We Are Living In The Great Releveling

Johannes Gutenberg
Image via Wikipedia

Years from now we will talk about living during the Great Releveling the way our grandparents spoke about the Great Depression. Times were tough, people tightened belts, many lost everything they had spent a lifetime building. But the Great Releveling will not be known only for gloom and doom but also for new and fundamentally different business models that emerged from this event.

The last time we had a Releveling of the sort we are now experiencing was over 500 years ago when an entrepreneur in Mainz, Germany invented a machine to mass produce books. His first product, The Bible, put a lot of monks out of work but also set the stage for an age of enlightenment that extended until just a couple years ago. Johannes Gutenberg democratized knowledge that eventually toppled the feudal systems of government that had evolved from hunting groups millennia before. His invention fundamentally changed the world and is still being felt today. Talk about a legacy.

I think the internet is doing this same thing right now. But the Royalty and Gentry are not the big losers but media companies who are not willing or can’t make the transition to a digital business model. Bob Garfield recently posted about this over at Ad Age and his main point — advertising doesn’t work anymore — is spot on. We are not living in a time where any business can rely on a single monetization strategy; welcome to the hybrid world.

You can see glimpses of the future now with services like Hulu, Amazon On Demand, Apple TV and Netflix. But each has issues to overcome before there is widespread adoption. On one hand, I like the simplicity of a monthly subscription that Netflix is selling. I can stream a selection of movies and TV shows to my Xbox or TiVo for a fixed fee. They even let me get DVD’s in the mail but this is a doomed model long-term and they know it. But I don’t have access to their entire catalog to stream at a moments notice which is it’s Achilles Heel. Amazon On Demand and Apple TV let you buy or rent content but their pricing model is too high. Why should I spend $4 to watch a movie when I can pick it up for a dollar at Redbox (or for free with their codes)? Hulu is an interesting idea — basically TV on the internet — but it will be doomed to failure since people will not tolerate more than just short interruptions in this post-TiVo world. They simply can’t run any more ads than they do now to retain viewers and I can’t imagine they are making much money for the short ads there now.

So how can information and entertainment be monetized?

I think it can only be a hybrid between advertising, it’s cousin product placement and subscription or purchase. So in this scenario a modest monthly service fee might be joined by short, “sponsored by” type product pitches. Hulu has most of this figured out today and should replace their interstitial ads in the programs with a straight-up under $15 a month subscription fee for unlimited, ad-free streaming. Amazon and Apple should adopt some sort of subscription model or just lower prices in order to be more than just a transitional service.

The days of broadcast and print advertising are over. The Great Releveling has begun. Get used to it.

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How I Would Save The Star-Tribune

Obama Star
Image by afagen via Flickr

The newspaper business is on the ropes. Subscriptions and newsstand sales are down while advertisers move their money elsewhere. A new generation is coming of age hardwired to the internet, electronic distribution and social networking. They don’t read newspapers. And print production costs continue to rise.

Here in the Twin Cities we are still a two newspaper metro. The Star-Tribune on the Minneapolis side of town and The Pioneer Press on the St. Paul side. And like a lot of other papers around the country, the Star-Tribune is doing the worst of the two, has declared bankruptcy and is looking over some bleak prospects. Within a couple years, I think, we will be down to one paper here unless the economy improves faster than anyone is predicting or the Star-Tribune is bought by someone looking for a big tax deduction.

So what can the management of the Star-Tribune do in such a situation? Plenty from my perspective but it’s tough medicine.

Here’s my 5 point plan to transform the Star-Tribune into a profitable business:

Get Out Of The Print Business: Print is dying and it’s also a large part of the cost structure for the paper. Sell the printing department to someone else. Since the Twin Cities still has a good sized print community, this should be pretty straightforward. Now look for a print partner to do your production for the lowest price (this might be the same company who bought your printing department).

Cancel Weekday Hardcopy Editions: Yes, go down to 3 print editions a week from Friday-Sunday. You’ll take a hit on the subscription revenue but that’s the least of your worries right now. The savings in printing and delivery costs should make up for the shortfall.

Get Behind The Kindle: Electronic distribution is the future and the Star-Tribune should have a $5.99 monthly Kindle edition. Do a contest to educate readers on how great the Kindle is and give some away. Even consider working out some deal with Amazon for a Kindle discount in exchange for a 2 year electronic subscription.

Adopt Blog Software Online: Change the current website CMS to WordPress or Blogsmith. Run the online site like Engadget with a core of staff writers and a ton of freelancers. Post often and repost on all the social networks and messaging services. This will create more online traffic and more advertising revenue.

Embrace User Generated Content: There are a lot of good writers in town who would contribute to the paper in return for link-backs and/or a little bit of money. For niche content this would be a lot more cost effective than having staff positions. Encourage people to send their camera-phone pictures and videos of breaking news like CNN does. Good things will happen.

I really don’t think the Star-Tribune will do any of these things but some paper somewhere might. The news business is not going anywhere; the newspaper business is going away. Those who change now will still be around in 5 years. Hopefully one of these papers will be the Star-Tribune.

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iPod Shuffle For Podcasting

second generation iPod shuffle
Image via Wikipedia

The single most popular post here is one I did 17 months ago about the inability for the iPod Shuffle to auto-sync podcasts from iTunes. Since then, I’ve just manually dragged my podcasts from the same smart playlist that auto-syncs fine to my 5G iPod. The Shuffle even keeps this smart playlist updated when it resyncs, removing the played episodes in the iTunes playlist. So like a lot of electronic gadgets, I’ve adapted to it’s conventions.

Even with this limitation, I have almost exclusively converted over to using my Shuffle for podcast listening. It’s size and nearly endless battery life make it the music player I always carry around with me (in my Levi’s change pocket usually). With a cassette adapter I can listen in many cars or I can just plug right into the “aux” jack. I can even plug it into my car stereo head unit with an adapter. It’s a pretty versatile music player that keeps me updated during walks and yard work.

I’ve decided I will keep my 5G iPod until it literally dies as the iPod Touch doesn’t yet have the battery life or size for my needs (my 60GB iPod has about 45GB of music and video on it currently). And when that fateful day arrives, I’m not sure if I will upgrade to a new iPod as I’m assuming I will be using my smartphone for most video and music playback (currently leaning toward the T-mobile G1 but the iPhone is not out of the question). But when my Shuffle dies, I will go to Best Buy or Target to pick up a replacement right away. It’s become so integrated into my routine that it would be missed even with the annoying sync issues.

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G1: Openness Takes On Cool

Earlier this week Google and T-Moblie announced the first phone to run Google’s new Android OS, the G1 (a.k.a. HTC Dream). What I find most interesting about this device is the totally open source approach Google and, for their part, T-Mobile have taken with the G1. In stark contrast to the closed system of Apple’s iPhone, the G1 and Android platform will be an technology to watch in 2009.

But it’s not yet clear if Android will become the Chumby of smartphones or an open source alternative to iPhone. There are quite a few good signs that it might be the latter as the G1 seems to be a solid product. In addition to the on-screen keyboard they provide a slide out hardware keyboard. This was one of my own problems with the iPhone (along with price, which has recently been addressed). And since the G1 is on my current mobile carrier, upgrading is much less of a hassle than moving to the Apple/AT&T world.

So I’m going to keep watching this space and see what develops in coming months. My T-Moblie subsidy runs out next May, so we should have our answer by then. And I do believe openness can overtake cool if enough developers embrace Android. Let’s hope they do.