Tag Archives: Hulu

Information may want to be free, but do we?

Posted on
6

There’s a bit of buzz going on right now about the release of Diaspora. If you’re not familiar with the name, it is essentially to Facebook what Linux is to Windows. That’s right, the collectivists are rising up again. Just as numerous articles about iTunes, Facebook, Apps, and other ‘walled gardens’have begun circulating through the media, the holdouts of a “free Web” are working hard to disrupt the corporate machine with a free offering.

The question is, this time, will the ‘free web’collectivists prevail. History is in their favor. However, we live in a very different time. The capitalists have made significant inroads and far more is at stake now that the Internet is recognized by money holders as an important revenue source and potential profit center.

So, do we want information to be free? Or would we prefer to pay for the convenience of walled gardens? Facebook has been reluctant to charge for membership even though 5¢ per user per month would have major impact on revenue. Yet nominal fees for Flip cameras and ‘good enough’technologies like MP3 have subverted higher quality by delivering more convenience. We’re all time crunched and often times good enough is truly good enough.

Different devices same dynamics.
For power users of the Internet,  ’free’is almost an expectation. Yet increasingly people outside this small subset are becoming more comfortable with forking over a nominal fee for a small application or bit of content. Sure you could find that article online somewhere, but for a few bucks its just easier to get an online subscription.

When we do this, however, we make a choice. Just as AT&T holds iPhone users captive and Blu Ray and HDVD fought it out for format dominance, so we become held fast to iTunes or Amazon. You might argue that one can always jump ship and abandon a standard by abandoning a device but often times you have to give up previous acquisitions based on proprietary formats. That can represent a significant investment.

By the same token, sticking steadfastly to open standards and avoiding the walled gardens omits us from the popular places and often leaves us chasing multiple formats and inter-device compatibility. Tech-headed hardcore collectivists will put in the time to smooth this out, but most of us won’t bother.

These are not new problems. They are the problems phone companies thrust upon their long-distance account holders 15 years ago and home video player owners pushed on people 25 years ago. Interestingly, in both cases a disruptive technology made the point moot as VOIP killed charge-for-distace telephony and is now eroding the need for a disc-playing video device in the home.

Today Hulu and YouTube and AppleTV and Netflix are all fighting to dominate the video-via-Internet market. This is the same battle as long distance telephone and home video players, just a different base technology.

There is another important difference too. We live in a mature post-mass-media world now. This would indicate that a single dominant player is less likely to emerge as market dynamics favor niche audiences and niche products most of the time.

Generation gap.
In my mind the single greatest ideological collision of our time is that of the open-source, everything-free collectivists who pioneered the web and the capitalists who have funded its explosive growth and much of its innovation. Squarely a Gen Xer, I grew up with a free internet and have that expectation. Millennials and the generation following them (now in grade school) are growing up with $2 apps and pay-for-content models. Where I am offended by the affront of having to pay for content, younger web users think nothing of this.

Sure, there will always be holdouts. You will always be able to get content for free from someone, somewhere. Even today anyone with bit torrent savvy can skip right by Netflix and Apple TV and download full length movies for free. This will always be a thorn in the capitalist’s side but now that so many others are comfortable using the Internet there’s plenty of available market share to profit on. Were I to put my money down now, I would say the capitalists have a growing advantage. Time and the aging of the Net Generation is on their side. The growing size of the non-power userbase who favor paying for convenience is also on their side. My suspicion is, just like Ning, Disapora will only see a little traction. Where Apache, MySQL and Linux are tools for the very collectivists who use them, social network software like Diaspora is meant for the non-poweruser who frankly wants to hang out with friends. Those friends have already chosen Facebook.

But…
It is worth sounding a not of caution to the capitalists though. If you build a walled garden, it needs to be Eden. AOL learned this the hard way. They built easy and convenient but blocked out too much. As more and more people began to hear that there was ‘more’outside the garden they got curious and began to climb over the wall. Facebook works very hard to keep up with people’s needs. Adding Places to FB immediately kicked Foursquare and Gowalla down a notch. Why? Because 500MM people use FB. If the non-poweruser wants to be where everyone is, Facebook has the advantage right now.

The second challenge is privacy. While people are increasingly willing to participate in capitalism online, they are sensitive about their information. One significant slip there could have a heavy cost as trust online is hard to earn. Even more interestingly, the 140-character nature of our reading habits fuels this fire. We see the headlines of bank hacks and privacy violations and often don’t read the articles. The net effect is things can feel less secure than they really are. There’s also a strong collectivist set within the mainstream locations like Facebook. These are the people who post Facebook’s quiet privacy policy changes for the world to see. Inherently leery of the capitalists, they are self-appointed agents of the masses and work hard to subvert the efforts of capitalists from within their own walled gardens.

The third challenge is innovation outside the capitalist model. Disruptive technologies have tended to come from those who do not buy into the capitalist philosophy. Apache and Linux were swipes against what power users saw an inferior technologies that were overpriced. So these developers banded together and turned the marketplace upside down. Now the “LAMP stack” is the favored, open format for the web. Perhaps something similar is being worked on now that will shatter the proprietary iTunes and Amazon formats.

I’m watching Apple begin to behave a little less like the underdog and a little more like Microsoft used to be accused of. You know, monopolistic. Google is doing the same. My guess is, in some cellar somewhere someone with no greater agenda than sticking it to the Man is developing something that will eventually chip away at the capitalists again. If enough people get wind of this – and that is increasingly easy in our interconnected age – it might make a difference.

The future favors the capitalists and the trend right now is to choose convenience over freedom, but it is a far more fragile advantage than in the past and trends online shift quickly.

Only The News That’s Fit to Publish

Posted on
5

It only takes a brief perusal of the assorted headlines, blog postings and tweets, to see just how much the news industry is struggling with disruptive technologies today.

In pondering all this, I am struck by the relationship between the inherent intervals of various technologies and the ‘newsiness’of the news. ‘Bringing you breaking news’has been a long-time value proposition of the news industry but I’m not so sure it can survive.

By way of example, my Twitter feed is truly real-time news. It updates by the second. So fast in fact that I can’t keep up. In many ways its my personally-defined CNN news ticker (even if many of the headlines are obtuse and the TInyURL links blind).

Facebook (as a stand-in for traditional social networks) seems to run at an update interval of ‘a few times a day’. It’s news is hyper-local to me – not geographically but socially. And let’s face it, in this day and age, geography matters less and less in terms of the people we feel connected to.

Blogging seems to walk the line between ‘a few times a day’to ‘once daily’. The content tends to be longer and better reasoned. Blog topics can also be rather granular so I get a very concrentrated dose of a topic I am interested in.  In short, blog posts have a greater opportunity to be of higher quality than a tweet or even a Facebook update. I may not know the bloggers I follow (so they’re not as ‘local’) but I have chosen them because I like the way they think and write about the topics I am interested in. Often they also feel more ‘authentic’because I assume (often incorrectly) that they are pro-am writers and not salaried corporate suits.

So in comparison to traditional news sources, Twitter is faster, Facebook is more ‘local’and blogs have a higher perceived authenticity alongside longer, meatier content.

So what’s left for the commercial news industry to sell that these other guys don’t seem to be better at?

Here I’d point to the YouTube v. Hulu slugfest. While YouTube got a lot of hype (and market valuation) Hulu has actually made money, attracted advertising revenue and demonstrated a longer-term value proposition by focusing on professional calibre content.

Where YouTube saw the Internet as a social technology with media distribution capabilities, Hulu seems to see the Internet as a distribution system with social capabilities. This isn’t symantics, it’s carving out a competitive advantage.

What would happen if the news industry focused less on ‘breaking news’and more on ‘quality news narratives’? What if the news industry gave up reliance on the audience for fast, endless soundbytes and headlines and focused on reasoned discussion, in-depth analysis and professionally-assembled details. These are all things professional news companies should be able to do better than the UGC set.

If you think about it, a lot of what defines today’s professional news leaders are the people offering the editorial. Think Fox news. Think the op-ed section of the Times. While neither Fox nor the Times can be as fast as twitter or as local as Facebook or as authentic and granularly focused on single topics as the pro-am bloggers I like, it can deliver a production quality and talent base these other media can’t. Plus they’ve got the credentials to get into the right rooms with the right people to tell many types of stories – political, business, celebrity – first-hand.

When Gutenberg invented movable type it enabled anyone to produce text. That didn’t mean everyone’s text was worth reading, only that it could be made and distributed. Music production software has done the same for music. So have Podcasting, camcorders, blogging software, Twitter, etc.

All of these technologies enable anyone to publish. What they don’t do is assure quality. Quite the contrary, they bury us all in a lot of crappy content. For every piece that goes viral, most go nowhere. And a lot of the ‘viral’stuff is a blip on our radar that vanishes as quickly as it appears offering 15 minutes of fame and then a return to unpaid obscurity.

A professional news provider could still build its reputation on having the best imagery, the best produced video, the most reasoned, well-researched and articulated stories all presented by charismatic talent that resonates with an audience. This news provider would not replace my Twitter stream or my Facebook friends or my blog surfing, but it would be something that, when I got tired of the banality of everyday content, would be stimulating and remarkable.

Social media is a great equalizer – for good and bad. It is highly disruptive and the reality is, the available marketshare for professional news may shrink overall (just like most markets as they mature and consolidate). Some outfits will simply lose and disappear. Others will have to rethink their infrastructure from the ground up if they’re to keep the lights on and their employees paid. But among the millions churning out user generated content something professionally made and remarkable will always find an audience.

Despite our culture’s infatuation with all things user-generated, quality content will always provide value to a well-defined audience whose needs are being met. The trick then is to build a business that can efficiently create that quality content by leveraging all the tools available. Doing this may be ugly work, but such is the nature of adaption.

‘All the news that’s fit to print’might still be a useful governing principle. The focus must change from ‘all’(volume and speed) to ‘fit’(quality and value) and not necessarily assume ‘print’.

Mistakes, Change, Trial & Error

Posted on
2

I have been reading a great book on the neuroscience behind decision making. I was reading that the brain likes to be right. It wants to predict outcomes. Dopamine secretion happens when events work according to the brain’s expectation (i.e. dopamine is a reward). The secretions stop or change when things don’t work as planned. This abrupt reduction in dopamine is experienced as a jarring change by the body. Here, the brain modifies its expectations to try and be right the next time (and to keep the dopamine flowing).

So it seems that the brain’s use of dopamine is tied to learning via trial and error. Mistakes, to the brain, are useful (and necessary) learning tools provided we choose to learn from them. In fact, this type of learning often gives rise to the ‘instinctual’reactions well-experience professionals make in athletics, combat, or emergencies.

In thinking about this idea of learning from mistakes, I couldn’t help being reminded of the ‘Now Not New‘ concept I organize many of my own business perspectives on.

In business terms, ‘Now Not New’is a revenue-centric outlook that leverages the trials and errors of those focusing on ‘new’to provide real solutions ‘now’. By my way of thinking, pioneers take big risks, probe the unknown, and most often fail. For some people the high-risk excitment of being on the bleeding edge is a great motivator.  Certainly our culture’s willingness to reward those people with hype and praise adds to the appeal.

For businesses, these pioneers provide great learning that can be refined and redirected with a higher probability of tangible success (see my earlier bit on inventions). In this sense, businesses focused on ‘Now Not New’may not get the first wave of buzz that pioneers attract, but they tend to make the money and build new business categories. Hulu is doing it now against YouTube. YouTube you’ll recall got a lot of hype and market valuation but still isn’t making anyone much money. Conversely, because it is making money Hulu is getting plenty of hype. Which, as an executive would you prefer?

Related, it seems that neurologically speaking unpredictable outcomes – either from mistakes or change beyond our control – are jarring. It’s no surprise then that human beings tend to dislike making mistakes or coping with change despite lip service otherwise.

Companies, by extension, also seem to prefer homeostasis. Yes, there are plenty of people and books and seminars preaching the embrace of change and the positive benefit of mistake making. But between the lines, what they’re selling is a means of ‘expecting the unexpected’which is in fact fighting the jarring feeling of mistakes and change and attempting to make it predictable.

Switching gears for a moment, in stories about wilderness survival, most tragedies stem from the endangered person’s refusal to acknowledge the change in their circumstances or to learn from a mistake once they’ve made it. They can’t let go of what was supposed to happen and won’t accept what is now happening. In this state of denial they become disoriented to the reality around them, make poor choices, and often pay the ultimate price.

Transferring this knowledge from the wilderness frontier to the business frontier: On the topic of expertise, it might make sense to be wary of anyone claiming to be an expert in an industry that hasn’t been around long. Expertise comes with experience which is an accumulation of a lot of trial and error. In businesses (and I’m thinking social media) that haven’t been around very long, it’s simply impossible to have made enough mistakes to be considered an expert at this nacent stage.

Second, we should admit when we’re lost, confused or uncomfortable. Denial in business leads to paying its own ultimate price. Once we acknowledge being lost, we can start looking for a way out.

Third, we should build mechanisms into our organizations that allow us to learn from mistakes.

Lastly, acknowledge and behave according to the fact that nothing is consistently predictable. This means setting up operational mechanisms to observe and asses at regular intervals. It also means thinking hard about how to adapt to change knowing that everyone in the company will be uncomfortable with it.

In mistakes, change and trial and error lie opportunities for business poised to see and solve for the problems of now which in turn will lead to growth and revenue (the dopamine of industry).