Internet, Media Business, Video

99 Problems, Video Discovery Ain’t One

This post is part of a conversation-by-blog with Hunter Walk about this question: “Is video discovery a scalable business?” Read Hunter’s post first.

Dear Hunter-

You had me at “video discovery.”

That may sound odd coming from me. After all our startup launched Vodpod in 2007 — “Pinterest for video” long before Pinterest ever launched! — and Showyou in 2011, and both services frequently get lumped into the “video discovery” category.

I find it hard to argue with any of your points given both personal experience with the services we’ve built and close observation of the online video world going all the way back to 1997 (I think you were in college then, right?). Pair up almost any form of media — music, video, news, blogs, events, concerts — with the word “discovery” and you’ve got trouble. For all the reasons you point out, and more.

Take “music discovery.” Remember all those “music discovery” startups? Of course not. Turns out no one wanted music discovery. We just wanted to listen to some music. We wanted a better radio. There’s a lesson in there somewhere.

I think that lesson is this: that by framing a service as “media discovery” you unwittingly adopt the framework and mentality of “utlity” services and apps: “What is the pain-point for the user?” And that framework almost never works when it comes to media. I’ve got 99 problems, “media discovery” ain’t one.

That doesn’t mean, however, that the future is dim for new video services and apps. Just the opposite, I think. As Chauncey Gardner wisely observed, we “like to watch.” We want to be entertained. And informed. And nothing is as entertaining as video. I mean, my God, did you see that Trolololo video?

Devices like the iPad (and to a lesser extent the smartphone) demand we rethink where and how we’re entertained. When we talk about tablets we talk about how they’re a replacement for PCs. But they’re also replacing televisions. They’re portable screens we can carry around the house, from a comfy chair to our beds. We use our tablets in the evenings and the weekends, sometimes alongside our TV, sometimes as a replacement for it. And when we tune in on these devices, we don’t want to snack, we want to gorge.

And while YouTube is a colossus that stands astride the web, it hasn’t cracked the code here. We ask people who have just downloaded Showyou about how they use the YouTube app. You won’t be surprised, I suspect, to learn that the main reasons they launch the YouTube app are (1) to search for a video, or (2) when they’ve tapped a link on a web page which in turn spawns the YouTube app. People generally don’t (yet) think: “Oh, it’s 9PM, I’m tuning into YouTube.”

So, I see a bigger, more expansive opportunity for startups here. A chance to build a new kind of entertainment platform for the 21st century. One that plays to the strengths of the Internet, that taps into its architecture of abundance, its use as a “communication” (i.e., social) platform, its openess; but that does so within the context of how and why we use our tablets.  That’s a huge opportunity; but it’s something very different, and more profound, than “video discovery.”

Internet, Media Business, Startups

The Digital Revolution: Lessons from the 19th Century

Last summer I spent a fair bit of time reading up on the history of the newspaper business. Biographies of Hearst, Pulitzer and E. W. Scripps, along with a few more academic books on how these newspapers actually became big businesses.

The most suprising thing I learned?  That without the twin forces of urbanization and industrialization, there would have been no modern newspaper business, no modern advertising business, and no modern media business.

Those two tectonic shifts in the 19th century created new neeeds; those new needs created a huge array of new markets that flourished well into the 20th century. The newly created needs most relevant to the newspaper business produced by urbanization and industrialization were:

Need for ready-to-wear clothing
Up until the mid-19th century, most people in the West made their own clothes. Buying clothes was beyond the reach of all but the very rich. But with urbanization and industrialization, it suddenly became possible to buy clothes. And, in large urban areas, getting the right clothes (even though mass produced!) became a marker of your status and position in life. Department stores, an invention of the 19th century city, built huge new markets catering to this new need.

Need for Packaged Goods
Most people in the West also grew and produced their own food up until the middle of the 19th century. But as the West became increasingly urbanized and industrialized, that just wasn’t possible. People working at factories or other jobs in cities needed to be able to buy packaged foods and sundries, giving rise to businesses like P&G, Kellogg, and Colgate.

Need for Entertainment
Finally, those living in cities were no longer bound to a full day of work tending to the land or to their animals. The middle and upper classes, and even the poor, suddenly found they had time for leisure, made more abundant still by electricity which extended the day.

Newspapers flourished in late 19th century as they built huge audiences among urbanites catering primarily to this need for entertainment.  The great papers of the late 19th century offered a steady diet of crime trials, sex scandals (tame by our standards today), and increasingly sports news. Publishers like Hearst and Pulitzer added muckraking journalism that entertained and agitated for change.

With millions of readers every day, newspapers offered packaged goods companies (P&G) and sellers of clothing (department stores) the very best way to grow their businesses. Buying an ad in an urban newspaper with a big circulation was the most effective way to market to city dwellers who needed to buy clothes, or packaged goods.  And this gave rise to an entirely new market — for media, and for the creation and making and selling of advertising. That had never really existed, in any meaningful way or at scale, until the late 19th century. And it would not have occurred without the forces of urbanization and industrialization.

It’s obvious to most anyone now that the huge tectonic forces at work in this generation are the combination of computing and digitization (or, digitalization as the English would say).  These new forces have fostered new ways of making existing markets more efficient — you can now buy nearly anything online, for example.

But they’ve also given birth to new needs, desires fresh and new and that perhaps we didn’t know (or still don’t know) we had including these two:

The need for self expression and self-representation
For many on the Internet, it’s no longer sufficient just to go online; you need to be online.  As we spend increasing amounts of time on the Internet, or engaged in a digital life, many people want to have a presence there and assert there personhood there. This began with early online communities like The Well and other BBS, but has gotten a fuller expression with blogs, sites like Digg and Stumbleupon, and media publishing platforms like YouTube and flickr and even Vodpod. Myspace and Facebook (and to a much lesser extent, Twitter) were the first mainstream incarnations of this need.

The need for immediateness
We now live in a world where we expect — and crave — access to anything from almost anywhere at anytime. Google has been the most obvious outlet for this new need, and a whole new market — search-related advertising — was borne from it. But one could also list Amazon, Netflix, Craigslist, e-mail, IM, and real-time services like Facebook and Twitter as tapping into our new need for immediateness.

Other, more recent services and products can be explained as illustrations of these two new needs. I would argue that services driven by game mechanics — Foursquare and Farmville for example — are primarily driven off the need for representation of self. “Leveling up” and earning badges helps to define who we are online, helps to foster our sense of digital personhood.

The iPhone, Blackberry, and other smart phones show the need for immediateness made manifest in the mobile world.  The iPad, if it succeeds, will do so because it satisfies our need for immediateness in some more profound way than laptops and smart phones do (and this is why I’m skeptical about it); and not because it’s a “consumption” device.

Just as markets for clothing, packaged goods, and entertainment begat the entirely new market of media and advertising in the 19th century, it’s interesting to contemplate what new markets might get created from our newly created needs for self-expression and immediateness. Virtual currency, curiously, can perhaps be understood best through this prism; we want Farmville dollars to facilitate our self-expression; we buy virtual currency to satisfy our desire for immediateness.

But what else? What might come next? What other markets might be born as the result of all this?

Media Business

History of the Newspaper Business

A month or two ago, our local newspaper (the SF Chronicle) arrived sheathed in a special cover, with a surprisingly interesting illustrated history of the paper. You can get a sense of that history here.

The story of the paper’s creation was so outlandish and improbable that it got me interested in a broader history of newspapers, particularly as significant businesses (the media empires created at the turn of the 19th century by Pulitzer, Scripps, Hearst among others). You could see, in the founding and evolution of the Chronicle, something not too dissimilar to what we’re witnessing now, with another great media revolution and birthing of new media outlets like Talking Points Memo, Politico, TechCrunch, GigaOm and more.

So I have before me a couple of books about the history of the newspaper business (there were shockingly few about this subject). I’ve just begun to sink my teeth into E. W. Scripps and the Business of Newspapers by Gerald Baldasty. For those of us who are new media entrepreneurs, there is stuff to be learned. I’ll try to share the most relevant bits in a series of posts over the coming weeks.