The Coming Video War Between Apple and Google

This follows my recent post about how a new TV interface from Apple could decimate the television landscape.

Even though Steve Jobs never talked about changing the face of search with Siri, its natural language interface.

But doing so would certainly be a riveting Hollywood screenplay in which Jobs, the uber-innovative, uber-inventive CEO, ultimately gets revenge on a corporate rival he views as a “copy cat.”

In this fictional script, that rival would be Eric Schmidt, one of the top executives at search giant Google. It’s Google, after all, that’s breathing down Apple’s neck with its rapidly expanding Android phone platform – a platform that, according to Jobs and his lawyers, mimics Apple’s breakthrough iPhone technology.

Putting this Oscar dream aside, there’s intensifying competition heating up between Apple and Google, even though Jobs is –sadly – no longer on the scene.

Indeed, even though Google has had voice-enabled search for some time on iOS and Android devices, Schmidt has said it’s possible that Siri could be a real and radical game-changer.

Schmidt may be right.  And if he is, then Google will be facing a serious threat as Apple reinvents Google’s home turf of search.

With a “personality” that displays a unique understanding of humanity, Siri’s digital chromosomes enrich the user’s experience. This sets it apart from Google’s more mechanical offerings, and shows why Apple’s consumer-obsessed culture is so different from Google’s corporate DNA, which is as robotic and algorithmic as the “Android” name suggests.

There is rich irony here, as Apple disintermediates the greatest disintermediator of all time.  When Google’s superior search service started, it practically single-handedly reduced the brand-driven experience that consumers had thereto relied on with directories and a fully editorialized Web.  Google replaced those channels and home pages with 10 blue links.  And in the process, became users’ destination of first resort 13 times per day.

And Apple has always been a curator extraordinaire – developing collections and exercising famous (and occasionally notorious) judgment to determine who deserves to be in its directories of songs and apps.

But now, Siri stands ready to flatten the world of entertainment.

In all fairness, Page and his team are now trying hard to enrich the user experience by aligning their YouTube brand with media companies like Disney, and doling out big dollars for proprietary programming. The hope here is that YouTube can create dozens of lucrative user-friendly / user-favorite Web channels featuring comedians, sports stars, musicians and other entertainers.  The company is building stocks of its ‘own’ media weapons in preparation for the coming war.

But, as always, it will be hard for Google to win the hearts of consumers when it comes to content; and it will be especially daunting because Apple is already so completely connected to users.

Meanwhile, with its enviable consumer connection, Apple will undoubtedly extract a toll from media companies, who still want to bathe in the warm digital light that emanates from the inviting and engaging brand Jobs built.  And, as it has in every other media category, Apple stands to capture an outsize share of profits for delivering content into a magical consumer experience.

Jealous much, Google?

With Siri TV, Apple Will Dismantle the TV Networks

This article was published as a guest post at All Things D, and is republished here for DigitalQuarters readers.

Steve Jobs died without fully transforming television, but the day after he passed away, Apple unveiled Siri, its natural language interface. Though it’s currently only embedded in the new iPhone 4S, Siri could eventually change the face of the TV industry.

Notice I said “TV industry.”

But from my perspective, Siri’s greatest impact won’t ultimately be on users, or on device manufacturers (though they certainly risk losing market share to Apple). It will be on the TV industry’s content creators and packagers. Why? Because a voice-controlled television interface will fundamentally disrupt the six-decade-old legacy structure of networks, channels and programs. And that’s a legacy that — until now, at least — has been carried forward from analog to digital.Most observers and analysts believe that Siri’s voice commands could eliminate the need for those clunky TV remote controls. With the blurring and exponential proliferation of television and Web content, telling your TV what you’d like to watch, instead of scrolling through a nearly infinite number of program possibilities, makes a lot more sense.

There’s an important underlying precedent here.

If the Internet can be generalized to have one effect across every industry that moves online, that effect would be disaggregation. Choices go from finite to infinite. Navigation goes from sequential to random access. And audiences choose content by the item far more than by the collection. We’ve gone from the packaged and channelized to the unbound and itemized. Autonomous albums are fragmented into songs; series into clips; and magazines and newspapers into articles and individual photos.

As much as we may think that has already happened with video, it is nothing compared to the great leveling that will occur in the voice-controlled living room. Voice-controlled TV means direct navigation to individual episodes, programs and clips. And it will almost certainly lead to a discernible deconstruction of the network and channel structure — not to mention the decomposition of even the aggregated marketplaces like Netflix, Hulu and YouTube.

Here’s the simple reason: No one is going to sit on their couch and say, “Siri, show me NBC’s ‘Community.’” In a voice-activated world, monikers like “NBC” become useless. They don’t stand for anything meaningful to the consumer. They’re just remnants of a decrepit channel structure that’s unraveling. And, in the end, they’ll simply connote the fast-fading allure of mid-20th century mass appeal.

To be sure, the TV majors will lose much of their ability to realize network effects. Already, you’re hearing less about “lead in” and “lead out.” What you are hearing more about, however, is disconnected videos. A program on YouTube, for instance, will sit on a level voice-controlled playing field with an NBC show, and that field will soon become even more level, because Siri will eliminate the menus that structure the artificial hierarchies of content collections.

So how will we be able to get network effects back in video? Let’s look at four possible ways:

  • Branded Content — Players can build a strong brand that stands for something with their audiences. Break.com, Discovery and Oprah are all meaningful and build long-term customer loyalty. (“Siri, show me new TED Talks.”)
  • Curation — Brand the collection with a curation strategy so that the curator’s name and stamp of approval means something to the audience. (“Siri, show me Jason Hirschhorn’s latest movie suggestions.”)
  • Social — In the fully social world that we expect to see, focusing on the virality of content means you tap the human distribution network and social operating system. (“Siri, show me what videos my friends are watching.”)
  • Personal — We’ve already seen the extraordinary value of well-tuned personalized recommendations, with Netflix’s notable prize and other famed stories of the benefits of great recommendations. Increasingly, our own patterns of individual videos and the brands we affiliate with, along with recommendations from friends, will be combined into personalized recommendations we won’t even have to ask for. I have no doubt that Siri will be as good a “Genius” as iTunes is at recommending what else to watch. Ultimately, in the age of data, whoever knows the most about us will be able to give us the best experience.

Beyond disaggregation, personalization is ultimately the most powerful consumer value of digital media. My mother’s TV experience was to walk over to her TV set and turn a dial to select among three channels to satisfy her individuality. But in the next generation, no two people will receive the same recommendations from the millions of content choices available.

Before he died, Jobs now famously told Walter Isaacson, his biographer, that he had finally cracked the TV code. It’s unclear what Jobs meant, what this entailed or what he thought it would lead to in the years to come. So, barring further posthumous disclosure, Jobs’s own predictions of his ripple effects will be a media mystery for now.

One thing that’s clear, though, is that Jobs’s Siri will start the dismantling — or creative destruction — of the TV industry as we’ve known it for the last 60 years.

SOS – The Social Operating System

Facebook F8 has made clear that the digital world is now powered by social operating systems.  It’s all changed.  The below post was previously published at paidContent, and is republished here for DigitalQuarters readers.

SOS – The Social Operating System

How the Social Web Has Rewired the Digital World From the Ground Up

In the wake of Facebook’s F8 mega-event, with its parade of product, feature, and platform announcements, I’m struck by the recent major inflection that has social networking penetrating more and more completely into our digital lives.

Indeed, social networking has moved from something that’s a destination activity, to something that is ever-present throughout every digital experience.  And, no doubt, Facebook will continue this rapid progression.

My awareness that social networks have seriously and profoundly journeyed into our lives began with the startling statistics that I published in June:  the searchable Web is shrinking (by 9% in consumers’ monthly time spent over a recent one year period); while the social Web is growing (with a matching 69% increase in time spent on Facebook specifically).

But the change has since intensified, as Facebook’s share of consumer attention has increased even further, and as Web sites the world over race to recruit Facebook “fans” and “likes.”

In addition, the trendline has also become increasingly clear and sharply etched in recent months with the LinkedIn IPO; and with the Google+ Project, as even mighty Google vies for relevance as a social fabric that helps weave our world together.

Putting it all together, I’m seeing a restructuring of the stack: a new layering of how media is created, distributed, and experienced, different from the first generation of the Internet.

It’s the rise of what I’ve come to view as the “social operating system (Social OS).”  And I think it changes everything for media and other companies online.

The New Way News Travels

Unlike the analog world, where content and distribution companies have largely fixed channels (licensed spectrum; contracted cable distribution; stable subscription bases; theater outlets; and other distribution power), digital content isn’t channelized.  It’s itemized.

That means digital content has to earn an audience – item by item.  The first generation of digital media publishers turned to search engine optimization to solve that, with an endless and constantly escalating set of editorial and technical tricks to bait search algorithms to rank them highly.  This became de rigeur for every digital publisher; even as it spawned an arms race to find an audience.

But now that social is ubiquitous, the nature of distribution changes for media companies.  And now, instead of having to reinvent the distribution wheel every day for every page, publishers can rely on a system far more powerful than the search engine to sort, select, and rank content.  That system is part human, and part technology – but it is 100% social.

The Social OS sits at the boundary between content and the people who consume it.  It provides a layer of functionality that lets Web companies focus on their unique content and the experiences that they offer – while earning distribution, not via channels, but via people.  And, in the process, they earn, not a mechanistic relationship with an algorithm, but a real relationship with their audience.

None of this was possible until very recently.

The Internet was too immature: both in terms of technology, and audience. Indeed, it’s only since this decade started that we’ve had the social network and mobile technology in combination with literally billions of users online; this mix lets people connect to each other, and allows content to flow effortlessly from one consumer to the next.

And it’s this combination of technology (networks like Facebook and Twitter); content (with providers like Apple, NetFlix, and YouTube, not to mention the hundreds of blogs and media companies); and, most significantly, real people online to spread all that goodness, which makes the Social OS work.

The New Common Medium For Transmission

That’s why each Social OS is defined, first and foremost, by who’s on it, and what the connections mean.  But beyond that, each social operating system can make identity, personal information and interests, relationships, and other data and actions available to applications.  And third, and most importantly, is the role of the Social OS as distributor.  Because Social OS’s have transformed the primary navigational coordinates of the Web from document-to-document links to person-to-person, the Social OS becomes the medium for propagation.

As recently as a few years ago, large media companies saw some parts of this wave coming, and they thought the answer was for each of them to build their own proprietary social network.  But relationships between people aren’t proprietary to media; rather, they are the conduits through which all media travels.

And that puts in perspective what Mark Zuckerberg recently said, about how media is the next big application for his Facebook Social OS:

“Some of the earliest examples we’ve seen are with games.  It just leads to massive disruption.  And I think, over the next 2, 3 years, we’re going to start to see that in more and more industries, and the next ones I would expect are going to be media-type industries.”

Or, as we say at my company, Wetpaint, we are becoming the Zynga of publishing, leveraging social operating systems like Facebook, Twitter, and YouTube to build a powerful media business on top of them.

Reinventing the Media Industry For a Social World

The rise of the social operating system has two implications for old (and even some new) media companies, who are mostly still trying to figure out what to do with all this.  If the idea isn’t to be a social network, then how do they use Social OS’s to make their business more successful?

Social maven Jonah Peretti, co-founder of Huffington Post and CEO of BuzzFeed, points out that different social networks specialize in different content:  Facebook users share “what you want your friends to think you like … content you can wear as a badge of honor,” while Twitter is a platform for topic curators and wholesalers in the information trade, and LinkedIn has a strictly professional domain.

For its part, YouTube has its own character: with most consumption anonymous, it’s largely an open public repository, and much of the networking that forwards YouTube videos from person to person happens via email, Facebook, and other networks.

And, as Google gets into the fray with its Google+ Project, presumably it is meant to specialize in closed groups, when full public exposure isn’t in order. If it works, it will likely find its best traction in topics like health & wellness, parenting, or certain hobbies.

For media companies, the key is knowing which Social OS’s to bet on; and then tuning content, packaging and distribution for them.

For celebrity entertainment and gossip at Wetpaint, we know Facebook is a natural match for mass consumer promotion.  On the other hand, for industry analysis, like my blog posts, I’m not surprised that Facebook is relatively unimportant:  for most of my readers, my posts wouldn’t fit in among family photos and Farmville accomplishments.  Twitter and LinkedIn do far better for heady topics like the future of media.

High Stakes:  The Future of an Industry

The last decade of audience fragmentation and content de-bundling on the Internet has ravaged media, particularly in a world characterized by fierce competition for the love of Google’s robots.

When Mark Zuckerberg recently spoke at a Facebook event in Seattle, he said:

“The last 5 years have been about connecting all these people. The next 5 years are going to be about all the crazy things you can do now that these people are connected, and I think it’s going to be cool.”

In a world powered by social operating systems, the prize is that, when we execute well, we get to be hooked into people’s lives.  Media companies can earn constant places in consumers’ newsfeeds, along with a button asking them to consider sharing their experience every time they see us. I think that’s going to be cool.

 

 

 

Xconomy: Facebook, Google and Beyond

A couple of weeks ago, here in Seattle,  I had the opportunity to participate in a discussion about the future of SEO (search engine optimization) and SMO (social media optimization), along with one of the top SEO experts in the world:  Rand Fishkin.  The conversation was a lively one, moderated and reported –by Curt Woodward, at Xconomy.

My view is that – particularly for media – we are at a tipping moment.  The web is no longer a field of static documents navigated by a precise search engine.  Instead it’s a living organic distribution machine from person to person, through the ether of “social operating systems” like Facebook and Twitter.  And, as a result, I expect Google will be losing ground to Facebook.

It’s was a lively and fun dialogue.

Read the highlights and play-by-play here, courtesy of @curtwoodward.

My Tricoastal Media Map

This week at the All Things D D9 conference, I found myself telling people that lately I’ve been “tricoastal.”  It’s a codeword I’m enjoying for the rotation I have been doing between the Bay Area, Los Angeles, and New York.  I seem to run between the three of them continually, as I’m trying to put together my best thinking about the future of media.  And, despite the time, expense, and hassle of the travel, I keep finding that blending the three of them is far more powerful than if I spent time in any one of them.  And if I didn’t visit all three frequently, I wouldn’t just be facing the catastrophic loss of super elite status on multiple airliner, nor innumerable calls from my mother asking “where are you and are you wearing a sweater??”.  Far worse, I’d be missing an accurate picture of media.

My company, Wetpaint, has its roots in Silicon Valley.  The Valley is great for its appreciation of the mechanics of digital media.  In fact, it’s obsessed with them.  The Bay Area practically invented the word “virality,” and it understands distribution – both through search engines and social networks, and from person to person – far better than others.  At least at a mechanical level.  The Bay Area culture is left-brained; it celebrates analytics, tactics, and leverage created by software and automation to get nonlinear results from human efforts.  However, it is blind to the art of content and the realities of the advertising business.  It assumes that both of these can be deconstructed successively into analytical components; that all actors are rational; and that these are systems problems, not human problems.  But these assumptions are all patently false in media.

New York, on the other hand, recognizes the art of editorial and the less predictable, more spontaneous nature of the consumer.  The iconic titles of companies like Conde Nast, and their personality-driven cultures, seem to have established a reverence for the editor-monarch with perfect knowledge, and have embedded a culture of royalty based on editorial superiority that translates into sales prowess.  And that last component is met by New York’s enormous advertising machine, which operates based on a currency of relationships and perks.

But it’s Los Angeles that impresses me even more for being image-obsessed.  Hollywood’s influence seems to understand the value of brands the best – that brands are greater than the sum of their parts.  The LA mentality, however, assumes that content creators have captive distribution – as they do in broadcast and cable TV channel agreements and movie theater agreements.  It assumes that once a brand is launched it becomes a pipe through which you can shove whatever content you want, like a cable channel, as though the lead-in and lead-out are guaranteed.  And it carries an assumption that brand franchises have immense value to be tapped and negotiated by dealmakers.

In truth, digital media doesn’t operate this way.  No distribution is guaranteed.  Just as LA has seen the record companies crumbling under disaggregation, now it is happening to other forms of digital content.  Published content online needs to find its audience one “single” at a time.  The brand value of the collection, while still significant, no longer carries guaranteed distribution online.  And the personalities linked to that content no longer have the star-power that an Anna Wintour or Tina Brown have been able to create in the New York model.

None of which is to say that the Silicon Valley mechanists are right, either.  They aren’t. Their mechanical analysis of the universe doesn’t survive contact with humanity.

Instead, what I love to find every time I tour is how these pieces fit together.

If you’re not practicing the art of content that the New York media is best at, then you are creating a bunch of meaningless drivel that will never deserve the loyalty of a branded relationship.  That branded relationship is the exact mantra of LA’s movie franchise creators; and yet, the distribution mentality of LA (that you can own a captive channel) is all wrong.  Instead, I find that the Silicon Valley mindset of each item needing to find its audience – and then self-lubricate for viral distribution – complements it best.  And this, then, reinforces the fact that it all starts with the NYC notion of content, in contrast to Silicon Valley’s algorithmic bias that it’s all about the technology.

By putting the three together, we end up with a complete picture of media – content, mechanics, and brands all working together – and that combination is one that represents how the audience behaves, with human drives around interest, engagement, and loyalty.

 

 

Let’s Get Real – Blogging Is About Fame, Not Fortune

I have a question for Jonathan Tasini, who is leading a $105 million lawsuit on behalf of thousands of uncompensated bloggers against The Huffington Post.

If you and your litigious colleagues are so good, so valuable, and so organized, why don’t you launch your own online media venture to out-compete HuffPo?

I’m sure you have your reasons – and, of course, initiating a lawsuit is so much easier than starting a digital publishing site from scratch.

But, let’s get real.

Blogging isn’t free-lancing, and it’s hard to imagine that any of the contributors who sent their material to HuffPo ever thought it was. As I wrote several weeks ago, every contributor knew the basis of the transaction: write what you have to say in exchange for being publicized. As always, the prime currency of blogging was fame – not fortune.

So who’s trying to cash in now?

On a broader, more global note: I feel sad for the desperate bloggers who are trying to shake down HuffPo; and I’m deeply sensitive to the fact that  the media world is under pressure and steadily shrinking. But Tasini and his fellow litigants look like starving dogs scrapping for a shred of meat. It’s unseemly and unproductive.

What’s next?

Will Tasini respresent a class action suit against Endemol on behalf of all American Idol contestants, who were totally exploited as they sought super-stardom?

Or will he represent the tens of millions of users in a suit against Facebook, for advertising against their status and Farmville activities?

Both legal moves would make for entertaining blog posts, and I look forward to the juicy reading!

Sometimes, You Get Lucky and Just Nail It!

I’m not the Amazing Kreskin, and I hardly consider myself a visionary prophet. I’m just Ben. But I happen to live and breathe the digital publishing business because it’s my professional passion.

So, I was quietly surprised to read this week that Hulu’s subscription video service will surpass one million subscribers in 2011.

This forecast comes from Hulu CEO Jason Kilar, and was reported in the Wall Street Journal; it was also analyzed by Peter Kafka in All Things Digital.

I was taken aback by Jason’s announcement – not because I doubted Hulu, but because I somehow managed to predict the Hulu Plus subscriber number exactly a year ago.

Indeed, a year ago, in April 2010, I said: “I expect that the service will reach or exceed a million subscribers by the end of 2011.” (See my April 23, 2010 prediction here.)

In life, like baseball, sometimes you win; sometimes you lose; and sometimes you’re rained out.

But the W’s always feel best.

Good job, Jason!

And for the record: I continue to be bullish on Hulu. As long as it can keep its content license agreements humming, it will have a killer collection of content, plus killer experience, to offer consumers; it also has killer context to offer advertisers. And that’s a formula for great success.