A great video from the O’Reilly TOC conference, Where Jeff Gomez talks about telling a story across multiple media platforms. (thanks to Gerd Leonhard for linking to these great talks)

We all know that franchises such as Star Wars and High school musical have been great at telling stories and generating revenue across multiple media platforms.

Jeff, the worlds foremost cross media producer, talks about how use transmedia to create immense loyalty and new revenue.

This makes a lot of sense thinking about free content and the freemium business model. If i story is successfully told across different platforms, some of these might be free and some paid.
While he is not a great speaker, there are a lot of great points in there and it is definitely worth the 22 min. (I have started the video where he starts talking about transmedia, before that he talks about his own story and work.)

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Recently I spoke to Juan Senor of Innovation about the future of newspapers.

Juan Senor makes a living from telling news organizations the strategies they need to adopt to survive in this new world order. And from the discussions it is clear that he has told the newspapers that although they wont die they still need to innovate and change the way they do business if they want to survive competitively.

The message that Juan Senor is giving newspapers is that they need to proactively adjust to the current reality. Generic news is free, it is unlikely that anyone will pay to hear that there are protestors protesting fiercely and braving the icy cold conditions at the climate summit or that Michael Jackson is dead. For news organizations to make money they will have to rely increasingly on the journalistic skills of their employees.

They will have to start selling in-depth news and analysis along with tools that people can use in their daily lives. A case in point is the way http://www.desmoinesregister.com sells crime report to people buying houses in the city.

Should newspapers be in the breaking news business?
Well, they have always been in it; however, it was partly due to the fact that they had a monopoly over the distribution channels. This monopoly was not substantially affected by TV and Radio but the internet has surely taken it away for good.

Therefore the question that is most important is not “to charge or not to charge” rather “How to charge?’. In such a situation you can’t expect to make money from breaking news. What you need to do is to turn your ordinary journalists into “Journanalists”

As all good consultants, Juan Senor has a 2×2 matrix that explains this

A short bit about what news organizations need to do

It is surprising to see how only few people seem to understand how to adjust analog business models in a world where internet is the primary and most powerful medium. Juan Senor is one of those people I have met who does a great job of communicating as to what will happen and what needs to be changed to survive this tectonic shift due to the internet.

However, in terms of mindset he comes very close to news executives. He says that the biggest mistake of the past 50 years was to give content free online.

Needless to say that I disagree with this statement (this could be an interesting subject for an entirely different post). The fact remains that news organizations still need to adapt to current realities. It is only by innovation will the news organizations find a way to make money.

Embedded are the slideshare presentation of a recent talk he gave on the subject and two video interviews

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Last week he posted a presentation where he goes through the transformation of the music industry. Describing how attention is a commodity and attention is the new scarcity.

It is definitely worth a look, and remember to chose the full screen option so you can read the post it’s.

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Sharing knowledge does not impoverish the giver, in fact sharing knowledge, culture, and information is not only good for the receiver but it also nurtures creativity, innovation, and helps solve a host of global problems. Creative Commons provides an easy template to do just that.

This is what makes people appreciate and love creative commons. There are many who like Creative Commons for its progressive and idealistic perspective, but there also is a sound business perspective to it.

There are some business models where it is possible to make more money using Creative Commons license. Bringing this perspective to the fore and highlighting it will help spread Creative Commons and make businesses aware of its immense potential.

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The BBC dot.life blog tells the story of the evernote model.
“..so about 1.5% are choosing to pay - that doesn’t sound a very cheerful state of affairs. But Phil Libin came charging back with a series of spreadsheets and graphs telling a more encouraging story.”

There are two main points that need to be included to create a better picture of evernotes freemium model.

1 The cost
Evernote has costs as low as nine cents per free user, which is partly does to a lot of work being done on the users computer.
(As startup CFO rightly points out, the cost side is a very important element of a freemium model. A large part of Skypes freemium success is do to their p2p infrastructure, which insure very low cost)

2 The pattern of conversion
While only 1.5 convert at this point in time, there is more to the conversion pattern. About half of the new users leave within a few week, a thus create very little cost.

The half that stays almost all remain loyal, and are increasingly likely to upgrade. If this trend continues then the current free users hold a treasure of likely premium costumers.

While not making a profit at the moment, Evernote founder Phil Libin is very positive.
At the moment their policy is full transparency with the numbers, so it will be interesting to follow them in the future. I will be sure to update you here on the blog.

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The fact of the matter is that comparing freemium success just on the basis of conversion rates does not make much sense. At best it is an arbitrary number like the number of units sold. Only when other variables are taken into account does it make sense.

As in the retail model, no one would be influenced by looking at the units sold by the competitors unless other variables like price and expenses are taken into account.

However, this is exactly what people do when they are looking at the freemium model. People wrongly focus excessively on the conversion matrix. There is no denying the fact that it is an important matrix to monitor and improve upon, however, it is not something that can be useful in comparison unless the companies considered are very similar in terms of price, reach and cumulative overheads.

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A few weeks ago I did a video interview with Eric Frank from Flat World Knowledge. I tried doing it as an video interview, but the quality ended up being to poor to use. For this reason I have been thinking a bit about how best to precent this and future case studies. I decided to use the Flat World Knowledge case as the first, in a database of case studies within freemium business model.

The format of the entries in this data base will be: a little text, a short video and sometimes a slideshare presentation. During the next months i will be adding a collection of such cases.

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An economic argument for sharing knowledge with those around you.

Recently I had a talk with an acquaintance who is working on creating a network in a very specialized technical niche. The challenge is to create a network where the participants can meet, interact, share their knowledge and not just exchange pleasantries and drink coffee. Personally I was fascinated by the challenges and efforts involved in this endeavor.

Hypothetically if we both posses an apple each and give them to each other then we will still have one apple each. However, if we both have an idea and give them to each other the overall value increases with the increase in the number of ideas shared. How does this happen? Well, ideas as such are non rival goods, we consider any item as a non rival when its consumption by any one person does not make it any less available for consumption by another, and hence the overall increase in value.

The freemium model emerged after the appearance of digital non scarcity e.g. products that have no or marginal cost of duplication like mp3 files or computer programs. This has created a situation where such products can be widely shared at not extra cost. Freemium is model where the producer benefits from free sharing. The more a free product is shared the larger will be the demand for premium products.

In a similar way the non rival nature of ideas creates the possibility for an economic model wherein you get more as you share more. This has been amply demonstrated in a larger perspective.

Society
On a societal level things that inhibit the exchange of ideas are seen as inhibiting societal innovation and thereby stifling growth. A great argument on this can be seen in the economic brief for Eldred Vs Ashcroft. Here 17 eminent economists argue that an extension of copyright is not a good idea.

Industry
On the industry level one can closely look at the industrial revolution in England. The free exchange of ideas at the lunar society is widely regarded as one of the main reasons for the success of the industrial revolution in England. In the post modern era a good example is the open source software industry where freemium was leveraged to create a vibrant ecosystem of businesses around freely shared content.

Business
For the stand alone businesses the recent wave of crowd sourcing is a good example of using knowledge sharing for personal benefit. For example the Netflix prize, where $1 million was promised to the one that could better their movie comparison algorithm by 10%. In order to do this they had to publicly share what they had so far.

While there are both sound reasons and practical cases arguing the economic benefits of sharing ideas, it is hard to create concrete demonstration of this model. Like the case of my acquaintance trying to set up a network.

From a structural point of view I think that there are mainly two reasons we find it hard to share.

First, it is hard to convince people that there is an inherent personal advantage for them in doing this. Working with freemium my experience says that most people intuitively don’t believe that freemium can be a good business model. The same holds true with sharing knowledge in networks. The only plausible reason for this is that because we are so conditioned to working with rival and scarce goods that this intuitively becomes the basis for us rejecting this idea.

Second, it is difficult to create a structure that will allow true sharing. This is a classic case of the ‘prisoners’ dilemma’ wherein both parties can potentially benefit from cooperating, it becomes difficult to coordinate the cooperation so that both parties see the advantage. All parties in a network will objectively benefit from sharing knowledge. Yet it is difficult to create a structure that lets the participants believe that this can truly happen.

In the case of my acquaintance and others like him setting up networks for knowledge sharing I believe that it is important to address the twin challenges in order to create a truely successful knowledge sharing platform.

1. The participants should have a better understanding of the fact that there is individual benefit in sharing knowledge. This can be done by gathering a group of cases that positively demonstrate this or by creating a game where the advantages become apparent with the help of gameplay.

2. The structure should be such that allows ‘fair’ sharing for all the parties and avoids “Narrow self interest” as seen in the prisoners’ dilemma.
Inspiration can be borrowed from networks like The Value Investors Club.

This can be done by framing clear rules for taking part in the network.

What do you think? Are there any other factors that are important for creating networks where true sharing happens based on selfish motives? Is it possible to create a network where different companies start to regard each other as “the companies formerly known as competitors”?

Image: somaya

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Through Duncan’s blog I found this new website and business model for poetry. Based on letting users read and listen to poetry read buy the author. They then sell MP3 downloads and texts of those poems.

This is a classical freemium model as it has been seen in a lot of other areas. Someone might think that it could be difficult to sell a download when it is available for free. Yet this is something that the success of Nine inch nails, Ghosts I-IV proved possible.
It will be very interesting to follow the progress of this site. I have asked them for an interview and will hopefully soon return with more details about this site.

What do you think, will poetryspeaks.com be a success ?

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