Keep Your Content Simple, Stupid

January 10, 2011 in Essays, Marketing

Gerard O’Neill recently pointed us to the ‘reading level’ feature in Google’s advanced search.

You can now use Google’s Advanced Search option to determine whether the content of a given blog or site has a reading level that is basic, intermediate or advanced. In the Reading Level menu select ‘annotate results with reading level’ and then enter the url of your preferred site in the ‘search within a site or domain’ box.

His post, titled “Where The Smart People Go,” showed a comparison of some of the reading levels of various Irish websites and the results were obvious – the more “high brow” or “niche intellectual” sites had a more advanced reading level than the sites with a more “mass market” audience.

Gerard found this search tool from Christopher Mims, who reviewed even more sites with varying reading levels.

Wired.com is “decidedly middlebrow”, but ieee.org is the “Smartest” of the lot.

The consensus seemed to be that an Advanced reading level made for a “smarter” blog.

I think the opposite is true. If you want to write posts that spread, surely a simpler writing style is better.

I did a few quick searches and the results for Seth Godin confirmed my hunch.

His blog is one of the most popular on the web. He riffs on very intelligent concepts and shares groundbreaking ideas, but less than 1% is at an “advanced” reading level.

He packages powerful ideas in simple, readable and share-able posts.

The lesson from Seth is that simpler content spreads.

And, as we all know – ideas that spread, win.

Charging Extra For 3D Is A Mistake

August 11, 2010 in Business, Economics, Essays

We all know that the music and movie industries have been crippled by the digital revolution of the last 10 years. Some blame piracy and filesharing, others (including me) blame the economics. Regardless of the cause, we can all still agree that these are two giant industries brought to their knees by the internet… right?

Wrong, actually! The recorded music industry has been decimated in the last five years, there’s no doubt about that, but the film industry has actually been booming. Despite all their complaining about piracy (you wouldn’t rob a car, would you?) the industry has been growing remarkably. Take a look at these figures published by the UK Film Council (found via TechDirt):

  • The core UK film industry has grown 50% over the last 10 years
  • UK box office takings at record levels, with growth of over 60% over 10 years
  • They have had a 500% return on their investments in film
  • More films are being released, up over 30% in the last decade
  • Independent films are performing quite well, taking in nearly half the revenue of major studio films

So why has the recorded music industry been decimated while the movie industry is thriving? The answer lies in the economics at work – specifically the economics of scarcity and abundance.

The internet has transformed the distribution of film and music. They were once both limited in supply (there’s only so many plastic discs in the world) but they are now in infinite supply online. One copy of a song or a film can be replicated (copied and pasted) a million times over at practically no cost. When supply becomes abundant like this, price will plummet towards zero.

This has happened across both industries. Independent musicians find it very hard to command any price for an MP3, so too do YouTube with their videos. Larger monopolies (Record labels and Film Studios) are struggling to maintain high prices on mainstream products, but the market is finding ways of bringing the price to it’s natural equilibrium (think Napster, Limwire et al).

So both of these industries have had core products – relatively scarce CDs and DVDs – transformed into infinite, digital goods. The important difference between the two has come from what they’ve done with the remaining scarce products in their arsenal.

If you’ve noticed me using the term “recorded music” instead of just “music industry” it’s for a reason. The music industry as a whole has been booming too, boosted mostly by live performances. Tickets to see your favorite musician live in concert are limited and scarce – so they can still command a price. The experience isn’t something easily replicated and it’s not something you can download on a filesharing network. Better still, the abundance of freely available music online has created more fans listening to more music made by more musicians than ever before, which in turn is creating more demand for live concerts.

I know this seems hard to believe, given all the sky-is-falling talk we hear from the industry – but even the PRS in the UK recently reported (PDF) that 2009 saw a 4.7% rise in the industry’s total revenue.

As for the movie industry, I don’t have any supporting data, but my guess is that this is the same effect we’re seeing in their record numbers. The internet is enabling more film makers to make more movies to be watched by more fans than ever before. The cinema is still providing a scarce, difficult-to-replicate service (big screen & popcorn and all that), and so it’s reaping the rewards of a population more “into” movies than ever before.

And It’s Egg Shaped

So maybe the future is bright for these two industries that seemed doomed since the advent of file sharing? Don’t bet on it!

The music industry, instead of recognizing the value of a scarce concert ticket and nurturing it as a growth industry, are crippling it. They’re treating it as a replacement for CD sales and hiking ticket prices to plug the gap in the numbers. This, it seems, is starting to have pretty disasterous effects. I won’t go into it in much detail, but there are plenty of reports this summer of hundreds of cancelled shows, of a dismal Live Nation investor presentation, and the Ticketmaster CEO blaming piracy for driving up ticket prices.

The movie industry are also faced with the same opportunity. With home theatres becoming more and more affordable, they risk loosing out on a major source of income as the theater experience becomes easily replicated at home. This is why so many people view innovations like 3D and IMAX as important parts of the future of the movie industry – because they help enhance the cinema’s attraction and stop the experience drifting into abundance.

So what are they doing to make sure 3D is as appealing as possible to keep people coming back to the theaters? Jacking up the prices on the tickets AND charging for the glasses, of course!

Eejits.

(P.S. I love terrible puns, so I really wanted to end the post by saying “If only 3D glasses helped stop such short-sitedness”)

Facebook Is Evil

April 6, 2010 in Business, Essays

Anyone who knows me knows that I’m a fan of Google. This isn’t a post to describe my personal affection for a corporate entity, but it is an attempt to describe one element that I find particularly appealing.

Don’t Be Evil

This phrase is Google’s infamous, informal corporate motto. I love it. Not only does it help reinforce my romantic, naive teenage dreams that I could become the next Richard Branson or Bill Gates just by doing good in the world, but it also helps prove that in the new business world, evil is bad for business.

A small bit of history on the origins of the motto: At the start of the last decade, in the company’s early days, they had reached a pivotal point in their growth. Google was starting to expand beyond a small team of like-minded individuals and so the founders felt there was need to somehow define the company’s core values. Equipped with the new set of values any potential new-comer, when faced with a decision in their job, could instinctively know what “Google would do”.

John Battelle’s book on Google, The Search, tells the story like this:

On July 19, 2001, about a dozen early employees met to mull over the founders’ directive [to elucidate Google’s core values] … The meeting soon became cluttered with the kind of easy and safe corporate clichés that everyone can support, but that carry little impact: Treat Everyone with Respect, for example, or Be on Time for Meetings.

The engineers in the room were rolling their eyes. [Amit] Patel recalls: “Some of us were very anticorporate, and we didn’t like the idea of all these specific rules.”

That’s when Paul Buchheit, another engineer in the group, blurted out what would become the most important three words in Google’s corporate history. “Paul said, ‘All of these things can be covered by just saying, Don’t Be Evil,'” Patel recalls. “And it just kind of stuck.”

The message spread, and it was embraced, especially by Page and Brin… “I think it’s much better than Be Good or something,” Page jokes. “When you are making decisions, it causes you to think. I think that’s good.”

And that’s what “Don’t be evil” came to mean within the company. It was their way of reminding every member of staff that the user comes first. It informs their design, marketing, advertising and strategic decisions. Yahoo used to sell the top spot in it’s search results as paid placements, but Google decided confusing it’s users into clicking ads was “evil” and so it kept it’s search results separated from it’s sponsored links. Almost anything that taxed or exploited or inconvenienced a user was considered evil and avoided, even if it meant losing revenue in the short term. Even though this was borne out of a sense of moral obligation, it has since become an incredibly powerful driver of business success.

Facebook Is Unstoppable

I don’t know how many news articles and blog posts I’ve read that proclaim Facebook’s current position to be unbeatable, but I do know that I agreed with most of them. There were many reasons that Facebook overtook and usurped the user bases of MySpace, Bebo, Orkut, Hi5 and all the rest, but today these reasons are somewhat unimportant. Facebook has emerged as the victor from the early social networking free-for-all, and with it’s massive userbase (400 million and counting), open APIs and top class design, there really is no need for a competitor. When it comes to main-stream social networks, where the user’s utility and enjoyment comes from the fact all their friends are on the same network, the world only really needs one.

For this reason alone, I found it very difficult to imagine what features a new would-be contender to the throne might have, or how anybody could hope to gain a network effect stronger than Facebook’s own. But last week I read two separate articles that stopped me wondering how Facebook might eventually be toppled. “This is it for Facebook,” I thought. ” This is the beginning of the end.” (dun dun dun!)

The Love Of Money…

If I could alter this bible quote above, I would change it to “earning no money is the root of all evil.” Facebook has over 400 million users, but has only recently been cash flow positive. While they might be on track to earn $1 billion this year, the length of time it has taken for investors to start getting a return has got to be a huge weight on Mark Zuckerberg’s shoulders.

So let’s imagine we are Mark Zuckerberg, CEO of Facebook. (This scenario will probably be applicable to Twitter pretty soon too). Since founding Facebook in 2004, people have given you over $700m of their own money and are counting on you to earn them a large return on that investment. So how does your business make money? In 2009 you probably earned between $600m-$700m, and almost all of that came from advertising. Like the TV, Radio and Newspapers before you, you’re in the business of selling a captive audience to marketers. So what do you do to make more money in 2010?

This is the key cross roads that all companies reach if they are in the business of selling an audience to advertisers. If they mistreat their audience to earn extra revenue in the short term, their business suffers in the long term. This is why newspapers separate their sales teams from the editorial teams and this is why Google doesn’t like to be evil.

Facebook, it would seem, has bowed to the pressure. Here are the two headlines from last week that I mentioned:

Facebook Is Evil

Both of these moves are very evil, in the Google sense of the word.

The first article describes Facebook’s potential plan to take the benefits of Facebook connect, but to remove the pesky “user’s permission” element – “Imagine visiting a website and finding that it already knows who you are, where you live, how old you are and who your Facebook friends are, without your ever having given it permission to access that information,” wrote Marshal Kirkpatrick. Facebook, on the other hand, described it as a nice user experience and a way of making Facebook connect “more seamless” – how thoughtful of them!

The second article describes a new change in the language used on Facebook advertisements. Users can currently “like” an update on Facebook, just to express the fact that they enjoyed it, or they can “become a fan” of a brand or company to connect with them and receive regular updates from them. Facebook has realised that users are far more likely to “like” something than “become a fan” (presumably because there is no commitment in the first one) and so they decided to change the language on their advertisements. Now a user will be presented with an option to “like” an advertisement, but it will have the functionality of “becoming a fan.” In essence, Facebook are tricking their users into opting into communications from advertisers. Or as they like to put it “This lighter-weight action for connection to a Page on Facebook means that users will be making more connections across the site, including your Facebook Page.”

Good Vs. Evil

These two stories, to me, represent the first clearly visible chink in Facebook’s armour. I can now see the unique feature that the next big social network will have – an overt respect for it’s users’ privacy, a desire not to be evil. Or maybe it’s more basic than that. Maybe the business that overtakes Facebook won’t just have a desire to be good, but they’ll have a business model that doesn’t force them to be evil. I can’t help but believe that had Mark Zuckerberg thought of a better business model than “just throw some ads on the site,” he never would have felt compelled to claim that a disregard for privacy is the new “social norm.”

This may not be the stuff that Hollywood scripts are made of, but for me the next 2-3 years will as good as any epic Good vs. Evil battle. Not only will it reignite my romantic beliefs in the power of good, but it will prove that building a business model around “doing good” will be the most successful strategy for the 21st century.

The Google way vs. The Facebook way, let the battle commence!