Wetpaint CEO Ben Elowitz on the Future of Digital Media
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.
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?
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.
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.
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!
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.
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.
Early reports are in confirming the results of Google’s index changes. Yahoo’s Luke Beatty says two-thirds of Associated Content pages have lost traffic, while I’ve heard that total volume declines from Google search have reached 70% on some properties.
For sites like eHow and About.com, which get somewhere between 65%-70% of their traffic from search, the concentrated risk exposure that comes from Google engineers changing the algorithm makes for an unstable and uncontrollable business model.
Never in the history of media has there been such a precarious model for distribution, and the bad decision by SEO-focused sites to try and build a relationship with an algorithm looks worse and worse. The SEO-focused sites kowtow to the algorithm’s desires, as best as they can interpret them. They game their moves internally, based on what they think the algorithm wants, not what the customer wants. And they rely on the white hats, as well as all of the blackest hats they can stomach, just to please the algorithm.
But, unfortunately, the algorithm is capricious and unreliable.
What these companies should do is form relationships with consumers.
That means providing consumers what they want – and where they want it, which increasingly means in their Facebook or Twitter feed, and on their mobile phone.
In the end, this is the only way to create great experiences that are branded in the consumer’s mind today.
My advice, then, is simple.
SEO slaves, rise up – and revolt! Throw out the false God of the search algorithm and, in its place, focus on building valuable content and experiences. Win the audience, not the search.
Tim Armstrong, AOL’s CEO, has rebooted AOL with a talk-track of branded destinations, A-level journalism and sizzling original content; and early Monday morning, a full week before Valentine’s Day, his romantic media vision was considerably enhanced, when Arianna Huffington announced that she was selling Huffington Post to AOL for $300 million in cash and $15 million in stock.
For the record, that’s quite a premium price – 10 x Huffington Post’s $31 million in revenues.
Despite the cost, however, Armstrong is a very lucky man, and he received a wonderful gift from Huffington, whose hugely successful and much-talked-about Web site is a perfect match that helps “complete” AOL.
Indeed, the relationship between Armstrong and Huffington comes not a minute too soon for AOL, which is finally bringing on real creative assets and talent – including Arianna Huffington, herself, as chief editorial taste-maker.
To be honest, the media industry has been wondering whether Armstrong could actually pull off a deal like this. (True Confession: I’ve been among the doubters.)
And there’s good reason for the skepticism.
The problem, in large part, has been strategic. Since he assumed the CEO’s post, Armstrong has talked with clarity about his vision for an AOL made up of destination media brands, the way Time Inc. and Conde Nast have built their portfolios. But to date, his build-out of this city on a hill has fallen short. Instead of buildings gilded with leading journalism that attracts fame and eyeballs, his properties have largely been constructed by plumbers and mechanics laying a foundation for search engine rankings.
That’s why AOL’s recently leaked master plan, “The AOL Way,” is heavily oriented toward users’ search queries. The playbook emphasizes volume of content, page-views per post, and production cost per-piece. And, while “The AOL Way” is punctuated by periodic reminders like “quality content at scale,” the reader of the plan is left with the distinct impression that quality is a guardrail, not a compass direction for the journey to ROI nirvana.
Indeed, without a voice or a purpose other than page-views, “The AOL Way” comes off as soulless. Instead of emphasizing audience interests, an editorial point of view, or premium differentiation, it’s a volume strategy: the plan calls for the number of stories to jump from 33,000 to 55,000 a month; with median performance to go from 1,512 page-views per article to 7,000 within the quarter; all while gross margins rocket from 35 percent to 50 percent.
This Google-ingratiating strategy, at least from my perspective, is wrong-headed and short-sighted. It doesn’t do anything to help build a unique and long-lasting brand that is meaningful for audiences. And, as a result, it does very little to encourage people to eagerly and voluntarily type “AOL.com” into their browser’s destination bar. With this playbook, consumers don’t go to AOL; they merely end up there.
There’s a solid lesson here for all of us.
AOL – like everybody else in the media business – is clearly jealous of Facebook’s gravity-defying results. But it takes time for a proper media brand to achieve such stratospheric numbers. The great brands – The New York Times, ESPN, CNN, Wall Street Journal – have shown us that you build audience loyalty one positive interaction, one ambitious story, and one rich consumer experience at a time. To be sure, Huffington Post has shown us that, building its audience to a reported 25 million uniques over a well-paced five years.
So, it doesn’t happen overnight, and it certainly doesn’t happen if you’re just playing for quick search engine results.
Looking forward, it will be interesting to see whether Huffington – a savvy and independent thought leader who has always leaned forward – chooses to embrace “The AOL Way.”
My sense is that she will continue to follow her well-honed consumer-focused instincts instead. She brings a strong point of view, a decidedly human nose for news, and a variety of social strategies for distribution – not to mention her considerable star power. And that’s a good thing for AOL.
It’s important to recognize Armstrong’s considerable achievements. He saw that AOL’s subscription model was a non-starter; he chose areas of core content concentration for AOL; and, unlike Yahoo!, for example, he pared AOL’s portfolio quite dramatically.
But the pre-Valentine’s Day courtship and consummation with Huffington will mean very little in the consumer marketplace if Armstrong doesn’t get rid of his seemingly unshakable Google obsession – and very soon.
Here’s hoping that Arianna can help nurture Tim’s AOL, and turn it into a true media destination.