The Praized Blog

For every kid that I bump into who is wandering the media industry looking for an entrance that closed some time ago, I come across another who is a bundle of ideas, energy and technological mastery. The next wave is not just knocking on doors, but seeking to knock them down.

Somewhere down in the Flatiron, out in Brooklyn, over in Queens or up in Harlem, cabals of bright young things are watching all the disruption with more than an academic interest. Their tiny netbooks and iPhones, which serve as portals to the cloud, contain more informational firepower than entire newsrooms possessed just two decades ago. And they are ginning content from their audiences in the form of social media or finding ways of making ambient information more useful. They are jaded in the way youth requires, but have the confidence that is a gift of their age as well.

via The Media Equation – For Media, a Sunset Is Followed Quickly by a Sunrise – NYTimes.com.

What it means: David Carr describes what happens to an industry (newspaper, magazine, book publishing in this case) when it waits too long to change and innovate. Reading this, I can’t help but think of my recent blog post on Niklas Zennstrom and Janus Friis (founders of Kazaa, Skype and Joost) who chose to work against and with media.  These two paragraphs also makes me think of the vibrant energy felt in the Web industry circa 1997-1999.  It also reminds me of this article Kevin Kelly wrote post- dotcom bust, when everyone in the digerati was licking their wounds.  Let’s not forget the Dotcom bust lead to what we call today Web 2.0 and the rise of social networking.

You know what? It’s all intuition at this point, so I can’t back this up with data, but we’re probably on the verge of another major shift in local media. The year of mobile is happening right now. Location is the hottest topic amongst techies.  The Kelsey Group invites people to attend ILM ‘09 conference (you should!) by saying “Get Ready for the Post Recovery Digital Shift”. I think they’re right. Expect investments in disruptive local technology and startups to pick up once again next year and traditional media companies need to be ready for this new game.

Update: don’t believe that VC investments are coming back? Read this post written today on the True Ventures corporate blog. Excerpt: “Over the past few weeks we’ve seen extremely high activity in new venture investments. Starting in September, we witnessed the return of multiple term sheet deals, short fuse situations, and a renewed urgency to most fund-raisings. (…) Venture is back. And it’s back because of one word: exits.”

Seeing Niklas Zennstrom’s name on LeWeb’s list of speakers along with the news that Joost’s assets were being acquired by Adconion Media Group got me thinking about the dynamics of that specific startup. Joost was founded in 2006 to build a online video portal with the core idea that legal video streaming would be more efficient if it was built on peer-to-peer technology. The company signed content licensing agreements with major media companies, they had major funding ($45M), 150 software developers and experienced founders/entrepreneurs (Zennstrom and Janus Friis) who had had major successes with Kazaa and Skype. It seemed they would be successful once again.

It didn’t happen. Why? CNET explains that their technology choice of a downloadable application certainly impaired their chance of success. The arrival of Hulu, a big hit with users, also didn’t help  but I was specifically struck by this other reason: “Some of the big-name content partners seemed to be putting in a halfhearted effort with Joost, offering up reruns and esoteric programs instead of the new programming that people actually wanted to watch”. Hmmm…

Think about Kazaa and Skype. What did Zennstrom and Friis successfully achieve with these new initiatives? They directly attacked major players in large mature markets using industry weak points. Kazaa was an assault on the music industry, Skype took on telcos. They didn’t say “let’s work with these guys”. They just did it and leveraged the fact that these two industries were very profitable and slow to innovate. They foresaw the disruptive impact of technology and created a lot of value for their shareholders. Venture capital firms usually love these startups. When they created Joost, they changed their entrepreneur paradigm and it failed. Zennstrom and Friis’ new startup Rdio is in the online music space and it looks like they’re going to be working with the music industry. Will it impair their chance of success or has the music industry matured enough in the last 10 years to embrace innovation?

It got me thinking about newspapers, directory publishers, the movie industry, radio, magazines, and other traditional media companies. At one point or another, all these industries (who generate or used to generate fat profit margins) fought technology and we’re slow to innovate. I think it’s getting better (still not fast enough in my own opinion) but I was reminded it is still very slow in Canada by this blog post (in French) written by Yannick Manuri. He says that 40% of all online advertising spent in the country benefited foreign media companies and anecdotally he doesn’t see the sense of urgency in Canadian media companies. It’s a reality in other countries as well.

Why do we need industry disruptors to stimulate innovation in media? Couldn’t it happen by itself?

Conceivably the next great media company will be all spokes and no hub. It will exist as a constellation of connected apps and widgets that live inside other sites and offer a full experience plus access to your social graph and robust community features.

via The Next Great Media Company Won’t Have a Web Site – The Steve Rubel Lifestream.

What it means: Brilliant quote from Steve Rubel. He hits that one right out of the park.  He understands that content and features want to be atomized (or de-portalized) and that has a major impact on the way media companies operate online.  This is the main reason why we built our Praized platform on a hub & spoke API model, where activities are happening at the edge and aggregated at the hub level. And when you add the social graph on top of those spokes, you get local verticals + friends, probably the most relevant experience possible.

Morgan Stanley, the US research firm, released a report this week titled “How Teenagers Consume Media“. Written by a 15 year-old summer intern, the document explains what is relevant and what is not in today’s media/technology world from a teenager’s point of view.

Highlights:  

On newspapers: “No teenager that I know of regularly reads a newspaper, as most do not have the time and cannot be bothered to read pages and pages of text while they could watch the news summarised on the internet or on TV. “  The intern adds that most of his friends do read the free newspapers like Metro.

On radio: “Most teenagers nowadays are not regular listeners to radio. ” They listen to online radio though.

On social networking: ” Most teenagers are heavily active on a combination of social networking sites. Facebook is the most common, with nearly everyone with an internet connection registered and visiting >4 times a week. Facebook is popular as one can interact with friends on a wide scale. On the other hand, teenagers do not use twitter.”

On directories: ” Directories Teenagers never use real directories (hard copy catalogues such as yellow pages). This is because real directories contain listings for builders and florists, which are services that teenagers do not require. They also do not use services such as 118 118 because it is quite expensive and they can get the information for free on the internet, simply by typing it into Google. “

On mobile phones: ” Mobile Phones 99% of teenagers have a mobile phone and most are quite capable phones. “

What it means: more anectodal than data-driven evidence, this report nonetheless confirms many things we take for granted now but it still holds a few surprises. The observation that teenagers don’t listen to radio regularly is, to a certain extent, a surprise to me. Radio used to play a very important social role when I was young but this might explain why we hear so much ’80s music on commercial radio these days. The industry don’t cater to youngsters. They’re trying to hold on to listeners from 20 years ago. A bit of a surprise on the cold reaction to Twitter as well but then again, they’re not prepared to build a second social graph after having spent so much time building one on Facebook.

On the other side, I’m not surprised at all by newspapers and business directories usage. I suspect very little teenagers (except for me!) used to read print newspapers in the past and Yellow Pages usage is usually driven by life events, most of them happening after you leave your parent’s house. So, no surprise there. I think what should concern directory publishers is two-fold. First, teenagers think that Google will provide them with the answers Yellow Pages used to provide to their parents on business searches. So, in effect, as Seth Godin said, “Google is the Yellow Pages”. Second, because they’re heavy users of Facebook, teenagers now bring their network of friends (their social graph) along with them wherever they go (including with their mobile device). That proximity enables easy word-of-mouth recommendations. So, what does that mean for publishers? It means they need to embed themselves wherever these kids will go for references as you might not be able to convince them to use your core web site.

Big fracas in the local social media space today with the publication of a long anti- article, “Yelp and the Business of Extortion 2.0″, in the East Bay Express. Jeremy Stoppelman, Yelp’s CEO, has many issue with the article and answers on the company blog. You can read Greg Sterling’s analysis on the whole situation here.

What I found interesting in the East Bay Express article is the description of the package Yelp is selling to small merchants.  According to an e-mail sales pitch that was forwarded to the journalist, advertisers receive the following:

1. Advertisers ”can highlight a favorite review to appear at the top of the page about their business.”
2. “They also show up first in search results for similar businesses in their region (for example “coffee” near “Alameda, CA”).”
3. “Ads for that business appear on the page of local competitors, while competitors’ ads do not appear on their page.”
4. “Owners can post photo slideshows, add a “personal message” about their business, and have the ability to update info on special offers and events.”
5. They also can find out how many users visit their web site, update their page, contact Yelpers who’ve reviewed their business, and have access to an account manager who will help “maximize” their experience with Yelp.”

You can see some of that info on the Business Owner section of Yelp.com.

What it means: people often ask me how you can monetize social media in a local search context.  Yelp seems to have found a combo of items that could be attractive to merchants in such a context. Ranking a review, appearing as a “related merchant”, the ability to upload additional content, and some tracking and reporting appears like an interesting social media ad bundle.  Does this package monetize as well as the traditional “advertiser ranking” model we find in many local search sites?  I don’t think so, but it’s the delicate balance between users and advertisers’ needs that Yelp is trying to maintain.  Not easy!

In  a op-ed column titled “While Detroit Slept“  in the New York Times this morning, Thomas Friedman talks about the US auto industry on the eve of a massive government bailout.  He says:

As I think about our bailing out Detroit, I can’t help but reflect on what, in my view, is the most important rule of business in today’s integrated and digitized global market, where knowledge and innovation tools are so widely distributed. It’s this: Whatever can be done, will be done. The only question is will it be done by you or to you. Just don’t think it won’t be done. If you have an idea in Detroit or Tennessee, promise me that you’ll pursue it, because someone in Denmark or Tel Aviv will do so a second later.

What it means: The troubles of the US car industry remind me of the issues facing traditional media today. US car manufacturers have (had?) a very profitable product line (SUVs, trucks), media publishers have a very profitable product line (print, TV, Radio).  Along comes a very disruptive environment created by a perfect storm of elements (credit crunch + high price of gas + lack of innovation in smaller cars & renewable energy technologies) and it creates a death spiral requiring government interventions to save jobs and companies.

Traditional media is also potentially at risk and might be facing that same perfect storm in the near future. Elements like high growth of Internet usage & revenues, slow decline in offline reader/viewership, high level of debt in many media companies, lack of innovation online (in some cases) and a negative perception (TV is dead, Newspapers are dead, Yellow Pages are dead, etc.) introduce challenges, that combined together make it difficult to surmount. I believe media publishers need to work on two fronts to avoid this situation: 1) they need to invest massively in online & mobile, increase innovation, reward risk-taking and allow project failures (but fail quickly if needed). 2) they also need to win the PR/communications war. Media need to embrace the Web, join the online conversations, prop-up successes but admit failures as well. I’m a firm believer in (and a staunch defender of) traditional media but the time for action is now!

I’ve been thinking about Robert Scoble’s post on Facebook since I blogged about it yesterday. In it, he invites people to become “friend” with him on Facebook (and he does it again in his last post yesterday night). Intuitively, I knew he was unto something and I asked the Praized blog readers to do the same thing (you can do it by clicking here).

Now, I’ve been “friends” with Robert ever since I met him at Google Zeitgeist 2005. We were sitting at the same dinner table and had the occasion to exchange a few words (he’s a great guy BTW!). For those who don’t know him, Robert was one of Microsoft’s technical evangelists. He was part of the Channel 9 MSDN Video team, walking around the Microsoft campus and shooting very informal new product videos. He became extremely popular by having a more balanced view about his employer (more balanced than traditional PR people), sometimes congratulating and sometimes criticizing Microsoft. More info can be found on his Wikipedia profile

Since meeting Robert, he’s been part of my LinkedIn network, and recently I added him in my Pownce network. I obviously added Robert to my Facebook network yesterday afternoon after reading his post (and he accepted it quickly).

Now, if you look in his Pownce public feed, you’ll see that Robert has been micro-blogging about stuff he’s doing. He currently has 1253 “friends”, all early adopters as Pownce is still in beta. In Facebook, he now has 2702 “friends”. Yesterday night, I got a message in my Facebook news feed section. Robert had uploaded a video and
I got an alert about it because he’s in my friends list.

It made me wonder: why would Robert Scoble accept “friends” invitation from people he does not know? Why do you want to be connected to people you don’t know and alert them to stuff you’re doing? And then it hit me! Robert Scoble is media. He’s building his own broadcast network. He understands that media is completely fragmented and, by participating in all these new social communication vehicles (blogging, Twitter, Pownce, Facebook), he’s aggregating readers and viewers,
thereby increasing his penetration and his worth as a media. I’m convinced Robert reaches close to 100% of all early adopters in Silicon Valley (and a good chunk in North America). He now has tremendous influence on “influencers”.

Now, I finally understood why I invited people yesterday to connect to me in Facebook. I am media as well. By writing the Praized blog every day since October 2006, I have become media. And if you are media, you want to build up your “circulation” to increase your influence and by extension, your value. But be aware: you have to accept the reciprocal conversations though. Robert Scoble receives updates from 1253 Pownce friends and 2702 Facebook friends. The noise level is very high. This conversation is not unidirectional.

I have seen the future of media and it’s Robert Scoble.

A new TLA is born this morning: FOG, Fear of Google.

Coined by Geoff Ramsey from eMarketer (and reported by Robert Scoble) at the Forbes Internet Leadership Forum in Cancun, it crystallizes the constant fear under which traditional media firms live ever since Google has become an advertising juggernaut.

Scoble reports on three examples he heard this weekend:

• What will happen when Google’s growth slows down? Will they use their lock on the marketplace to increase prices?
• The fact that Google is changing the expectations of advertisers, especially in regards to performance-based vs. branding advertising
• People are starting to cheer for Microsoft to acquire Yahoo, to make sure Google is kept in check.

What it means: take a deep breath… Feeling better now? Now, if you’re Big Media, Google is clearly your frienemy. But that happens a lot online (read about the Google & eBay relationship). To a certain extent, Google is after the same ad dollars as you, but they also offer tremendous opportunities.

1) Google (and other search engines) is the entry door to most of the web’s content. Make sure your content is well-indexed. At the same time, you need to make sure you’re investing in your destination sites to make them as relevant as possible. Aggregate content in your vertical (including competitors!) to make your site the one-stop shop for users. Launch social features and applications to increase your site’s stickiness. You also need to continue investing in your brand(s).

2) SMEs are looking for leads. If you’re managing a sales team that talks with these guys, make sure you offer them search engine advertising as part of your portfolio of products.

“Key to the development of a local online ad market is the identification of the local web, and this offers a remarkable opportunity for those willing to explore this territory today. In the not-too-distant future, everyone will have access to the local web, but this access is unavailable today, because the database hasn’t been created. It exists in bits and pieces, but no technology can replace the human research necessary to build the initial database. This is a task that will pay huge dividends to the one who creates it, market-by-market, and there’s no reason this can’t be done by a local media company.”

“The local web is where the web itself will find its real value propositions, and that’s enough to make a guy want to stick around for awhile.”

Exactly my thoughts!!! Have a nice weekend!

From Terry Heaton’s PoMo Blog, a beautiful article!

Meta-Praized is a collection of links & stories we’ve “dugg” on Digg.com in the last few weeks. By clicking on that link, you can always follow what’s currently on our mind:

• “Google plans street advertising presence” via Engadget
• “Google Talk to Interoperate with AIM This Year” via the Google Operating System blog
• “Microsoft Hits 100 Million IE7 Installs” via BetaNews
• “Privately, Hollywood admits DRM isn’t about piracy” via Ars Technica
• “Small Town News Station Heads to YouTube” via SplashCast Media
• “MTV to buy RateMyProfessors.com” in News.com
• “Asterisk: The Future of Telephony” via linux.inet.hr
• “Google (Google Checkout) breaks ceasefire with eBay” via Valleywag
• “Big Media’s Crush on Social Networking” in the New York Times
• “Google Inc. is currently in negotiations to purchase Adscape Media (videogame advertising)” in CNN Money
• “Traffic to newspaper blogs soars” via MarketWatch