Infographic produced by Atlassian

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Tapping into the collective is great for some things and not so much for others.

Information can easily be disseminated via Wikipedia, opening up knowledge historically limited to academia.  News can be broken on Twitter, turning the control of traditional media on its head. 

But when the crowd is being tapped for paid services and not free information, there is an inevitable resistance from those being 'sourced.'  Designers abhor crowdsourcing.  As would any provider of services that doesn't want to become a commodity with a dollar sign next to their creative IP.  Justifiably, they want their reputation, references and existing customers to count for something.

Despite this push-back, crowdsourcing is great for the receiving end.  For a promising example of how to monetize the crowd, look at TechCrunch 50 2009 Winner Red Beacon.  Quickly and easily you can get a wide sample of what the market can provide.  This flattening of the service process is powerfully democratizing.  Is crowdsourcing the new RFP?  The incumbents sure hope not.

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“Whenever I walk somewhere, and someone hands me a flyer, it's like they're telling me, ‘Here, you go throw this away.’” – Mitch Hedberg

I love most things about my apartment in San Francisco.  Close proximity to the wonderful Alamo Square park, nearby restaurants/nightlife and a spacious backyard.  But one thing bothers me – and it’s not that halfway house this time.  We receive a constant flood of direct advertising that covers our doorknobs, front doorstep and stairway railing.  You know, old-school spam. 

Rather than ignoring them like usual, yesterday I had a different thought.  I picked up the best looking flyer.   “Jet Car Limo” read the 5x7 glossy mailer, a car and limo service based in San Bruno.  Never heard of them.  So, like I do for most businesses, I started with social search:  Yelp.  No results for San Francisco.  I changed the city to San Bruno.  Still nothing.  I then checked Twitter.  No Twitter handle or relevant search results.  Next, Google.  Sure enough, their snazzy website popped up as the first result.  Not surprisingly, no links to any social media presence.  Separately, on the Google results I found their LinkedIn page.  Not good news here either: 2 followers and no description.

Here's an idea.  Instead of hiring someone to walk around San Francisco all day with expensive direct mailers to litter on stranger’s doorsteps, why not go online?  Create a profile on Yelp, Facebook and Twitter.  Find your customers, get free feedback.   Promote, engage and listen.   Technology is perfect for making small businesses look big.  Just ask the Crème Brûlée Cart guy.

If you must go with direct mailers, do something to stand out.  Normally when I see people handing out flyers I think of the above gem from Mitch Hedberg.  However, today I saw a purple cow.  Standing on a corner in SOMA a man from Local Kitchen & Wine Merchant proclaimed, “Free fries!”  as he handed out a lunch menu and a small bag of fries (well, more like pita chips).  For once, I didn’t think of Mitch.  Sure, the “fries” were cold and kind of stale.  But it was memorable.

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One of Hulu's biggest accomplishments has been creating a convenient, free and legal alternative to Bit Torrent for high-quality video content.  Even with big losses like the full series of It's Always Sunny In Philadelphia, it has remained the best library for online video.  However, the free times they are a-changin'. 

Today, Gizmodo reports on recent comments from Chase Carey, deputy chairman of News. Corp which co-owns Hulu, boldly claiming that, "Hulu's Glorious Free Days Are Officially Numbered."  Well, not quite.  According to TV Week, "[Carey] later told B&C's Claire Atkinson that not all content on Hulu would be behind a pay wall."  So, to the freemium model we go?  Or payment on a per-episode basis?  Proceed with caution, content distributors and recall history: Netflix's streaming subscription model has been a widespread success in contrast to the tepid reception of rental/purchasing alternatives on devices like the Apple TV.  Sorry, that hilarious episode of The Office where Dwight's desk is moved to the bathroom isn't worth $2.99 tethered to one device.

A discussion on the future of TV would not be complete without our good friends the cable providers.  Where do goliaths like Comcast belong in the ecosystem of IP-based syndicated content?  Trying to maintain relevance, they're scrambling to compete with TV Everywhere initiatives of their own.  But do they really address a consumer need in our social, peer-driven world of discovery?  For me, not really.  I don't have time for aimless channel surfing, I find out about shows through peers.  Like the hilarious Glee.  That's right, I said it.  The sole remaining benefit of cable providers is to promote niche channels/shows that would otherwise struggle to receive national audiences.  You gotta love cable bundling packages.  If there's a lesson to be taken from the dumb-pipe-be-damned mobile operators, it's that powerful incumbents will fight hard to preserve dated business models.

Perhaps the transition to paid online content was inevitable as a critical mass audience moved online and pre-roll advertisements didn't cover the bill.  The Chris Anderson model of free may be viable for the long-tail but is it realistic for expensive TV production and Hollywood salaries?  Maybe not.  As the outspoken Mark Cuban humorously puts it, "We aren’t talking healthcare, we are talking The Simpsons.  No one in the country has the right for their Simpsons to be subsidized."

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So long glory days of the CD...

Source: New York Times.

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Shawn Fanning’s infamous 1998 project (Napster to the unfamiliar) was my first taste of technological disruption in music.   Since then, the business model for record labels has steadily eroded: physical media sales continue to drop, although at a slowing rate.  And despite ridiculous RIAA lawsuits and high-profile cases like The Pirate Bay, piracy remains normative: a new study of college kids finds, “kids know that piracy is illegal, but they do it anyway.”

With the music business in freefall, what positive effects has technology brought to music?  A huge one is social discovery.  Facilitated through social networks like Facebook or services like Last.fm, Pandora or imeem, it’s never been easier to share, discover and enjoy new artists.  Still, the monetization of these services has been a long, slow struggle as they experiment with combinations of advertising, subscriptions, and premium access.

In additional to social technologies, the longtail brings promise to the music industry.  What does this look like today?  Recent research grounds us from the hype:

• “U.S. album sales in 2008: More than 115,000 albums were released, but only 110 sold more than 250,000 copies, a mere 1,500 topped 10,000 sales, and fewer than 6,000 cracked the 1,000 barrier.” - Chicago Tribune
• “A study last year conducted by members of PRS for Music, a nonprofit royalty collection agency, found that of the 13 million songs for sale online last year, 10 million never got a single buyer and 80 percent of all revenue came from about 52,000 songs. That’s less than one percent of the songs.” - New York Times

In other words, most of us still listen to and support only a few mainstream artists.  Outside the online world of social discovery, the incumbent, defensive power of labels remains strong: terrestrial radio, MTV and BET devote the majority of airtime to the same top 40 songs.  Whenever I listen to the radio, it feels like the same 12 songs.

How can we shift the music industry’s archaic model to be more consumer-friendly and profitable?

• Embrace music as promotional, even free, content...  According to Wired, “The best-selling MP3 album at Amazon in 2008 was Nine Inch Nails’ Ghosts I-IV, which was released free...”  This may not be viable for all bands, because NIN (and Radiohead with their similar In Rainbows experiment) already has a massive audience.  But the ease of distributing content illegally cannot be ignored.  Heck, even DRM is easy to break.  Make content free and link to merchandising and live concerts.
  
• ...and extra(s)! extra(s)!  Fans want more than an mp3.  Take a cue from the iTunes LP and give us add-ons like song lyrics, extra tracks and high-quality album art.  We'll pay more, if it's worth it.  Despite the $250 price tag, many diehard fans will buy the recently released box set of the Beatles discography.
  
• Be social. Rather than fight social music services with paralyzing royalty rates, see these services as your allies.  Use innovative social platforms like those offered by CultureJam to promote music on Twitter by creating a sense of 'social currency.'
• Don't ignore the longtail.  Although mostly potential to-date, the longtail is as vibrant as it ever has been.  And will continue to grow.  In tandem with the eventual death of mainstream advertising, the value of niche will become ever-important our flat world. 

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The University of Pennsylvania and UC Berkeley recently collaborated on a survey of 1,000 US Internet users about targeted advertising.  Their findings published yesterday received a good amount of press across the marketing and technology landscape.  The results?  Consumers don't want targeted advertising, especially at the price of our privacy.  The findings surprised many pundits, but I don't buy it.

The average consumer doesn't think about the behaviors marketers already employ to target us with advertising.  What began with Nielsen TV audience data in the 1950's has expanded to include Google tracking cookies to study where we browse, mobile usage patterns from our cellphone carriers and 'preferred' credit accounts at retailers that track our purchasing behavior.  Whether or not you like it, we are being tracked online, in purchases and with mobile behavior.  Ask us a few survey questions to make us aware of these tactics happening without our explicit consent and of course we would say we don't want even more of it.

Still, important issues remain that must be addressed in order to make the future relationship between marketers and consumers more harmonious.  Key advice for brands:

• Keep policies transparent.  Most consumers don't know what personal information is already being used by marketers, nor want to know (Orwellian, much?).  Still, don't make it feel like my privacy has been invaded.  Clearly communicate goals and proposed consumer values.
• Allow users the right to opt-out.  Don't make the same mistakes of Facebook Beacon.  Make first initiatives opt-in to encourage user feedback, especially if planning to roll out to larger audiences.  Make us want to share information by first showing us the benefits.  Which ties into my third point...
• Make advertising social and fun.  The promise of social media marketing still remains large and uncracked.  New efforts from Facebook and Nielsen will try to open up the potential of their 300 million users.  This can be through interactive games, lightly-branded experiences or encouraging viral, peer-driven campaigns.  Yet, tread carefully and listen to users. 
• Don't forget to make exciting products.  Create products that consumers want to talk about. This makes your job easier, too.  Foster a brand that's honest and encourages crowd input.  Make us want to like you and we promise we will make it worth your time.

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