A Manifesto for the content Industry 10 - Free Your People

If you’re doing the other stuff right your people should have some pretty interesting jobs. I bet they’ve got interesting stuff to say. Do they blog? We do. Do they comment in chatrooms? We do. Let them join the conversation, it should be part of their job.

The entertainment industry is an aspirational business. I don’t know how many applicants you get for even the most minor role but I’ll bet the glamour of either the music of movie industries pull in a bunch more candidates than the equivalent roles in engineering or finance.

Journalism and writing are also aspirational jobs. Pretty much any industry where you’re paid to express yourself (or facilitate that expression) is going to be an attractive one to a lot of people.

Which is why seeing articles like this one is a bit depressing: Sky News clamps down on Twitter use

Basically, in implementing this ruling, each of their individual twitter feeds became less valuable. In fact, you might as well cancel the individual feeds and just link to the website.

If we go back to our old techdirt equation of Connect with Fans + Reason to Buy = $$$, this appears to be a clear case where the institutional instruction is reducing both of those factors; by restricting people to only tweeting about their field it makes it harder to make a connection with readers (fans) and by forcing everything through the central news desk it slows down the transmission of information and potentially reduces the value of their feed (reason to buy).

In a market where the legacy players are fighting to preserve both their reputations and their relevance the expertise of their staff remains one of their most powerful weapons. Restricting access to that expertise (or vice versa) undermines the business.

The entertainment industries in particular are suffering something of a crisis of perception as much as anything, contempt for the inherent imbalance in current copyright law, and the continued head-in-the-sand behaviour of the lobbying groups has meant that “the industry” is widely seen as “the bad guy”. Actually engaging with those disenfranchised fans (rather than suing them) is going to be necessary to rebuild the industries’ reputations* and the people on the ground are the ones to do this – not the CEOs or heads of the lobbying groups. Why? Because of Stephenson’s sixth law**:

I’ve recently discovered a blog run by a bunch of creators*** (mostly musicians) who appear to be trying to do something around that connecting with fans and, judging by some of the comments, they appear to be having some degree of success in terms of persuading people. Unfortunately they also appear to be trying to approach the whole debate from a moral standpoint (ignoring the underlying economics is rarely a good idea) and also by thinking of things in terms of a zero-sum game – they seem to be trying to attack pretty much every web-based service as not-paying-as-well-as-the-old-model rather than paying-better-than-nothing.

Additionally some of their writers have a tendency to embark on aggressive, expletive-fuelled rants about the people they’re trying to win over, which doesn’t seem a particularly good strategy.

But anyway, it’s a good example of trying to free up your people and helping them connect with their current & potential future fans – and they’re getting a lot of hits on their articles.

So whilst I may disagree with a lot of what they say, it’s a prime example of getting your message across without falling foul of the sixth law.

* Assuming that the industries update the rest of their business models as well. White-wash won’t work.

** This, of course, has absolutely no data to support it at all.

*** I’m told that there’s a rumour (could I be less specific?) that this site is in fact supported entirely by a major music label and is what is known as an “Astro-turfing” site, but I have seen no evidence on this and it’s largely irrelevant for the purposes of this instalment.

A Manifesto for the Content Industry 9 - Be Genuine

We’re sick of spin, we’re sick of hype. If you churn out repetitive and unoriginal content whilst claiming it’s the best thing since last year’s clone, we’ll stop listening and go elsewhere (a lot of people already have).

“The best thing since sliced-bread” gives over 3 million hits on a google-search, I wonder how many of those things really are?

There is a theory that for any headline that ends with a question-mark*, the answer is “no”.

“You can tell when a politician is lying, his lips move.” Gets you over 500 hits on Google.

“Don’t believe the hype.” By Public Enemy reached number 18 in the UK chart

“So what?” I hear you ask. Well, we, as a populace, and hence as customers, are becoming more cynical. Advertising is pervasive but untrusted, techniques such as having the volume of the commercial breaks louder than the host programme and releasing ad campaigns that are designed to be offensive safe in the knowledge that any ASA activity will be retroactive further heighten the sense of intrusion.

Programmes such as The X-Factor are routinely referred to as “glorified karaoke” and the shelf-life of the winners is generally planned only to last until the next series (anything else is a bonus).

Media conglomerates have control of so many different channels that it is easy to find an advertisement for a TV programme masquerading as an article in a paper owned by the same company (or vice versa).

We, the customers, have known this for a while but, with the advent of a truly interactive web, people are finding out how to route round the hype, the misinformation and the adverts and are finding their own trusted sources.

Many legacy companies are seeing this as a threat. This loss of control means that their influence is reduced accordingly:

If people are TIVO’ing shows then they’re not watching your expensive adverts

If people aren’t listening to commercial radio they’re not hearing your carefully selected play-list

If people aren’t reading the newspapers then they’re not reading your trend-setter’s latest must-watch / -read / -listen to recommendations

But overall spend on entertainment is going up, especially for independents. So where are they getting their recommendations?

Well, the same way that they always did really, from friends, peers, colleagues, trusted reviewers, fanzines etc. It’s just that now, most of these are online and can have a far wider influence than they did previously.

And the reason that people are listening to these sources is that they respect the opinions and advice given. These new sources have established a track record on honest and reliable output that allows people to make a judgement based on that history.

This is an opportunity, and an easy one to open up. Most aspects of the content industry have their talent scouts (in one form or another) who could easily open up a credible dialogue with potential fans and customers, but very few are doing so.

More often than not this gap has been filled by amateur  / semi-pro bloggers and websites.

Sometimes industries will embrace these new sources, frequently they will do so in a confused, contradictory and ultimately litigious fashion.

This link [http://www.techdirt.com/search.php?cx=partner-pub-4050006937094082%3Acx0qff-dnm1&cof=FORID%3A9&ie=ISO-8859-1&q=dajaz1] shows the list of articles about popular hip-hop blog Dajaz1, a blog that was taken offline for hosting infringing content, a significant chunk of which was found to have been provided by the record labels for promotion.

There are plenty of other examples of fan-supported sites being closed down for copyright reasons that, ultimately, just drive people away from legitimate content.

From accounting practices to promotion techniques the legacy content industries (particularly music and movies) don’t have a good history of honesty. That’s a gap in the market, that’s an opportunity.

P.S. As well as my recurring concern about companies adapting before I’ve finished writing this I sometimes wonder if I’m going the wrong way with some of my analysis. Fortunately there is no shortage of regular reminders that reform is needed, generally in the form of one of the industries taking some ridiculous legal action. After writing this up last night my vindication came with this article from techdirt** about how skipping commercials might be considered illegal.

* e.g. Did radio-active, nazi gerbils kill Elvis in JFK cover-up?

** My go to source for all that is wrong in the Intellectual Property world.

A Manifesto for the content industry - 7. Be Brave

Be brave. If you’re focussing on sequels, glorified karaoke acts, this year’s answer to “X” or trying to build a brand then you are guaranteed to miss the next trend when it comes along.

First, as has become traditional, some numbers:

Rather than copy and paste a big picture please have a shufti at this Infographic from techdirt showing the numbers in an expanding industry http://www.techdirt.com/articles/20120129/17272817580/sky-is-rising-entertainment-industry-is-large-growing-not-shrinking.shtml

What this shows us is that the overall entertainment sector is growing, both from a creation side and a sales side. So why do we hear so much about a dying industry being decimated by piracy?

Well, it’s partly because of that column on the left. The gaming industry of 20 years ago was niche and pretty negligible compared to the established movie and music industries. That’s all changed now and the customer’s entertainment dollar has a whole new market to play in.

So that’s part of it, and it’s partly because most people don’t know what decimated means, but we’ll step past that…

Having had a look at the top 20 singles, albums, tours, movies, paperbacks and video games (mostly courtesy of that other growth industry – Wikipedia) I notice the following things

The singles market is dominated by a few major artists.

The biggest movies of the year were mostly sequels, as were the video games.

The biggest tours were all by long-established by acts.

Novels alone still seem to have a good presence of debut works.

This tells me one of two things, either all the best stuff has been produced and there’s nothing good coming out of the ever increasing amount of new content, or the respective industries are scared of this new fangled internet thing* and are banking on their known, well, bankers.

Hence we’re seeing the sequels, cross-overs, franchises and the building of “brands” from the majors whilst most of the truly original content is coming from the independents and smaller subsidiary production houses.

This isn’t new, but the extent to which it is happening is, and it’s particularly galling in the music industry. Here we have an industry that has always defended its 90% take** on the grounds that it needs it to invest in new and developing artists. But speak to those within that industry who are tasked with that job and you’ll find there’s less and less money and time going that way. The general approach is now to let the scene develop organically and then cream 2 or 3 artists off the top when a lot of the hard work has been done by the artists and local enthusiasts.

If the content industry really wants to get back on the front foot they need to stop playing it safe and start hunting out the cutting edge; they have the skills and the resources to be shaping a new zeitgeist rather than perpetuating last year’s trends. But it means being brave, it means taking some of those profits and gambling with them, it means trying to reverse that process whereby companies go from creative start-ups to legislating dinosaurs.

It will pay off in two ways, firstly it increases your chance of finding the next being thing and being in at the start of a new scene and secondly it gives your customers a reason for some brand loyalty and, to go back to the techdirt equation***, a reason to buy (and then come back to buy again).

To refer to the previous chapter, it takes you away from content as a commodity and starts to return it to being culture.

The other way that the industry needs to be brave is in terms of how it connects its fans to its creators. We’ve talked about this before and we’ll come back to it again, but pretending the internet doesn’t exist is not going to work.

P.S. I love the wording from the US constitution at the bottom of the infographic, “to promote the progress of science and useful arts.” Does that mean that non-useful arts shouldn’t get copyright? Damien Hirst, I’m looking at you.

P.P.S. I know it doesn't mean this.

 

* An MPAA spokesman recently admitted that “the internet isn’t a platform we’re comfortable with”.

** On average, some of the older, more established bands do better, the manufactured ones don’t tend to get close to that.

*** Connect With Fans + Reason to Buy = $$$

A Manifesto for the content industry 6 – Focus on Quality

Focus on quality. A corollary to adding value; you cannot compete on quantity, it’s you vs the world, you have to be better than good.

So what do I mean by focusing quality? Well, simply put, it is finding and exploiting (in a positive sense) the great stuff.

First though, some numbers to explain why quality is the differentiator for any kind of business based on digital content:

•At least 35 hours of content is uploaded to Youtube every minute.

•The movie featured in this blog post was shot on an $800 SLR.

•Garage Band recording software is available from £13 and a fully specc’d copy of Cubase from £190

•e-books now outsell paper books on amazon and can be produced with free software and the cheapest pc you can find.

•Portable digital recorders with condenser mics now cost less than £100.

•You tube, Picasa, Bandcamp, and oodles of other sites allow creators to upload and share / sell their content for free.

•Over $100million was pledged to Kickstarter projects last year.

•There are over 200 million blogs and this number rises every year.

What all of this means is that it is easier than ever for creators to produce good content, easier than ever for them to share it directly with their fans, and easier than ever for people to find new content.

What’s not easy to do is find the best content. There’s so much good stuff out there that finding the great stuff, and getting in front of the right people, is a challenge for creators and consumers alike.

As with adding value, focusing on quality is where middlemen have a role.

We touched on this in the previous instalment (I used the example of the difference in production values on albums by The National) and these two aspects do sit together to a great extent, getting top quality content in front of the right audience is still a real challenge at all levels of the industry.

In the TV and music world there is currently a focus on the reality TV shows and their offspring, Big Brother, X-factor and their ilk. This is very much a lower-end-of-the-market play and, whilst it offers high returns for low overheads in the short term, the numbers indicate that this may have a short life span. Audiences for Big Brother and similar shows have fallen heavily since their early highs and whilst the X-factor continues to grow its TV viewing figures, the sales of singles are falling (even when downloads are taken into account). The limited longevity of the acts also means that there is very little “long tail” to be capitalised on.

By focusing on the lower end of the quality scale the output becomes a commodity rather than “art”, which, as well as removing any long-term re-sale value from the product, makes it open to competition from lower / zero cost producers, removes a lot of potential for any brand loyalty and makes the operation very vulnerable to a sudden shift in public opinion.

The competition for consumers attention is more open than ever, whilst the major content producers also own the major media and distribution channels a demand can be created, but as the net democratises the flow of information, and as peer-recommendation outgrows media hype, the money that people have to spend on entertainment will move towards quality output, even as they continue to watch and listen to the mass produced output.

* This may be my first ever blog post that has no asterisk'd footnotes. Oh wait.

SOPA so bad

I feel I should be posting something about SOPA/PIPA here being as it's such a crock of shit and seriously fucks up this wonderful little thing I like to call the web.
But in truth, everything that needs to be said is being said and collated by those far more intelligent than me, so I'll just point you here: http://www.techdirt.com/
The other reason that I'm trying to avoid writing anything about is that the outright lies and bullshit that is being spouted by the likes of the MPAA and RIAA makes me so angry I'm almost unable to write a coherent sentence.
So all I'll say is, get out there and make a noise.

Maybe it's while we still can.

Stephenson's Responsibility Threshold

I have a theory, well, actually that’s an exaggeration; I have a hunch.

My hunch is that the standard salary model employed by most companies in the capitalist west is fundamentally broken.

The model is, theoretically, based on the idea that the greater responsibility and accountability you shoulder, the greater your salary in reward.

In the realm of a small business, where the owner is the principle benefactor of success as well as being the main loser in the event of failure this is a clear and effective mechanism.

In a pure capitalist model this probably works as well, if your company underperforms your shareholders oust you from the CEO seat.

But we in the UK (and the US as far as I can tell) are a long way from a pure capitalist model. Government-granted monopolies permeate our economy in the form of copyrights, patents and trademarks, monopoly and merger commissions rule against market-created monopolies, deals are done behind closed doors in clubs and meeting rooms that do not act in the best interests of the shareholders or customers, etc etc etc.

We all know this, but we put up with it because changing it is outside our sphere of influence.

Lobbyists and voting blocs have more say that we do, we resign ourselves to the inevitable.

One of the reasons that it ends up being outside our influence is that there are actually a very small number of people at the top of the pyramid who not only wield a disproportionate influence in their domains, they also, through their connections to other members of this elite, have a disproportionate influence in other domains.

This effect is amplified by the “revolving door” by which people enter and leave government having made or influenced changes in the area that they subsequently work*.

This is where Stephenson’s Responsibility Threshold comes in.

Basically my hypothesis states that at the bottom of the salary scale the risks incurred by the individual are far greater than the potential impact of their failures, whereas at the other end of the scale, the impacts of the failures are far greater than the risk incurred.

I’ve represented this on the graph below:

I hope this makes sense?

The bit where the business and personal impacts meet is Stephenson’s Responsibility Threshold and it represents two things:

Firstly, it is the point at which you can say someone is over-paid (to the right) or that you have a job that is unlikely to reward risk takers and innovation (to the left).

Secondly, and this is where I’m really straying into the realms of the completely unsupported hunch, it highlights the point at which true accountability stops.

To the left you have a state whereby the individual does not fully have the authority for the job they have been charged to do (they cannot be accountable because they have never truly been empowered).

To the right you have the situation of the exec who signs-off the work without understanding what they have improved. Effectively they cannot be accountable because they cannot be expected to understand everything that happens beneath them (see Andy Coulson and James Murdoch [claiming] not to know about the phone tapping at News International papers for example).

Fortunately the more cerebral media (and Private Eye especially) provides plenty of examples that I can use to back up my theory:

A recent study highlighted by the BBC found that Directors were more optimistic than their front line staff about the future in terms of the wider economy, their company in particular and their personal future if something were to go wrong. Sherlock Holmes was not required to figure out why this might be the case; not only are the rewards higher, the penalties are lower too.

A junior member of staff at NBC recently posted (on you tube) a video clip from the early 90s of a couple of journalists discussing (and failing to understand) what the internet is. 20 years later it’s very amusing and lots of people looked it up. The people in the clip subsequently showed it on their current morning chat show and had a good laugh about it. The employee who posted it was fired.

The Rotten Boroughs column of Private Eye*** is riddled with examples of people failing hugely in one exec job only to turn up in a similar one 6 months later having received both a pay-off and a pay in. The In the City column shows much the same in the corporate world and the tragicomic career of Geoff Hoon is a classic example for how it works in government.

So assuming that you’re in complete concordance with what I’ve written, the only question remains is, at what level does the threshold manifest itself? Obviously this will vary from company to company but I’m reckoning it’s in the region of £142,000 - $400,000.

*Google Richard Bowker for a prime example.

** Some nice examples of reward for failure here:

David Liddiment, oversaw the collapse of ITVs ratings to its lowest level in 47 years, now a BBC trustee advising on Radio 4.

Sally Morgan, former Blair aide exposed in the cash-for-influence sting by Channel 4, now chair of Ofsted.

Lord Lang, former tory MP, got lucky under Major, rejected by his constituents in '97, now chairman of the Advisory Committee on Business Appointments.

You could make a list like this every fortnight that it comes out.

Data Shift

I'm a big fan of the video Shift Happens. If you haven't seen it already, take a moment to absorb some staggering statistics.

Enjoy that? I love it.
Today I found another couple of interesting statistics courtesy of this article on the BBC website.
The whole "295 exabytes of information" is, to be frank, almost meaningless. The number is too large to comprehend for mere mortals.
But further down the article there's a much more interesting (well, interesting to me) statistic: "It shows that in 2000 75% of stored information was in an analogue format such as video cassettes, but that by 2007, 94% of it was digital."
Whoah!
In seven years we went from massive majority analogue information to even-more-massive majority digital information. It's no wonder that so many industries are struggling to understand the real impact that has on their businesses.
The internet is a digitial copy machine (hat tip: Confused of Calcutta), and a very price-efficient one at that. Trying to shift your business model from one where you were the gate-keeper of a finite resource to one where you become the introducer to an infinite one is a mighty task, and it's no wonder so many industries are resorting to ever-increasing attempts at protectionism (read the blogs from any day's output on techdirt) rather than waking up to the fact that the world has changed and their business model is no longer fit for purpose.

Equations for the future

So the internet has been around a while now, the major labels are still suing their customers as their first response to free advertising (i call it sharing, the more dramatic amongst the industry call it piracy. Really? Piracy? Read some news articles on Somalian waters or the East China Sea to find out what modern piracy really is) but somehow they're still there and, more depressingly, we're still here.

But these things take time, a lot of time when your opponents (and perversely this includes people like the BPI who are supposed to represent me) have the ears of the government.

But to recap...

I think what we're seeing the beginning of is a mass levelling of the playing field. Basically we will end up with fewer superstars but more people making a much more modest living from their music. There are a multitude of alternative business models out there, they're all evolving, the trick is finding one that works for you. Most of them are based around the following (which you'll see in a number of places on the web but i think it originated at Techdirt): Connect with Fans (CwF) + Reason to Buy (RtB) = $ This is much the same as the 1000 True Fans theory but expressed differently. Effectively it comes down to your ability to engage with your fans and persuade them to support you (CwF) and your producing a product that's sufficiently high quality to make it worth buying instead of downloading (RtB). Personally i think there's a factor missing here, which, for lack of a better term, i shall call Elevation. And this what the current major labels do. With the rise of free distribution mechanisms and cheaper technology there is more and more really good music being made. The challenge now for any artist to stand out from the crowd, to raise yourself or your band above the level of everyone else and get noticed. Sadly it's not enough just to be really talented, you still need some mechanism to elevate yourself above the noise level. The major labels have massive publicity and marketing budgets, that's how they do it but it doesn't work for an independent act.   Unless you're an independent act with a corporation-sized bank account. No? let's move on then...  As always though, there are a number of alternative ways to do this. One way is via working out what your niche is and targetting that, there's a lady who writes songs about sailing (whose name i forget, irritatingly) who sells very well to, funnily enough, the yachting and sailing crowd. That's her thing and it's effective for her. Another option is to consider your location and work out if you're in the best place for your music, different areas have different scenes, sometimes it helps to be part of that scene, sometimes it's best to be unique in your region. What you don't want to be is stuck in the middle. Another option is to partner with a publicist / advertiser, there are people trying to make careers there as well and some mutual backscratching might be possible. One approach that appears to be coming through is to target a really, really small niche, with a very high-end product (hat tip to Confused of Calcutta). The mass market is always going to be the territory of the major labels - don't try and compete, figure out what your Unique Selling Point is and work out how to make the most of it. So i think the equation should actually be: e(CwF + RtB) = $ But at the end of 2010 i find myself no nearer establishing what my business model is. So i suspect 2011 will be no more successful for me than this year was. Hopefully others will get further along that particular line.