Would you give your services away for free?

Chris Anderson’s long-awaited follow-up to the Long Tail has just hit bookshelves. Entitled Free: The Future of a Radical Price the book argues that abundance is causing prices to fall effectively to zero. Here the psychological advantage of giving something away for free actually benefits the producer – through wide-spread take-up that can lead to other revenue opportunities.

It is a fascinating, and highly contentious, thesis. Malcom Gladwell, writing in the New Yorker, dismisses the arguments. For instance, he points out that Lewis Strauss’ prediction that electricity would be free (derived from nuclear power) failed to come true due to the massive infrastructure costs of the electricity grid that required continual fees to finance. Similarly, Youtube might be successful by providing videos for free without interruptive advertising, but it is losing a lot of money.

These are sound criticisms, but there is an additional one of the Pandora’s box. If I give something away for free in order to gain revenues from new streams (e.g. giving CDs away for free and making money from tours and t-shirts), how long before these alternative sources also see their price depress to zero. Does this trend continue until we reach something that is inherently scarce?

Possibly, but nothing is scarcer than our time, yet as Chris Anderson points out, we will choose to spend our time doing something that is free.

Anderson’s reply to Gladwell was largely unhelpful. While he correctly observes that the review itself is given away free on the New Yorker website, his implication that Gladwell’s position of defending the status quo is driven by his vested interested in being a journalist is unfair.

The example of GeekDad is also misjudged. He makes money on this through advertising around an amateur community – it has been very successful and the community leader now has a book deal. People may indeed engage for “fun” or in the hope of jump-starting a writing career, but then there is no traction or quality control – I don’t believe the argument that a passionate amateur is better than a paid professional. Sometimes, maybe, but not always.

Furthermore, what happens when the talented amateurs get their book deals? They become too busy to participate, so the untalented amateurs take over. It’s a bit like a the toilet circuit in the music industry – an occasional rough gem among a lot of dross. The only difference is that ad impression revenue is more stable than door receipts.

In a comment to the post, Anderson points out that the book centres on the freemium model – it would have been better if his initial response had focused on this as it is a nice business model (though again I am sceptical of its long-term viability).

It has thus far worked for companies like Flickr as passionate photographers need more storage space than the basic account offers [updated for attempted grammar correction], and the built-in community aspects of the site have created traction. But, as bandwidth charges decrease, other services (e.g. Facebook) offer unlimited storage. Flickr only retains revenues due to the time cost of transferring photos and restarting a community. Is this sustainable indefinitely? I don’t think so.

Elsewhere, the local coffee shop occasionally gives away free tasters – but only as marketing; not as a continual persuasion tool to get me to upgrade to a full cup.

Would I give my work (research) away on the freemium model? Occasionally, I would. But only because the losses accrued from giving something away up front can be written off to PR/marketing.

This isn’t sustainable because there isn’t a continual influx of new clients – the benefits of giving reports or data away diminish each time. One could argue that information is free and opinion is scarce – and that I could give data away for free but charge for a report. In this sense, it is why newspapers are increasingly reliant on columnists.

But again, this is only valuable on occasion – at least in research. News may be free in the sense that affected parties can spread the information widely without cost. But research – the collection and collation of facts, opinions or attitudes – costs money. An entire population isn’t going to magnanimously upload all the required information without monetary or social recompense.

How about your industry? Could you survive by giving away your core product/service for free, and offer a premium version (or a diversification) to make up the difference?

I’m sceptical, but am by no means unconvinced.

sk

PS Chris Anderson is speaking at the RSA tonight. I can’t go as I’m at Bon Iver but I look forward to hearing the response

Image credit: http://www.flickr.com/photos/iirraa/

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Does digital make physical information obsolete?

I was always a hoarder. Tidying my flat yesterday offered a reminder of this – old mobile phones; broken sunglasses; shoeboxes of sampler/demo CDs. And magazines. Lots and lots of magazines.

However, that was me. I’m not sure if it still is me.

There were several reasons I kept and stored things – laziness, the chance they could come in useful or the chance that they might appreciate in value.

So at my parent’s home, I still have boxes of Beano, Match, Amiga Power, FHM and so on. And in my flat I have piles of the Economist, Observer Sport/Music Monthly and the odd glossy magazine.

But I might be moving soon. And do I really need to transport them with me?

Their mass production and less than mint condition means they aren’t collectible. The notional value of storage space probably outweighs their resale value. And, unlike when I first started reading magazines, I have the internet.

Why do I need to re-read something when there is more new content available than ever before. Why do I need to go dig out an old piece of paper when I can type in a search term? Why worry about space when there is near limitless bandwidth?

There is still some sentimental value to owning something tangible (e.g. I won’t be throwing away my copy of Filament) and some things can still be considered collectible (e.g. I have all the issues of 52) but there is less need to keep everything else on the off chance of usefulness.

There are of course downsides to this. Hard-drives aren’t indestructible (and I am particularly poor at backing things up) and permalinks are only permanent within the host’s benevolence and continued existence. I may have access to the Economist’s online archive now, but the moment my subscription lapses that privilege vanishes.

But the dusty, ripped, faded copies of my magazines shows that the physical isn’t permanent either. And while the chances of a burglary or house fire are lower than that of a computer/internet malfunction, that may soon change.

So, like the workplace where the only physical items it seems we need to archive are those involving paper self-completion surveys or signed documents (and how long before digital signatures become the norm?), my private archives may soon be going online.

One question is now what to do with everything. Recycling bin; charity shop; or ebay?

And what else can I switch to non-physical?

sk

Image credit: http://www.flickr.com/photos/gord99/

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Don’t replicate; interpret, iterate and improve

I’m currently pitching for a project that would carry out some research in the UK market that has already occurred in the US.

The easiest thing to do would be to recreate the US study. It makes the data more relevant to the UK market, and would offer an interesting comparison between the two territories.

But that is lazy. And not only is it lazy, it is sub-optimal.

Nothing is perfect. Everything can be improved.

A facsimile of a facsimile of a facsimile degrades in quality.

The solution is to identify the strengths of the original. This essence becomes the focus of the new version. The next iteration. The improvement.

Let The Right One InMy favourite example of this is Let The Right One In (or Låt den rätte komma in to Swedish speakers).

The book is pretty good – a Stephen King style page-turner with an interesting take on the vampire mythology.

The film takes the essence of the story but completely alters the tone. Simmering anger becomes languid beauty.

It is completely wonderful – one of my all-time favourite films.

Some might argue that this is dangerous territory. For every successful adaptation, remake or re-envisioning, there is a joyless hack, abject failure or a misguided wreck depressing the success rate.

But if you harbour any doubts over your ability to improve on something, you have to question why someone would want to employ you in the first place.

Beg; steal; borrow. Interpret; iterate; improve.

sk

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Would you compromise on your TV picture?

A project I recently worked on looked at the concept of IPTV and web-enabled TV services. It was a great project that, since it was commissioned and thus proprietary, I sadly can’t go into details on. However the issues involved are fascinating, and pose some difficult questions for companies looking to operate in this space.

Background

Traditionally, TV pictures are transmitted via a designated area of spectrum. There is a finite amount of space that channels can purchase, and then their content is broadcast to anyone within range.

IPTV sees the bottleneck reversed. There is near limitless space to upload content to and then transmit, but the delivery – via broadband pipes – is finite and limited.

The issue

When we watch TV, we expect a certain standard of delivery. And our expectations are pretty high. Unlike computers -with viruses, server downtime and dodgy connections – TVs just work.We have a good, uninterrupted picture, and the hardware shouldn”t fail us.

What constitutes a decent picture on our TV sets is pretty subjective. We all have different standards, and the picture we are used to receiving depends on a couple of factors

  • Method of transmission: Satellite generally broadcasts in higher quality than terrestrial, which is more variable
  • Quality broadcast in: As well as standard definition, we have varying qualities labelled as high definition (I believe 1080p is the benchmark?), while people watching on their computers will be used to lower quality
  • Size of the screen: The bigger the TV screen, the worse the picture (in terms of sharpness) as the same amount of information is stretched over a larger area

The picture you receive becomes a problem if IPTV becomes popular. With more people using their broadband to view TV shows more often, there is a chance that the broadband will reach capacity, and that the transmission will stall or fail.

There is essentially a trade-off between the quality of the picture you receive and the likelihood that the service will fail. The lower the picture resolution, the less data is transmitted and the less chance that capacity is reached at your local broadband exchange.

FYI: In terms of the picture we currently receive; on standard TV it is 2500-3000KB/s (I don’t know the exact number). Online it is generally anything from 500KB/s upwards (though there may be services offering rates below this)

The options

A trade-off isn’t necessarily the right word, because the issue doesn’t rest on an A vs B matter. The situation could be potentially resolved by any of the following:

  • Offering IPTV at a continual lower standard than “regular” TV
  • Offering IPTV at regular definition with viewers accepting transmission may be intermittent
  • Using a technique called adaptive bit rate where the quality of a stream varies according to your broadband speed (though this could result in noticeably poor quality at times)
  • Innovating other areas of delivery, such as viewers having to partially or fully download a programme before watching
  • Forcing other programmes using the internet connection (e.g. online gaming, torrents) offline to give IPTV sole access
  • Restricting access to IPTV only to those that have a certain broadband speed (e.g. 8MB/s)
  • Restricting access to IPTV to a finite number of people on a first-come first-served basis

These all have benefits and drawbacks. But would any be acceptable to the viewing public? These measures run contrary to the trends of hi-definition pictures on massive flatscreen TVs – can IPTV take off?

Largely, it depends on what the IPTV service is. If people are buying a new service on the promise of thousands of channels, then they may be a bit disappointed to find that Youtube XL is still broadcast in grainy quality. But if it is an additional channel or service on an already existing platform (and most platforms have, or are getting, internet connectivity) then they may be more forgiving.

A solution?

What would I choose? I couldn’t stand an intermittent service and I am in favour of everyone having the right to choose. A decent picture is important when watching TV, but if I really want to watch something I will tolerate it (case in point: watching England-Andorra in 500KB/s on ITV.com). So I’d actively choose and use lower, or adaptive, quality.

Would you watch IPTV if it meant having to compromise on what you were seeing on your TV screen?

sk

Image credit: http://www.flickr.com/photos/31333486@N00/

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Why do business cards still exist?

gaping voidI don’t have business cards. I don’t want business cards. And I don’t need them.

Business cards are a remnant of a bygone age. Where people stayed with the same company, with the same job title, for many years. Where business was analogue rather than digital. Where the Rolodex were a staple of the office stationary order.

That era has passed. Job titles are forever changing and increasingly meaningless. Taking self-aggrandizement/irreverence (delete according to personal opinion) to a new level, some companies even allow employees to make up their title. In some cases they act as a useful barometer of seniority. But how long has it been since a manager actually had serious business authority? How many levels of hierarchy call themselves Director? (NB: The old ITV hierarchy was particularly confusing; I reported into a Head who reported into a Head who reported into a Director).

If someone wants to contact me, there is:

  • Contact details on my email signature
  • My company website
  • A general Google search (I’m not the best example as I’m not the first entry)
  • A specific Google search (e.g. incorporating blog or twitter)
  • Asking for my phone number and entering it into a mobile phone (assuming you don’t have one of these)

The exchange of business cards may be a ritual in some cultures, but it is increasingly wasteful. If I am given a business card, it goes into a drawer never to be seen again (no offence). I have piles of unused business cards from previous employment and job titles.

Business cards may provide fodder for optimistic websites or aspiring artists, but what other reasons are there for needing them? I’m stumped.

sk

Image credit: Gaping Void

Filament magazine – for the female gaze

Filament Magazine – “the thinking woman’s crumpet” – has launched its debut issue. A 72 page quarterly, it contains erotica aimed at the female gaze. Some might consider it a brave time to launch a new print magazine given the current economics; can it succeed?

(Disclosure: The editor – Suraya Singh – and I are former flatmates and I am part of a small feature (fully clothed, I might add) in the first issue)

The aim behind the magazine is to right a few perceived imbalances in the way men and women are represented in the media. Both male and female orientated magazines focus on the female appearance – women are told how to improve their looks; men are invited to admire them. In addition to displaying images of men in various scenarios and states of undress, Filament also contains intelligent and well-thought out articles that seek to inform and inspire.

Filament has done well with media coverage in the build up to its launch. Links and images to the press can be found on the Filament LiveJournal page, but to give a few examples:

  • The Independent has a nice article on it
  • It was featured on Radio 1’s Newsbeat
  • Small snippets in both the Evening Standard and London Paper
  • A negative article in the Daily Mail (163 comments and counting) – which can only help.

It was also featured on The Wright Stuff, where one contributor said Suraya “should be shot” for her research. Apparently (I haven’t seen the show), voxpops of women asked about the magazine were largely negative.

This is highly disingenuous. The market for female-orientated erotica is a niche one, and the aesthetic of the magazine (such as the gothic-esque typeface and a cover picture with religious undertones) only reinforces that the title won’t be troubling OK! for sales anytime soon. The average woman on the street is not the target market.

But what of the research? Outside of plenty of desk research, one of the main avenues of primary research to gather public opinion was through this LiveJournal community. This is a self-selecting group of people within a website declining in popularity, but does this matter? Filament’s primary aim should be identifying those that could be interested in such a title, and then understanding their desires and dislikes in detail. The community, to a degree, does this. Only when these have been catered for, the target audience can be expanded with more diverse content and communications.

Can Filament succeed? It will undoubtedly be tough. The magazine is available for £7 through subscription only, and so it will never be able to attract the casual reader. A lot of work needs to go into raising the profile among the target market and then convincing them to not only purchase the magazine but also to then promote it among their peers. As nice as mainstream media coverage is (in some ways it “legitimises” the title as a serious venture), it is the specialist blogs, fanzines and titles where the bulk of the effort should be concentrated, and where success or failure will ultimately be determined. Though as Alan Sugar might say, you only need to ensure your costs are lower than your revenue in order to succeed.

Filament has made a strong start, and I hope it does succeed. One potential criticism of the title could be that – with articles on topics such as feminism and pornography – it takes itself too seriously. But I can attest from the launch party – with burlesque, chinese pole, life-drawing and a sense of fun – that this certainly isn’t the case

sk

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