In fact consumers never really were paying for content, and publishers weren’t really selling it either. If the content was what they were selling, why has the price of books or music or movies always depended mostly on the format? Why didn’t better content cost more?
A copy of Time costs $5 for 58 pages, or 8.6 cents a page. The Economist costs $7 for 86 pages, or 8.1 cents a page. Better journalism is actually slightly cheaper.
Almost every form of publishing has been organized as if the medium was what they were selling, and the content was irrelevant. Book publishers, for example, set prices based on the cost of producing and distributing books. They treat the words printed in the book the same way a textile manufacturer treats the patterns printed on its fabrics.
Information – Bloomberg terminals, stock newsletters – is a different business. Publishers flatter themselves when they argue they are in it.
What happens to publishing if you can’t sell content? You have two choices: give it away and make money from it indirectly, or find ways to embody it in things people will pay for.
The first is probably the future of most current media. Give music away and make money from concerts and t-shirts. Publish articles for free and make money from one of a dozen permutations of advertising. Both publishers and investors are down on advertising at the moment, but it has more potential than they realize.
I’m not claiming that potential will be realized by the existing players. The optimal ways to make money from the written word probably require different words written by different people….
The reason I’ve been writing about existing forms is that I don’t know what new forms will appear. But though I can’t predict specific winners, I can offer a recipe for recognizing them. When you see something that’s taking advantage of new technology to give people something they want that they couldn’t have before, you’re probably looking at a winner. And when you see something that’s merely reacting to new technology in an attempt to preserve some existing source of revenue, you’re probably looking at a loser.
The Guardian asked me to write a column about the transparent life and my writing about my prostate cancer. Here it is:
* * *
In the company of nudists, no one is naked and there is nowhere to hide. In this space and on my blog, I have been arguing that with the internet, we are entering an age of publicness when we need to live, do business and govern in the open. So I was left with little choice when I learned I had prostate cancer. I had to blog it.
So far, no regrets. Oh, one troll tweeted that in my blog post, I had merely used my cancer to plug my book (which, by the way, is entitled What Would Google Do?). But my Twitter friends beat him up on my behalf. I got emails pushing nutty cures on me – yes, there is cancer spam – but Gmail’s filters killed them for me. And I have had to be mindful not to bring my family into my glass house; my transparency shouldn’t necessarily be theirs.
But it has all been good. On my blog, on others’, in Twitter, and in email, I received an instant and lasting shower of good wishes and some good advice about my choice of surgery. My brothers in malignancy have shared their experiences with generous candour. I even inspired a few of them to blog their own stories. They joined me in urging men to have the PSA blood test that revealed my cancer.
After my blog post sharing the diagnosis was republished last week in the Guardian, I heard from Emma Halls, chairman of the UK Prostate Cancer Research Foundation, who said the disease affects almost as many men as breast cancer does women, but it gets less funding and little attention.
That stands to reason. We men don’t like talking about penises – certainly not when they malfunction. Discussing one’s incontinence and impotence post-surgery – both temporary, we hope – well, it doesn’t get much more transparent than that. It’s one matter for me to disclose my business relationships, politics, religion, and stock ownership on my blog’s “about” page; it’s another to do this.
So I think I’ve become about as transparent as a man can. I am living the public life. There are dangers here. I risk becoming merely a medical and emotional exhibitionist. And I know I have violated my own privacy to an extreme.
But I think we need to shift the discussion in this era of openness from the dangers to privacy to the benefits of publicness. It’s not privacy that concerns me, but control. I must have the right and means to keep my disease secret if I choose.
By revealing my cancer, I realise benefits, and so can society: if one man’s story motivates just one more who has the disease to get tested and discover it, then it is worth the price of embarrassment. If many people who have a condition can now share information about their lifestyles and experience, then perhaps the sum of their data can add up to new medical knowledge. I predict a day when to keep such information private will be seen by society as being selfish.
Collectively, we will use the internet’s ability to gather, share and analyse what we know to build greater value than we could on our own. That is the principle of transparency that I want companies and governments to heed: that openness in their information and actions must become their default, that holding secrets only breeds mistrust and robs them and us of the value that comes from sharing.
I believe this openness at the source will become a critical element in a new, linked ecosystem of news, as institutions and individuals will be expected to provide maximal information on the web. Such open intelligence also allows an unlimited number of watchdogs on those in power, helping to bring about a new, collaborative – and ultimately, I hope, more effective and efficient – system of journalism.
So for me, transparency is a necessary ethic of the age. That is why I used my medium, my blog, to share my prostate cancer. If I believe in the value of publicness, how could I not?
The Washington Post reports that “in the past year alone, the Postal Service has seen the single largest drop-off in mail volume in its 234-year history…. That downward trend is only accelerating. The Postal Service projects a decline of about 10 billion pieces of mail in each of the next two years, going from a high of 213 billion pieces of mail in 2006 to 170 billion projected for 2010.”
No, physical delivery won’t ever die. (Like a good newspaperman, I lie in headlines to get attention.) Indeed, we’ll get more ever deliveries of more stuff that used to be on store shelves but are now ordered online. That’s what UPS’ and FedEx’ businesses are built for. But, as the Post says, we’re sending fewer messages to each other; we have much better means to do that now. And companies are trying hard to reduce their cost of dealing with us – billing, bank statements – by taking that online.
There is still a business to be had in distributing coupons and circulars (aka junk mail); this is why newspapers are holding onto delivery a day or two a week. But that’s transitional; it won’t last forever.
As volume decreases, costs to users will increase as deliverers try to cover fixed costs that just can’t be cut anymore. Newspapers like to think they, too, have fixed costs and that’s why they keep whining that readers “should” pay their bills. But they don’t; for their core business – content and advertising – papers have new efficiencies online that the Postal Service doesn’t have. Except for those trucks and presses. They are fixed costs and that puts them in the same sinking ship as the mail.
At some point soon, the couponers will desert both the Postal Service and newspapers because they’ll be just too expensive. But consumers still want coupons; they have real value. (I often tell the story of coming back from a strike when I was Sunday editor of the New York Daily News. We didn’t have coupons because our new owner, Robert Maxwell, was feuding with Rupert Murdoch, who controls coupons – aka FSIs or free-standing inserts – in the U.S. When we got them back, circulation went up more than 100,000. Those readers weren’t buying news. They were buying ads.) Coupons are creeping online but it’s still a pain to deal with them digitally. Mobile devices may be the solution, but they’re not there yet.
So physical coupons and circulars are still great business – if you can get them into consumers’ hands. And it occurs to me that someone will craigslist – that is, undercut – both newspapers and the Postal Service in the delivery business. It’s in the interests of Murdoch’s coupon empire to do so and work with large retailers that produce circulars to come up with an alternative. Or an entrepreneur could establish a network to make it happen. I see the return of the paperboy (oops, the world has changed since then; pardon me: the paperyoungperson): networks of small agents who can deliver this material, which isn’t wildly timely (get it there this week) without the cost structure needed for individualized delivery – the Postal Service – or with a time wrapper of expensive content – the newspaper. Again, it’s transitional, but it’s a nice business for some years.
Here’s what happens then: The cost of mailing an old-fashioned letter will become prohibitive as the Postal Service covers its fixed costs for a system we won’t kill.
And the economic benefit of distributing a Sunday newspaper will all but disappear and news organizations – the ones still standing – will have no reason to hold onto the presses and trucks.
I want to love my cable company – honestly, I do. They bring me things I love and depend upon. I love TV. I really, really love the internet. (The phone? Well, I love that, too – but unfortunately for the cable company, it’s my iPhone I adore.)
So why don’t I love my cable company? We all know why: because it’s a marriage as ruined as the one in War of the Roses. It’s a relationship built entirely on aggression and passive aggression, on each party trying not to give the other one what it wants, on stonewalling or fighting. So how do you change that? I speculated in What Would Google Do? about what a cable or phone company run by Google (GT&T) would be like, but that’s only wishful thinking.
After my contretemps with Cablevision this week – and the ensuing lively discussion about it in the comments here, on other blogs, and in Twitter – I’ve been trying to think about it how this relationship can be rebuilt. Because I don’t like the relationship and I don’t like the way I am in it.
When my internet didn’t work. I called the company and its employee read off a script: ‘Sorry to hear that sir, let’s try this. Oh, that doesn’t work. We’ll see you in three days.’ I then operate off my script: ‘That’s unacceptable. I pay for the service. I want it fixed ASAP.’ Them: ‘No.’ Me: Get me a supervisor.’ Them, after much argument – because it always takes argument: ‘OK, tomorrow, but you have to wait home all day.’ Me: ‘That’s unacceptable. I have a life.’
I pay for the service to work and want it to work. They want to maximize customer service efficiency (is that a sufficiently nice way to say it?). We end up in a standoff that, in my experience, can be broken only by outlasting them and being angry. It’s still a script. But I don’t like the role I play. I don’t like myself. I’m an ass. Because it works. I end up victorious – the internet I paid for is working again – but sullied and embarrassed by what I had to say to get the service I need. How to break that cycle?
There are a few new factors in the cable business in recent times.
First, cable companies have competitors (yay!) – well, at least one competitor: the phone company. In Twitter, it took no time at all – less time, indeed, than it took Cablevision to respond – for Verizon people to smell the carrion of a dead marriage and to seduce me.
Second, we have Twitter (and blogs and YouTube). As I said in the comments on the post below, it doesn’t matter how many followers you have because your message can spread and so the smart company has to respond. The people formerly known as consumers are now media.
But the company also has Twitter. Witness what Frank Eliason (aka @comcastcares) has done to respond to customers and to humanize his company. Oh, Comcast still has problems – Eliason will confess that – but the fact that I got better service on my Cablevision account from a Comcast employee speaks volumes. It says there’s a lesson to be learned there.
At the end of my Dell contretemps, I wrote an open letter to Michael Dell with what I sincerely hoped would be helpful advice. They didn’t change their ways because of what I said. But what they did end up doing what I suggested and I’ve since written about that in BusinessWeek and in my book.
So I’ve been trying to think of advice for Cablevision.
First, throw out the script. Give employees the ability to take responsibility, to deal with us honestly, and to get things fixed. That’s one of the things Dell did and it made a huge difference.
Second, become human. Comcast’s Frank Eliason is a person. He’s not a bot with standard answers. We wouldn’t stand for that; as the Cluetrain Manifesto teaches, markets are conversations and we recognize when they are being held by man vs. machine. Microsoft, Dell, Sun, Comcast have all been enriched by enabling their people to talk with us as people. Not every employee will be capable of that; it’s the ones who are you want working and speaking for you.
Third, I’d invest in customer service as the best form of advertising possible. Zappos learned that lesson and it just earned them $900 million.
Fourth, create a service level agreement (SLA) so customers know what to expect when they call and so they can hold the company to it. That’s the real problem. We come loaded for bear because we know what’s going to happen, we know the script: the cable company is going to push us off as far as possible and we’re going to demand as soon as possible. The agreement becomes an assurance (natural disasters aside) we can count on and we know the consequences.
Fifth, you’re not going to believe that I’m saying this, but charge for better service. Yes, I would complain about that. But here’s the way I think it would play out: The cable company charges for a good SLA; its competitor, the phone company, sees the competitive advantage of advertising that you get that included with them; the cable company is then forced to meet the challenge. And we end up with the SLA. If we don’t, I predict that local governments and the FCC and FTC may impose them. So I suggest you figure out the way to get there on your own.
Sixth, make it a goal to have delighted customers. Yes, I know, that sound silly: fodder for needlepoint. But go back to the beginning: I want to love my cable company. If – surprise, surprise, surprise – I do, I’m going to talk about that. In the age of Twitter, that’s the best advertising you can get. This is how the investment in customer service will pay off: with advertising that’s better than anything you put in TV or newspapers … and it’s free. And it keeps customers from leaving for Verizon. That’s how a company takes advantage of the free economy.
This attitude also might motivate cable companies to change other policies that irk, like bundling in dozens of channels I have to pay that I never watch. But the issue that bothers most people about their cable companies is dealing with them for installation and service. That’s what I’d concentrate on first. Service isn’t a favor you do for customers, as various employees implied with me. It’s how you live up to your deal and delight customers.
You see, I’m not an ass. I only play one on the phone to get what I think I deserve in a business deal in which I have no power other than that. And, cable guys, I know you’re not lazy slugs trying to rip me off; that’s just the script they make you read from the policies they set in the front office. Can’t we all get along?
Brian Frank riffs on yesterday’s post on the license to fail and argues that our standard for success should not be perfection but instead “generativity”:
. . . instead of evaluating things on how well they accord with preconceived models and assumptions, let’s evaluate things by looking at how many unexpected new opportunities they generate.
Failure breaks things open and allows us to remix the pieces in different ways. If we don’t do this from time-to-time — if we just keep accumulating more mass onto the same framework — eventually it gets too bulky and falls on our heads.
There are lots of interesting nuggets of ideas in his rambling on the idea. Frank illustrates his point talking about the progression of scientific theory from Newton to quantum and Einstein: “But now it’s becoming more difficult to stand on Newton’s shoulders. His ideas aren’t as generative anymore; they perpetuate more than they generate.” I don’t know enough there to agree or disagree; I see Frank searching for a metaphor for what I’ve been calling beta-think or what I’ve been arguing with newspaper people about finding opportunities wherever they see problems:
Much of the new science — like the new economy — is not about layering subsequent successes on top of each other, but they are generative in the sense that they open up new fields to explore. They are adventures that could very likely fail to prove their original hypotheses but can’t fail to generate new ideas and insights.
Next Frank tries his worldview on human psychology as he also challenges perfection as the goal:
Even looking at the people who hold perfection in high esteem, it isn’t perfection itself that motivates them, it’s the challenge of pursuing it — and the sneaking uncertainty that they can’t attain it: it’s a dare….
If you take the uncertainty and randomness and genuine risk out of life (as in, risking oneself, not just other people’s money) you take the life out of life…
So why would we perpetuate organizations, rules, and systems that are based on the fundamental assumption that randomness and uncertainty can be mechanized and ordered into a irrelevance?
He and I agree that this effort at order comes out of the industrial age: the need and drive to mechanize and systematize everything to do because that’s what the means of mass production and distribution demanded. In WWGD?, I argue that we are leaving that age and entering an economy and society built on abundance and knowledge (which, to return to Frank’s point, comes when you expand past old assumptions: when you generate new ideas). He concludes:
The society that embraces uncertainty, nurtures a love for it (i.e. a love of learning) and develops institutions that thrive because of randomness rather than despite it, will eventually have the most success, generation-by-generation.
: Howard Weaver also responds to my post, riffing on failure and perfection in cultures, industries, and economies:
In private life – business and commerce, the academy, creative endeavors – Jeff’s point is fundamentally applicable. I was lucky enough to be taught as a young editor periodically to ask the folks I worked with, “When was the last time you made a good mistake?”
I’d stress, of course, that a “good mistake” didn’t involve coming in drunk and misspelling all the names. A good mistake was one where we learned something we couldn’t have learned otherwise, where we were better off afterward for what we learned, where we had a clearer vision of what to try next.
Weaver agrees with Craig Newmark on British failurephobia and that makes me finally come up with a theory for what I’ve observed from my Guardian colleagues in political and media news in the U.K.: I call it the off-with-their-heads reflex that comes whenever a TV exec or a government minister or someone under them messes up. We see moments of that in America, of course. But we need to focus less on the mistake – the fall from perfection – and more on the question of whether the mistake is fixed and the lesson learned; if so, then the experience and the person may be valuable; if not, fine, behead them.
: LATER: There’s an interesting discussion about the beta life at the Business Innovation Factory.
In the Philippines, the ABS-CBN TV network has been training citizens – 1,000 in the first recent class, 700 in the next – to report on the upcoming election there. They call it the Boto Mo iPatrol and count 15,000 members. Their curriculum:
They will orient the “patrollers” on the fundamentals of citizen journalism—from shooting pictures or videos using cell phones or cameras, to writing captions and telling a story, to uploading their reports to the Internet. They will also be briefed on the electoral process and the ethics of journalism.
I’ve argued that training is going to be a key role for the professional journalists and news organizations as they learn to collaborate with and empower communities to report on themselves. ABS-CBN News is doing that, gaining thousands of new witness-reporters in a story too large for any news staff to cover alone and adding value to their coverage, including verification.
At yesterday’s Personal Democracy Forum – where I was in the unfortunate position of speaking inbetween two of my favorite geniuses, danah boyd and David Weinberger – I sang the obvious hymn to the choir, arguing that government in a Google age means transparency. All governments’ actions and information must be searchable and linkable; we need an API to government to enable us to build atop it.
I also argue that as newspapers die – and they will – government transparency is a critical element in the new news ecosystem that will fill the void. When government information is openly available, a dwindling handful of journalistic watchdogs in a state capital can be augmented by thousands, even millions of watchdogs: citizens empowered. I’ll write more about this as part of the New Business Models for News Project.
But at PDF, I also listed four cautions regarding transparency – charges to us as citizens:
* We have to give permission to fail. In speaking with government people about What Would Google Do?, I’ve learned how much they fear failure and how cautious that makes them. Without the license to fail, government will never experiment, never open up, and never be collaborative.
In other words, we need beta government: the ability of government to try things, to open up its process, to invite us in, to collaborate. That was the lesson I learned from Google about releasing a beta: it is a statement of humility and openness and an invitation to join in. We need that in government.
* Transparency must not always mean gotcha. Oh, there are plenty of people to catch red-handed. But if transparency is about nothing more than catching bureacrats and politicians buying lunches, then we will not have the openness we need to make government collaborative.
* We have to figure out how to make government and its work collaborative. What if we were able to help government do its job? What if it acted like a network? What if it acted like Wikipedia, where a small percentage – less than 2 percent, says Clay Shirky – create it; it would not take many citizens to help make government work in new ways.
* We have to turn the discussion to the positive, the constructive. Again, there are plenty of bastards to catch. But we must move past that – especially once we have more watchdogs watching – so we can build.
I ran around the auditorium like a fool – a role I enjoy – playing Oprah and asking everyone in the audience to say what they thought government for the Google age looked like. Since I was running, I couldn’t take notes, but the #pdf09 Twitter hashtag captured some and PDF will put up a video later. Lots of great thoughts.
Salesforce.com’s Marc Benioff says the future of computing will be like Twitter – that is, live, not batched. “Any concept of batch or delay in development or execution, I think, will not be tolerated by customers anymore,” Benioff said at Structure 09 according to the Digitalbeat report.
But this urgency isn’t just about speed. It’s about organizing work around process over product: beta-think. “Even in development, customers are demanding now that they want to be able to build in that sandbox and deploy immediately, instantly, no delay,” Benioff said. Take that principle past software to other industries – news and advertising, to name two – and to work itself as beta becomes a principle of workflow and management. And that shift will bring a cultural clash to countless workplaces just as we’ve seen in the newsroom.
Many companies haven’t realized this is where things are headed, he said. Benioff recounted attending meetings with chief information officers who all refused to believe that Twitter represents anything significant; they don’t have accounts themselves because “it’s not their generation.” Benioff’s response? He types the name of their company into Twitter search and shows that they’re missing out on a huge part of the conversation. (Benioff isn’t an impartial observer here, since Salesforce’s Service Cloud product is all about connecting companies to their customers on services like Twitter.)
“I think corporations have to step it up in terms of integrating with these real-time systems,” he said.
That’s the same lesson that Iran’s Supreme Leader, Ayatollah Ali Khamenei, has learned recently as Twitter is used to organize anti-government protesters, Benioff added: “He’s probably on Twitter right now.”
Three apparently unrelated items on the shift from valuing the product to valuing the process as the product:
* Trendwatching tells the story of what it calls “foreverism” – that is, that things never end (friendships, news stories, product development) and uses as illustration not only process journalism but also beta chocolate. TCHO is a chocolate company populated with geeks and so they brought betathink to their candy, releasing it as a beta, taking feedback from customers, and iterating it 1,026 times before coming out with the 1.0 chocolate. They didn’t put out bad chocolate to start with; they did their best. But then their customers helped make it better, ever better.
* Experientia.com reports – translating the newspaper La Stampa – that Italians are buying goods less often and renting them more often.
But the real revolution is that renting is becoming a way of life which is changing consumption and society. Car sharing, bike sharing, i.e. quick rentals of cars and bikes, but also dress sharing, i.e. the rental of clothes and handbags. There is toy sharing: children toys, small machines, lego, and puzzles. Even tools for the disabled, wheelchairs, orthopaedic supports, computers, and whatever you might need in the gym, sports or vacation. You don’t need to buy, you can just rent.
I think this ties into the idea of process: You can always rent the latest without having to buy it. You can afford to do so because you are sharing the cost with other users. Companies can find larger customer bases who are likely to be satisfied more because they are getting the latest. We move from a consumption economy to a use economy.
* NYU student Cody Brown delivers a neat take on the discussion about process v. product journalism last week, making distinctions between batch and real-time processing of journalism (read: The New York Times as opposed to blogs). Because The Times’ brand hinges on it as a product that has been curated and edited and checked and polished – note editor Bill Keller’s language on The Daily Show about his package – it finds itself in dangerous territory trying to compete in real time with those whose brand expectations are entirely different.
Brown says that for print, the “gestalt” is “batch processing.” How should it develop its brand? “As the voice of god.” How should it publish information on a developing story? “Cautiously. It should triple check it’s information and call every source involved in the story to give them an opportunity to comment.” How should it produce its product? “Into tight neatly written comprehensive articles … meant to exist as a ‘first draft of history.’” Who should do this? “Professionals. It’s expensive. A finite number of pages means a constant question: what is newsworthy to the most number of people?”
Compare and contrast with his take on online. Gestalt: “”Real Time Processing. Information is processed on the fly.” Brand? “An open platform…. Take the values/tactics that go on behind the walls of a newsroom (’the magic journalism box’) and execute them publicly.” How to publish? “Instantly. When a page is able to be updated at any frequency, corrections can be made just as fast. Rumors and gossip can be used as leverage to get sources, who otherwise wouldn’t, to spill what they know. Publishing incomplete information is the fastest way to get users to contribute to the bigger picture. This is a tactic in effective commons-based-peer production and it is how Wikpedia grew so fast and so well. As Harvard Law Professor, Yochai Benkler, describes, it often looks like a ‘disaster area.’ This is the ’scuttlebutt’ the Times can’t wrap its head around.” How should it produce its work? “API.” Who should do it? “Everyone in the beat. When a website has unlimited pages: there is no excuse.”
Brown says it’s possible for one to produce like the other But “the challenge is in branding.”
The messy, opinionated, incomplete, rumorladen, shit-show that is actual news production is hidden away. If you want a real time news website, it must be brought to the surface. This isn’t a problem for a brand like Tech Crunch, but it puts print news brands in a terribly awkward position. How does The New York Times show the mess under its articles without wrecking the omniscient aura of the brand it has worked so hard for? …
Batch is killing them. Online, it is expensive, slow, and wasteful. It’s not sustainable and it’s a problem that will only get bigger for the The New York Times. … The fundamental problem The New York Times has online is that its brand carries too much weight. The Times stamp means a piece has been packaged, and is no longer in process. If they’re interested in participating in the journalism of the 21st century, they need to shed the baggage of the last one.
They won’t.
Very neat take on the question. It’s not just the standards, tradition, and ego of the legacy press that prevents it from enjoying the benefits of beta, Brown argues, but the perception and value of its practices and reputation. That would seem to argue that it’s impossible for the legacy to update from product to process. I’m not sure I agree, but I do think that Brown put the challenge clearly through one end of the prism. The question is whether the legacy press – for the benefit of its staff even more than its audience – can issue enough caveats to enable it to work real-time. Forget blogs in this discussion. Will The New York Times ever be comfortable working on the standards and practices of 24-hour cable news? Can it afford to? Don’t they have to?
(By the way, the subject of last week’s NYT snipe, Michael Arrington, did well in an On the Media interview on his process with Bob Garfield.)
