Backing The Wrong Horse
This week’s readings were a continuation of Wikinomics and to begin Chris Anderson’s The Long Tail. Over the course of weeks, we’ve read books talking about the advantages of open collaboration in the work place. Microsoft created Channel 9 enabling them to change their public face and appear more human to their customers. Bob Lutz, CEO of GM, manages his own blog to share his insights of his company with the public to make himself appear more approachable and the company more friendly. What open collaboration shows us is more can be done effectively if we work together, but only if you have a really good idea.
But what if you ignore it altogether? What if you hold your head under the surface of the earth singing a happy tune ignoring the world in which you live? Well, you do that, everything still changes, but you have a lot of dirt in your ear. This, I’m afraid is what’s happening to the music, television, and radio industry. Heck, why be so gentle – the broadcast industry just doesn’t know what’s going on anymore. The Federal Communications Commission was designed to patrol the airwaves when the spectrum was defined as limited. Signals took close in range could overlap and blur causing transmission trouble for the small rural areas. However, once modernization took over, cities became larger and technology got better and, hey, the spectrum got larger. Now, in addition to AM and FM, we have HD Radio. Simply put, HD Radio is a near simultaneous broadcast of two signals on the same frequency(Truthfully, they are on different frequencies, but for the purpose of railing against the FCC, they are on the same frequency.) Ok fine, HD Radio isn’t on the same frequency, it’s one or two slight movements to the right or left of a frequency to be different, but different enough from frequency X to be called frequency X1b. HD Radio is a reaction and less of an invention. It is a marketable and controllable form of pre-existing music technology. It is also a reaction to the growing number of individuals listening to their iPods, Zunes, or other portable media players. Even online music services by Yahoo! or Pandora are proving to be better sources of unfiltered music than terrestrial radio of less than the cost of either and HD Radio player OR Satellite. That’s not innovation, that’s defense. Certainly necessity is the mother of all invention, but the all-mighty dollar is the biggest driving force there is. And let’s not kid ourselves, really, that’s what this is all about.
Amazon.com is an example used in both Wikinomics and The Long Tail as being a hub for capitalism. It’s a hub because it had become the ultimate catalog and one of the ultimate open source business models. While Wikipedia is a public library for anyone to add, subtract, or edit, Amazon.com is a company where anyone can go to purchase items. Though it doesn’t have the bazaar functionality of eBay, Amazon.com does provide many popular items, as well as an enormous number of niche items. Additionally, Amazon.com allows sellers to link up with them in order to drive up business for both the small business owner and Amazon.com. The symbiotic relationship does more for the small business owner, I think, because Amazon.com is already a branded company so having a connection to the small business provides a sense of comfort to the customer. What drives Amazon.com, unlike the big business models of Viacom(whose own Sumner Redstone claimed himself a “non-adopter“) or Apple who really seems to know how to build a better(?) iPod, is innovation and connection. Microsoft connected with Ford, Lincoln, and Mercury to create Sync so a driver can control the music vocally, but that’s not innovation, that’s comfort. That’s building in a logical thought pattern – it’s how can we make driving safer and easier? Well, we can’t stop idiot drivers from talking on their cells, texting while driving, or playing with their music players, so let’s make it controlled through voice-activation. Too me, that’s not new. What’s new is making a challenge to developers and programmers everywhere saying – you think you’re good, help us come up with the next big thing. That’s innovation. Step outside of the comfort zone and create a new niche.
Chris Anderson had a lot to say about the power of niche’s in his book The Long Tail. Niches, he suggests, often have a larger demand than popular items. Niches are the X axis with popular items(film, music, books, etc) being the Y. My favorite explain he provides when discussing the business of movie-making is what a hit film should be, mostly because it sounds an awful lot like the biggest selling summer movie of 2007 ::sigh:: Transformers. It had upwards of $200 Million dollar budget, it had big names, and it had incredible special effects. My love for Optimus Prime notwithstanding, it was a BAD movie. A thin storyline held together by bad shots and terrible dialog. But it made millions globally, so a sequel is on the way. Whereas innovative films like The Boondock Saints made very little money as a Direct-to-VHS/DVD, YET 50,000+ of people went nationwide to the 1-night screening of the Director’s Cut edition. The sequel of which is still seeking financing while Transformers 2 rolls out in ‘09. I only wish that the studios would start to listen to their constituents instead of their stockholders. If they did, the products would be better and maybe we’d get a sequel to Serenity as well (for the groundlings, Serenity is a film made 2+ years after Fox shit canned it. The fans demanded more, and Joss Whedon(creator) was able to make it so with a little help.) It’s interesting what a little public involvement can do, isn’t it? A film can be made of a canceled TV show or even have one brought back after DVD sales go through the roof – Family Guy anyone?
I guess what I’m trying to say can be summed up best by what my girlfriend just said, the reason Microsoft is so big is they don’t offend anyone’s gentle sensibilities. If you make popular products, people will buy them. They will be a hit and they will sell. But if you make something new, if you make something lasting, people will remember it and get involved. If you don’t believe the power of niches, take a chance and go here. The truth of the matter is this, if you don’t innovate, you’re dead. That’s good business. “Content is King,” says Sumner Redstone, but people also want connection, they want interaction. They want it now, and they mostly want it for free. If CEOs don’t start listening, they’ll be too late to realize they’ve been backing the wrong horse.
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