Mobile News

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WsjMobileReaderPhone

I mentioned in an earlier post that I use the WSJ Reader on my Blackberry which allows me to read news updates and my favorite WSJ columnists (Jenkins, Mossberg, Morgenstern, etc.) at no cost. Even better, it pulls in feeds from my favorite blogs (about 15-20) in real time. I'm convinced that I get more news and information from the reader than I do through any other medium (TV, newspaper, magazines, etc.).

Whenever I add another blog I think about how great this thing is...for me. But what's the WSJ getting out of it? Probably a few things:

  • Advertising fees (though very minimal, there's very little space for ads)
  • Click throughs: once in a while I'll wind up clicking through to their website to "get more information"
  • Branding/Loyalty: I've cancelled my newspaper subscription but WSJ remains top-of-mind for me and I continue to consume their product.
  • Word of mouth: because I'm reading columns and articles from the WSJ, I'll continue to talk and write about the WSJ
  • Upsell opportunity: they show ads for other Dow Jones products

But I think there's something much bigger and potentially brilliant going on here: The Wall street Journal has built a platform for all the news a reader could want that carries virtually zero distribution costs. Or, put another way, the WSJ Reader solves the two fundamental problems with a newspaper's business model: limited space and big costs. The jury is out on how well mobile attention can be monetized but my sense is that the WSJ is doing something pretty smart here...I'm sure I'll be writing more on this in the coming months.

My BlackBerry

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A lot has been made in recent weeks about Barack Obama being forced to go without his BlackBerry when he takes office later this month. I love the fact that we've elected a president that uses a BlackBerry -- clearly he's a hands on guy.

Anyway, I can feel Mr. Obama's pain as I wouldn't know what to do without my Curve, which I've had for about a year now.

Here are the things that I'm currently using the device for, in no particular order:

  • Phone (home and cell)
  • Texting
  • Email (work and personal)
  • Blogging (because the keyboard is so easy to use, I rarely feel the need to write on my laptop anymore)
  • News. I've setup the WSJ.com Reader on the device so I get real time news feeds from all of my favorite news outlets and blogs. I get more news through my BlackBerry than other format.
  • Personal calendar, address book, tasks and notes
  • Alarm clock
  • General web surfing
  • Facebook (I have the application though I rarely use it)
  • Camera 

And many people are doing much more than that...

There are still a few things that I still can't do on my BlackBerry that I wish I could, such as:

  • Easily view and edit MS Office docs
  • Watch video on Youtube
  • Easily use HTML email
  • iTunes (download and sync)
  • Stream live TV
  • Online radio (there's a way to do this I believe, I'm working on it)
  • Synchronize with my web browser (passwords, favorites, etc.)
  • Better web surfing (faster, more windows, flash, etc.)

Some of these things are coming soon, some require support from the service providers and some are simply limited by form factor. But for the most part I'm now at a point where I've become extremely reliant on my BlackBerry. There's a lot more progress coming to be sure but I'm convinced that the major handheld device makers (Blackberry/Apple/Palm) have built products/platforms that address the fundamental challenges of handheld computing. The development to come is simply icing on the cake.

Newspapers

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Paul Mulshine had a good column in the Wall Street Journal recently defending traditional journalism (newspapers) and criticizing the amateur bloggers that are putting them out of business.

He makes the point that because most bloggers aren't paid for their work they'll be less willing to, say, sit through a three hour school committee meeting and summarize the key points in an easy to read article. So in the future, the casual follower of events at the school will be left unaware of what transpired at the school committee meeting.

I agree with the Mr. Mulshine that, generally speaking, this is scary and would no doubt be a bad thing.

Here's where we differ: it's not going to happen.

Blogs and newspapers have fundamentally identical business models; they generate attention or "eyeballs" that can be monetized in the form of advertising fees. Some also charge nominal access fees though typically this doesn't generate significant revenue relative to ads. On a macro level it is this business model that dictates what does and doesn't get reported or blogged on. To make money, editors and bloggers have to answer a simple question: what will generate attention? If an article on the school committee meeting will generate eyeballs, then it will be reported on, or monetized.

Newspapers are disappearing not because people don't care about the school committee meeting, they're disappearing because people's attention is shifting online. Quickly. And the scalability of online advertising doesn't change the underlying business model.

Because many bloggers are unpaid, amateur, dishonest and uninteresting, Mr. Mulshine assumes that the industry will remain this way. But assuming there's always demand for information from honest, reliable sources, the blogging industry will slowly morph into more of what we know as traditional journalism, only better.

As is true with most industry changes, I think we'll find that the maturation of blogs and web content and the absence of newspapers is good for everyone -- including newspaper reporters.

Bloglines and Bloggers

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One other thought on Bloglines. (the blog aggregator that I plugged in an earlier post). The interesting thing about these services is that they allow a reader to completely avoid the ads served up on blogs. That is, you never actually leave Bloglines' site -- they simply feed you the text from the blogger's most recent post(s). Most of the blogs I read don't actually serve ads. They're simply using the forum as a way to generating interest and eventually selling more of their product or service. But for those bloggers that are generating substantial revenue by serving ads, these services present a big challenge.

Radiohead

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I don't think there's a really great business model here but if I'm going to write about the economics of music, I have to write about Radiohead's democratic pricing model.  Basically, fans could pay whatever price they wanted for the album.  I hear that they got, on average, 8 bucks.  There aren't a lot of bands that could pull this off so I'm not sure this is an emerging trend.  Worth thinking about though.  Could this work for other industries?

Music & Business Models

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I've been thinking more and more about monetizing music and I have to say that I would much rather continue to pay $14 for a CD then to see the whole industry shift to an advertising model.  Supporting art with ads is depressing and just plain wrong.

I mean how far can this go?

Imagine if museums didn't charge admission?  Instead, you could get in for free but all of the art would be covered in advertising?

The Music Industry & The Long Tail

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There's a brilliant post from Seth Godin today on the music industry that's worth reading a couple of times.  And not just for people that work in the music industry. Check out it here.

Here's what I think is the most powerful sentence in the entire post:

"You used to sell plastic and vinyl. Now, you can sell interactivity and souvenirs."

I've been thinking about this for a while but it's nice to finally hear an expert say it so plainly.  To me, selling copyrighted music in the digital age is like selling the Mona Lisa  -- once you've sold one copy you've sold em' all.

Knowing how quickly old industries can disappear and new opportunities can pop up, here are a couple questions that we should all ask ourselves at least once a year...

If record companies can go from being extremely profitable to being forced to sue their customers to having a superfluous product and being forced to sell souvenirs and interactivity in about a decade, what could happen to my product?  And what am I doing about it today?

Facebook's Top Two Questions

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What are Facebook's most valuable assets? 1.  Attention from high-value consumers. 2.  Data (behavioral, demographic and preferential) on these high-value consumers.

How should they leverage these assets to make money?

If it were me, I'd simply broker the sale of that attention and data to interested parties (advertisers that want it to sell stuff and advertisers that want to learn more about consumers).  There's no shortage of either.

But here's the catch.  Much like a real estate broker wouldn't sell your house with you knowing it, Facebook can't sell a consumer's attention or data without them knowing it. Everything is op-in and the user always gets a portion of the transaction.

 

Monetizing Facebook's Beacon

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Beacon, the controversial advertising tool used by Facebook to deliver highly targeted ads to users, was removed from the site a couple of weeks ago due to increasing concerns from privacy advocates. Beacon was a great idea.  Basically, the tool would allow data from other sites to be automatically delivered to a user's Facebook profile.  For example, if you went to Fandango to purchase movie tickets, your transaction data would be transmitted to Facebook and included in your profile.  That way your friends would know where you buy movie tickets and what movie you're going to see. Minus the privacy concerns, I think it's pretty neat.

Here's how I think this probably affected each of the three stakeholders.

Facebook: For Facebook this was wonderful because, presumably, they could charge advertisers high fees (with sky-high margins) for these ads.

The Advertiser: For the advertiser it was great too because it effectively created "forced word of mouth"; i.e. "oh, Betty buys her movie tickets at Fandango, maybe I should too".   Of course this doesn't mean that Betty is necessarily happy with the Fandango service or that she would recommend it if the data were under her control -- which does make the referral a bit less impactful.  Nonetheless, there's still a lot of value here.

Facebook Users: For the users, this wasn't so good.  It was an obvious invasion of their privacy for nothing in return.

To me this was the perfect time for Facebook to use the "pay-the-consumer business model" I've referred to in other posts.

Think about it for a moment.  This is a win-win-lose model.  Facebook and the advertisers win and the user loses.  How could the user win?  Why not simply transfer some of the margin from Beacons' sales directly to the users.  That's right, invade the user's privacy but give them something in return.  Further, make everything opt-in.  Privacy advocates can't complain when everything is opt-in.  And there'd be no shortage of opt-ins because people like easy money.  You could setup variable pricing for the advertisers based on unique users that viewed the data -- you could even charge based on the profile's of the users that made the transaction (Facebook has a TON of demographic and behavioral data that they could share with advertisers.)

To execute this, they simply could've added an icon to every users homepage asking them if they wanted to make some easy money.  When the icon is clicked, the users could opt into Beacon's various features.  Each feature would clearly describe two things:

1.  Exactly what data they'd be forfeiting and who it would be seen by. 2.  Exactly how much money they'd receive in return for the opt-in.

Of course they wouldn't have to actually send cash to the user.  It could be gift cards, or actual merchandise from their favorite merchants.  It could even be raffle based -- "opt into Beacon for the chance to win an iPod).  Eventually it could buy users access to premium site features.

The bottom line her is that the only way innovative ad systems like Beacon will be sustainable is if the users have control of the data that is sent and if they feel like they're getting something in return.

The key here is trust.

And I don't know about you but I'm usually more likely to trust companies that pay me.