• Seth’s Blog: Don’t Shave That Yak! – A thing that I do, which I shouldn't.
• SnapABug visual customer support – Another live support feature for your website, but this one includes screen capture to help troubleshooting.
• 13 Useful JavaScript Solutions for Charts and Graphs | Resources –
• Buzzzy – A Search Engine for Buzz. – Google Buzz search with an API.
• New Facebook Statistics Show Big Increase in Content Sharing, Local Business Pages – Facebook historical statistics as of February 2010 based on previous updates to their public statistics page.
• Lost Moon Radio: Live Band Karaoke With The Moon Units – Live band karaoke in LA. Available for parties and private events. Very fun!
• Fixed to Flexible – The Ebook – A free 37 page eBook on high-level microeconomic business theory with solid practical examples. The primary focus is on margin, specifically the pricing and cost strategies that go into that equation. It's a very quick read, concisely and clearly written with very illustrative (if somewhat over-simplified) examples.

  For me, the most interesting ideas were on 'constructing value' for a previously unknown product. First, you need to have a compelling free offering so there is minimal risk to customers trying your new product. Secondly, you should take the lead in setting the perceived value of your new product by using an 'anchor' of premium pricing even if you end up selling at a discount to it.

• The Twitter Engineering Blog: Introducing the Open Source Twitter Text libraries – Twitter releases libraries for parsing tweets.
• Great Lake, a Chicago Pizza Shop, Enjoys Being Small – Question – NYTimes.com – A very interesting story about a small artisan pizza shop in Chicago that was reviewed in GQ as one of the best pizza shops in America and how they are (or rather aren't) dealing with their newfound success.

  "We really enjoy the work that we’re doing and we don’t want to cheapen it. Consciously or unconsciously — probably both — we’re trying to create a manageable way to earn a living and still maintain our sanity. We value time as much, if not more so, than money."

• Give-A-Fuck-O-Meter – Saving this to send to people in the future when they tell me something I could care less about.
• The Conservative Case for Gay Marriage – Conservative attorney Ted Olson, a member of the legal team challenging the federal constitutionality of California's Proposition 8 banning same-sex marriage, explains his rationale for participating in the case as a conservative American who wishes to preserve and forward the fundamental principles on which this country was founded:
  "Conservatives and liberals alike need to come together on principles that surely unite us. Certainly, we can agree on the value of strong families, lasting domestic relationships, and communities populated by persons with recognized and sanctioned bonds to one another. Confining some of our neighbors and friends who share these same values to an outlaw or second-class status undermines their sense of belonging and weakens their ties with the rest of us and what should be our common aspirations."
• YouTube – Sugar: The Bitter Truth – A very interesting, if long and sometimes quite technical (it is a med school lecture) explanation of the scientific, socio-economic, and political reasons our food is making us less healthy as a nation (and ultimately a planet) in the last 30 years. It centers around increasing our refined sugar intake, in particular fructose, which has the same long-term chronic health effects as alcohol.
• The Third & The Seventh on Vimeo – One of the most amazingly photo-real works of CG animation I've ever seen.
• Facebook Developers | Extending Facebook Share – Mention of awe.sm in the official Facebook blog post announcing their new sharecount button and data APIs.
• How Best Buy plans to beat Wal-Mart – Dec. 1, 2009 – A strategy to make Clayton Christensen proud. Best Buy is betting that the consumer electronics and computer markets have not yet reached a good enough point where cost is the only factor. By providing an integrated buying/service solution with their in-house Geek Squad division, Best Buy hopes to differentiate from retailers like Wal-Mart who are commoditizing the purchase experience. In this case Best Buy is playing the Apple Computer role to Wal-Mart's WinTel approach.
• What’s strategic for Google? – An interesting and concise analysis of Google's various product/business initiatives using a simple but intuitive strategic framework.
• 500 Internal Server Error – 500 Internal Server Error
• Entrepreneuring…Side Effects | Howard Lindzon – A humorous (but all too true) list of the potential side-effects of starting your own business.
• Paul Buchheit: Open as in water, the fluid necessary for life – A very interesting rationale for the potential common good of social media behavior that is increasingly referred to as "over-sharing". The more we share about what we think and do, the more information will be available to help improve ours and others' future decisions.

  "The basic pattern of openness is that better access to information and better systems lead to better decisions and better living. This general principal is broadly accepted, but we're just now discovering that it also applies to the minutiae of our lives."

• The New Music Business Model: Imogen Heap « Deep Dive Marketing – A very thorough account of the many ways Imogen Heap is using different social media services (i.e. Twitter, YouTube, Flickr, uStream) as a cohesive whole to build deeper relationships with her most engaged fans.
• Ping – How Sharing Links Has Become Big Business – NYTimes.com – NY Times article on the democratization of influence on the web and the roll of individuals and their social networks as traffic drivers.
• 20×200 : Print Information : think-make-think (second edition) – If I were ever to hang an inspirational print on my wall, this would be it.
• Communilytics: Applied Community Analytics: Web 2.0 Expo New York 2009 – Co-produced by TechWeb & O’Reilly Conferences, November 16 – 19, 2009, New York, NY – Web 2.0 Expo panel on which I will be speaking on 11/16/2009
• Op-Ed Contributor – Wall Street Smarts – NYTimes.com – A deceptively simple (yet likely true) explanation of the underlying cause of the financial meltdown: the level of Wall Street’s intelligence finally caught up with that of its greed.
• Twitter to Facebook: 5 Ways to Post to Both – Mashable mention of TweetPo.st.
• Letters of Note: Okay, you lazy bitch – A great letter from Hunter S. Thompson to a production executive on film adaptation of his book “The Rum Diary.” If you know anything about the film business, you know that sometimes cursing and threats of bodily harm are more than appropriate, they’re necessary
• No. 1 With Bullets? USB Uzi Is Latest Killer Album Format | Underwire | Wired.com – Wired blog coverage of the upcoming release from Get Busy Committee, which will be available on Uzi-shaped USB drives.
• 100 years of Big Content fearing technology—in its own words – Ars Technica – A well-compiled overview of the arguments used by content industries to stifle various production and distribution innovations from the gramophone to the DVR. The overriding theme being that incumbent content producers are more inclined to seek government intervention (usually through sensationalist fear-mongering tactics) to protect old models in the face of new technologies rather than to figure out ways to improve their businesses to take full advantage of the benefits these technologies afford.
• Olark – sell better using live chat – Live chat tool to interact with customers on your website in real-time.
• 30 Under 30 2009 – Hype Machine Profile – Very nice write-up of my friend Anthony Volodkin, founder of the Hype Machine, named #27 in Inc. Magazine’s 30 Under 30 for 2009. He definitely should have been higher
• The power of no reward | Derek Sivers – An interesting article on the difference between ‘Social Mindset’ and ‘Market Mindset’. Actions driven out of personal volition are more authentic and the motivation is more powerful though more difficult to activate. Whereas actions driven out of financial calculation are by definition more mercenary — easier to activate, but of less value and harder to maintain. If you can appeal to someone’s ‘Social Mindset’, you cheapen your offer by invoking their ‘Market Mindset’.
• The Power Of Passed Links – A framework for thinking about the relative value of inbound traffic from different sources based on conversions (however one defines them) and growth. The hypothesis is that links passed from friend to friend via channels like Facebook and Twitter will have significantly higher conversions.
• Edward Sharpe and the Magnetic Zeroes: Get Wasted With The Day, In Robes recorded Aug 31, 2009 – Live session with Edward Sharpe and the Magnetic Zeros, including downloadable tracks.
• Official Google Blog: Leave the math to us: Advertisers increase their profits using Conversion Optimizer – “Each and every time someone types in a search query, AdWords runs a new keyword auction. Advertisers who are still bidding on a cost-per-click basis will be using the same bid in many different auctions, so sometimes their bid may be too high or too low. However, for advertisers using Conversion Optimizer, we’ll automatically adjust the bid for each of these auctions so that it can hit the sweet spot more often, helping the advertiser to make more money.”
• Seed is the new Series A for VCs | VentureBeat – A good overview on the move by later stage investors into earlier “seed” rounds along with advice for entrepreneurs on raising a pre-Series A round.
• Know all those Retweet Buttons across the web? Well now Facebook has one. – The first write-up on fbShare.me, from The Next Web.
• Awe.sm Lets You Track Articles Shared Into Facebook – Write-up of the latest Snowball Factory product, the fbShare.me sharecount button for Facebook.

• Thingfo powers Biggest Gleek social media game for Fox hit “GLEE” – finding, channeling and rewarding the top evangelists at Thingfo blog – Announcement of the new social media game for the Fox TV show Glee, built by Thingfo and powered by awe.sm.
• Facebook | Publishing to Twitter from Facebook Pages – Facebook has released a feature that enables Fan Page owners to syndicate their updates to Twitter automatically.
• 500 Internal Server Error – 500 Internal Server Error
• Peer-to-peer ‘(un)classes’ match interest with passion – Springwise – Another nice write-up of (un)classes.
• Unclasses.org Launches | Culture San Francisco – DailyCandy – A nice (if oblique) write-up in Daily Candy SF on my side-project (un)classes.
• Raphaël—JavaScript Library – Raphaël is a small JavaScript library that should simplify your work with vector graphics on the web. If you want to create your own specific chart or image crop and rotate widget, for example, you can achieve it simply and easily with this library. Used by Thingfo.com.
• Hitwise Intelligence – Robin Goad – UK – An interesting post about Twitter traffic growth in the UK. But, the most interesting part is the chart showing sources of traffic for various vertical categories of websites. Notably that over 40% of traffic to sites in the 'Entertainment' category is coming from either Twitter or Facebook. This reinforces my hypothesis that social media is a particularly powerful marketing channel for content.
• The Smart Growth Manifesto – Umair Haque – HarvardBusiness.org – 20th century economies are limited to unsustainable, unfair, brittle, dumb growth. Smart growth is more sustainable, equitable, and resilient based on 4 pillars:
  1) Outcomes, not incomes
  2) Connections, not transactions
  3) People, not product
  4) Creativity, not productivity
  The inefficient legacy technologies for measuring growth forced us to reduce our understanding of it to purely quantitative terms that don't accurately represent the whole point of progress: to advance humankind. People do not measure happiness and satisfaction in purely quantitative terms, yet those have become our de facto measures of success. Now that we have the capabilities to measure the effects of qualitative goods, we should abandon our legacy tactics that reduce progress to mere numbers.
• Confessions of an Executive Producer: earn it – "The irony is consumers have never been easier to find but never harder to reach. As I see it brand/consumer relationship is analogous to that of a married man to his mistress. For years the affair was a simple proposition. He wined and dined her. Bought her jewelery. Paid her rent. In return he got laid and left guilt free at the end of the evening. After years of this pattern, the mistress begins to feel used and unsatisfied. She desires more than material goods. She wants conversation. She wants to be listened to. She wants to be in a relationship. Much to the displeasure of the adulterer, sex can no longer be bought. It has to be earned. I believe the same thing is happening today with the brand/consumer relationship. Brands must earn consumers time not simply purchase it. The problem is they don't know how and don't seem eager to learn."
• Tweetpo.st – Update Facebook & Twitter At The Same Time | Visit tweetpo.st – Write-up of TweetPo.st on the Killer Startups blog.
• TweetPo.st – the smart way to update Facebook from Twitter « EverythingTwitter – Write-up of TweetPo.st on the Everything Twitter blog.
• TweetPo.st, aggiorna facilmente Facebook da Twitter – Geekissimo – A write-up of TweetPo.st on an Italian technology blog.
• TweetPo.st – a smarter way to update FaceBook from twitter – A write-up of TweetPo.st on twi5, a Twitter tools site.
• Master of 500 Hats: How to Pitch a VC (aka Startup Viagra: How to Give a VC a Hard-On) – Dave McClure's excellent presentation on how to structure a startup investor pitch (oh, and it's funny too).
• the blip.tv blog : blip.tv: the next generation – "Over the course of the last century the television networks (and their younger cable siblings) have evolved into nearly perfect businesses. Unfortunately, however, they have optimized for a historical condition: an oligarchical economy of scarcity. The networks are perfect for an era of expensive production, limited distribution and ubiquitous attention.

  2009 is not 1949. Modern consumer electronics and the Internet have ushered in a new economy of plenty. Production costs have decreased at an astounding rate. Distribution has become ubiquitous. It is no longer necessary, for all but the most ambitious projects, to seek out a studio to bankroll your pilot and a network executive to green light you for a time slot. Your talent and work ethic are now greater predictors of your success than who you know."

• How to Pitch to a VC or Angel – ReadWriteStart – A collection of high-level tips for startup investor pitches, including Guy Kawasaki's 10 slides / in 20 minutes / with 30pt font rule.
• Maturation of the Twitter Ecosystem – A very cool presentation about how the ecosystem of Twitter applications has evolved over time (featuring a shout-out to TweetPo.st on slide 31).
• TweetPo.st a smarter way to update Facebook from Twitter – Another nice write-up of TweetPo.st, a Snowball Factory product
• LocalBunny Gives Businesses Custom Twitter Bots, But It Longs For Old @Replies System – LocalBunny is a new paid service targeted at small businesses that will auto-respond to keyword mentions on Twitter with @replies based on user-defined rules. The kinds of use-cases mentioned as examples are interesting and the app sounds good on paper. But, I'm not sure I'm fully convinced that auto-responses will be successful in a medium like Twitter with such a high value placed on authenticity.
• BackType — Blog Archive » Tweetcount Widget & Plugin – Announcement of the new awe.sm-powered Tweetcount widget from BackType. It shows the number of times the current page has been tweeted using the BackTweets API and uses awe.sm to create new tweets.
• Brand Mentions Preferred over Ads – eMarketer – Study showing that earned media (i.e. consumer/press brand mentions) and permission marketing (i.e. *solicited* emails) are more effective than paid media in general and interruption marketing (i.e. banner ads and pop-ups) specifically.
• Digg the Blog » Blog Archive » DiggBar and Digg Short URLs – Digg reverses course on their URL shortener and states that they have no intention of marketing it as a conventional URL shortener. It is solely a way to share Digg pages.
• 10 Impressive New Implementations of Facebook Connect – TweetPo.st (né TweetFace), an application built by our company to connect Twitter and Facebook, was included as #7 on Mashable's list of "10 Impressive New Implementations of Facebook Connect".
• TweetMeme Blog » Retweets Are Go – Announcement from TweetMeme that their popular Retweet button now supports awe.sm.
• Sharing on Facebook Now More Popular than Sharing by Email – Data from the AddToAny showing that Facebook is now the most popular sharing channel for their share widgets. This data claims Facebook has 24.0% of shares while email has only 11.1% of shares. However, this is inconsistent with ShareThis data from less than a year ago that still had email near 50% of all shares.

• Ed Ulbrich shows how Benjamin Button got his face | Video on TED.com – A look at Digital Domain's process for creating the fully CG performance of Benjamin Button's head for the first hour of the film. Using high-resolution 3D scanning and the F.A.C.S. methodology they developed a template for creating a digital library of facial components that could then be animated using the actor's actual facial expressions.

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 ).

• Bookmarklet Builder – Handy tool for building bookmarklets, can convert back and forth from normal Javascript to bookmarklet form.
• TwitterFriends – Your relevant network on Twitter – The most comprehensive (and interesting) Twitter stats application I've found to date. Instead of gimmickry about how you rank against other Twitter users in meaninglessly vague and opaque terms like "authority," this exposes the hard data about yours and your network's behavior compared to average, and gives you some pretty cool visualizations. If I understood statistics and such better, I think this is the kinda tool I could totally geek out on.
• Which HD video Web service is the best? | Webware – CNET – In depth side-by-side comparison of online video hosting services.
  "- The victor: YouTube
  This time around, we feel really comfortable giving YouTube the quality crown. Its HD encoding is really nice, and you can't beat the price (free). One thing that really separates it from the others is that you can do so many things with your clip once it's up there. You can replace the music, as well as add subtitles and annotations. Community members can also respond to it, adding in-line video replies."
• The Bacon Explosion – Take Bacon. Add Sausage. Blog. – NYTimes.com – A (very tasty) example of the power of social media to spread content virally. According to the article, the blog post about this recipe garnered 27,000 views 2 days after being posted thanks mostly to Twitter, Digg, and StumbleUpon. In the month since being posted, it has been viewed 390,000 times and linked to from 16,000 sites. Not bad for some bacon.
• Secrets of my success: Netflix CEO Reed Hastings – Jan. 28, 2009 – A brief profile on Reed Hastings w/ business tips:
  – Target a specific niche: When there's an ache, you want to be like aspirin, not vitamins. Aspirin solves a very particular problem someone has, whereas vitamins are a general "nice to have" market.
  – Stay flexible: We named the company Netflix (NFLX), not DVDs by Mail because we knew that eventually we would deliver movies directly over the Internet.
  – Never underestimate the competition: We erroneously concluded that Blockbuster (BBI, Fortune 500) probably wasn't going to launch a competitive effort when they hadn't by 2003.
  – There are no shortcuts: Occasionally great wealth is created in a short amount of time, but it's through a lot of luck in those situations. You just have to think of building an organization as a lot of work. It may or may not turn into great wealth.
• Streaming video cannibalizing DVD rentals, says Netflix – Ars Technica – Netflix results show that streaming video views are taking away from DVD-by-mail volume. Given that there is no price difference (both streaming and DVD-by-mail cost the same per month), the streaming bitrate is at DVD quality or less, and the selection of films available for streaming is worse than that of DVD-by-mail, this is further proof that *convenience* (the only real advantage of streaming vs. DVD-by-mail) is a very powerful motivator for media consumers.
• Facebook Pages Leaderboard – A neat tool for tracking the popularity of Facebook Pages by number of fans over time. However, the data doesn't appear to be totally reliable. So, be sure to check the current stats on Facebook before hanging your hat on any of these numbers.
• Announcing the AllFacebook Pages Tracker – Interesting facts about Facebook Page fan stats (as of January 27, 2009)
  – Barack Obama is #1 w/ 4.7M fans, Homer Simpson is #2 w/ 2.6M, and Coca-Cola is #3 w/ 2.3M (I pulled the stats for these from Facebook directly)
  – All Facebook is tracking 620,000 Pages
  – Only 50,000 Pages (~8%) have > 1,000 fans
  – Only 276 Pages (~0.04%) have > 500,000 fans
• Deborah Schultz: Life isn’t binary, neither is the Social Web – "The social web is my web – it's PERSONAL to me. I am not creating media when I am online so much as I am connecting with people using media as my medium…The social web can actually provide much deeper and more interesting connections for customers and companies than simply being a marketing channel – it ties into the entire product lifecycle. And that is where stuff gets really interesting…and much more complex. This is where relevance and context and trust and intention all come into play."

• Tube Mogul Buys Video Analytics Firm – "TubeMogul currently has over 40,000 users, ranging from networks and studios such as CBS, to web only video producers and bloggers like 'Fred.' Illumenex current clients include Internet TV pioneer Revision3 and comedy site 'eBaum’s World.'”
• "Don’t forget…" – a set on Flickr – Really cool street art project in Berlin (where else) that is adding Photoshop interface elements to billboards to remind passers-by that these images of beauty are artificially enhanced. (via https://addons.mozilla.org/en-US/firefox/addon/9591)
• Facebook Developers | Facebook Developers News – Facebook is now allowing custom FBML tags, essentially code libraries produced by 3rd party application developers that can be used by other application developers to add functionality from one app to another. This opens the door to officially sanctioned mash-ups of Facebook apps, which are already mash-ups in themselves. Using the term mash-up in a non-ironic fashion makes me want to punch myself.
• The Inauguration of President Barack Obama – The Big Picture – Boston.com – A poignant collection of photos of Barack Obama's inauguration and the reactions to it around the world. My favorite is the American soldier in Iraq crying tears of joy (#19). The fact that the routine transfer of power in our country can inspire such powerful reactions around the world is evidence of what a truly global world in which we now we live. And I believe it shows that we as American citizens are making progress towards redeeming ourselves in the eyes of the world, who hold *us* (not just our leaders) accountable for the actions of our nation.
• Transcript – Barack Obama’s Inaugural Address – Text – NYTimes.com – Text of Obama's inaugural address.
• Rev. Lowery Inauguration benediction. Transcript. – Lynn Sweet – "Lord, in the memory of all the saints who from their labors rest, and in the joy of a new beginning, we ask you to help us work for that day when black will not be asked to get back, when brown can stick around — (laughter) — when yellow will be mellow — (laughter) — when the red man can get ahead, man — (laughter) — and when white will embrace what is right."
• Resources Every WordPress Theme Developer Should Know About! | Arbenting – A comprehensive list of resources for WordPress Theme development.
• YouTube Videos Pull In Real Money – NYTimes.com – Many have long claimed that the only profitable type of online video content was repurposed TV shows/films or other "professionally produced" content. This article give several examples dispelling that myth and showing that the online video audience and business has reached a point where even so-called amateurs can make real money. For example, Michael Buckley is making >$100k/year from his homegrown entertainment news show "What the Buck?" purely through YouTube's partner program.
• Op-Ed Contributors – The End of the Financial World as We Know It – NYTimes.com – Comprehensive (if not revelatory) overview of some of the primary drivers of the financial bubble and resulting collapse by Michael Lewis and David Einhorn. Puts things like the failures of the ratings agencies and the greed of financial services company shareholders, which have been examined more deeply on their own, into the broader context of our current hindsight.
• YouTube Is Changing How We Think About Video | Techdirt – "The power of YouTube is that it enables something entirely new and different to emerge and to thrive. In the history of disruptive innovations, merely taking a product from one medium and moving it to another usually doesn't get very far. It's the projects that really embrace the new possibilities that are only possible via that new medium that really make an impact."

This past Sunday, I had a long discussion about the NY Times article on Time-Warner’s new content-centric strategy with my father, who happens to be in the film business. While the article touched on some of the complexities that exist in the legacy value chains for both movies and tv, I thought it glossed over important details and ended up being somewhat contradictory. On the one hand, the author labels the move to spin off T-W Cable as “eviscerating the once-popular corporate notion peddled by business consultants and merger specialists that content and distribution should reside under one roof.” But just a few paragraphs down, he talks about T-W’s interest in NBC Universal, primarily as a distribution outlet for the tv shows T-W produces.

In theory, a pure-play content company would *just produce content* — it wouldn’t program (i.e. tv network), it wouldn’t distribute (i.e. movie studio), it wouldn’t deliver (i.e. cable/satellite provider). This type of horizontal focus (or modularization) is advocated by Clayton Christensen once a market of vertically-integrated solutions has reached a “good enough point” for consumers, because it enables the firms at each layer in the value chain to focus on what they do best and exploit best of breed solutions available in the rest of the stack to do the rest, thus maximizing overall efficiency and profit. In our terms, a company purely focused on making the best content is free to choose *whatever* distribution solutions will make it the most money from that content. In NewTeeVee’s analysis of this same NY Times article, they said “How we watch is all the same. What we choose to watch, however, is a different story.” In other words, distribution is the commodity and content is the differentiator. I couldn’t agree more if the only channel in question is online. But as long as content creators want to exploit their content beyond the Internet, there is a different set of rules, and those rules generally extend to what those creators can do with their content on the Internet as well.

Studios can no longer claim ignorance of what consumers want — Jeff Bewkes (T-W CEO) tells a story of how he was told by file-sharers “We’ll pay for movies if you give it to us the right way” — but, they are now claiming (however ironically) impotence to deliver it —  that the major stakeholders in their other (more lucrative) means of exploitation, like Walmart (DVD), theater owners (theatrical, duh), and cable/satellite operators (PPV), won’t let the studios innovate too much online for fear of cannibalizing the other channels. As much as this may be true, the studios are pretty happy to have their hands tied because they already know how to (and do) make a lot of money from those other channels and they have barely started to figure out how to make real money online. Going back to Christensen, this is a classic example of an entrenched incumbent seeing disruptive innovation coming a mile away and doing nothing, as epitomized in this quote from the NY Times article:

But until technology forces Hollywood’s hand — Mr. Bewkes suggested that it would take three to five more years before high-definition videos are delivered conveniently over the Internet — the industry will retain its grip on sequential windows of release.

This all stems from the fundamental discontinuity of extending an offline media business online. In the offline world, control is the key to success — it is what enables the winners to exploit the inherent inefficiencies in the system at the expense of the losers and, to no small degree, consumers. In the online world, attempts to retain control generally stifle growth by limiting exposure — you have to be willing to let go of your content to a certain degree and you need to build business models designed to take advantage of that approach. Not only is this counter-intuitive to a lot of conventional media executives, who have built careers (and personal fortunes) retaining the tightest controls possible, but it may also be in direct conflict with other important revenue streams, as we see with T-W above.

Unfortunately, there is no easy solution for those trying to bridge the gap. Some companies, like the NY Times itself, are leaping across this digital divide while they still can and largely abandoning efforts to artificially protect their offline business from the specter of cannibalization. And, they seem to be having some success. This past Sunday evening, there were five NY Times stories on the front-page of Techmeme (the next closest sources were TechCrunch and CNET with two stories each), which should be driving some solid traffic to nytimes.com. By making their high-quality content available for free on the web, instead of holding it back to drive paying offline subscribers, the NY Times is aggressively driving readers (and thus ad revenue) to its online business. While those online readers may not be as lucrative as the offline subscribers today, there’s lots of room to improve online monetization if you have the readers, and offline readership is only going down and fast. On the opposite end of this spectrum is the Philadelphia Inquirer and their recent moves to consciously make their online offering *less* competitive in preservation of their offline business. T-W and the rest of the film industry seem stuck somewhere in the middle — keeping abreast of what consumers are demanding and giving them just enough incremental progress to remain satisfied without actually doing anything really disruptive to the studios’ other businesses. Christensen would argue that waiting too long on the offline side will preclude one from successfully making it to the online side when it’s finally more attractive (see Recording Industry). I guess we’ll see which side Bewkes and company end up on when “technology [finally] forces [their] hand.” ]]> https://jstrauss.me/blog/2008/08/if-you-love-something-andor-want-to-make-money-from-it-set-it-free/feed/ 2 59