I take back everything I ever said about Om Malik (just kidding, Om :D): his latest piece for Business 2.0 on online radio, more specifically how it’s dead in the water, is wide of the mark in my estimation.
I agree with a lot of Om’s assertions about the viability of streaming radio over wired networks. Even looking at the lowest common denominator, there are too many free sources of music (even just considering streaming sources) for a me-too paid offering to compete.
Mobile is a bit of a different case, though. There’s exclusive content that’s got added value when it’s mobile, Major League Baseball being the easiest example. Freeing time-sensitive content, like sports or perhaps news, from being tied to a physically connected location, is where mobile streaming makes sense.
I also think Om discounts the fact that people seem to like to listen to radio, and the tastemaker factor. The radio market is still huge, even with the impact of streaming services, iPods and file-sharing. The tastemaker factor plays into this: people want to know what’s cool and what’s new. He cites recommendation services, but I think they’re still a ways away from replacing influential DJs (the good ones, anyway). Webcasting has expanded the sphere of influence of some great stations like KCRW from Santa Monica, KEXP out of Seattle and my personal favorite, WOXY from Cincinnati. What used to be regional stations, at best, find themselves playing to national and global audiences.
The Internet freed these stations from their initial geographic constraints by sending their signal out to anybody’s PC, anywhere. It’s a logical extension that this geographic restraint be broken too, and let users listen to these stations anywhere — via their mobile phone. (As an aside, WOXY.com has added aacPlus streams that sound amazing, even at 24kbps — now all I need is a Series 60 client with which to play them). Satellite radio in the US is moving to integrate its hardware into mobile handsets, with a view to adding more subscriptions.
But subscriptions aren’t the only business model out there for streaming radio, and certainly aren’t the best fit for mobile, given the cost of mobile data. The three stations I mention above all stream free; KEXP and KCRW are public stations that try to convert online listeners to donate and become “members”, while WOXY is running ads — a tried and trusted method, provided a station can gather enough listeners.
I bet Om thought it was cool the first time he could listen to live cricket commentary over the Net. I’d also bet he’ll think it’s cool when he’ll be able to listen to it on his mobile phone.
In the middle of Tomi’s interview, I interjected the following thoughts about Citizen Journalists:
I think Citizen Journalism is actually a symptom of something altogether bigger - Citizen Content Creation, for want of a better phrase. Sure, we’ll have people taking pics and writing stuff for online and offline newspapers. But they’ll also create ringtones and logos for phones, create their own music and art and make their own movies - even create their own advertising - see the George Masters’ case below.
After writing that, I starting reading the latest edition of the Trend Watching newsletter, which is the best publication like this that I’ve found. Go and subscribe today - FREE - it’s great.
Their latest edition is all about “Customer Made”, which is their take on the same sort of trend. It includes everything from the home made ads (check out the fabulous Tiger Woods one if you didn’t see it last week), design competitions, modified/remixed/mashups of products (high and low tech) and customer compiled content.
Their take on where this is going next is that customers will start to ask for real compensation for contributing to success. While I think there’s a lot of truth in it, never underestimate the appeal of people becoming famous - albeit very temporarily, like seeing their name on a leader board in a game. To many people, that’s as good as getting paid.
How do I know? Well, you don’t think I do this for the money, do you? Snort!
No, this hasn’t turned into a Tomi Appreciation Society website and no, he’s not bribing me to say nice things or paying me in any way.
But Tomi’s new book is out - Communities Dominate Brands - so I took the opportunity to get the first interview about it. I will also be reviewing it here in due course, when I get my copy and find time to read it.
It’s no coincidence that Tomi wanted the first interview to go to a blogger. One of the themes of the book is the power of community and bloggers have proven to be a central force in this movement. How better to make this point then, by giving the scoop to a blogger, rather than old-school journalist?
Here’s the interview:
1. If you had to summarise the key message in your new book, Communities Dominate Brands, what would it be?
The digitally connected and empowered customer-community is a very recent phenomenon, that is now radically altering how businesses can function. Communities from bloggers to mobile phone smart mobs can turn against a brand or support its activities.
Putting in context of the other huge business impacts of such radical changes over the past 100 years as TV, credit cards, the internet etc., communities are the single biggest change in a hundred years. Only the advent of electricity had as big an effect.
But this change is very recent, the first signs became visible only two-three years ago, and the very first case studies can now be made in 2005, from which we can start to form general trends.
That is what this book is about. It is the first practical business book on how to capitalise on community power. Don’t become a victim of communities by accidentally arousing them against you. Don’t be left in the dustbin of history by ignoring communities. But learn now how to embrace and engage communities to your advantage. Winners in all industries over the next five years will be those who were among the first to grasp this change.
2. Who should read it?
Any senior management in any business. But even more so any mid to senior management involved in the IT/media/telecoms space, and all whose job description has the word customer or marketing or advertising or branding or PR in it.
And of course those companies that intend to make services and products for the most advanced customer communities such as dating, rating, gaming, blogging, virtual worlds, and mobile phone based smart mobs.
3. If you take an example like the famous Kryptonite bike locks, how should Kryptonite reacted when the story broke?
Kryptonite is one of our 13 case studies. Kryptonite was the most trusted brand of bicycle locks - and I personally have bought several in the past for my various bikes.
They did nothing explicitly against communities, they just happened to be the first significant brand to get caught by the fury of the enraged community. In their case it was bloggers of course, but similar stories can be found in politics from the overthrow of the Philippines government in peaceful revolt by smart mobs, to the bad word-of-mouth that has killed Hollywood movies, etc.
What any company needs to do is two things - first, it needs to build the dialogue with its communities to learn to discuss issues openly with the customers. It’s also important to note there may be multiple communities of interest for any single brand. This means honestly dealing with the good and the bad.
And then when a problem occurs, as they do for every business in the world, to deal with it openly and honestly. Kryptonite could have salvaged the problem and turned it into a non-story, if they had been aware of the community power.
Unfortunately for Kryptonite, they happened to be the first and thus will probably always be one of the famous case studies of the emergence of digitally connected and empowered community power.
4. Is blogging here to stay? And how should marketers treat them?
Absolutely. The Blogosphere grew from half a million to 8 million in two years. Today 11% of all internet users access blogsites actively. The blogging world appeared suddenly over the past two years and is now one of the most influential media forces in the world.
Take for example CBS’s former anchorman Dan Rather. It was not pressure from CBS’s peers, the traditional broadcast and print media that forced him to retire. It was the pressure from the Blogosphere that discovered the story and kept it alive.
But what we explain clearly in the book, is that all digitally connected communities are new, they are only starting to learn. What seemed enormously powerful last year, will be everyday normal this year, and trivial next year.
As they are digital, virtual, and global - the communities can evolve much more rapidly, to become more efficient than any PR or marketing organisation can hope to match. If you start a fight with a virtual community, you will lose.
So I don’t think that blogging has shown its true power, no. Blogging will become dramatically more powerful over the next few years.
5. There have been quite a few attempts by marketers to create faux blogs. Can this be done successfully and if so, how?
No.
The blogosphere is the ultimate truth police. With RSS feeds, permalinks and your history on file, you cannot maintain a credible false personality on the blogosphere. The truth police will catch you out.
This will become even more relevant as the blogosphere expands during 2005 and 2006, and the older bloggers will be suspicious of businesses attempting to commercialise this space. So they will be very harsh in condemning newcomers who don’t conform to the “rules”
6. What’s your favourite “story” from the book?
There are so many.
But perhaps Oh My News from Korea is the inspiration for all of us in telecoms/IT and media.
Oh My News is four years old, and today is Korea’s third largest newspaper. It gets 90% of its content from what it calls “citizen reporters.” These may contribute via the internet, but by far the greatest majority of the contributions, both text and pictures, are provided via mobile phone.
The amazing fact is that there are already 35,000 of these citizen reporters. The newspaper is considered extremely reliable, and the newly elected President gave his first interview to Oh My News.
In terms of readership they sell 1.2 million copies per day, making Oh My News a bigger newspaper than most in the USA for example.
But the best part of the story is that each of the contributors, essentially amateur journalists, bloggers and mobloggers - gets to be paid. They are paid about 20 dollars per submission. The citizen reporters say that even more rewarding than the money, is to see their name in print.
I wrote about this type of future arising, in my second book m-Profits. The first attempts at creating paid content by the populace, via mobile phone, have been sporadic and no massive success had yet appeared. Not before Oh My News.
Now for the first time we have a truly successful major newspaper that is made essentially completely by readers and via the mobile phone. A vision of the future. Every newspaper in the world needs to study this model and quickly adapt, or disappear.
Russell adds: I think Citizen Journalism is actually a symptom of something altogether bigger - Citizen Content Creation, for want of a better phrase. Sure, we’ll have people taking pics and writing stuff for online and offline newspapers. But they’ll also create ringtones and logos for phones, create their own music and art and make their own movies - even create their own advertising - see the George Masters’ case below.
This will create a new Renaissance - but this time everyone who wants to will be involved, not just a few elite. The Long Tail theory fits this model nicely.
7. Which companies/brands “get it” as far as communities go?
Until their recent fight with bloggers, I’d say that Apple is one that seems to be doing very much the right way in terms of the i-Pod, the i-Tunes and how these relate to its main business, the Macintosh personal computers.
One of the cute stories in the book is about a passionate i-Pod fan, George Masters, who was so in love with the product, he created a professional style TV ad, that he posted on the web. That clip has been downloaded some 40,000 times. Talk about a customer that is dedicated to your brand !!
Let’s hope that they come to their senses over the bloggers’ sources case before they undo the years of hard work and success in building a community.
8. And who doesn’t?
There is no obvious candidate to answer this. Most brands today are ignorant of community power.
For example TV ads influence only 17% of our decisions, while world-of-mouth influences 71% of our decisions. Where does most of the marketing/advertising money go to? TV advertising of course.
This is what is so warped about marketing today. Most companies try to make their interruptive ads ever more competitive, clever, funny or different. They get lost in the clutter. For a tiny fraction of that investment they could get huge returns by engaging the customer community. But the changes are starting to be seen, from companies ranging from Adidas and Coca Cola to Boeing and Ford.
9. You’ve talked about Alpha Users in the past - people who “sell” technology and applications to users. How should marketers best identify who they are and communicate with them?
There is only one technical way to isolate Alpha Users, and for that you have to have the social network of the communities identified accurately, and after that, to separate the Alpha User in each community.
It takes a special social networking technology, and the only industry with the information that is personally accurate enough, is with mobile telecoms operators.
For example, fixed wireline telcos cannot identify if it is the father of the family who places the call on the phone, or if that is the mother, or the daughter etc. Only the mobile phone is truly personal.
But there are many surrogates and good communities to engage before we have to go to Alpha Users. The bloggers are the fastest way. Fan clubs are another. And companies can recruit influences and evangelists, etc.
So many other ways exist that for now will help improve the performance of marketing activities, even if Alpha Users are not identified. As mobile operators get their Alpha User analysis systems online, over the next 3-4 years Alphas are the normal way of launching any new services or products in any industry..
10. Is there anything you’d like to add?
Two quick comments. The virtual/gaming world is a remarkable opportunity and one that most brands and companies can learn from.
And I’ve said many times, that the blogging trend will inevitably migrate to mobile blogging (moblogging) as already in Japan and Korea the majority of blogging is via smartphones.
So if you think blogging is big and influential, imagine how much more so it will be when bloggers are always on always connected and respond and post in real time.
If you like the sound of the book, I’ve got you all a 10% discount. All you need to do is go to the FutureText (publisher) website and put in the promotional code mobile-weblog.
More info on the book is here.
Watch out for my review in due course, but if it’s anything like Tomi’s previous books, it’ll be well worth a read.
Gizmodo says that the Motorola iTunes Phone “has been refused by almost every American wireless carrier” now.
The reason won’t be because of the (presumably) sexy and sleek design. But because the operators want to be the ones who sell users music for their phones - over their own networks. The iPhone is designed to allow users to transfer downloaded songs from their PC to the phone, not download direct.
This was somewhat predictable - here’s what I wrote back in June last year about the original announcement, when I questioned whether anyone had thought about what operators might think about the idea:
Surely Motorola can’t have overlooked this? When you move quickly (and instinct says this was a deal that happened quickly), mistakes can happen. But not, I think, as basic as this. It would be like Mars launching a new chocolate bar and forgetting to build in a margin for the retailer.
It seems that mistakes as basic as this can be made though.
However, it’s also a fundamentally wrong and short-term strategy for operators to try to control all content, as well as take a hefty slice of the margin, that ends up on a phone, or is sold over their networks, for that matter. All this will lead to is that new products will be introduced cripplingly slowly and users will be even slower in the adoption process.
In parallel, users will find ways to circumvent this walled garden and climb around or over the walls. This will mean that operators will lose the data revenue (their core business) as well as the content revenue.
As an example, I’ve been saying for a long time that there will be a boom in P2P content (ringtones, music, images and video) exchanged over Bluetooth.
The record industry created their own monster with Napster, by refusing to allow legitimate music downloads. The same thing is going to happen to the operators if they continue to try to censor their networks.
In this instance, the operators have opened up another network anyway, by refusing to sell the iPhone. Apple is apparently going to launch iTunes Mobile 1.0 anyway imminently. While no details have been announced, my bet would be that it’ll be a Java application that’ll run on any Java phone (most newer ones, in other words). This will allow user to transfer music from iTunes from PC to phone, simply and easily.
This means that the operators again get nothing - no data revenues and no content revenues either. And since the US carriers are planning to sell direct-to-phone music for $3 a track (in comparison to 99c from iTunes), I don’t expect their launches will be a great success either. Why do they think they can sell at this kind of price?
Anyway, the result of this strategy to strangle the iPhone is that there are now at least two ways for users to get music on their phone - illicit P2P and legal iTunes.
Both lead to no revenue for operators.
So a pretty sorry story all round. Apple and Moto failing to predict the blindingly obvious. Operators for being greedy and short sighted. Ho hum. More of the same then.
