September 2009 Analysis - Mac Slocum

Fear = Epic Fail

Quote of Note

The Science of Fear, by Daniel Gardner The disruption sweeping across the content industries tends to whip the fear up in media folks. Newspapers are dead! Newfangled gadgets are killing predecessors! Free is locked in bloody conflict with pay! "Human sacrifice, dogs and cats living together ... mass hysteria!"

It's all a bit much.

That's why I find the reasoned perspective in Daniel Gardner's excellent book "The Science of Fear" so refreshing. For example, the following excerpt objectively traces the genesis of fear in just a few dead-simple sentences. Entire fields of rigorous academic inquiry have failed to define fear's pathways so aptly:

But how do people choose which risks to worry about and which to ignore? Our friends, neighbors, and coworkers constantly supply us with judgments that are a major influence. The media provide us with the examples -- or not -- that Gut feeds into the Example Rule to estimate the likelihood of a bad thing happening. Experience and culture color hazards with emotions that Gut runs through the Good-Bad Rule. The mechanism known as habituation causes us to play down the risks of familiar things and play up the novel and unknown. If we connect with others who share our views about risks, group polarization can be expected -- causing our views to become more entrenched and extreme.

Seems easy, doesn't it? If we acknowledge bias and our own reactionary triggers, we can elevate analysis above the muck of fear. No more killing gadgets or dying industries. With a little reflection, we can view the issues at play within the context of what's actually happening.

Amazon Resurrects Orwell Annotations and Opens a New Can of Worms

Commentary

In an attempt to tie up the Orwell debacle, Amazon is offering affected customers replacement copies of "1984" or "Animal Farm" and the reinstatement of any personal annotations. From the New York Times:

Amazon said in an e-mail message to those customers that if they chose to have their digital copies restored, they would be able to see any digital annotations they had made. [Emphasis added.]

It's been more than a month since Amazon extracted the questionable Kindle editions, yet assumed-dead user notes now spring phoenix-like from the Orwellian ashes. Why the delay? Amazon, it would appear, claims jurisdiction over the saving, disassociation, and, if it's feeling magnanimous or motivated, full reinstatement of user notes according to its own schedule.

Playing devil's advocate, it may be that Amazon felt the controversy surrounding the Orwell deletions warranted back up of the notes, and perhaps the restoration delay was tied to a rights issue. But even with these (potential) explanations, a "surprise note resurrection" reeks of creepiness. If Amazon didn't delete annotations associated with illegal books -- an unfortunate but reasonable bit of collateral damage -- then what does it delete? Are the mistakes and alterations in my shopping cart history burned into a permanent record? Can a deleted S3 file miraculously reanimate? I can't help but raise an eyebrow toward all of Amazon's services, which is a shame since I admire the company's non-Kindle offerings.

Naturally Scarce Products Call "Shotgun." Advertising, You're in Back

Sustainable Model for Online Content Businesses

In an interview with CNBC, Gary Hoenig, general manager for ESPN The Magazine, says the economic downturn put advertising in the hot seat:

... the overdependence on advertising is a real crutch for media and this is an opportunity for us to actually get to the consumer and say, "Hey, what are you willing to pay for"?

The advertising conundrum is something I've run up against throughout my career. In an odd way, my focus on Web content forced me to confront the detriments of advertising earlier than my print and broadcast comrades because Web ad rates have always been low. The rest of the industry is learning what Web folks already know: ad revenue kinda sucks.

When I started to conceptualize a sustainable model for online content businesses -- a project I've been working on for quite a while -- I pushed advertising to the back burner. It's still present, and money can certainly be made in the online ad realm, but it's a rickety foundation for a content business. That's why I diversified the revenue streams across naturally scarce products (education, consulting, research, in-person events), sponsorships, and advertising. The aggregate is far more stable than advertising alone.

And speaking of that sustainable model for online content businesses project: each section includes a comments area, and I welcome all suggestions and criticisms. The model's fundamental concepts aren't original, and I'm certainly not positioning this as anything revolutionary. Rather, it's a collection of ideas, theories and guidelines that I collected over the years and arranged into a structure. What it becomes and where it goes are up in the air, but I found the organization and writing process quite useful. The framework helps me parse the vast number of perspectives and innovations I run across.

"User" and "Customer" are Different Animals In the Freemium World

Commentary

The New York Times' recent piece on Evernote inadvertently cracked open an important question in the "freemium" discussion: What's the difference between a user and a customer?

The language attached to freemium business models requires specificity because these businesses associate expectations with distinct user groups. With freemium, there's a vast canyon between free access (users) and pay access (customers); they are not synonymous. That's why the following clarifications are necessary:

User -- A visitor who accesses a site, product or platform, but does not pay. Example: I use Dropbox, but I don't pay for the top-tier services (yet ...)

Customer -- A converted user who now pays for premium access or services. Example: As my storage needs increase and I become more reliant on Dropbox, I'll likely convert into a paying customer.

I realize this entire post teeters on nitpicky semantics, but heated debates require clear boundaries.

Sidenote: I highly recommend the Times' Evernote story. It's a great representation of the opportunities and obstacles that come with freemium models, and it has actual numbers.

Mac Slocum I'm an editor, producer, writer, teacher and Red Sox fan. If you want to know more, read my bio.



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