“a zero billion dollar business”

I’m almost finished with Chris Anderson’s Free – The Future of a Radical Price. It’s hard for us old dogs to wrap our minds around how free can be a real business model but Anderson makes his case with lots of compelling examples and insights. Here are a couple of my favorites:

“Venture capitalists have a term for this used of Free to shrink one industry while potentially opening up others: “creating a zero billion dollar business.” Fred Wilson, a partner at Union Square Ventures, explains it like this: “It describes a business that enters a market, like classified or news, and by virtue of the amazing efficiency of its operation can rely on a fraction of the revenue that the market leaders need to operate profitably.”

Gulp. And then there’s this little conundrum:

“The nature of the advertisement is different online. The old broadcast model was, in essence, this: Annoy the 90 percent of your audience that’s not interested in your product to reach the 10 percent who might be (think denture ads during football games).

The Google model is just the opposite: Use software to show the ad only to the people for whom it’s most relevant. Annoy just the 10 percent of the audience who isn’t interested to reach the 90 percent who might be.”

Watching or listening to stupid ads that had no relevance for me never bothered me when there were no alternatives. I just tuned them out. Now I find myself thinking “why am I watching Billy Mays scream at me about gluing my pants back together?

“four-wheeled hellcat from Planet Kickass”

My pal Mal points us to this brilliant Craig’s List ad. I’m tempted to buy the car just to meet the man (?) who wrote this.

“OK, let me start off by saying this Xterra is only available for purchase by the manliest of men (or women). My friend, if it was possible for a vehicle to sprout chest hair and a five o’clock shadow, this Nissan would look like Tom Selleck. It is just that manly.

It was never intended to drive to northstar mall so you can pick up that adorable shirt at Abercrombie & Fitch that you had your eye on. It wasn’t meant to transport you to yoga class or Bath & Body Works. No, that’s what your Prius is for. If that’s the kind of car you’re looking for, then just do us all a favor and stop reading right now. I mean it. Just stop.

This car was engineered by 3rd degree ninja super-warriors in the highest mountains of Japan to serve the needs of the man that cheats death on a daily basis. They didn’t even consider superfluous nancy boy amenities like navigation systems (real men don’t get lost), heated leather seats (a real man doesn’t let anything warm his butt), or On Star (real men don’t even know what the hell On Star is).

No, this brute comes with the things us testosterone-fueled super action junkies need. It has a 265 HP engine to outrun the cops. It’s got special blood/gore resistant upholstery. It even has a first-aid kit in the back. You know what the first aid kit has in it? A pint of whiskey, a stitch-your-own-wound kit and a hunk of leather to bite down on when you’re operating on yourself. The Xterra also has an automatic transmission so if you’re being chased by Libyan terrorists, you’ll still be able to shoot your machine gun out the window and drive at the same time. It’s saved my bacon more than once.

It has room for you and the four hotties you picked up on the way to the gym to blast your pecs and hammer your glutes. There’s a tow hitch to pull your 50 caliber anti-Taliban, self cooling machine gun. I also just put in a new windshield to replace the one that got shot out by The Man.

My price on this bad boy is an incredibly low $10,900, but I’ll entertain reasonable offers. And by reasonable, I mean don’t walk up and tell me you’ll give me $5,000 for it. That’s liable to earn you a Burmese-roundhouse-sphincter-kick with a follow up three fingered eye-jab. Would it hurt? Hell yeah. Let’s just say you won’t be the prettiest guy at the Coldplay concert anymore.

There’s only 69,000 miles on this four-wheeled hellcat from Planet Kickass. Trust me, it will outlive you and the offspring that will carry your name. It will live on as a monument to your machismo.

Now, go look in the mirror and tell me what you see. If it’s a rugged, no holds barred, super brute he-man macho Chuck Norris stunt double, then contact me. I might be out hang-gliding or BASE jumping or just chilling with my ladies, but I’ll get back to you. And when I do, we’ll talk about a price over a nice glass of Schmidt while we listen to Johnny Cash.

To sweeten the deal a little, I’m throwing in this pair of MC Hammer pants for the man with rippling quads that can’t fit into regular pants. Yeah, you heard me. FREE MC Hammer pants. Rock on.”

Twitter spammers: No clue. No pride.

I really hate to think that spammers will be able to destroy Twitter in the same way they’ve destroyed email. Okay, maybe not destroyed but made it a pain in the ass to use. And I haven’t gotten much spam on Twitter but know it’s coming.

Here’s the latest. I know nothing about Shorty Small’s –other than they are clueless– but will, in the unlikely event I find myself in Branson, avoid it and encourage you to do the same.

They search twitter for any reference to “Branson” and then put a little commercial in your Twitter stream. In the example to the right, you’ll notice the business didn’t know (care?) that I was poking fun at Branson. BBQ spam. Yum!

Don’t hate me because I’m beautiful

While flipping through the latest edition (were there previous editions?) of Jefferson City Magazine, I came across this ad for KRCG TV. Actually, it’s only half of the ad. I think the facing page had some news guys or something. But Marketing Consultant Kristi Gratz was clearly out front.

marketing-consultant

I don’t know Ms. Gratz but assume she is a very good Marketing Consultant or she would no be so featured. But this ad does not conjure up reams of ratings data and CPM charts. Frankly, Ms. Gratz looks hot. I don’t think that was her –or KCRG’s– intent, it’s just the filthy old horn dog in me.

And if you imagined Jefferson City as some midwestern hayseed haven, take gander at the cover of Jefferson City Magazine. It would seem you can’t swing a dead cat without hitting a babe or a hunk (and the occasional horn dog).

This cover has given me a great idea. Coffee Zone: The Ones To Watch. I don’t have time to lay it out tonight, but watch this space or YanisCoffeeZone.com later this week.

If you’ll excuse me, I’ve got to call KCRG regarding some spots promoting smays.com.

“Oh, hello. May I speak with Ms. Gratz, please? Yes, I need some marketing.”

YouTube as Home Page

Remember those early Web 1.0 home pages with the navigation buttons and long “Welcome to our Website” paragraphs? Which eventually morphed into more dynamic content, maybe even a blog? How about just making YouTube your home page?

In a recent conference call I cautioned against being “a PowerPoint company in a YouTube world.” I’m guessing the kids at Boone Oakley don’t do a lot of PowerPoint presentations. [By way of Planet Nelson]

“Sorry, There’s No Way To Save The TV Business”

A thought-provoking column by Henry Blodget in the Silicon Alley Insider. Here’s his nutshell:

“As with print-based media, Internet-based distribution generates only a tiny fraction of the revenue and profit that today’s incumbent cable, broadcast, and satellite distribution models do.  As Internet-based distribution gains steam, therefore, most TV industry incumbents will no longer be able to support their existing cost structures.”

According to Blodget, the TV business models for the past 50 years have been based on:

  • Not much else to do at home that’s as simple and fun as TV
  • No way to get video content other than via TV
  • No options other than TV for advertisers who want to tell video stories
  • No options other than cable–and, more recently, satellite–to get TV
  • Tight choke-points in each market through which all video content has to flow (cable company, airwaves), which creates enormous value for the owners of those gates.

No more creating mass through scarcity

So you’ve got a TV station or radio station or newspaper with all this good “content.” The cost of producing it is already sunk so you put it on your website and sell some banner ads. Ch-ching. But it just isn’t working for a lot of “legacy media” and Terry Heaton explains why:

“The assumptions of any content play are that its value is so great that expensive, adjacent advertising will support it and that the mass attractive to advertisers can be created through scarcity. Neither of these assumptions is viable online, and the real problem is that both must be present for significant revenue to be realized.”

So what do we do?

“We should nurture our legacy products as best we can, but we simply must separate our ability to make money from our dependence on the content we create. The key to that is in defining, understanding and developing the Local Web.”

I added the bold in hopes that would help me understand what he’s saying. I think he’s referring to the content we are already creating. We have a story in the paper, we put it on the web. We have a good radio morning show, we stream it. And so on.

We can’t just “re-purpose” our existing content and expect to attract an audience that will be attractive to an advertiser. I think he’s right.

The unbundled media world

I’ve been doing some work on the website of one of our networks and came across a story about what appears to be a big music festival. I exchanged some emails with the news director about linking and adding content from other sources (Google, flickr, YouTube, blogs, Twitter, etc). She expressed some concerns about this.

She, like some many veteran reporters I know, seemed to be coming from that place where you write your story (with audio/video/stills) and it goes into whatever distribution channel your company happens to own: paper, magazine, radio/TV station. That’s where her “audience” finds the story.

And it worked just fine for a long time. But then the web comes along and most of us clapped our hands because we saw it as just one more way to reach “our” audience. A one-way pipe from which they would “consume our content.”

From a recent post (“The Web’s Widening Stream”) by Terry Heaton:

“The “Browse” phase of the Web was its first, and it’s where the name of the desktop application known as the browser originated. The Web was seen as a series of roads leading to destinations, We hopped from site to site — or in the case of AOL, destinations within the site — and everybody was happy. “Visitors” to sites were welcomed through a front door, which became the most valuable online real estate in terms of advertising.

“Search” disrupted the paradigm by allowing people to access documents within a site without going through that front door. We were still visiting sites, though, because that’s “where” the content resided. Search destroyed the value of the home page, and also allowed for advertising adjacent to search results — a way of monetizing content that existed only in link form on the pages of the search. If you wanted to buy ads next to football content, you didn’t need to buy football pages, for example. You could simply buy ads on search results for football.

“Subscribe” blew everything apart, because users no longer had to even visit websites, assuming publishers were willing to make their content available in RSS form. Most major publishers refused to play the game, so media company RSS feeds have generally contained only a sentence or two, thereby forcing users back to the site of origin, where publishers can monetize pages. This irritating practice has kept publishers from exploring revenue possibilities in a truly subscriber-based environment, and it’s the key thing holding back the development of RSS.

But a new paradigm is threatening all of the others and will eventually force all publishers into the unbundled media world. The staggering popularity of social media messaging via Facebook and MySpace “status updates” and, of course, Twitter is creating an information ecosystem that is a series of real-time streams. These streams come in short bursts, but when added to the RSS of Microsoft’s “subscribe” phase of the Web, they form powerful, relevant and meaningful sources of knowledge and information for an increasingly networked world.

Mr. Heaton quotes (and links to) VC John Borthwick who views “streams” as the new metaphor for the web:

In the initial design of the web reading and writing (editing) were given equal consideration – yet for fifteen years the primary metaphor of the web has been pages and reading. The metaphors we used to circumscribe this possibility set were mostly drawn from books and architecture (pages, browser, sites etc.). Most of these metaphors were static and one way. The steam metaphor is fundamentally different. It’s dynamic, it doesn’t live very well within a page and still very much evolving.

A stream. A real time, flowing, dynamic stream of information — that we as users and participants can dip in and out of and whether we participate in them or simply observe are a part of this flow.

And then there is the advertiser:

“Advertising will be another fundamental part of the stream, but the rub for media companies is that advertisers can enter the stream themselves, without the assistance of being attached to media content. This is the inevitable end of a truly unbundled media world.”

If I started this post with a point in mind, I lost it along the way. I think it had something to do with the notion that a reporter –any reporter– could write/produce a story and expect others to find it and read it (and comment on it?) without being connected to them in some synchronous manner.

Or perhaps: All of us can tell the story better than any of us.

Whatever. Read Mr. Heaton’s piece.