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Went to the Mozilla Firefox birthday party in SF last night with DR and Dan Perkel. Loads of fun.

Chris Anderson’s new book ‘Free: The Future of a Radical Price’ has stoked the fire of a debate that seems to be never ending in media circles. In it, Anderson talks about how in the digital world, the most effective price is ‘zero’ and that those who have recognised this are generating revenue from models like cross-subsidies (giving away a DVR to sell cable service) and freemiums (offering Flickr for free while selling the superior FlickrPro to serious users).

Anderson’s book has angered (mostly traditional) media professionals whose business model seems to be threatened by such claims. In a post on Twitter (11 July 2009), Mail & Guardian publisher, Trevor Ncube wrote: ‘We need to collectively recover from the cardinal sin of giving content for free & move to sustainable biz models.’

Ncube’s reaction is endemic to the traditional media sector around the world. Unlike Anderson, he does not equate a system where content is given away for ‘free’ with a sustainable business model. People need to once again value the credible information that the media produces, he believes. That is the future.

How do we navigate through the clearly emotional defensiveness of big media and the utopian ideals of technologists to understand an age in which the media have, according to Chris Anderson, ‘lost their monopoly on consumer attention’ and are now flailing about trying to re-assert their value proposition in the midst of all the new competition? What’s the business model?

Anderson predicts that there will be a new role for professional journalists in the age of ‘Free’:

‘There may be more of them, not fewer, as the ability to participate in journalism extends beyond the credentialed halls of traditional media. But they may be paid far less, and for many it won’t be a full time job at all. Journalism as a profession will share the stage with journalism as an avocation. Meanwhile, others may use their skills to teach and organize amateurs to do a better job covering their own communities, becoming more editor/coach than writer. If so, leveraging the Free—paying people to get other people to write for non-monetary rewards—may not be the enemy of professional journalists. Instead, it may be their salvation.’

Malcolm Gladwell, in a cutting review of Anderson’s book (New Yorker, 6 July 2009) says:

‘His advice is pithy, his tone uncompromising, and his subject matter perfectly timed for a moment when old-line content providers are desperate for answers. That said, it is not entirely clear what distinction is being marked between “paying people to get other people to write” and paying people to write. If you can afford to pay someone to get other people to write, why can’t you pay people to write? It would be nice to know, as well, just how a business goes about reorganizing itself around getting people to work for “non-monetary rewards.”’

Anderson responds with a model from his own experience with a parenting blog called Geekdad which soon became too popular for him to manage on his own. ‘Wired.com makes good money selling ads on GeekDad (it’s very popular with advertisers); Ken (the community manager) gets a nominal retainer, but has also managed to parlay GeekDad into a book deal and a lifelong dream of being a writer; The other contributors largely write for free, although if one of their posts becomes insanely popular they’ll get a few bucks. None of them are doing it for the money, but instead for the fun, audience and satisfaction of writing about something they love and getting read by a lot of people.’

This, says Anderson is ‘the difference between “paying people to write” and “paying people to get other people to write”. Somewhere down the chain, the incentives go from monetary to nonmonetary (attention, reputation, expression, etc).’

Anderson admits that this may not be the answer for every media business. He’s right. The more plausible scenarios for traditional media are models that employ both free and paid services (not always in the ‘article’ format), where the media recognises the value in providing information as a service, rather than believing that it has value in itself.

Intellectual property sharing

One scenario is where the business decides which content should be shared freely, and which should be bundled into a unique service offering that customers will be willing to pay for (also called the ‘freemium’ model). Here, it makes sense for the ‘free’ component to be free as in ‘gratis’ as well as free as in ‘liberty’ so that users are licensed to share the content with others on their own social media channels using open copyright licenses such as Creative Commons. By making the content free, the business can leverage the power of the network to ‘advertise’ the site, thus building the value of the paid-for service.

Business diversification

Companies like ITWeb are doing well financially because they have an incredibly diversified business. Apart from reporting on their news site and various magazines, they also offer a digital ‘press office’ service to IT companies, as well as running conferences and workshops around technology themes. In this way, companies like ITWeb are able to ‘give away’ content for ‘free’ on their websites, while cross-subsidizing media products by being seen as the portal for all things IT-related in South Africa.

Hardware bundling

Gladwell begins his critique of ‘Free’ by telling a story of how the Dallas Morning News approached Amazon with a licensing proposition for the Kindle. The publisher was shocked when he learned that Amazon wanted to take 70% of the subscription fee, declaring that this was not the business model that could save the beleaguered newspaper industry. If devices like the Kindle gain more ground, making printed titles obsolete, then papers like the Dallas Morning News will either have to accept such revenue share, or else build their own hardware with which to ship their products.

What exactly are we trying to save here?

There doesn’t seem to be much evidence to suggest that we’ll pay for newspapers online in the same way that we used to pay for the print version. Someone will pay, but it may be advertisers or premium customers, for advertising, press offices or networking.

As for iron laws about the business models of future media, Gladwell is perhaps the most accurate here: ‘The only iron law here is the one too obvious to write a book about, which is that the digital age has so transformed the ways in which things are made and sold that there are no iron laws.’

I wanted to look up the article that was written in Brainstorm this morning. I have the mag somewhere but wanted to read the online version. This is what ITWeb expects online readers to pay to read articles online. I still don’t understand the logic and can’t believe there are still magazines who block stories like this (especially for past editions that I wouldn’t be able to buy off the shelf even if I wanted to!)

Reading a bit more about what the magazine industry is saying about digital editions led me to a great quote entitled ‘The Deadly Sins of Digital Publishing‘ from the MPASA website that states plainly that there are great opportunities for digital editions in terms of providing easy access, adding value online and delivering greater value to advertisers, but that the greatest sin is a ‘failure to commit’.

‘If you can’t commit to it, you should spend your energies elsewhere.’

I couldn’t agree more.

Woices is a beautiful little site ‘that allows people to create, share and consume echoes, audio records which are linked to a very specific geographical location or real world object. Woices ultimate goal is to extend reality by creating a new layer of audio information, what we call the echoesphere, that will make the world a more interesting place.’

Bekka and I are going to record a few Jozi walks through our favorite neighborhoods, aren’t we Bekka?

I’m always interested in what Google does for CSI (corporate social investment). In this case, they’re going to be choosing no more than five projects that ‘help as many people as possible, in any way’ and finding funding to launch them.

The winners will say a lot about how the company (and the people who vote for the ideas online) frame problems in different socio-economic contexts, and how they think these problems can be solved. Interestingly, the focus is on the idea rather than the people (you can submit an idea and suggest an org to carry it out, but Google will decide who should implement the project). I don’t think this is necessarily a bad thing – ideas people are not always good at implementing – I only wonder whether they should also have had a more participatory process to decide on the who the implementers will be. Implementation partners should be measured by their experience and reputation – and what better way to measure that than to open this up to the wider community to help decide.

I also wonder why Google didn’t find a better way to enable people outside of the Google context (not necessarily offline users in the developing world, but at least those who spend less time online at telecentres etc due to high costs than their Northern counterparts) to help decide the winning ideas. If you’re going to get a community to decide, then you need to ensure that you have a representative sample to help decide it. Otherwise it will, once again, be someone else’s solution to someone else’s problem.

A couple of us have been working on trying to ‘map’ the ‘move towards openness’. This is my attempt – covering the different levels of openness in communication input – process – output. I’m sad not to be at the openeverything event in Cape Town that Mark and Philipp are organising – looks like it’s going to rock!

The iSummit is done and dusted. Beautiful event. Starting to look like a festival. Now for some rest.

Pic: by Kenji

‘The commons sanctions idiosyncratic experimentation and creativity that is often too risky and costly for most markets to undertake. This is one of the key ways in which communities of social trust out-perform the market and corporate bureaucracies. The commons doesn’t have the expensive overhead or imperative to be marketable. The commons can afford to be flexible and customizable, especially to local needs. It has great appeal because it tends to be more culturally authentic than broadcast networks and Hollywood studios that cater to large, lowest-common-denominator audiences.’

Dear friends,

Last week, the iCommons team had a short workshop session to practice the ‘Checklist on openness’ that we’re hoping to work with participants to develop at this year’s iSummit. We practiced by using an equally slippery concept that we’ve been thinking about a lot lately, which is the question: ‘What makes an organisation ‘international’?’

After an initial brainstorm to capture the key characteristics that we should be looking at (including things like staff, community, beneficiaries, mission and funding) we started looking more deeply at what boxes needed to be checked in order for an organisation to validly call itself ‘global’.

What we came up with probably posed a lot more questions than answers. For example, ‘Do you need an internationally representative staff to be an international organisation – or is it enough for the staff to be aware of diversity?’ And ‘Can any small non-profit organisation claim to have beneficiaries all around the world – and does it matter if most beneficiaries are in developed countries?’ And perhaps most importantly, ‘What does it mean if most of your funding comes from one part of the world, and goes to another part of the world?’

We did, however, come up with a few answers – all of which were incredibly illuminating.

If a global organisation is only as global as the respect that it has around the world, then we need to develop mechanisms to ensure that we are accountable to our beneficiaries, as well as to our funders. Peer assessment, in other words, should be built into everything that we do. This also means that we cannot claim to have too diverse a range of beneficiaries because we will not be able to serve them all, and we will therefore suffer from their negative assessment as a result.

The exercise also showed me how important the distribution of funds is in the development of a validly international organisation. If we accept that an international organisation must serve a wide variety of local beneficiaries, then the organisation should necessarily have more than one physical location. This means that the organisation should spend its money in more than one physical location, thus empowering the network to serve its beneficiaries more effectively.

This doesn’t mean that money is the only way to empower local communities, but it’s absolutely essential that the wide distribution of funds is part of the question of how global, really, is a particular organisation.

I did this very basic graph of where iCommons spends its money, and I feel that, although we’re doing pretty well, we can do more to distribute funds outside of HQ.

This is not an easy thing to say because it seems so hard sometimes just to keep the core economically sustainable. But I do think that it’s a conversation worth having – a conversation about the shifting identity of a global organisation in a shifting world.

What do you think?

Best wishes,

Heather.