Musing about culture and customers and choice: the eBaying of “content”

I have the privilege of spending time with many startups, in a variety of guises: as incubator, as advisor, as investor, as chairman, as well-wisher, friend and supporter. The startups differ widely and wildly: they range in size from a handful of people to hundreds;  they have annual burn rates in the thousands and in the millions; they have different strategies and different ways of executing them; the motives that drive them are different, the things that keep them awake at night differ as well. They make different types of products and services, for different markets, with different social and economic aims and consequences.

But they share one thing: They keep asking themselves the same set of questions:  “What does the customer want? What will she do with our product or service, how will it be used? Why will she come to us for it? And what will she pay for it?”

This isn’t rocket science; it isn’t even illuminated startup management. It’s Customer 101. So we speak a lot about customer choice, and, much of the time, we do something about it.

When it comes to culture, however, we seem to forget. Which is strange, because the changes that are taking place are at their most severe in the cultural arena. Changes that are taking place to reverse the developments of the last fifty, maybe even hundred years in a number of key aspects of culture.

  • These changes are simple yet far-reaching:
  • Consumption to Participation: The television and broadcast ages brought the ability for people to consume events globally, but it took the tools of today to let them participate globally. Obama’s campaign is a classic example. There were people all over the US, even in the “red” states, who contributed to his campaign, who participated in the discussions. Yes, there were people in Europe who tried to donate money into Obama’s campaign and failed for good legal reasons; but they could still engage.
  • One Place to Many Places: You couldn’t be part of an orchestra unless you went to where the orchestra was. Now the Mountain comes to many Mahomets, the orchestra comes to you, there are many examples of distributed music ensembles.
  • One Time to Any Time: Gone are the days when Super Bowl Monday was a nightmare for young men in Europe, who had to stay up into the early hours of Monday if they wanted to make an “evening” of it. Now they can still do that, but they don’t have to. They can hold their party on Monday night if they want. Not everything is streamed live, or needs to be. YouTube passed a billion hits a day and doesn’t stream anything live.
  • Hit Culture to Long Tail: When costs of warehousing and distribution were a significant proportion of overall cost, it made sense to reduce the number of items in inventory. As that changed the size of “inventory” available changed dramatically. So for example I buy many books from Amazon or Abebooks that aren’t in their top 10,000 sellers. Many of these books would be impossible to get via a traditional bookshop. The same goes for music and video. It doesn’t matter how many studies I see that seek to pooh-pooh Chris Anderson’s thesis, I look to what I do and what I can do. What I can do is a lot more than what I could do, because my transaction costs for “long-tail” items have reduced sharply.
  • Using to Making: The proliferation and ubiquitous availability of tools that are themselves participatory by nature has changed the basis of participation. Think of the number of video cameras you saw in the 1960s, the 1970s, the 1980s and now. Just look at the photographs, videos and notes that make it on to Facebook. Soon, Facebook will be a country whose population exceeds that of every country bar India and China. A country where everyone has feedback loops to the mother ship. Say what you like about the Borg, but don’t underestimate it. A critical change is taking place there. A country with more photo uploads than Flickr, more games players than World of Warcraft, more people than most of Europe or America. And global in reach. The stuff that gets uploaded to Facebook is not “copies of originals” but often mutations. Think of the number of video cameras you saw in the 1960s, the 1970s, the 1980s and now. More on this later.
  • Scarce to Abundant: One of the most fundamental changes is that of the internet as a copy and remix machine, making artificial scarcity something very difficult, something almost impossible. The very concept of artificial scarcity is relatively new, born of the consumption mindset driven by mass marketing. Things analog were, or at least could be, scarce. [If they weren’t scarce then you could hoard them or cartelise in order to make them seem scarce]. Things digital are fundamentally infinite in abundance, since the cost of reproduction and transmission is trivial.
  • Forced to Voluntary: Payment for cultural services has always changed from age to age; sometimes it’s been about patronage; sometimes it’s been about passing the hat around; sometimes it’s been about levies and fees, as with library schemes and radio broadcasting. The fixed purchase scheme is relatively recent in comparison and is in the process of being rendered obsolete. People will now pay what they are willing to pay, even for ostensibly free things.

I could go on, but won’t. The point is simple. We’re moving from an analog world to a digital world. That means that many things change. The most important change is that in a world of abundance, the buyer sets the price. The customer is in control.

The story is one of empowerment and inclusion, of enfranchisement. And one of the key shifts that is taking place is in the almost-random repurposing of things past. For example, take the concept of “literal videos“, as exemplified by Dustin McLean. What a lovely idea. Take an old video, keep to the original pictures and backing music, rewrite the lyrics to reflect what’s actually happening on the video rather than in the song. My particular favourite is the literal video version of Bonnie Tyler’s Total Eclipse of the Heart. My thanks to Dave Morin, who pointed it out to me via Facebook.

I keep trying to tell people that while the internet may have been discovered or even invented by Al Gore, it was definitely not invented exclusively as a new distribution model for Hollywood or its musical cater-cousin. Who could have predicted that someone would do this to Carl Sagan and to Stephen Hawking.

People are creating value from things long forgotten, long abandoned, long deemed worthless.

There is an eBaying of content going on, as people repurpose stuff they find in the digital garage and attic that is the Web.

Some people will become the new scavengers, looking through the detritus of the web for things to reuse and remix. Some will build the places where they look, the tools they look with: the Bit Torrents and Pirate Bays of this world. Some will do the remixing, as in the Dustin McLeans. Some will buy, but not all: there is already a plethora of data points about freemium models and conversion rates.

If we allow this to happen, then new revenue streams will begin to emerge, new business models will come about.

If we allow this to happen, then we can participate in these new revenue streams and models.

If we try to prevent it from happening, we will fail. And therefore not participate in the new revenue streams and models.

The customer now has choice.

And we have a choice. To be on the customer’s side. Or not.

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