Mainstream media merges with social media, including the rise of news aggregation
Alex Iskold and Richard McManus have a great piece on Read/ Write Web titled “Mainstream Media Usage of Web 2.0 Services is Increasing”. The article details how many major media organizations are regularly including “Digg this”, “Tag on del.icio.us,” and other “web 2.0” features that we’ve grown used to seeing on blogs. Alex says:
It appears that we are nearing a tipping point for the mass adoption of prominent web 2.0 services, like digg and del.icio.us. Endorsement by mainstream media opens these services up to millions of people who otherwise would either not know about them, or not take them seriously. So these are not just links, these are literally endorsements – or recognition of additional value for mainstream media.
Alex’s piece includes the following chart which shows web 2.0 functionality on major media sites.
As it happens, Future Exploration Network did a similar research exercise as part of a recent strategy project we did for a global news organization regarding the future of one of their online news sites. While we came up with some similar results to Alex, we also focused on personalization and aggregation functionality. At the moment the only major news sites that offer the ability for users to select their own news feeds from any media source are USA Today and Fox News. I haven’t yet had a chance to see the personalization features of MyTimes – the New York Times personalized news site, which is still under Beta. However I presume that it will offer this capability as well. Until very recently this open third-party aggregation functionality was only possibly from pure online properties, notably Yahoo! News, Netvibes, and of course any of a host of browser-based RSS aggregators. Big media content providers wanted to be just that – content providers. Now they are beginning to realize that providing quality content IN ADDITION to allowing readers to aggregate the best of the web creates a far stickier relationship. They can have the best of both worlds.
All of this reflects what I’ve written before about the symbiosis of mainstream media and social media – each learns from the other, integrates their best features, and feed off each other, until the boundaries between them are blurred beyond recognition.
Will micropayments transform publishing and the internet?
Micropayments on the internet have been a major topic of discussion since the mid-1990s. The internet supposedly creates a “liquid economy” in which products and services can flow easily around the planet. Yet a foundation for any business is the ability to get paid. Most transactions are done through credit cards, with Paypal a rising alternative, yet these systems are either not appropriate for very small payments, due to high transaction fees, or are not widespread enough. As such, it is almost impossible to charge for anything worth less than a few dollars. That’s fine for relatively expensive items such as books, but makes everyday content such as news, analysis, and humour very hard to charge for.
Bill Gates said today at the World Economic Forum at Davos that Microsoft is launching a points-based micropayments system. As Robert McLaws and Dean Collins have pointed out, similar systems have already been implemented by Microsoft for Xbox Live to enable simple online transactions. Not for the first time, a concept tested in the gaming community is now reaching the broader community. Mary Jo Foley harks back to Passport, Microsoft’s aborted attempted in 2001 to create a “digital wallet” amid a suite of online services. Today, as then, Microsoft’s power cuts two ways: many get exposed to Microsoft’s offerings and view them as credible, yet there is strong reticence at Microsoft’s power. The more limited scope of the current offering, where consumers buy a portfolio of points for $10 or $20, then spend them online, will make this a far more palatable offering.
As Donna Bogatin and a number of others have noted, a good micropayment system could disrupt Google’s Adwords program. Publisher may be able to make better money by charging tiny amounts to visitors to read their wares, than they can by putting up advertisements. There are two big uncertainties here. One is whether people will be prepared to pay even small amounts for content, now that an everything-is-free mentality has built up. Even if that turns out to be possible, Microsoft’s challenge is to become the de facto standard for online micropayments. In this domain more than most, network effects reign – online one micropayments systems is going to win. I believe that in the long run a micropayments system will be central to the internet. But I’m not convinced that either of the two conditions will be met for a good while. It is an idea whose time is coming, but may not yet be quite here. Publishing will definitely be transformed when micropayments are part of the general infrastructure, by creating a better business model to encourage high-quality, targetted content. Let’s see how this one pans out.
The magic of data visualization for everyone
Every day I am amazed afresh by the transformative power of the Web. Today I have discovered Many Eyes, a site hosted by IBM’s AlphaWorks. It combines open participation with a wonderful set of visualization tools. As such anyone can upload data sets, and then create sophisticated visual representations of those data sets, including scatterplots, tree maps, histograms, bubble diagrams, network maps and far more. Anyone can then either reuse the data sets, create new visualizations, add comments, or blog about the visualizations. To try it out I created in around one minute a bubble diagram representation of the frequency of words in the English language (See below for the non-interactive diagram – I won’t link directly, as I think generating the diagram is rather resource-intensive – have a look at the visualization gallery that includes it). In the first edition of my book Developing Knowledge-Based Client Relationships, which was published in 2000, I wrote about both data visualization and concept visualization (which uses visual representations to convey concepts rather than information). Both of these will be fundamental in a world in which we are swamped with information. While I haven’t spent as much time on visualization over the last years, I am shifting back towards this space, not least in facilatating clients in easily understanding and responding to strategic issues.
In Tim O’Reilly’s very interesting post about the site, he asked Martin Wattenberg and Fernanda Viegas, the people who conceived Many Eyes, about their inspiration. Fernanda calls it ‘“social data analysis,” in which “playful, social exploration of data leads to serious analysis”. Martin says that their goal is to “democratize” visualization. These are seriously valuable tools being provided for free to the community at large, where one person can use the tools for their own purposes, then have their ideas be taken up and developed further by others. I’ve long used AlphaWorks as one of the best and earliest examples of open innovation. It’s great to see them both offering this kind of value to the community, and have this fully integrated into their business models. Note that another social data visualization site, Swivel, launched before Many Eyes – it doesn’t appear to have as rich visual functionality, as Brian Dennis notes, but has far more data sets uploaded for people to play with.
Media and advertising will be everywhere
“Add this to the endangered species: blank spaces,” opens an article in today’s New York Times on pervasive advertising. Some of the innovative ways it mentions in how advertising is filling the blank spaces in our environment include:
* Eggs in supermarkets are being stamped with CBS TV show titles
* US Airways airsick bags and seatback trays
* Chinese food cartons promoting Continental Airways
* Examining table covers in doctor’s surgeries
* Video screens in taxis
* Turnstile gates
* Interactive floor displays that respond to people walking on them
* Toyota and Unilever projecting ads on building sides
* Dry cleaning bags
Absolutely. This is how we described Media is Everywhere, one of the five ideas transforming media that we included in our Future of Media Report 2006:
In the future everything from walls and table-tops to cereal packets and clothes will be screens and video will be everywhere. E-paper will add video and audio functionality to the formerly static pages of newspapers, and books will play commercials for the author’s latest novel. If the advertisers have their way, there will be no respite outside your front door.
Implications: Consumers may respond aggressively to the commercial invasion of public and private spaces. Devices such as TV-B-Gone will be used to shut off or shut out clutter.
Opportunities: Getting messages closer to consumers. For example, since 70-80% of purchasing decisions are made in-store, ads will be in shops and malls rather than on TV at home. Producers of quality video content will reap a bonanza.
Of course there will be pushback from consumers and local government. But within whatever boundaries are created, there will be more experimentation, especially in micro-spaces, which will gradually be filled with moving images. And in time we will grow to accept media and advertising being literally almost anywhere we turn our attention.
Trend map for 2007 and beyond
Given it’s festive season now, it’s probably time for a bit of fun. Nowandnext.com and Future Exploration Network have collaborated in producing a map of major trends for 2007 and beyond, across ten segments: society & culture, government & politics, work & business, media & communications, science & technology, food & drink, medicine & well-being, financial services, retail & leisure, and transport & automotive. Click on the map below to get the full pdf.
Trend Blend 2007+ map
Inspired by the subway map for a well-known city, the map shows some of the major trends in each of these segments, as well as the key intersections between the trends. Have a browse through to see some of the more interesting trends in the landscape. And please don’t take it too seriously…
As with most of our content, this is released on a Attribution-ShareAlike Creative Commons license, so if you disagree with the trends we’ve chosen or think you can improve on the map, please take it and run with it!
Our clients will get a glossy pinup of the map, and if there’s enough demand we’ll release a T-shirt….
Fabulous festive season to all!
The cost of online advertising sales and media globalization
The current issue of BRW, Australia’s largest business weekly magazine, has an interesting article on how technology is changing the Australian media landscape, which is in the throes of a major transition. The article quotes me on the issue of scale in online businesses in Australia, especially relating to the cost of advertising sales. To expand on this theme… one of the most transformational advances in the online world over the last years was the introduction of Google AdSense, which allows anyone with a website to get advertising revenue without any overheads. All you do is set up Google AdSense – or any of a number of its competitors – on your website, a trivial matter, and you can garner revenue commensurate with the audience you are reaching. Google sells advertising, aggregates it, and then allocates it across millions of websites. Thus the long tail is born. However, naturally Google prices the advertising to take a tidy profit for itself, with AdSense accounting for 39% of its revenue. Thus you can make substantially more money if you sell advertising directly, both because you are cutting out the middleman, and because you are able to sell extremely targetted advertising and sponsorship, tailored to be presented in the formats most relevant and desirable to the advertiser. The other side of this, of course, is that you then incur the cost of advertising sales. This is the primary logic behind the blog networks such as b5media, Gawker Media, and Weblogs Inc., in which you bring together a pool of blogs, spread the cost of advertising sales across the network, and get the full potentail advertising value from your sites.
The interesting piece comes when you are targetting local (read non-US) markets. I have written before about how it is a lot easier to target most non-English markets – for example French, Portuguese, Korean, and Japanese websites are each predominantly visited by readers from one country. Yet in the English-speaking space, you are immediately sucked into a global, yet US-centric, world of sites, links, and conversations. So what does an online media company based in, say, Australia, do to make good money? This is particularly pointed if the site is based on communities or social networks. There is certainly a viable – if relatively small – local market to be addressed (2006 Q2 online advertising in Australia was $A226, up 59.4% YOY). If the reach of the online media site is sufficient it can justify a direct salesforce for local advertising, and then serve AdSense or similar advertising to visitors from overseas. However in the grand scheme, only fairly large local operations can afford to do this. From these factors stem a whole array of strategic issues for local online media company operators, including local versus international target audience mix, costs of advertising for local and international visitors, and alliances for ad sales aggregation. The globalization of online media is an increasingly important and multi-faceted issue – I will write more on these topics later. I also hope to get the time to make some comments on recent events in the Australian media landscape, but with around 80 hours scheduled on airplanes over the next two weeks, nestled between an imposing set of client strategy workshops on diverse continents, a keynote, and other major deadlines, I’m not quite sure when I’ll get to it…
The greater the uncertainty, the greater the value of scenario planning
I have been applying scenario planning with clients for the last decade across a variety of industries and environments, including the future of financial services, technology, capital markets, risk management, construction, Internet, Asia, and far more. As I wrote back in 1998 in an article on scenario planning in portfolio and risk management, “The greater the degree of uncertainty and unpredictability, the greater the value of using multiple scenarios rather than forecasts.”
Knowledge@Wharton has just published an interesting discussion on Will a New Theory Help Firms to Manage in a ‘Flat’ World? (registration required), which looks at how executives can make sense of the rapidly changing environment. Paul Kleindorfer, a Wharton professor of operations and information management, made this very interesting comment:
In the past six months, there has been an upsurge in the number of companies coming through INSEAD [the European institute for management education] looking for assistance in scenario planning and scanning, or determining the signposts that suggest which scenario or scenarios should be the focus. Some companies — like Nestle, Unilever and Procter & Gamble — have been doing some scenario planning, but it’s been directed toward competition and technology. So these and other companies were completely blindsided by the recent increase in mineral oils — which was spurred by a law in Germany requiring power plants there to burn 10% bio-fuel by 2010 –and its impact on the vegetable oils and other ingredients they purchase for their products.
These sorts of commodity risks have escaped the scrutiny of many companies. Now they see a single government make a decision and it throws the profitability of an important ingredient out the window. So scenario planning and scanning, together with strategic modeling, intelligence and other issues, are really beginning to take on a much larger significance than before. It used to be about markets, technology and competitors, but now there’s a much richer texture.
Over the last decade I have certainly seen how the cycle of interest in scenario planning from major organizations has tracked the degree of perceived uncertainty in the business environment. The scope of the imponderable now, ranging from geopolitics to consumer behavior, overlaid on the necessity for long-term strategic thinking, means that scenario-based approaches are again on the rise. As suggested by Kleindorfer’s comments, I have seen many traditional consulting firms do scenario planning in such a reductionist manner that the scenarios cover only part of the scope of uncertainty, which entirely defeats the purpose. Today more than ever, there is massive value in engaging in scenario planning for long-term strategy development, in a way that really does uncover assumption and open out thinking across the organization.
Changing investor disclosure could transform the world of blogging
I have previously written about blogging and Regulation FD, which is a Securities and Exchange Commission (SEC) regulation that requires egalitarian dissemination of substantive news that could affect the share price. On the face of it, blogs and RSS are the perfect way to allow perfectly equal access to news by everyone. Yet this is not allowed by current SEC regulations. So Jonathan Schwartz, CEO of Sun Microsystems, has written to Christopher Cox, the chaiman of the SEC, to ask him to change the regulations to allow blogs and similar tools to be used for disclosure of substantive news. He says that previous conversations with Cox indicate this will be heard with receptive ears. Schwartz has of course disclosed this on this own blog, together with the full letter to Cox. If this change is approved, this will be an enormous boost for blogs, because it will mean investors and intermediaries will have to monitor the blogs of public company officers, and it will allow company directors to disclose substantive information on their blogs, in turn reducing the governance issues of corporate blogging. It makes all the sense in the world to use the power of RSS to disseminate information – this in fact would be a significant improvement to current mechanisms – so with just a tiny variation in the regulations on what are appropriate ways of disseminating corporate information, blogging could become quite a different world, with the development a thoroughly corporate segment of the blogosphere focused on egalitarian diffusion of investor information, and by-the-by, resulting a deeper and broader view of public company activities, and better informed investors.
Open innovation in collaborative filtering
Netflix has just announced a $1 million prize to whoever can improve the accuracy of their movie recommendation engine. To enable people to design an improved recommendation engine, they’ve provided their users’ ratings of 100 million movies, an extremely valuable database. This harkens back to Canadian gold mining company Goldcorp’s initiative, whereby they publicly released the geological data on their properties, and set up a competition with prizes for whoever could give them the best recommendations on where to dig for gold. Other open innovation initiatives such as Innocentive match a whole series of people looking for innovation, again providing pre-specified rewards for meeting specific parameters. Some note that the prize will mean a lot of people work for free, and it’s arguable that if you can indeed do better than the other competitors, you’ll be able to make more than $1 million from it commercially anyway. The size of the prize indicates the value in enhancing the accuracy of collaborative filtering, as I’ve written about many times before. If Netflix can more accurately recommend a movie to its customers, the more likely they will stay with Netflix. For companies with other business models, greater accuracy directly impacts sales and revenue. More and more energy and resources will be going into this space. Netflix has chosen to combine two of my passions – open innovation and collaborative filtering – so I will be very interested to see the results from this. Details of the prize are at netflixprize.com, which will provide a progress chart on how the competing teams are doing.
IBM drives open business
This is fantastic. IBM has announced that it will voluntarily publish its patent filings on the Internet. The upside is that it is taking the lead in creating a clearer, less confused, higher quality patent landscape. The (potential) downside is that it exposes its technology directions and strategy to its competitors as they develop rather than once they’re implemented. The great thing about this kind of leadership in creating openness and transparency in business is that it usually is a ratchet – once it becomes more open, it is very hard for it to go back. There are plenty of businesspeople who hate the idea of open business, and fight it in every aspect of how they do business. Too bad for them. We are shifting to a world of open business at a very tidy pace, and I for one think that’s a great thing. Embrace it, or have a tough and miserable time fighting the trend.
