March 9, 2010
"I’m sorry. In my world, ‘subscription’ means paid"

— me to an advisory client yesterday, via email

10:40am  |   URL: http://patriciahandschiegel.tumblr.com/post/437218873/im-sorry-in-my-world-subscription-means-paid
March 8, 2010
Hmm. Majority Of Sharing Is Not By Way Of Social Networks Afterall

…but email (the pie chart is worth clicking through the link!)

It seems there have been a lot of holes poked into the social internet’s story lately, as well as where the internet platform in general is in terms of its position as the main communications and information distribution platform in our society. First, research showed people DO pay for content on the internet and are willing to continue to. Then, it was the reality that SEO doesn’t really drive that much audience. More recently, it was that the TV platform was still the dominant platform for people to get information/news. And now today, the study above about email being the primary way people share things on the internet. That was something that had come up last year after Obama won the election as well — the White House was quoted saying email marketing was used primarily in promoting the future Mr. President, not social networks as the media had been stating. It’s all things that were always here and true. People haven’t been aware of it but it’s coming into the picture now.

Even bigger, however, is that it points to something very interesting about the social internet. It’s actually not the best delivery model for content and likely won’t ever be. In fact, as the social web becomes more about tools and varying means of communicating on demand as the user desires (group or single person), it’ll likely be harder to slip things like content into the mix. That’s because social networks are utilities on the internet platform, very similar to phone calls. It doesn’t mean there won’t be some place for content to be integrated, but it’s not likely that it’ll be to the degree people believe it will be in the future. It’s why social networks need to be careful when angling for a content play - it’s not native to what the functionality is of their core service. A lot of sites do it to make money off ad sales because they don’t understand that first and foremost, they are a utility and utilities on platforms monetize via value added services and subscription access. Content/utility hybrids can be done but companies have to be careful not to interfere with the core reason why users are there. It’s worth noting that as the way users communicate via the internet evolves, what works as a value added service today may not later.

The good news is, email is said to be 75% effective in doing what you want it to do. Now, all a newspaper or media site has to do is offer a new, more valuable, greater access version of its content on it’s website and enable users to subscribe for a tiny fee (to start), delivered via email, or if a user would prefer a social network via DM or automatic link. Someday, someday.

A good example of a value added service model on a social network is Facebook’s virtual gifts, digital payments, and the EventBrite relationship in the news today

6:31pm  |   URL: http://patriciahandschiegel.tumblr.com/post/435871285/hmm-majority-of-sharing-is-not-by-way-of-social
March 7, 2010
"when you are here you should get your brows done by my girl. grow ‘em out. i’m having an accountant do them tues — i do not think i could ever do my taxes myself."

— Common conversation, via email

1:09pm  |   URL: http://patriciahandschiegel.tumblr.com/post/433060304/when-you-are-here-you-should-get-your-brows-done
Understanding The Internet Platform Eco-System Is Key To Legacy Platform Businesses To Adapt To The Internet

“Beyond the iPad, he believes that all the talk once again from big media companies about erecting paywalls or somehow charging for news, articles and video online is shortsighted at best. He comes back to the simple fact that the open Web is where the users are. Talking about paywalls and paid apps is like saying, “We know where the market is and we are not going to go there.”

“Despite trying time and again, Andreessen’s observation is that media companies have no aptitude for technology, nor do they really understand what technology companies do. The one thing technology companies do really well is deal with constant disruption.”

— Two quotes from an article today about internet business’ thoughts on media business.

The above brings up a very interesting point about the internet: It is a communications and information distribution platform that is replacing FIVE other platforms in our society. This means that five industries — print media, TV, landline phone, mobile phone and radio — are moving from their legacy platforms to a new one. It also means that multiple industries that do business differently down to the revenue model and approach are now all in one giant sandbox together. It does not mean that one platform business, like the internet business, will know how those industries need to adapt and adopt online. Confidential to the internet business: Your content ‘success’ stories are AOL and Yahoo. You haven’t exactly done any better with content business as content business has done with technology/internet. 98% of everything you’ve championed to date about user behavior online — like people not being willing to pay for content — has been wrong. How’s that internet video working out, Veoh, Mania, Joost? What was that about internet killing TV? That’s because it won’t kill it — it’ll replace TV’s platform. When it does, it’ll be the same business, only the delivery model, devices and platform will be different. I will bet my entire shoe collection on it.

I have not found one person in the internet business in five years that sees or understands the internet is a telecommunications platform and approaches it like this, and the only company that does so is Google, and in some ways, Apple. What’s a packet or an IP multimedia subsystem, everybody? How about a showrunner? Are you aware that over platforms historically subscription content and paywalls have actually existed out of user demand for greater access? The internet business thinks the world’s going to be free or cheap (and somehow, we’re all going to make money too) but the reality is, good content and access costs money, and people - not business - drives subscription content’s existence. If you studied content over platforms historically, you’d find that most content play is subscription or subscription/ad hybrid. Nobody holds a gun to my head and forces me to buy Lucky Magazine every month — I choose to. I don’t like Lucky online because the site is a mess, and all the free blogs and digital media companies just don’t have the same access to things. Most bloggers can’t afford to fly to Fashion Week in Milan and sit in the front row. They can’t even buy adequate analytics tools or research reports to advise and report on internet business. Subscription content is driven by users wanting greater services or access. It always has.

It’s very important for everybody to understand that many different businesses do business over the platform and not all — even great companies in the internet or media or TV business, etc. — will know how the other should approach things because they are not experienced in those businesses. Most of all, to assume all users behave the same is a mistake — but also false. The “open web” is not where “everybody is” - that’s like saying everybody in the world behaves the exact same way and does the same things. It’s not true anywhere and it’s not true online. Plenty of research has proven this. In fact, in reality, the only thing that the internet has changed is access, devices and delivery. Much of business and user behavior — albeit migrated to a new platform — has and will stay the same. This has been true in platform business for decades. The internet won’t likely change it.

During 1.0, retail business did not turn to the internet industry to learn what to do — it studied the platform, found the right methodology and adapted on its own. That’s the right approach. Content business needs to focus on how to do content business — not technology business — online. The only thing it can learn from the internet side is how to build an audience, because it has seemed to forgotten, though mind you — it was the internet business that championed gaming page views and uniques which everybody is finding out doesn’t work. You have to build a customer base to have a business - there is no cheap, easy or scalable way to do it. That’s been internet/technology’s problem in adapting to content business on the internet.

I do agree that the industries have to let go of their legacy platforms and move on, however. +1. The sooner all do, the better.

8:38am  |   URL: http://patriciahandschiegel.tumblr.com/post/432597526/understanding-the-internet-platform-eco-system-is-key
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March 5, 2010

9:06am  |   URL: http://patriciahandschiegel.tumblr.com/post/428528015
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Oh Already, Yahoo

I don’t mean to pick on Yahoo, but this one is tough.

Laying off bunches of people then turning around a few months later toting how you’ll be spending money “buying audience, technology and tools” is a little like saying you need a government buyout, then blowing $40k at the spa. But, maybe they were employees in the parts of Yahoo that Yahoo doesn’t feel are relevant to what Yahoo is. What I wonder though: Does this mean Yahoo’s longtime strategy of content partnerships for its “media company” aren’t cutting it anymore?  It seems odd that a company with the kind of reach Yahoo claims it has would need to be acquiring audience. Is signing a deal with Wal Mart then later adding in the kind of content that fits the brand kind of like Babe Ruth pointing to the bleachers then trying to hit a home run? Yahoo suddenly feels that it needs to do a “better job at targeting American moms,” coincidentally just after nabbing the Wal-Mart account.

What’s odd is that Yahoo then said that the “fight” to get new users is “just too expensive” and that it’ll be focusing on getting ads around relevant users instead. I guess this can parlay into its strategy of buying audience. But, in the same sentence, it says it can put its money elsewhere than trying to get the next unique visitor in the U.S., like in Brazil and Mexico. So much for those American moms. For a likely fraction of what Yahoo is going to spend buying things could be spent building its own real audience on its own. There is absolutely no reason why a major company that spends a $100 million on ad campaigns can’t build a product, and then an audience around its product, itself. Though Yahoo was quoted saying its content is a mix of partnerships and “its own editorial voice.” Yahoo shuttered its editorial office years ago and to my knowledge hasn’t brought it back. Maybe Yahoo’s “own editorial voice” is in all those things they’ll be buying? Yahoo further says that its interesting content that makes people visit the site — yet it’s session times are down. That’s the opposite of what happens with good content but who knows.

It’s unfortunate that the very day Yahoo’s CEO says that they need more video that a report comes out that online video use has dropped. Granted, internet video will grow by what the internet platform is here to do, but it’s worth noting a good majority of companies playing in online video have closed or moved on. You’d think Yahoo would know its early for video. You never know, but ouch. Then, Yahoo was quoted saying that the reason why it wasn’t as big as Google was because “they do different things.” Like email, search, instant messaging and content aggregation through partnerships. Call it crazy, but that sounds pretty similar to Google.

Dear Yahoo: Your problem can’t be solved by buying things. Your problem is that you want to make money but not a real business. You can say you’re a media company but nothing you said about your content play has to do with what your audience wants — just what might sell ads. It’s fine to try to snap up audience around what sells but the problem is that you don’t focus on actually building an audience, or truly being what your audience wants, so you will likely lose whatever it is you buy (again). You mind as well admit everything you’re doing is about attracting advertisers, because that’s all you’ve said. Save the millions you are gearing up to waste and do this instead: Get to know your audience versus your advertisers and make — not buy — real products for them (as it costs less). The money will flow from here. Or, just add “ad network” to all those things Yahoo is, because at this rate that’s what you are. Or maybe say nothing — I’m not sure what you’ve said all week has helped.

Side note: Creating ads and content around users is not new or novel. Everybody’s doing it. -1 Yahoo. But I did agree with Yahoo’s mindset that advertisers users want a personalized experience online.

5:32am  |   URL: http://patriciahandschiegel.tumblr.com/post/428259606/oh-already-yahoo
March 4, 2010
Seeing Around Corners

Me: “Could money and the moreso the card processing industry have disruption looming ahead? Signs point to yes.” - Digital Currency Will Likely Bypass Cards As The Access Point, January 31, 2010

Wired: “The reign of the bank and credit cartel is ending.” - Money Wants To Be Free, March 2010

12:40pm  |   URL: http://patriciahandschiegel.tumblr.com/post/426754903/seeing-around-corners
Clever Verifone, But The New Thing In Payments Won't Involve Cards

I keep saying that money is about to be disrupted. It is, more than anybody will expect.

But it’s not likely going to play out this way, with plastic cards and middle devices that enable financial transactions on the fly. It’s a layer of authentication but technology can be so much smarter these days. I’m sure we can come up with something else that’s a little more current. Consumers are already widely comfortable using digital payments, which are essentially digital currencies in a sense. We pay bills online, sites like Facebook, Astrology.com, Paypal and I believe Stardoll enable various forms of digital payment (including digital currencies). Moving to this entirely would be no different from society accepting plastic cards over writing paper checks (which masses adapted and adopted), including in offline environments as the internet platform integrates into other things beyond devices (gas pumps, toys, TVs, etc.). It’s not a question of if but when.

Google and Paypal have been making interesting moves in the area of online payment lately. If both are aware, they will not get swept up in the card and go right to what’s likely ahead. After all, those plastic cards are frauded to the tune of millions every year. Could consumers be moved away from them? Likely, they will. And, soon. It also means there is potential for new players to enter the money space, many who will be unexpected. Watch the sky. There’s about to be a perfect storm.

Side note: Here’s a great early example of how the internet can be integrated into things. And, here, here and here, too.

7:08am  |   URL: http://patriciahandschiegel.tumblr.com/post/426332697/clever-verifone-but-the-new-thing-in-payments-wont
March 1, 2010
P.S.

The reason why the internet is disrupting each of the other platforms differently and at a different rate has everything to do with its own evolution and development. News was first disrupted, then print media overall, so it makes sense that these legacy platforms would be seeing steeper declines today — it’s a natural part of the evolution. How things move over the internet is via packets, and news or bits of information need very little speed/compression to move — that’s why the internet could deliver them via dial-up. TV on the other hand is not quite there yet because the internet has only been able to deliver TV (aka video) content since 2005. Packets containing TV content (or voice calls, for that matter) are far fatter/heavier and need very fast connection to work, which we have now. This shows you how slow disruption can be in its cycle — we won’t likely see the broadcast TV significantly shaken by the internet for at least another two years. Just the same we should expect — a.k.a, not be surprised — to see steeper declines and changes in the areas that were first disrupted (like newspapers).

It’s important to note that all of this could be happening faster if there were more effort centered around migrating users where we need them to go. Given that the internet is going to do what it came here to do, we mind as well jump on the train. It would save everybody a great deal of time, money and hassle. Eventually everybody will come to this conclusion. For now, we’ll fumble along.

8:09am  |   URL: http://patriciahandschiegel.tumblr.com/post/420044646/p-s
Media/Internet/Etc 2.0 Wrong Again. People Get Most Of Their News From TV, Not The Internet

  • 78% of Americans say they get news from a local TV station
  • 73% say they get news from a national network such as CBS or cable TV station such as CNN or FoxNews
  • 61% say they get some kind of news online
  • 54% say they listen to a radio news program at home or in the car
  • 50% say they read news in a local newspaper
  • 17% say they read news in a national newspaper such as the New York Times or USA Today.

- From a research report today about how Americans consume news and information.

How about that. After years of media/internet/etc. championing the idea that “news is dead” and nobody uses anything except the internet to get news and information, an actual study — determined via research — shows otherwise.

Now pretty much everybody doing business on platforms besides or in addition to the internet would have told you the same. Hear anybody talk from the research side and they’ll say TV is still the dominant platform over all. Even the Obama campaign said as much. Shortly after President Obama made it to office, the White House said its strategy was NOT centered on social internet as media/bloggers/etc were saying but broadcast TV and old school, 1.0 internet things like email marketing. Granted, studies (like the one above) are always subject to who and how many people are in the study, etc. so they can just be a slice of what’s going on, but lots of other research out there proves the same. As it turns out, contrary to what everybody on the internet side has seemed to believe and champion, people aren’t predominantly getting news from the social internet. They’re not even predominantly getting news from the internet at all.

This is a little disturbing, given that for the past five years the blogs and media covering the internet have said otherwise — leading lots of people in business down what’s essentially the wrong pipe. But, the right approach to a disrupted/fragmented market is to not fixate on any one platform but see them as a blend, and coordinate your business efforts around whichever is dominant to YOU and your customers. That’s the approach of multi-platform business (or transmedia as some call it). This is how marketers, advertisers, etc. also have to think as well. What the Pew study really shows is that we are all in a multi-platform market. Everybody in platform business (media, TV, etc.) should be operating as such.

The internet IS here to replace the other platforms in the market — that was why it was created. But, it’s not there yet, obviously. -1, 2.0. You should know your stuff.

Side note - The study shows that most who do get news from social network sites do so from other people sharing it — and not necessarily from the social network distributing news itself. That says a lot about the play some social networks are taking with becoming news outlets — and why I’m not a big believer of it.

7:57am  |   URL: http://patriciahandschiegel.tumblr.com/post/420028036/media-internet-etc-2-0-wrong-again-people-get-most-of