Tag Archives: Social Networking

User-generated blues

Remember when user-generated content was all the buzz? It still is in the social networking space. Facebook is nearly 100% user-generated content, but where’s the business model?

Facebook is top dog in social networking, but it’s number one among the most fickle user base. Not too long ago all your Facebook friends were on MySpace. Should Facebook irritate users further with another UI change or more ads, its users will go elsewhere.

In 2005 Rupert Murdoch surmised that MySpace had achieved permanent dominance in its segment due to Metcalfe’s Law, and promptly shelled out $580 million for the soon-to-be-number-two social networking site. Apparently Murdoch failed to factor zero switching costs into his network valuation model.

But this isn’t about MySpace or Facebook. It’s about user-generated video content. In another blow to the Long Tail [see previous post], both AOL and Brightcove have announced their free video publishing services will go dark in mid-December. From Brightcove’s announcement:

Although more than 40,000 publishers have signed up for the Network, it represents less than 1% of our revenue. Our core business, the Brightcove platform, has been extremely successful for us and for our customers. So we’ve decided to focus 100% of our business efforts on the Brightcove platform, which customers pay us to use.

That’s not much revenue, but a good amount of storage and bandwidth. Brightcove is a distribution platform, so it makes sense to move unprofitable content off the system. AOL is in a much different position. Liz Gannes gives a good analysis over at NewTeevee.

If you’re truly pushing your overall platform as a default, there should be a way for users to post videos without leaving to log in somewhere else. But it’s also an ominous sign that simply hosting a few user videos is a significant enough diversion of resources to be considered worth cutting. The cost of running a video service is pretty high, regardless of how cheap everything is getting.

Video differs from other types of UGC. Watching video online requires greater audience commitment than text, still images, and even audio. Having reasonably short, clearly rated, and easily searchable content all in one place are the table stakes. YouTube for UGC and Hulu for commercial material are the clear winners. There’s no room for a second tier player.

The dynamic changes somewhat for longer form content. Users have to block out a time to watch the content. That investment in time must be rewarded. Quite often the content offerings on the free platflorms don’t reward that investment. Put more succinctly, a lot of the content on free Brightcove Network wasn’t very good, making it difficult to find the good stuff. What Brightcove learned is that charging producers to publish content filters out a good proportion of the nearly unwatchable.

It’s not a feel good story about the democratization of the media or the Long Tail. It’s just a market working itself out. To this capitalist, that’s a pretty good feel good story in 2008.

Visualizing data

Earlier this week the NY Times ran a piece about the experimental website Many-Eyes.com. At first glance the site is every statistician’s nightmare — the marriage of complex visual interpretation and social networking. Being a believer in the wisdom of the crowd, I don’t expect this harm public discourse in the least. As this election cycle proves, there’s really nowhere to go but up in public debate of complex issues.

As an editor and motion graphics artist, data visualization is hard to get right and impossible to do inexpensively, requiring both sides of the brain to fire on all cylinders. If it was possible to post a data set and tap the collective knowledge of the audience to parse it and visualize it meaningfully, we might be on to something.

At it’s most basic level, the tool streamlines the process of data visualization. You can take a look at this view of Olympic medals won by each country from 1896-2006.

It’s also useful as a tool to verify editorial conclusions. For example, one data set on the site created a word tree for all Obama’s references to McCain in his acceptance speech at the Democratic convention. Add some phoneme capabilities, and data visualization could be visually interesting — in real-time. Click image to see full size.

Of social networks and cable TV

This week’s Economist features a brief analysis of the social networking boom and where it all might lead. Some interesting parallels were brought to the fore. Among them:

  • AOL’s acquisition of Bebo is much like Microsoft’s acquisition of Hotmail a decade ago.
  • And that the network effect still holds.

Social networks as they are now constructed are walled gardens – LinkedIn users cannot communicate with Facebook users. Users typically receive invites from colleagues on multiple networks. Fragmenting a user’s network diminishes its value.

The article ends with an interesting twist – that all the social networking we need is contained in our email clients, address books, and calendars.

That is because the extended in-box contains invaluable and dynamically updated information about human connections. On Facebook, a social graph notoriously deteriorates after the initial thrill of finding old friends from school wears off. By contrast, an e-mail account has access to the entire address book and can infer information from the frequency and intensity of contact as it occurs. Joe gets e-mails from Jack and Jane, but opens only Jane’s; Joe has Jane in his calendar tomorrow, and is instant-messaging with her right now; Joe tagged Jack “work only” in his address book. Perhaps Joe’s party photos should be visible to Jane, but not Jack.

This kind of social intelligence can be applied across many services on the open web. Better yet, if there is no pressure to make a business out of it, it can remain intimate and discreet. Facebook has an economic incentive to publish ever more data about its users, says Mr [David] Ascher [a Mozilla manager], whereas Thunderbird, which is an open-source project, can let users minimise what they share. Social networking may end up being everywhere, and yet nowhere.

Everywhere and nowhere. This got me thinking about cable television providers as we move into the IP-delivery era. Clinging to the walled garden approach will lessen the value of cable distribution networks. Letting viewers aggregate content from multiple sources will be more profitable. Comcast, Cablevision, and Time Warner need only look at last decades big walled gardens — AOL, Compuserve, and Prodigy. How are they doing now?

Old media bubble?

Fascinating report out from Kagan Research earlier today. The report notes that even though cinema is the text book definition of a mature industry, private equity money keeps pouring in to the industry.

“This volatile business, amazingly, never seems to be short of investment capital,” notes Wade Holden, analyst with Kagan Research. “One big reason is that the major studios have a knack for turning every new technology that, at first glance, is threatening into a source of money. That goes back to the VCR and before that broadcast TV itself.”

True enough. Coupled with the steady cash flow still generated by old media, the sector’s a pretty good hedge against the inevitable burst of the social networking bubble. Think about it. How much money is there behind a social network? According to Fast Company’s hype machine, a lot.

It’s a tough read without a Web 2.0 jargon dictionary. The article focuses on the work of a 28-year-old “internet anthropologst.” Enough said?

Personal connections–forged through words, pictures, video, and audio posted just for the hell of it–are the life of the new Web, bringing together the estimated 60 million bloggers, those 72 million MySpace users, and millions more on single-use social networks where people share one category of stuff, like Flickr (photos), Del.icio.us (links), Digg (news stories), Wikipedia (encyclopedia articles), and YouTube (video).

Gotta love that 60 million bloggers quote. Let’s assume that about a third of the world’s bloggers are Americans – a conservative guess. That means that about one in ten American adults are bloggers according to FC. I think not.

It gets better.

“Social networking isn’t a product or, God forbid, a company, but a feature that lives in service of some other mission,” says Bradley Horowitz, head of technology development for Yahoo. “The spirit of social computing is the concept of leaving value in your wake.” That value starts with expression. Users of social-networking sites are producing and freely sharing a whole universe of content for others to consume. Some of it approaches journalism in quality, some approaches art, or advertising, and a great deal of it is more fun and appealing to the 18-to-34 target demographic than whatever is on TV. Why watch fake “reality” shows when you can connect with actual reality?

Yeah, every 18-34 year-old’s all about leaving value in his or her wake. Where do they come up with this stuff? Oh, and by the way, 18-34 year olds aren’t the demographic they used to be. They don’t represent the proportion of disposable income in the economy they used to.

Why watch that fake reality? Because that fake reality is edited by a professional. It’s fun to watch passively. I understand Horowitz’s point… to a point. This social networking stuff might eat into old media consumption, but what it’s really going to eat into is good, old-fashioned face to face social networking. Our personal social networks will become broader, but also shallower. That will be social networking’s legacy.

%d bloggers like this: