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Netflix, Books, and Music are all Failing for the Same Reason

May 31, 2012 in entrepreneurship, marketing by George | 2 comments

Netflix has lost its social object.

For its initial (massive) run Netflix was defined by its “social object” of the Red Envelope. For some period of time, the Red Envelope was a sort of badge; an external manifestation of internal values:

The Red Envelope signified a person’s love (not like) of movies. Not a movie fan, but a movie fanatic.

Having this Red Envelope on your desk / coffee table allowed for the thing that the movie fanatic wanted to happen to happen:

A visitor to the movie fanatic’s home/office would see the Red Envelope, and ask about it. This allows the movie fanatic to do what he (not “wants to do”) must do: Talk about his passion.

The Red Envelope was the conversation starter, and the tool that enabled the movie fanatic to become an evangelist for Netflix. It was the tool that allowed the burden of promotion to shift from Netflix to the movie fanatic.

It was the tool that accelerated Netflix’s growth.

    The Red Envelope is largely gone. It’s been replaced by a stream.

    The stream can not and does not act as a social object.

    Markets are conversations.

    The conversation starter — the Red Envelope — is gone.

    The conversation has died down considerably.

Music has lost similar social objects.

Vinyl’s resurgence is only partly explained by its sound quality.

The main reason people crave vinyl is that it acts as a social object — an external representation of internal values — and, when seen sitting on someone’s coffee table/hanging on their wall, provides the conversation ignition for the music fanatic to become an evangelist for the band who they love.

It was the tool that accelerated music’s growth.

    The vinyl record (and its less-effective counterpart, the CD) is largely gone. It’s been replaced by a stream.

    The stream can not and does not act as a social object.

    Markets are conversations.

    The conversation starter — the Vinyl Record (and, its less-effective counterpart, the CD) — is gone.

    The conversation has died down considerably.

Writing has lost similar social objects.

Books have long been the classic example of social objects (an external manifestation of internal values). We have — museum like — portions of our house that act as a display case for these values (they’re called book cases). We have tables specifically designed to display these — coffee table — books.

These books provided the conversational ignition between the fan of the author of the book, and their friend, and allowed the fan of the author to become an evangelist for the author, and thus shift the burden of promotion from the author herself (or her less-effective counterpart, the publisher) to the fan. (“Books are the new vinyl” will become a meme, just watch).

    The book, while not gone, is rapidly being replaced by a stream (download).

    The stream can not and does not act as a social object.

    Markets are conversations.

    The conversation starter — the book — is gone.

    The conversation has died down considerably.

What are our new social objects? The iPad. People use it as an external expression of their internal values. It’s why the market for iPad covers is so high.

Apps may fill this role to a degree. You are, to a point, defined by your apps.

It’s not the same, however, and we all know it.

Savvy companies will recognize that they must create social objects even as their products largely move to the intangible.

Failure to do so deprives customers of the tools they need to make the switch from fan to evangelist, and therefore decreases the chance of the burden of promotion from the creator (or label, publisher, producer) to the constituent, and thereby puts a ceiling on growth.

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the brittle loneliness of the constantly-connected world

November 13, 2011 in tech by George | 5 comments

I’m working on a longer article about this topic for Berklee’s Music Business Journal, but it’s a theme, I think, worth exploring from a variety of vantage points. [UPDATE: Here's the article.]

The main thrust of my journal article is that social media has failed to live up to its promise. Essentially, the guttering candle flame that looked as if it might ignite an entire “markets are conversations” moment, has been extinguished, and in its place…

Well, there’s the rub.

It seems most can agree to feeling, at best, frustrated by social media in its varied incarnations. I don’t believe a day goes by for me where I don’t hear someone talk about how they’re tired of Facebook, etc. However, people are loath to abandon it (the cost of quitting – moving/losing all those photos – is too high). Related, no alternative has emerged.

I’m not sure, however, that it’s just fatigue that is making people dissatisfied. Rather, I think it’s an unfulfilled promise. For a moment, FB (etc.) seemed to offer authentic connection, and, thus, hope with respect to our greatest collective fear: loneliness.

As those connections — once co-opted — became increasingly less authentic, the value of these social networks fell. The promise of not-lonely disappeared.

There are moments of authentic connection out there, however. It takes some looking. It takes following the bread crumbs (often originating on FB).

One such example that works for me is the newly-introduced live stream sessions on Daytrotter. And, yes, full-disclosure, I’ve been working with Daytrotter for ~4 years now.

Why these work for me is their authenticity. You hear the artists creating in real time…warts and all.

“Any sufficiently advanced technology is indistinguishable from magic,” and this to me is magic. The tech disappears. The intimacy re-appears. For the time that the artists put themselves out there, there is a bond between listener and artist. For this time, we’re not alone, and we’re not lonely.

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Let your Customers Stir the Pot

October 11, 2010 in marketing, strategy by George | 2 comments

I think every parent has faced the frustration of trying to cook a nice meal for their young kids, having said young kids not eat bite one, cleaning up the uneaten food/cooking mess, and then averring never to cook for them again.

Last night we had half that situation. Annabelle, age 6, who has shown an interest in cooking from an early age, helped me cook. Henry, age 4, who has shown an interest in knives from an early age, did not.

Annabelle ate a good deal of what was cooked. Henry did not.

I expressed my frustration about the half-eaten meal to Marci later in the evening. She wisely said, “You have to just keep cooking with them. Keep showing them that this is something important.”

She pointed out that Annabelle, who had been the fussiest of eaters as a toddler, actually did eat. She noted that the fact that Annabelle was engaged in the cooking process likely had something to do with her being willing to try food she ordinarily wouldn’t have.

She suggested I work harder to engage Henry in the process. I told her I was worried about being stabbed, but said I’d try.

My wife is smart.

I thought about this process later and it made me think of a phrase I’ve been overusing recently: “condition your customer.”

Right now in many businesses, but particularly in arts-related businesses, customers are confused. They’ve been spoon fed for so many years by content providers who have attempted to package the creations of artists into neat, easily-digestible servings of art.

As these content provider institutions are crumbling, and as content creators are increasingly bypassing these middlemen and going direct to their constituents, there is confusion.

The customers are not used to things like: pay-what-you-will, subscription, bundles, free-mium, or any of the other direct-to-fan presentations that artists are serving up. Of course, artists are also confused about how to approach customers.

It’s not that these customers are necessarily opposed to these types of offerings, it’s just that right now, like an unfamiliar food does to a child, they just taste sort of funny.

As customers become increasingly conditioned these offerings will soon go from exotic to de rigueur, and customers will (sorry) eat them up.

The best way to condition customers is to do just what we’ve tried to do with the kids: show them how the (veggie) sausage is made. In other words, bring them into the process.

This process is something that got severely distended in the post-industrial/assembly line era, where companies “packaged” and customers “consumed,” and the customer was intentionally kept none-the-wiser with respect to how the “thing” was made.

What was lost during this time, of course, is the fact that markets are conversations. MARKETS ARE CONVERSATIONS.

In order to condition (and I’m not really comfortable with the subtext of that word; it seems manipulative, but that’s not the intent) a customer, talk to them.

Explain to them, for instance why you are presenting your offering the way you are. Bring them into the kitchen. Let them stir the pot. Create an architecture of participation.

When you do this not only will your offerings become more familiar and less “strange” to your customers, but the customers will take pride in the fact that they were part of the process.

When that happens, they go from customers to evangelists. They have inside information, and will do what everyone with inside information does: share it with others.

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The iPad and the development of Markets

April 5, 2010 in design, innovation, tech by George | 2 comments

The release of the iPad is bringing to the fore a topic that is near and dear to me, and one that I believe will be at the center of design thinking, marketing, etc., discussion for the foreseeable future.

Essentially, some are threatened by the iPad’s “closed” system. The most vocal seems to be Cory Doctorow. In his piece, “Why I won’t buy an iPad (and think you shouldn’t, either),” Mr. Doctorow puts forth the idea that the iPad represents a closed system, and therefore is a “gadget” that stifles innovation, etc.

With respect to Mr. Doctorow (who I do indeed respect immensely), I feel he’s dead wrong here. As someone who at 14 wrote my first piece of software on a Commodore 64 (it was a program that attempted to teach my 6 year-old brother some basic math aptitude by rewarding him with a piece of a picture every time he got the arithmetic problem correct; get ten right and you’ve “built” a race car), and as someone who now likes few things more than devoting an hour or so every other night to teaching myself Ruby on Rails, and as someone who’s been instrumental in the development of two successful iPhone apps (here and here), I just don’t understand his thought process.

The iPad is a delivery device, and, as such, relies on creative types to develop the content to justify its existence. Developing this content — books, movies, tv shows, apps of all stripes — and having an elegant distribution channel and device for our users to consume and enjoy our creations represents a massive win for the creative class.

Did developing not only this device but the distribution channel require Apple to make some decisions that were not informed by “open source” wisdom of the crowds? Absolutely. And, thank God.

The “wisdom of the crowd” could no more design the iPad nor the delivery mechanism (i.e. the App store) than “they” could design any other elegant system.

Why people have not yet come to the realization that wisdom of the crowd/crowdsourcing, etc. is simply a variant of design by committee (taken to a massive extreme) is beyond me.

This is not to say that there is no value to be had from crowdsourcing, etc. There is. What people seem to be neglecting is that these crowds tend to lack experts, or that the sheer volume of the crowd often mutes the experts.

Below is a quick little graphic I created to show the development:

As the Cluetrain famously taught us, “Markets are conversations,” and in a pre-industrial society that’s all we had.

Conversations were muted entirely during the industrial era; Henry Ford: “You can have any color Model T you want, so long as it’s black.”

Conversations were inauthentic during the Modern era; companies attempted to manipulate us into believing we had choice when we didn’t, etc.

The Internet — a medium for conversation and storytelling — allowed us to reclaim our voice, and thus, our choice. Amazon rankings representing the earliest and most cogent example of how “civic sharing” destroyed the Modern conceit of brands über-alles, and began our move towards “wisdom of the crowd” fascination.

We’re in an interstitial period now where we realizing that the wisdom of the crowd alone isn’t working. The recent kerfuffle over negative Amazon reviews for Michael Lewis’ new book, based not on the content of the book, but rather its lack of availability as an e-book, represents an example of this failure. The crowd wasn’t wrong exactly, but rather the current system did not allow the crowd to communicate their collective voice effectively.

What is required now is more filters and crowd leaders. Taking a cue from social entrepreneurship, “teams of teams” must emerge that allow for better organization of the crowd. Again, this requires people with real expertise to marshal the voices.

What is required is that someone with a point of view and knowledge make decisions. This is what the iPad represents. Decisions were made. Cory Doctorow and others were left out of this decision making process, and they don’t like it.

I personally am delighted that I can read Mr. Doctorow’s work on my iPad; I’ll read more of his work more enjoyably because of it. However, I’m also very glad that Mr. Jobs (and his team) designed the iPad and not a collection of Mr. Doctorows.

I know precisely what would have been developed by the “open source” community. It would have been a watered-down version that attempted to please everyone.

I refer to this dynamic as the Coder/Manager Dilemma. Essentially, without a strong manager the coders will water down an idea and leave the manager no economic choice but to ship a product that is less than what had been envisioned. Mr. Jobs is one of the few that seems to combat this (The Kindle is an example of the coder/manager dilemma writ large).

This post (via Daring Fireball) sums up the need for expertise:

…open source has nothing to teach literature or indeed any artistic creation, since talent doesn’t scale as you give more and more developers check-in access to the version-control system set up for your novel. It further explains why one’s inability to hack an iPad means precisely nothing. Nobody needs to program an iPad to enjoy using it, except those who have no capacity for enjoyment other than programming and complaining about same.

This was the weekend those of us with high standards lost their remaining residue of patience for ideologues who hyperbolize about open systems without actually creating something people want to use.

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Steal this Plan: Artists House Social Media

February 7, 2009 in marketing by George | 10 comments

I’m going to say this (in ital.) at the top and bottom; just so there’s no confusion:

I write all this not as some sort of self-congratulatory wank, but rather to document a plan that has worked. I implore you, therefore, to, in the words of Abbie Hoffman, “Steal This Plan.” It will work for you whether you’re a band, a label, a restaurant, etc.

Over the past three months or so we’ve been working on leveraging social media to create more awareness of Artists House.

Late fall: I corral three of my very fine students, Andrew Goodrich, Brett Cooper, and Evan Stoudt, and we make up a plan:

1. Set up a blog
2. Set up a Twitter account
4. Create a Facebook group

Then we set some milestones to accomplish prior to our regularly scheduled weekly meetings: Get 30 people following us on Twitter; Get 30 friends on FB; write 3 blog posts.

Importantly, while these numbers were arbitrarily chosen, they were participatively set; we all agreed on them.

The goal, of course, was to use these social media tools to create awareness and traffic for the main Site.

Before connecting the dots of the social media elements back to the main Site, however, I determined we needed to achieve critical mass with the social media itself.

We worked from November until January doing just that.

Once we cracked 2k followers on Twitter (we’re now at 3k, and I gotta shout out Andrew’s work on this; amazing), and 500 friends on FB (we’re now nearing 700), it was clear we had built a Tribe, and it was time to start linking the Tribe back to the main Site.

The first effort to do this occurred about two weeks ago when we held our first UStream live chat. Don’t look for it; you won’t find it. It was a mess. We had audio/video/chat problems. It was also thrilling and one of the most exhilarating things I’ve been a part of…well…ever.

It was clear, even from this fumbling first attempt, that we had a community. People who heretofore had only been “followers” or “friends” were now interacting (in real time) with us. It was a conversation.

Needless to say (as it’s sort of my hang up) after the first UStream experience, we set some goals for the next one: get rid of the technical problems, and try to get 100 people to tune in (30 more than those who turned in to the first one).

Below is the second UStream conversation. We did indeed hit the 100 people mark, we did clear out most of the tech problems, and – once again – it was a wildly exhilarating experience of connecting with the Tribe.

Clearly, there’s a lot of room for improvement, but I’m darn proud of what we’ve done.

Equally importantly, these UStream broadcasts are materially impacting on the traffic to the main Artists House Site; the Wednesdays on which the broadcasts take place are the highest traffic days of the week. Additionally, the overall trend for traffic is up on a day-to-day basis.

It’s important to note that had it not been for the effort put in to develop a robust Twitter and FB presence, the UStream broadcasts would have been worthless, and there would have been no impact on the main Site whatsoever.

There are certainly more things we will do to leverage SM to create traffic/awareness for the main Site. The thing is that we now cando these things.

SM is great, but it must be tied to objectives and metrics, and it must all tie together. A Twitter account unconnected to a Site/FB account, etc. is a one-legged mule.

I write all this not as some sort of self-congratulatory wank, but rather to document a plan that has worked. I implore you, therefore, to, in the words of Abbie Hoffman, “Steal This Plan.” It will work for you whether you’re a band, a label, a restaurant, etc.

I only ask that if you steal this plan to remember, markets are conversations; find your voice. This takes time, but it’s worth it.

To wit, a conversation with our Tribe (who I couldn’t love any more):


Find more videos like this on ArtistsHouse Music Community

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