Another brilliant post by Umair Haque via the Harvard Business Review - he spells out a lot of stuff that keeps coming up in my presentations, as well; so here's a bit of a remix of this juicy post, my comments are [...]
"On one side is the old high ground of the industrial era capitalism; on the other, the new high(er) ground of next-generation capitalism. The yawning chasm in between them is the gap between the 20th century and the 21st" [I call this the EGOSystem vs the ECOsystem, see more here and here]
"Currency intervention, breaking Copenhagen, crackdowns , collusion, corruption, coercion, and censorship: China's ongoing bad behavior as global citizen is, when we connect the dots, the gigantic elephant in the world's boardroom. What's driving it? The quest for monopoly, monopsony, and control" [I wrote about something quite similar in my 2007/2008 blog-book "The End of Control", check out the free online chapters here, and a related presentation, here]
"That's yesterday's high ground, and China's focused like a laser beam on it. China's moves are the textbook stuff of b-school's blackest arts. Through larger distribution, fiercer litigation, greater exclusivity, cheaper and faster production, a bigger cash pile, advantage is gained. But the high ground has shifted. The new high ground is an ethical edge. It's
not about having more; it's about doing better. It's not about
protecting exports, pressuring buyers and suppliers, price
discriminating against the powerless, and programming consumers to buy,
buy, buy — it's about making people, communities, and society
authentically better off. It's not about caring less — but caring more.
It's not about ruthlessness. It's about mindfulness" [Couldn't have said it better, myself; here are just a few things I would add: in this new ecosystem that Umair is describing, we will need to develop web-native economic models and entirely new metrics for evaluating them, friction will indeed be fiction (to a very large degree) and the importance of control will be utterly eroded by the steadily increasing power of trust, engagement and transparency]
"The old high ground was built for 20th century economics: sell more
junk, earn more profit, "grow" — and then crash. An ethical edge
operates at a higher economic level. It is concerned with what we sell, how profits are earned, and which authentic, human benefits "grow." It's a concept built for the economics of an interdependent world" [A key term, imo: an interdependent world, i.e. not a broadcast world but a connected and networked world]
"An ethical edge just might be the ultimate cause of advantage.It's
how better distribution, production, marketing, and pricing — all just
proximate causes of advantage — ultimately happen. Jim Chanos's
investment thesis says: without an ethical edge, new value cannot be
created — old value can only be shuffled around (hi, Wall Street)....So here's the single question everyone should be asking. The old high
ground is the new low ground. Yesterday's mountain is today's valley.
Are you ascending to the new high ground?"
There are a ton of really great kernels of wisdom and learnings in this open letter by Google's Jonathan Rosenberg. Be sure to read the whole thing; but here is the most essential part:
"Closed systems are well-defined and profitable, but only for those who control them. Open systems are chaotic and profitable, but only for those who understand them well and move faster than everyone else. Closed systems grow quickly while open systems evolve more slowly, so placing your bets on open requires the optimism, will, and means to think long term. Fortunately, at Google we have all three of these"
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
Google is the master of creative disruption: if you are an Android-OS powered mobile user, great maps and the best navigation tools have just become a available to you, for free. Tough to beat that one, Tom-Tom, Garmin etc - or what? Says Google's blog: "Today we're excited to announce the next step for Google Maps for mobile: Google Maps Navigation (Beta) for Android 2.0 devices. This
new feature comes with everything you'd expect to find in a GPS
navigation system, like 3D views, turn-by-turn voice guidance and
automatic rerouting. But unlike most navigation systems, Google Maps
Navigation was built from the ground up to take advantage of your
phone's Internet connection...."
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.
Another quite ingenious, somewhat obvious-yet-still-missing-until-now innovation by Google was just announced: Google Fast Flip. I totally agree with Scott Karp over at the Publishing2.0 blog who blogs: "Google knows a lot about the future of news — more than many publishers. It’s evident in Google’s new product, Fast Flip, which allows news consumers to “flip” through news stories. What’s striking about Fast Flip is that Google is innovating precisely where publishers used to lead innovation..." Totally spot-on: why did this rather obvious idea not come the publishers, themselves? Where is their in-house innovation? I guess one reason is that many publishers don't seem to want to actually collaborate with each other... or am I wrong?
I test-drove Fast Flip, myself, and it really adds good value if you are not searching for complex stuff (since many magazines aren't indexed yet, I guess?) So what about the money? eCommerceTimes reports: "For the first time, Google is sharing ad revenues from advertisements
served up alongside the stories, and the company says it hopes the
service will help increase traffic at those sites. Previously, Google paid only wire services for content. "We think publishers who participate in Google Fast Flip will
benefit in the form of additional exposure, Web traffic and revenue,"
said Google spokesperson Chris Gaither. "That additional traffic offers
another opportunity for a publisher to win loyal readers and show ads
if they'd like. While it's too soon to tell if Fast Flip will graduate from Labs
status, the company is may allow publishers to embed the Fast Flip
technology on their own Web sites in the future, Gaither told the
E-Commerce Times..."
2 key points: a) sharing ad revenues from ads served ALONGSIDE the stories (this is new, and crucial), and b) participating publishers benefit of additional exposure, web traffic and revenue (i.e. all three benefits are to be considered -- this is not just all about immediate cash revenue sharing. This is crucial, imho).
Scott Karp has another nugget in that really drills down to the bottom line: "In digital media, on the web, the news package is now a function of
software — which is why Google is innovating precisely where publishers
are not. Fast Flip is, more accurately, an
attempt to create a new UI for news — a better way to consume
publishers’ content than publishers provide on their own sites"
A bit more from eCommerceTimes: "It's not perfect, and it won't solve the advertising crisis in traditional publishing, but Google's
Fast Flip news-viewing product may represent a small step toward helping pen-and-paper publishers make a profitable leap to the digital age.Google rolled out Fast Flip on Monday as an experimental Labs product. It allows users to slide through tiled screenshots of news stories from the service's three dozen partner publishers. Clicking on a screenshot -- the service uses screenshots to speed
loading times -- brings up a larger view that allows readers to flip
screens from story to story, almost as if reading a newspaper or
magazine. A second click on the screenshot takes the reader to the publisher's site..."
Have you every wondered how you could really protect your data online? Here is what one of my favorite online comedy sites, The Onion, has to say on this subject: "just move to Google's opt-out village". Really funny ****!
Found via Techcrunch
This is the Drop.io streaming version of my talk at Google San Francisco "The End of Control and the Future of Content", see my previous blog post for more details and the PDF. Bottom Lines: The fight for Control was
a fight for Distribution. The flight for Attention is a fight for
Trust. The beneficiaries of Control were Monopolies. The beneficiaries
of Trust are those that Collaborate. Advertising 2.0:
Information becomes Conversation. Interruption becomes Engagement.
Annoyance becomes Entertainment. 'This is an Ad' becomes 'This is
Content'....
The Youtube Video is here (unfortunately not in very good quality). Download the MP3
Jeff Jarvis rocks - no doubt about it. I have been reading his new book "What would Google do" and in my view it's at least as important as Wikinomics or the LongTail. Check out Jeff's slideshow and video below (yes, you can fast-forward thru the first 8 mins of German intro;) - no matter what business you are in, this will give you some serious food for thought; if you're in the content business - well... watch it 5 times! Some of his key points:
The link changes everything
Do what you do best and link to the rest
Join a network / Be a platform
Think distributed
If you’re not searchable, you won’t be found
Everybody needs a little SEO
Life is public, so is business
Your customers are your ad agency
Small is the new big
Manage abundance (not scarcity)
Join the open-source, gift economy
The mass market is dead—long live the mass of niches
I touched upon this in my presentation at the Mobile Monday event in Amsterdam: I think we are going through a totally amazing and very challenging paradigm shift, right now (and this may still be a somewhat delayed consequence of the Internet (r)evolution and the first .com bubble): From EGO to ECO, from Control to Openness, from Domination to Collaboration. A few examples:
The amazing shifts in U.S. policy and America's new global role: when President Obama implements his far-reaching plans to rewire how America works we will see this new trend towards win-win solutions rub-off everywhere else, too, and kick off chain-reactions in many other, traditionally more dominance-focused countries such as Russia, as well (and the reverse is also true). The old Bushinator mantra 'You lose - we win' has simply become unsustainable in today's networked economy, and America will doubtlessly struggle with this shift from domination to partnering for quite some time. However, I definitely anticipate a strong trend towards open systems and open platforms in the global economic and political spheres - as well as in technology and content / media - with utter transparency and TRUST becoming the key requirements for success, everywhere. There will no doubt be considerable debate on what this trend means for copyright and patent laws, globally, too, since these laws have traditionally been used for shoring up market-shares and protecting the interests of the large, dominant players in many industries.
The music industry: the decline - or shall we say gradual vaporization - of most major record industry players due to their amazingly persistent obsession with control, makes a great case study. Rather than to finally permit new revenues to be co-developed via collaborating on win-win scenarios, the IFPI and RIAA are still looking for new enforcement and protection mechanisms such as the now flamed-out '3 strikes & out' legislation - it does make you wonder if their 'leaders' have lived under a rock for the past 5 years! In any case, the music industry is the prime example why monopolistic and totally centralized structures will simply not work in the future, and why we need governme
I
nt intervention when a market place is clearly dysfunctional. Many of my readers know that I have been talking about this for a looooong time, but now we are finally seeing it take shape: the music rights organizations and their related content licensing processes will undergo significant and sweeping changes in the next 2-3 years; everything is moving from a 'not allowed / not possible' default mindset to a more collaborative, open, flexible, transparent and public rights licensing
logic - and they must adapt or get out of the way. The bottom line: If it's not based on a web-centric and connected logic it will cease to exist. As an example, the current conflict between the Music Performing
Rights Organizations (PROs and MROs) such as PRS, GEMA and Youtube is based on
this basic paradigm disparity: PRS and GEMA are thinking of the music rights still
being firmly and exclusively their business (i.e. an EgoSystem), and
Youtube/Google think of music rights as being a crucial component
of a new, 21st century content ecosystem that concerns everyone and should not be governed by monopolies and cartels. Therefore, for Google I reckon that the music rights issue is something that must go far beyond
the traditional structure that's based on 'I own the rights, exclusively, and you'll
need to pay whatever I ask for'. My prediction is that if the traditional rights-holders and
the many societies that represent them don't materially change their thinking on this very soon, they may
wall see a wide-spread revolt of their younger, more progressive
members, because they know that not permitting the use of music on Youtube (and
Google!) is simply a suicidal move, in terms of getting attention and building your brand. Get off the Ego and think Eco!
Microsoft's Windows OS is becoming less and less dominant (and relevant, too) as 'free' and cloud-based operating systems are gaining ground everywhere (Linux, Google)
Most telcos, mobile operators and ICT companies are trying to switch from the traditional 'total control of the network, the infrastructure and the users' to open platforms as fast as they can (e.g. AT&T's open source plans, Skype's open Silk codec, Nokia's Open Symbian Foundation, Google's Android Mobile OS)
In software, the continuing trend towards open-source and crowd-sourcing is clearly visible everywhere (e.g. the huge success of Firefox vs IE, and the rise of open-source DMBS)
Many large corporations are starting to move into crowd-sourcing, wanting to pursue increased openness in return for a chance to realize network-economy benefits. E.g. Glaxo Smith Kline's recent move to release a huge amount of cancer research data into public domain (Note: in this context, I highly recommend Yochai Benkler's fantastic book "The Weath of Networks")
The mind-boggling popularity and global success of API-driven web portals and platforms (Twitter's amazing growth, Friendfeed, the new Facebook 'River', widgets, the UK Guardian's open API etc)
For many large companies as well as for SMEs (small medium size enterprises), Social Media is quickly becoming CRM (customer relationship management) - rather than running expensive ads that talk about 'Me' and how great the new product is (i.e. Ego), the switch to 'having conversations with the customers aka users' is visible everywhere: Ford's new Fiesta campaign, Kraft's cool iPhone app. Brands can no longer be just BIG EGOs - they are part of Ecosystems, too.
In Advertising, the entire paradigm of 'we'll yell until you listen' is finished - this concept was all about the Ego of the brands, and about us, the people formerly known as consumers, listening. Now it's all about the Ecosystem: Do you come recommended? Who trusts you? What makes you worthy of my consideration? Why should I pay attention to you? Who vouches for you? Who has told me about you? Are you open and transparent? Here, too, Egosystem has become Ecosystem, and a Trillion $ industry is changing as a consequence - from Push to Pull, from Yelling to Talking / Listening. Tough gig but... a gold mine if you can make it ;)
This is from our new series called "Where is it Going (WiiG)": Futurist Glen Hiemstra and Gerd Leonhard
talk about Behavioral Targeting, privacy, the future of advertising and
Google's recent announcements in this context. Subscribe to WiiG via iTunes (download all videos as soon as they go up).
MP3 file is here Details are here. Some snippets: Bottom Lines: The fight for Control was
a fight for Distribution. The flight for Attention is a fight for
Trust. The beneficiaries of Control were Monopolies. The beneficiaries
of Trust are those that Collaborate. Advertising 2.0:
Information becomes Conversation. Interruption becomes Engagement.
Annoyance becomes Entertainment. 'This is an Ad' becomes 'This is
Content'. The Sharing Economy Logic: Sharing...the
Output (i.e. publish, re-mix, co-create, life-stream...) the Input
(i.e. remuneration in cash, attention, reputation...) ... the Thruput
(i.e. usage data, meta content, attention trails >> New Data
Economics)
I just uploaded this new video (below) to my video channel on GerdTube.net (Blip.tv); it's somewhat similar to what I presented at Mobile Monday Amsterdam on March 30, 2009.
Topics: A
drastically different Broadband Culture is imminent - total mobility, always-on, low-cost Internet access,
constant peering and pervasive social media, rivers of news and oceans
of content. Developing nations will go straight to digital content-access,
straight to mobile EVERYTHING and straight to next generation
advertising and marketing. Control, Domination and Push / Monolog is
out; Openness, Collaboration and Conversation is in. From EGOsystem to ECOsystem. More: check out the GerdTube RSS feed (download all shows via iTunes)
I have mentioned Google's music-related activities in Chinaa few times during the past 2 years; and just yesterday this topic seems to have heated up considerably. I think these developments are crucial and need further exploration.
As you may know, Google owns a good chunk (or all?) of the Chinese search engine Top100.cn, one of the biggest rivals of the Chinese super-portal and ruling search giant, Baidu. However, Google is still a more or less distant second in the Chinese search market (in 2008, Google had approx. 16.6% vs Baidu's 76.9%) and really needs its Top100 property to better compete with Baidu. The major issue here is - you guessed it - the availability of CONTENT- or rather, the simple displaying of links to millions of music & film files that those hungry freeloaders i.e. digital natives want to stream or download. Baidu allows this - in fact, thrives on it - while Google / Top100 does not (i.e. it filters and removes the links to the files). This is a huge handicap for Google, because the filtering of those content-links is basically driving away all of those 100s of millions of Chinese Internet users that are looking for just that.
Realizing that the real value of the users is in their participation and engagement, and then in paying-with-attention, Google has clearly pursued a strategy akin to the 'Music Like Water' model that I (and Dave Kusek, my partner-in-crime for "The Future of Music") have also described countless times: Google will simply provide the platform where music can be turned into money, by connecting the user with the content they want right where they already are (i.e. the search page), while gradually but aggresively monetizing their presence and their clicks via 3rd party payments - and this does not mean just ads. Sounds simple but maybe this has not yet been financially feasible in the past - today, any new money for the music companies is welcome, I guess, so here we are, finally: Search with us and we'll give you Free Music. Kai Fu Lee Image via NYT.
Clearly, it is much better for Google to offer and develop a new payment logic and mechanism for the music that is being used, i.e. to somehow license and pre-pay for it (I call this 'being the lubricant of the ecosystem') until such time where the revenues from advertising, up- and cross-selling are big enough to pay for everything, and quite possibly beyond that, as well. And as far as the music licenses are concerned - otherwise a no-go minefield that few Internet companies have crossed in the past - China is clearly a very good place to start as most of these new revenues will be 'found money' for the record labels.
Total Telecom reports: "Record companies will take roughly half of any revenue from banner ads
placed on the page users see when they are downloading or streaming
songs, with Top100.cn taking the remainder. Google could benefit from
increased traffic on its Chinese site, and can sell its trademark
search ads on the search page" The bottom-line? For all parties, it is better to deploy new kinds of ads (think mobile - that will certainly be key), sponsorships and affiliate links while the music is being used (fka consumed;) and to thereby fund thepool of music licensing costs, then not to get involved and leave the turf to all the other guys that don't play by the rules, anyway.
Now, Google has apparently licensed 350.000 tracks from all major labels (how long did that take... I am afraid to ask... *rant alert) and many leading Chinese record companies and artists, and if you are logged into Top100.cn, and based in China (sorry - no access from EU / US), apparently all the music is yours to stream and download.
So: Google pays for the music to get our attention for their ads - sure sounds like a familiar strategy. Radio and TV broadcasting, anyone?
Another interesting morsel is that apparently streaming and downloading is treated as pretty much the same thing (again, from the WSJ coverage, see link below): "Google's Lee said songs on the service are downloaded or streamed
around 1.5 million times a day, and he hopes the number will eventually
be many, many times that". I believe I have mentioned this basic fact of Internet music a few times before, too: streaming & listening IS downloading, access IS ownershop, and that's that. The legal artifacts remain, I guess...?
Now, just because I won't want to agree with the major labels and their lobbyists too much;) - here are my big questions:
If this works in China, why not do this everywhere else? If this works for Google, why not for telecoms, ISPs and mobile operators? If this works for music, why not - sooner or later - for music, TV, video, books and newspapers?
First: China does not have much of a business of 'selling units', i.e. there are no Billions of $ in selling CDs or single-track downloads. Therefore, any money that the rights-holders (i.e. the record labels and music publishers, and hopefully the artists) can actually get from anyone in China is probably very welcome; and that is exactly what the Google / Top100 deal will provide. And even though it would be a fair bet to guess that this deal is probably not coming cheap for Google China, it is probably still quite doable since the 'competition' of physical music sales is negligible and so-called 'cannibalization' of traditional music sales is not a major concern for the record industry in China. This would of course be substantially different in the UK or Germany where CD sales and the omni-present iTunes still generate Billions of Euros per year. But this is the lesson: someone had to put some money down. Congrats to Google / Top100. Next: the telecoms - within 6-9 months, imho.
While the cannibalization prevention is, of course, entirely reasonable (if you still sell units), it does beg the question: why do those lucky Chinese Internet users - many of whom may never had to worry much about potential copyright issues, 3 Strikes+Out ideas or MP3-server raids - now get a de-facto feels like free music service, while we - the more or less faithful and compliant residents of 'The West' - still need to pay 1 Euro / 1 $ for each single download on iTunes, $3 / month for Last.fm (ouch) or run off to the record store, or order on Amazon.
This clearly does not make sense: it feels a bit like we are being penalized for having actually paid for our music until now. So, some will surely argue, does this mean we should stop paying for music until such deal is being offered in Europe as well? You tell me - but it's sure worth a discussion, I think. It seems to me that this model is workable around the world now - and not just for / with / via Google - and that it should be pursued in Europe and the US, as well. Give us a licensed platform provides 'feels like free' music to the users, based on collective and public blanket licenses that can enable anyone that wants to offer music with what they do, while paying for the licenses with the traffic that those offerings, the added values, the platforms, will generate.
Here is another interesting quote from the WSJ: "I can't overstate how important the new Google service is, said
Lachie Rutherford, president of Warner Music Asia Pacific, which is
making its entire global catalogue available in China as part of the
deal: until now, the online market in China has been completely
un-monetized by the music business"
This strikes me as a very interesting way of putting this: Lachie / WMG: isn't the entire Internet music-sharing economy (i.e. P2P, stream-sharing, drive-sharing etc) un-monetized, as well? And why is that? If WMG can do this in China because their is no previous unit-sales income worth mentioning, why not do it for the Internet, period? Why not license Google - and Facebook et al - and the ISPs in much the same way? Or will you just do this in places where nobody paid anything to begin with?
Techdirt has a very fitting comment, on this (see the link below): "The fact that the labels are moving forward with this plan in China,
given its reputation as the wild west of copyright infringement,
undermine their contention that they can solve the supposed piracy
problem with legal or technological means elsewhere. Furthermore, it
exposes the reality that what's staring them in the face is a
tremendous opportunity, not a problem"
Not much to add here, except for my usual Lessig-esque mantra "Compensation not Control". Google + Telecoms - will you do that for / with us, please? This year?
Keynote Speaker, Think-Tank Leader, Futurist, Author & Strategist, Idea Curator, some say Iconoclast | Heretic, CEO TheFuturesAgency, Visiting Prof FDC Brazil, Green Futurist
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