What happens to a community review site when members of the community use it as a weapon against people they don't approve of? Sites like Yelp and Citysearch are finding out, as users target businesses that supported California's Proposition 8 (the state's recently-enacted gay marriage ban). The results so far are not pretty. They illustrate some of the weaknesses of online reviews, and the complexities of managing a community site.
It's a learning opportunity for any company that relies on online reviews or runs a website that allows user comments. I wrote about it over on the Rubicon site (link).
Showing posts with label rubicon. Show all posts
Showing posts with label rubicon. Show all posts
Everything you always wanted to know about web community, and then some
It's been a long time since I posted, and I apologize. In addition to doing a bunch of work for clients at Rubicon, I have been preoccupied with a big strategy project we just finished, on online community. We released the results today, and I think you might find them interesting, so here's a summary.
In our strategy work with tech companies, we're frequently asked about web communities -- how they operate, what they can and can't do, and how a company should work with them. The companies we deal with generally fall into three camps when it comes to community:
--Many companies are still learning about online community and don't know what to do or what to expect.
--Some companies have already tried some online community activity, but were disappointed -- often because they attracted only a few enthusiasts rather than the masses of end users they expected.
--And of course some companies run successful web communities, either as a sideline or as their core business. They're very hungry for information on how other communities operate, and insights on what they could do better.
To help deal with all of those questions, we conducted a study of online community in the US. We surveyed more than 3,000 US web users on their overall internet usage, and then dived deep on their use of online communities and what impact those communities have on their lives. I know some of you will be disappointed that the survey is US-only; we'd be delighted to repeat the research in other parts of the world if anyone wants to sponsor it ;-)
Meanwhile, here are some of the key things we learned:
--Small groups of enthusiasts dominate most online conversations, but that doesn't mean online communities matter only to a narrow segment of people. Most web users read community content rather than contributing to it, and are strongly influenced by the things they see there, especially product reviews and recommendations. Those reviews are now second only to word of mouth as a purchase influencer for web users.
--Because most web users are voyeurs more than contributors, if you're running an online discussion, you should think of it as theatre -- it's a performance in which the community leader(s) interact with a small group of contributors for the education and amusement of the rest of us. All the web's a stage, but we're not all players in it. At least not equal players.
--This means companies that turn away from web communities because they're populated mostly by enthusiasts are missing the point. They've mistaken their fellow actors for the audience. If you're running a community, you need to take care of the active participants in a community so that the rest of the audience will watch and learn.
--If a company needs more incentive to work with the Internet, it turns out that the web has also become the number two source of product support information for web users. After checking the manual, web users are more likely to check a company's website for information or search the web than they are to take traditional steps like calling the manufacturer or asking a dealer. That will be comforting to many companies that want to reduce their support costs, since phone support is very expensive. But how many of those companies have bothered to put detailed support information online, and make sure it's well indexed by the search engines?
--There are an enormous number of tidbits in the study regarding web use. A few items that stood out to me include:
A full report on the findings is available in PDF format here (link). I know many people don't like to read PDFs online, and besides you can't easily comment on them or link to sections in them. So we've also posted the report online, cut into several sections for easy reading:
Part one summarizes the report, and gives detailed information on the use of community online, and what that means for business (link). This is the section that gives information on community usage rates and the "most frequent contributors" who dominate online conversations.
Part two discusses the leading web destinations in the US, measured in several ways, and discusses the role of community in them (link). This is where you'll find learn about the remarkable membership rate of Classmates.com, the #3 social community site in the US when measured by profiles. We also answer questions like: "Is Facebook more popular than MySpace?" "What do web users value more, Wikipedia or NYTimes.com?" and "What are the top five most-visited types of website?"
Part three talks about the role of community sites in the social lives of Americans (link). This is where we compare Republicans and Democrats online, and look at how different age groups use the social networking sites. We answer questions like: "How many young people lie about their age to get access to websites?" and "How many web users create fake identities online?"
What does it mean to mobile?
I always get that question when I post something that's not directly related to the mobile industry. In part, my answer is that I think this information's useful to anyone who's interested in technology. You're soaking in the internet, and it's good to understand how it works.
But community users don't limit themselves to only PC access, so online community will have a big effect on the mobile industry. It's important to understand what's really happening in the wired internet so you can sort out which mobile web opportunities have the best prospects. For example, I saw a presentation by someone senior at a mobile company the other day, and he was touting the importance of Twitter as a driver for the mobile web. I almost laughed out loud, because I had just been working on our report, and I knew how tiny the Twitter audience is. It's a classic case of people in the tech industry assuming something they use a lot is also being adopted by the masses.
That's not to beat up on Twitter specifically; they have a great base of users. But mainstream they ain't.
The other thing mobile people should think about a lot is the huge role that young people play in the generation of online content. As a group they are vastly more active online than older people. We aren't sure exactly what the cause is. Some of it may be that high school and college students just have a lot more time on their hands, and they spend some of it posting to the web. But probably also some of it is generational. Whatever the cause, it's likely that young users will be some of the heaviest drivers of use of the mobile web, especially the uploading of content and comments.
Not that Apple needs another advantage, but that probably plays to the strengths of the iPhone, because Apple has such a good franchise with young people in the US. It also helps to explain why RIM is trying to reach out to young people. In Europe, I think Nokia and SonyEricsson have a better chance at those users, because their brands are strong with young people. But they'll need the right products as well, which is a subject for other posts...
In our strategy work with tech companies, we're frequently asked about web communities -- how they operate, what they can and can't do, and how a company should work with them. The companies we deal with generally fall into three camps when it comes to community:
--Many companies are still learning about online community and don't know what to do or what to expect.
--Some companies have already tried some online community activity, but were disappointed -- often because they attracted only a few enthusiasts rather than the masses of end users they expected.
--And of course some companies run successful web communities, either as a sideline or as their core business. They're very hungry for information on how other communities operate, and insights on what they could do better.
To help deal with all of those questions, we conducted a study of online community in the US. We surveyed more than 3,000 US web users on their overall internet usage, and then dived deep on their use of online communities and what impact those communities have on their lives. I know some of you will be disappointed that the survey is US-only; we'd be delighted to repeat the research in other parts of the world if anyone wants to sponsor it ;-)
Meanwhile, here are some of the key things we learned:
--Small groups of enthusiasts dominate most online conversations, but that doesn't mean online communities matter only to a narrow segment of people. Most web users read community content rather than contributing to it, and are strongly influenced by the things they see there, especially product reviews and recommendations. Those reviews are now second only to word of mouth as a purchase influencer for web users.
--Because most web users are voyeurs more than contributors, if you're running an online discussion, you should think of it as theatre -- it's a performance in which the community leader(s) interact with a small group of contributors for the education and amusement of the rest of us. All the web's a stage, but we're not all players in it. At least not equal players.
--This means companies that turn away from web communities because they're populated mostly by enthusiasts are missing the point. They've mistaken their fellow actors for the audience. If you're running a community, you need to take care of the active participants in a community so that the rest of the audience will watch and learn.
--If a company needs more incentive to work with the Internet, it turns out that the web has also become the number two source of product support information for web users. After checking the manual, web users are more likely to check a company's website for information or search the web than they are to take traditional steps like calling the manufacturer or asking a dealer. That will be comforting to many companies that want to reduce their support costs, since phone support is very expensive. But how many of those companies have bothered to put detailed support information online, and make sure it's well indexed by the search engines?
--There are an enormous number of tidbits in the study regarding web use. A few items that stood out to me include:
- -About a quarter of US web users say they have dated someone they first met online.
- -Although Twitter and SecondLife get a lot of press, their audiences are very narrow when you compare them to major social sites like MySpace, Facebook, and even LinkedIn.
- -Yahoo is the second most valued website in the minds of US web users, after Google. It's ahead of major web properties like YouTube and Facebook. All of the negative press about Yahoo sometimes makes people forget how strong its user base is.
- -The major social networks are much more satisfying and useful to teens than they are to adults. In fact, satisfaction with the social sites declines steadily after age 14.
- -Since we're coming up on an election in the US, it's interesting to look at political ties on the Internet. Democrats are more active online than Republicans, and say the web has a greater influence on their behavior, including voting.
- -Young people dominate online conversations, with people 22 and under producing about half of all user-generated content and comments. So if you sometimes feel like you're dealing with kids online, it may be because you are.
A full report on the findings is available in PDF format here (link). I know many people don't like to read PDFs online, and besides you can't easily comment on them or link to sections in them. So we've also posted the report online, cut into several sections for easy reading:
Part one summarizes the report, and gives detailed information on the use of community online, and what that means for business (link). This is the section that gives information on community usage rates and the "most frequent contributors" who dominate online conversations.
Part two discusses the leading web destinations in the US, measured in several ways, and discusses the role of community in them (link). This is where you'll find learn about the remarkable membership rate of Classmates.com, the #3 social community site in the US when measured by profiles. We also answer questions like: "Is Facebook more popular than MySpace?" "What do web users value more, Wikipedia or NYTimes.com?" and "What are the top five most-visited types of website?"
Part three talks about the role of community sites in the social lives of Americans (link). This is where we compare Republicans and Democrats online, and look at how different age groups use the social networking sites. We answer questions like: "How many young people lie about their age to get access to websites?" and "How many web users create fake identities online?"
What does it mean to mobile?
I always get that question when I post something that's not directly related to the mobile industry. In part, my answer is that I think this information's useful to anyone who's interested in technology. You're soaking in the internet, and it's good to understand how it works.
But community users don't limit themselves to only PC access, so online community will have a big effect on the mobile industry. It's important to understand what's really happening in the wired internet so you can sort out which mobile web opportunities have the best prospects. For example, I saw a presentation by someone senior at a mobile company the other day, and he was touting the importance of Twitter as a driver for the mobile web. I almost laughed out loud, because I had just been working on our report, and I knew how tiny the Twitter audience is. It's a classic case of people in the tech industry assuming something they use a lot is also being adopted by the masses.
That's not to beat up on Twitter specifically; they have a great base of users. But mainstream they ain't.
The other thing mobile people should think about a lot is the huge role that young people play in the generation of online content. As a group they are vastly more active online than older people. We aren't sure exactly what the cause is. Some of it may be that high school and college students just have a lot more time on their hands, and they spend some of it posting to the web. But probably also some of it is generational. Whatever the cause, it's likely that young users will be some of the heaviest drivers of use of the mobile web, especially the uploading of content and comments.
Not that Apple needs another advantage, but that probably plays to the strengths of the iPhone, because Apple has such a good franchise with young people in the US. It also helps to explain why RIM is trying to reach out to young people. In Europe, I think Nokia and SonyEricsson have a better chance at those users, because their brands are strong with young people. But they'll need the right products as well, which is a subject for other posts...
Adobe frees mobile flash: It's about time
Today Adobe announced a series of changes to its emerging web applications platform. The changes include:
--The next version of the mobile Flash runtime will be free of license fees. Adobe also confirmed that the mobile version of the Air runtime will be free.
--Adobe changed its licensing terms and released additional technical information that will make it easier for companies to create their own Flash-compatible products.
--The company announced a new consortium called Open Screen supporting the more open versions of Flash and Air. Members of the new group include the five leading handset companies, three mobile operators (including NTT DoCoMo and Verizon), technology vendors (including Intel, Cisco, and Qualcomm), and content companies (BBC, MTV, and NBC Universal). Google, Apple, and Microsoft are not members. It's not clear to me what the consortium members have actually agreed to do. My guess is it's mostly a political group.
Adobe said that the idea behind the announcements is to create a single consistent platform that lets developers create an application or piece of content once and run it across various types of devices and operating systems. That idea is very appealing to developers and content companies today. It was equally appealing two years ago, when then-CEO of Adobe Bruce Chizen made the exact same promise (link):
If Adobe had made the Open Screen announcement two years ago, I think it could have caught Microsoft completely flat-footed, and Adobe might have been in a very powerful position by now. But by waiting two years, Adobe gave Microsoft advance warning and plenty of runway room to react -- so much so that ArsTechnica today called Adobe's announcement a reaction to Microsoft Silverlight (link).
Also, the most important changes appear to apply to the next version of mobile Flash and the upcoming mobile version of Air -- meaning this was in part a vaporware announcement. Even when the new runtime software ships, it will take a long time to get it integrated into mobile phones. So once again, Microsoft has a long runway to maneuver on.
Still, the changes Adobe made are very useful. There's no way Flash could have become ubiquitous in the mobile world while Adobe was still charging fees for it. The changes to the Flash license terms remove one of the biggest objections I've seen to Flash from open source advocates (link). The Flash community seems excited (link, link). And the list of supporters is impressive. Looking through the obligatory quotes attached to the Adobe release, two things stand out:
--Adobe got direct mentions of Air from ARM, Intel, SonyEricsson, Verizon, and Nokia (although Nokia promised only to explore Air, while it's on the record promising to bundle Silverlight mobile).
--The inclusion of NBC Universal in the announcement will have Adobe people chuckling because Microsoft signed up NBC to stream the Olympics online using Silverlight. So NBC is warning Microsoft not to take it for granted, and Adobe gets to stick its tongue out.
What does it all mean?
Nothing much in the short term. As I mentioned earlier, this is mostly a vaporware announcement (other than the license changes). Some people are speculating that this will put pressure on Apple to make Flash available on the iPhone (link). That's possible, if Apple's real concern was that they didn't like Flash Lite. Now they can port full Flash, or someone else can do it. But if Apple is in reality unwilling to let anyone else's platform run on the iPhone then we'll see other objections to Flash emerge.
The marketing competition to control the future of web apps is continuing to heat up. Microsoft is trying to take the whole thing proprietary by creating a comprehensive architecture, Adobe is trying to drive its own platform, Sun is trying to re-energize Java, Google is making its own moves, and so on (link). Plus, of course, most web app developers today are happy with what they're using now and have little interest in switching to any of the new architectures (check out the dandy commentary by Joel Spolsky here).
It's an enormously complex situation, and it's going to take months, if not years, before we can start to see who's winning and who is losing. Rubicon is working on a white paper that will try to clarify the situation a bit. I'll let you know when it's published.
In the meantime, enjoy the marketing fireworks. The intense competition is forcing companies to innovate faster and open up their products, as Adobe did today. I think that process is good for just about everyone in the industry.
--The next version of the mobile Flash runtime will be free of license fees. Adobe also confirmed that the mobile version of the Air runtime will be free.
--Adobe changed its licensing terms and released additional technical information that will make it easier for companies to create their own Flash-compatible products.
--The company announced a new consortium called Open Screen supporting the more open versions of Flash and Air. Members of the new group include the five leading handset companies, three mobile operators (including NTT DoCoMo and Verizon), technology vendors (including Intel, Cisco, and Qualcomm), and content companies (BBC, MTV, and NBC Universal). Google, Apple, and Microsoft are not members. It's not clear to me what the consortium members have actually agreed to do. My guess is it's mostly a political group.
Adobe said that the idea behind the announcements is to create a single consistent platform that lets developers create an application or piece of content once and run it across various types of devices and operating systems. That idea is very appealing to developers and content companies today. It was equally appealing two years ago, when then-CEO of Adobe Bruce Chizen made the exact same promise (link):
If we execute appropriately we will be the engagement platform, or the layer, on top of anything that has an LCD display, any computing device -- everything from a refrigerator to an automobile to a video game to a computer to a mobile phone.
If Adobe had made the Open Screen announcement two years ago, I think it could have caught Microsoft completely flat-footed, and Adobe might have been in a very powerful position by now. But by waiting two years, Adobe gave Microsoft advance warning and plenty of runway room to react -- so much so that ArsTechnica today called Adobe's announcement a reaction to Microsoft Silverlight (link).
Also, the most important changes appear to apply to the next version of mobile Flash and the upcoming mobile version of Air -- meaning this was in part a vaporware announcement. Even when the new runtime software ships, it will take a long time to get it integrated into mobile phones. So once again, Microsoft has a long runway to maneuver on.
Still, the changes Adobe made are very useful. There's no way Flash could have become ubiquitous in the mobile world while Adobe was still charging fees for it. The changes to the Flash license terms remove one of the biggest objections I've seen to Flash from open source advocates (link). The Flash community seems excited (link, link). And the list of supporters is impressive. Looking through the obligatory quotes attached to the Adobe release, two things stand out:
--Adobe got direct mentions of Air from ARM, Intel, SonyEricsson, Verizon, and Nokia (although Nokia promised only to explore Air, while it's on the record promising to bundle Silverlight mobile).
--The inclusion of NBC Universal in the announcement will have Adobe people chuckling because Microsoft signed up NBC to stream the Olympics online using Silverlight. So NBC is warning Microsoft not to take it for granted, and Adobe gets to stick its tongue out.
What does it all mean?
Nothing much in the short term. As I mentioned earlier, this is mostly a vaporware announcement (other than the license changes). Some people are speculating that this will put pressure on Apple to make Flash available on the iPhone (link). That's possible, if Apple's real concern was that they didn't like Flash Lite. Now they can port full Flash, or someone else can do it. But if Apple is in reality unwilling to let anyone else's platform run on the iPhone then we'll see other objections to Flash emerge.
The marketing competition to control the future of web apps is continuing to heat up. Microsoft is trying to take the whole thing proprietary by creating a comprehensive architecture, Adobe is trying to drive its own platform, Sun is trying to re-energize Java, Google is making its own moves, and so on (link). Plus, of course, most web app developers today are happy with what they're using now and have little interest in switching to any of the new architectures (check out the dandy commentary by Joel Spolsky here).
It's an enormously complex situation, and it's going to take months, if not years, before we can start to see who's winning and who is losing. Rubicon is working on a white paper that will try to clarify the situation a bit. I'll let you know when it's published.
In the meantime, enjoy the marketing fireworks. The intense competition is forcing companies to innovate faster and open up their products, as Adobe did today. I think that process is good for just about everyone in the industry.
Some other things you didn't know about iPhone users
Earlier today I told you about the survey of US iPhone users that Rubicon Consulting just conducted (link). When you publish a big study like this, there are always a few secondary data points that don't fit into the whitepaper -- kind of like outtakes in a movie.
I thought you might be interested in seeing the outtakes. So, here are some other interesting factoids about iPhone users...
How do you carry your iPhone?
To me, one of the most interesting findings of the study was that half of iPhone users are under age 30. I had expected them to be older, because PDA and smartphone users have traditionally been in their 30s and 40s.
With the younger age of iPhone users comes some other differences, including how they choose to carry their iPhones...
"How do you carry your iPhone?"
What was your primary motivation for buying an iPhone?
People usually have multiple reasons for buying a product, some of which they won't even admit to themselves. But when we asked iPhone users why they bought the product, I found their answers to be refreshingly candid...
"When you obtained your iPhone, what was your number one motivation?"
The iPhone is a babe (or guy) magnet
One of the benefits of a popular new technology product is its ability to attract members of the opposite sex when displayed at a party or bar. We assumed that the iPhone would have such an effect, and more almost 70% of iPhone users agreed.
"Does the iPhone help you meet members of the opposite sex?"
Which websites do iPhone users visit?
In our whitepaper on the survey, we reported that most iPhone users say they browse on the iPhone a lot more than they did on their previous mobile device. But we didn't have enough space to report which websites they visit on the iPhone most often...
"Which websites do you visit on your iPhone, and how often?"
I was very surprised that the new social communication service Spitr (link) didn't make the list.
What other devices did the iPhone replace?
About a quarter of iPhone users said it is replacing use of a notebook computer. But given the enthusiasm of iPhone users, it's not surprising that they are also using it to replace some other technology products:
"What else did the iPhone replace?"
What other features do you want in the iPhone?
In the whitepaper, we listed some of the most desired iPhone features. We didn't have room to list other features that people also asked for. Here they are...
"What other features would you like to see added to the iPhone?"
Eight point scale: Strongly interested = 7 or 8, mildly interested = 5 or 6,
mildly disinterested = 3 or 4, strongly disinterested = 1 or 2.
Personally, I was disappointed that Strategic Conquest (link) wasn't listed higher.
When and where do you use the iPhone?
An advantage of a mobile device is that it can go with you anywhere. This leads to some unusual usage patterns that the industry doesn't like to acknowledge. I think it's important to report them.
"When and where do you use your iPhone?"
So now you have the full picture of iPhone users. As you can imagine, these usage patterns are having a profound effect on the thinking and behavior of companies in the mobile industry. I think they probably had a lot to do with Google's decision to buy Sprint (link).
I should add one other piece of information -- as I said in my earlier post on the iPhone user study, the study is definitely not an April Fools joke. However, I can't make that same assurance about the post you're reading now.
I thought you might be interested in seeing the outtakes. So, here are some other interesting factoids about iPhone users...
How do you carry your iPhone?
To me, one of the most interesting findings of the study was that half of iPhone users are under age 30. I had expected them to be older, because PDA and smartphone users have traditionally been in their 30s and 40s.
With the younger age of iPhone users comes some other differences, including how they choose to carry their iPhones...
"How do you carry your iPhone?"
What was your primary motivation for buying an iPhone?
People usually have multiple reasons for buying a product, some of which they won't even admit to themselves. But when we asked iPhone users why they bought the product, I found their answers to be refreshingly candid...
"When you obtained your iPhone, what was your number one motivation?"
The iPhone is a babe (or guy) magnet
One of the benefits of a popular new technology product is its ability to attract members of the opposite sex when displayed at a party or bar. We assumed that the iPhone would have such an effect, and more almost 70% of iPhone users agreed.
"Does the iPhone help you meet members of the opposite sex?"
Which websites do iPhone users visit?
In our whitepaper on the survey, we reported that most iPhone users say they browse on the iPhone a lot more than they did on their previous mobile device. But we didn't have enough space to report which websites they visit on the iPhone most often...
"Which websites do you visit on your iPhone, and how often?"
I was very surprised that the new social communication service Spitr (link) didn't make the list.
What other devices did the iPhone replace?
About a quarter of iPhone users said it is replacing use of a notebook computer. But given the enthusiasm of iPhone users, it's not surprising that they are also using it to replace some other technology products:
"What else did the iPhone replace?"
What other features do you want in the iPhone?
In the whitepaper, we listed some of the most desired iPhone features. We didn't have room to list other features that people also asked for. Here they are...
"What other features would you like to see added to the iPhone?"
Eight point scale: Strongly interested = 7 or 8, mildly interested = 5 or 6,
mildly disinterested = 3 or 4, strongly disinterested = 1 or 2.
Personally, I was disappointed that Strategic Conquest (link) wasn't listed higher.
When and where do you use the iPhone?
An advantage of a mobile device is that it can go with you anywhere. This leads to some unusual usage patterns that the industry doesn't like to acknowledge. I think it's important to report them.
"When and where do you use your iPhone?"
So now you have the full picture of iPhone users. As you can imagine, these usage patterns are having a profound effect on the thinking and behavior of companies in the mobile industry. I think they probably had a lot to do with Google's decision to buy Sprint (link).
I should add one other piece of information -- as I said in my earlier post on the iPhone user study, the study is definitely not an April Fools joke. However, I can't make that same assurance about the post you're reading now.
O'Reilly Web 2.0 Summit: No Cave of Wonders
There is so much happening in the Web world that I went into this year's annual O'Reilly Web 2.0 event hoping it would be like Aladdin's Cave of Wonders--full of bright shiny new companies that did amazing things, each more enticing than the last.
Instead, the conference was more like a United Nations conference, full of important people talking about important issues, but not a lot of surprise or dazzlement. The name "summit" really does fit. That’s not the fault of the folks at O'Reilly; their conference has just grown in stature so much that it attracts CEOs from huge companies as speakers. By definition those people are very careful about what they say, and don't make major announcement at an industry conference.
So while it was interesting to see people like the CEO of AT&T, we didn't necessarily learn a lot. But there were a couple of highlights worth passing along…
The full article is on the Rubicon Consulting web site, here. There's no registration required. From a mobile perspective, the highlight (or lowlight) is a quote from VC Ram Shriram on what a mobile software company has to do in order to get funded.
Instead, the conference was more like a United Nations conference, full of important people talking about important issues, but not a lot of surprise or dazzlement. The name "summit" really does fit. That’s not the fault of the folks at O'Reilly; their conference has just grown in stature so much that it attracts CEOs from huge companies as speakers. By definition those people are very careful about what they say, and don't make major announcement at an industry conference.
So while it was interesting to see people like the CEO of AT&T, we didn't necessarily learn a lot. But there were a couple of highlights worth passing along…
The full article is on the Rubicon Consulting web site, here. There's no registration required. From a mobile perspective, the highlight (or lowlight) is a quote from VC Ram Shriram on what a mobile software company has to do in order to get funded.
Who's really using web apps, and why?
In my work at Rubicon, we spend much of our time helping tech companies with strategy and product planning. One recurring theme is the impact of web applications. We help web app companies figure out their customers and product plans, and we help traditional tech companies understand web apps and what to do about them.
As we do this work, we repeatedly run into a lack of basic information about how web apps are being used -- how many people use them, who uses them, which apps they use, and so on. There's a lot of anecdotal information from individual web companies on how they're doing, but almost nothing on the usage of web apps across the industry as a whole.
So we decided to fill that hole. This summer we did a survey of about 2,000 US adult PC owners on their usage of web applications. We released the results this morning at the AjaxWorld conference. Some highlights:
--37% of US home PC owners use at least one web application on a regular basis. Usage has already spread far beyond early adopters.
--Usage varies dramatically by app category. E-mail and games are the two most popular web app categories, but some other categories (such as online word processing) have very low adoption so far.
--College students are more enthusiastic adopters of web apps than non-students. More than 50% of college students use at least one web app regularly.
To me, the study was a good reminder of the practicality of most PC users. Although we in the industry worry a lot about the technical distinctions between things like web apps and packaged applications, most users don't care. They just want to solve their problems and get on with their lives. If a web app is better or cheaper than a packaged app, they will use it. If it isn't better in some way, they won't.
If you're working at a web app company and want to create a popular service, be sure you solve a real world problem that people care about. The doors are wide open if you do that.
If you work at a traditional software company and think you're immune to competition from web apps, or that it'll take years for them to affect you, you're living in fantasyland. For about 70% of US PC owners, there are no significant barriers to adoption of web apps.
There's a lot more analysis (and graphs of the findings) in the full report on the Rubicon website. Check it out here.
And there's some interesting commentary about the study here and here and here and here.
As we do this work, we repeatedly run into a lack of basic information about how web apps are being used -- how many people use them, who uses them, which apps they use, and so on. There's a lot of anecdotal information from individual web companies on how they're doing, but almost nothing on the usage of web apps across the industry as a whole.
So we decided to fill that hole. This summer we did a survey of about 2,000 US adult PC owners on their usage of web applications. We released the results this morning at the AjaxWorld conference. Some highlights:
--37% of US home PC owners use at least one web application on a regular basis. Usage has already spread far beyond early adopters.
--Usage varies dramatically by app category. E-mail and games are the two most popular web app categories, but some other categories (such as online word processing) have very low adoption so far.
--College students are more enthusiastic adopters of web apps than non-students. More than 50% of college students use at least one web app regularly.
To me, the study was a good reminder of the practicality of most PC users. Although we in the industry worry a lot about the technical distinctions between things like web apps and packaged applications, most users don't care. They just want to solve their problems and get on with their lives. If a web app is better or cheaper than a packaged app, they will use it. If it isn't better in some way, they won't.
If you're working at a web app company and want to create a popular service, be sure you solve a real world problem that people care about. The doors are wide open if you do that.
If you work at a traditional software company and think you're immune to competition from web apps, or that it'll take years for them to affect you, you're living in fantasyland. For about 70% of US PC owners, there are no significant barriers to adoption of web apps.
There's a lot more analysis (and graphs of the findings) in the full report on the Rubicon website. Check it out here.
And there's some interesting commentary about the study here and here and here and here.
What we're learning from Web apps, part 3: Breeding new types of media
The argument over the viability of Web 2.0 applications misses the point -- most of the applications on any new computing platform die. What matters are the innovations and new business models that we learn from them (link).
Last time in this series I discussed what we're learning from Web 2 about managing a community online (link). This time I want to talk about the role the Internet is playing in the creation of new forms of media.
Is the internet a new medium?
I should start with a definition of what a medium is. Webster calls it, "a channel or system of communication, information, or entertainment" (link). I want to build on that a little. To me, a medium is something that moves information and/or entertainment between people. Movies are a medium, newspapers are a medium, oil painting is a medium. So is the telephone call, when you think about it. Each medium has its own distinct usages, economic model, and audience.
A lot of people have written about the Internet and/or the Web as a new "medium." A quick online search will give you thousands of articles and weblog posts on the subject. But there's something funny about the articles -- although they all call the Internet a medium, they define that medium in many different ways. For example...
--The Internet is a medium for mixed-media communication.
--It's a medium for online music broadcasting.
--It's a medium for making politically-motivated attacks. (And an unregulated medium at that. Heaven forbid we should practice unregulated politics.)
--It's "a perfect medium for the sale of software and other digital products."
--It's a medium for interactive, moving content.
--It's a "new medium for business communication."
--It's "a medium of news dissemination."
--It's "a new medium for design."
--It's a new medium for video.
--It's a new medium for communication by individuals.
--It's a new medium for socializing.
I think that in reality the Internet is not a new medium for anything. It's a transport mechanism. It is to data what a road is to eighteen-wheel trucks. And the Web isn't a medium either; it's a set of protocols for accessing and delivering data. To abuse the road analogy, it's the warehouses and truck stops that load, unload, and service the trucks.
The Internet is a meta-medium
When we talk about the Internet as a medium, we're confusing the delivery mechanism with the goods being delivered. This is a crucial distinction, because if you think of the Internet as a medium you won't understand its real power. The Internet is a meta-medium. It's a medium for creating new types of media; a general-purpose mechanism that spews new media as quickly as people can think them up.
And spew it does. As I hope you know if you've been reading this weblog for a while, I am not a fan of hype and overblown predictions. But I think the evidence shows that the Internet is enabling an explosion of new forms of media at a faster rate than ever before in human history. I believe this is one of the most revolutionary effects of the Internet, but we're so close to it that we don't think about it much.
Freeing media from the distribution mechanism
In the past, each new form of media was generally tied to a unique distribution infrastructure, technology base, and economic model. For a new medium to arise, you generally had to create a whole new production and distribution mechanism for it. For example:
Novels required the development of the printing press, a distribution infrastructure consisting of publishers and bookstores, and an economic model in which the reader pays and revenue is shared with the publisher and distribution chain.
Radio serial drama required the invention and sale of millions of radios, the construction of studios and transmitters, the creation of production companies and networks, and an economic model in which advertisers paid for the programs.
Movies required not just the creation of motion picture cameras, but also studios to produce the films, modified theaters to show them, a distribution system to deliver the reels of film, and an economic model in which ticket revenue and in-theater food sales combined to pay for the whole thing.
The huge effort and investment involved in creating these distribution chains severely limited the growth of new forms of media. For example, it took about 20 years from the invention of television and movies until either of them reached broad commercial distribution.
In contrast, new media proliferate on the Internet as fast as people can visit new websites and install plug-ins. (Obviously, this applies only to media that can be distributed electronically. But that still covers a lot.)
This chart gives you an idea of how the pace of change has accelerated.
This chart was based in part on a fantastic media history here.
Some people would say that most of the Internet media types I listed on the right edge of the chart aren't actually new media; that they're just a tweak on existing media. For example, Henry Jenkins argued in a great article for MIT Technology Review that you have to differentiate between media, genres, and delivery technologies (link):
I think he's right from the perspective of classifying things analytically, but if you follow that thinking religiously then it's almost impossible to create a new medium any more, unless smell-o-vision or machine telepathy comes along. I think in practical terms, you have a new medium as soon as you create a substantially different set of audience and business dynamics, because those are the changes that create meaningful new economic opportunities for creative people and businesses.
Here's the test: if you can't take material created for some other medium and replay it unchanged, then I think you've invented a new medium. CDs were not a new medium because they were created and sold in the same way, to the same people, as vinyl LPs. But radio drama was a new medium, because it had its own distinct audience and rules. You couldn't just take a stage play and turn it into a radio drama unmodified.
By this standard, the Internet is spawning new media forms faster than bunnies breed in Australia.
Of course, not all of these new types of media will be successful long-term. But it's exciting to see so much experimentation happening so quickly, and I believe it will have a profound effect on the ways we communicate and entertain ourselves in the years to come.
The revolution in front of you
Okay, so that's the theoretical foundation on what's happening. Let's discuss some examples -- three new forms of media we're creating, the rules and opportunities they create, and what comes next.
Online video
Oh, man. This one's so complex that you could write a book on it. The term "video" includes a huge variety of different things -- music videos, TV shows, animation, movies, video clips from amateurs, even commercials. Each one appears to have a different online audience and different financials.
Some of them have already run through a cycle of excitement and disappointment. For example, some people speak of an "internet animation era" that came and went at the start of the decade (you can read more about the expectations here). Usually the culprit for the disappointment is the failure to find a sustainable business model.
The hottest area in online video today is obviously short clips like the ones you see on YouTube. The ironic thing is that this form of video had virtually no traction prior to the Internet. Meanwhile, movies and TV shows -- which everyone predicted would move onto the Internet quickly -- don't have nearly as much momentum online.
Why YouTube is successful. Using YouTube is like eating potato chips ("crisps" if you live in the UK). When you're bored, it's great to browse short video clips looking for things that are funny or amazing or just plain weird. The brilliant aspects of YouTube (in my opinion) are that the video loads fast (can you imagine eating potato chips if you had to unwrap every chip individually?), and that the YouTube site links you to lots of other related videos, so it's easy to wander. If one video is boring, you're only moments away from something else.
This instant gratification factor turns the rules of traditional video on its head. In traditional video, quality and an immersive experience are king. To suck people into a television program or a movie, you use incredibly high quality images, editing, and sound. (If you want to know how important this is, look at all the enormous amounts of money the industry is spending to move to high-definition broadcasting and higher-capacity DVDs.)
That's why short online video is a different medium. Rather than immersion, the goal is instant gratification.
But how do you make money? The problem with short online video is that no one's sure how to make money from it. You pay to see a movie. You watch ads on television (well, you're supposed to, unless you use TiVo). Many companies are trying to attach commercials to online videos, but the result is often extraordinarily annoying to viewers.
That's not intuitive to the broadcast folks. Depending on what country you're in, to watch free TV you'll typically watch nine to 20 minutes of commercials in order to see an hour of programming (link). That's a ratio of between 15% and 30% commercials.
Apply that same ratio to a short online video, and you're watching a 30 second commercial to see a two minute video clip. Sounds reasonable, right? It's actually borderline intolerable to viewers because it breaks the instant gratification cycle. The whole idea is to beat boredom, not generate it.
Remember, this is a new medium. It has its own rules.
Maybe the answer will be very short ads, but no one knows what's short enough, and if those short ads will even work. Or maybe the answer is putting print ads on the website alongside the video. But unlike search, you don't know what topics a video viewer will be interested in, so it's much harder to target the ads. How will you individually track the demographics of people viewing more than six million separate YouTube clips? You'd basically have to build a database on the individual thoughts and behavior of every Internet user. That, I presume, is why YouTube was a good strategic investment for Google. It's also why I'm deeply skeptical about the high-profile efforts by entertainment companies to create sites competing with YouTube. Without Google's demographic and ad-targeting infrastructure, it will be hard for a competitor to monetize its videos.
And oh by the way, it's not clear that even Google can make this whole video thing work financially.
So let's classify short online video as an emerging medium: Proven audience, unproven economics.
Video in the mobile world. This is the current Flavor of the Month in the mobile data world. (Or maybe it was last month's flavor, and this month is GPS.) Anyway, there are a lot of people predicting that video is going to be very hot in the mobile space.
As was the case with PCs, you have to ask what sort of video you're talking about. The most intuitive use is short video. We know people use mobiles as boredom-busters, and short video is almost custom-made for that. But we run into the same economic problems as we have on PCs, only more so. It's not clear how many commercials people will tolerate in their mobile video.
Broadcast video, viewed on mobiles, is becoming popular in Asia. But by my standard that's not a new medium -- it's just building a television into your phone. And it bypasses the Internet, so it's not relevant to this discussion. (I recently wrote a long article on mobile video; if you missed it you can read it here.)
Virtual Reality as a Medium: Second Life
Most people think of Second Life as a game, or maybe a cult. But my Rubicon colleague Bruce La Fetra recently wrote an article (link) making the case that it's a new medium, and I believe he's right. Think about it. Here's the test of a new medium:
--Facilitates interaction between people. Second Life certainly does that.
--Has its own distinct audience. Double check. That's why some people look at Second Life as a cult.
--Has its own economic model. Triple check. This one even has its own currency.
A virtual meeting place. Second Life is so flexible that it's very hard to say what it'll turn into ultimately. It's already a meeting space for some people, and the upcoming addition of voice should improve that dramatically. Supposedly Cisco is providing pre-built avatars for employees, and a number of tech companies are using it for meetings (check out the slightly breathless but eye-opening article here).
Prototyping the physical world. Another clear use for VR is allowing individuals and corporations to create interactive experiences for others. For example, as Bruce points out, hotels are starting to test lobby layouts using Second Life. Brands like GeekSquad are using Second Life to reach out to customers, giving them another way to engage (read more about it here).
Some of this commentary is so enthusiastic that it reminds me of the commentary we saw in the bubble period. Second Life is definitely a geek playground, but I'm not sure how many "normal" people will want to mess around in virtual reality. We won't know until we try.
Is it a business or a standard? The ultimate business model for Second Life is still up in the air. Land owners pay real dollars for virtual real estate and corporate avatars, giving Linden Lab a revenue stream. However, the company is in the process of open-sourcing its server code. This will make it possible for anyone to create their own "land" without paying Linden Lab, and dramatically increases the likelihood that Second Life's technology will become a generalized standard for virtual reality. That's very healthy for the medium, but leaves Linden Lab without an obvious business model. There's an interesting discussion here.
The process of moving from a captive platform to the base of an open ecosystem is incredibly tricky. I think Linden is right to do it, because otherwise an open standard for virtual reality would have eventually emerged, pushing Second Life completely out of the picture (think of what happened when AOL went up against the Internet). But now Linden will need to find some parts of that open ecosystem where it can provide valued services. I think managing the virtual currency is a good start, but I haven't been able to find any clear statement of what the company's long-term financial model will be; please post a comment if you find one.
So the status of Second Life is similar to that of online video: Definite audience, unclear financials.
Virtual reality and mobile. Virtual reality thrives on large screens and fast processors. I think it's probably safe to say that it'll be limited to PC-sized devices for a long time (at least until we get flexible screens and fuel cells powerful enough to drive high-end graphics processors in a mobile). Until that day, I wouldn't be investing heavily in creating a SecondLife client for Nokia S60.
Feeds
Actually, these are several new media that I have grouped together for convenience: Text feeds, audio feeds, and video feeds. Plus more types of feeds to come.
Different feed types have different audiences. Steve Olechowski of Feedburner gives a great speech summarizing the feed world and what's happening in it. One of the interesting tidbits he gives out is that different types of feeds tend to be dominated by different subjects. Text feeds most commonly focus on technology, while audio feeds are most often about music, social issues, and religion ("Godcasts"). So different forms of communication -- text vs. recorded speech -- attract different types of creators and audiences. I suspect that video feeds are going to be different yet again, although it's probably too early to judge today. You can hear one of Steve's speeches here.
The thing I like about feeds is that they're efficient. Rather than going to a website to read or listen, you can bring the content to you and access it on your terms. A lot of people use online feed readers like Feed Burner, but my favorite is Feed Blitz, which consolidates all your feeds into a single daily e-mail. That lets me scan about a hundred articles a day in a matter of minutes.
Text feed vs. weblogs. One problem with text feeds is that they take readers away from your weblog, meaning they won't see the ads. That creates a lot of concern for weblog authors who rely on advertising. So they do things like putting only article summaries in their feeds, or embedding ads in the feeds, neither of which are popular with feed users.
Olechowski argues that authors shouldn't worry -- that the people who read feeds are different from the people who read websites, so there's little cannibalism. He says that providing a full-text feed from your weblog actually increases visitors to the site, rather than reducing them.
He has an incentive to say that, since his business is distributing feeds. But I think he may also have a point. Let's use Mobile Opportunity as an example: About 80% of the readers coming directly here are referrals from other websites and web searches, not returning readers. I think the general pattern for readers is that they come here from a web search or other link, and if they like the content then they subscribe to the feed. That's why I put extensive introductory information and links to previous articles in the sidebar on the right side of the page. If a web search visitor is interested in the sort of things I write about, I want to make sure they can determine that quickly so they'll either bookmark the page or subscribe to the feed.
The feed readers never see the sidebar, but they don't need it because they know what I've written about before. People who read via feeds have a different set of special needs. Chances are they use a feed reader that consolidates a lot of different feeds, which they then skim quickly. That makes it very important to use self-explanatory headlines for articles, and clear sub-heads within each article so people can skim easily. Web links are a special problem -- because they're colored and underlined, they stand out from the text. But they're not usually the things you want people to skim, because they don't summarize the content. That's why I've started putting links at the ends of sentences, rather than embedding them in the flow of the sentence.
I'm not trying to make money from this site, but if I were, I'd have to think very hard about what sort of ads go on the web page vs. in the feed, and where they get placed.
The bottom line: you write a little differently for a feed than you do for a weblog, and the financial model is subtly different as well. So it's a slightly different medium.
Status of feeds: Text feeds are quite well established, and audio feeds took off rapidly once they were enabled on the iPod. The financial model (to the extent that there is one) appears to be advertising, but I haven't seen a good discussion of the economics of advertising within feeds (please post a comment if you know of one). Presumably Google's recent purchase of FeedBurner is intended to allow them to stream ads into feeds, so we'll probably see more activity there. The dynamics of other types of feeds (video, etc) are still to be determined.
Feeds and the mobile world. Feeds are a spectacular fit for the mobile world; actually a much better fit than browsing. In general browsing is something you do live, while feeds can be fetched in the background, cached on the device, and then read or listened to whenever the user wishes.
A text feed is also much easier to reformat for a small screen. In a lot of ways, it's designed to be reformatted.
If I were working on a mobile data device today, I'd push this feature very hard -- figure out who my target customers are and what feeds they'd be most likely to enjoy, cache the top ten our so automatically, and give a great discovery mechanism so people can easily find more. Feeds are a commodity in that you can get them for free, but easy navigation and discovery of feeds is potentially a very attractive area for innovation.
I know third party developers are already doing this; if I were at a mobile hardware company I'd be making it a standard feature in every device.
What comes next?
What other media are emerging? Many more new forms of media emerging than I've listed here. I'm very interested in your ideas -- what do you think are some others to watch, and what's special about them? One I'd love to investigate more is the rise of casual games -- quickie games, usually based on Flash. Games like this were very popular in the early days of personal computing, and they seem to be making a comeback on the web. You can find some nifty ones on sites like Kongregate (link; check out Fancy Pants).
The transcendent need for a billing mechanism. When I said that the Web is a tool for creating new media, I left out an important detail. It's three-quarters of the tool. We have a great delivery system, and Google is well on its way to dominating the advertising part of the financial model. What's missing is a standard mechanism for people to pay for content that's not supported by advertising. Some types of content work fine with ads, but I think some other types are better when paid for. Novels, short stories, music, and research reports all qualify. Creators and readers would both benefit from a system in which people could easily pay a few dimes or a few dollars directly to the author, but today we generally have to fumble with credit cards and awkward systems like PayPal. And credit card vendors strongly discourage small payments.
Minipayments vs. micropayments. The Web community chewed over this issue and spat it out several years ago. They believe that micropayments are dead, and the subject is closed. You can find examples here and here and here and here. Wikipedia has a nicely balanced discussion of the debate here.
This is one of those cases where the groupthink tendency of the tech industry is a liability. It reminds me of MP3 players before the iPod -- a lot of people have tried something, nobody's gotten it right yet, and therefore it must be impossible. It'll continue to be impossible up until someone does it right, at which time everyone will suddenly agree that it was inevitable.
(Quick aside: Whenever everyone in the tech industry agrees on something, bet against them. A perfect consensus is a sign that healthy questioning has ceased, and there's bound to be a blind spot.)
In this case, I think the blind spot was that people predicted the wrong role and features for micropayments. Some people made it a payment vs. advertising debate (link). It's not -- some types of media are good for advertising, some good for payment. We need both, with a creative tension between them.
Another problem is that some of the advocates of micropayments envisioned a very fine-grained payment system, in which people would pay hundredths of cents for all sorts of content, like the way natural gas or water is metered. That sounded logical, but it didn't work in practice because gas and water are predictable commodities; you don't mind metering because you know exactly what you'll get. You don't know how good a website will be until you've visited it, by which point you have already paid if you're metering. We need larger payments for content that people can preview and read reviews about before they pay. Apple has proved decisively that on the wired Internet a payment system that charges about a buck for discrete chunks of content can indeed succeed.
Call it minipayments.
We desperately need a generalized minipayment system for content on the web. Because people have to trust it, it needs to come from a major vendor, and it should be exposed to developers as a web service so it can grow rapidly. Ideally, it should be tied to a lot of existing content with an easy discovery mechanism (again, like iTunes). Yahoo would be the perfect company to provide this service. Microsoft could do it too. Unfortunately, a lot of companies are focusing a huge amount of their energy on the almost hopeless task of beating Google in search advertising, when the better opportunity is owning a different piece of the infrastructure, one that doesn't have a dominant vendor yet.
Other companies that could do it include Amazon, Apple, eBay, and even Linden Lab. Google could do it too, of course, but it appears to be more interested in stealing PayPal's customers than in building something new.
I'd put this service on the list of computing products I want desperately, right after the info pad. Somebody's going to do it eventually. When they do they'll get a great business franchise, and the explosion of new media on the Web will accelerate even further.
I can't wait.
Next time: The Web as a software development platform.
Last time in this series I discussed what we're learning from Web 2 about managing a community online (link). This time I want to talk about the role the Internet is playing in the creation of new forms of media.
Is the internet a new medium?
I should start with a definition of what a medium is. Webster calls it, "a channel or system of communication, information, or entertainment" (link). I want to build on that a little. To me, a medium is something that moves information and/or entertainment between people. Movies are a medium, newspapers are a medium, oil painting is a medium. So is the telephone call, when you think about it. Each medium has its own distinct usages, economic model, and audience.
A lot of people have written about the Internet and/or the Web as a new "medium." A quick online search will give you thousands of articles and weblog posts on the subject. But there's something funny about the articles -- although they all call the Internet a medium, they define that medium in many different ways. For example...
--The Internet is a medium for mixed-media communication.
--It's a medium for online music broadcasting.
--It's a medium for making politically-motivated attacks. (And an unregulated medium at that. Heaven forbid we should practice unregulated politics.)
--It's "a perfect medium for the sale of software and other digital products."
--It's a medium for interactive, moving content.
--It's a "new medium for business communication."
--It's "a medium of news dissemination."
--It's "a new medium for design."
--It's a new medium for video.
--It's a new medium for communication by individuals.
--It's a new medium for socializing.
I think that in reality the Internet is not a new medium for anything. It's a transport mechanism. It is to data what a road is to eighteen-wheel trucks. And the Web isn't a medium either; it's a set of protocols for accessing and delivering data. To abuse the road analogy, it's the warehouses and truck stops that load, unload, and service the trucks.
The Internet is a meta-medium
When we talk about the Internet as a medium, we're confusing the delivery mechanism with the goods being delivered. This is a crucial distinction, because if you think of the Internet as a medium you won't understand its real power. The Internet is a meta-medium. It's a medium for creating new types of media; a general-purpose mechanism that spews new media as quickly as people can think them up.
And spew it does. As I hope you know if you've been reading this weblog for a while, I am not a fan of hype and overblown predictions. But I think the evidence shows that the Internet is enabling an explosion of new forms of media at a faster rate than ever before in human history. I believe this is one of the most revolutionary effects of the Internet, but we're so close to it that we don't think about it much.
Freeing media from the distribution mechanism
In the past, each new form of media was generally tied to a unique distribution infrastructure, technology base, and economic model. For a new medium to arise, you generally had to create a whole new production and distribution mechanism for it. For example:
Novels required the development of the printing press, a distribution infrastructure consisting of publishers and bookstores, and an economic model in which the reader pays and revenue is shared with the publisher and distribution chain.
Radio serial drama required the invention and sale of millions of radios, the construction of studios and transmitters, the creation of production companies and networks, and an economic model in which advertisers paid for the programs.
Movies required not just the creation of motion picture cameras, but also studios to produce the films, modified theaters to show them, a distribution system to deliver the reels of film, and an economic model in which ticket revenue and in-theater food sales combined to pay for the whole thing.
The huge effort and investment involved in creating these distribution chains severely limited the growth of new forms of media. For example, it took about 20 years from the invention of television and movies until either of them reached broad commercial distribution.
In contrast, new media proliferate on the Internet as fast as people can visit new websites and install plug-ins. (Obviously, this applies only to media that can be distributed electronically. But that still covers a lot.)
This chart gives you an idea of how the pace of change has accelerated.
This chart was based in part on a fantastic media history here.
Some people would say that most of the Internet media types I listed on the right edge of the chart aren't actually new media; that they're just a tweak on existing media. For example, Henry Jenkins argued in a great article for MIT Technology Review that you have to differentiate between media, genres, and delivery technologies (link):
Recorded sound is a medium. Radio drama is a genre. CDs, MP3 files and eight-track cassettes are delivery technologies. Genres and delivery technologies come and go, but media persist as layers within an ever more complicated information and entertainment system.
I think he's right from the perspective of classifying things analytically, but if you follow that thinking religiously then it's almost impossible to create a new medium any more, unless smell-o-vision or machine telepathy comes along. I think in practical terms, you have a new medium as soon as you create a substantially different set of audience and business dynamics, because those are the changes that create meaningful new economic opportunities for creative people and businesses.
Here's the test: if you can't take material created for some other medium and replay it unchanged, then I think you've invented a new medium. CDs were not a new medium because they were created and sold in the same way, to the same people, as vinyl LPs. But radio drama was a new medium, because it had its own distinct audience and rules. You couldn't just take a stage play and turn it into a radio drama unmodified.
By this standard, the Internet is spawning new media forms faster than bunnies breed in Australia.
Of course, not all of these new types of media will be successful long-term. But it's exciting to see so much experimentation happening so quickly, and I believe it will have a profound effect on the ways we communicate and entertain ourselves in the years to come.
The revolution in front of you
Okay, so that's the theoretical foundation on what's happening. Let's discuss some examples -- three new forms of media we're creating, the rules and opportunities they create, and what comes next.
Online video
Oh, man. This one's so complex that you could write a book on it. The term "video" includes a huge variety of different things -- music videos, TV shows, animation, movies, video clips from amateurs, even commercials. Each one appears to have a different online audience and different financials.
Some of them have already run through a cycle of excitement and disappointment. For example, some people speak of an "internet animation era" that came and went at the start of the decade (you can read more about the expectations here). Usually the culprit for the disappointment is the failure to find a sustainable business model.
The hottest area in online video today is obviously short clips like the ones you see on YouTube. The ironic thing is that this form of video had virtually no traction prior to the Internet. Meanwhile, movies and TV shows -- which everyone predicted would move onto the Internet quickly -- don't have nearly as much momentum online.
Why YouTube is successful. Using YouTube is like eating potato chips ("crisps" if you live in the UK). When you're bored, it's great to browse short video clips looking for things that are funny or amazing or just plain weird. The brilliant aspects of YouTube (in my opinion) are that the video loads fast (can you imagine eating potato chips if you had to unwrap every chip individually?), and that the YouTube site links you to lots of other related videos, so it's easy to wander. If one video is boring, you're only moments away from something else.
This instant gratification factor turns the rules of traditional video on its head. In traditional video, quality and an immersive experience are king. To suck people into a television program or a movie, you use incredibly high quality images, editing, and sound. (If you want to know how important this is, look at all the enormous amounts of money the industry is spending to move to high-definition broadcasting and higher-capacity DVDs.)
That's why short online video is a different medium. Rather than immersion, the goal is instant gratification.
But how do you make money? The problem with short online video is that no one's sure how to make money from it. You pay to see a movie. You watch ads on television (well, you're supposed to, unless you use TiVo). Many companies are trying to attach commercials to online videos, but the result is often extraordinarily annoying to viewers.
That's not intuitive to the broadcast folks. Depending on what country you're in, to watch free TV you'll typically watch nine to 20 minutes of commercials in order to see an hour of programming (link). That's a ratio of between 15% and 30% commercials.
Apply that same ratio to a short online video, and you're watching a 30 second commercial to see a two minute video clip. Sounds reasonable, right? It's actually borderline intolerable to viewers because it breaks the instant gratification cycle. The whole idea is to beat boredom, not generate it.
Remember, this is a new medium. It has its own rules.
Maybe the answer will be very short ads, but no one knows what's short enough, and if those short ads will even work. Or maybe the answer is putting print ads on the website alongside the video. But unlike search, you don't know what topics a video viewer will be interested in, so it's much harder to target the ads. How will you individually track the demographics of people viewing more than six million separate YouTube clips? You'd basically have to build a database on the individual thoughts and behavior of every Internet user. That, I presume, is why YouTube was a good strategic investment for Google. It's also why I'm deeply skeptical about the high-profile efforts by entertainment companies to create sites competing with YouTube. Without Google's demographic and ad-targeting infrastructure, it will be hard for a competitor to monetize its videos.
And oh by the way, it's not clear that even Google can make this whole video thing work financially.
So let's classify short online video as an emerging medium: Proven audience, unproven economics.
Video in the mobile world. This is the current Flavor of the Month in the mobile data world. (Or maybe it was last month's flavor, and this month is GPS.) Anyway, there are a lot of people predicting that video is going to be very hot in the mobile space.
As was the case with PCs, you have to ask what sort of video you're talking about. The most intuitive use is short video. We know people use mobiles as boredom-busters, and short video is almost custom-made for that. But we run into the same economic problems as we have on PCs, only more so. It's not clear how many commercials people will tolerate in their mobile video.
Broadcast video, viewed on mobiles, is becoming popular in Asia. But by my standard that's not a new medium -- it's just building a television into your phone. And it bypasses the Internet, so it's not relevant to this discussion. (I recently wrote a long article on mobile video; if you missed it you can read it here.)
Virtual Reality as a Medium: Second Life
Most people think of Second Life as a game, or maybe a cult. But my Rubicon colleague Bruce La Fetra recently wrote an article (link) making the case that it's a new medium, and I believe he's right. Think about it. Here's the test of a new medium:
--Facilitates interaction between people. Second Life certainly does that.
--Has its own distinct audience. Double check. That's why some people look at Second Life as a cult.
--Has its own economic model. Triple check. This one even has its own currency.
A virtual meeting place. Second Life is so flexible that it's very hard to say what it'll turn into ultimately. It's already a meeting space for some people, and the upcoming addition of voice should improve that dramatically. Supposedly Cisco is providing pre-built avatars for employees, and a number of tech companies are using it for meetings (check out the slightly breathless but eye-opening article here).
Second Life is a tool for holding three-dimensional visual conversations...I know some people can't hold a serious business conversation without a pen and paper to draw with; Second Life is made for those people....One day, you'll be able to import sales data from an Oracle database, create a three-dimensional diagram of that data that changes in near-realtime, and hold a meeting of top corporate executives all over the world in Second Life to discuss the results. --Mitch Wagner
Prototyping the physical world. Another clear use for VR is allowing individuals and corporations to create interactive experiences for others. For example, as Bruce points out, hotels are starting to test lobby layouts using Second Life. Brands like GeekSquad are using Second Life to reach out to customers, giving them another way to engage (read more about it here).
Some of this commentary is so enthusiastic that it reminds me of the commentary we saw in the bubble period. Second Life is definitely a geek playground, but I'm not sure how many "normal" people will want to mess around in virtual reality. We won't know until we try.
Is it a business or a standard? The ultimate business model for Second Life is still up in the air. Land owners pay real dollars for virtual real estate and corporate avatars, giving Linden Lab a revenue stream. However, the company is in the process of open-sourcing its server code. This will make it possible for anyone to create their own "land" without paying Linden Lab, and dramatically increases the likelihood that Second Life's technology will become a generalized standard for virtual reality. That's very healthy for the medium, but leaves Linden Lab without an obvious business model. There's an interesting discussion here.
The process of moving from a captive platform to the base of an open ecosystem is incredibly tricky. I think Linden is right to do it, because otherwise an open standard for virtual reality would have eventually emerged, pushing Second Life completely out of the picture (think of what happened when AOL went up against the Internet). But now Linden will need to find some parts of that open ecosystem where it can provide valued services. I think managing the virtual currency is a good start, but I haven't been able to find any clear statement of what the company's long-term financial model will be; please post a comment if you find one.
So the status of Second Life is similar to that of online video: Definite audience, unclear financials.
Virtual reality and mobile. Virtual reality thrives on large screens and fast processors. I think it's probably safe to say that it'll be limited to PC-sized devices for a long time (at least until we get flexible screens and fuel cells powerful enough to drive high-end graphics processors in a mobile). Until that day, I wouldn't be investing heavily in creating a SecondLife client for Nokia S60.
Feeds
Actually, these are several new media that I have grouped together for convenience: Text feeds, audio feeds, and video feeds. Plus more types of feeds to come.
Different feed types have different audiences. Steve Olechowski of Feedburner gives a great speech summarizing the feed world and what's happening in it. One of the interesting tidbits he gives out is that different types of feeds tend to be dominated by different subjects. Text feeds most commonly focus on technology, while audio feeds are most often about music, social issues, and religion ("Godcasts"). So different forms of communication -- text vs. recorded speech -- attract different types of creators and audiences. I suspect that video feeds are going to be different yet again, although it's probably too early to judge today. You can hear one of Steve's speeches here.
The thing I like about feeds is that they're efficient. Rather than going to a website to read or listen, you can bring the content to you and access it on your terms. A lot of people use online feed readers like Feed Burner, but my favorite is Feed Blitz, which consolidates all your feeds into a single daily e-mail. That lets me scan about a hundred articles a day in a matter of minutes.
Text feed vs. weblogs. One problem with text feeds is that they take readers away from your weblog, meaning they won't see the ads. That creates a lot of concern for weblog authors who rely on advertising. So they do things like putting only article summaries in their feeds, or embedding ads in the feeds, neither of which are popular with feed users.
Olechowski argues that authors shouldn't worry -- that the people who read feeds are different from the people who read websites, so there's little cannibalism. He says that providing a full-text feed from your weblog actually increases visitors to the site, rather than reducing them.
He has an incentive to say that, since his business is distributing feeds. But I think he may also have a point. Let's use Mobile Opportunity as an example: About 80% of the readers coming directly here are referrals from other websites and web searches, not returning readers. I think the general pattern for readers is that they come here from a web search or other link, and if they like the content then they subscribe to the feed. That's why I put extensive introductory information and links to previous articles in the sidebar on the right side of the page. If a web search visitor is interested in the sort of things I write about, I want to make sure they can determine that quickly so they'll either bookmark the page or subscribe to the feed.
The feed readers never see the sidebar, but they don't need it because they know what I've written about before. People who read via feeds have a different set of special needs. Chances are they use a feed reader that consolidates a lot of different feeds, which they then skim quickly. That makes it very important to use self-explanatory headlines for articles, and clear sub-heads within each article so people can skim easily. Web links are a special problem -- because they're colored and underlined, they stand out from the text. But they're not usually the things you want people to skim, because they don't summarize the content. That's why I've started putting links at the ends of sentences, rather than embedding them in the flow of the sentence.
I'm not trying to make money from this site, but if I were, I'd have to think very hard about what sort of ads go on the web page vs. in the feed, and where they get placed.
The bottom line: you write a little differently for a feed than you do for a weblog, and the financial model is subtly different as well. So it's a slightly different medium.
Status of feeds: Text feeds are quite well established, and audio feeds took off rapidly once they were enabled on the iPod. The financial model (to the extent that there is one) appears to be advertising, but I haven't seen a good discussion of the economics of advertising within feeds (please post a comment if you know of one). Presumably Google's recent purchase of FeedBurner is intended to allow them to stream ads into feeds, so we'll probably see more activity there. The dynamics of other types of feeds (video, etc) are still to be determined.
Feeds and the mobile world. Feeds are a spectacular fit for the mobile world; actually a much better fit than browsing. In general browsing is something you do live, while feeds can be fetched in the background, cached on the device, and then read or listened to whenever the user wishes.
A text feed is also much easier to reformat for a small screen. In a lot of ways, it's designed to be reformatted.
If I were working on a mobile data device today, I'd push this feature very hard -- figure out who my target customers are and what feeds they'd be most likely to enjoy, cache the top ten our so automatically, and give a great discovery mechanism so people can easily find more. Feeds are a commodity in that you can get them for free, but easy navigation and discovery of feeds is potentially a very attractive area for innovation.
I know third party developers are already doing this; if I were at a mobile hardware company I'd be making it a standard feature in every device.
What comes next?
What other media are emerging? Many more new forms of media emerging than I've listed here. I'm very interested in your ideas -- what do you think are some others to watch, and what's special about them? One I'd love to investigate more is the rise of casual games -- quickie games, usually based on Flash. Games like this were very popular in the early days of personal computing, and they seem to be making a comeback on the web. You can find some nifty ones on sites like Kongregate (link; check out Fancy Pants).
The transcendent need for a billing mechanism. When I said that the Web is a tool for creating new media, I left out an important detail. It's three-quarters of the tool. We have a great delivery system, and Google is well on its way to dominating the advertising part of the financial model. What's missing is a standard mechanism for people to pay for content that's not supported by advertising. Some types of content work fine with ads, but I think some other types are better when paid for. Novels, short stories, music, and research reports all qualify. Creators and readers would both benefit from a system in which people could easily pay a few dimes or a few dollars directly to the author, but today we generally have to fumble with credit cards and awkward systems like PayPal. And credit card vendors strongly discourage small payments.
Minipayments vs. micropayments. The Web community chewed over this issue and spat it out several years ago. They believe that micropayments are dead, and the subject is closed. You can find examples here and here and here and here. Wikipedia has a nicely balanced discussion of the debate here.
This is one of those cases where the groupthink tendency of the tech industry is a liability. It reminds me of MP3 players before the iPod -- a lot of people have tried something, nobody's gotten it right yet, and therefore it must be impossible. It'll continue to be impossible up until someone does it right, at which time everyone will suddenly agree that it was inevitable.
(Quick aside: Whenever everyone in the tech industry agrees on something, bet against them. A perfect consensus is a sign that healthy questioning has ceased, and there's bound to be a blind spot.)
In this case, I think the blind spot was that people predicted the wrong role and features for micropayments. Some people made it a payment vs. advertising debate (link). It's not -- some types of media are good for advertising, some good for payment. We need both, with a creative tension between them.
Another problem is that some of the advocates of micropayments envisioned a very fine-grained payment system, in which people would pay hundredths of cents for all sorts of content, like the way natural gas or water is metered. That sounded logical, but it didn't work in practice because gas and water are predictable commodities; you don't mind metering because you know exactly what you'll get. You don't know how good a website will be until you've visited it, by which point you have already paid if you're metering. We need larger payments for content that people can preview and read reviews about before they pay. Apple has proved decisively that on the wired Internet a payment system that charges about a buck for discrete chunks of content can indeed succeed.
Call it minipayments.
We desperately need a generalized minipayment system for content on the web. Because people have to trust it, it needs to come from a major vendor, and it should be exposed to developers as a web service so it can grow rapidly. Ideally, it should be tied to a lot of existing content with an easy discovery mechanism (again, like iTunes). Yahoo would be the perfect company to provide this service. Microsoft could do it too. Unfortunately, a lot of companies are focusing a huge amount of their energy on the almost hopeless task of beating Google in search advertising, when the better opportunity is owning a different piece of the infrastructure, one that doesn't have a dominant vendor yet.
Other companies that could do it include Amazon, Apple, eBay, and even Linden Lab. Google could do it too, of course, but it appears to be more interested in stealing PayPal's customers than in building something new.
I'd put this service on the list of computing products I want desperately, right after the info pad. Somebody's going to do it eventually. When they do they'll get a great business franchise, and the explosion of new media on the Web will accelerate even further.
I can't wait.
Next time: The Web as a software development platform.
New offers for startups, and established companies that need insight fast
Please forgive the commercial message, but I wanted to let folks know about a couple of new services that we're offering at Rubicon Consulting. We're trying to design services tailored to the special needs of tech companies, so I'm interested in feedback and suggestions.
Most of the work I do in my day job is big, traditional consulting projects for tech companies -- defining a product strategy, creating a marketing plan, etc. But we noticed two situations in which people needed something smaller and faster. That's what the new offers are about.
Boot Camp: Bringing a team up to speed on a critical industry issue
A Boot Camp is an interactive half-day working session, led by Rubicon's principals (that's me and our other principal, Nilofer Merchant), focused on one of the most important issues facing tech companies. We teach your team what's happening, opportunities and pitfalls, and best practices. And we lead them through brainstorming on exactly what you can do about it. The session is designed to drive alignment, set priorities, and challenge conventional thinking.
In 2007 we're offering Boot Camps on:
--Moving from the enterprise market into small and medium business
--How traditional software companies can compete with Web 2.0 (hint: It's not about posting your app for free online and selling ads)
--Mobile market essentials for non-mobile companies
--Defeating an assault by Microsoft
--Online marketing: Best practices and killer opportunities
The Rubicon Consultation: Advice for startups
If you're an entrepreneur, you often don't need a project, you just need seasoned advice. The Rubicon Consultation is designed and priced specifically for that situation. Our principals work with your core team in a custom half-day or full-day session focused on a deliverable, plan, or issue that you need to resolve. Just like a consultation with a doctor, it's a great way to get quick insight from a trusted advisor.
Consultation topics can include:
--Review and tune a key presentation
--Refine the pitch for an important alliance
--Brainstorm product features and value proposition
--Define a market opportunity
--Get independent feedback on your strategy
...or whatever else you need. Just call us and ask.
We've been doing consultations for about six months now while we tested the process, and they're a lot of fun.
Click on these links for more information on Rubicon Boot Camp or the Rubicon Consultation. Or drop me a note.
Thanks for listening.
Most of the work I do in my day job is big, traditional consulting projects for tech companies -- defining a product strategy, creating a marketing plan, etc. But we noticed two situations in which people needed something smaller and faster. That's what the new offers are about.
Boot Camp: Bringing a team up to speed on a critical industry issue
A Boot Camp is an interactive half-day working session, led by Rubicon's principals (that's me and our other principal, Nilofer Merchant), focused on one of the most important issues facing tech companies. We teach your team what's happening, opportunities and pitfalls, and best practices. And we lead them through brainstorming on exactly what you can do about it. The session is designed to drive alignment, set priorities, and challenge conventional thinking.
In 2007 we're offering Boot Camps on:
--Moving from the enterprise market into small and medium business
--How traditional software companies can compete with Web 2.0 (hint: It's not about posting your app for free online and selling ads)
--Mobile market essentials for non-mobile companies
--Defeating an assault by Microsoft
--Online marketing: Best practices and killer opportunities
The Rubicon Consultation: Advice for startups
If you're an entrepreneur, you often don't need a project, you just need seasoned advice. The Rubicon Consultation is designed and priced specifically for that situation. Our principals work with your core team in a custom half-day or full-day session focused on a deliverable, plan, or issue that you need to resolve. Just like a consultation with a doctor, it's a great way to get quick insight from a trusted advisor.
Consultation topics can include:
--Review and tune a key presentation
--Refine the pitch for an important alliance
--Brainstorm product features and value proposition
--Define a market opportunity
--Get independent feedback on your strategy
...or whatever else you need. Just call us and ask.
We've been doing consultations for about six months now while we tested the process, and they're a lot of fun.
Click on these links for more information on Rubicon Boot Camp or the Rubicon Consultation. Or drop me a note.
Thanks for listening.
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