Social Media Now: Blogosphere No More!
May 23, 2007
Two indications that the heyday of the “blogosphere” is over this week.
First came the rapid rise and seven figure sale of WallStrip. From an industry perspective this is vlogging’s “Dan Rather” moment. I expect a lot of heat around vlogs in the next few months. DIY Internet media always proceeds from easiest to produce/lowest bandwidth text based stuff, up through harder to produce bandwidth hogs. Its time for strong, semi-pro vlogs to climb up into the mainstream the way political blogs did a few years ago.
Second comes today’s Technorati redesign. Technorati founder Dave Sifry writes:
Whereas folks using Technorati a couple of years ago were predominantly coming to us to search the blogosphere to surface the conversations that were most interesting to them, today they are increasingly coming to our site to get the 360 degree context of the Live Web - blogs of course, but also user-generated video, photos, podcasts, music, games and more. They want all the good stuff out there, all in real-time, and we’re using the power of 80 million bloggers to help organize it and make it fun to browse; using the wisdom of crowds as a mirror on ourselves.
Technorati made itself the arbiter of success in the blogosphere by inventing a kind of blog economy where links were the currency. But the company’s own research showed the growth of blogs slowing and new kinds of metainformation (like tags) replacing links in the value chain.
Steve Rubel’s experience summarizes the situation nicely:
…I have to admit that I don’t use Technorati nearly as much as I used to. Link authority was a good metric a year ago, but it’s not nearly as worthwhile today when you consider all of the centers of influence one may wish to search and track. Link authority doesn’t tell me who’s an influencer on Facebook or which video artists are rising on YouTube. It was great in 2005, ok in 2006 and really has faded from relevance in 2007.
At the heart of the new Technorati is the goal of truly live search of the live Web across all its platforms (text, audio, video) and all it’s meta-information sources (keywords, tags, directories), a universal search that goes head to head with Google’s strategy, a losing proposition to Rubel who says “the heyday of dedicated “live web” search engines like Technorati is coming to a close.”
Michael Arrington at Techcrunch reads the redesign similarly:
This is also a clear move by Technorati away from blog search, although many of the media search features have been around for a while. It may be an acknowledgment that they can’t beat Google Blogsearch over the long run, or it may be a strategy to go after a larger potential market for time sensitive content. Or both….
All signs are that Technorati is continuing to look for a replacement to Sifry, the founding CEO, and rumors that the company is looking for a buyer persist despite denials from the company.
But Robert Scobble kicked the tires at the new Technorati and was impressed:
Technorati does “Live” search MUCH MUCH better than Microsoft and even better than Google’s Blog Search.
I predict that, with this update, Technorati will become a quick takeover target. If I were at Microsoft I’d be spending a few corporate hours wining and dining Dave Sifry.
Technorati is so superior to all the other blog search engines now that it isn’t even funny.
Can’t wait to spend some time with it.
Sphere: Related ContentSocial Media Now: How Much is DIY Talent Worth?
May 22, 2007
Is DIY Internet video a new media type? Or just a minor league development system for traditional media?
The announcement that CBS is acquiring Wallstrip, a business group vlog covering stocks, sure looks like the classic minor league or indie rock development path. Wallstrip founder Howard Lindzon tells the rather unremarkable tale of the company’s development on his blog under the headline “You Can Make Money from Blogging!!!” But that headline is a big of misdirection. First, Wallstrip isn’t a blog, it’s a vlog. If it were a blog CBS wouldn’t have been interested. Second, proof that a company will acquire your vlog is hardly proof that the vlog can make money.
I don’t mean to dis WallStrip–in fact I’ve never seen one of its vidcasts and my friend Fred Wilson is involved and I know he has impeccable taste when it comes to Internet companies. I just want to put the deal in perspective for all the new media triumphalists out there who insist that Internet video is killing the TV stars. It looks more like Internet video is creating TV stars. And, as Om Malik points out, “the Wallstrip deal does put a price tag on these ‘talent’ oriented buyouts.” The price for the Wallstrip talent acquisition was $5 million according to reports, but what exactly is CBS buying? Said Duncan Riley at Techcrunch:
From my previous discussions with my source close to the deal, WallStrip has close to no revenue; indeed he claimed that WallStrip has no revenue at all. The cost of CBS or other media outlets establishing a rival video blog to WallStrip would be relatively low and CBS now faces that real threat, the purchase of WallStrip bound to create new startups targeting the investor focused video podcasting market.
I think I understand CBS’s thinking. The company needs to prepare content for the new Internet video distribution channels sprouting like mushrooms (like AOL and Joost). It needs a team that understands how to make content that suits that form and feed the monster, and the Wallstrip team has proven it can produce video if not revenue.
But if getting a pretty girl to read news and commentary online is worth $5 million….well, any pretty girls out there interesting in starting a social media vlog?
Facebook Opens Up: MySpace may be the biggest operation in the social media business, but Facebook is the best.
At every step of the way the company has made the right decisions, at least according to my standing focus group–my 15 year old daughter and her friends. Staying elite before going open kept the creeps out. Keeping the nav and design clean make it quick and easy to use where, according to the girls MySpace was clunky and slow to load. Today my daughter keeps a ghost MySpace page (I wonder how many MySpace members are, in fact, vestigial), but she and her friends live their lives on Facebook.
Now the company is apparently ready to open itself to third party developers who will do everything from widget building to social shopping, as yesterday’s WSJ story noted. If there were social shopping on Facebook my daughter and her friends would never visit Amazon or J.Crew; if there were music recommendation and downloading they’d never go to iTunes.
Yesterday’s WSJ piece was the kind of Monday morning leak that only reporters at the WSJ and the NYT get, and it touched off a lot of speculation as to the true nature of Facebook’s new program, which will supposedly be unveiled on Thursday.
Tony Hung described it as a “reverse API” strategy:
But, what is Facebook doing?
Its letting *other* companies build mashups *for* Facebook *within* Facebook, and then not sharing any revenues (if any are made) with that company.
Wow.
Whatever you call it and however it shakes out, Facebook’s strategy is 180 degrees opposed MySpace’s vertical integration strategy of buying backend service providers.
Link Love:
Sharing the Widget Wealth
Change.org, The Network for Political Change
Social Media Now: Virtual Religion
May 18, 2007
James Au, whose pioneering beat for Reuters is Second Life, has a fascinating story this morning about the rise and apparent fall of Avatars of Change, one of the first native religious orders to be formed in SL.
The group was founded as a Neo-Confucian “ecumenical religious and cultural order, united by the Avatarian Way.” It’s membership is interdenominational and it’s practices seem to be centered around consulting an I Ching-based, software oracle.
Au’s story revolves around a controvert sparked when the group’s founder (an offline Christian whose avatar is Taras Balderdash, a gray-bearded Asian man in a silk robe with a blue dragon on his shoulder) asked group members to vote on a proposition that would bar Muslims on the basis of the proposition that Islam is inherently intolerant and therefore not “Avatarian.”:
“There are many jewels of Moslem culture,” he avers. “Music, Sufi mysticism, etc., but the world is now dealing with the youthful energy of its fundamentalism. What I am hoping to hear from our Avatarians is a positive argument against my position; someone who argues, based on the Quran, that I am wrong. So far all I’ve got is constant reminders of other religions being intolerant, particularly Roman Catholic Christianity.” Taras considers this an evasion of the point. “I am interested in the theology. People are people, whatever their faith, and God loves them all. But what hope do we have that a tolerant Moslem theology will win out?”
The vote, which is scheduled to conclude this Sunday, naturally sparked controversy in SL.
(Au interviews a Sufi, Drown Pharaoh, who leads regular prayers in an SL mosque, whose response to AoC paints the group’s vote as an extension of old western Orientalism. If the exchange reads as an argument among theology students that’s because it is. Drown Pharaoh identifies himself in the story as “a religious studies graduate and a committed member of an interfaith community on SL, Koinonia.” The discussion is fascinating, and it mirrors offline debates about the nature of Islam and about who is entitled to speak for Muslims.)
And enough of an AoC membership revolt that the religion appears to be collapsing. From Au’s interview with Taras Balderdash:
My questioning the tolerance of Islam for other faiths has produced such grief and chaos that I have rethought the concept of the the Avatars of Change and left the Order,” he told me late yesterday. “I am just a monk now. The Order is falling apart pretty rapidly, so I’m not sure how much of it will survive without me.”
I’m less interested in the theological debate–which mirrors debates in the offline world about the nature of Islam and who has the right to speak about a given faith–then I am in the nature of religion formation in virtual worlds. In an environment where there is no real death, where nothing is random, and there is no mystery as to the creation of the universe, what role could a native religion play? One sign that social media is truly transformative–not just a new way of doing old things, but a new kind of culture–would be the rise of a native spirituality. But do people’s avatars have spiritual needs that are different in nature from the needs of their humans? Or is there some kind of spiritual practice native to cyberspace that can offer something missing in the real world?
I wish I had the answers. Stay tuned.
Sphere: Related ContentSocial Media Now: Social Media’s Virtual Economy
May 17, 2007
A decade ago an acquaintance at Time Inc. told me the company–renowned through the generations for launching era-defining magazines–would never launch a new title again. Instead, the company would add new publications by acquiring small start-ups that had built audiences they couldn’t fully monetize.
It didn’t quite work out that way for Time, as the very successful launch of Real Simple in 2000 proved. But the logic remains a dominant one in the media business. Let start ups innovate and build audiences, then grab properties that can be made profitable thanks to the economies of scale in backend production and the sales and marketing that big companies can provide.
That seems to be what’s going on in the social networking space. The latest news involves the Walt Disney Company and ClubPenguin, a site for kids variously described as a massively multiplayer game, a social network and a virtual world. According to paidContent ClubPenguin has more than 4.5 million monthly uniques and, although the basic functionality is free, there is premium game functionality available to subscribers who pay $6 a month.
PaidContent confirmed Sony’s interest with sources described as “insiders” and reported that the price on the table is around $450 million:
Some people were intent on floating a $500 million number but our sources peg the price at around $450 million, which would be a 7.5 multiple based on this year’s projected revenue of about $60 million. The self-funded company is already profitable and, according to our information, is operating at about 50 percent margin—ie $30 million in profit this year.
GigaOm joined the race to advance the story writing that NewsCorp had made a $200 million offer for the company, but also getting a non-denial denial quote from Lane Merrifield, co-founder of New Horizon Interactive, the Canadian company behind ClubPenguin.
Om Malik sees the rumored deal as part of a trend, noting that Disney is rumored to be looking at another Canadian tweens site, Webkinz:
Club Penguin isn’t the only company generating interest. Disney, for instance, is rumored to be interested in Woodbridge, Ontario-based Webkinz, another Canadian tween site that has been growing a break neck pace, and is a kid favorite….
One of the reasons these kid-focused communities have taken off versus the more complicated communities like Second Life is that they are dead simple and highly focused.
Most of these online worlds run on Flash, so there’s no complicated client download/installation.
Ok, I get the focus, I get not needing to install a client, but dead simple? Well, maybe ClubPenguin is, though I’d hardly describe Second Life that way.
What I suspect is profoundly interesting to big media players is the new economic models that fire virtual worlds–not only subscriptions for games (something about ClubPenguin that certainly must appeal to Sony), but also the purchase of stuff, both real and virtual. As GigaOm notes Webkinz is owned by Ganz, one of Canada’s largest manufacturers of stuffed toys–and going back to the 1980s cartoon/product boom (remember GI Joe, Transformers, My Little Pony, Care Bears), the connection between products and media properties that feature them has proved to be fertile ground.
The best take on the economic appeal of it all comes from Andrew Chen, entrepreneur in residence at Mohr Davidow Ventures, who correctly notes virtual worlds appeal because of the sales of virtual products
First, let’s start with the numbers:
Habbo Hotel generates $77MM in 2006 (Source)
Club Penguin generates $65MM in 2007 (Source)
Second Life exchanges $1.MM in the last 24 hours (Source)
IMVU, Puzzle Pirates, and Stardoll are all doing very well also
These numbers are pretty exciting because they are NOT advertising dollars, but rather people directly purchasing merchandise on website
Advertising doesn’t work on social networks, Chen explains:
Ads don’t support what people go to social networking sites for….
Because of this, it’s well documented that the CPMs for social networking sites are quite bad. Clickthrough rates are very low - in the case of Facebook, you’re talking about 0.04%, or 4 clicks in 10,000 impressions. Compare that to Google, which is delivering upwards of 300X the CTR.
Seems obvious that clickthroughs would be better on a search site where users come to click, but not as effective in a virtual world where people come to stay. But, Chen notes, where ads are intrusive and tangential to the social networking experience, the sale of virtual goods is endemic, a fundamentally new business model that is native to social media:
Virtual goods in social sites is like dressing up or buying someone a drink at a night club
Because virtual goods go with the flow, in terms of what users want and expect, it makes it easier to monetize groups of people.
…
The really fascinating part about this model is that it support communities, rather than being something that interferes with the user experience. Go with the flow, and money will follow.
Fascinating stuff. If big companies–media companies or retailers–start gobbling up virtual worlds, it will be interesting to watch them try to strike a balance between maintaining a community vibe and ramming product down the throats of users–a uncomfortable experience even in the virtual world.
Sphere: Related Content
Social Media Now: Will the Widget Survive?
May 16, 2007
On the heels of the still-unconfirmed deal to buy Photobucket, Fox Interactive Media’s MySpace is apparently making another widget move–acquiring slide show widget maker Flecktor for as much as $20 million, according to Techcrunch, although FIM has declined to confirm or deny the deal.
Michael Arrington neatly lays out the logic of the deal:
It’s an odd acquisition…since Photobucket also has a slide creation product that competes with Flektor.
But Flektor has a killer team of founders…. Also, Flektor is custom code built on Flex, whereas Photobucket’s competing offering is built with Adobe’s tools. If Adobe decided to compete directly in this space, MySpace will be in a better position owning their own code.
The acquisition also makes sense from a strategic standpoint. MySpace has massive distribution as the largest site on the Internet. Photobucket brings storage to the table, and the Flektor team looks to be able to create awesome tools for users to create content.
But what might the deal mean for the rest of the world of widget start-ups? At VentureBeat Dan Kaplan looks at the impact on the leading slide show specialists, Slide and RockYou:
While both Slide and RockYou have huge user-bases, they also depend heavily on social networking giant MySpace and other sites. MySpace has made it abundantly clear that it is happy to pull the plug on widgets that lose its favor. If a Slide or RockYou try to push more advertising, and compete head-on with one of MySpace’s new properties (Photobucket, and potentially Flektor), MySpace may try to snuff them. How valuable are these immensely popular widgets when a small competitor can innovate quickly, get scooped up at a much lower price by MySpace and have a giant platform (like MySpace) to gain distribution?
Good question, one David Hornik’s VentureBlog post earlier this week offered a possible answer to. I recommend reading the whole piece, which is a nice wrap up of the state of the widget economy. But most interesting are his observations on the relationship between start-up widget makers and the big boys of social networking:
If a widget is doing nothing to monetize its host’s traffic…, it might be viewed as neutral or perhaps symbiotic for freely increasing the functionality of the host’s site. If a widget is seeking to monetize the host’s viewers (e.g., ads or branding on a voicemail widget), the host may view that widget as parasitic. This relationship, of course, assumes there is a zero sum game of monetizable attention on any given host service, therefore the fact that a widget is monetizing some of that attention means the host has lost that revenue opportunity in return. ….my view is that if a service’s functionality is significantly enhanced as a result of the various widgets that attach to it (e.g., the MySpace experience was massively enhanced early on by the work of both Photobucket and YouTube), one might argue that the widget experience is always symbiotic — enhanced functionality in exchange for traffic, monetized or not.
But it’s interesting to see how quickly the the attitude among the digerati has changed towards widget start ups–from cheerleading for a new world order, to fatalistic resignation about the power of MySpace and Facebook. Om Malik, has a non-interview interview with FIM’s Peter Levinsohn, which is not nearly as bullish on widgets as Hornik’s piece:
The acquisition, if true, is yet another proof that widget (and other start-ups) need to diversify their user bases, because sooner or later MySpace is going to end-up compete with them. This is the way of the large companies, and it is not unusual. What is strange is that start-ups ignore this fact of life - putting their destiny in other people’s hands.
Think this way - if a company trying to do an IPO gets 50% of its revenues from one customers, even the bravest investor runs away from that deal. Why should it be any different for start-ups who are basically hawking traffic and eyeball stats? Funnily enough people have been ignoring what Fox executives have been saying for a while now.
But the Internet media business has always been like squeezing toothpaste, and its hard to imagine that MySpace and Facebook represent the last large audiences to be amassed in the social networking business.
Sphere: Related Content
Social Media Now: When Users Attack!
May 15, 2007
Digg-hating has become a favorite pastime of the digerati. The sport hasn’t reached the proportions of Microsoft-hating yet, but it’s getting there.
Yesterday’s flap began when Neil Patel at Pronet Advertising wrote a post claiming to prove that Digg editors or algorithms are intentionally burying certain stories posted to the service in a kind of double-secret censorship.
Several bloggers followed up with posts taking issue with Patel’s data–which came from Digg internal data posted through several Digg public applications. Other bloggers followed up supporting Patel with anecdotal “evidence” of stories being censored. Executives at Digg have yet to respond to the story. The latest to-do comes two weeks after the Digg user revolt over Digg’s removal of stories liking to code for cracking HD-DVDs.
I don’t know if it’s true that Digg is burying stories, though I’ve asked the company if it is, and if so what criteria are being used.
But I am fascinated by the anger and resentment that seems to be continuously bubbling up from the Digg user community. Why does Digg suffer the slings and arrows of user anger while other user-informed news sites, like Wikipeida, don’t? And what can companies do to avoid facing the kind of user revolt that Digg has faced this spring?
At the heart of the current brouhaha are questions–perhaps unfair ones–about Digg’s honesty. Just as the Sanjaya flack threatened to undermine the perceived credibility of American Idol, the Patel charge threatens Digg’s credibility–are the top stories really the stories users like the best, or are ulterior motives at work?
That question goes to the core of what Digg has promised users: “everything on Digg is submitted by our community,” the company claims, and “Digg is a digital media democracy.” But Digg also retains rights to remove content for any reason at any time. It’s a reasonable policy given the potential for corporate liability, but it can leave the company in conflict with users–as in the case of the DVD code, the posting of which threatens Digg with legal liability.
MG Siegler–whose story was the buried one at the hear of Patel’s post–suggests that the solution is total transparency:
It is time for Digg Founder Kevin Rose to man-up once again. It is time to make Digg fully transparent. It is time to remove the barrier that hides the bury data from the users. Mr. Rose, tear down this wall.
Siegler is right, the greatest possible transparency is always the best policy for Internet businesses. But users don’t revolt at eBay because tools to track prices and volume of certain kinds of goods aren’t made freely available to sellers AND buyers. eBay users have a different expectation in part because they carry into their eBay experience certain preconceptions of a retail marketplace, but also because eBay doesn’t promise to be a digital democracy.
In some ways Digg’s troubles have resulted from the company being a bad parent–not providing users explicit, firm rules; and capriciously and mercurially changing the enforcement of whatever obscure rules exist (like pulling down the code cracking stories then putting them back up in response to a user tantrum).
But there’s a third reason for Digg’s recent problems, one that’s not often discussed among the cognoscenti–users don’t share Digg’s liability. Would a user revolt over the DVD cracking code have snowballed if every Digg poster shared legal liability? Just as flame wars erupt more easily online than fights do offline because of the abstraction of cyberspace, social media users are more likely to engage in certain behavior online than off because they don’t face any consequences.
Of course, shared liability is a two way street–users also don’t share in the rewards of social media companies–not just ad revenue but also capital appreciation in community equity. But what if they did? A social media property in which not just revenue but also equity is shared with users would be a fascinating thing to watch develop. Would a community of users behave differently if users were equity-holders?
Link Love:
MTV Licenses Social Net Media Player; Offers Grant Money For Student Developed Programs
Meebo Launches Meebo Rooms (oh, and Meebo now has ads)
Social Media Now: How Big is Your Widget?
May 11, 2007
Several pieces this morning got me thinking about the size and scale of the widget business. First, Matt Marshall at Venture Beat wrote about Slide–maker of a web slide show widget:
Slide, the maker of a Web slide show feature, has emerged as a major player, boasting 150 million daily slide show views and more than 200,000 new slide show “widgets” created daily.
These numbers are astonishing, and are enough to make it the largest “independent” widget company on the web, according to the company. It is a striking example of how quickly you can grow if you have a good, simple idea.
Techcrunch too touted Slide as well as a competitor called Flektor, hyping their value based on traffic numbers and the recently reported $300 million price that MySpace has agreed to pay to acquire Photobucket:
The new kid on the slide show block is Flektor. It just recently came out of beta and has few users so far, but we’re hearing they are getting a lot of attention from potential acquirors.
Does Michael Arrington get a finders fee? I find myself frustrated by Techcrunch when its tone become so unremittingly promotional, for example: “Flektor is brand new and doesn’t have the capitalization complications of the older startups. My bet (and rumors around the valley back this up) is they may be acquired in the next six months by one of the social networks, perhaps one of the up and comers looking for as many tools as possible to compete with MySpace.” Buy now! Tickets going fast!
By contrast Fred Wilson threw a bit of a wet blanket onto widget traffic numbers, writing about Clearspring, which claims to be serving 60 million content widgets a day. Fred, who is one of the most knowledgeable and thoughtful investors I know, doesn’t doubt Clearspring’s numbers, but he does wonder out loud about the way we measure widgets:
But before we start putting Clearspring in McDonald’s territory (billions served), let’s get something straight. Serving widgets generates huge numbers quickly.All you need to do is look at Photobucket, Slide, and RockYou’s numbers for their photo/slideshow widgets to see how powerful the widget model is. I don’t have access to the actual numbers for these three photo widget services and I’d prefer not to print the rumors I’ve heard, but I’d venture a guess that their numbers for widgets served each day will make Clearspring’s 3bn number look tiny.
I do know the numbers for FeedBurner’s widgets and they are well north of what Clearspring is serving. But this post is not about whose you know what is bigger than whose.
It’s about the challenge of understanding what is what in the widget market.
The Internet has long promised to be the most measurable media platform ever, but despite the plethora of metrics that exist–heck, perhaps because of the plethora of metrics that exist– no universally-accepted, bullet-proof, third-party standards exists to allow apples to apples comparisons between one Internet property and another, never mind between one widget company and another.
This babel of measurement is only exacerbated by the distributed nature of widget traffic. From Fred again:
Are those 18mm uniques that are attributed to Photobucket being seen on Photobucket.com? Or are those 18mm uniques the number of people that are being exposed to the Photobucket widget wherever it is being embedded (MySpace, Beebo, etc). I don’t know the answer to that simple question, but it’s an important one.
And what’s the right number to look at? Should Photobucket get credit for having an audience that sees its widget on other services pages? When that page includes five to ten other widgets? Or should it just get credit for those who interact with the widget in some way?
There’s no doubt that the widget business could benefit from a third party measurement that every party could trust. Perhaps the measurement system should be multi-tiered–measuring total traffic, number of widgets distributed, traffic at the point of distribution, and click-through rates (to the extent that a widget is actionable).
Would widget makers welcome such a system? It seems to me that for the moment the dearth of real measurement benefits widget-makers by inflating the value of their products. But a widget to measure widgets–that would have some real value.
Link Love:
Chinese Social Net 51.com Secures $10 Million In Second Round
Last.fm Adds Personalized Music Anywhere Widget
Facebook Marketplace: The Alternatives
Lots of blather on the Net this morning about Facebook’s new free classified ad offering. Here’s a different take that looks at competitors from an end-user’s perspective
Sphere: Related Content
Social Media Now: How Much Is Social Media Worth?
May 10, 2007
We have a couple of indicators this morning about how much a commercial social network can earn, and how inexpensive it is to build a profitable one.
At the top of the market is MySpace. New Corp, which announced earnings yesterday, doesn’t break out MySpace’s numbers in it’s SEC filings but during a conference call with analysts yesterday, executives confirmed that they expected interactive sales to reach at least $500 million this year, led primarily by MySpace. (FIM also includes Foxsports.com and AmericanIdol.com.)
With nearly 56 million visitors a month, $500 million per year amounts to around 74 cents in revenue per monthly visitor (if all of FIM revenue is attributed to MySpace). We don’t know if MySpace is profitable on an operating basis but perhaps we can infer something from the fact that News Corp doesn’t tell us.
Meanwhile, Techcrunch reports on a company called Tagged. Even at half the scale of MySpace, Tagged’s numbers are substantial–40 million members (half of whom are active) and 1 billion pageviews per month. Furthermore, Tagged CEO Greg Tseng says his company is profitable at $600,000 in monthly revenue. I think that means Tagged is attracting one billion pageviews monthly on an investment of $7 million a year.
Will the commercial social networking business develop on two tracks–with an indie, hits business continually bubbling up from the bottom end?
Look at the current economics of Hollywood comedies, which Jon Gertner brilliantly chronicled in the New York Times Magazine last November:
comedies…tend to have lower physical production costs, since they often don’t require extravagant sets or expensive postproduction work. And if they have low artistic production costs as well (for the cast and directors), they have a kind of jackpot potential that dramas, at least in recent years, have lacked. In other words, even when a comedy doesn’t produce the huge revenues of a blockbuster like ”Harry Potter,” it can help push the returns of a portfolio way up if it is put together in a way similar to ”Little Miss Sunshine” or ”The 40-Year-Old Virgin,” which starred an inexpensive and untested Steve Carell. Such a film will pay off in the theater, on DVD, in television sales — and ultimately contribute to the studio’s catalog. A popular comedy is a valuable piece of intellectual property. If it’s made cheaply, it’s the equivalent of investing early in Google.
Speaking of money, I’m fascinated by Sequoia’s investment in Joost . As Matt Marshall at Venture Beat notes:
Roelof Botha, general partner at Sequoia Capital, led the firm’s investment in Joost. He was also the lead investor in YouTube, a short-length video site — different from Joost, which wants to show full-length video.
Obviously Internet video paid off enormously for Sequoia with YouTube. And by virtue of its founders experience and its corporate support, Joost looks like a great investment. But it sure looks like a hedge, playing both sides against the middle in media wars.
Sphere: Related Content
The Problem with Podcasting
May 9, 2007
Podcasting as we know it is a disaster.
Howard summed up a few of the problems in his post this morning:
Podcasts are still hard to get, find, and take with you, except if you have an iPod and are using iTunes. Even then, you have to search, subscribe, and regularly sync and remove old content. Microsoft hasn’t build podcast-catching functionality into Windows Media Player or the Zune (not that we should judge by what’s in the Zune.) But I can listen to audio podcasts or watch video podcasts on my Tivo (some are pre-loaded, others must be tediously typed in). Still not a wonderful overall experience, but Rocketboom looks great on TV.
Howard’s first point is the most important one–podcasting, right down to its name, is fatally tied to the iPod. If consuming DIY Internet video had required the used of a portable player–even one you already owned–a near random search for content, the docking of devices and constant file maintanence, YouTube would have never fetched $1.6 billion.
To thrive, DIY Internet audio needs effortless cross-platform access, content that is uniquely suited in form to Internet listening (in other words content must do more than emulate traditional radio), and some useful means of discovery. In short, what podcasting needs is its own YouTube.
There’s legitimate debate about whether or not YouTube could have exploded as a business without the unauthorized redistribution of copyrighted content. But there’s no debate about whether or not YouTube revolutionized Internet video. It did. And it did so for two reasons.
First, it provided a central hub where content could be amassed. Second, it offered a fantastic system for discovery, a system that worked because it was social not only with shared tags and ratings, but also, and most importantly, with social redistribution through an embeddable Flash player.
By giving viewers the opportunity to tag and share video, the YouTube system transformed a media format that was otherwise one-way into something interactive. This spurred viewing and provided feedback to video posters who began creating videos that suited the format that users most appreciated (largely short, often comic).
Podcasting, or DIY Internet audio (I prefer to think of it outside of the ‘Pod’) may well get its YouTube. As Howard mentions podcasting may be among Joost’s offerings–though the degree of user control permitted by Joost remains to be seen. But without a transformation of that sort I think podcasting will remain a geek’s niche.
How big a niche can that be? It’s hard to tell from the Pew numbers. Howard reads Pew’s survey to show a 71% increase between April and August of last year in the number of people who have downloaded a podcast at least once (although the way Pew presents its research makes it hard to make apples to apples comparisons). And Howard and Mary Madden of Pew arrived at the figure of 17 million for the number of people who had downloaded a podcast at least once, a number Howard compares favorably to that of satellite radio subscribers. But its a bad comparison: one-time downloaders vs. a body of subscribers with a 2% churn rate and an ARPU of $11 a month. Call me when podcasting in the aggregate generates $2.2 billion a year.
I know I sound like a wet blanket (it’s what I do best). But that’s not what I’m trying to be. I would love to see a vibrant Internet audio universe but I think there are many rivers to cross between here and there. (And don’t get me started about the cost of podcasting copyrighted music.)
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Social Media Now: Widgets, Discovery, and Catching a Buzz
May 9, 2007
When is a widget not a widget? That’s the question I find myself asking this morning as I read about Mpire’s official roll out today of 80 new widgets that variously package affiliate shopping and selling data from Amazon and eBay.
Mpire’s collection of 75 widgets gives free access to packaged, historical Amazon and eBay shopping trend results across 15 popular categories, such as entertainment, sports, fashion, technology, games and youth/teens. Typically, consumers and eBay sellers have had to pay a monthly fee to find out what’s hot or gaining in popularity.
The widgets are for publishers who are Amazon and eBay affiliates, and they are free to publishers. They republish semi-custom content about eBay and Amazon sales (ie, what’s hot in certain categories) with the value proposition to publishers being a tool to drive more retail traffic through the affiliated site. The widgets won’t be revenue generators for Mpire, Hulett told Techcrunch. The program is more about mindshare than about money.
John Cook at the Seattle Post-Intelligencer has a longer interview with Huellet and Mpire co-founder Dave Cotter who explains the retail widgets as an evolution in web advertising.
Maybe. Sales tracking data, particularly those that track information about market prices on eBay, are certainly valuable. And anything that increases sales is gravy to members of online retail affiliate networks. But is that kind of information broadly valuable to surfers? I’m not sure. Still the notion that actionable widgets represent an evolution in online ad networks is a compelling one.
Now if Mpire would only work some kind of social shopping component into the mix.
Speaking of social shopping, the Wall Street Journal reports this morning that eBay’s acquisition talks with StumbleUpon have heated up, with a potential deal being priced at around $75 million.
Since its very successful purchase and integration of Paypal in in 2002, eBay’s acquisition strategy has been a bit mysterious. I never understood what Skype had to do with running an auction house. But I get the potential core use of StumbleUpon–a social discovery engine: driving buyers to other things they might like but would never think to search for.
Discovery has the potential to solve enormous problems for online retail which today works most successfully when buyers know exactly what they are looking for but least successfully when trying to replicate the bricks and mortar experience of browsing and window shopping leading to impulse purchases.
Link Love:
Mobile Social Networks, Don’t Go it Alone
Katie Fehrenbacher looks at mobile social network start-up InterCasting (whose consumer service is called Rabble). The company has begun selling business to business application through which: “carriers and web-based social network providers….can plug into Intercasting’s gateway via APIs, and the service combines a server software and a handset client”
Buzzlogic Shows Which Bloggers Have Power, and Where
At VentureBeat, Matt Marshall offers an excellent, in-depth look at Buzzlogic’s product–an enterprise-class (and enterprise priced) software for tracking the influence of certain blogs and the impact of blog buzz on products and services. Figuring out how to measure this stuff is crucial to the development of social media as an industry and Buzzlogic seems to be way out in front of the curve
Last.fm + YouTube = Last.fm Video!
Kristen Nicole at Mashable tells us about plans by the UK social music discovery company Last.FM to launch a video service this week.
Social Media Now: Web 2.0 for Adults
May 8, 2007
I’m amazed by the wide range of reaction yesterday to the survey by the Pew Internet & American Life Project.
Reading the reaction among the meme-makers I found out that the social web is a bust, with “far fewer participants than its architects would have us believe”, that it is a playground for a small minority of geeks, that its upside has a very low ceiling, that active 20-something Web 2.0 participants will abandon their behavior when they become busy in their 30s.
I also found out that “the study is a powerful indication that the social Internet is thriving and getting adopted by a broad spectrum of society rather than an elite group”, that the mainstream media is hostile to the Internet and has mischaracterized the Pew survey, and that the low numbers of adults who have engaged in podcasting represents an opportunity, not a failure.
It seems like everybody with a dog in the fight is anxious to spin the survey. I won’t recap the results. They’ve worked over by the digerati for the past 24 hours. Furthermore you can read the full results for yourself. But I will suggest that readers think about a few things:
First, the data in the Pew survey is a year old. That might not mean much, but than again it may. In a year on the Internet enormous changes can occur.
Second, I’m increasingly skeptical about the value of traditional market research phone surveys that extrapolate out from small samples (around 4,000 respondents in this case). In the old world of mass media, when consumers had few choices, it was easy to conduct a survey of, say, a small number of network TV viewers and extrapolate out national numbers. But in a million channel universe in which consumers have almost infinite choices, the behavior of any given 1000 users may not reflect the behavior of any other 1000.
Finally, I don’t think that Pew’s attempt to segment the market is all that valuable–less valuable even than Forrester’s ladder—there’s too much overlap between categories, and the criteria that divide categories are a mix of measurable behavior and attitude. The segmentation is more confusing than illuminating. Market segments are like jokes–if you have to spend an hour explaining them they’re not working. What is a “productivity enhancer”? How is such people different from “mobile centrics”?
But there’s lot of valuable and interesting, demographic information at the end of the Pew survey. Some of it’s unsurprising–college educated, upper income, men are the most avid Web 2.0 participants. Omnivores, who “have the most information gadgets and services which they use voraciously to participate in cyberspace….,” have the youngest median age (28) among Pew’s strata. And among people with 10 years of online experience there are differing attitudes toward technology, but similar behaviors at least with respect to Internet data usage, although only the so called “omnivores (8%) are avid users of digital media entertainment technology.
The most interesting comments I’ve seen on the report today date come from Curtiss Thompson at 9:01am:
Their findings clearly show that despite adults accessibility and capability to use various forms of technology for communications purposes, very few engage in public forms of communication. They instead use private means of communication, such as cell phone text messaging and online instant messaging. This seems to be indicative of the generational divide, where the older generations value their personal privacy far more than the younger generations, who actively engage in social networking sites that broadcast personal information and communication in a more public manner.
And from Mathew Ingram:
I was pleasantly surprised to find how *many* people engage in “Web 2.0″-type activities. The study says that when asked about things that include blogging, posting comments to a blog, uploading photos or video, creating webpages or mixing and mashing content from other sites, 37 per cent of those surveyed said they had done at least one of those things.
What’s not to like about a number like that? I was expecting the proportion to be much smaller — along the lines of the emerging 1-9-90 rule of thumb for social media, where about one per cent of people create content, 9 or 10 per cent consume it and about 90 per cent couldn’t care less about it. I find the fact that almost 40 per cent of people blog, upload photos, post comments and so on cause for considerable optimism.
Two final notes worth considering. If 37% of American adults have engaged in at least some Web 2.0 behavior, that means 83 million people over 18 have either posted to a blog, tagged a photo, or watched a YouTube video. That’s a big number. Also, the numbers for podcasting in the report are atrocious, even among the most elite users. If podcasting where a stock, I’d short it.
Link Love:
Me.com Launches a Ning Competitor
New Bill to Give Bloggers Same Shield Law Protection as Journalists
Sphere: Related ContentSocial Media Now: Corporations vs. Communities
May 4, 2007
Events conspired this week to throw into high relief the core question for those who would commercialize social media: can a balanced be reached between user control and corporate control or will commercial social media always exist on a cliff’s edge over which either party can push it at any time?
In the Digg/HD-DVD fiasco, it was users who pushed the corporation over the edge–forcing the company to ignore a legal takedown request in order to keep it’s community alive. As Fred Wilson wrote:
I’ve been around web communities since we invested in Geocities in 1996 and one thing I’ve learned is the community thinks they own the community. And if you are the one who actually owns it, you’d better act like the community owns it or you’ll lose it.…
Forget about what’s right and wrong in this case, the important point is Digg showed that they control the community and will police it.
That’s a big deal. They might get away with that on issues like hate, porn, terror, but not on hacking.
When you get in the way of geeks sharing hacks with each other in a geek community, you’ve done something big.
Meanwhile over at MySpace, it was presidential hopeful Barack Obama who was feeling the wrath of the crowd. The Obama campaign had jumped all over a MySpace page started way back in November 2004 when a paralegal named Joe Anthony became a fan of the then-newly elected senator.
Since Obama announced his presidential bid, his campaign had been working with Anthony and the profile had pulled 160,000 friends and garnered Obama a lot of press buzz. But, after an open dispute with Anthony over control of the site, the Obama camp this week had MySpace hand over the “BarackObama” name, refusing to compensate Anthony who reportedly offered to hand over control for a fee of $39,000, a number reflecting the 5 hours a day Anthony claims to have devoted to the site.
Today the “official” Barack Obama MySpace profile has 33,500 friends and the candidate has lost not only a high profile volunteer but also a voter. As Anthony himself explained to Micah Sifry in an open letter:
The campaign got involved in February and although at first it was very exciting, it quickly became clear that they just had no interest in me or my involvement. They only wanted to take control of the profile and get on with it. I bit the bullet for a while and kept working for the good of the campaign, but they quickly went from passive aggressive, to aggressive, and then eventually just rotten and dishonest.
For the past few weeks, the campaign decided it would be better if they just took control of the profile and we decided to try to come to some agreement. By this time, I didn’t have quite as much respect for the campaign guys, and frankly felt like I was just being used. They knew about this profile the entire time, and really just waited until it got enough media coverage and friends request so they could step in and bully me out of it….
This was not about money and I don’t believe that one person who has interacted with me via the Obama profile over the past couple of years would be able to say that my efforts were anything but sincere. This was about holding a campaign to their message, about acknowledging my work, and taking this community seriously.
Apparently the message here is, as an individual, if you have too big of an impact, you’re just a liability.
This is how Obama lost my vote, and one of his strongest supporters.
TechPresident has offered excellent extended coverage of the dispute, Anthony’s explanation, Obama’s response, and even an analysis of what Anthony’s profile might really have been worth (as much as $90K according to Sifray). Most interesting is the response from someone in the Dean campaign who had faced similar problems to the ones faced by Obama:
We called people like Joe Anthony “centers of gravity”– people who had built up their own Dean communities. We wanted centers of gravity as close to campaign as possible without imploding.
At first, new centers of gravity were exciting, but very perplexing, and our tiny team debated options. We quickly ran into an odd clarifier–the law. Because of legal concerns about campaign coordination, we were told early on by our lawyers that we had two choices: to have a manager/agent relationship with grassroots supporters, or to not direct grassroots supporters actions at all….
We simply couldn’t have a manager/agent relationship and still have all this flowering of intelligent political energy: we chose to be hands off, talking with people but not telling them what to do.
Finally today we have word that YouTube is finally going to begin to bring its user-creators into the corporate side flow by doing something Obama didn’t want to do for Anthony–offer money.
YouTube announced on it’s corporate blog that it was adding half a dozen or so high profile posters to its partnership program–the same program to which CBS, the NBA, and other big media producers belong.
YouTube didn’t announce specific criteria for choosing the initial members who got a bump in status other than to say that “they have built and sustained large, persistent audiences through the creation of engaging videos, their content has become attractive for advertisers….”
At NewTeeVee Om Malik had an interview with Jamie Byrne, vice president of marketing at YouTube in which Byrne 20 to 40 producers would be included in the initial roll out, with more potentially added in the future.
At Techcrunch Duncan Riley wonders what the revenue split is worth:
…the new Partners Program only goes as far as monetizing the actual YouTube page destination with Adsense units. Whilst not without merit, the new program is limited given the way YouTube content is consumed. The great strength of YouTube from its earliest days has been the use of embedded video on external sites: a large number, if not a majority of viewers will never see the advertising, viewing it only on blogs and forums which if they are running Google Adsense units, do so in a way that does not benefit the content creator.
But nearly everyone expects YouTube to begin inserting pre-roll video advertising at some point in the not to distant future. It will be interesting to watch what happens with the YouTube program–will it spark competition to be chosen for partnership? will it spark resentment that some but not all members are chosen to participate? will it generate enough money for chosen members to matter at all?
Link Love:
BlogCatalog Gets Socially Networked
NBA Taps Into Second Life
If Markets Are Conversations Then Twitter Is Money
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Social Media Now: Mainstreaming Social Media
May 3, 2007
Last month a Twitter comment from Chris Heuer led to a discussion here at Social Media Club about when social media would cross into the mainstream.
I was surprised by the question. At the latest, social media crossed over in July of 2005 when NewsCorp bought MySpace. In fact, social media is so deeply ingrained in the mainstream that no self-respecting media company would launch a new online property without significant social functionality built in. Witness the beta launch yesterday of the inelegantly named Disney Xtreme DigitalSM–a social networking site for tweens built around ever-popular Disney characters and content.
Disney’s site offers social media “lite” functionality–profiles, customization, chat, message walls and, most importantly for Disney, and most interestingly for the social media biz, parental controls governing chats, discussion participation, and file uploads. Parents have to establish accounts linked to those of their children–which adds a lot of steps to the registration process and may be a drag on member acquisition. Still, one can’t imagine a Disney tween site without airtight protection.
The Disney effort, launching in beta on the heels of the Digg fiasco yesterday, offers an illustration of the two-tiered development of social media as it goes mainstream. Pure play social media properties–which do nothing more than offer tools to members looking to connect with one another and share media–have the kind of credibility that attracts users but have struggled with monetization and executive control. Content-centered social media properties have the advantage of highly attractive entertainment media as a calling card. But in trying to control how the community uses the content, these sites at best present a corny, out of step public profile–like Frank Sinatra singing Nirvana songs–and, at worst, face the kind of user revolt that Digg experienced.
For now the mainstreaming of social media looks a lot like the mainstreaming of MP3 file sharing in the 1990s. Traditional media players at the time tried to shut down the competition with lawsuits while simultaneously launching their own services with strict controls. The result is a universe in the 2000s in which user directed illicit file sharing co-exists with successful, controlled, industry digital music offerings. Social media in the next decade may look very much the same–with a two track ecosystem of corporate controlled media businesses offering social functionality, and white label social networks where anything goes.
Link Love:
Exclusive: The Digg CEO Jay Adelson Interview
Wired News interview with Digg CEO isn’t much of a read, but at least its from the horse’s mouth
HerFabLife is Bookmarking for Trendy Women
Prepare yourself for a flood of niche social media properties like this one, a social bookmarking site for young women interested in fashion and entertainment
Cisco: Social Networks will Define Media Consumption
One of the most interesting goings on in the social media business is Cisco’s attempt to reinvent itself as the builder of The Human Network (as opposed to the router network). Dan Scheinman, senior vice president of Cisco Systems’ Media Solutions Group, delivered a keynote address at the Digital Living Connection Conference in Santa Clara, in which he proclaimed:
Sphere: Related Content“It’s the beginning of new era. Consumers are driving the next set of value creations…Enterprise is last now. We have 1,500 employees on Facebook because we don’t have the internal tools to provide community…. A lot of the enterprise has been behind in adopting all these tools.”
Social Media Now: UGC and its Discontents
May 2, 2007
Live by the link, die by the link. Yesterday’s Digg user revolt was an object lesson in the power and peril of user generated media.
I won’t give a blow by blow recap of the events–Techmeme is already overburdened by links to recap stories. You can read a first hand account of how the snowball got rolling here; and Danny Sullivan has an excellent wrap up of events at Search Engine Land. What you need to know is that someone posted to Digg a link to the hexadecimal key to cracking HD-DVD’s DRM. Digg pulled the link down, together with several other stories, after receiving a takedown request. Digg users then began bombing Digg with the code in links and by early this morning Digg founder Kevin Rose had capitulated:
But now, after seeing hundreds of stories and reading thousands of comments, you’ve made it clear. You’d rather see Digg go down fighting than bow down to a bigger company. We hear you, and effective immediately we won’t delete stories or comments containing the code and will deal with whatever the consequences might be.
If we lose, then what the hell, at least we died trying.
Social media triumphalists and anti-encryption cyberlibertarians are crowing about a great victory. Duncan Riley’s response was typical:
Will the Digg Revolt of 2007 result in a renaissance in listening to users? maybe, and hopefully it will at Digg, but others should also take note: corporate arrogance towards the user base shouldn’t have a place in Web 2.0, and companies that continue to act in this old fashioned way can now look at a case study of what collectively users can say and do when you won’t listen to them.
Grant Robertson’s was the most ludicrously over the top, comparing the mass postings to Digg with the last great schism in Christianity!
Witness the modern equivalent of the 95 thesis’ Martin Luther nailed to the door of Wittenburg church. We, digital citizens –commonly referred to by the vulgar term of ‘consumers’ — have had enough of content lock-in. We’ve bought and re-bought entertainment media — repackaged and regurgitated digital vomitus — until we’re blue in the face. We’ve been told time and time again that DRM is for our own protection, and we’re finally and inconsolably fed up.
Others looked for nefarious, conspiratorial motives in Digg’s actions :
Episodes of the DiggNation video show were sponsored by the HD DVD Promotion Group. DiggNation is produced by Revision3, a company run by Digg founders, Jay Adelson and Kevin Rose. Rose is also a co-host of the DiggNation show.
Inside the fishbowl its easy to be seduced by the transformative power of collective intelligence, but history has taught us that the mob mentality can also produce the most dangerous and destructive behavior of which human beings are capable. We’re hardly talking about blood in the streets of Paris following the French Revolution here, but what happens to a social media company if its users get it wrong?
That’s the provocative question asked by Andrew Lih whose excellent blog item is the best I’ve read on the subject this morning:
This is quite unprecedented — you basically have a multi-million dollar enterprise intimidated by its mob community into taking a stance that is rather clearly against the law.
Andrew gives us the relevant text from the DCMA:
(2) No person shall manufacture, import, offer to the public, provide, or otherwise traffic in any technology, product, service, device, component, or part thereof, that—
(A) is primarily designed or produced for the purpose of circumventing a technological measure that effectively controls access to a work protected under this title;
If the Digg situation results in legal action, Digg’s only defense will be to challenge the constitutionality of the DCMA provision, dicey proposition at best. And it will be interesting to see if all those armchair revolutionaries who posted links and comments will pony up money for Digg’s legal defense–Pete at Mashable proposes taking up a collection.
The industry fall out will also be interesting to watch. Will the Digg fiasco chill investment in user generated content? What about Wikipedia and other sites to which users posted the offending code? Those sites were able to remove the illegal material without being over run. What processes do they have in place that are lacking at Digg? And is there some difference between the communities of contributors at Digg and at Wikipedia that accounts for the fact that Wikipedia wasn’t surrounded by surfers with virtual torches and pitchforks?
Stay tuned.
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Social Media Now: Google Claims Safe Harbor, Clearchannel Goes Social
May 1, 2007
There’s not much news to be gleaned from the response to the Viacom lawsuit filed by Google/YouTube in federal district court in New York.
As predicted Google is pinning its defense on the safe harbor provision of the Digital Millennium Copyright Act which was designed to shield ISPs from lawsuits when subscribers used their accounts to trade copied media files.
The response outlines a number of secondary defenses–everything from a claim of fair use to an unexplained claim that Viacom had somehow consented to allow its clips on YouTube because it had other deals with YouTube. The alternative arguments are all weak. But the weakest, and perhaps most revealing, is the “Innocent Intent” defense–in which Google appears to be claiming that YouTube didn’t intend to allow copyright infringement. Donna Bogatin has a short reaction at ZDNet that gets to the heart of the matter, pointing to claims Google made to analysts in its latest earnings call.
If the case goes to trial (an event I doubt will occur) the outcome will be based on case law established in the Napster case. To wit: did YouTube deliberately build it’s business model around contributory infringement and does it have the ability to identify and remove infringing material. Unfortunately for Google, the answers to those questions appear to be “yes.”
ClearChannel Launches Social Nets: Yesterday Billboard’s Brian Garrity reported that radio giant ClearChannel Communications is launching social networks centered on a dozen of its largest radio stations.
Five of the branded Nets have already launched in beta, like Wildspace–the social net for San Francisco station KYLD-FM (94.9 FM). Wildspace is certainly a better Web presence than the station’s extremely busy Web site. The network already has more than 380 members, and of course the radio signal can be streamed.
At Mashable Kristen Nicole notes that social network white label provider Onesite is powering the ClearChannel nets.
I love this strategy. Radio has always been a local business. By virtue of it’s formatted playlist it has been a business that takes advantage of listeners’ sense of shared identity. And talk, not music, is the industry’s driver. Perfect ingredients for social networking success. The radio industry has gone away from it’s core strengths for years–eliminating a sense of personality by jettisoning DJs, centralizing and nationalizing programming. Social networking could help lead the radio business into a new cross platform era in which listeners are deeply tied to stations. Imagine the power of social network tied to an local sports-talks station like WFAN in New York. This is a strategy that is definitely worth watching.
Link Love:
Pure Digital raises $40M, its camcorders share with YouTube
Fascinating new vidcam with a built-in USB plug and software to help enable direct uploading to YouTube
eBay Launches “ToGo” Widgets For Any Listing
Snocap Partners with Warner Music Group to Sell on MySpace
Veodia Streams Live from Your Blog
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