The NewGround Blog

Publishing & Advertising 2.0 – Part 1

Publishing and advertising are undergoing structural transition last seen when Gutenberg’s press was invented. The Internet, and more specifically, the broadband Internet (which has reached critical mass during the last six years), eliminates the cost of distribution as an economic factor in media publishing and advertising. The fact that some businesses, including most of the historical advertising and publishing concerns, have not adjusted their business models has absolutely nothing to do with Bush or politics. For extended treatments of this subject, see Carlota Perez: Technological Revolutions and Financial Capital and Clayton Christensen: The Innovators Dilemna. For more concise observations in point of the facts of structural change in advertising business, I refer you to these:

Excerpt from Andy Kessler’s series of blog posts on Media 2.0 (Kessler is a money manager, investment banker & vc/hedge fund operator who also writes books (latest titled Running Money) and articles published by Forbes, Wired, LA Times, Am Spectator, Weekly Standard & WSJ)

So what is a Media Mogul to do? They control pipes in a world of zero margin costs. It costs virtually zero to sell one more digital song, or run one more digital ad or post one more digital classified. As chips and bandwidth get cheap, digital distribution crumbles the quaint old days.

* Craigslist took the classified ad business away from newspapers by doing it better for zero marginal cost. They charge for job listings in San Francisco and NY because, well because they have some bills that need to be paid. So classifieds were are huge profit center and are now,… , are worth almost nothing.

* Music is must cheaper to distribute in digital form than truck deliveries to record stores. Copyright issues be damned, listeners preferred digital music to be carried around in devices the size of a deck of playing cards or a pack of Wrigleys Chewing gum. Morpheus, Kazaa, BearShare, LimeWire gave customers what they wanted. iTunes barely makes up for the record labels missing the beat. Music may not want to be free, but it sure wants to be distributed for free.

* Voice calls via Skype, PC to PC, are free. They single-handedly yanked down the price umbrella of overseas calls to 7 cents a minute. The telcos had to respond to free.

* Newspaper and TV journalists had a long run as the trust voice of news. Now distributed bloggers can take turns scooping professionals. It’s not only that distributed news gathering is cheaper, its the zero marginal cost of distribution. Post it to a blog, get picked up by other blogs and search engines. Bask in glory. Rinse. Repeat.

In each of these examples, because of marginal costs approaching zero, it is increasingly a better business to provide technology to millions, even billions of folks rather than try to protect the control of a pipe to a few. The right answer is to GO WIDE. It’s time to get horizontal. Newspapers should have licensed Craigslist’s (or eBay’s) technology years ago. Telcos should have embraced or emulated Skype. Drop CDs and distribute all your music (and everyone else’s) online at a price that doesn’t protect retail, but destroys it (which is happening anyway!).

The time and the tools are ripe for this GO WIDE approach. Especially on the Web, which is nothing but layers and layers of functionality.

Bill Gates

This process will be hastened, he believes, as more and more television content moves online. “Internet TV and the move to the digital approach is quite revolutionary,” he says. “TV has historically has been a broadcast medium with everybody picking from a very finite number of channels. If you want content that is a local sports thing or a hobby that you are interested in, that’s not available to you. The use of the internet to deliver those video signals and the idea of seeing what you are interested in, and having the ads targeted to you, is becoming the standard way that video is delivered. Over the course of this next decade that will be very common.”

Internet advertising, aimed at niche audiences and more creatively ambitious, will provide a way round the increasing problem for advertisers of television viewers fast-forwarding through commercial breaks in shows that they have recorded. “It will be possible to target the ads and it will be important to have ads that the consumer doesn’t skip over, incorporated in the right way.”

Om Malik’s posts – Google… the OS for Advertising and The Web Money Machine – Beyond Adwords (author of Broadbandits: Inside the $750 Billion Telecom Heist, writer for Red Herring, Business 2.0, Forbes, WSJ and now founder/executive editor for GigaOm.com)

excerpts:

Google’s core competency is to use technology in a manner that devalues and deflates4 traditional industries by extracting inefficiencies in existing processes. And the long-term strategic implications of this “Google effect” is much more disruptive than simple market realignment… rather, it’s an issue of rendering old core (human) competencies obsolete and replacing them with new ones reliant on automated, scalable technologies (much like what Wal-Mart did to retailing and what Craigslist is in the process of doing to classifieds). For instance, the only way for traditional media companies to leverage the core competencies they have today in order to compete with Google’s Ad/OS, in the long run, is to start breeding ad salespeople who will have the expertise and capability to sell across all media platforms. Sure, that’s feasible… when pigs can fly.

The media industry is in the middle of a massive change, thanks to the ubiquitous presence of broadband everywhere. Fast pipes are enabling niche networks, venture capitalists are investing in new media properties. The online video market resembles an old fashioned bubble, and companies are sprouting up like mushrooms after a fresh monsoon. All of this is predicated on one business model: advertising. Google bet $1.65 billion in chips on YouTube, betting that it can profit from this shift to online video. Their confidence is understandable: Google now accounts for 25% of all online advertising dollars.

Great Advice for Jobseekers!

 

Although this post by Guy Kawasaki is six months old, his advice for Jobseekers has timeless value.  A few excerpts are presented below, but there’s a lot of wisdom in this one, so don’t miss it.

The best way is to profess your love of the company’s product or service, and I literally mean “love” not “read about,” “have used,” or “looked at the web site.” If the company is at all enlightened, passion can overcome the lack of a “perfect” educational background and work experience.

… here’s the 1/2/3 Rule of Resumes:

1 page long.

2 key points.
3 sections.  "Two key points" means that your resume should only have three sections: contact information, work experience, and educational background.

Bring copies of your resume to the interview

Answer the first question, “How are you?” with a great response.  For example, a great response is, “I feel great. I’m really anxious to learn more about this job and tell you about myself, so that we can determine if we’re a good match.” In other settings, this question is an unimportant formality. In an interview it’s an opening to blow away the interviewer with your enthusiasm.

Get the scoop from the first interviewer. A job interview is a sales call: Listen to what the customer says she wants and then explain why you are the solution.

  • "What are you concerned about in filling this role?”
  • “What are the company’s greatest challenges?”
  • “What are the hot buttons of the other people I’ll be meeting?”

How can I immediately help this company? If you can’t help the company immediately, then maybe this isn’t the right company for you.

Provide your references on the spot. Print your list of references so that you can provide them in the interview—as opposed to providing them later. In general, try to anticipate every possible request that would turn into a follow-up item: providing references, sample work, examples from your portfolio, software that you’ve written, whatever.

If you really want to play the reference game at the highest level, ask your best reference to proactively call the interviewer.

Tell the interviewer you see a good fit and want the job if this is the truth.You’d also be amazed at how few candidates go for the close. You should clearly communicate that you want the job because aggressiveness counts for a lot in job interviews…

If you don’t think there’s a good fit, say so too. At least you’ll be remembered as an honest person. Perhaps the company will have a position in the future that is a good fit.

Great Picture!

Image hosted by ImageSocket.com

Not much to do with business or technology, but you might find this scene at the newground!

Squarespace

NewGround’s web site, including this blog, is created within a web-based application developed and hosted by a company named Squarespace.  This service, in my mind, would best be described as a Web 2.0 Content Management System (CMS).  From a business perspective, I believe the Squarespace service offering represents a great value proposition.  For $20/month, we get a web development and hosting platform that allows us (non-HTML proficient people) to create, store update/refresh, manage and publish our website, including this blog,  I mention this because today I noticed this post on their customer service blog describing the recent launch on the same Squarespace service (and servers) of a much larger and much more heavily trafficked website (of former US House Majority Leader Tom Delay).  The contents of that post not only raised my esteem for the Squarespace platform capabilities, but also underscore what a great value proposition it is – for Delay a great website/managed traffic service for $100/month versus several thousand to create the same capability for yourself.

Business Development 2.0

According to a veteran IT venture capitalist and current Web 2.0 investor, the Web 2.0 phenomenon is producing changes in the job description for "business development"  Fred says:

 

But the job of a business development executive is changing. You have to be more product focused, more technical, and focus on making deals where there is already user level integration happening.

 

 In a previous post, Fred described how the public api’s published by Web 2.0 companies not only allow them to effectively partner without all the overhead of a business/legal deal, but also to do so much more quickly.  Nevertheless, as a commenter on that post observed:

The BD guy has always been the guy who sees how two companies can play together. Today’s smart (good) BD guy simply works more with his in-house API guru and less with his Rolodex.

Competition in the “Last Mile”

Via Susan Crawford, we learn that at least one government official understands what’s at stake in the telecom regulatory environment in Washington.  In support of a recent report from the FTC’s Internet Access Task Force Commissioner Jon Leibowitz opines:

Let me begin by commending the staff for this Report. It begins the process of identifying guiding principles for our growing Internet competition mission. At least as importantly, to my mind the Report provides a powerful basis for the Commission to oppose, as part of our advocacy program, future attempts by states to limit or prohibit municipalities from offering broadband to their own residents. Some of these proposed laws address legitimate questions, but others are simply unconscionable.

In the same report, he also observes:

As an agency charged with enforcing the antitrust laws, we know the importance of competition well. Increased competition means lower prices and higher quality for consumers. But the lack of competition along the “last mile” of the Internet to consumers can have an even more profound effect than high prices in local markets. It can interfere with the growth and development of the Internet everywhere.

I suppose we should be happy that at least one commissioner "gets" it, and that his commission’s mission is to promote and advance the cause of fair competition, especially when the competitors and regulators in the communications industry seem to prefer unfair competition in spite of the harm it brings to our country, its commerce and its citizens.

Digital Storage & the Second Gutenberg

n response to Wretchard’s post regarding the Second Gutenberg Revolution, I would submit that there is no need to worry about books as containers for human thought/history. Given the continually accelerating and exponentially declining cost of digital storage, I-Pods and similar devices with terabyte and petabyte storage capabilities are just around the corner.  Consequently, it will soon be as easy for people to carry the Library of Congress plus the entire historical catalog of recorded music as it is to carry one’s cell phone.  The Library of Congress would require approximately 80 terabytes of storage capacity, which at today’s cost of approximately $.40/GB, would cost about $30,000. Continued progression down this cost curve is certain, short of nuclear war, which means that the price/GB for data storage in 5 years will be under $.02/GB, at which point the Library could be stored for $1600. Another five years and the cost will be $1/TB (terabyte), or $80.  Remember, an I-Pod is essentially a hard drive with earphones, and now a small video monitor, attached.  Over 2 billion people currently own cell phones, and assuming trends for the last five years continue,  that number will exceed 3 billion by 2010. The rate of decline in storage costs blows away the rate of decline in either cell phone costs or cost/minute of call time, so you can see where its all headed (eg, Apple’s announcement yesterday re: movie downloads).  If your find these figures hard to fathom, remember that the first IBM PC included 64 MB of RAM; the current PC standard is 1 GB.  Future archaelogists should not have to look too hard to find these devices. Furthermore, Google has already scanned all non-copyright protected books into its database, and others will follow suit.  Finally, for those who don’t know about it, the Internet Archives (aka Wayback Machine) already contains an impressive database of historical Internet pageviews, music and other digital information (including most of the live performances of the Grateful Dead in high quality audio format).  Check it out!

Caravan – Van Morrison & The Band

Thanks to Scott at Powerline for this post celebrating Van Morrison’s 61st birthday and tipping me off to a video on YouTube of Van Morrison singing "Caravan" with The Band during their "Last Waltz".  He makes the following observation about this particular performance:

Van’s performance with the Band is memorably documented on film in Martin Scorsese’s "The Last Waltz." Below, courtesy of YouTube, is the clip with Van and the Band performing "Caravan" from "The Last Waltz." Van steals the show. The camera catches Van with the barest hint of a smile as he triumphantly leaves the stage. "Hey, Van the Man," Robbie Robertson exults.

Here’s the YouTube vid: