Saturday, August 1, 2015

Platform Capitalism, or why your parents can't understand the Internet

Picking up on the previous post that looked at some of the debates surrounding digital disintermediation, today on the blog we delve a bit deeper into the tensions that have emerged between the radical openness of Internet technologies and what can only be called the unlikely economic structures enabled by online platforms, or marketplaces.

There was a time, and it was not all that long ago, when the principles of business went more or less like this: a manufacturer made something at a cost of X, a distributor or wholesaler bought the item in bulk and then made it available to retailers for X + Y, who in turn marked up the item to X+Y+Z and sold it to customers. If the goods produced filled a market need in ways superior to competitors then the manufacturer could end up reasonably well-heeled. If the anyone in the chain misjudged the market they got saddled with a bunch of inventory they couldn’t sell. There was pretty much no way of knowing what was going to resonate with customers and what wasn’t. This was a world based on best guesses. It was also a world based on things, put into boxes, then wheeled onto trucks, then stored in warehouses, then shot out to retail outlets, where the customer, at long last, came face to face with the good and decided whether or not s/he would buy it.


Contrast this with:

- A business based on individuals renting out their car on an hourly basis

- A business based on deploying civilian drivers to deliver groceries to your door

- And in one of the better known examples, a business based on individuals renting their home, or a room within their home, while they themselves are in the home, to strangers, on a night-by-night basis

There are a million reasons why a rational person, in the pre-Internet sense of the term, would be inclined to think that none of these businesses would work. For starters, these are marketplaces of people unknown to each other, they are often transacting at a relatively low dollar level, the consumer is not incented to adequately care for the property being used, etc. etc.

All this brings to mind discussions I’ve had over the years with an old friend, who is an Ivy league MBA and who was living in the Bay Area during the first dot com boom of the mid 1990s. At that time she got called into several ‘litmus test’ meetings for these new things called eCommerce businesses, one of which was a company called eBay that was proposing to do the world’s biggest yard sale, but transacted online. She was the person in the room who argued vociferously that it would never work. Why? Because what systems are in place to ensure that the person in Wisconsin who wants to buy the toaster I put on this website will pay me? And how will they pay me? By check? And how do they know I”ll actually send the toaster? How does any of this make sense? And she wasn’t wrong….except in the perfect hindsight sense of the term. (We have since joked, many times, that she should make herself a t-shirt that reads “I said eBay wouldn’t work”).

So what’s changed?

The best explanation I’ve heard for why these businesses work is the ability of the Internet to couple anonymity with trust, and commodify the latter.

Some have dubbed this phenomenon platform capitalism, a reference to the wildly successful slew of platform-based companies, or enterprises that build facilitating marketplaces as opposed to physical products or conventional services. These are the co’s that have figured out that facilitating access and communication, as opposed to owning real estate, or fleets of vehicles, or warehouses stocked with inventory, or even bearing the expenses of creating editorial content, is how the road to 21st century riches is paved.

So counterintuitive is this phenomenon to many that is has also been referred to as the WTF economy.



The WTF economy at a glance:

“WTF?! In San Francisco, Uber has 3x the revenue of the entire prior taxi and limousine industry.

WTF?! Without owning a single room, Airbnb has more rooms on offer than some of the largest hotel groups in the world. Airbnb has 800 employees, while Hilton has 152,000.

WTF?! Top Kickstarters raise tens of millions of dollars from tens of thousands of individual backers, amounts of capital that once required top-tier investment firms.”

And so, the Internet has morphed from being the communal, we the people, cybertopia of the early 90s, to one which has become dominated by what can be understood as privately owned public spaces.

By inviting the public in for free, or more accurately for “free” (meaning strings are attached, and you trade things such as your online history and personal data for services and products delivered digitally), platform-based businesses are able to move large portions of the public away from an ownership-based economy or a subscription-based economy to one in which we can access as little or as much as we need, whenever and wherever we are, usually using an app on our phone as our control panel.

Disincentives for participation are removed and large-scale, global user bases in the millions to hundreds of millions (and beyond) can be built relatively quickly.

So powerful are some platforms that, for example, august news organizations such as the New York Times are entering into agreements with Facebook that encourage the Times to publish directly to the Facebook platform. Why does this matter? Because it’s evidence of where the power lies when fewer visit specific publisher/news sites, such as nytimes.com, and a billion plus people around the world spending 20% of their online time on Facebook, a single site/app.

It should come as no surprise, then, that the platform that pulls in the audience has the power.

If you’re a merchant of any sort, yes you have the ability to use your own website to sell directly to consumers, but it’s hard to avoid Amazon, which has become the Walmart of the Internet. Actually that’s not true. As of last week Amazon is bigger than Walmart.

We also have YouTube as the Walmart of video. It has 63% market share for total videos watched per month, it closest competitor, Vimeo, has less than a quarter of that amount, and just 1/10th of the unique monthly viewers.

So let’s not make any mistakes. These 'privately owned public spaces' are not co-ops, nor are they the common property of government; they are enterprises, with investors and shareholders to whom they are obliged to create value and a return on capital. Furthermore, they are built upon a principle in which value to the enterprise accrues as we all participate by joining, uploading, commenting, and sharing. Whereas publishers once had a monopoly on the creation and distribution of content, platforms increasingly have a monopoly on the creation of audiences.

This is one of the realities of the new bypass the middleman and/or gatekeeper of today’s online economy: For better or worse much of it is predicated upon this thing called platform capitalism. In the world of platform capitalism there is little or no cost to get into the game, the game being the ability to make whatever you have created, or are trying to sell, or rent, available to a global audience. One of the ways this game is evolving is through consolidation, as dozens of the smaller players get acquired by larger ones. And many of these larger players were not even in the particular game to begin with. The easiest way to understand this shift is to look at the example of the YouTube multi-channel networks, or MCNs.

They started out as small networks, bringing together individual YouTube channels into what are essentially taste networks – of game enthusiasts, or music fans, or foodies, or whatever the case may be – and then selling ads against the audience corralled. And who’s doing the acquiring of these MCNs? Among the buyers are well-known companies such as AT&T and Disney, who early on weren’t interested in what was likely looked upon as nothing more serious than noise emanating from YouTube.   

And yet....

What starts out as nothing more than desire and drive on the part of individual creators, usually without aspirations or expectations or any sort of industry structure propping it up, has the potential to get multiplied by fans and followers, and turn into something with broader market appeal. And this thing, that begins life outside of the walls of industry has become a new form of currency that traditional media companies, operating very much within the walls of industry. want to leverage.

One of the outcomes of this phenomenon is that over time the democratization of communication, the initial impetus for this blog, gets sideswiped, to varying degrees, by new re-massifying forces. The niche offerings that made the online environment so refreshingly unlike the mass market world of hierarchical decision-making, capital-intensive production and distribution, and limited shelf space, are still there of course, but what we’re seeing is a privileging of those who sign up for more industrial muscle with the new middleman companies such who aggregate the work of podcastersYouTubers, InstagrammersVine creators, etc. and optimize it for an advertising-supported world of content. 

You thought all this stuff was free? Nope, it’s only “free”.


But is it meet the new boss, same as the old boss, though? I believe only the cynical would go that far. Are there trade-offs? Sure there are. But before crying ‘sell out’, you may want to bear the following in mind:

This could be a good thing for both creators and audiences, as it means fewer conventional ads and more entertainment and information products in their place. If we’re not paying for content online – whether it’s music or video or audio or image or text-based -- that means creators aren’t getting paid, unless a third party enters the picture and sponsors/underwrites it. In this model, there are no advances from music labels, publishers, studios – whatever the case may be -- that need to be earned back via a multi-year deal, that in the majority of cases handcuffs the creator.

Also, the risk is reduced for the financial backer of the content (whether it’s the label, studio, publisher, or brand) because online, audience uptake now observable and measurable in real time. Yes, creative destruction is undeniably present, but so are new processes that redefine the landscape for creators and audiences, as well as for the funders of the creative products and experiences who benefit from the affinity created between the creative product and the audience/consumer.

Things are far from being figured out but these are some of the reconfigurations of markets that we can now point to in an environment in which scarcity and closed systems have been replaced by access and (over)abundance.

Monday, July 13, 2015

When disintermediation gets dissed

Today’s post comes courtesy of a student’s proclamation of displeasure in a course I’ve been teaching for the past few months. I’m happy to report that said student became noticeably less dissatisfied as the class progressed, and that we followed up with a series of emails on the topic. It’s no coincidence that the topic on the table was digital disintermediation in the creative industries, the same theme that has concerned this blog for the past 2 1/2 years.

With the student’s permission I’m sharing those emails in today’s post and will follow up in future blog posts with additional thoughts on the topic of the impact of the Internet on the creative industries.

But first, some context.

Last week’s class was our second to final session in the course, one in which we’ve been studying the shifts in media, marketing, and communications as systems move from being dominated by top down, broadcast environments to ones in which that space is shared with individuals who have been able to amass audiences from the ground up, using technologies and platforms such as Twitter, Facebook, YouTube, Instagram, Vine, Soundcloud, blogs, and podcasts to speak directly to consumers/fans/users and construct mini media companies for themselves, out of themselves.

This, in a nutshell, is digital disintermediation; a removal of the middleman – e.g. the publishing house, the record label, the newspaper, the radio station – that once brokered the traffic between creator and audience.

                             

Fairly early into my Powerpoint I could see that Michael Martyn (he says we can call him Mike), one of the older MBAs in the class with over 20 years of experience in the arts, on both the performer and administrative sides, was not happy. I was only a few slides in to a deck of 50 or so slides when an “I’m not buying it” came from the third row of the classroom. The instructor cannot ignore such comments, of course. By this point I had already stated that I was going to address issues such as the ‘myth of digital democracy’ and related concepts that paint overly optimistic pictures of Internet economics, but Mike’s comment sped things up a bit.

His objection was that the middlemen are still very much there, pointing to YouTube a prime example. And while there are certainly forces of reintermediation at work that tug at the DIY-ness of disintermediation, I pointed out that there is a big difference between a platform and a middleman.

A middleman plays the role of gatekeeper, acting as a combination of filter and waystation between the creator and the marketplace. Put plainly, the likes of book publishers, record companies, and broadcasters are all in the business of making decisions that stem this flow of creative outputs, with the belief that their choices are better suited to the desires and tastes of the audience. That would be the opposite game of what universal upload platforms such as YouTube and Souncloud make possible. They do not discriminate. At least not in terms of allowing anyone, anywhere, to make their work accessible to a global audience.

In this environment of platforms and digital media that is networked at the peer-to-peer level, we have the extraordinary ‘trickle up culture’ tales of:
  • Podcaster Marc Maron, who was a veteran comedian on the brink of bankruptcy (financial and emotional) that started podcasting in his garage in 2009 and then hit 1 million downloads per month (January 2011), and then 3 million downloads per month (January 2012), and now gets over 5 million downloads per month and is approaching 200 million cumulative downloads. And yes, President Obama did recently visit his garage and do an episode of the podcast – a request that came not from Maron, but from Obama’s people.
  • Rappers like Tyler the Creator, who started out on Tumblr, tell Larry King “the suits are idiots”, and pride themselves on navigating their own way through the entertainment industry.


  • And there's the less well known, but ridiculously prolific Lil B, who released 676 songs in 26 months – offering them all for free online – and used 125 different MySpace pages early on to reach fans directly. Oh, and he's also given talks at NYU  and MIT.

But back to our class.

Mike was more satisfied with the snapshots of the creative industries I went on to discuss, but we still went on to start up an email correspondence to further hash things out. With his blessing, I’m sharing those emails here, and of course welcome your thoughts, comments, or experiences on the topic, as it is one in which things are constantly evolving.

MM wrote:

Thanks for the follow up. My experience is that people unfamiliar with the sector paint that rosy picture themselves unless it is explicitly laid out for them what the conditions are.

It was a good class. The business issue closest to my heart, and one of the reasons I'm doing my MBA, is that of creating the possibility for sustaining incomes in the cultural sector, and to have this issue be taken seriously by authorizers.

While the DIY ethos is great it is often highly dependent on a level of privilege that makes it exclusive.

I always try to make sure that the reality of the wage situation in the sector be front and centre. I know you know this: I just feel an obligation to the sector to make it central to any discussion because - hey - it's business.

You touched on most of the things that I wanted to say over the course of the class, so I'm sorry if I jumped the gun: I'm very passionate about this issue in particular. For example: one debate that never gets old is how Economic Development Strategies that rely explicitly on VOLUNTEER RUN festivals and events to anchor their tourism plans are supposed to develop a local economy? This is the level of thinking that I'm accustomed to dealing with on these things.

LK wrote:

I'm happy to hear that you agree that overall the information presented was balanced -- neither painting a rosy picture of the industry, nor one of doom & gloom. I will likely teach it again, so the feedback is very valuable.

I hear what you're saying about economic sustainability and, e.g, volunteer labour as an assumed line item in budgets. As I noted last night, one of the realities of industries such as film, radio, TV, music, fashion, etc. is that the market does not balance supply & demand the way it does for, say, plumbers and accountants. For better or worse it seems like there will always be a greater supply of labour than demand in the creative industries.

To this end, you may want to look at the work of Angela McRobbie (you may already have) on the creative industries as economic sector (she was actually one of my profs at grad school). She's based in the UK so her perspective is UK-inflected, and grounded in cultural studies, but there's a lot there that you may find interesting/helpful.

MM wrote:

I have some familiarity with McRobbie, and my own 20 years lived experience working towards economic development of the sector reflects anecdotally much of what she presents. In the late 80s-early 90s the largely not for profit cultural sectors began to move en masse from models of employment to contracts. This developed against the backdrop of a less embattled public sector and more lucrative private sector than we have now: there was a market beyond the worker's immediate network for their work, and not all work came through the network.

This trend towards contracted labour has spread throughout the labour market into public and private spheres. I think McRobbie agrees the cultural sector is the canary in the coalmine for the economy as a whole.

We're not just talking about supply of labour, of course, but the supply of creative capital, which is markedly different. As you indicated, the sheer volume of creative capital flooding the market is pertinent to this discussion.

I make the allusion of what is happening to a democratization of the vanity press of the 19th century: where once only the rich terrible poets had access to the presses now all the terrible poets have access. I will hypothesize that closer examination of the still-emerging long tails of the exposure bell curve will reveal not a sustained, gradual rise but a series of steps and plateaus. Moreover, in the context of the digital distribution space I see an emergence of 'pre-popularity' steps, distinguished by three sequential determining factors:

1) Taste / Access to taste makers
2) Geography
3) Resources of the creator

The only thing that I find more remarkable than the volume of bad poetry on Twitter is the vast, truly supportive, audience for it. While the social network enables exposure it is only an enabler; perhaps that's our McLuhanism here. While I lack enthusiasm for further consolidation of wealth and power among fewer and fewer 'printing houses', I acknowledge we are not even beginning to see how the enabling effects of mass distribution will affect tastes on a global scale.

And now a few concluding thoughts from this blogger....

The reality is that the floodgates are now wide open, with the price of entry reduced to almost nil.

Creation, marketing, distribution, and publishing are all possible at the individual, direct-to-fan level, using tools such as these. 

Click to enlarge



                                  We’re also seeing marketplaces that look like this:

Click to enlarge
                       

Source: http://www.platformgiant.com/rob-walch-interview/

And consolidation that looks like the chart below, which on the left shows companies that aggregated YouTube channels for specific markets or demographic segments, and on the right shows the the media, entertainment, telco, and technology companies that have been acquiring them over the past few years.


For example, some companies specialize in aggregating makeup and fashion bloggers, while others specialize in aggregating video game commentators, and others specialize in content that appeals to 18-24 year old males. What the larger companies – in this case firms ranging from AT&T to Disney -- missed from the world of trickle up culture the first time around, they are now vigorously scooping up in the form of acquisitions of the smaller companies that rolled up groups of YouTube channels into a single entity, branded them, and sold targeted ads against the content.

What started out with webcams in garages, backyards, and bathrooms has become a corporate concern in multi-billion dollar companies. Whether or not this is any sort of ‘win’ for individual creators of content that lives and grows online remains to be seen. What is known is that the path from zero to tens and hundreds of millions of views, downloads, and clicks, has never been more rapid, and that in the process new forms of currency have been minted. It’s also worth noting that as this consolidation occurs new barriers are erected between creators and consumers. There are those creators who have either been pursued by or who pursued the aggregator networks. And in a number of cases those networks have in turn been acquired by larger corporate interests. Each one of these steps adds layers (and percentage payments) between the creator and the media platform, and alas we have re-intermediation on our hands.

Thanks for reading and stay tuned for Part 2 of this post and a closer look at Platform Capitalism: Democratic enablers, or monopolists in everyman’s clothing?

Related Reading
Steven Johnson, New York Times, "The Creative Apocalypse That Wasn't": http://nyti.ms/1FtB8YY

Saturday, June 20, 2015

Dropping the needle on the record with Kid Koala

We’re breaking away from theory and practice today on the blog for an artistic injection. This one is via virtuoso turntablist Kid Koala, perhaps best known for his Drunk Trumpet, in which he uses breaks, beats, and sounds from various recordings to simulate a horn section that’s had one or two too many. I can only imagine how this would have gone over in Fletcher’s band in Whiplash


Last night there were no tipsy trumpets, however. Instead, 60 tiny turntables, situated at tables of 4, in a temporary building known as the Festival Shed located near the intersection of Wellington & John streets in downtown Toronto as part of the annual Luminato Festival. (Extra trivia points for those who may not already know that the festival’s artistic director is Rufus Wainwright’s partner, Jorn Weisbrodt.)

The Kid Koala show was billed as a Satellite Concert, which made me think it may have been going out live via webcast, when in fact I believe it was being recorded. It was hard to tell as the evening was one of large scale media experimentation. So much so that there were those of us in the audience who were never entirely certain we were doing our parts ‘correctly’. 



Yes, we all had parts. The idea was that each mini turntable would constitute part of the audience orchestra. We had a miniature DJ crate stationed in front us, containing a handful of colour-coded records – the labels were red, blue, green, purple, and orange, along with a miniature mixing unit, and a light that would flash a particular hue which was our cue to drop the needle on the accompanying disc.

Koala's custom pressed, colour-coded vinyl
The Interstellar Orbiter mixer
The light flashed and we were to drop the needle
on the record of corresponding hue. If I continue
with this behaviour, consult a physician.

The discs were custom-pressed vinyl, and, we were told, were designed to harmonize with the larger composition, whether played at 33 or 45, whether spun backwards or forwards, and wherever the stylus met the vinyl.  It wasn’t entirely clear if things were functioning as planned, but dammit we all wanted this thing to work, so though there were numerous table-to-table exchanges about whether or not things were actually ‘working’, we dutifully did our jobs as audience disc jockeys, following the commands of the coloured lights that flashed before us. 



Or perhaps the whole thing was a psychology experiment, designed to see if people would believe their little discs were having an impact on the show in progress if they were told this was the case. While we participants were – or weren’t, who knows? – spinning and switching records and twiddling knobs on our table mixer -- Kid Koala was filling the room with a kind of dreamy, spacey wash of sound with some live instrumentation and occasional vocals that sounded like half-speed Bjork, which of course added to the galactic feel. Oh, and there were ‘chemical puppeteers’ as well. They stood by a tray full of plastic squeeze bottles, resembling a futuristic condiment stand. From this perch, globules of what appeared to be water, oil, soap, and various coloured liquids were artfully dribbled onto a surface that was projected onto the giant screens behind Mr. Koala.

Chemical puppeteering in action at Kid Koala's Satellite Concert
June 19th, 2015, Luminato Festival, Toronto

In these days of the heroizing of the DJ in the world of EDM/electronic dance music I say kudos to Koala and crew for trying something so ambitious, visually arresting, and highly interactive (in theory? in practice?). I still don't know. And to me, at least, it doesn't really matter.

A few more atmospheric shots from last night's show.
Good to see some trees in outer space.

Wednesday, June 3, 2015

The hyperlocal: On white squirrels and related playlists

In the personal stock market of my life, I announce today that blogging output has been significantly down in Q2 2015. This is owing largely to the fact I’m currently teaching and, and, as adult life dictates from time to time, work must come first.

But today that all changes...for a brief moment at least. And it’s all because of a white squirrel, featured prominently in an ad for Spotify that I saw recently outside of Toronto’s Trinity Bellwoods Park. Shortly after relocating to city I learned of this strange species of white squirrel when the local papers reported that one of these rare rodents was found “alarmingly stiff” and “dangling over a footpath” in the area.

That was last summer and since then I’ve come to learn that there are only a handful of these pale little creatures in the city and that they are so beloved, if not mythologized, that a coffee shop in the area bears their name. After all, not many have actually seen a white squirrel in the park, so the next best thing is the tribute coffee shop I guess.

Bonus Points: For those who want to regale co-workers with the depth of their white squirrel knowledge I recommend this video:



But back to the Spotify squirrel ad.



Upon seeing it, and then snapping a picture with my phone, it struck me that this thing referred to as 'mixed reality', the blending of the digital and the physical, is now, in its most basic form, just a taken for granted, everyday occurrence. Armed with phones that have more computing power than all of NASA had in 1969 we’re all participating in media consumption, pretty much all the time, and as a default setting. It is both opt-in and built in. There if you want it, and capable of being ignored if you don’t. 

And this is the genius of the Spotify poster. It combines the hyperlocal message of the legend of the Trinity Bellwoods white squirrel with a soundtrack especially crafted for squirrel spotting. Is the soundtrack squirrel-themed? Or walk in the park themed? Not at all.

But what Spotify is saying is that wherever you go, they’re there too. And they’re also letting you know that they’re hip to the local lore. This isn’t the local radio station running an ad reminding you to tune in for that wacky morning crew on weekday mornings from 6 a.m. or for ‘no repeat workdays’. This is a global brand demonstrating not only its knowledge of the community but also giving you the whimsical gift of a playlist, especially created for your day in the park.

Saturday, May 2, 2015

Fans love YouTube & YouTube loves its fans

A quick post today after executing a blogger's version of a surgical strike at North America's first YouTube Fan Fest.


Fan Fests invert the time-honoured entertainment industry tradition of making it all about the stars, and instead use the event to 'give back' to the people that helped the celebs get to where they are. It's not like the spotlight isn't still on the stars -- of course it is -- but Fan Fests are one of those genius marketing moves that simultaneously promote products, services, and people while allowing the hoi polloi onto the red carpet.

Toronto's Yonge Dundas Square was 'Fest central and as such became the gathering place for the crowd of about 10,000 who came to the outdoor plaza on one of those days when the weather couldn't have been more co-operative. But who were these 10,000 people, and what were they there to see? The answer, in short, is that they're the new face of the mainstream media audience, and they converged on the central downtown Toronto square to see social media's version of mainstream entertainment: YouTube superstars.  

Phalanx of YouTube fans assembling for
first North American FanFest 
Gigantic Bethany Mota billboard hovers high
above the YouTube FanFest crowd, Toronto,
May 2015

Not that long ago 'Internet famous' meant a small but dedicated following for people who probably couldn't have or wouldn't have made it via regular media channels. Today it means the likes of Bethany Mota and Jenna Marbles, who have millions of followers and hundreds of millions and a billion plus views respectively. So this is not about the marginal, it's about what the mainstream now looks like. It's mass media that just happened to originate online, made by people, not industry; like this video, whose 6 million views represents just a scintilla of Jenna Marbles' 1 billion and change YouTube views.


Unlike TV audiences, YouTube audiences play a role in the programming, almost every step of the way. They can tweet directly to their favorite YouTubers, they can ask them questions, and actually receive answers, they can make suggestions for things they want to see in videos, and presto, those suggestions make their way to the screen. 

So why not a big outdoor event that simultaneously thanks the fans and serves as a giant promotion for specific YouTubers' channels and for YouTube in general? And why not make it free? And if you sense a mushy line between programming, promotion, celebrities, and fans, it's because the line really does have the consistency of melted margarine.

On the one hand YouTube serves up the new face of the mainstream in the form of Marbles and Mota at its Fan Fest, and on the other hand it caters to specialized audiences, who, when considered at a global scale, can make big enough stars out of people doing what would otherwise be considered non mainstream content. Two cases in point are Jasmeet Singh aka JusReign and Lily Singh aka Superwoman (no relation, as far as I know). Both are Canadians of Indian descent, with substantial global followings for their sketch comedy style videos that lampoon their heritage. JusReign has about 70 million YouTube views and Superwoman has close to 700 million YouTube views. Judging by the number of Indo-Canadian fans shrieking and selfie-ing with these 'Tube titans it's evident that the online video platform is able to serve a specific audience better than any conventional broadcast platform ever could. 




Related Posts: 

YouTube: When the going gets weird...
Beauty & the blog: or how a quirky girl is beating the brands at their own game
The Stars of YouTube: Buffer Festival 2014
YouTubers in 2015: The appeal of the Annoying Orange
YouTubers in 2015: A King of Trivia & A Girl Next Door Beauty Blogger
Why PBS moved from 'owned & operated' media to YouTube

Monday, April 20, 2015

The creative economy of today: Is the (3rd) party over?

Who doesn’t want the freedom of working for themselves? Of not having to endure bumper to bumper rush hour commutes, getting sardine canned on the subway, of sitting through marathon meetings, of dealing with dress codes (except for those crazy casual Fridays), and, well, all the rest that goes with office politics?


But what’s really involved in the life of being a freelancer -- or free agent --in today’s creative industries? To get some perspectives on this question while in Austin for SXSW 2015 few weeks back I hotfooted it over to a panel discussion on the realities of today’s creative economy. Moderating the proceedings was Scott Belsky, founder of the online portfolio site Behance (which I must admit has alway made me think of Beyonce), and now VP of  Mobile Products & Community at Adobe, which acquired Behance at the end of 2012.

Belsky got the discussion going with a compare and contrast of then and now for creative workers such as photographers, graphic artists, designers, and writers. In the creative economy of the past, he pointed out, creators were generally represented by agents or middlemen, or were employed by a company. There was not much in the middle. In the case of the former, creators were not infrequently taken advantage of, and often felt like they were unable to make a solid living as total freelancers, because, in part, of the cut taken by agents or middlemen, and because the same entities were not highly incented to send a living’s worth of work to individual creators. 

As most people had to rely on 3rd party representatives and static representations of their work (vs. dynamic, current portfolios), it was difficult, if not impossible, to achieve scale as an individual. And on top of that, the tools that provided the capacity to scale, or manage work at a higher volume, simply weren’t there. Well...that was then, and this is the now.

"Sharing is the new networking. That is what builds reputation."

                                                                                   - Scott Belsky, Adobe

According to the panelists, today more creatives than ever are able to work as independents. Many represent themselves, using a combination of word-of-mouth/referrals, augmented by digital networking capabilities and the high quality options for posting and updating portfolios online. Software-as-a-service business tools -- e.g. FreshbooksMailchimpCashMusic, Harvest -- have made it easy for independent contractors to do everything from track billable hours to sell their wares direct to fans.

As a result, there’s a new middle ground emerging. In addition to the rugged individualism of the 1-person DIY operation, we’re seeing the emergence of the DIWO (do it with others) model, in which people are creating small teams of their own, sometimes ramping up and down for particular projects, sometimes starting boutique agencies of their own.

Opportunities are now coming from a new source: Exposure.

And exposure and discovery trump referrals when it comes to new business for creative talents, said Belsky. He cited things like the ability to follow photographers and designers on Instagram as an example of work finding you, vs. you having to find work.

There are also new types of intermediaries, such as WorkingNotWorking, which provides access to some of the best work out there for some of the best people out there. . It’s described as: “an invite-only, real-time network of the busiest, most talented and most sought after creatives in the business.”  Among the companies to which WorkingNotWorking dispatches its creative work force are Apple, Google, IDEO, Wieden+Kennedy, and The New York Times. In other words, the top tier of the top tier.  Workingnotworking.com does this by seeking out, and vetting, the top 10% in the creative community. This way people know they’re going to find someone not just good, but great. And creatives don't pay, companies seeking creatives do, via a flat fee subscription, not a commission. Justin Gignac founded WorkingNotWorking and he possesses several accolades in the design world, but is probably best known for being part of the creative team that created ElfYourself, the application that has given birth to almost a billion selfie elves.

Another way to gain exposure, and with any luck paying gigs, is through mashing and (re)mixing existing work. Since 2001 this has been enabled by Creative Commons. Creative Commons licenses are the global standard for sharing, with over 1 billion licensed works made available online. Its CEO Ryan Merkley was also on the SXSW panel and he pointed out that we used to think about publishing and sharing separately. Publishing was governed by rules and laws, whereas sharing forgave most of those.  Now we can think in terms of enabling things for distribution, as well as in terms of remixing.

And while some argue that technology has become commoditized and has therefore devalued the works of creators, Emily Heyward, a partner in the Brooklyn and San Francisco-based branding firm Red Antler remarked that in all corners of the creative industries -- music, newspapers, book publishing, advertising -- the old systems are crumbling. As a result, it's hard to justify paying tens or hundreds of of thousands for logos when you can get one for $99 online. Or even $5.


Merkley of Creative Commons chimed in at this point: "Nothing replaces a professional", and reminding us that all know how good a 99 cent anything. "This is why crowdsourcing is never going to compete with professional work. Professional work includes professional briefs, professional delivery, and professional revisions."

Hayward added: "It’s the difference between thinking about design as a cost vs. an investment. If you’re doing it twice it’s going to cost you more. And give you more grief." Despite all the cost-cutting and attempted commoditization of skills she insisted “it’s the most exciting time to be in a creative field."  Why? "Because creators are able to build their own brand, largely independently, and to use it, and digital marketing and networking, as differentiators." Her list of common mistakes for creators to avoid: 
  • Have a multi-disciplinary skill set
  • If you don’t have those skills yourself, then team up with someone else who does
  • UX (User experience), graphic design, web design are often desired together, so you can optimize by offering a small bundle
Gignac of WorkingNotWorking pointed out that it’s now also easy to make your portfolio look like a million bucks online, using tools that are readily available. “Having an outdated portfolio is not acceptable.  Also,  so much…looks like shit online”, he said. “Show off your stuff online like Barton Smith did”, who did a “Facebook facelift”, just for fun, and now has a job at Facebook. “You are your brand. And ironically, people good at selling other people’s products often terrible at selling themselves.”

So does this mean the traditional advertising agency model is dead? That independents and ad hoc creative teams will be the ones holding all the power? As is the case with so many reports of death, this one is overstated. Which is not to say that a game of fat margins and opacity between client and service provider is a game you want to bet on; just that being the David in a land of Goliaths no longer means relying on a biblical grade miracle in order to have a fighting chance.

Related Post: Platform Capitalism, or Why Your Parents Don't Understand the Internet

Wednesday, April 1, 2015

Why PBS moved from 'owned & operated' media to YouTube

There was a time when the mandate of public broadcasters was clear. Their job was to cover topics deemed to be in the interest of, and for the good of, the public at large. Sometimes that meant the high-minded, sometimes it meant the culturally diverse, and sometimes it meant giving voice to the marginalized. Think of it as the take your vitamins, eat a balanced diet version of media. We all know it’s good for us, but we also know that kale doesn’t exactly taste great.

At the same time, over the past few years the terrain once trod upon almost exclusively by public broadcasters has found itself imprinted with the footprints of others – namely podcasters, YouTubers, and bloggers. Chart topping podcasts like Hardcore History and YouTube science channels like Vsauce  have proven that there’s a huge audience for content once primarily referred to as ‘educational’. Podcasters, bloggers, and YouTubers have amply demonstrated that an unconventional approach to content and production can, and does, work. Hundreds of milions of views and downloads don’t lie.

In this new reality, shows, or content, (whichever term you prefer) can be made by enthusiasts, not just by broadcasters. And the product is available to anyone, at any time, via laptops, tablets, and phones. The question then becomes: how and where do public broadcasters fit into this picture?

While in Austin for SXSW 2015 I attended a session called “NPR & PBS: Public Media, Reaching New Publics” that addressed this question. The main presenter was Lauren Saks, Director of Programming at PBS Digital Studios.

As so many conference sessions do, this one began with the people on the panel throwing out one of those ‘can I have a show of hands’ questions to the audience. This one asked how many people in the room grew up watching Sesame Street.  Almost everyone’s hand shot up.  The next question was ‘how many of you either listen to NPR or watch PBS now’. What looked like about 2/3 of a room filled largely with people between the ages of 25 and 40 had their hands in the air. This was not typical, we were assured. As Saks informed us, most people in the U.S. grow up watching Sesame Street then don’t tune in to PBS again until they’re in their 50s or older. As for NPR, the radio service, we learned that the average listener is 55, upper middle class, and affluent. “Our mission is to speak to the public. And we’re not doing that with these demographics”, admitted Saks.

And so, in the spirit of decentralized media explored in the preceding blog post, PBS figured out that they needed to be where audiences were. This is a definitive move away from the old school thinking that says audiences must come to us. To the media properties we own, and have grown, over years of building reputation and brand. That’s a nice idea, but in an age of abundance (if not overabundance) of content it just isn't happening that way. Those in the content game are figuring out they have to go to where the attention is going. And that means places like YouTube, Tumblr, Twitter, Instagram etc. This is why even august organizations like the New York Times are entering into content-hosting partnerships with Facebook. For many, if not most, the primary destination is now Facebook, not a specific newspaper’s website. A similar change is afoot for broadcasters who are seeing their audiences move en masse to sites like YouTube.

Consider the case of PBS Digital Studios. 

It launched in 2012 and according to the blurb on its YouTube page:

PBS has long brought you original, thought-provoking programming. With PBS Digital Studios, we take that same mission and apply it to the Internet age. Working with creators from across the web, our network of short-form video series will showcase the best of the Internet while also celebrating the best parts of public television.


“For PBS Digital Studios we moved off our 'owned & operated' platform to YouTube”, said Saks recently at SXSW. And this turned out to be a good move. As of the end of March 2015 PBS Digital Studios on YouTube has 4.7 million subscribers and just under 350 million views. It offers 60+ channels, covering arts, culture, and science, and as Saks puts it:

“We’re bringing an audience we’ve never had to our brand. And we match the tone to the platform. We don’t try to shoehorn something into a place it doesn’t fit.”




Among several dozen others, PBS Digital partnered with pioneering YouTubers Hank & John Green aka ‘The Vlog Brothers” for a channel called Crash Course, which has become one of the most popular in the PBS digital network.


Saks said bringing Hank & John Green on board was an easy decision to make. “They were doing PBS type content on YouTube before we were even thinking about it, so people were doing it with or without us, and we’ve learned so much from John & Hank. We’ve learned about loyalty, about the conversation in the comments. People come back every week because they think of John & Hank as their friends. And these people may well turn into PBS viewers and donors in the future.”

The trade-off here is this: sacrificing the owned and operated PBS platform for access to YouTube’s 1 billion+ monthly users. The costs? Well, for starters, YouTube takes 45% of the ad revenue, but they’re the elephant in the room, and as such they can take (close to) the lion’s share of the revenue. And apologies for the mixing of animal metaphors but I couldn’t resist. 

The other beast in the room is Facebook, where YouTube video is commonly shared. It's responsible for about 25% of all traffic referred online.


And finally we have Twitter, where, from a marketing perspective, we find distribution done by the public at large, as seen here during a momentary glance at a column on Tweetdeck. This kind of circulation of comments, links, images, and videos goes on, of course, 24/7, and is driven by fans and enthusiasts, not the content creators themselves.

This is a very different supply chain. 

Distribution is essentially free. Plus you’re not buying media for promotional placement, as was the case in the past. Instead, you’re contributing content to a platform that generally doesn’t create its own. Facebook, Twitter, and YouTube are not like the BBC or the New York Times in this way; they are the pipe, and others fill the pipe. 

And why do we fill it? Because the pipe has a global reach, and because the content that flows through it can achieve exponential, not just linear growth, thanks to its circulation in networks with many, many outward reaching nodes and hubs. 

Kudos to PBS for recognizing the value of being where audiences already are and partnering, rather than competing with, creators whose work a) complements the PBS brand and b) is already resonating with viewers.

Related Posts:

Platform Capitalism, or Why Your Parents Don't Understand The Internet
What Buzzfeed got before anyone else: Decentralized Media
YouTubers in 2015: A King of Trivia & A Girl Next Door Beauty Blogger
You Tubers in 2015: The appeal of the Annoying Orange
The Stars of YouTube: Buffer Festival 2014