Archive for the 'brand' Category

Why I dislike micropayments, don’t mind charity, but really have a better idea

A sure-fire way to think up a great idea for the future of the news is think about the fundamentals. “What’s news?” That’s a good place to start. Dave Winer gets at the fundamentals really well.

Let’s ignore most of the fundamental components of the news and focus on a couple: users and creators. Very roughly, those map to readers and writers. But “users” and “creators” emphasize that readers are active and don’t simply passively consume the news. Users want to re-purpose the news, get more out of it. We also don’t want to forget that creators aren’t just writers; they’re also photographers and editors.

inverted_jennyOne pretty important fact is that users and creators are all people. And people can trust one another. Obvious? One would think so, but there’s been a big corporate wall between them for decades now. The publication has overshadowed the writer. We viewed newspapers as the creators. Writers and photographers were faceless bylines most people ignored.

For example, we once trusted the New York Times to give us all the news that’s fit to print. It’s an awesome slogan, containing a slant rhyme and some serious alliteration, sure, but it now works much less well as a promise. I doubt its author ever intended it to be strictly accurate, but now it’s no where near artfully true anymore. Only the internet can make that promise now. It is the great disintermediator.

And so creators of news are re-emerging as real people to their users, who are also real people. That relationship, however attenuated, is a better place to locate trust. Let me put it another way: there’s greater potential trust in user-creator relationships than in reader-newspaper relationships. Humans are built to trust other humans, personally.

Now, we certainly also have relationships with groups. I’m no anthropologist, but it would certainly seem that, as humans, the concept of group identity runs deep. We can trust a person because he’s part of a club or a tribe. It’s a good thing, then, that appreciating user-creator bonds doesn’t demand that we deny the existence of reader-newspaper bonds. The internet may erode—but it doesn’t destroy—the concept of a traditional brand, anchored in a group of people who share a common purpose. The internet supplements, or unlocks, the concept of a personal brand.

Why all the fuss about brands and user-creator relationships and, ultimately, trust? Simply put, trust is an economic good. It’s worth something. It makes markets work more efficiently. As a trader might say, trust is positively accretive to value. This is not just about peace, love, and harmony. Trust creates value. Value gets monetized. Money pays journalists. Journalists save the world.

So if there’s trust to be created, there’s money to be earned. Trust is the foundation for a value proposition. All else equal, it stands to reason that users will pay more for the news in which they have more trust. If so, then it follows that users will pay more for the news they use based on a relationship with creators, in whom they can place more trust than they can in newspapers as brands.

Whew, so all that was wildly theoretical, blurry stuff. Before moving on to something more concrete, let’s sum it up. Shifting the news relationship from reader-newspaper to user-creator increases potential trust, an economic good, and unlocks value, which people may pay for. But even the strongest value proposition does not a business model equal.

So let’s move to the concrete: the business model. How do we monetize this theoretical value tucked away in user-creator relationships?

You do it with an idea I’ve been flogging the past couple weeks. You do it with Mitch Ratcliffe’s idea, in which users pay creators for “added convenience or increased interaction.” Note the elegant fit: increased interaction between one person and another is what fosters relationships and trust. Giving paying users otherwise exclusive twitter access to the creator could work. SMS updates could work, as could a permission only room on friendfeed. Even something as simple as a gold star on paying users’ comments—a symbol that they support the creator financially—would provide incentive for the creator to reply. Tiers of stars—bronze, silver, gold—are possible too.

There’s a social network lurking not too far below the surface. Because we’re in the business of fostering trust, transparency is paramount. So this social network would do best to require real identities. Users would have to be clear about whom they support, and creators would have to be clear about who supports them. Both users and creators would have personal pages of their own, identifying whom they support and who supports them and what dollar levels are being exchanged for what levels of interaction. This way, creators would have the ability to avoid potentially conflicted supporters. (Of course, a person could be both a user of some news and a creator of other news, paying for some and receiving too.)

Paying users of different authors would eventually form their own communities, if creators nurtured them well in the context of a supportive information architecture within the social network. Done right, membership in a community, which could suggest and debate tips for the creator, would represent its own value proposition for which users would be willing to pay up. Creators could have multiple communities, populated by groups of users characterized by different interests, areas or expertise, or even locations.

Creators would set their own prices, reaching their own equilibria between cost and numbers of paying users. Users would tend to pay less to a creator who offered less-value-added interaction by ignoring more questions and comments. But there would tend to be more users willing to pay a smaller amount than a larger amount. Users and creators would have to think about their elasticities of supply and demand. Over time, individual users and creators will find a balance that strikes her fancy. On the one hand, some creators might prefer a smaller set of users who pay more money and enjoy more interaction. Other creators, concerned about possible undue influence, might prefer a larger set of users who pay less money for a thinner relationship. And on the other hand, some users might prefer to be among a small community with better access or thicker relationships to the creator, while other users might prefer spreading themselves around and having thinner relationships with more creators. I don’t see any obvious reasons why a basically unfettered market wouldn’t work in this case.

Note that this represents an end-run around the problem that news is an experience good—you don’t know the value of an article till you read it. (New is not like buying a pair of pants.) This solves the problem that news itself is often nearly worthless the day after its published—yesterday’s news is today’s fishwrap. (It’s not like buying a song from iTunes. Also, ed. note: please, please, please follow that link to Doc Searls. The VRM parallels are clear and profound.) Finally, this also solves the problem that any given news article has myriad relevant substitutes—articles about the very same topic, event, or person and articles about equally interesting topics, events, or persons. (News is not like the Inverted Jenny. Yay philately!)

As with Kachingle, recently blogged by Steve Outing, this kind of freemium news doesn’t have to be the entire solution. It’s certainly compatible with advertising, though another feature might be a lack of it, just as it’s compatible with charity.

The point is that this idea and the business model on top of it are inspired by deeply human phenomona. Personal interaction and trust are constitutive of what it means to be human. They’re a large part of what makes the world go around generally, and we should look to them to save the news too. The right tools and insights can help right this airship called journalism.

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News Is an Experiential Good; Or, Why it’s not like buying a pair of pants

When you buy a pair of pants, you try them on first. You want to make sure they fit. So clothing stores give up scarce retail space to enclose little spaces that are no good for displaying their trendy threads. They’re called dressing rooms, of course. If there were a store that rejected the idea that we should be able to try on our pants before we buy them, we’d reject the store. We’d protest that we’re worried about wasting our money on pants that we don’t like, and we’d threaten to go elsewhere. “Sizes and cuts and feels are too hard to predict,” we’d complain. “I really like your Sevens, but I’m not sure I’ll love them. What if I my hips are too big?”

One really seriously unfortunate fact about the news is you can’t very well try on an article before you read it. Sure, you can read the teaser, the first paragraph, or the pull quotes. Maybe there’s a cute sidebar or attractive graphics with catchy captions. But you don’t really know whether you and the article will make a great match till after you’ve already read the thing.

This is an age-old case study in brands. That’s why every issue of the New Yorker or the Economist or Cosmo or Men’s Health or Maximall seem vaguely, surreally the same, issue after issue, cover after cover, or cartoon after cartoon. High brow or low—the economics are the same. It’s their way of informing their reader that reading the last issue is a little bit like trying the new issue on for size. If you liked our work before, you’ll like it again. It’s different, but it’s really the same.

That’s one reason why Steve Brill’s “secret plan to save the New York Times and journalism itself” is flawed. I don’t have the resources to offer a top-to-bottom critique, so I’ll focus on one point. One the one hand, “All online articles will cost 10 cents each to read in full, with simple, one-step purchases powered by an I-Tunes-like Journalism infrastructure.” And on the other, “There would be a five cent charge to forward an article to someone else. Paying customers would get a license to do that” when they set up their accounts.

If the pants analogy suggests that it’s hard to charge for content before the consumer experiences it, what does it say about paying for it after? That’s essentially what this recommendation feature would be, after all. And I think it’s far from obviously crazy.

Maybe many people would be willing to pay five cents to forward the full text of an article to a pal. But it’s important to remember that what you’re doing when you recommend an article to a buddy. You’re trying it on, testing it out. You’re decreasing your pal’s risk that he’ll read the article and conclude he wasted his time. In short, you’re adding value, helping both the publisher and presumably your pal too.

This is of course ultimately why people are so hot to trot about linking, curating, aggregating, filtering, etc. It’s the economics of attention in a world of blooming, buzzing, atomized media. (UPDATE: It’s “superdistribution.”) So it would be awesome if a newspaper could get people to pay in order to add value to their content. But to the extent that charging for the ability to make recommendations will actually disincentivize them from adding that value, there’s an important bit of cost-benefit analysis to do.

Of course, people could still recommend the article without paying the five-cent fee, leaving their pals to sign up and pay ten cents if they’re not already customers, but I wonder whether that wouldn’t turn out to seem just rude in light of the fact that you and your pal probably have basically the same purchasing power with respect to five- or ten-cent articles.

Finally, I’ll repeat that this is why I’m so bullish on the proposition that journalists need to find in-demand scarce goods and services whose value is relatively easily quantified before the point of purchase. This is what I was thinking about in my recent post “Freemium News,” which was itself a reaction to Mitch Ratcliffe’s excellent thoughts on “the economics of great journalism.” My sense is that forwarding articles for free might be the kind of discrete, non-experiential feature for which someone might be willing to pay a flat upfront fee.

Whoops! CJR lost (ignored?) my comment on “Music Lessons”

So I’ll post it here, pointing to the piece by Alissa Quart, who asks, “Could one ailing media industry—music—teach another ailing media industry—journalism—a thing or two about survival?” Check it out.

My comment?

Readers now care deeply about the biographies of the people who produce their news, writing or talking or what-have-you. But why? And how to convice journalists who want so badly to get it?

I think the answer lies in trust. I think trust is the general concept and can explain why the “Unbiased Media ideal” worked in the departing era and why the “premodern storytelling mode” will work the arriving one.

It is largely the story of Too Much Information, which is itself a chapter of the digital democratization of the printing press and a chapter of essentially free access to the internet. It is now orders of magnitude easier to produce and to consume the news, in other words. Interaction is cheap, even nearly free, between perfect strangers continents apart, and fast. More and more, trust just happens differently.

This explanation is nothing new. Prominent writers have been talking about these inside-out, upside-down profound shifts in media since many students at the j-school were in the fifth grade.

So what does “cheap interaction” promise? Instead of rewriting what others have already said (because links are free and clicks are convenient), let me point the way to Umair Haque on the erosion of brands.

Extra credit to the brave journalist who groks the flipping of attention from relatively abundant to relatively scarce (see the ppt).

This isn’t a tweak to the old system. This doesn’t call for a Friday meeting to develop a new strategy. This isn’t a call for a pretty new website or flashy widget. This simply a new business, a new industry, a new world; this is a return to first principles of old.

So what is the news? It’s producers, who write or share the news, and consumers, who read the news. They are be largely the same people; they must trust one another. The news requires sources. The news is stories about people and organizations, about topics or beats, and about events. The news is opinion, and the news is fact. The news is new—sometimes so new nowadays that it can happen in real- or near-real time and can thus morph into a conversation.

So, yes, write about journalists ripping a page from musicians’ script, if you like. But mightn’t it be more worthwhile to write our own, pieced together from basic facts and laws like these?

I bet it would be fun.

The building blocks of news: topics and people too!

I’m glad Jeff Jarvis has returned with a vengeance to his blog. My suspicion is that he’s been saving up this New Building Block piece, making due with fun pointers to the serious topic while buried in his book.

Yesterday, he wrote about (one aspect of) a subject near and dear to my heart. The radical unbundling of the news. In a post titled “The building block of journalism is no longer the article,” Jarvis writes, “I think the new building block of journalism needs to be the topic.”

He’s only half-right, though. As I’ve said way too many times, in way too many ways, on this blog, the new architecture of news—its new elegant organization—is two-fold.

On the one hand, yes, topics are central. We’re talking ideas, brands, memes, beats, events, and more. On the other hand, however, PEOPLE ARE CRITICAL.

Consider these data points:

At the time, I linked to that post, called “Towns are hyperlocal social networks with data (people that is).” That bit of link bait caught his eye, and he excerpted a chunk of it in a follow-up post called “It’s about people” a few days later.

In fact, my post, called “Grokky Jarvis Has Something to Say about the News,” was about more than people. I wrote, “The bits of content must be contingent on the people they discuss. The people, and also the issues, who constitute the story, as it were, must be liberated from the confines of the article.”

Ouch, that syntax makes me cringe, but there it is nonetheless: the PEOPLE and the ISSUES.

See here, here, and here for the details. That’s networked news.

The Great Unbundling: A Reprise

This piece by Nick Carr, the author of the recently popular “Is Google Making Us Stupid?” in the Atlantic, is fantastic.

My summary: A print newspaper or magazine provides an array of content in one bundle. People buy the bundle, and advertisers pay to catch readers’ eyes as they thumb through the pages. But when a publication moves online, the bundle falls apart, and what’s left are just the stories.

This may no longer be revolutionary thought to anyone who knows that google is their new homepage, from which people enter their site laterally through searches. But that doesn’t mean it’s not the new gospel for digital content.

There’s only one problem with Carr’s argument, though. By focusing on the economics of production, I don’t think its observation of unbundling goes far enough. Looked at another way—from the economics of consumption and attention—not even stories are left. In actuality, there are just keywords entered into google searches. That’s increasingly how people find content, and in an age of abundance of content, finding it is what matters.

That’s where our under-wraps project comes into play. We formalize the notion of people finding content through simple abstractions of it. Fundamentally, from the user’s perspective, the value proposition lies with the keywords, or the persons of interest, not the piece of content, which is now largely commodified.

That’s why we think it’s a pretty big idea to shift the information architecture of the news away from focusing on documents and headlines and toward focusing on the newsmakers and tags. (What’s a newsmaker? A person, corporation, government body, etc. What’s a tag? A topic, a location, a brand, etc.)

The kicker is that, once content is distilled into a simpler information architecture like ours, we can do much more exciting things with it. We can extract much more interesting information from it, make much more valuable conclusions about it, and ultimately build a much more naturally social platform.

People will no longer have to manage their intake of news. Our web application will filter the flow of information based on their interests and the interests of their friends and trusted experts, allowing them to allocate their scarce attention most efficiently.

It comes down to this: Aggregating documents gets you something like Digg or Google News—great for attracting passive users who want to be spoon fed what’s important. But few users show up at Digg with a predetermined interest, and that predetermined interest is how google monetized search ads over display ads to bring yahoo to its knees. Aggregating documents make sense in a document-scarce world; aggregating the metadata of those documents makes sense in an attention-scarce world. When it comes to the news, newsmakers and tags comprise the crucially relevant metadata, which can be rendered in a rich, intuitive visualization.

Which isn’t to say that passive users who crave spoon-fed documents aren’t valuable. We can monetize those users too—by aggregating the interests of our active users and reverse-mapping them, so to speak, back onto a massive set of documents in order to find the most popular ones.

Pictures! to Accompany Words! about brands!

I won’t rehearse what I wrote before about brands and advertisers and content-producers and so forth. I just want to add a picture I’ve been sketching out in my head over the past few days.

Here’s roughly how the triangle of publishing-advertising-consumer, for instance, has worked and works now:

And here’s roughly how the triangle of publishing-advertising-consumer will come to look, to the extent that “advertising” and “consuming” are still relevant terms:

Other than the color of the magic sparkles—going from green to purple—what’s changed? Well, the direction of the arrows around them, of course!

Companies, says my interpretation of Haque, will be listening to consumers beliefs about their products. Consumers will have cause to air those beliefs, in a conversation among themselves, the publisher, and the company as well, because a publisher will “seed” that conversation and host it.

I don’t know how this will work beyond obvious examples of product reviews. But there are other possibilities that come to mind. What if an earnest politician paid an editorialist to start a conversation about some policy in order to elicit his constituents’ beliefs about it?

I may be pushing the limits of reasonability here, but what if a government paid journalists to write about its war-planning because it actually wanted its citizens’ opinions about it?

The point is to imagine a world in which it doesn’t pay to keep secrets. The point is to imagine a world in which, on the contrary, openness pays and listening pays because talking fails.

Blue-skying Brands; Plus, Summize Delivers Sensical UGC to Twitter

Traditionally advertisers’ job has been to talk about a promise of expected utility about their, or their clients’, goods and services. To do that, they’ve paid producers of content to attract readers, listeners, and viewers and get them to engage with advertising.

But now—for a whole mess of really interesting economic and social reasons, like cheap interaction and expensive attention—people think that listening is becoming more important that projecting. Advertisers, or their clients, are supposed to listen to their consumers, who in markets, networks, and communities , are collectively generating UGC, or “user generated context”—”the result of the complex, multilevel network effects that hapen when millions of consumers connect.”

Can content producers “seed” the conversational context to which advertisers are supposed to listen?

Consider a restaurant that once would have stuck slick ads in fancy magazines. Now the restaurant might pay a blogger to review the magazine and attract a lively customer-driven conversation comprising replies to the post and comments on it.

But wait! Doesn’t that represent a hopeless conflict of interest? Isn’t that just payola? Well, not if the restaurant is actually interested in listening—because they want to form their strategy around their customers’ beliefs. If they were engaging in payola, on the contrary, they would be trying to form their customers’ beliefs around their strategy. That’s projecting, or talking.

The idea is that restaurant welcomes a bitter review for the opportunity to draw out customer agreement (in which case it can learn what to change or improve) or, hopefully, provoke customer rebuke (in which case it can focus on new improvements).

Note that the money still flows from an advertiser (or its client, like a restaurant) to a producer of content. Content still flows from producers to consumers. This hasn’t changed.

But the thing that contains the “beliefs” about the brand used to flow from the advertiser to the consumer (via an ad); flowing in the opposite direction was engagement from consumer to advertiser. Now the thing that contains the beliefs about the brans flows from the consumer to the advertiser (via UGC); flowing in the opposite direction is now engagement from advertiser to consumer. This has reversed.

PS. This is more or less how you monetize twitter+summize.


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