A meeting of the minds

Rafat Ali and PaidContent.org are holding their first conference: The Economics of Social Media. I’ve been dying for Rafat to blow up the conference business and its tired conventions, as I’m sure he will. And this is a good and necessary topic. As he says:

If you read the post yesterday about Universal Music Group CEO calling the likes of YouTube and MySpace as “copyright infringers”, you know there’s a genuine need for a business dialog in a more rational environment. That’s what we hope the conference will provide. . . .

Our hope is that this will be the first conference focused on discussing the bigger business issues: what are the companies operating in the sector, what kinds are being started, how are big media, entertainment and information companies interacting and adopting social media in their businesses, what are business models evolving in various sub-sectors, and how is online marketing arms of big media using social media sites and services.

A few suggestions on what I think we need:

* We need to teach the incumbents that the economics of media are no longer all about direct revenue: “consumers” buying “their content.” That was nice for them while it lasted, but it’s over. In the post-scarcity, open media economy, you can gain greater advantage, I believe, by also recognizing indirect revenue and new economies of social scale: The “consumers” market your brand for you. They distribute your “product” for you. The “audience” now creates its content, often around yours. You have a new opportunity to build and maintain direct relationships with the public, around the middlemen who’ve dogged your lives. This can also build a valuable store of data and experience about the public and what they really want. It’s a great new era. Only the old guys can’t see the opportunities; all they see is decline and fear. So we need to demonstrate to them what is possible.

So I would love to see such a conference pull together success stories and research demonstrating just how people are beginning to make money in this new world, even if they don’t realize it. NBC just didn’t see, for example, that the “theft” of its Saturday Night Live segment was the greatest gift the show could have had; it brought them audience — and thus ad revenue — they never would have gotten otherwise and will not get from still trying to spend marketing dollars to bring “audience” to their addresses and channels. I want to see someone model that business, as the old guys say, and a dozen more.

* These incumbents need to meet, face-to-face, the people who are taking their segments and songs and stories and recommending and promoting and distributing them up on the internet and, even more important, making them part of a larger act of creation (listen to On The Media about LonelyGirl15 and StarTrek and the impact of the people’s creation). They have to learn that these people aren’t the enemy. They are the people formerly known as their audience, who should be known now as their friends. These are the people who get their stuff seen and heard; these are the buzzmeisters of media. Treating them as enemies is cutting off your nose job to spite your face.

* They also need to hear from the people who really own the social space that is the internet. They need to understand that MySpace will fail if it becomes RupertsSpace. They need to hear what is evil and unwelcome: how you may not exploit us. And they need to hear what the people would like from the big guys — content, tools, bandwidth, space, and, yes, revenue. Once they realize that the people are friends, then they need to be generous with those friends and need to see that supporting their creativity and enthusiasm is a necessity. They need to understand that you can’t play in social media if you aren’t social.

* I do think we need to start looking at the explosion in venture capital. The one true impact of the much-fabled Web 2.0 is that companies don’t need as much money, which means that VCs can’t invest big buckets of bucks in a few plays, which means that lots of plays are getting money but it’s much harder for the good ones to stand out. That’s probably too far afield for a one-day conference.

* I would like to see Doc Searls and David Weinberger redefine the language of media, proposing words to replace the outmoded concepts of “consumer,” “audience,” “content,” “copyright”…

A few suggestions. Oh, and hold the next one in New York, willya?

  • Rafat

    Hey jeff
    thanks for these thoughts…and this will help flesh out a lot of issues.
    and oh, we’ll force you to come to LA for this one…you just wait :)

  • http://www.postreach.com hans

    I am looking forward to the conference also. Isnt it a bit ironic that you use LonelyGirl15 as an example, when that is content created by a PR agency?