Microsoft spins off social networking site

Back in November 2003 I blogged about a social networking project within Microsoft Research called MyWallop. At the time, fuelled by what I call the first phase of social networking, I speculated that something like this could become an opt-in part of Windows, unleashing an extraordinary ability for people to create useful connections across all PC users. The social networking space has – for now – moved on to focus on the big succcess stories like MySpace, which are based on personal expression, social identity, and entertainment, rather than business or utilitarian links (a space which has not gone away and will return in a different guise). It turns out that Microsoft sat on the project for several years, then finally decided to spin it out, with the expectation that it would be able to do better outside Microsoft’s walls than within them. Given what’s happening with some of Microsoft’s other initiatives, a wise choice. Wallop has now raised $13 million in venture capital, and just released the product in beta, with the intent of taking it to a full release early next year.
Wallop has a significantly different business model to other social networking sites. They have decided to eschew advertising, despite the massive deal MySpace won with Google. Instead, they charge members for the ability to customize their personal space. The personal spaces in MySpace’s are very basic and difficult to personalize extensively. As other commentators have noted, Wallop’s positioning is closer to CyWorld, which has had massive success in South Korea and recently launched in the US. CyWorld enables members to personalize their spaces to mimic their own homes, or create fantasy rooms. However in Wallop, members can also make money – if visitors buy the entertainment or features they have selected to place on their site, Wallop takes just 30%, leaving the rest of the revenue to the member. The idea is that the space becomes a marketplace for a wide range of digital expression, across music, avatars, art, animation, and more. Significantly, the entire site was developed in Flash, which enables Flash developers to create and sell artifacts within the site. In short, Wallop is a very interesting experiment to see whether people will both want to build networks in this environment, and spend money on content there. I think it will do at least fairly well, as it represents a real alternative to the existing social networking sites, but the critical issue here is scale. How well it does will significantly impact which way the social networking space evolves from here, as companies uncover what business models work or don’t work, and copy and refine the ones that do well.

Giving structure to citizen journalism

Jay Rosen has just announced that Reuters is giving $100,000 to NewAssignment.Net, which provides a more structured model for open source journalism, bringing together amateur and professional media creators. The money will be applied to hiring a full-time editor for the site. Jay gives some background to why Reuters is choosing to support this project:

Part of the background to the gift is a speech given March 2nd 2006 by Reuters CEO Tom Glocer to the Online Publishing Association. It was called “The Two-Way Pipe.” Glocer said the news industry “faces a profound challenge from home-created content-– everything from blogging and citizen journalism to video mash-ups.”
In 2005 he and his colleagues were worried about a shift in power they saw coming, but “it was about the consumer as editor,” Glocer said. “You get the news you want when you want it, either pulled by something like an RSS feed or a Tivo box or pushed by the media company.” This was a legitimate demand. And while companies like his are still catching up with that demand “our audiences have already moved on-– now they are consuming, creating, sharing and publishing.” Consumers as producers! That’s a power shift more confounding than the explosion of choice.
His puzzle: “If users want to be both author and editor, and technology is enabling this, what will be the role of the media company in the second decade of this century?” As Scott Karp pointed out (his blog is about the next era in publishing) Glocer’s answers to that question weren’t very revolutionary.
But some of his observations were keen. “On the day the Tsunami struck, Reuters had 2,300 journalists positioned around the world, mercifully none were on those beaches,” he said. “On that fateful day we also had 1,000 stringers around the globe – but none of them were there either.” The only way to get the story was from amateurs to whom the tools of media production had been re-distributed. His conclusion: “You have to be open to both amateur and professional to tell the story completely.”

NewAssignment.Net is explicitly joining traditional and social media in creating a “pro-am”, or professional-amateur model. For example, amateurs can collectively be given fact-checking tasks, or issues identified by amateurs can be passed on to professional journalists. For a long time I’ve believed that what is happening and will happen is a merging and integration of traditional mass media and emergent social media. In our Future of Media Report, we explicitly discussed how the “professionalism” of traditional media both provides standards and expectations, and is also a limiting box. NewAssignment.Net looks like a particularly promising model, though the details are not yet clear. However irrespective of how successful it is, the space in which it is playing, of bringing together the resources and capabilities of amateurs and professionals, is where much of the action will be moving forward in the world of media.

A manifesto for the newspaper industry

Tom Mohr, formerly president of Knight-Ridder Digital before its sale in June, has just published Winning Online – A Manifesto, proposing that the US newspaper industry should merge into a single industry-wide network, at least for its digital assets. He suggests that there is $4 billion of additional revenue to be gained by 2010, primarily by gaining targetted advertising. Part of Tom’s argument starts from the fact that in the US market, all but a few newspapers are local. It is important to note that there are very different dynamics in just about every other country in the world, where the newspaper markets are dominated by national players, so this is a particularly US view. Other key aspects of his case are the combined power of the newspapers’ advertising salesforces, and the negotiating power they have collectively, for example being able to withhold their content from the content aggregators such as Yahoo!. However Tom’s last point is that this collective work will take leadership. Indeed. In a network economy, leadership is required to show the potential of collaboration, and to bring participants together to create and share collective value. Having closely studied similar situations across many industries (for example FXall, RosettaNet, XBRL, CPFR), I simply do not believe that the industry structure or the participants in the US newspaper industry will allow this plan to make any headway. Reflecting on Tom’s piece, Don Dodge thinks that newspapers and magazines will die as soon as their current readers die. No way. E-paper will revitalize them in a new form. Don is in a minority of people who are happy to read news and entertainment sitting in front of a screen or on a portable device. Once the current print publications are digital, they will have a new lease of life.

The gradual rise of music collaborative filtering

A piece just out in the New York Times covers the current array of music collaborative filtering services (though it doesn’t call them that), including Pandora and Last.FM. I’ve written about these numerous times in my books and blog, including my initial thoughts on discovering Last.FM in 2003 (still love it!) and http://www.rossdawsonblog.com/weblog/archives/2006/01/collaborative_f.html”>a comparison between Last.FM and Pandora. The article refers to a report by Gartner that predicts that by 2010, 25% of online music sales will be driven by collaborative filtering engines. That’s a high figure, given that social networks and personal recommendations will always be at the heart of individual musical discovery, but I do agree that much of the way new music will become visible will be through these kinds of tools. To review, the concept of “collaborative filtering” is that we collaborate to filter the virtually infinite possibilities we face. This is largely done through tools that compare our tastes with those of others, so we can benefit from what people with similar taste to us have discovered. The magic of this is that it becomes far easier to find what we like (be it entertainment, information, or anything else) in a world of infinite choice. One of the most important impacts of technology has been to uncover creative talent, since access to either high-quality production or distribution is no longer a barrier. This means we have far more entertainment choices than ever before. The growth of the “long tail” is vastly enabled by software that provides recommendations for things that we love, that we would never find otherwise. These collaborative filtering services are fundamental to the way the future media landscape will unfold. Progress on these for the last decade has been slower than I would have hoped, but it is picking up, and the promise is there for all of us to find far more music that we love.

Yet more on the future of PR

This week I was interviewed by Nicholas Scibetta, Global Director of Ketchum’s Communications & Media Strategy Network, on The New Media Transformation, looking at the implications for the PR industry. The interview is here. Below is an excerpt from the interview:
NS: What is the future of media and what is the role of both new and traditional media in PR programs, given the current media landscape?
RD: Mass media will not die — what we are seeing emerge is a continuous spectrum from traditional mass media through to small community-based conversations. For any particular client or campaign, PR professionals will have to consider where across this spectrum of media they should be investing energy to achieve results. In some cases, accessing only traditional media will be appropriate, while in others, new-media channels will be the primary target. Usually these will be complementary, especially given that traditional media increasingly takes its cues from key bloggers, and their stories can have little impact if they do not generate a discussion among bloggers.
Newspapers and business magazines, in particular, are actively looking for story ideas from bloggers, not least because it means those stories are more likely to get attention. Anecdotally, major bloggers are often pestered by mainstream journalists to link to their stories. A few high-profile bloggers linking to a journalist’s article means that it will get far more attention. Related to this is the reality that it is not just advertising campaigns that are now measurable and accountable, but also journalists, whose readership is now often directly measurable. Journalists whose articles are not read won’t have a job, and those that get many readers will quickly rise.
Newspapers and bloggers are now competing for scoops. A similar dynamic will soon emerge in the video landscape. The television networks are now experimenting with putting selected programs online, advertising slots and all. This makes sense, as it can only generate additional viewers, and value for their advertising. At that point, the number of viewers will be strongly related to how many bloggers link to the program, or people endorse it on popular video sites, such as YouTube.
NS: What impact do social-networking sites like MySpace and Facebook have on the media and what does it mean for PR professionals?
RD: Advertisers are seeking to reach young people who no longer consume traditional media. They can now do that by positioning themselves at the interstices of their social relationships – for example in social-networking sites. PR practitioners must be enormously careful in this space. Advertising is an overt message, so can be tolerated. Seeking to influence without being seen in the absence of disclosure is more likely to have a negative than positive impact. This means that PR practitioners need their activities in social-networking spaces to be entirely visible and clear, with the clients’ interests evident. For example, if people are rewarded to endorse a product or service, that should be disclosed. There are many possible effective PR activities in social-networking spaces. Complete transparency in these activities must be the guiding principle.

Will the 1% rule change?

I was recently interviewed by Mediasnackers, a neat site that focuses on how young people consume and create media. The interview, which is on the Mediasnackers site, covers a number of interesting themes, such as power shifting to the edge and edgeio, user generated content, and the shift by Gen Y to heuristic learning styles that Ross Gibson of UTS pointed out at the Future of Media Summit. I was asked about the 1% rule, which, based on research on YouTube, Wikipedia, and other sites, suggests that approximately 1% of a site’s visitors contribute content, and 10% interact in some form with the content. For those old enough to remember bulletin board systems (BBS), the rule of thumb used to be a “lurker” to participant ratio of 1:10. However there are now far more options to consume content, and clearly video and other multimedia content takes more effort to create than text comments. Undoubtedly, as generations shift a far larger proportion of people will create online content. In the US over half of teens have created and posted online content of some form. Yet it’s also important to note that 18% of American over 65s have also created content, so the gap may not be as big as people tend to think. The proliferation of online content sites is likely to keep pace with growth in content creation, leaving the 1% rule a good rule of thumb, especially for multimedia content.

Marshall McLuhan and the laws of the media

I have been a long-time fan of Marshall McLuhan. Some of his well-known insights and aphorisms are immensely powerful. It is profoundly true that media are extensions of man; they extend our senses to take us to distant places and perspectives. McLuhan’s best known tenet, the medium is the message, is something that we all implicity understand in our media-rich world, though we rarely express it. When I first read The Medium is the Massage, which came out in 1967, it looked to me almost exactly like the bold typographical style and layout that Wired magazine was thought to have pioneered in the late 1990s. McLuhan had been there three decades earlier, and he was acknowledged as the “patron saint” of the magazine.. His influence has been profound, but now 26 years after his death, his thinking is embedded into the way we think rather than being broadly acknowledged.
While I’m not a big reader of biographies, I have just finished reading Marshall McLuhan: The Medium and the Messenger , by Philip Marchand, who did an outstanding job at capturing the life and whimsy of the man. One theme that comes across very strongly through the book is how incoherent most of McLuhan’s speaking and writing was. This is not a surprise to those that have tried to get their heads around even some of McLuhan’s more mainstream work such as Understanding Media, however this seems to have been pervasive through almost all his work. The thing was McLuhan had no interest in being coherent or consistent – his approach was to spin off a million ideas and see which ones landed. Many of those that worked with him recognized both his genius, and that he was virtually crazy.
One episode that illustrates McLuhan’s extraordinary prescience is that in 1955, well before he became famous, he set up a company called Idea Consultants. One of their slogans was “A headache is a million-dollar idea trying to get born. Idea Consultants are obstetricians for these ideas.” The company never sold any ideas or got any work. However one of McLuhan’s often brillliant ideas at the time was to create a TV program that would select a business problem, build it into an interesting format, then offer a reward for the viewer who came up with the best approach. McLuhan thought that this would be far more likely to result in a good solution than hiring any group of consultants, however good they were. Today, this would be considered an innovative, pragmatic, and viable project. Maybe it will happen in the next few years. Fifty years ago, clearly the world was not quite ready for it.
One new thing I learned about in reading the book was what McLuhan called the Tetrads, or the “laws of the media”. it stirkes me that these “laws” are actually highly relevant to strategic analysis of any industry which is undergoing rapid change. I still have to dig up the original material to interpret it properly, but the following is my loose interpretation of McLuhan’s Tetrads.
1. Any innovative technology enhances or accelerates some of what existed before.
[Q: What does it enhance or accelerate?]
2. Any innovative technology erodes or renders obsolescent some of what existed before.
[Q: What does it erode or obselesce?]
3. Any innovative technology retrieves something that has become obsolescent.
[Q: What does it retrieve that has eroded or become obsolescent?]
4. Any innovative technology, when pushed to the limits of its potential, reverses or flips into something entirely new.
[Q: What does it reverse or flip into?]
McLuhan used the telegraph as an example. Again adapting his work:
1. The telegraph amplified the reach of events, and changed daily news to instaneous news.
2. The telegraph rendered opinion based, local broadsheets obsolescent as people sought faster, broader news.
3. The telegraph brought back group involvement and discussion around events, which had been fading.
4. The telegraph flipped from one-on-one communication into multi-point broadcast, and reversed the corporate hoarding of information.
I am a strong believer in strategic questions (as briefly illustrated in the Future of Media report). Asking the right question is most of the way to getting the right answer. The strategic questions raised by McLuhan, if applied effectively as part of a strategy process, can be immensely valuable in understanding how specific new technologies will change us, and the opportunities they create. I will play with these questions more around some current issues, and will share anything interesting here.

Future of Media Summit Partcipant Blog

Just to let readers know that the Future of Media Summit coverage and blog has moved over from this blog to the Future of Media Summit Participant Blog. This was created for blogging by all Sydney and San Francisco participants at the Future of Media Summit. It includes coverage of the event itself, the audience panels at the event, and discussion thereafter. This blog will continue to cover other topics on the future. As always, these are experiments, so no doubt later will morph into another form. Just email us if you’d like to participate in the new Future of Media blog.

Live videostream for the Future of Media Summit

The live videostream for the Future of Media Summit is now available for pre-registration. Just go to the registration page, then at the time of the event login to the videostream. The live conference videostream is available free to anyone who cares to join us…
Live videostream times (first 3:30 hours from Sydney; last 2 hours from Sydney and San Francisco)
Sydney: 19 July, 8:30am-2pm
San Francisco: 18 July, 3:30-9pm
New York: 18 July, 6:30pm-12
London: 18 July 11:30pm – 19 July 5am
Hope you can join us…

Launching the Future of Media Report 2006

From the start, a key part of the idea for the Future of Media Summit was to create some interesting content that would provide a basis for discussion at the event. Something that would help people think in a structured and productive about what’s really happening in the world of media. The Future of Media Report 2006 is NOW! officially launched.
The Summit is on next July 18/19, simultaneously in Sydney and San Framcisco. Get thee along! It will be a mighty fine occasion, with well over a 100 people in Sydney, nigh on 50 in San Francisco, and a whole bunch globally on the live videostream. Check the website in the next couple of days about the live videostream. There’ll also be some kind of “audience blogging” at the event, including people in all locations. If not, just read the report, and the event will leave a trail of participatory content behind it.
Some of the things you’ll find in the report:
Global media market highlights. In 32 years media will have doubled its share of the global economy. Newspaper revenue is stagnant, but television, driven by cable subscriptions, is growing healthily. The US is heavily overrepresented in the global media markets, boasting 42% of all revenue. However China’s media appetite is exploding.
Global media comparisons. Other countries are catching up to the US in online advertising, though classifieds is a particularly strong source of revenue growth in the US. Teens spend more total time with media than adults, but less time watching TV.
Emerging media relationships. The Washington Post far outstrips other major US newspapers in blog references per print copy, but still lags The Guardian. Almost half of all “mashups” are based on location. PhotoBucket outstrips the growth pace of MySpace.
Content creation and usage. Eighteen percent of Americans over 65 years old have created content on the Internet, showing it’s not just for teenagers. 37% of all blog posts are in Japanese, more than in English.
Media industry networks. Microsoft remains the company most central to global media alliances and joint ventures. Yahoo!, Apple, CBS, Viacom, and Sony Ericsson are among those that have become more central over the last five years.
The Future of Media Strategic Framework. A framework to pull together some of the many threads that make up the future of media, including the symbiosis of mainstream and social media, the consumer/ creator archetype, content, formats, revenue, distribution, globalization and localization, and intellectual property.
Five ideas transforming media. Key ideas include “time compression,” describing how people’s media consumption habits change when they get busier, and “infinite content,” about a world in which limitless media is available.
Media snippets. In 1892 there were 14 evening newspapers in London. Today there is just one. 36% of US high-school students believe that newspapers should get “government approval” before stories are published.
The main intent of the report is to build a conversation. So we do hope this sparksthoughts, comments, additions, disagreements, other stimulating stuff in this space.