It was a great pleasure to be invited to contribute to the Sao Paulo / Brazil-based Fundacao Dom Cabral's innovative CEO leadership program, led by my colleague and Swiss-Brazilian collaborator and leadership guru Didier Marlier, as a visiting professor. Below is a fairly large and long (95 pages - do not print!!) slideshow with most of the important stuff I presented; needless to say this was not the usual 45-60 minute session but took pretty much the entire afternoon. I was extremely impressed with the organization and their hosts (FDC / Dalton Sandenberg) as well as with the fast and agile minds of the CEOs that attended - we had some very inspiring conversations. And Caipirinias, too;). Update: Low-res download of PDF here: PDF 11.5 MB Open Network Economy Gerd Leonhard FDC SP Low-res
Enjoy. Share. Retweet. And get my free iPhone app before it turns 'freemium'.
If you are interested in attending please contact me (eMail, Twitter); they have very few places left. It's a free event but reserved for senior executives in the TMT sectors.
We would like to invite you to The New Year Revolution: an insight into what's on the horizon in the technology, media and telecoms sector in 2010 (and beyond!)
We are delighted to welcome Gerd Leonhard, TMT futurist as our keynote speaker.
Gerd is renowned for his presentations and think-tank appearances, which are hard-hitting and provocative yet inspiring and motivational. His clients include Nokia, Google, Sony-BMG, Siemens, ITV, the BBC, The Financial Times and many others.
Following Gerd's keynote there will be a session bringing you up to date on important law changes for 2010.
Date: Wednesday 13 January 2010
Time: Registration, breakfast and networking at 8.30am. Seminar 9.00am to 11.00am, including time for questions. There will be more time to network when the seminar has concluded.
Venue: Berwin Leighton Paisner Adelaide House, London Bridge, London EC4R 9HA.
I have been very busy compiling my best essays, blog posts and other writings from the past 3 years, and have finally uploaded the most recent version to Lulu (my favorite print-on-demand book store). The new book is now called 'Friction is Fiction' and is available in 3 versions: 1) 158 pages, 6x9 inches / U.S. trade format, full-color, for $60.40, here (yes, it's quite pricey because of the cost of printing 4-color, on-demand) 2) the same dead-tree version, but in black & white only, for $19.98, here (much cheaper but a lot less cool;) 3) as a PDF, for a token price of $7.50, here.
I would be delighted if you would consider buying whatever works best for you - what better Christmas present could you possibly think of! Please note that this book will be updated every 3 months, to include my latest writings. If you want to share the book page please just send people to www.frictionisfiction.com - thanks.
As to giving away the free PDF, here is the deal: you can contact me anytime (via email, Facebook or Twitter) to request a free copy of the PDF if you just don't want to (or can't) spend the $7.50, and I will send you the download link. In return, what I ask from you is to pay me with attention, i.e. to write a review on Lulu, a blog-post, or a tweet about my book, with a link (all 3 is best;). Deal?
As to the title: I used to simply call this compilation 'The Best of Media Futurist' but while looking through all those posts - and spending a lot more time revising them - I found an important thread that goes through almost all of it and which therefore has become the new title: Friction is Fiction. So what does that mean? It means that if you are currently basing your success on maintaining or even constructing hurdles, difficulties or other bottlenecks somewhere in the system - i.e. if there is something that impedes the flow of information, or a transaction or purchase so that a higher price point or some other form of control over the can be obtained - then you are very likely to face diminishing revenues in the next few years. Building obstacles for users (fka consumers) used to work just fine but... no longer. Building walls is the fastest road to suicide in the digital economy.
The web has been utterly ruthless about finding these glaring points of friction, such as paying for eMail (remember that?), paying a ton of money for long-distance phone calls (remember those pre-skype days?), or consumers not having any access to travel booking systems, flight information or seating. These hurdles are being removed, one-by-one, and those 'people formerly known as consumers' are getting more powerful every single day. Banking on friction to increase your revenues has become like throwing matches into the river and asking it to stop - it's useless.
Friction was, of course, the main money-maker in the media, entertainment and content business, for a long time: certain CDs were only available in certain stores at certain times in certain countries, DVDs with those movies you really wanted were only available in certain countries and within certain 'windows', books had to be printed and shipped, and ring-tones could only be purchased from your operator. Basically, at every turn the consumer encountered have-to's and must's which essentially allowed a substantial level of control by the media and content companies - and thus, higher prices. In many cases, the more friction the higher the price you could ask for.
No longer. Read the book!
Related: my blog-book "The End of Control": download the first 6 chapters here. Also: My Music 2.0 book is available via Lulu, here
Once again, great stuff by Mary Meeker and her Internet team at Morgan Stanley, via the Web2.0 summit. The video, embedded below, is good, too, but in my opinion it's the the slides that matter most: every single page packs a punch and makes you think. Great mix of facts, statistics and some key foresights. A must-read (and then... digest). Techcrunch has some great comments on this presentation, here.
I contributed to a fun event at the Host Gallery in London tonight, organized by Canvas8 (where I am involved as one of the adjunct thought-leaders): "Twitter,
Facebook, Spotify, Tripadvisor, Augmented Reality, Smartphone Apps,
YouTube – the range of technology choices for brands wishing to engage
with consumers is huge. For many these are uncharted waters, and these
technologies can raise more questions than they answer.
This
time the theme of ‘The Changing Face of Media’ is emerging technology.
Based on the speakers’ experiences it asks the question: how can brands
best use technology and not be used by it..."
As promised, here is the PDF from the event, below (click on the Slideshare link to download it, or embed it on your blog) Enjoy. RT. Superdistribute. Mix & Share.... Picture on the right by James Cridland via Flickr
I'll make this brief since I am at the NRT lounge going back to ZRH in an hour. Here are some of the key trends for the immediate Future of the Content Industries that I wanted to share with you.
Pre-Web Content Economics: Consumers. Scarcity. Centralized. Computer = Internet Access. Professionals only. Everyone watching the same thing. Friction generates a nice flow of $. Total Control is crucial. EGOsystems. Content is King. Exclusive Copyright. Content Monopolies, Rights Cartels and Oligopolies. Enforcement. Push. The large Networks rule. Walled Gardens bear fruit. Near-time Web & Database Search. Marketing = Monologs: Listen to Me. Consumers trusting Companies. Advertising = Interruption. Privacy = 'On' by Default. Mass-Media Rules. Broadcasting. All stuff is on my Machine. Pay Cash or Leave. Free = Bad. Distribution = Power. Power = Money.
Web-Native Content Economics: Users & Followers. Abundance creates new Scarcities... of Attention. Everything is decentralized. Mobile = default Internet Access. Professionals, prosumers, usators, users... all at the same time. Utter Fragmentation. Friction is Fiction. Trust is crucial (i.e. Money). ECOsystems & Interdependence. ConTEXT is King. New Usage Rights & Ubiquitous Licensing. Open Content Platforms. Engagement. Pull & Attraction Economy. Networked not Networks. Walled gardens wither. Real-time Web & Social Search. Marketing = Conversations: Listen to each other, then talk. Trusting People Like Me. Advertising= Engagement. Privacy = 'On' is an action I must take. Mass-Niches Rule. Narrowcasting. All my stuff is in the Cloud. Pay with Attention (and Cash). Freemium=Good. Influence = Power. Power = Money - and many other kinds of rewards.
Boy - there is a lot we can learn from this - and have a good laugh, too. Both of these guys are just great, in their own way. Check the comments on the video, too - some real morsels there, as well. Nice to see CBS is finally sharing some clips, too;). Thanks to Techcrunch / Crunchgear for sending this my way.
The 3-minute daily AdAge video shows always provide some interesting morsels. In this short excerpt, below, Jason Kilar (Hulu's CEO) says: "We don't have a marketing department because
if our product isn't going to sell itself on its own merits we've got
bigger problems". This is very much how I look at the role of Marketing, going forward, as well. My 4 cents on this topic:
Design the marketing right into your product or service, from the get-go - if people will not want to share what you are offering, that's where you need to start!
Instead of paying to grab people's attention (which usually means disrupting them, several times), invest in your product to be so attractive, or better yet, addictive, that your users will promote it for you. Word of MOUTH and word of MOUSE is what will drive your success more than anything else, so that's where every cent is well spend
Once a good many people are using your product or service, enable and encourage them to share all that goodness with their friends and peers (great examples for that include Nike+ and the recent T-Mobile Life's for Sharing campaign); put 'share this' and 'tell your friends' links and widgets everywhere, and integrate things like Facebook Connect, Google Connect and Twitter.
The best way to activate your users as voluntary brand-messengers is to allow them to co-create, to engage, to get involved - and of course, to talk to them, to build relationships. This is the key to Twitter's rapid growth.
"The internet is radically disrupting most of the traditional content
distribution and selling models, starting with music and games,
followed by TV, film, books and print publishing. Once everyone
is always-on, mobile and hyper-connected, and everything is available
everywhere, how will content be created, distributed, marketed,
consumed, and paid for? Who will do what, for whom, and how will the
traditional players such as broadcasters, record labels, publishers and
distributors adapt? If new players, starting with telecoms, device
makers, advertisers and brands, indeed move into the content business,
what will be their challenges and opportunities?
Given the
challenging financial climate, how do we reconcile the need to reward
enterprise and secure sustainable revenue streams, with the
expectations and demands of the “freeconomics” generation? What kind of
legal, regulatory and cultural framework do we need to ensure that this
new eco-system of creators, consumers and intermediaries generates more
benefits for all involved?
Speakers: Gerd Leonhard, media futurist, author and blogger; Richard Titus, Controller of Future Media, Audio, Music & Mobile, BBC; David A. Smith, chief executive of Global Futures and Foresight (GFF). Chair: Ralph Simon, CEO, The Mobilium Advisory Group and Chairman Emeritus & Founder, Mobile Entertainment Forum - Americas.
I think 2009 will be a key year for the content industries, the creators, media companies, platforms, labels, publishers and other middle(wo)men.
In 2009, the value of content - starting with music and news - is being redefined for the Internet age. The gloves are off: the music rights societies want more money for each play, many journalists and writers are fearing a gloomy future as newspapers stop printing and shift to digital publishing around the world, and the book-authors guild is quarreling with Amazon about the Kindle2's robotic voice renditions of their works.
The bottom line is that the core logic and operating mantra that the 'Western' content industries have employed until now is becoming unstable and, economically speaking, increasingly unworkable. The Internet has severely disrupted the traditional value chains, and the promised land of advertising-supported free content has not yet materialized.
Let me outline these shifts and challenges a bit more:
A) Controlling the distribution of content - whether by technical or via legal means - is increasingly becoming an utter 'mission impossible' unless you want to adopt a seriously totalitarian Internet regime (as seems to be proposed in France last week I fear...)
B) Closed systems and walled gardens (yes, those of the telecoms and mobile operators, too) are leaking everywhere. Closed and centralized ecosystems are becoming very expensive and thus hard to maintain, e.g. Microsoft Windows versus the ever-mushrooming Google Web OS (soon to include voice communications), Android and Symbian mobile OS vs Windows Mobile, free streaming vs paid subscriptions such as Rhapsody, open API-based platforms such as Twitter and (now) the Guardian's Open Platform versus proprietary offerings such as iTunes or the WSJ, and so on and on.
C) On the Net, just about every mode of content consumption -aka listening, watching, reading- does in fact create copies, too, so the traditional legal distinction of 'free use/listen/watch but paid copy' is... well, toast, I would say. This creates significant legal uncertainty and pulls out the rug under the value logic of the traditional publishing industries.
I like to refer to this tectonic shift as 'The challenge of 21st Century Content Economics' (see a related swf movie here); riffing off a similar phrase I picked-up at Umair Haque's very inspiring blog.
First, here are some of the most common questions I keep getting about the Future of Content:
If everyone gets to make use of content (music, video, news, images) 'for free' or for much cheaper than before the advent of the Net, if just about everything but my dinner can be shared and remixed and forwarded, won't we just see a 'rush towards the bottom', i.e. all content gets cheaper, all the time, until it stops making real $ altogether? And how will 'open' content make any money, anyway? Who will pay for something that can be gotten for free? How can you compete with free? And beyond that, if everyone thinks they can be a creator, producer or broadcaster, too, who will still pay for the 'professionals'?
When access finally replaces ownership on a large scale, e.g. printed newspaper-reading goes away and reading on mobile devices takes over, or streaming music on my iPod Touch overtakes buying single tracks on Amazon or iTunes (ps: I think it already does), who should pay for what, when, where and how? Is this kind of universal access monetizable like the 'copy' was? How is the current law going to help us with this... or not? When the very definition of COPY becomes unworkable, what happens to Copyright?
If we agree that not making your content available online seems like an unrealistic option (as it indeed robs the creators of the most popular platforms and ways to present, market and promote themselves to their audiences) is the traditional right to refuse permission, based on the exclusive right of the author (or their representatives i.e. the publishers and labels, studios, rights organizations etc) still feasible and realistic? Can the law as it is now still be used to monetize our creations, or will the insistence on these pre-Internet laws just render us irrelevant, attention-wise and dollar-wise? And if we need to make our content more available, where will the new money come from? In other words, if not Control, then... what...how...when?
Here are some answers that I have been investigating (please bear with me for a few hours while I find the definitive solutions ;):
1) I think content can be both free or cheap, and very expensive. This sounds paradoxical, perhaps, but the reality is that in a system that is no longer based on selling units or copies (i.e. CDs, DVDs, books, single-track downloads, cable slots etc), the value of content is very likely to be constantly re-determined by a multitude of surrounding and incremental factors.
So the correct answer to that key question of 'what's the value of content' should probably be a solid: 'it depends'. As much as that may make the job of getting remuneration so much harder, I think it is also potentially quite liberating that we will no longer need to worry about controlling distribution so that we can sell more copies. Instead, as would be the case with the flat rate for digital music that I have been pushing for for the past 7 years, we could then shift our entire focus to getting and keeping Attention and Trust - 2 factors which now are the very foundation of any commercial success. In fact, I would argue that because of the de-emphasis on copies most content marketing and promotion tasks will get a lot easier (and much less costly) since we can now use the content as a marketing tool, itself.
2) So what are those future value-determining factors? Here are a few from a long list that I have been compiling:
The best quality experience, at the perfect time. Compare listening to a low quality audio-stream on your mobile, in the train, to enjoying an HD recording on your living room (or car?) sound system. The first one could be feels-like-free or bundled, the other one could be a premium, paid-for service. The difference is just my particular use case, not the 0s and 1s.
A new, attractive and convenient package (or shall we say, alternate user interface?) A powerful and very recent example is 'The Presidents of The United States of America' iPhone app: the user pays a one-time fee of $3 for free, on-demand streams and videos from the last 4 albums, and lots of up-selling is built right into the app. iPhone users that are fans are very likely to shell out $3 to get this cool widget, and in a way I guess they are now actually paying for what they would otherwise have gotten for free, anyway (i.e. to listen to their favorite music, on-demand). Plus, the band now has a direct and totally unique path to their biggest fans - and that is the new gold, in my opinion. Sounds like a great deal to me: package it nicely and it will sell regardless of free alternatives.
Also note that this same phenomena is what still sells printed books. The words i.e. the content anyone can probably get for free, somewhere, but the feel and smell of the paper, the physical format, the touch, the familiar and comfortable user-interface (UI) is what I am actually paying for when I buy the good old, dead-tree version. In other words, I pay for the design, the printing and shipping, and only implicitly for the 'words'. It is important to note, though, that nice user interfaces will soon be available on electronic reading devices, as well, therefore leading us to that very same, original question: what will we pay for when we buy content, ultimately? We may soon enter the age of content-as-software-packages: many of us may soon no longer order the printed versions of books (last not least because of environmental concerns) but we may happily pay a few Euros a month for a digital book subscription, or add it in a bundle via our mobile phone bill, only to then buy the 20 Euro multimedia / virtual world edition of a book we really like - except that it won't be printed and shipped but also downloaded to my mobile device.
Authenticity and timeliness. I foresee a future where I will gladly pay a bit more to make sure that what I get is the bona-fide real thing, from the actual creator, in its correct version and without any shortcuts or changes. An authorized, paid-for English translation of the new Paulo Coelho book (digital or otherwise) would certainly be more enticing to me than 'free' copy that is not stamped with his approval. And if I can get it the moment that it's finished, even better (and I pay another premium).
Selection, expert curation, filtering, culling, context, annotation. In my experience, few people have time to find the best music for a specific occasion. Why would I bother looking for a great selection of ambient 'space music' for my yoga sessions when a true, bona-fide authority such as Stephen Hill (Producer of the superb Hearts of Space / HOS online radio show) has already done this for me? My payment to HOS would therefore be not so much for the actual songs, it's more for the service of having them filtered and annotated by a real expert.
3) For the very same reason that content can be simultaneously worth a lot or very little (i.e. because of its disembodiment and the shift from selling copies to providing access), it follows that many rightsholders and their agencies may no longer be able to get fixed fees per copy, or even per use of a piece of content. Simply because if they continue to do that they will make it impossible-by-design to comply with their rules and legally use their content in all but the most highly subsidized cases, because most of the time a fixed fee will not be obtained on the other end (i.e. the users), either.
Youtube simply cannot pay a fixed 1 cent per stream - even with Google's deep pocket behind it - because the Youtube users will not pay 1 cent (or even a fraction thereof, for that matter) per stream, and advertising revenues that would support these kinds of license fees are not within reach yet (because, just like content, the web's advertising and marketing logic needs to be reinvented first, as well !). This new business needs to be build together, from the ground up.
We are seeing this hairy issue creep up everywhere: GEMA (the German copyright organization) reportedly wants up to 12.9 cents per music video that is played on Youtube in Germany; the reason being - and this is my personal guess - that they probably treat each video-play as an on-demand performance which would be charged almost as much as an actual copy (i.e. a download). And of course, the reality is that those digital natives are in fact using Youtube as virtual jukebox - watching my 15-year old son hang out in his room I can certainly attest to that.
So GEMA's (and PRS') point is as correct as it is pointless: these on-demand plays are very much like a download, in terms of how the users are using the content. Access is replacing ownership.
But here is the tough part that cannot be avoided no matter what: it's not the users, or Youtube (or Last.fm or Pandora or Hulu or Miro or Boxee etc) that are at fault here, it's how traditional content industry entities such as GEMA and PRS define the value of music (and other content). For them, a piece of content still has its fixed and minimum value, and if you want it, you'll need to pay up according to those rules.
As I am investigating more alternatives I will keep you posted so... stay tuned!
IBM's Institute for Business Value has published a brilliant new study entitled A future in content(ion): Can telecom providers win a share of the digital content market? A lot of what they are saying in this study is amazingly close to what I have been trying to tell the telcos for the past 2 years: you MUST get involved with content and media, no 2 ways about it. Read this study! The 3 biggest eye-openers:
Finally, here are the videos from my keynote speech at NPOX 2009 in Hilversum, courtesy of OMROEP, the Dutch broadcasting organization which invited me to speak about The End of Control, the People formerly known as Consumers and the Future of Broadcasting (Radio and TV), at their annual gathering and conference, NPOX. The PDF and slideshare stuff is here.
These are some trends I have culled and then 'deducted' from my research over the past 3 months - if you have any better information or see errors here, please comment or ping me via Twitter. This certainly bodes well for anyone in the digital content ecosystem - we just need to get 'old' to 'new' now ;)
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We are delighted to welcome Gerd Leonhard, TMT futurist as our keynote speaker.![Reblog this post [with Zemanta]](http://img.zemanta.com/reblog_e.png?x-id=283400e5-7604-4a93-a3f1-553e1cde0e3e)
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Suggested hashtag for Twitter users: #rsamedia![Reblog this post [with Zemanta]](http://img.zemanta.com/reblog_e.png?x-id=4f7a83f4-a810-4af5-9bc3-7a6903ac8cfc)
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