Posts about big

Breaking up is easy to do

Paid Content is reading the giant Lazard report urging the break-up of Time Warner so we don’t have to. Here’s The Times coverage. And Gawker quotes Michael Wolfe’s Vanity Fair column arguing that Time Warner doesn’t have a reason to exist.

In some sense, the best that people can say about Time Warner is it is somehow not like other companies–which are fundamentally about ownership and control. It’s a postmodern entity: the inevitable result of consolidation is that everything is connected in such a tortured and ham-handed way that nothing is quite connected….

No investor, man on the street, politician with his finger in the wind, or employee would tell you differently: Time Warner, along with all the other centralized, vertically integrated, horizontally organized, multi-platform-function media companies, is just too big. The idea of agglomeration without limit turned out not to be such a good one. A no-brainer bad one….

There may be nobody who actually believes in big media anymore.

And this, folks, is why I do not think that media consolidation is an evil ready to eat up the world. Media consolidation makes companies too big and too dumb and the marketplace will take care of them.

I can’t wait to get my proxy to vote on Icahn’s efforts to break up (AOL) Time Warner. I’ll vote yes.

Small TV

Atom Films is starting a studio to underwrite productions for online. Note that they’re not spending millions on each but thousands. Small is the new big.

Fuse lit

Diane Mermigas writes a good summary of the fuses lit under big, old media and how they’re burning down this year.

In truth, it all comes down to the caliber and vision of company management and leadership — something media and entertainment industries have in perilously short supply. In a quest to conquer the digital fast track, an aging ruling class is anointing their next-in-line top executives and their next-of-kin, few of which have the “right stuff” to reinvent these industries during the next several decades. While many will move their companies into the thick of a digital transition, few are skilled enough to ingeniously mine it.

That will require a new generation of graduates from the Steve Jobs, Bill Gates and Steven Spielberg school of mavericks and free-thinkers. It also will require a new standard for innovation and imagination, concepts that these weary industries have difficulty budgeting for much less mandating.

Can the incumbents do it? I’m not sure.

She goes on to give them their assignment. It’s very simple: Empower the consumer.

Companies will need to be thoughtful about reshaping industry economics and logistics according to the new rules of play.

The bottom line: they likely will make more money than they do today beckoning to the whims of emancipated consumers….

If the likes of Google (through search and other online analytics) and Apple (through portable devices) taught us anything in 2005 it is that empowering consumers is very good business….

…it looks like the “killer application” of new media is what the consumer wants, when they want it, where they want it.


‘The fans are dictating’

It’s internet-culture day at The Times. Below, I link to a story about the internet exploding TV. Shortly, I’ll have a post about the Times story on Amazon’s author blogs. And there’s also a story about the net and musicand, again, how the public is finally able to decide who the stars should be:

Even as the recording industry staggers through another year of declining sales over all, there are new signs that a democratization of music made possible by the Internet is shifting the industry’s balance of power.

Exploiting online message boards, music blogs and social networks, independent music companies are making big advances at the expense of the four global music conglomerates, whose established business model of blockbuster hits promoted through radio airplay now looks increasingly outdated….

In a world of broadband connections, 60-gigabyte MP3 players and custom playlists, consumers have perhaps more power than ever to indulge their curiosities beyond the music that is presented through the industry’s established outlets, primarily radio stations and MTV.

“Fans are dictating,” said John Janick, co-founder of Fueled by Ramen, the independent label in Tampa, Fla., whose roster includes underground acts like Panic! At the Disco and Cute Is What We Aim For. “It’s not as easy to shove something down people’s throats anymore and make them buy it. It’s not even that they are smarter; they just have everything at their fingertips. They can go find something that’s cool and different. They go tell people about it and it just starts spreading.”

There are several signs that as more consumers develop the habit of exploring music online they are drawn to other musical choices besides hitmakers at the top of the Billboard chart – a trend that suggests more of the independent labels’ repertory will find an audience.

On the Rhapsody subscription music service, for example, the 100 most popular artists account for only about 24 percent of the music that consumers chose to play from its catalog last month, said Tim Quirk, Rhapsody’s executive editor. In the brick-and-mortar world, he estimates, the 100 most popular acts might account for more than 48 percent of a mass retailer’s sales.

“It’s no longer about a big behemoth beaming something at a mass audience,” Mr. Quirk said. “It’s about a mass of niche audiences picking and selecting what they want at any given time.” …

But no factor is more significant than the Internet, which has shaken up industry sales patterns and, perhaps more important, upended the traditional hierarchy of outlets that can promote music. Buzz about an underground act can spread like a virus, allowing a band to capture national acclaim before it even has a recording contract, as was the case this year with Clap Your Hands Say Yeah, an indie rock band.

Is every star in the new world as big as the stars in the old world? No. But neither is the industry dependent on a blockbuster economy; success has new definitions and so does fame.

Small is the new big.

Who wants to own content?

I obnoxiously ask who wants to own content from the media-company perspective. That question is usually asked, of course, from the creator’s perspective. On-Demand Media, a good blog, asks it from the consumer’s perspective:

Bill Gates says that CDs and DVDs will be the last physical form of media. I’ll go further and say: soon consumers won’t even be caring about owning files….

What does owning media let you do? It lets you play what whenever you ‘own’, provided you have the right devices, the media is handy, etc.

Now what if someone came and offered you a way to carry on with your practice, i.e. to be able to play what you ‘own’ whenever you want, in perpetuity, without having to worry about downloading, synching, or copying files (or worrying about physical media, of course)?…

What counts is the practice, not the thing.

Yup, life is about verbs. Or at least the internet is. And media should be.

A truly open ad marketplace

Fred Wilson wants a transparent ad marketplace:

But there are some things that aren’t yet right about this market.

For one, there really isn’t true price transparency. And there isn’t true performance transparency….

And as I alluded to in the previous paragraph, it is not yet possible for any publisher to run any ad as long as the price and terms are acceptable to both parties. There are a few places where this happens in the online advertising market, like affiliate networks and paid search (sort of). But there are many more places where the advertisers and publishers are contained in walled gardens.

So, I believe that right now, we have a marketplace, but it’s a nascent marketplace.

The thing that gets me so excited, though, is that is so clear where all of this is headed.

Toward massive liquidity

Toward total price and performance transparency

And toward a completely open marketplace where anyone can run anyone’s ad campaign.

And in the process, we will build something that is easily a factor of 10 and maybe a factor of 100 of where we are today.

So, let’s make it happen.

Well, Amen. This is what I was pushing for starting in March with a proposal for an open-source ad call and there is movement in some quarters on this. We need:

1. Open-source metrics — measuring not just traffic but influence and more — with open reporting.

2. An open-source ad call so any advertiser can put together an ad hoc network of the best sites, so any publisher can join the best ad campaigns, so any network can extend reach with any sites for any campaigns.

3. An auction mechanism to match buyers and sellers.

4. The ability to layer on top of this analystics and trust networks (i.e., specifically approved sites that meet advertisers’ needs).

This will be the real Google slayer: an open, transparent, virtually frictionless marketplace where buyer and seller can find and deal with each other openly and where buyers get more value because of greater efficiency and sellers get more value because they sell more than just the words on their pages: They sell their influence, authority, relationships, trust.

Yes, let’s build it.

Local ain’t easy

Brad Feld invested in Judy’s Book, yet another effort to get people to submit reviews of local merchants and such. Fred Wilson concedes that the same issues folks like me raised with Riffs hold for Judy’s Book. Judy’s Book tries to encourage people to submit reviews by having them earn coffee cards and iPods — paying them, in other words. Paying for contributions is great. But it just indicates that it is otherwise difficult or impossible to get people to contribute content. And I’m not sure this will scale any better than previous efforts have.

I go to the North Jersey page and the questions I see are about earning those spiffs, not about good Mexican restaurants. And even if I did find those reviews, I don’t know who these people are; I don’t know whether to trust their taste. So such efforts have two problems: Getting enough contributions — which is a lot of contributions, since you’ll want to cover most vendors in most areas — and then worrying about the quality (aka trust) of those contributions.

Feld says part of the reason he invested in Judy’s Book is because it comes from Andy Sack, who created the very similar Abuzz, which was a success … well, at least it was for Sack and his investors (including Feld). But Abuzz was bought by the New York Times Company and proceeded to be a bust. There were efforts to get us involved when I was working at Advance and I resisted them all for the same reasons then as I do now:

1. It’s hard to scale local.

2. It’s hard to convince people to contribute content to me when they can now control content on their own.

If, instead, you can find ways to harness (aggregate, link to, make searchable, whatever) the content that people create under their own control and connected with their own identities (aka trust), then I think that will be superior.

There are models for local that may work, just not in a neat, centralized way. Baristanet is one. NashvilleIsTalking is another. Both leave control and content and trust and identity at the edges.

If you can figure out a way to enable that — with search, functionality, ratings of the raters, and revenue — then I think you’ll have a winner. Until then, I will wish luck to Judy’s Book and Riffs and other such services. But I think you’ll be just a centralized waystation on the path to a distributed future. Think edgey.

Media 2.0 101

I let Umair Haque’s Bubblegeneration blog pile up like unread, guilt-inducing copies of The Economist and The New Yorker and anything Clay Shirky writes because it takes time to read and let sink in what he has to say. So here’s my homework, Umair on:
* Media 2.0
* Peer production.
* Edge Competencies.
* Network economics.
* The fabled attention economy.
* And here’s a current post on edge compentences and newspapers, which warns:

Newspapers are canaries in the coal mine. The economic shift that is disrupting the structure of the media industry is deep and pervasive; within the next five years, it will touch all consumer-facing industries. What’s happening to newspapers should serve as a warning signal to players across markets that the deep economics of consumer-facing businesses are undergoing radical change: change as fundamental as that which marked the shift from the industrial to the knowledge economy. To understand this change, let’s define the problem the news market is facing.

The publishers, like the rest of the media industry, are facing a radical shift in industry economics; a structural disruption. Barriers to entry have been vaporized, as have switching costs. At the same time, the market power newspapers could exert over content creators and advertisers is eroding….

News executives must invest in the new media value chain. … What are the segments of this new value chain? As we’ve outlined, microplatforms allow prosumers to create personal media. Smart aggregators syndicate and distribute it. Reconstructors build individualized ‘casts of media for communities of connected consumers….