 at 9:15 am · Filed under
Blue Monster, Chris Anderson, Enterprise 2.0, Fox, Gaping Void, Hugh McLeod, Hulu.com, Long Tail, NBC, NPR, News Corporation, PBS, Public Media, Social Computing, Social Media, Social Objects, Web Advertising, Wired
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!
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(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:
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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.
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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.
- Concerts and merchandise: UP (+4%)
- Digital tracks: UP (+46%)
- Ringtones: UP (+86% last year, but probably just single-digit percent this year)
- Licensing for commercials, TV shows, movies and videogames: UP (Warner Music saw licensing grow by about $20 million over the past year)
- Even vinyl singles (think DJs): UP (more than doubled in the UK)
- 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.
