Tuesday, August 25, 2009

In Praise of the Ugly - But Useful

Wired has an article about Why Craigslist is Such a Mess. A wonderful mess. Craigslist delivers customer value without the burden of overmessaging. Serendipity plays a large part of the experience there too. You know you've missed a great deal because you didn't reload the page every hour, but you still look for deals anyway.

The craigslist article reminds me immediately of the 37signals blog post Why the Drudge Report is one of the best designed sites on the web. It's ugly, but it's consistent and it's fearless.

Craigslist drives the classified advertising market (and is driving local newspapers into the ground). Drudge drives the news cycle. All with minimal or no design budgets. Both with just the facts, ma'am. No baloney, no hype, just value.

Court Gets it Right

Here's some good news: a federal appeals court ruled that preference-based playlists are not interactive!

Just as anyone can tune the radio dial until he finds a station he likes, he can tell online services what music he likes and hear that kind of music - all under the US compulsory license, which means the online service doesn't have to negotiate special on-demand rights or prices.

This is a victory not only for Yahoo and Launch, but Pandora and every other preferences-based streaming service out there!

Saturday, August 22, 2009

Bookmarklets for Search

Here are some handy bookmarklets I use that let me select text on a web page, then click the bookmarklet to look it up directly on Wikipedia, Google and other places. You may find them useful.

In most browsers, you can just drag these links to your Bookmarks toolbar or favorites. In Internet Explorer, you'll need to right click links and select "Add to Favorites", then add them to your "Links" or other folder of your choice. The 2nd link is the same as the first, but with a shorter name to save space on your bookmarks bar.

Wednesday, April 8, 2009

The sound a dinosaur makes when it dies

Ironically the online arm of a print publication, BusinessWeek, reports that the Associated Press wants to launch its own online news portal to compete with Google News. As Time-Warner found out with AOL (or vice versa), readers don't want a single source for their news or entertainment. The AP even claims Google is essentially destroying the newspaper business because, of all things, Google makes it easy for readers to find and click through to stories they want to read. Yet the AP licenses its content to Google!

Newspapers should be knocking down Google's door trying to get their stories posted higher on Google News, yet here they are deploying "coding to lock out Google robots" (actually nothing more technological than putting a small, commonly-used text file on your site that tells Google to ignore your pages).

The only strategy that could possibly save the AP and its member papers from extinction is actually to stop licensing its content to online-only outlets like Google, Yahoo!, MSN, and AOL. The AP should also ban its offline subscribers from posting any AP content on their online outlets, or at least require it to be accessible only to signed-in subscribers who pay a certain minimum monthly charge. The only way the AP can save print is to boycott online. Subscriptions are a hard sell, and won't be popular. The market size is several orders of magnitude less than free.

If the AP is not ready to make the leap to a full-fledged boycott or require paid access, and my guess is it doesn't have the guts to, it needs to stop complaining about honest sites like Google News sending readers to its stories on its member's sites.

Thursday, February 26, 2009

Why newspapers are dead

The demise of printed newspapers is getting a lot of ink lately. People's primary psychological reaction to this news is nothing more than nostalgia. Journalism will survive the death of the medium.

The main news wires are ironically most responsible for the wholesale migration of newspaper readership to online. You can get an AP or Reuters story on Yahoo! as soon as it hits the wire. Why wait until tomorrow when the story is old news?

Newspapers' top remaining niche was local. However, their local revenue has been destroyed by Craigslist and will be further eroded by effective local mobile advertising.

Another niche will be quality reporting and investigation for time-starved intellectuals that summarizes important stories and filters the online thrash and bias. Think The Economist (though it's free online now too). Another niche will be underreported foreign news and analysis for expats and sophisticated readers. Think a more engaging Foreign Affairs. But these will be weeklies, not dailies.

My personal rebellion against newsprint has 3 primary sources: the unmanageable broadsheet (they should have gone tabloid style long ago - it's even cheaper to print), inky fingers and stains (yes, even with modern inks), and the AP's insulting repetitive inverted pyramid style (and single sentence paragraphs) designed to make it easier for an editor to cut a story short to fit column inches than for readability. A secondary complaint is the "continued on page 5" phenomenon. That's probably OK for the front page (get more headlines in front of the reader), but once inside, stop making me jump all over the place to finish a story.

Thursday, February 19, 2009

Wrapping your head around Web 2.0

Just as some declare that Web 2.0 is now passe, others are still trying to figure out what it is, and how to employ it.

For marketers, Web 2.0 means you get to have a conversation with your customers and learn more about their passions. For advertisers, it means you can no longer pitch products with one directional messages. For brand managers, it means your customers own your brand and are talking about it in ways that you might or might not like. For direct marketers, low response rates means Web 2.0 (at least the social networking and widgets part of it) hasn't lived up to the hype.

For software engineers, Web 2.0 meant you could easily get your hands on lots of great data and make it do what you wanted, or make other things out of it - but this posting is for the marketers out there.

I've found one of the road blocks to expanding into a Web 2.0 strategy is educating management on what exactly Web 2.0 is, and how it can help the company. Engaging directly with communities of customers is a new and scary concept for old school executives and PR agencies.

Here are a few resources that might help you educate others on what Web 2.0 even is, and how it can be leveraged (I'll add to this list from time to time as I find more sources):

  • The book Wikinomics by Don Tapscott is an intense introductory course on how collaboration is changing everything.

  • A McKinsey study Six ways to make Web 2.0 work by Michael Chui, Andy Miller, and Roger P. Roberts explains Web 1.0, Web 2.0, and covers some basic strategies to encourage participation in Web 2.0 solutions.

  • The article The Secrets of Marketing in a Web 2.0 World by Salvatore Parise , Patricia J. Guinan and Bruce D. Weinberg has rules of thumb for marketing departments, including the very scary words "Don't control, let it go."

Wednesday, February 18, 2009

SoundExchange reaches web royalty deal with NAB, but not webcasters

SoundExchange collects royalties under the US Government's compulsory licensing of music for radio stations. How much to charge for a web stream, and whether royalties for performance rights are included along with SoundExchange's traditional publisher royalties has been a point of contention for about a decade.

From what I can find in the press (which leave some questions unanswered), the National Association of Broadcasters (NAB, which represents terrestrial radio stations) has agreed to $1.50 per song per thousand online listeners, ramping up to $2.50 per thousand by 2015. (No news what stations pay for their airways broadcast listeners.) That deal is for radio stations that simulcast their programming over the Internet. It's also for any online-only programming those broadcasters might also provide. That $1.50 rate will more than eat up any online advertising the stations can sell, which typically sells for less than $1.50 CPM (thousand impressions) these days - and that's assuming they can sell a display ad for every song, not a single ad for every 3-5 (or more) songs typical of terrestrial audio ads inserted into broadcasts.

So it looks like the deal with pure online broadcasters got hung up on the question of programming interactivity and what appears to be an irrational insistence by SoundExchange on a percentage of a company's revenue, rather than a simple per-song fee. Some also blame RealNetworks for screwing up a deal reached in November 2008 by at least twice seeming to agree to terms, then pulling out at the last minute. (Sounds like Rob is being Rob again.)

US law grants an automatic license to play music as long as the broadcaster follows certain rules. The main rule is the music can't be played "on demand": a listener can't push a button and hear a specific song. Online services like Pandora skirt the on demand rule by allowing listeners to program their own stations by listing some artists they like. The listener is not guaranteed what song will be played, but it's likely something she or he wanted to hear. SoundExchange deems this outside the compulsory license law and wants extra money for that interactivity. They seem to forget that I can change my car radio from a country station to a rock station to a Latino station to an urban rap station whenever I want. Though I'm not selecting the music or affecting what an individual station plays, I'm still interacting with what I'm listening to.

True on-demand streaming services like Rhapsody, Napster, Zune, and others must negotiate separately with recoding owners (labels) to play music as US compulsory license law was not written for on-demand performances.

Friday, February 13, 2009

Microsoft reorgs Zune

This can't be good. Microsoft is splitting the Zune hardware team from the software and programming team.

The article also mentions Zune's device has merely cannibalized other non-iPod devices that used Microsoft's DRM under the "Plays for Sure" logo program. It's apparently made no dent in Apple's MP3 player market share.

I subscribe to Zune, but find their marketplace useless and their software client confusing. There's never anything I want to listen to on the main Zune page, and so far I haven't figured out any way to personalize it, or to automatically "recharge" my Zune with music I will like. Zune also infuriates me by showing me music in search results that they don't have. What's the point of that? To tease me, or to piss me off?

Google exits terrestrial radio advertising biz

Here is a lost opportunity. Google is getting out of the terrestrial radio audio advertising business. They say they will continue serving online audio ads.

The linked article mentions that total radio advertising has dropped. That seems to be a non-sequitur for Google, since they were starting from a 0% share of that market. Another article notes Google was mostly getting the low value remnant ad market.

Google was smart to try to expand their advertising empire offline. The number of people in real life dwarfs the number on the Internet.

I really thought that their democratization of advertising would lower the barrier to entry for radio advertising. However, audio ads are definitely more difficult to create than simply typing a few lines of text for an AdWords campaign.

Hopefully their online audio advertising can eventually help independent programmers make the Internet radio model work. I won't be surprised to see Google back in offline advertising in the future.

Wednesday, February 11, 2009

Total Music Shuts Down, Taking Ruckus With It

I'm building up quite a backlog of things to write about! Here's news that Univesal and SonyBMG's Total Music and its college music download service Ruckus have given up.



Matt Rosoff notes that not even free can compete with free:

Here's Total Music's VP of Product Management practically begging for a standardized set of platform APIs for accessing music legally:

Monday, February 9, 2009

Merchandizing and Recurring Revenue Online

Place-holder for a note I want to write about online merchandising and subscriptions - even for offline products.



Wednesday, January 21, 2009

Convergence of mobile phones and MP3 players

Here's an interesting article from Wired on mobile phone and MP3 player convergence.

5 Ways the Cellphone Will Change How You Listen to Music

Why carry two devices when you can carry just one? Just as heterogeneous component hifi stereos in the '70s gave way to same-OEM systems (as OEMs integrated the benefits of competitive manufacturer's expertise into their own systems), ubiquitous electronic devices will converge into one (camera, MP3 player, telephone, datebook, messenger, etc.)

We are moving away from an era where one company's MP3 player was obviously better than a phone company's MP3 player, and a phone company's phone was much better than an MP3 player company's phone. With the introduction of the iPhone and market penetration of other smart phones, the quality of all on-board features is improving to the point where it's redundant to carry separate devices for separate purposes.

Non-DRM music can also be mixed and matched from any music service to any phone, though even that functional separation will be a niche market. Integrated verticals like iTunes Music will continue to dominate the iPhone platform, and would dominate other mobile platforms if Apple were willing to support them. The difficulty here will be building a non-Apple brand with enough penetration that you're likely to have a friend who can show you how her service works. Without friend-to-friend training, any other service will fail.

Tuesday, January 20, 2009

File under: I can't believe we're still talking about this

Here's an article about some discussions at this year's MIDEM.

Music industry urged to embrace the Internet

Some quotes:

"In 2008, some 95 percent of the music downloaded from the Internet, or more than 40 billion files, was illegal, leaving the overall music market down around 7 percent on 2007... Consumers will only move to legal sites from illegal ones if the proposition is better and easier to use, critics say."

Music labels still don't get it. They had an army of techies and venture capital who wanted to make music over the Internet work 8 years ago. The labels squandered this opportunity, and are still digging in their heels.

The labels failed to learn what the shareware industry learned early on: it's better to make money from 3% of a huge market then 100% from a microscopic market. Labels are losing 95% of the money and customers that they could have reached. They still reject new technologies and business models, preferring to protect their special markets business and what I call "stupid VC" money. Huge advances are much more attractive to execs who will retire in a few years than investing in the future of the business. Meanwhile, the leaks around the edges remain a flood.

Friday, January 9, 2009

The Bright Future of Location-Based Mobile Search

The "next big thing"® is location-based mobile search and advertising.

I came to that conclusion not because companies are fighting to win mobile search markets, but after a mental exercise about what people actually buy on a regular basis versus what is typically advertised to them. The food court at the mall is generally busier than the rest of the mall. Same goes for the food at airports or county fairs. Sure you buy books at Amazon once in a while, perhaps a song on iTunes, or book show tickets or travel online, but I'm willing to bet not nearly as often as you buy gas as the corner filling station, or at my age, even dry cleaning services. And what about "that vast array of attorneys, lawyers, dentists, shoe shops, restaurants, and other close-to-home businesses"? The vast number of Yellow Pages-style small advertisers represents a huge location-based market opportunity.

So why don't you see advertising online for products you are actually likely to buy in the next week or month? I think you don't mainly for two reasons: because online advertising relies on large inventories (sold by the thousands to generate a click or two), and because local shop owners or managers lack knowledge of online advertising technologies and the ability to design ads.

Google revolutionized and democratized online advertising with its AdWords text advertising. No longer did you have to know how to run PhotoShop or Illustrator. All you had to have was a web site and a few words. Now a somewhat savvy shop owner could begin advertising without hiring an Ogilvy & Mather.

But your web browser still wasn't very good at knowing where you were. Even IP address to geographical location services aren't accurate enough (one IP location database pegs me 10 driving miles away from my actual location according to Google Maps' directions). Without mobile access, who wants to drive home and log on to the Internet while they're out with friends just to find a good pizza place on the spur of the moment?

Smart phones like the iPhone and Blackberry are solving both the mobile problem, and improving on finding your true location, either with GPS or cell tower location. Combine that with Google Maps local search and you begin to have a solution.

Now add on features that make location based services about more than just advertising (you wouldn't watch TV just for the ads...) Any location-based service must have a reason other than advertising to use it. The application must also blur the line between content and advertising (think of service locators like Yelp or City Search.) Prospects will actually ask for your ads! You won't have to push them on users. One recent feature announcement is Google's Latitude, which lets you stalk your friends by their location (and which makes barely believable claims to have signed up a million users in a week). Get people hooked on location-based services so you build up an audience make the effort worth while for advertisers!

As dumb phones reach market saturation, as more people upgrade to smartphones, as mobile browsing becomes less frustrating, and as Internet access on mobiles is seen as a necessity rather than a luxury, add democratized campaign setup so local shop owners can easily advertise to folks in the neighborhood or traveling through and you have the "next big thing"®!

Wednesday, January 7, 2009

AT&T iPhone exclusive will eventually end

AT&T has a limited window to be sure they have a compelling reason to stick with them after their iPhone exclusive goes away.

In my opinion, Apple's iPhone App Store has changed the paradigm for telcos who love to lock down their deck. (I will admit to really wanting the silly iBeer app.) Customers will demand the ability to install their own apps at will. Windows Mobile has long supported applications, but the hardware it ran on was never as sexy as the iPhone, and Microsoft or the carriers lacked a centralized app repository. As of this writing, Blackberry still hasn't launched its promised app store. Google has just announced that it will begin selling applications in its Android Market.

AT&T and all the mobile carries also need to reduce the number of manufacturers and models they carry, or at least rationalize how they're presented to non-technical customers. Right now, AT&T's smartphone page alone lists a daunting 33 devices (including colors and memory options) from 8 manufacturers (Apple, Pantech, Blackberry, LG, Motorola, Samsung, Palm, and HTC).

Apple's genius with the iPod was that even though there is a family of iPod models and colors, consumers can still refer to each model as just an iPod. This makes choosing an MP3 player easy, and you are likely to have a friend who has shown you and trained you on his iPod. (Apple is muffing it a bit by splitting hairs between the iPhone and the iPod Touch.)

Finally, just as mobile phones are expected to have cameras, they will also be expected to have music. The mobile music nut must still be cracked! A compelling music service needs to be in AT&T's plans, whether that's iTunes on more than just the iPhone, or some other single branded service, like Rhapsody or Napster. A carrier may try to build its own branded music service, but the investment may not pay back. Users want to share music with friends, even if the friend doesn't use the same mobile carrier. Unless that problem can be solved, it will kill any carrier-based music offering.

Apple gets to drop DRM, goes variable pricing, and gets OTA rights

Apple finally worked out deals with all the major music labels so they could offer iTunes Music without customer-unfriendly DRM (though their files will still be encoded in Apple's flavor of the unfamiliar AAC codec). In return, Apple agreed to two new price points: 69 cents and $1.29 in addition to 99 cents. The labels have long wanted variable pricing in iTunes.

But the big news here is OTA (Over The Air) rights, which allows music to be sent over cellular networks at the same price as IP/WiFi transmission. That's huge for mobile music! The labels were salivating at the prospect of extending their overpriced ring tone business into overpriced full downloads, and for many years have priced OTA rights out of the market. Luckily for the rest of us, consumers are not that stupid. If you can buy a song on your computer for 99 cents (or steal it for free), why in the world would you buy it on your phone for $2 or $3?

Labels also finally recognized the reality of the use cases around mobile music: if I buy a song on my PC, do I also get it on my phone (or vice versa)? If I buy it on my phone, why can't I move it to my PC?

So unifying full download prices across all delivery methods finally makes some sense.

Now music publishers must recognize reality and allow multiple fulfillments of the same song to the same person. No more 30 cent mechanical license taxes for more copies of the same song delivered to the same person in a different file format, on a different device, or for upgrades from the DRM version to the non-DRM version.