Dreaming of new business models for content – may the best one win!

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Last night I had a fascinating dream. In some off-street parlour people were being offered a fantastic immersive experience. They could step into a world that would be tailored to them in every way, catering to their interests and tastes, creating what for them would be the most entertaining experience imaginable. And it was entirely free! However the producers inserted advertisements into the experience, which you could choose to skip for a payment. What actually happened was that people were so entranced by the experience that they continually skipped the ads, distraught by the idea of being taken away from their entertainment. As such you regularly had people racking up bills of over a million dollars. I, as many others, was sure I had the fortitude and self-discipline to be able to handle the ads and time away from my entertainment, so I could experience this wonderful entertainment for free. Yet I was aware many who thought they could do it ended up paying fortunes to skip the ads. I entered the immersive experience, and found that I could direct my character how I wanted, interacting in an amazing world. I recall thinking that the personalization of the entertainment left something to be desired, and that it needed more development, but it was certainly a fabulous experience. By the time the ads arrived the dream had taken another turn into the fantastic, so I wasn’t able to test my resolve.

When I woke I thought immediately of the extraordinary book Infinite Jest by David Foster Wallace. In the book, a film titled Infinite Jest is so entrancing that anyone who sees it watches it in continual loop until they die in ecstasy. Some saw off their fingers in order to see it again. It is difficult for content creators today to make content as compelling as Infinite Jest. But perhaps they should be aspiring to do so.

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Web 2.0 in the enterprise is far more than just talk

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Two pieces of research just out show that the implementation of Web 2.0 in the enterprise is far more than just heady talk – there is already solid investment, and the intention of doing more with these technologies. In via Read/Write Web, Forrester has released the results of a survey of 119 CIOs on their use of Web 2.0 technologies. The headline results are that CIOs want to deal with the big boys. As IBM, Microsoft, Sun, BEA and their ilk release full suites of Web 2.0 tools, the CIOs are getting comfortable and buying. I wrote earlier in the year about how IBM’s releases of social media for the enterprise was driving acceptance in the corporate world. It seems this is indeed a key driver of uptake.

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Source: Forrester

Separately, Nick Carr writes that McKinsey & Co is releasing the results of a similar survey tomorrow, so presumably this is pre-release info. In this case 2,800 exeuctives around the world responded about their current and planned investment in Web 2.0 tools. While the figures are “only” a third or so of companies, this certainly contrasts with the same few examples of Enterprise 2.0 being trotted out time and again at conferences. There are many, many companies implementing these technologies while being very guarded in talking about it externally. While I haven’t seen the full Forrester data, apparently this contrasted with the McKinsey results in showing wikis and RSS as being more popular than social networking and blogs.

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While the two surveys are revealing different aspects of the situation, the unescapable conclusion is that there is a lot more happening in this space than is apparent to those reading the press and seeking specific examples. Many large corporates are implementing Web 2.0 tools, and this is a rapidly accelerating trend.

Chapter 6: Implementing key client programs

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I recently pointed to the launch of the second edition of Developing Knowledge-Based Client Relationships, including the free download of Chapter 1 of the book. Following on from this, the other free chapter from the book is

Chapter 6 – Enhancing Client Relationship Capabilities: Implementing Key Client Programs.

Over the last decade most major organizations have implemented key client programs or strategic account initiatives in various forms. Technology and institutional financial services organizations got there a little earlier in the piece, while most large professional services firms have developed solid initiatives just in the course of this decade.The fundamental issue is how organizations continually enhance their capabilities at client relationships. Whatever their organizational abilities at client relationships, they must develop these further over time. Increasingly the field of play that distinguishes competitors, particularly in professional services, are the firm-wide capabilities in engaging in collaborative, knowledge-based relationships. In this chapter I look in detail at the five domains that organizations must address to enhance their client relationship capabilities, as illustrated in the diagram below.

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However the most vital issues are in the realities of how key client programs are successfully established and implemented. The majority of these initiatives experience limited success. The chapter goes into detail on launching programs, selecting key clients, segmentation, remuneration, developing client strategies, establishing client action plans, and more of the nitty-gritty of making key client programs work. Have a read.

Keynote speech on the future of investment

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I’ve just found out that there’s a video stream of a keynote speech I did last year on the future of investment at the Brillient PortfolioConstruction conference. At the time I wrote about one of the key frames I used for the presentation, focusing on population growth and economic growth in the period from 1600 to 2050. We are at a key inflection point in human history, when population growth is slowing after an extraordinary acceleration in the second half of the 20th century. The vital question now is whether economic growth can be maintained as population growth slows.

Another interesting perspective I highlighed in my talk was how recent price stability is an aggregate phenomenon. There is in fact strong deflation in many sectors, such as clothing and durable goods. A massive drive to commoditisation and extreme price pressures in many sectors of the economy is being facilated by global sourcing, automation, and supply chain efficiency. At the same time there is strong inflation in sectors where supply is driven by local labor, or reflects aspirational consumption. Where people are spending discretionary income to improve their quality of life, prices will continue to rise.

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Some of the other issues I touch on in the keynote are:

• Drivers of commoditization

• Pervasive connectivity

• Media everywhere

• The modular economy

• The quest to spend

• Greater consumer expectations

• Augmented humanity

I then cover some of the specific implications for portfolio managers. I’ve been interviewed before on the issue of why we will need new investment vehicles as economy activity becomes more modular and shifts away from listed companies. Another significant issue is that as industry boundaries blur, portfolio managers are finding it harder to identify discrete investments that represent industry sectors or underlying trends. Click here to watch the video of the complete keynote.

Business models, scalability, and how advertising value is distributed from the head to the long tail

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As now happens frequently, mainstream media has taken a blog discussion, written it up, and sparked off more interesting debate. Media symbiosis continues to develop. A blog post by Jeremy Liew of the VC firm Lightspeed Venture Partners on how to build online media businesses with at least $50 million in revenue triggered an article in the New York Times titled Popularity May Not be Enough. In essence, he says that there isn’t enough money in advertising for more than a handful of content businesses to make good money. Mainstream media can still price their advertising at a reasonable price, but not the emerging players. The piece explores some of the key issues, including other possible business models, with some interesting comments from Tim O’Reilly.

I think part of the point is being missed here. A VC may only be interested in businesses that earn $50 million annually, but other people will be very happy with a healthy personal income to effort ratio. The entire economy is being modularized, and we mustn’t forget that part of the fundamental dynamic at play here is the growth of many smaller businesses to complement the media monoliths. Allen Stern makes essentially the same point.

As such we are beginning to see how the head, the long tail, and what is in between becomes populated by media and content. A couple of years ago I used the following diagram in a keynote I did at a public relations conference. I’d probably create it differently now, but the point remains that there are different segments along the power law curve along which all media and content creators are distributed. Different business models will apply at different points on the curve.

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Kyle Reddinger suggests creating “niche monopolies” is the go, which aligns with the “topic specialists” I proposed. Matt Terenzio says that we will move towards “true value” in how advertising dollars are allocated. It’s very hard to think why this won’t be the case in the long term. However Scott Karp seems to believe that value has got misaligned, with Google a possible culprit in driving down advertising revenue. Mathew Ingram thinks a “measure of engagement” will help identify the value of pricing. There is indeed great value in developing the mechanisms that allow us to understand how value is created in online advertising. But in the meantime there will be vagaries in advertising pricing. All the while new business models will emerge along the curve. VCs love “scalable” business models. However there’s no reason why all business models should scale.

Museum 2.0: bringing our heritage to the people

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Last year Sebastian Chan, web services manager at the Powerhouse Museum, and I were interviewed together on ABC Radio about social media and its implications.

In the context of our Web 2.0 in Australia event, Sebastian just emailed me about what the Powerhouse Museum has been doing. He says:

Basically our collection database plays on the notion of serendipity and allows users to tag objects to help others find them more easily. Under the hood we also do a lot of search tracking which allows the collection database to make recommendations based on the search choices and search language used by others. For example, a search for ‘cricket’ now recommends other related ‘sport’ searches . . . something that is the result of user interactions with our site, not a centrally stored thesaurus. The new collection search has tripled web traffic to the museum in 10 months and now represents nearly 65% of our monthly site visitation.

We have been getting a *lot* of coverage in the cultural sector both locally and internationally and are being looked to as an example of a new approach to making museum and gallery content discoverable online. A lot of libraries are very interested as well. It continues to be built in house.

The only other museum tagging projects are STEVE.museum and that has not gone live with a ‘all of collection’ implementation and the Smithsonian’s photo collection which is in a very early stage. The value of it all, of course, is better public access to collections – using the langauge the general public uses (rather than specialist museum speak) etc.

Very nice stuff. It’s well worth checking out what the Powerhouse is doing here, as well as Sebastian’s blog. It’s important to remember that Web 2.0 isn’t only about start-ups. These technologies also can be valuable tools to help us engage as a community with our cultural heritage.

Enterprise 2.0 – are the differences philosophical?

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A vigorous discussion continues on whether Enterprise 2.0 happens by itself or by design. Andrew McAfee says that he and Euan Semple agree “vociferously”. He also makes the very relevant point that “doing nothing” will only work well if companies don’t block access to online collaboration tools.

Dion Hinchcliffe points to organizations where the use of wikis and blogs has proliferated simply through user demand. He also notes that data is at the heart of corporate applications. As such, having many collaborative tools without a way to aggregate the information results in balkanization of corporate information. This is part of my point that higher level planning helps to unleash the power of participatory applications. He concludes his comments by saying:

“What’s a likely sweet spot for applying Enterprise 2.0 inside the firewall? Keeping adoption of your preferred tools simple within the complex landscape of your organization so users won’t prefer theirs; flatten your network as much as you can, open your systems using simple, open standards, and push the tools out fast (the network effect is pronounced with these tools so speed does matter). Make Enterprise 2.0 as simple as humanely possible for your organization in this framework, but no simpler.”

Dave Snowden distils the discussion to a “Weltanschauung for social computing”.He says:

“If you aim to influence, but not design evolution you have more control than if you attempt to design an ideal system.”

I absolutely agree. Corporations cannot design in detail emergent systems – this is an oxymoron. Yet they can influence these systems, by creating an environment that supports these high-value yet unpredictable outcomes.

Update on Web 2.0 in Australia

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The Web 2.0 in Australia event announced a few weeks back, to be held 6 June, is shaping up to be an absolutely terrific event. BEA Systems is the Gold sponsor. BEA acquired the major content management system vendor Plumtree in October 2005, and has made a number of other related acquisitions since then, positioning the company in the content space in addition to its traditional middleware offerings. BEA is now readying an Enterprise 2.0-style suite of products, which it will providing a brief preview of at the event. KPMG has shown its thought leadership by taking on the role of Venue sponsor, providing their sleek conference site as space for the event.

The panelists will be absolutely awesome. I’m particularly excited that Richard MacManus, editor of Read/ Write Web, one of the top 10 technology blogs in the world, will fly in for the event. He knows the Web 2.0 space like almost no-one else. We also have Sheryle Moon, CEO of the Australian Information Industry Assocation (AIIA), the premier industry body in the country, Allan Aaron, General Partner of Technology Venture Partners, one of the top few technology venture capital firms in Australia, Brad Howarth, who I consider the journalist in Australia who understands this space the best, and a few more of similar calibre to be announced soon.

Event partners now include AIIA, Australian Private Equity & Venture Capital Association Limited, Smart Internet CRC, and Innovation Bay, with several more expected soon.

The showcase members won’t be announced for a while. Right now we’re looking at the more obvious examples. However we’re actively tyring to look beyond that, so please provide suggestions or put your hand up. I will be posting specific criteria on what we’re looking for shortly.

The Web 2.0 Strategic Framework will follow in the footsteps of the extremely popular Future of Media Strategic Framework (over 60,000 downloads) – I think this will help provide a useful map of the territory. It will be released before the event.

The major challenge we’re going to have with the event is that it is an invitation-only, closed door event with limited capacity, and we will have to turn away the vast majority of the many requests for invitations we’re receiving. The event is designed to be primarily for very senior executives to provide them with a pragmatic understand of the field and state of play.

So… we’ve decided we will also run an informal Web 2.0 in Australia drinks function that evening, including a little discussion, likely a broad-based showcase, and much conviviality, open to all. Details later, but you can put it in your diaries now.

Creating the future of documentaries

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The February issue of Inside Film magazine focuses on the state of industry in documentaries. An article DOC2012 examines the shape of documentaries in Australia over the next 7 years. The piece quotes me as follows:

The potential impacts of digital media are broad. Media strategy consultant and chairman of the Future Exploration Network, Ross Dawson, believes the growing access Australians have to low-cost, high-quality video recording is creating a plethora of potential documentary content.

“It starts to get the Australian population at large documenting what they feel is interesting or pertinent about their lives and what they experience,” Dawson says. “This can lead to an extraordinarily rich repository of what is happening in Australia, which is a resource for documentary makers.”

The rise of internet-based social networks is creating communities of interest that may become a new form of funding. By tapping into a niche audience or issue online it may be possible for a filmmaker to more easily raise the capital to make their production.

There are many ways in which new technologies are likely to transform documentary making. As more and more high-quality cameras become available, there will be more footage that will be invaluable in documenting our life and times. Most people will be happy to make available their video content for use in documentaries. We just need better mechanisms to match videographers (all of us) with those that wish to use that footage. In the last paragraph above I was referring to approaches such as Swarm of Angels, which are arguably more relevant to documentaries than feature films. Documentaries are often of interest to particular groups, who can not only choose to support the creation of something they will want to see, but may also actually profit from it. In short, social media platforms are likely to have far more impact on the future of documentaries than on more mainstream content such as feature films.

Is Enterprise 2.0 easy or hard?

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Euan Semple, formerly head of knowledge management at the BBC, has written a blog post titled The 100% guaranteed easiest way to do Enterprise 2.0?. His answer (in summary) is:

DO NOTHING

GET OUT OF THE WAY

KEEP THE ENERGY LEVELS UP

So is it that easy? Last week at Barcamp Sydney I bumped into James Robertson, who had recently been at FastForward conference (and been one of the writers on its the excellent conference blog). He told me that at the event there had been a fundamental disagreement between Euan and Andrew McAfee, the Harvard professor who has popularized the term Enterprise 2.0. Euan said that it was easy to make Enterprise 2.0 happen. Andrew said that it wasn’t. Andrew has written a great post about it that is well worth a read for the counterpoint. He says:

But it still felt as if most people weren’t with me — as if most participants in the round table felt that enterprise 2.0 was essentially a historical inevitability. So I asked for a show of hands. I asked “How many of us, when we look into the crystal ball that shows the organization of the near future — say 3 to 5 years from now — see widespread deployment of E2.0 technologies?”

Almost every hand in the room went up.

At this point I completely lost my poker face. I sputtered “You have got to be kidding me!!” or something equally profound as I stared around the room.

Very interestingly, Andrew brings up a analogy with the (lack of) success of knowledge management, a movement I was associated with back in the 1990s before I endeavored to distance myself from it (see my thoughts on the future of knowledge management written in 2004). Andrew says:

I reminded the audience that there were plenty of conferences devoted to knowledge management (KM) systems and approaches in past years, and that these events had almost certainly featured rooms full of enthusiasts wondering exactly what the future was going to look like, and probably paying very little attention to the possibility that the future would be KM-free. I asked the room how many people wanted to be remembered as this decade’s equivalents of KM enthusiasts and evangelists, and got a few chuckles.

James Dellow goes into this comparison in more depth, and seems to suggest that he’s prepared to back Enterprise 2.0 over knowledge management’s success.

I have to say that I’m on Andrew’s side on this one. I count myself as a true believer in Enterprise 2.0, but I’ve seen enough of organizations to know that the status quo has enormous power, and making good changes happen is never easy. In particular, unstructured implementation of social media tools in organizations will yield only a fraction of the value of a planned one. Yes I believe in emergence, but leadership is required to create fertile fields. If people try something once and it’s not useful, they won’t try it again. In particular, there are ways to structure how social media works so it creates valuable results in collaborative filtering and enabling useful connections. You don’t know what the results will be, but clear vision and specific planning and actions will make it far more likely to be valuable than just letting it happen.