The death of serendipity?

A version of this was published in marketing magazine in Feb 2009; this piece looks at how the internet threatens to paint us into an intellectual corner.  Eli Pariser of MoveOn also speaks about this at TED in 2011 (no link published yet).

 

In a 1754 letter, the writer Horace Walpole coined the term ‘serendipity’ – a word he derived from an old Persian tale, ‘The Three Princes of Serendip’.  In the story, the protagonists always benefited from unplanned discoveries, and these seemingly random occurrences ultimately enabled them to fulfil their mission.

Early in the development of the web, the capacity of the internet to surprise and divert us was recognised with the phrase ‘web-surfing’ - following links through the internet that led to places the reader had never anticipated when starting their mouse-journey.

And although web-surfing rarely created the sort of benefits the three princes sought (wealth, kingdoms, marriage to beautiful princesses etc.), the web was seen as a force that opened up our horizons – exposed us to new thinking, concepts and ideologies.  But now, there’s an increasing concern that far from expanding our horizons, digital media in general are making our worlds smaller.

In the analogue age, the shortage of bandwidth meant few TV channels – so ideas competed for exposure, and we had little choice but to see them.  Now, we can watch the God Channel, the Wine Channel, the Gay Network on Sky, and never be exposed to atheists, real ale fans or Jeremy Clarkson.

On the internet, collaborative filtering means we passively influence others when we do things online.  We can shop at Amazon, and be shown other books purchased by people who bought the book we’re interested in, and listen to Last.FM where similar listening profiles will suggest tracks we might like.  In this way, our choice of music and books is swayed by people whose consumption patterns indicate they’re like us.

Social networking has added another dimension to this, enabling us to hang out with people who share our views, rather than merely people who share our geographic location.  Now, we can hang out with others who believe in reincarnation, UFOs, homeopathy or banking, and never trouble ourselves with views that run contrary to our own.

Increasingly it seems, digital media perform a reductive role in our lives – patting us on the back and telling us we’re right, and keeping anything unsettlingly different away from us.

Just as it’s said that the Queen believes the world smells of fresh paint and the national anthem’s playing everywhere, we’re constantly presented with a worldview that induces complacency. 

The world looks comfortable, unchallenging and familiar, and it appeals to what sociologists call homophily – the ‘birds of a feather’ tendency of people to cluster around things that are common to them.

Isn’t this good though?  Isn’t it great that if we like Aretha Franklin we could discover Etta James?

Undoubtedly.  But we’re never going to hear Bach’s double violin concerto, or the Dead Kennedys. 

Which makes a new development on LibraryThing.com interesting – this website for people to catalogue and share their libraries recently launched the ‘unsuggester’ – a tool they describe as ‘the worst recommendation tool ever’.  It uses statistical analysis of users’ libraries to determine the books least likely to exist in the same collection – type in Immanuel Kant’s ‘Critique of Pure Reason’, and it suggests ‘Confessions of a Shopaholic’; enter ‘Henry Kissenger’ and you get ‘Terry Pratchett’.

Unsuggester is fun, but it tries to address a serious issue.

When we launch new products, we challenge behaviour patterns.  When we try to attract new customers, we’re asking them to do something different.  If the effect of homophily is to fuel people’s insularity and build resistance against change, then in the future it will be harder to talk to people unbidden, more difficult to create new relationships.

As marketers, homophily can reinforce our brand relationships.  But it can also stand in the way of new ones, and addressing this might just benefit from some serendipity.

Regulators are out of their depth when it comes to the internet

A version of this piece was published in Marketing in 2008


  The media village. It’s a phrase we often use (conscious of its irony) to describe the close-knit and often incestuous community that’s built up around the media and entertainment business in the UK.

It’s a slightly self-deprecating description – perhaps a function of British reserve, a reluctance to trumpet success. But successful it is – responsible for £1bn in exports in 2006, and remarkably (given all the complaints over the level of US-sourced programming) – the UK is a net exporter or television content, with the Office of National Statistics showing a £100m surplus over imports.

This is something to be proud of – after all, US media companies, with their huge domestic markets, have an innate advantage when it comes to funding production. That British companies are more than holding their own is a real achievement – and a reminder of how increasingly international the media markets are.

The web-based media market has no such statistics published about its contribution to the balance of payments – but it’s a pretty safe bet that we’re a net importer, with MSN, Yahoo, Google and AOL mopping up a substantial part of the market in the UK.

The web media market is a truly international one, dominated by a few mostly US companies who have benefited from their huge domestic market size, access to receptive capital markets and little domestic regulation.

But whilst the UK TV industry has evolved to become a sophisticated international business competing on a global stage, it’s notable that regulators and legislators still seem to hark back to the village days.

Andy Burnham, Secretary of State for the Department for Culture, Media and Sport used his speech to the Convergence Think Tank last month to announce that the UK would be rejecting the EU’s directive allowing product placement on TV.

His concern was that product placement ‘contaminates’ programmes, and that "British programming has an integrity that is revered around the world and I don't think we should put that hard-won reputation up for sale."

What’s not clear is whether he thinks this is a commercial argument or a consumerist one.

Consumers need protection, the theory goes, against the exploitation of their attention. There should be a clear line between commercial messages and content, because implied endorsement that placement brings is untransparent and unethical.

Now, in between living the life digital and the life real, I watch TV from time to time – and it’s pretty clear to me that product placement is rife, both in UK and US-sourced programming.

We’re a bit more subtle in the UK (it typically goes under the guise of ‘set dressing’) but in the US they really go for it. Action series ‘24’ has Ford, Cisco and Apple, whilst American Idol has its judges sitting behind large Coca Cola tumblers and the contestants waiting in the Coke lounge.

Cheesy it might be, but nobody died. As viewers, we’re exposed every day to these placements when we watch American imports (although Idol pixellates the glasses), and nobody really minds.

The reality then is that we’re only actually ‘protected’ from product placement if we watch British TV – the rest of the time we’re fair game; and that renders these rules rather pointless.

On the commercial side, it’s surely the responsibility of the executives of these media companies to decide how they manage their reputation – not the culture minister.

So this pronouncement by the culture minister has little effect beyond hamstringing our domestic industry, taking away a source of revenue from them that helps them to compete in the global media market.

The idea that government would stand in the way of business in this way in the US would be unconscionable – Kangaroo would be celebrated; here, it’s referred to the competition authorities.

If we want to have a strong domestic base for our media companies (both in TV and online), regulation is going to have to catch up with the new world order, and see that the real threat both to businesses and consumers is what happens outside the village.

Will all media be digital eventually?

A version of this piece was published in Marketing in 2008


For the last eleven years, I’ve sought out my respite from the digital maelstrom on a small Greek island.

Just a few years ago, there was no cellphone coverage, getting on the internet required you to dismantle the phone socket, twisting the wires together and holding them in place with sellotape (or band-aid on one occasion), and the one internet café on the island offered two computers sharing one ponderous dialup connection.

It was charming, idiosyncratic, picturesque. After a few days, it was pretty annoying.

But arriving there last week, it’s all change. Instead of upgrading the phone system (still rather antiquated), they’ve gone straight to wifi. Across the island, laptops can be used pretty much anywhere (though the sand remains a problem) and it’s brought the global media village crashing in.

Islanders who have spent their lives getting the papers a day late (a week late in winter) are now keeping facebook profiles. They’re downloading episodes of Lost. They’re video conferencing on Skype. They’re more online than we are.

Their media world has changed beyond recognition, and it’s not been a gradual process.

It was a reminder of what we’ve been through in the last ten years, as email, instant messenger, online shopping, Google, eBay, iPlayer have reshaped our access to information, to media and to each other.

But it was also a reminder that this change continues unabated in lead markets like the UK just as less developed countries catch up.

Last week’s Washington Post carried an interview with Steve Ballmer, Microsoft’s ever ebullient CEO, who predicted that by 2018, all media would be delivered via the internet. “There will be no newspapers, no magazines that are delivered in paper form. Everything gets delivered in an electronic form.”

Of course, we can all see why Microsoft would like it to be so. But how realistic is this?

Already, cinema is transitioning to digital, fundamentally changing the distribution economics of the medium and enabling more choice in cinemas, as well as altering the way advertising can be delivered and targeted.

Internet radio has been around for years, but ironically it’s wireless that’s causing a new surge in popularity as portable internet radios that connect through a domestic wifi network become common.

Viacom is wiring the London Underground for digital advertising, launching cross-track HD projection later this year, and anyone who’s ever visited Japan or South Korea will have seen the explosion in massive digital billboards there.

But it’s print and TV that are the biggest prizes. Ballmer complains that TV is insufficiently interactive (his son plays Xbox games through the night with people around the world, and TV just isn’t that engaging), and that it fails to offer sufficiently personalised content – he’d like to watch his high-school football matches from back in Detroit – he knows they’re videoed, but he’d love to watch them online.

He’s right. The internet is raising the bar; changing consumers’ expectations of what other media will deliver. In time, it will be consumer demand, not technological change, that will make TV an internet delivered medium. Technology is the enabler, but it will be consumers that will decide – and no matter what the current establishment might hope for, TV will be a massively more attractive medium when consumers can control their consumption (as PVRs show).

Which leaves print. Whilst the convenience and indestructability of paper will ensure it’s around for a long time yet, the economics of printing relies on volume. But as electronic media eat away at that volume, offering up-to-date news, searchability and multimedia, there will come a tipping point where it simply becomes uneconomic to use paper.

Even on a small Greek island, the media world now is almost unrecognisable from ten years ago. As Ballmer cautions, it’s not really important whether digital will dominate in 10, 8 or 14 years, the point is that it is inexorably replacing other media as the means of distribution – and that process isn’t slowing down, it’s accelerating.

Newspapers - adapt or die?

A version of this piece was published in Marketing in 2008


Every medium that’s ever been invented is always expected to replace those media that went before. So TV was expected to kill cinema, radio to kill newspapers, newspapers to kill town criers (probably).

And for no medium has this been more true than for the internet, which has been touted as the killer of pretty much anything you can think of.

The reality though is more nuanced, and provides at least as much opportunity as it does threat.

In this context, Charles Darwin had it right:

“It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.”

Newspapers adapted to the popularity of television news by changing their approach – either focusing on gossip and features, or bringing depth and consideration to stories that TV couldn’t give time to.

And the success of cinema chains like Vue is testament to how investing in the value proposition can bring audiences flocking to a medium that if we believed pundits in the ‘50s and ‘60s, would be dead by now.

But for the Capital Times newspaper in Madison, Wisconsin, last week was a landmark in their history as the company closed its afternoon-published newspaper, becoming an exclusively online proposition.

"Today marks our last edition as a traditional daily newspaper of the sort Americans knew in the 19th and 20th centuries," an editorial read. "Starting tomorrow, The Capital Times will be a daily newspaper of the sort Americans will know in the 21st century.”

So are they right? Is the future exclusively online, or is it likely to remain a mixed economy?

Of course, there is no ‘right’ answer. Whilst it is still economic to distribute newspapers in physical format and consumers demand them, there will still be a business – but this is obvious.

It seems likely that at some stage in the future, demand may shift to the consumption of media on portable devices. Units with roll-out colour screens that allow a highly portable but easily viewable experience are already in prototype, and with the ongoing desire of mobile networks to find a use for 3G we might not have long to wait.

Newspapers as diverse as the Sun and the Guardian have recognised this – building audiences to their online product. Their objective is to move the brand from being a ‘newspaper’ to a ‘media’ play – with the newspaper, website and mobile services being the outward manifestations of this brand.

This is smart, because it develops secondary revenue, constructs a successor to the primary vehicle should that market start to fall, and widens consumers’ expectations of the brand.

It isn’t just newspapers that face this challenge though – TV companies too are investing in their web presence with a view to achieving the same goal. Channel 4 are now regularly commissioning multimedia projects – the Big Art Mob, a four-part TV series comes with a community website and a mobile site that let users upload images of civic art, whilst the recent Embarrassing Bodies series is accompanied by a website and online games. All this content is merged in around their 4OD online video site, where you can catch up on shows you missed.


But the Capital Times isn’t completely abandoning its print past. It is hedging its bets, continuing every week to publish free an entertainment guide and a news digest.

Because in the past when newspapers and TV stations lost audience, they closed for ever. Now though, a future exists for these brands on the web and in mobile, and for stronger brands in building further value in their relationships with audiences – through enriching their output with content in these other channels.

So far from killing other media, the internet is creating new opportunities for them to evolve – and it’s their adaptability to change that will determine their success in meeting this challenge.

Ger your free content here!

A version of this piece was published in Marketing in 2008



In November Rupert Murdoch announced that following News Corp’s acquisition of the Wall Street Journal he “…expected to make it free”. I wasn’t at the announcement but I doubt there were many gasps of surprise from the audience.

More interesting though was the recent u-turn on this decision, Murdoch instead opting for a hybrid model. Content that is relatively easy to find elsewhere will be made free but the specialist content, in other words, what most people buy the subscription for, will still be subscription-based.

So what does this mean for marketers? Is the hybrid model the way forward? No doubt Murdoch’s bean counters created innumerable financial models and decided the best way to maximise profits was to drive more traffic by offering content for free, and hence increasing advertising revenue, but at the same time keeping the crown jewels under lock and key for subscribers only. Perhaps not so surprising given subscription revenues are estimated at around fifty million dollars a year.

But before we all run around implementing hybrid models lets stop and have a think about what’s really driving the digital market - customers. What does the internet offer customers? Well many things, but the overriding driver, and what’s changing market economics the most, is one simple word – choice.

Consider Pirate Bay, a peer to peer file sharing ‘solution’. Or in other words a method for people to download paid for content for nothing. Before the authorities got their way Pirate Bay had 10 million customers. The choice these customers made was not to pay for content.

Take the US hit show, “Lost” as an example. The show could be downloaded in the UK shortly after it had aired on the East coast of the USA and before the West coast had even seen it. It was coming to terrestrial TV in the UK, and therefore was going to be free anyway, so the downloaders didn’t really feel like they were doing anything wrong.

This is of course questionable logic, and I’m not advocating illegal downloads. The lesson though is clear. The internet has given consumers much more choice and what people want is what they don’t have to pay for.

So what does the future hold for the subscription model? It isn’t dead, but the prognosis isn’t healthy.

Consider another huge subscriber model business – online dating. Take a look at your teenager daughter’s FaceBook page and you’ll probably see a profile that states she is single and interested in, “meeting men”. Putting aside the obvious alarm bells this rings as a parent it’s also likely ringing bells at match.com and all the other subscription dating sites.

A more direct attack has been mounted by Plentyoffish.com, the owner of which proudly announces on his site that he is the sole employee, runs the site from his Vancouver apartment and that it is 100% free. A real life cupid? Reports of $10 million a year in advertising revenue suggest not.

So maybe Murdoch will need to re-think his hybrid strategy for the Wall Street Journal. But what he’s probably sweating about more is how the pesky internet might interfere with subscription TV.

Take a look at Kangaroo for example, the joint venture between BBC Worldwide, ITV and Channel 4 purporting to offer over 10,000 hours of programming from kick off. Not all of it is planned to be free, but it seems pretty clear that the Kangaroo concept isn’t built around a revenue model that takes much from the consumer’s pocket.

So will consumers continue to stomach paying £40 a month for 100 channels when you can pay nothing for the ever expanding wealth of free shows available online? For now, probably yes, because the choice isn’t there yet. But choice is something the internet offers in ever increasing levels. And while consumers are of course unique, they share one attribute – everyone buys free.