These are my Delicious links for March 24th:
These are my Delicious links for March 13th:
These are my Delicious links for March 7th:
These are my Delicious links for March 2nd through March 4th:
And some quotes:
"The aesthetic quality of a product – and the fascination it inspires – is an integral part of the its utility."
"Things which are different in order to simply be different are seldom better, but that which is made to be better is almost always different."
(And on a personal note, my late grandma had Rams's Cylindric T2 lighter in her apartment when I was a kid and I always got in trouble for playing with it, but its design fascinated me.)
I first heard the idea for (un)classes a little under 13 days ago when Rahmin pitched it to Todd, John, and me at the Lair on Presidents’ Day. So, what’s an (un)class? It’s exactly what it sounds like: a way to explore your interests without the formal structures of an educational organization; or what we have come to call casual learning. From the brand new (un)classes blog:
(Un)classes are to continuing education what BarCamps are to conferences — a lightweight, low-pressure, and most of all fun way to explore topics that interest you without having to make a big up-front commitment.
Rahmin is one of those guys with a million ideas, and there’s something to almost all of them, but this one struck a chord with me. It was a product *I* really wanted, which is always a good sign. So, I started to think about why I wanted it and I came up with two fundamental themes that I think are resonant with a growing number of people.
Diversified Living
When I left Yahoo! a little over a year ago, I had spent nearly 4 years as close to singularly focused on work as humanly possible. Over those four years, I invested all of my life capital (i.e. time) in my career, which I thought was a sure-fire investment that would have a much higher rate of return than conventional instruments like hobbies and relationships — those only paid incremental quotidian returns, this could pay exponential life-changing ones. But then I was hit by a Black Swan in the form of Yahoo!’s well-documented struggles. And all of a sudden, a good portion of the capital I had accrued from my investment was in the form of influence within a company at which I was no longer interested in working.
So when I left, I vowed not to make that mistake again. I was not going to put all my capital into one life investment vehicle that could unexpectedly lose its value, I was going to diversify. I realized that life experience (i.e. travel, hobbies, etc) may not have a sexy upside, but it’s safe and pays a solid dividend. Whatever was to come next career-wise would never be a singular focus at the absolute expense of life experience.
However, I’m more than a little OCD (in the annoying perfectionist way, not the need to lock the door 7 times and spin around way) and I throw myself fully into what I do because I don’t know any other way. So, this new goal of life diversification would have to take forms that didn’t require an abundance of free time. But, there aren’t too many meaningful things you can do with a relatively small amount of sporadic spare time beyond read a novel or paint. You definitely can’t learn a new skill or study a subject that interests you, at least not through any conventional educational offerings of which I’m aware. And that’s where (un)classes fills a market void for me, it’s micro-education (Rahmin’s term) — a learning format with smaller basic units that fit my crazy lifestyle.
Weaponization of Hobbies
(First of all, credit to Raza for the term.) If micro-education is a format, then casual learning is a category within that format. What sets casual learning apart from other potential categories of micro-education is the inherent lack of competition, which appeals to my desire for my extra-curricular activities to be enjoyable and stress-free.
Don’t get me wrong, I’m a competitive guy. But, I think it’s somewhat ridiculous that you can go pro and/or compete in pretty much anything nowadays. Stuff that was meant to be fun has now been turned competitive at the highest levels, and I would argue that has trickled down to permeate every level of a given hobby to some degree. There is a certain expectation that by taking classes you are (at least in theory) fully committed to one day becoming an expert in that subject. And by not pursuing the next level once you get there, you are quitting. This implicit expectation can be very daunting for novices or dabblers and serves to keep people from even trying. What if I just care enough to only ever be a beginner?
And then there are the other students. Haven’t we all been there in the beginners’ sailing class with the guy who brought his own life-vest and keeps trying to complete the instructor’s sentences or in the introductory rock-climbing class with the guy who keeps volunteering how he’s only trying to get back in the swing of things after taking a few years off? I don’t want to spend my precious free time dealing with these people! Like I said, I’m competitive. So even if I’m not there to compete, I’ll end up taking it seriously just to shut that douchebag up.
Casual Learning FTW!
I believe both these themes, diversified living and a rebellion against the weaponization of hobbies, appeal to a lot of people who may not even know it yet or are just beginning to realize it.
The current recession has made diversified living not just something the growing ranks of the white-collar unemployed may see as a silver-lining until they find their next job, but a core value that will stay with them for the rest of their lives. The macro-economic Black Swan of the credit crisis is trickling down to become millions of personal Black Swans just like mine. Our generation that was trained to sacrifice everything short-term for our careers and the long-term benefits of professional success is seeing the foundational assumptions of that philosophy spectacularly undermined before our eyes. If all of a sudden I don’t reasonably believe that I’ll be able to make $10M by the age of 40, is the way I’ve been living my life worth the opportunity costs?
As for the weaponization of hobbies, everyone hates douchebags. ‘Nuff said. 🙂
Casual learning is unique in that it is purely learning for fun. By its very nature it can’t help you with professional training or becoming an expert at anything. And so, you end up with a self-selecting group of participants who are all there for the same reasons. What makes casual learning special is the community of intellectually curious individuals who want to pursue the joy of learning without having to make a substantive commitment to do so. (Un)classes fill the gap between nothing and full commitment to a subject matter and do so within a supportive and non-competitive group of like-minded individuals.
(un)classes.com
We’re trying to launch the first version of (un)classes.com in time for LaidOffCamp this Tuesday. Rahmin and I are working on product and marketing, Marcus is helping out with design, the fantastic guys at Cloudspace — Corey, Michael, and Tim (who also happen to be the guys behind awe.sm) — are doing the development heavy lifting, and Todd has even offered to chip in on some CSS work. It’s a side-project for everyone involved that basically kicked off Thursday night, and it will be nothing short of a miracle if we pull it off (and I promise to write about the process if we do). But we’re all really passionate about the possibilities of the idea and the community it can create, and we want to start using this product ourselves. 😀
If you made it this far, there’s a high likelihood you’re digging on the idea of (un)classes as much as we are, and you’re wishing there was a way to get involved right now. Well, today is your lucky day! Even though the site isn’t up yet, Rahmin setup a way for you to submit ideas for things you wanna learn and things you wanna teach. When the site goes live, your submissions will be the first classes in there and you will get an email with your account info. Of course, you can also follow (un)classes on Twitter and/or subscribe to the (un)classes blog.
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These are my Delicious links for February 19th through February 25th:
My dad and I had a long conversation over lunch today (at In-N-Out 🙂 ) about my most recent blog post. He mentioned that the studios are keeping a close eye on what is happening in the music industry as a preview of their own potential future 5 years down the road, and that they are taking preventative measures based on what they see. I replied with two reasons why I don’t think that’s something to brag about. First of all, that 5 years is more like 2 years (if that) and it’s shrinking every day. The pace of technological progress has only accelerated since it first began to disrupt the music industry, and it ain’t slowing down. Secondly, the film industry’s approach to understanding the data has been merely to plot historical events and interpolate a trajectory. They have made no attempt to understand the underlying equation and thus extrapolate the end-result. In high-school trigonometry terms, they are plotting points on the left half of a parabola without understanding that they are part of the graph of y=x^2. How do I know this? Because you can see it in their actions, they are clearly trying to treat a growing number of symptoms with no clue about the nature of the underlying disease.
My dad agreed with me and then said there’s a lot of money to be made by the guy who can show them what the future really holds. Being the giving person that I am, I hereby offer it to them free of charge (and with charts, no less!):
First of all, your audience is moving from conventional offline distribution channels to new online ones. You may think you have the control to slow this, but you don’t! At this point, you must consider it *axiomatic* that every genie will get out of every bottle. There are over a billion people on the Internet, and it just takes one to put your content on BitTorrent and all your anti-piracy efforts are rendered moot. Content consumption is moving from offline to online whether you like it or not. So, you have a choice: get on-board by giving consumers what they want and keep some of them as customers, or drive them away entirely by ignoring their needs. If you choose the latter, you probably won’t ever be able to win those lost customers back. And even if you choose the former, you will most likely never be able to aggregate the same size audience for a given piece of mass-market content online as you could offline. Mainstream media (or ‘head’) content is a first-class citizen offline, where there is artificial scarcity and so being first in line counts for something. But, there is an (effectively infinite) abundance of content online and what matters most is finding what is most interesting to me.
That’s the bad news. Here’s the good news, by moving online you can build deeper relationships with that smaller audience and explore variable pricing options to increase the average value of each individual fan (again I reference Josh Freese, who illustrates this point not without irony). However in order to fully engage your most passionate fans and get them to give you more money, you can’t continue to just sit back and pump out passive entertainment experiences with some snazzy marketing around it. You will need to invest in turning your content into 360° entertainment and change your mentality about selling it as a packaged good.
Yes, I know that sounds expensive. It definitely won’t be cheap and will require you to build out new competencies you don’t have today. But you’ll be able to pay for it (and then some) with all the money you save by getting out of the very expensive mass-market content and offline distribution businesses.
So if you’re willing to become an online-first media company, I think I can promise you’ll return to profitability in 5-10 years depending on how quickly you move to jettison your legacy offline businesses. Now, your shareholders may not be so keen on all these restructuring costs and write-downs, not to mention all the money you’re going to be leaving on the offline distribution table by focusing on getting into the online business while you still can. But, that’s ok because they value the long-term survival of the company over short-term profits. Right? </sarcasm>
Mass-market content and offline distribution are declining businesses, but they are still quite profitable. Especially compared to niche content and online distribution, which are clearly ascendent but still a rounding error to the bottom-line of these major media companies (not to mention the corporations that own them). I believe the decline of the former is going to be a lot quicker than the entertainment industry thinks (because they believe they can control it and they don’t understand the exponential acceleration of technological progress) while the rise of the latter will be retarded by a lack of investment in developing the infrastructure to make it a profitable business. The film industry obsessively spends hundreds of millions of dollars to build the biggest anti-piracy stick they can while watering the online video carrot with an eyedropper. If they were to put meaningful time and money into figuring out how to make legal online content consumption compelling and profitable, it would be more effective than spending a hundred times that on anti-piracy efforts. But they won’t, instead they will continue to do everything they can to prop up dying (but profitable) revenue streams, including stifling the growth of the emerging revenue streams that could one day take their place. And so, the studios will some day (soon) find themselves with not enough offline money and not enough online audience from which to try to make money.
If I were the head of a studio, I would stop trying to figure out how to grow the buggy whip business by keeping down the automobile. I would also recognize that transforming my profitable if shrinking buggy whip business into a money-losing automobile business making it up in volume is probably not in the best economic interest of my shareholders. So instead of throwing good money after bad trying to keep the overall buggy whip market from shrinking, I would focus on getting as much share as possible while all my competitors spent their time futilely worrying about the cars. I would ruthlessly cut costs to maintain profitability in the face of shrinking demand. And, I would put all those profits into a dividend so my shareholders would stop pressuring me for growth that isn’t there. Finally, when it’s time to close my buggy whip factory’s doors, I would take all that dividend money I earned and put it into the best automobile company I could find (and then I would be sure to sell that ~80 years later 😉 ).
[Cross-posted from my company blog.]
I just got back from a really fun (and delicious) lunch with Peter of Pantless Knights, who is in LA working on a hilarious new video, and one of the main things we discussed was the idea of Entertainment-as-a-Service. The term is a reference to the concept of Software-as-a-Service (SaaS), which is a business model generally contrasted with the conventional packaged or ‘shrinkwrap’ software model. Essentially, SaaS is a subscription business and packaged software is a retail business.
The entertainment industry is a retail business. Books, movies, tv shows, music are almost universally sold as one-off purchases. But, those things are just the packaging and the people selling them to you are just middle-men. The business of entertainment (not to be confused with the entertainment *industry*) is fundamentally a marketplace of attention between fans and content creators — fans have a finite supply of attention for which content creators are competing. So, then what is the entertainment industry? To use a very relevant analogy, it is the collection of intermediary businesses (i.e. publishers, studios, networks, labels) that have been acting like investment bankers, taking the raw materials of talent and creativity and packaging them up in a form they know how to sell (i.e. retail) and commanding a big slice of profit along the way. Entertainment doesn’t want to be a retail business, and that is the fundamental essence of the disruption the Internet has unleashed on the entertainment industry.
[Clarification: For the sake of this discussion, I’m using the term ‘content creator’ to represent those who add unique creative talent to the production process. As my dad pointed out, content creation is rarely a solo effort (most notably in film production, which can involve hundreds of individual contributors) to which studios, networks, labels, and publishers often contribute substantial value. But as those contributions are opaque and thus interchangeable as far as the consumer is concerned, I am excluding those who make them from the class I refer to as ‘content creators’ in this post. Otherwise said, even though the sound engineer plays a crucial role in creating the album, no one buys it based on *who* the sound engineer was.]
When you think about what elements of the entertainment business technology has really undermined, it’s nothing more than the packaging — the time slots and release dates and viewing windows and region codes that are artificial constructs of these middle-men trying to slice-and-dice the content into as many tranches as possible to squeeze out every last cent of profit. Just like the investment bankers and their CDOs fragmented and obscured the connections between investors and their investments, so have the studios, networks, publishers, and labels introduced complexity into the connections between content creators and their audiences. While that complexity, and the companies who created it, may have been a necessity in an era of technologically inferior marketing and distribution systems, they are simply market inefficiencies in the Internet age.
So, what is the difference between retail and subscription when it comes to entertainment? In a recent post on my personal blog about SaaS vs shrinkwrap software, I wrote:
The business model of packaged software invites feature bloat, because it’s upgrade driven and you need to continually find ways to justify why Thingamajig 2009 Pro Edition™ is so much better than Thingamajig 2008 Pro Edition™. Software as a Service businesses have a much different (and arguably greater) challenge, they need to continue to create value for their customers month after month….So, you end up with a much more customer-centric product…and a vendor who is truly interested in addressing your customer needs.
The first priority of a retail business is to maximize sales, building brand loyalty and repeat business may be means to that end but they always take a back-seat to whatever else will drive more sales. Whereas in a subscription business, customer retention (and thus customer satisfaction) is always top priority, even above new customer acquisition. So if a studio believes they can get a lot of people to see a crappy movie by spending more on marketing and less on quality, they will (and do, again, and again, and again…). Because all you’re buying from them is the packaging, they know you aren’t really paying attention to whether it’s a Fox or Warner Brothers or Paramount film (do you buy your cereal based on who made the box it comes in?). But, a director would rather disown a bad film than endorse the studio releasing something that doesn’t meet his standards and his fans’ expectations. This is because the director knows that his relationship with his fans is a subscription business, and if he disappoints them he will be unable to continue exchanging his content for their attention in the future. The studios understand this too — they don’t give Tom Cruise $25M (plus a cut of the gross) per movie because his acting skills bring $25M of quality to the screen, they do it because he has more than $25M in ticket, DVD, and merchandise sales worth of fans.
Entertainment is naturally a subscription business, and the Internet returns it to its natural state. The content creators who thrive online are those who understand this and focus on the ongoing satisfaction of their customers (see Ze Frank, Michael Buckley, Chris Leavins). The level of customer satisfaction these creators deliver is really only possible on the Internet because they can go direct-to-consumer without need of the middle-men and their packaging. These creators publish in all forms — video, photos, blogging, micro-blogging, music. They do not see themselves constrained by the legacy dividing lines of the entertainment industry, their goal is to entertain their audience by any and all means available. There is no distinction for them between primary and ancillary content, they are 360° entertainment brands. The other thing that has made these creators so successful online is their direct interaction with their customers. The best your most engaged fans can do offline is give you their personal attention (and the money that comes with it) and try to recruit others to do so as well. But online, they can interact with you and become part of the show. Empowering your customers is the surest way to make them even more engaged. As I wrote in another recent post on my personal blog:
Bringing your customers into the product development process has the dual benefits of helping you build better and more customer-centric products and making your customers your most passionate sales people (because after all, it’s their product too).
So, the Internet enables these creators to spend more time listening to their fans and creating new content they’ll enjoy while outsourcing the marketing to the community for free. This is the exact opposite of the offline retail model in which the studio takes money out of production budgets to put it into marketing campaigns. The ability to establish deeper relationships with their fans also allows online content creators to attain higher average attention per customer (ARPU) than is possible in the retail world, thereby making it easier to build more value by going deeper with a smaller audience.
To be clear, I’m not trying to say the only business model for content on the Internet is a recurring subscription fee. The ‘subscription business’ to which I’m referring is more the theoretical exchange of value between content creators and their fans, which can and will take many forms — including selling packaged goods. I’m also not saying that the online entertainment market is solely the domain of Internet-only content creators. In fact, I believe the Internet is most powerful as an entertainment marketplace when the quality and reputation of a historically offline content creator is freed of the constraints of the legacy packaged goods business model. Take for example Josh Freese, who gets extra points for using this freedom precisely to illustrate the absurdity of the conventional retail approach.
And now, I leave you with the profound product of the coming entertainment revolution:
P.S. Hat tips to Ian Rogers for the marketplace of attention thinking and Umair Haque for the marketing vs quality dichotomy.
These are my Delicious links for February 19th:
A little under two weeks ago in a comment on a GigaOM post about Boxee, I wrote:
I think [Boxee’s] current differentiation is based primarily on giving users the features and content they want in the form they want it, which is mostly a function of Boxee not being encumbered by the legacy business models of the incumbents.
Well, today those legacy business models came knocking on Boxee’s door in the form of Hulu pulling its content from Boxee at the request of its conventional media incumbent content partners. Though the very diplomatic (but still genuine, which is a hard line to walk) blog post from Hulu CEO Jason Kilar doesn’t say why, I agree entirely with TechCrunch’s assessment that the content partners weren’t so keen to see Boxee getting all this great press for doing an end-around the legacy value chain these guys are fighting tooth and nail to prop up. Boxee was a stand-out at CES in early January and I don’t think it’s any coincidence that Boxee first heard from Hulu on this matter just 2 weeks after the NY Times ran a very high-profile and positive article on how Boxee was so awesome for delivering major media content to the tv in the way consumers want (which also happens to be exactly what the major media companies have been fighting against). When you think about it, this timeline pretty much matches what it would take for the content companies to read the NY Times article, bitch about it to each other, decide to go to Hulu, get push-back from Hulu, and then steam-roll them.
Steve Raymond has a great post on why this is such a short-sighted move by the content providers, with which I totally agree. So, I won’t rehash it here. But, I will say that this issue is only the tip of the iceberg threatening Boxee. Though they have effectively found an un-endorsed end-around to the legacy living room value chain, this shows how dependent they still are on the goodwill (or at least ignorance) of the incumbents. They have poked the bear and it is now awake. The networks obviously don’t want to lose the high CPMs and concentrated audiences they get from broadcast tv, which can arguably be replaced by online ads at some point in the future. But, what can’t be replaced is the increasingly valuable fixed revenue stream from the carriage fees paid by cable and satellite operators (NBC and Fox, the primary content providers to Hulu, both own ~10 widely carried cable networks). A product like Boxee is a direct threat to cable and satellite operators because it eliminates their positions as programming gatekeepers and turns them into dumb data-delivery pipes. So, I wouldn’t be surprised if this move was driven more by the cable and satellite companies than the content providers.
In my original comment, I predicted if Boxee succeeded in pioneering this space they were likely to end up like TiVo. Now I think they’ll be lucky to get that far.