Monday, July 6, 2009

Anderson+Godin v Gladwell+Yglesias . . my two cents and versioned clickable newspapers instead of textbooks

It seems that Gladwell's review of Anderson's new book has started a discussion in the blabla-o-sphere. Seth Godin picked it up last week. This morning I found that Matthew Yglesias has picked up the ball. So far it seems that it's Anderson+Godin v Gladwell+Yglesias. I'm siding with the Gladwell+Yglesias team as of today.

It would be very cool if the NYT or WaPo or MSNBC or Bill Moyers or Google could get them all in the same room for two hours. Then release the video on cable and .tv (could be youtube or hulu or fora.) Then make the transcripts available. Then educators could pull down the content for their classes.

Then a versioned clickable newspaper could be used to satisfy the inevitable teachable moments that would occur in high school classes all over the States.

But until then, the conversation is trapped on the web. On June 30th, Competition, Profit Rates and Freeness appeared at Yglesias. It is a very interesting-to-me thread.

At comment 48, I added myu two cents:
It’s difficult to make watchable moving picture content in your basement.” Actually it’s difficult to make great moving picture content any where, with any tech. The reality is that making great communication content is very hard because the skill required is very rare.

The skill to make great content is still very rare. It’s been said that everyone has a story to tell but that very few have stories that anyone else wants to listen to.

When a few communications companies can share an oligopoly, the content is not that important as the way to aggregate a following. Once the technology is accessible to masses, the rules change from regularly delivered content to interesting content.

When a Google news search quickly reveals that newspapers mostly re write AP stories all looking at events through the same lens, it’s pretty clear that unique content is nice but never has explained the newspaper’s business success.

There have always been many examples of Free-to-the-user. But free-to-the-user has never meant free to produce. If one doesn’t earn the money to support production, it dies. Just as the energy to produce art disappears if the artist can’t feed themselves.

Ever decreasing margins is a fundamental stress on competitive capitalism. Every economist since Adam Smith has pointed it out. That reality is the stress under which business people choose to live. From society’s point of view, it drives innovation, higher living standards and democracy. But from the business point of view, it makes life much harder.

The easiest way to relieve that stress is to limit competition. When that fails the business has to reorganize to find new ways to earn the money to keep the whole thing going. GM is the most visible recent example. My bet is that being forced to face the reality of succeeding in a competitive market they will do great things, because hidden in a legacy organization there are great people.

As it is with GM so it will be newspapers, cable channels, TV and advertising. The defensible advantage are the pockets of talent. How that talent is monetized will be different in different places at different times.

As Anderson points out bands make predictable money from the concerts and t-shirts. The music is what makes fans. The money comes from selling fans the stuff they want. People buy art - t shirts, baseball caps - with no regard to cost of production. That’s why they are high margin businesses.

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