“Malone said he didn’t think that an advertising model made sense on Twitter, but there was some hope for a subscription model.” — From this morning’s Wall Street Journal article on what media moguls think of the digital future

The internet shivered a little at comments like the above from a Wall Street Journal article that ran today. I was going to write about TV this morning but I saw the above reblogged on Paidcontent.org and it stopped me in my tracks. Someone who runs a giant media company worth billions is just now thinking about this possibility when someone like me who is nobody has known it for five years?

Anybody who understand platforms would understand that the ad model traditionally doesn’t work around a utility service. Twitter’s core function is utility. How many ads do you get on your cell phone when you dial it? None. There is a reason for that. I post about a lot of this here. If you look at the internet as a platform, you can compare it to other platforms that have been around for a long time and find a lot of answers. For example, the way to make money on it.

I don’t think it is because of anybody’s age — anybody can learn. I think it’s because they’re looking in the wrong place, probably in some part because they are listening to the wrong people. I don’t believe in the gloomy forecast for the digital media future, but maybe if this is where people’s minds are at.

I have a bet for any media mogul. I bet I can assemble a team, create or take over a site, build and engage an audience and monetize it using models that have been proven and that go beyond advertising revenue only, including subscription services/content. Three years.

1:03 pm  •  9 July 2009

It seems funny that on the day I wanted to write about something other than business, two online stories (here and here) brought me back to it. First, I hate to appear as if I’m criticizing what other people say. I also don’t like to assume I know more than anybody — smart entrepreneurs always listen. But, this is the wrong idea about the future of the internet and a big reason why so many markets around the web are a mess.

— What we are experiencing in the world is a change of PLATFORMS. Those we used to use that are/will be affected include: Print media, broadcast television, mobile, PSTN (aka, landline). They are being (and will continue to be) modified or replaced by the internet platform.

— In the future, all of the above will go over ONE platform: The internet.

— Monetizing platforms is not new. It’s not complicated. It does not vary much from platform to platform. Study the history of platforms (or even just look a little into it) and you’ll see this.

— Information does not “want to be free.” Information can not be free because it costs money to make. There is not enough ad revenue to go around to fund this even in a fat market — that is why subscription content exists. It is also here because people choose to pay for it.

— In the future, some information will be free. Some will be subscription. That’s because of point #3 above.

— There are already working paywall models online from media outlets to social networks. There are many examples and variations of this. Just because the newspaper business messed up doesn’t mean it doesn’t work or “people won’t pay” subscription fees on the internet because they are already doing it.

— Devices will not usher in anything but the device agnostic and other functional capabilities of the internet that are related to it.

— Comparing today’s web user with the past is a mistake. User habits evolve and change. During 1.0, the masses thought it was “creepy” to be on “message boards” — the 1.0 term for guess what? Two way communication online, or in other words: Social networks.

— Media companies are failing because they are not focusing on the most important thing to do with a new platform: Marry people to it.

8:05 pm  •  6 July 2009

Fireworks over the Hollywood Bowl last night!

7:43 am  •  6 July 2009

Death Cab for Cutie rocking it out with the L.A. Philharmonic

7:32 am  •  6 July 2009

It’s not all work! Cutting lose at Paige Craig’s 4th of July party in Venice yesterday.

11:51 am  •  5 July 2009

This week, the topic of “free” content and services on the web is once again coming up in conversations, sparked by the recently released book on the topic. It’s hard for me to talk about it because to me, these conversations feel kind of elementary (and I say this with all due respect because many of those speaking are smarter than me in a lot of things and people I admire). But, it’s a little like “Allegory of the Cave” — people will not stop staring at the shadows on the wall to realize their view of the world might be wrong, and that there is a bigger, better scene if only they would look outside. I wish more would entertain the bigger picture of the web, the history of platforms of all types (including the internet) in our society and even greater, the lessons that already exist on topics such as this. I say all the time that we are taking the long way around with internet business. Someday, people will understand that I am right and why.

No less, on the topic of free:

1. The internet is a platform. We have many platforms that already exist. The rules on these platforms have not changed — only the strongholds around them. Nobody created these rules on the platforms — they grew out of evolution and necessity, just like they will online.

2. We would adapt and adopt business to the web faster if only we would understand point 1 above.

3. Ad supported, free content has existed over many platforms in the past and has always been poor quality, creating the appetite for better stuff even if it means paying for it. Push all the free you want on the internet, eventually the quality — not the cost — will drive other models.

3. Supply grossly exceeds demand for ad supported only content on the internet. The idea that there will be gobs of money to support all that free content is wrong.

4. It is ignorant to take an audience (society) that has voluntarily accepted subscription content and services and train them backwards. Only to eventually realize that they themselves drove the acceptance of subscription content by wanting to pay for it and will again. Again, taking the long way around…

5. Perhaps it is not an issue of “free” but “cheaper.” We will pay less than we do now for content and services on the new platform (the internet). It will not last forever, but we will.

6. The internet platform is unique in that it serves as a utility and content distribution platform. Monetization in these separate worlds are very different. It’s worth a look further if you want to make money where they are combined.

7. Anybody (newspapers, TV, internet sites, etc.) that is not succeeding in drawing an audience to their site is failing in marrying audience to platform. It has nothing to do with anything else.

Someday, people will listen to more people who see the internet from the same perspective as I do (platform focused). In entertainment business, at least 35 other people in high level business that I know talk about it. With internet business, I never hear anybody reference it, ever. Odd? You decide.

P.S. — this blog also has some interesting thoughts on the topic.

10:58 am  •  5 July 2009

Last night I met a newspaper photojournalist who has been with major dailies for the past twenty years. As she sat with us, two hybrid girls who grew up with both the web and print media, her stories were so incredible. All I could think about is what a shame that ignorance and immaturity is killing off the reporting business. Ignorance on the part of print media itself (and those leading them) for not knowing what to do, and immaturity that people don’t understand the web is supposed to replace print. The non stop “print is dead! print is dead!” chants from bloggers (and journalists) is ridiculous. Yes, print media is going to be replaced by digital. There is nothing to see here. It’s what the internet has intended to do all along because it is smart. Nobody ushered this in - no person, blog, etc. It’s simple evolution.

Print is passing away, but reporting is not — and the confusion of the two is unnecessarily killing reporting. It doesn’t make sense because more or less, writing and publishing words on the internet is no different than writing and publishing words on a piece of paper: It is all reporting. It is all journalism. You are all essentially media. It’s fine to celebrate and take advantage of barriers lowering in markets disrupted by the web, but we need to replace these things with real, viable businesses then — that means digital media outlets focused on making viable, digital media businesses versus banking on a sale to Hearst, Conde Nast and AOL as a model. I personally think we all benefit more from trying to help old entities also transition to the internet, but if you truly want to see their demise, fine. However, we all better be working to put something in place of it, then. We all lose if we do not.

Other things to note:

— TMZ: Breaking the Michael Jackson stories has nothing to do with digital media being better or good, and everything to do with TMZ obviously having a very good tipster. Do people really think TMZ would get that much insider information without someone leaking to them? This can happen with any media outlet. Lucky for TMZ, they were the one chosen this time.

— I understand that it hit the web before it hit television, but there is plenty of news that is brought by television before it hits the web, and plenty of people who got the news through other forms (including radio). It is a nonsensical discussion.

— Internet TV has nothing to do with declines in broadcast TV audiences.

— “Advertisers spending more money online” does not mean digital media companies are benefitting — particularly independent outlets, blogs, etc.

— The White House itself said that traditional TV and older web technologies (email marketing, etc.) won Obama’s campaign, not social media as many assumed and reported.

— The idea that people “won’t” pay for content, etc. on the internet is false. There are already many examples where people are. If you’re talking about the topic, this should be part of the conversation.

— Branded entertainment is not new, novel or ground breaking in media or entertainment. It makes no sense that media is toting it as a big idea regarding web video.

— It’s been said that internet advertising takes longer and needs to be viewed more in order to be effective.

— Print media can make the transition to digital effectively — All Things Digital, NY Times, and many other examples exist. They may not be making much money, but neither are most blogs.

7:42 am  •  3 July 2009

There is something interesting going on in the world of business at the moment, particularly as it relates to information and content. The advertisers and brands are beginning to have greater control over what’s created — to the point that they themselves are doing so. This isn’t new, of course — it’s said the same kind of scenario went down shortly after television was invented, and has existed over the course of time. I don’t mean “advertorial” or “sponsored” content (like you see with Daily Candy, etc.). I mean where the brands are the publisher — and what you consume is directly created and controlled by them. Until more recently, the magazines you read are created by a publisher, like Conde Nast, etc., with the content/information funded by a small subscription fee we pay and ads from brands. The same goes with television shows. However, today the world is changing. Anybody can become a publisher thanks to the internet. The barrier of entry to do so is very low. Costs are less expensive than ever before, and there are channels to market completely free of charge. It ushered in the “user generated content” era — and guess what else: A nice little hole where brands can now become the producers of what you read and watch. And of course, they are.

Lexus car company started L Studio. Brands are said to more or less be deciding everything that’s on TV (including that abundance of cheap and trashy shows) at the moment. Many production companies in the Web TV market are solely creating content for brands — there was just a story about it in Business Week, toting it as the “way to make money with internet video.” Uh, sort of. Social networks give the ability to promote market everything free of charge, and amateur content creators, hobbyist bloggers, influencers, etc. are more than happy to help spread the word to their thousands of followers — often for just free product, special invitation or a ride in a car. Not long ago, a friend of mine with a digital media company said, “We have brands coming to us saying ‘Why should we pay your company to advertise when people on the web will promote us free of charge?” The brands are right, really. If the “free” content world online demands that brands absorb the cost of everything, well, I don’t blame the brands for wanting to take a bigger stake and do it themselves.

Somewhere, there are people who will fixate solely on one part of this picture: Free. Ad free world! No more commercials! No more fees for content! In a way the enthusiasm is understandably so. Cable TV costs are insanely expensive, magazines can be up to $4 a pop or more. But, I wonder — what will it be like where it’s the brands coming to media and entertainment to create what we consume versus the other way around? Only time will tell.

8:19 pm  •  29 June 2009

Meghan, Sayeh and I at an opening party last night

12:58 am  •  26 June 2009

"All through dinner, all I could think about was how confident you were, how sure of yourself you are. Then, as you were leaving and I stopped you, you looked at me and looked so vulnerable. That was what did it."

— Paraphrased from someone recently met. Men are so confusing!

11:29 am  •  25 June 2009