Better Than Free

The internet is a copy machine. At its most foundational level, it copies every action, every character, every thought we make while we ride upon it. In order to send a message from one corner of the internet to another, the protocols of communication demand that the whole message be copied along the way several times. IT companies make a lot of money selling equipment that facilitates this ceaseless copying. Every bit of data ever produced on any computer is copied somewhere. The digital economy is thus run on a river of copies. Unlike the mass-produced reproductions of the machine age, these copies are not just cheap, they are free.

Our digital communication network has been engineered so that copies flow with as little friction as possible. Indeed, copies flow so freely we could think of the internet as a super-distribution system, where once a copy is introduced it will continue to flow through the network forever, much like electricity in a superconductive wire. We see evidence of this in real life. Once anything that can be copied is brought into contact with internet, it will be copied, and those copies never leave. Even a dog knows you can't erase something once it's flowed on the internet.

Copy-Transmission

This super-distribution system has become the foundation of our economy and wealth. The instant reduplication of data, ideas, and media underpins all the major economic sectors in our economy, particularly those involved with exports -- that is, those industries where the US has a competitive advantage. Our wealth sits upon a very large device that copies promiscuously and constantly.

Yet the previous round of wealth in this economy was built on selling precious copies, so the free flow of free copies tends to undermine the established order. If reproductions of our best efforts are free, how can we keep going? To put it simply, how does one make money selling free copies?

I have an answer. The simplest way I can put it is thus:

When copies are super abundant, they become worthless.
When copies are super abundant, stuff which can't be copied becomes scarce and valuable.

When copies are free, you need to sell things which can not be copied.

Well, what can't be copied?

There are a number of qualities that can't be copied. Consider "trust." Trust cannot be copied. You can't purchase it. Trust must be earned, over time. It cannot be downloaded. Or faked. Or counterfeited (at least for long). If everything else is equal, you'll always prefer to deal with someone you can trust. So trust is an intangible that has increasing value in a copy saturated world.

There are a number of other qualities similar to trust that are difficult to copy, and thus become valuable in this network economy. I think the best way to examine them is not from the eye of the producer, manufacturer, or creator, but from the eye of the user. We can start with a simple user question: why would we ever pay for anything that we could get for free? When anyone buys a version of something they could get for free, what are they purchasing?

From my study of the network economy I see roughly eight categories of intangible value that we buy when we pay for something that could be free.

In a real sense, these are eight things that are better than free. Eight uncopyable values. I call them "generatives." A generative value is a quality or attribute that must be generated, grown, cultivated, nurtured. A generative thing can not be copied, cloned, faked, replicated, counterfeited, or reproduced. It is generated uniquely, in place, over time. In the digital arena, generative qualities add value to free copies, and therefore are something that can be sold.

Eight Generatives Better Than Free

Immediacy -- Sooner or later you can find a free copy of whatever you want, but getting a copy delivered to your inbox the moment it is released -- or even better, produced -- by its creators is a generative asset. Many people go to movie theaters to see films on the opening night, where they will pay a hefty price to see a film that later will be available for free, or almost free, via rental or download. Hardcover books command a premium for their immediacy, disguised as a harder cover. First in line often commands an extra price for the same good. As a sellable quality, immediacy has many levels, including access to beta versions. Fans are brought into the generative process itself. Beta versions are often de-valued because they are incomplete, but they also possess generative qualities that can be sold. Immediacy is a relative term, which is why it is generative. It has to fit with the product and the audience. A blog has a different sense of time than a movie, or a car. But immediacy can be found in any media.

Personalization -- A generic version of a concert recording may be free, but if you want a copy that has been tweaked to sound perfect in your particular living room -- as if it were preformed in your room -- you may be willing to pay a lot. The free copy of a book can be custom edited by the publishers to reflect your own previous reading background. A free movie you buy may be cut to reflect the rating you desire (no violence, dirty language okay). Aspirin is free, but aspirin tailored to your DNA is very expensive. As many have noted, personalization requires an ongoing conversation between the creator and consumer, artist and fan, producer and user. It is deeply generative because it is iterative and time consuming. You can't copy the personalization that a relationship represents. Marketers call that "stickiness" because it means both sides of the relationship are stuck (invested) in this generative asset, and will be reluctant to switch and start over.

Interpretation -- As the old joke goes: software, free. The manual, $10,000. But it's no joke. A couple of high profile companies, like Red Hat, Apache, and others make their living doing exactly that. They provide paid support for free software. The copy of code, being mere bits, is free -- and becomes valuable to you only through the support and guidance. I suspect a lot of genetic information will go this route. Right now getting your copy of your DNA is very expensive, but soon it won't be. In fact, soon pharmaceutical companies will PAY you to get your genes sequence. So the copy of your sequence will be free, but the interpretation of what it means, what you can do about it, and how to use it -- the manual for your genes so to speak -- will be expensive.

Authenticity -- You might be able to grab a key software application for free, but even if you don't need a manual, you might like to be sure it is bug free, reliable, and warranted. You'll pay for authenticity. There are nearly an infinite number of variations of the Grateful Dead jams around; buying an authentic version from the band itself will ensure you get the one you wanted. Or that it was indeed actually performed by the Dead. Artists have dealt with this problem for a long time. Graphic reproductions such as photographs and lithographs often come with the artist's stamp of authenticity -- a signature -- to raise the price of the copy. Digital watermarks and other signature technology will not work as copy-protection schemes (copies are super-conducting liquids, remember?) but they can serve up the generative quality of authenticity for those who care.

Accessibility -- Ownership often sucks. You have to keep your things tidy, up-to-date, and in the case of digital material, backed up. And in this mobile world, you have to carry it along with you. Many people, me included, will be happy to have others tend our "possessions" by subscribing to them. We'll pay Acme Digital Warehouse to serve us any musical tune in the world, when and where we want it, as well as any movie, photo (ours or other photographers). Ditto for books and blogs. Acme backs everything up, pays the creators, and delivers us our desires. We can sip it from our phones, PDAs, laptops, big screens from where-ever. The fact that most of this material will be available free, if we want to tend it, back it up, keep adding to it, and organize it, will be less and less appealing as time goes on.

Embodiment -- At its core the digital copy is without a body. You can take a free copy of a work and throw it on a screen. But perhaps you'd like to see it in hi-res on a huge screen? Maybe in 3D? PDFs are fine, but sometimes it is delicious to have the same words printed on bright white cottony paper, bound in leather. Feels so good. What about dwelling in your favorite (free) game with 35 others in the same room? There is no end to greater embodiment. Sure, the hi-res of today -- which may draw ticket holders to a big theater -- may migrate to your home theater tomorrow, but there will always be new insanely great display technology that consumers won't have. Laser projection, holographic display, the holodeck itself! And nothing gets embodied as much as music in a live performance, with real bodies. The music is free; the bodily performance expensive. This formula is quickly becoming a common one for not only musicians, but even authors. The book is free; the bodily talk is expensive.

Patronage -- It is my belief that audiences WANT to pay creators. Fans like to reward artists, musicians, authors and the like with the tokens of their appreciation, because it allows them to connect. But they will only pay if it is very easy to do, a reasonable amount, and they feel certain the money will directly benefit the creators. Radiohead's recent high-profile experiment in letting fans pay them whatever they wished for a free copy is an excellent illustration of the power of patronage. The elusive, intangible connection that flows between appreciative fans and the artist is worth something. In Radiohead's case it was about $5 per download. There are many other examples of the audience paying simply because it feels good.

Findability -- Where as the previous generative qualities reside within creative digital works, findability is an asset that occurs at a higher level in the aggregate of many works. A zero price does not help direct attention to a work, and in fact may sometimes hinder it. But no matter what its price, a work has no value unless it is seen; unfound masterpieces are worthless. When there are millions of books, millions of songs, millions of films, millions of applications, millions of everything requesting our attention -- and most of it free -- being found is valuable.

The giant aggregators such as Amazon and Netflix make their living in part by helping the audience find works they love. They bring out the good news of the "long tail" phenomenon, which we all know, connects niche audiences with niche productions. But sadly, the long tail is only good news for the giant aggregators, and larger mid-level aggregators such as publishers, studios, and labels. The "long tail" is only lukewarm news to creators themselves. But since findability can really only happen at the systems level, creators need aggregators. This is why publishers, studios, and labels (PSL)will never disappear. They are not needed for distribution of the copies (the internet machine does that). Rather the PSL are needed for the distribution of the users' attention back to the works. From an ocean of possibilities the PSL find, nurture and refine the work of creators that they believe fans will connect with. Other intermediates such as critics and reviewers also channel attention. Fans rely on this multi-level apparatus of findability to discover the works of worth out of the zillions produced. There is money to be made (indirectly for the creatives) by finding talent. For many years the paper publication TV Guide made more money than all of the 3 major TV networks it "guided" combined. The magazine guided and pointed viewers to the good stuff on the tube that week. Stuff, it is worth noting, that was free to the viewers. There is little doubt that besides the mega-aggregators, in the world of the free many PDLs will make money selling findability -- in addition to the other generative qualities.

These eight qualities require a new skill set. Success in the free-copy world is not derived from the skills of distribution since the Great Copy Machine in the Sky takes care of that. Nor are legal skills surrounding Intellectual Property and Copyright very useful anymore. Nor are the skills of hoarding and scarcity. Rather, these new eight generatives demand an understanding of how abundance breeds a sharing mindset, how generosity is a business model, how vital it has become to cultivate and nurture qualities that can't be replicated with a click of the mouse.

In short, the money in this networked economy does not follow the path of the copies. Rather it follows the path of attention, and attention has its own circuits.

Careful readers will note one conspicuous absence so far. I have said nothing about advertising. Ads are widely regarded as the solution, almost the ONLY solution, to the paradox of the free. Most of the suggested solutions I've seen for overcoming the free involve some measure of advertising. I think ads are only one of the paths that attention takes, and in the long-run, they will only be part of the new ways money is made selling the free.

But that's another story.

Beneath the frothy layer of advertising, these eight generatives will supply the value to ubiquitous free copies, and make them worth advertising for. These generatives apply to all digital copies, but also to any kind of copy where the marginal cost of that copy approaches zero. (See my essay on Technology Wants to Be Free.) Even material industries are finding that the costs of duplication near zero, so they too will behave like digital copies. Maps just crossed that threshold. Genetics is about to. Gadgets and small appliances (like cell phones) are sliding that way. Pharmaceuticals are already there, but they don't want anyone to know. It costs nothing to make a pill. We pay for Authenticity and Immediacy in drugs. Someday we'll pay for Personalization.

Maintaining generatives is a lot harder than duplicating copies in a factory. There is still a lot to learn. A lot to figure out. Write to me if you do.

Source > Kevin Kelly

New Project Updates

I am really excited about a new project for one of my hospitality clients. They have asked me to review their 2009 Marketing Plan and provide an Executive Marketing Report of recommendations and/or affirmations about their plans. I love doing this! I had the wonderful opportunity recently to do a similar project for the Park Hyatt Beaver Creek.

Keep me in mind as you finalize your 2009 plans. Sometimes an outside set of eyes can provide insight that will help you meet your 2009 marketing objectives.

A recent client of mine told me the one thing that tipped the scale for them to choose me was my willingness to teach their staff through the process. My background is teaching, so it is a natural part of what I do. It's one of the reason my business has been successful for the last 9 years.

As Jay Leno said “Give a man a fish and he will eat for a day. Teach a man to fish and he will eat for a lifetime. Teach a man to create an artificial shortage of fish and he will eat steak.”

Social Media Marketing: Why a Holistic Approach Pays Dividends

Case Studies from Carnival Cruise Lines and Southwest Airlines
22 January 2009

Increasing we are seeing travel companies who aren’t just gently participating in user-generated content, or dipping their toes tentatively into the social networking pool, instead, they are investing full-throttle in a multi-faceted social media strategy. They are participating in a variety of non-travel sites, in a variety of formats simultaneously. Between them, Southwest Airlines and Carnival Cruise Lines now have a presence on all the major social networking and photo/video sharing sites. They have pages on YouTube, Facebook, Flickr and Twitter. They both have their own blogs and their own social networking communities, all of which have been incredibly successful.


So what can travel companies learn from companies such as Southwest and Carnival, when it comes to their social media strategy? Can you work with one site, like Facebook, or do you need to have a presence on all of them, at the same time? How do you manage a multi-faceted social media strategy? And what benefits have Southwest and Carnival seen, by taking a holistic approach to social media?

Read on for an overview on the holistic approach Carnival and Southwest have taken to social media. Jeremy Jameson, Corporate Strategist – Strategic Planning for Southwest Airlines, will be offering a deeper insight into Southwest’s social media strategy at EyeforTravel’s 2nd Social Media Strategies for Travel Conference, being held on March 10-11 in San Francisco. For more information visit www.eyefortravel.com/social-media

Carnival has set up their own cruise-centric social networking community called CarnivalConnections.com. This has been created specifically to bring family and friends together by helping them plan and manage their cruise vacations. The site features an “e-invite” electronic invitation tool that can be tailored family reunions, girlfriend getaways and other groups.

John Heald’s Carnival blog has had attracted 3 million visitors. Through his blog, Heald offers candid and colorful commentary on daily shipboard life, sharing interesting and often poignant tales of the guests and crewmembers he comes into contact with on a daily basis, all with his trademark brand of humor. This enormous amount of traffic creates good brand exposure for Carnival and with 25,000 comments it’s a proven customer-interaction tool.

In terms of videos and photos, Carnival as its own photo stream on Flickr, allowing customers to upload photos, and they also have their own channel on YouTube. On their website they have created a virtual tour, FunShipIsland.com, with sharing options, personalization tools and downloadable content.

Carnival was also an early adopter of Twitter – exploiting it to monitor their brand image, listen to questions from customers, communicate promotions and share experiences

A pioneer in the on-line marketing arena, Carnival’s new Web-based initiatives are designed to provide a effective and innovative means for reaching out to consumers and travel agents. Both FunShipIsland.com and CarnivalConnections.com continue to achieve unprecedented success, with each exceeding the one million visitor mark in 2008.

Southwest Airlines implemented a social media strategy three years ago and, like Carnival, they have taken a holistic approach, participating in numerous sites simultaneously. They currently have a presence on popular sites: Twitter, Flickr, Facebook, YouTube and LinkedIn.

Southwest produces new video content for YouTube on a weekly basis. By creating new and unique content they are reaching out to a vast and growing audience of people who are watching online videos on a regular basis. This strategy will also have a positive impact on their search engine rankings.

Their blog “Nuts about Southwest” is a real success story. A team of 30 employee bloggers regularly keep the site updated with new content and as a result they receive a massive 70,000 unique visitors each month. “Nuts about Southwest” was also winner of the 2008 PR News Platinum PR award for blogs.

As well as a loyal following of blog-readers, Southwest also have a huge following of 8,000 people on micro-blogging site, Twitter. Twitter allows its users to send and read other users' updates (otherwise known as tweets), which are text-based posts of up to 140 characters in length.

Finally, Southwest Airlines is a heavy user of LinkedIn, the world’s largest professional network. They currently have 3,000 active employees connecting their professional networks via this site.

No other US airline has participated in such a multitude of social media sites in such a short space of time. And it is obviously paying dividends for Southwest, not just in terms of brand awareness but also generating huge volumes of traffic. Southwest continues to be one of the most successful airlines in the world posting a profit for 35 consecutive years -- something no other American carrier can boast.

“Our brand is suited to social media because it’s a natural progression of our 37 year commitment of having authentic relationships and conversations with our customers” said Jeremy Jameson, Corporate Strategist – Strategic Planning for Southwest Airlines.

The majority of Southwest’s’ customers are online, and if recent statistics are to be believed then those people are inevitably interacting with social networks. Customer service and transparency make up the DNA at Southwest; social media channels provide a compelling way to bring the brand promise to life. Although Carnival is less dependant on online bookings, their online image presents a down-to-earth attitude with top management communicating directly with customers.

Southwest and Carnival are both “fun” brands with loyal followings so are suitably poised to take advantage of the social media revolution. They both have a mass appeal and a positive, less-than-corporate attitude. Most importantly they are both brands which consumers feel they can easily engage with, and want to engage with.

Jeremy Jameson, Corporate Strategist – Strategic Planning for Southwest Airlines will be speaking at EyeforTravel’s Social Media Strategies for Travel Conference on March 10-11 in San Francisco (www.eyefortravel.com/social-media). He will be joined on his session by Jeff Hanson, Regional Director of Marketing & eCommerce - Western Region, Marriott International, Juston Parker, President, Parker Hospitality Group and Kevin Fliess, CEO, TravelMuse.

For more information on Social Media Strategies for Travel on March 10-11, 2009, in San Francisco, click here: www.eyefortravel.com/social-media