Scott Porad

I take lots of notes. Then, from time to time I go back and review them, which I was doing a few moments ago. I found one that I really liked…it really seems to pack a lot of punch in just a few words:

In the future, power will flow toward the artists who can build an audience independently. It’s always been that way, but creators have more tools now.

What I meant by “tools” was that the Internet and social media allow artists (and others, like brands) to connect directly with consumers thereby building audiences independently.

In other words, the power of the gatekeepers is in decline. He gate keepers are not the same kingmakers they once were. Those who learn how to capture the power that is slipping from their grasp will be the kingmakers of the future.

Here’s a really valuable lesson: if you had $5 and 2 hours to make as much money as possible, how would you do it?  That’s the question that Tina Seelig, a professor at Stanford, asked her class.

The nominal lesson that Seelig gains from the experience is that that one of the keys to entrepreneurship is to be flexible and think outside of the natural constraints of the problem.  She split the class in to three groups, and each set them about their challenge:

One group employed a loss-leader strategy: they setup a free bike tire pressure testing station on campus, and if your tires were flat then they offered to pump them up for a small fee.

Another group used an arbitrage strategy: they acquired reservations at popular restaurants, then sold them to people waiting in line.

But, the group that made the most money thought outside of the box: they sold a classroom presentation to a consulting firm that wanted to recruit students from their class.

Photo Credit: Steve McN.

Personally, I see a totally different less in this experience: the understanding that the asset is the audience.

I was making a similar point last week when I talked about how important it is to get your product in front of the right customers:

…once you know your potential customers, how do your reach them? Effectively, this is sales and marketing. Typically, product development types detest the marketing types as slick, do-nothing, blowhards. But, it turns out, they have a pretty tricky job which is, “how do I put my product in front of my potential customers in a cost-effective way”. Turns out this is easier said than done.

The bottom line is that when you have an audience what you have is a set of consumers, and when you have a set of consumers there is inevitably a set of sales and marketing people who will pay to get in front of them.

Of course, this is not revolutionary: it is the fundamental premise by which media companies like Cheezburger work.  Media companies offer content so that an audience is attracted to their broadcast, and then sell visibility to that audience to advertisers.  However, and this is why I’m writing this post, it’s an asset that is often overlooked.

I’m hopelessly addicted to golf. Some men drink, a few cheat, many fish, I golf.

The “A” position is the most optimal place to land your drive on a golf hole. Yet another way that golf forces you to accept imperfection. Golf is truly The Zen Sport.

TheAPosition.com is a new golf journalism site launched by my friend Bob Senoff. Bob has brought together 8 of the worlds best golf writers in to one site. The content on the site is excellent.

Then, they’re going to do special promotions for new product launches for major golf brands.

The concept behind the site is brilliant, and I encourage you to check it out. Especially if you golf!!

It drives me batty when people explain that Twitter is like Facebook except only the status updates.  That is such a hideous explanation.

Yes, that is true, but one giant difference is that Twitter messages are completely out in the open whereas Facebook status updates are a) only shared with friends, and b) imprisoned within the walls of Facebook.

Along those lines, I’ve been spending a lot of time thinking about the actual words “social media”.  What is social media?  What do those words mean?  Let’s break it down:

• The word “social” talks about the relationship or connection between people and/or groups of people.
• The word “media” is the plural of “medium” which is the means by which something is transmitted.

In our lexicon, we think of media as transmitting content.  So, in sum, “social media” is a form of content transmission that occurs between people.

Think about the implications of that for a second…social media is putting the power of transmission in the hands of the people.  That’s a very powerful idea.

So, lets go back to my original point: in some sense both Twitter and Facebook are social media because it is person-to-person transmission of content.  However, I would argue that Twitter is a more pure social media because the content is transmitted openly…to all of society.

If I buy a book on the Kindle, can I lend it to a friend?  My understanding is that I cannot.  (Well, I could lend my whole Kindle, but not just the book.)

If I were an author, I’m not sure I would like this because it eliminates the viral nature of books.  As an author, or any content creator, there is a lot of value in virality.  To simply have your name “out there” as a meme in the a community, hive or culture has a lot of value–as part of the conversation at a cocktail party, so to speak.

Think of this case: have you ever been lent a book that you enjoyed reading, then suggested to someone else that they read the book?  I have.  In other words, I became an evangelist for the author.  I think this is worth as much, if not more, than few dollars they would have earned from the book.

Or, what about books checked out from the library?

And, second-hand bookstores.  In a pure sense, the author not the seller, should be earning the dollars when a book is resold.  However, Mr. Market factors that loss into the original price of the book.  In other words, pricing has reached an equilibrium taking into account the viral benefits of the secondary market.

There are lots of technical ways Kindle could solve this problem, but let me suggest just one.  It’s not the best solution, but it’s easy: for each Kindle book that I buy and download I get to “share it” with exactly one other person.

From an implementation point of view, the act of “sharing” is simply by giving a unique promo code to a friend.  The code can be used only once and only for a specific book.  Online promo codes are well established, so this shouldn’t be hard.  And, there are many easy ways that they could be shared from device-to-device, by e-mail, etc.

Anyhow, all I’m saying is that there’s a lot of value to viralty.  This about it this way: in a perfect world, content creators would get paid each time their work is used.  However, just because they’re not getting paid cash doesn’t mean they’re not getting value from their work.

I was reconsidering yesterday’s post about the Kindle…you may recall that I wrote it while my local library.  It occurred to me: what does digital media and digital rights mean for public libraries?

Libraries have come to be viewed as an indispensable civic institution, but it hasn’t always been that way.  The first libraries were sort of like clubs: books were expensive and hard to come by, so people who had them would pool them together and share.  As I recall, Benjamin Franklin started the first library in the British Colonies…it was this type of library.

I mentioned this situation on the horizon to my grandmother who is a great lover of books.  She told me that she remembers “lending libraries” when she was growing up (in the teens, twenties and thirties).  They were sort of like a video rental shop–you’d get a book and pay by the day.  “A nickel a day,” she said.

In the future, when all books a digital, how will we check a book out from the library?  What does that mean for our society?  I have no idea, but it’s a fascinating question.

I’ve been considering buying a Kindle for awhile, but have mixed feelings about it.  For one, it’s expensive.  In addition, I like physical books…they make me feel warm and happy.  (In fact, I’m typing this very blog post from a desk at my local public library.)

Nevertheless, I was away last week, so I took the opportunity to download a book to the iPhone Kindle reader and give it a real try.  Honestly, it was surreal…soooooo many thoughts swirled through my head as I read the book.

The first thing was that it felt weird to pay $12.99 for something that effectively cost zero to produce.  Well, I suppose there were a lot of computers involved to produce it, but the marginal cost of each unit is zero (or very, very close to it).

After I thought about it for awhile I realized that how I felt was a reflection of the new relationship I was having with the “book”.  I wasn’t paying $12.99 for the bits that I downloaded from Amazon: I was paying the author for his work!

Think about that.  It’s a fundamental shift in consumer thinking…where we go from buying an object–a book or compact disc–to actually just buying the content.   In the past, I’ve always considered buying media as a function of the cost to produce and deliver it, but that is no longer the case.  My sense (although I have no hard data on this) is that consumer attitudes on this will adapt over time, just like mine did, and we’ll see a reduction in piracy as consumers come to terms with paying for content, not product.

That being said, the Kindle is one model of this new consumption framework–paying a fixed price to the content creator.  Another model that comes to mind is what Radiohead did with In Rainbows: they gave it away for free and said pay what you feel it’s worth.  Both models are more pure than the previous model of buying an object, and there other other models too–like Rhapsody or Netflix.  I couldn’t tell you which is the best, but I’m sure Mr. Market will figure it out.

Anyhow, so many more thoughts on the Kindle…expect another post tomorrow.

Recently, I wrote two guest blog posts for Journalism 2.0, Mark Briggs’ project that explores the future of news journalism.

In the first, The Catch with User-Generated Content, I discuss the pitfall that many web sites make when they foray into UGC:

But there’s a catch: the important lesson from Cheezburger’s success with user-generated content is that while content costs less, it is not free. That is, even though we do not pay our users for the content they contribute, there is still a cost associated with acquiring and managing that content. Why? Because only a fraction of the content submitted to us is of high enough quality to be used.

As a result, we incur significant expense to sift and filter and sort through the submissions to find the best. Specifically, we employ a four-stage review process — two phases leverage the user community to help us filter content and two phases of review are done by moderators employed by our company.

In the second post, What can journalism learn from I Can Has Cheezburger?, I talk about how the introduction of UGC is shifting the role of a news reporter:

There is still value for news reporters and organizations to be “source leaders.” I am one who believes that there is an important role for the professional news reporter in our society. But it is clear to me that user-generated content or crowd-sourced information is a valuable addition to news journalism because it can yield more and better information, and often faster.

However, as I’ve illustrated, that information comes with a cost which is finding ways to separate the signal from the noise. The task news reporting has shifted toward filtering. My view is that winners in the Internet era of news journalism will be the people and companies who, like Cheezburger, ReadWriteWeb and Amazon, develop systematic ways of filtering the flood of user-generated content and sources down to those with the best content. The result will be higher quality news and information, that is more relevant and on target with the audience, at a lower cost.

I had a moment of clarity over the weekend.

As a developer I’ve always despised “the marketing people”; they just drove me bananas with their half-baked plans, the checks they wrote to others that the development team had to cash.

To boot, I always thought the development team was superior because we actually made the stuff that the marketing team was pushing.  If it weren’t for us, I’d think with my chest puffed out and my head the size of a blimp, there would be no company.  My goodness, I must have been obnoxious.

Over the weekend my brother-in-law asked me what I’m planning to do after I Can Has Cheezburger?, which isn’t soon, but knowing that I’m a startup junkie he was curious.  I said that I want to get into the content creation business…basically, do a media company (which is what we have now, so I guess I should say “do another media company”).

And, then it occurred to me: in the media business, the marketing people are critical. You can make all the content you want, and it can be the best content in the world, but if you can’t get people to view it, if you have no audience, then you’re done.  Kaput.

I suppose this applies to all businesses, but for some reason it was most obvious to me with media.  For every Susan Boyle, there are hundreds of people making great videos or music and posting them on YouTube or wherever, but getting no traction.

So, I’m sure I’m not the first to say it, but let me be the most recent to remind you: when you’re doing your startup—whether it’s media or otherwise—the people who distribute the product are just as important, if not more important, than the people who create it.  It’s a ying-and-yang: a startup cannot succeed with out the interdependent strengths of each.

P.S. To all of “the marketing people” I’ve worked with in the past, I would like to take this moment to apologize.  I am sorry for having been a complete jerk and not treated the work you were doing with the respect that it deserved.  I am truly, genuinely, sorry.

Dear Video Advertiser,

I am writing today to talk to you about the advertisements that are placed to fund all the amazing free video I watch online.

Let me start by saying that I have absolutely zero objection to advertising funded content.  In fact, that’s how I make my living.

Regarding advertising to fund video content, I do not object to ads that appear before videos (pre-roll) or ads that appear after (post-roll) or ads that interrupt the content (interstitial, just like on regular ‘ol TV).

Nor do I object to obvious product placement.  One of my favorite TV shows is Friday Night Lights and it is by no accident that two of the main characters have after-school jobs at Applebee’s.  The writers work it into the story reasonably well, or at least such that it completely lame.

Also, when I watch soccer with my Liverpool-obsessed friend Darrell it does not bug me that the players have ads on their uniforms, and there are ads on the field and around the field and basically everywhere.  Like Friday Night Lights, these’s aren’t so intrusive such as to ruin the game.

No, none of these things bother me.  I accept them as the small price I have to pay to get great, compelling entertainment for free.  I think that’s a fair bargain.

But, here’s something I think you should know about: when I’m watching a video on YouTube (or wherever) it is very, very unlikely that I am going to click on one of the video overlay ads.  In fact, I’d say the chances are somewhere between zero and none.

Take a look at the ad below, then I’ll explain why I’m not going to click on it.

Watching video is technically different than reading text.  By technically, I mean our bodies are doing different things.  When reading text, our eyes are scanning the page, so an advertisement may “catch our eye” with valuable information.  (This is the promise of Google Ads, right?)  In this respect, an ad on a page of text might actually add some value to the page (and, for me at least, does not harm).

On the other hand, when watching video our eyes are focusing on one specific thing.  As a result, the overlay ad is a distraction.  It is getting in my way.  It is making it is making it harder for me to consume the content which, in turn, makes me unhappy.  My unhappiness is not aimed at iJustine—it’s aimed at you, for ruining my experience of watching her video.

What I do in this situation close the ad.  Sometimes, if it’s a video I am focusing on closely I will have to stop and pause, then close which is even more aggravating.  It’s basically a lose-lose situation.  I lose because you’ve ruined my experience.  You lose because I didn’t click your ad.

Now, some people might complain that a pre-roll or post-roll or interstitial is a worse viewer experience, but I disagree.

• Pre-roll: I may be eager to get to the content, but at least I’m going to watch for that reason.  The key here is that the ad needs to be proportionate to the content.  A 30 second pre-roll on a 30 second video is annoying.
• Interstitital: somewhat more aggrivating than pre-roll because you’re disturbing the flow of my video, but at least your not ruining the content.
• Post-roll: maybe I’ll pay attention less because it’s easy to click away, but if you truly have relevant* advertising then this is  ripe opportunity…I am there, with nothing to do, waiting for you to fill my mind with your interesting advertising content.

A qualitative data point about pre-roll: I was watching Hulu the other night and they gave me the choice to have one long ad at the beginning of the show, or four short ads sprinkled throughout the show.  I chose one long ad at the beginning.

Watching an ad for 2 or 3 minutes was a small price to pay compared to having my show interrupeted four times.  In fact, I was pleased by having a choice and patiently watched the ad up front.  And, get this, I even recall the advertiser: Toyota Tundra!

On the other hand, some people might want the four ads…to get a break from the show for more popcorn or the bathroom.  Those people have different viewing habits, and that’s okay.  The point is that Hulu is giving its users a choice and that’s resulting in a happier viewing experience.

All that said, let me summarize my thoughts to you: I think advertising-funded content is great; the food I feed my family is a result of ad-supported content.  However, when it comes to advertising-funded video there is about infinity times more likelihood that I am going to pay attention to your pre-, post- or interstitial roll ad versus an overlay ad.  I am never, ever, ever going to click on an overlay.  Overlays reduce the quality of my viewing experience and make me unhappy.

Sincerely,

Scott

* -  That ad above, that I saw on iJustine: completely, 110% irrelevant to me.  With all the data Google has about me—multiple e-mail accounts, a gajillion chat sessions, Picasaweb, Google Docs, etc.—you’d think they could put something relevant on there…what a waste.  Seriously, no ad would be more profitable for them in this case because of the intangible goodwill cost.