When the Web was spun it was all about sharing. That business model still works best. But those who never believed in the business model now dominate the business news pages, and the hunt is on for technology to prevent sharing.
I'm not saying piracy doesn't exist, that Web pages aren't stolen and hacked, or that digital content doesn't deserve protection. But this obsession with the one per cent of thieving Web users is restricting the experience for those 99% of us who aren't thieves.
Music is a great example. The vast majority of people who exchange MP3 files are using them legally. We use them to learn about new artists, and mix the equivalent of tapes with those files. We still buy albums and concert tickets for those we're excited by. What's gone is the gatekeeper function of radio stations and record labels. Power has moved to the groups , who can create their own networks of fans. You don't have to sell your soul to promoters and get burned out by the journey . You can test-market your sound on the Web (with a few self-arranged concert dates thrown in) and come to the market with a built-in base of support .
The reaction of the industry is to encrypt on the one hand while feigning cool on the other . Both moves are aimed at re-asserting the top-down industry format the market's rejecting. Instead, why not turn the "bug" of the RealJukebox into a feature, as C|Net's Evan Hansen recently suggested . Offer 30-second "clips" on MP3.com, then offer the whole song for data that lets you the listener follow-up with a review, and lets the producer follow-up with a request for an album order. You gain a database tracking millions of listeners in real-time (making you worthwhile to new groups), and listeners get not just the MP3s they like but a complete feedback loop.
This one-to-one or customer relationship management approach can be applied to virtually any digital file. Instead of demanding money up-front from those who might want to see a file, demand data instead. This gives you the chance to establish a relationship, and as the data is shared internally you gain the intimate market knowledge that was behind your earlier contracts. Once you change your business model in this way, "protection schemes" become just a front-end to relationship marketing, rather than an impediment to the market.
What this means is outfits like guild.com, which represents artists, need to scale-up and collect more data from potential collectors, a lot more data. People will give you data if you treat their data responsibly and provide value in exchange. Opt-out strategies aren't responsible, and encryption doesn't provide value. Opting-in, on the other hand, is a process with several steps, each of which is taken voluntarily, and each of which deserves a reward.
If you still don't get it, the answer to the privacy-piracy quandary was sung three decades ago. R-E-S-P-E-C-T, find out what it means to me.
I have begun my adventure at Voxcap.Com, discussing how next year's elections might impact the future of the Internet. I write daily for ClickZ, and appear on TechEdge Radio. I write monthly columns for NetMarketing, Boardwatch, and Intellectual Capital. Once every other month I'm in CLEC Magazine. The lead item here is also the Monday e-commerce column of Andover.News. You can still buy my book . Subscription instructions are at the bottom of each issue.
Remember that it's still journalism that keeps the Clues coming. Give me a call at 404-373-7634. (Yes, I do some commercial writing.) Now back to the show...
The one point Bill Gates has never gotten about the 1990s is that he's no longer a businessman, he's an historical figure. The game is no longer about building the company, but telling a personal story that will resonate through history.
How Gates reacts to Judge Thomas Penfield Jackson's "findings of fact" will determine whether, 100 years hence, his story is taught in 20th or 21st century history classes. He can fight and wait for a political bailout , he can break up the company on his own , or he can pursue a settlement that's short of a break-up.
All three strategies pose risks. If Gore beats Bush (not impossible), the political strategy collapses, and Bill's fairly liberal anyway. If Bill breaks up, Ballmer can run the OS company, but where does he personally land - chances are on the outside. I don't think Gates can imagine life without his company. Settlement talks will have to wait until the DoJ stops its victory dance. Joel Klein might then prefer an end to this before even a President Gore takes office, and if Gore catches up with Bush in a March poll you can see talks heating up.
The question is what could get Bill Gates into that 21st century text (or disk)? If he took the Internet company to a duplicate of his Microsoft success, that would work. He could create some great institutions (Gates University? The Gates Medical Center?) and become the next Andrew Carnegie. Or he could fight to become John D. Rockefeller or J.P. Morgan.
That last may be the riskiest strategy, however. The 19th century trusts put their faith in William McKinley, the George W. Bush of his day, but he was followed by Teddy Roosevelt. Every President elected in a year ending in 0 since 1840 has either died in office or been shot -- Reagan's 1981 wounds were quite similar to those that killed Garfield 100 years earlier.
In any case, it's Gates' choice, not mine and not yours. The Clue from here is that, before he chooses, he reads a bit of history.
Follow me, shouts the press release. The careful reporter asks, who are you, who's with you, and where are you really going?
So here's a round of applause to our profession, for not getting taken in by the announced "formation" of the Internet Lobby . A quick Web check shows it's a personal front for PR man Edward Segal , whose site calls him "an authority on how individuals and corporations can get their 15 minutes of fame." Rochelle Grayson of FlashCommerce asked the right questions when the release came out and the lack of response to her post shouldn't be misinterpreted. We got the message, and Mr. Segal will have to wait for his own 15 minutes.
Break Out Failure
Blaming the market for your failure is the oldest trick in the book. In the case of 'zines (as letters like this were called five years ago), many launched without business models and their founders are surprised to wake up to find they don't have a business.
Well, thinks Feed Co-founder Stephanie Syman , what if we all got together? That might make some sense in terms of aggregating an audience, but who would buy? The audiences of 'zines are hopelessly diverse.
Syman blames "the failure of the Web to radically alter the fundamental economics of publishing," according to News.Com. This is your Clue to the Cluelessness of her exercise. No publication is created for an editor, or even an audience. Its purpose is to organize and advocate a specific market. A publisher's business model will vary (mine is to get work from other publishers), but the best publishers identify their reader, examine the elements of their lifestyle, then capitalize by serving real needs.
ClickZ is a good example of a 'zine which does this. Publisher Andy Bourland does all the things I would here, if I were a publisher (and not just a writer). He serves his chosen market of ecommerce experts, finding new ways to bring them expertise, and finding new ways to capitalize on their attention. Sonicnet did the same thing in the realm of music, which is why their founder now runs MTV's Web strategy. Feed's problem is that it never served its readers' lifestyle, beyond serving content. (I doubt if they ever had a clear idea what their readers looked like.) Getting together with other market failures doesn't change that. Are they The Village Voice, the New Yorker, the New Republic? What do its readers want and need? Get it to them. Until you know how to plow your own field, don't expect nearby farmers to call you in as a consultant.
Clued-in is the idea behind Seagram's Jimmy & Doug's Farm Club . The idea is to leverage Seagram's TV, publishing, and publicity effort on behalf of groups that submit their music to the site. The guess here, however, is they won't execute, demanding rights for promises when most musicians (who are any good) know they don't have to sell their souls any longer.
Clueless (again) is Unisys, this time for their entire Internet strategy. It's hard to believe this company, as Univac, created the first commercial computer 53 years ago. I'd suggest firing Chairman Lawrence Weinbach, but who else would want to run this mess?
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