Archives for July 2010

Remember travel agencies?

deadcomScore Media Metrix released its monthly Web traffic report today and notes the summer uptick in the travel category.

More than 100 million Americans visited the category during the month, affecting the following travel sub-categories: Transactions, Hotels/Resorts, Ground/Cruise, and Airplanes.

Travel – Transactions sites ranked as the top gaining category for the month of June, growing 32 percent to 5.2 million visitors…

Hotels/Resorts sites also saw strong growth during the month with 36.6 million Americans turning to these sites for lodging options.

That’s a lot of traffic for what amounts to an essentially new business that’s been created by the Web. Before we had all of this information at our fingertips, we used travel agencies, those little storefront operations that you used to find in every strip mall in the U.S. The Web has wiped them out, almost completely. Ask somebody under 20 about travel agencies, and they’ll likely look at you funny.

another travel agency shuttersThe industry’s woes began with the September 11th, 2001 terrorist attacks and were complicated by the recession and deep discounts from travel providers. What used to be storefronts is now largely at-home agents who work on commission alone.

But the real killer of this industry was the Web, and it’s a lesson for anybody who lives and works in the world of (formerly) protected knowledge. The Internet finds the middleman in any transaction to be inefficient, and that is what has decimated travel agencies. Oh they’re still around — and still a smart bet in certain circumstances — but as the comScore numbers show, travel is mostly a do-it-yourself world today.

Senator Rockefeller's folly

Be Afraid!Politicians love an issue that allows them to appear on the side of the little guy against the bad guys. Their love affair with such blinds them to the truth, but in politics, there’s no need for truth, if it gets in the way of a good soundbite.

Witness the sad rantings of Senator Jay Rockefeller (D-W.Va.) during a hearing of his Senate Commerce Committee on the subject of behavioral tracking online. Sensing political mileage, Senator Rockefeller wants “do-not-follow” legislation that would help the FTC in its battle against advertising online.

This is one of those issues that just makes me mad, because the matter cannot possibly get a fair hearing when loons like Rockefeller are out there making noise. Here, thanks to an article in Broadcasting & Cable, is the rapier quick mind of Senator Rockefeller:

“Imagine this scenario,” said Rockefeller. “[Y]ou’re in a shopping mall. And while you’re there, there’s a machine recording every store you enter and every product you look at, and every product you buy. You go into a bookstore.  The machine records every book you purchase or peruse.  Then, you go to the drugstore.  The machine is watching you there, meticulously recording every product you pick up – from the shampoo to the allergy medicine to your personal prescription. The machine records your every move that day. Then, based on what you look at, where you shop, what you buy – it builds a personality profile on you.  It predicts what you may want in the future – and starts sending you coupons. Further, it tells businesses what a good potential client you may be – and shares your personality profile with them.”

Rockefeller said that scenario is playing out “every second of every day.”

This is idiotic demagoguery, and that’s being kind. “The Machine.” Oooo. Be scared!

Well, imagine this scenario, Senator Rockefeller. A man or woman walks into a mall wearing a hat on his or her head, a mask over his or her face and gloves. He or she walks into a store, apparently looking for something, and proceeds up and down every aisle, touching everything. He or she enters the bookstore and demands that all of the staff turn their backs as he or she scans the shelves, again, apparently looking for something or perhaps just killing time. Upon leaving, the workers are permitted to return to their work, which we assumes means helping people find what they’re looking for. But wait! Everybody is wearing masks and hats and gloves! Now multiply this scenario by thousands of shoppers similarly attired, wandering the mall, drifting in and out of shops, and you have exactly what is hoped for by the absolute anonymity legislation that prohibits tracking.

We need policing, of course, and the industry is well aware of the need for self-governance here, but proponents of new laws are only using the issue to better themselves politically. A browser-level “do-not-follow” is a bad idea in an era when privacy itself needs an honest debate.

The FTC would better serve consumers by cleaning up existing matters — like spam of all sorts (including telephone and regular mail) — than sticking its nose in an artificial scenario from the mind of a politically-motivated U.S. Senator.

It's all about unbundled distribution

unbundled news itemsOne of the things that keeps media companies from realizing the potential of the Web is an instinct that says, “I must control my distribution.” In the world of scarcity from which traditional media comes, this is an understandable and necessary thought, but online, it’s ultimately suicidal, because the world of the Web is one of abundance. The issue then becomes one of “how do I get my content to stand out in a world of abundance,” not how do I limit its distribution to create scarcity.

This was played out last week in Knoxville, when veteran radio newsman Dave Foulk was forced to remove a news and traffic report service he had created on his Facebook page, because his employer wanted those people to come to its website only for such information. The 42-hundred plus “fans” he was serving are upset, because they’d come to know Dave as a trusted source. They will not go to the station’s website, no matter what the station does, so the end result is just 42-hundred pissed off fans.

In a world of scarcity, restricting access creates value, but in a world of abundance, it does the opposite. People didn’t need to chase Dave Foulk; they read him, because he made it convenient for them. Can they live without that information service? Of course, and they will. We’ve got this idea in our heads that we can “force” behavior, to which empowered consumers now respond, “Screw you!”

(This decision by Foulk’s employer also conflicts with our beliefs about the value of personal branding, but that’s another entry altogether.)

Scarcity and abundance are diametrically opposed concepts. The dos for one are the don’ts for the other, It’s the central explanation for the bruising on my head from bashing it against the wall when well-intentioned news people argue with me about things like, for example, website design. We think design is the top priority, because we think the home page is where people interact with us. It’s our doorway, we think, the place where interested people judge our skill in keeping them informed. The truth, however, is it’s just another URL in a literal sea of others. Do we honestly think ours is “special?”

“Well, Terry, if it’s the only choice they have about getting our content, then they’ll HAVE to come.”

No they won’t. And those who do will, at best, be your most loyal viewers, so what have you gained?

In a world of abundance — where aggregation is king — website design matters nil, because for all media today, it’s what you send into the real-time stream that counts and that can be “received” lots of different ways. We keep wanting to create a nice user experience that assumes people come to our websites for a visit, when the Web itself — and especially those who are designing and building its applications — cares ONLY about what’s in the wild that it can use. In this context, “the Web” refers to the multiplied thousands of people who are constantly working to evolve the tubes and pipes into the real time experience it was built to become. If the Web was just the infrastructure, media companies might have a case for strategies that smack of scarcity, but it’s not.

Facebook isn’t so much a destination as it is a precursor of the Web itself.

I don’t want this to be a rant or to sound critical, but our obsession with developing revenue instead of making money prevents us from working with the Web itself. Rather than try and go WITH the flow, we foolishly try to force the Web into our own wants and needs, and in the end, this will hasten our demise.

So let me repeat something I’ve said often in the past: your RSS feeds are vastly more important than your website.

What you release into the wild for others to use — as they see fit — will determine your health as a business in the years to come. We should be designing for our feeds, not using them to drive people back to our websites. This is contrary to what the industry believes is best practices, but it is the truth.

I first began exploring the concepts of unbundled media in late 2004 and published The Remarkable Opportunities of Unbundled Media one year later. People were already using the Web to unbundled things that others wanted kept bundled, such as, oh, music cuts. There was an extremely powerful consumer message in this action, and one that, frankly, most media company people ignored entirely. Then came YouTube, and again, people unbundled — made into clips — that which traditional media wanted kept bundled.

Never underestimate empowered consumers.

Also never underestimate the smart people trying to meet empowered consumers’ demand. Whole new business concepts have been developed — funded primarily by venture capital — that help people unbundle and rebundle to fit their needs (and their busy schedules). Can you say “TiVo?” If there is one truth that you can take to the bank in looking towards tomorrow, it is that content will be separated from its source. Fight it at your own risk. Explore it, and you’ll find opportunity.

For example, GoogleTV is almost upon us. By this time next year, many people will have TV sets or set-top boxes that allow them to find programming through Google’s TV search engine. What will you put into the stream that will “help” Google find it? How will you monetize that? These are incredibly important questions, because Google’s intention is to, again, assist in separating content from its sources.

Another example is the hot, new iPad application, Flipboard. Flipboard is controversial, because rather than take RSS feeds, it scrapes content and images from media websites (with appropriate links back to the original source). It does so, because a) it can, and b) the RSS feeds of most media companies are crap. Flipboard rightly wants to create a great user experience, and I expect there will be some sort of legal fight downstream over this. If media companies “win,” they’ll actually lose, because, once again, we live in a world of content abundance, not scarcity. The right response would be to pay attention to what we’re distributing in the wild.

We’ve developed the concept of Continuous News and are currently helping media companies reengineer their news departments to better serve the genre. It is quite an undertaking, but the results are magnificent, and these companies are much better positioned to meet the demands of tomorrow than those who cling to old ways of operating.

In the Continuous News environment, the output of the stream — and that includes the Web, Twitter, Facebook and any other application that will come along — is the reason these news departments come to work. We’re continuing to define and redefine that output, but at least we’re working on it, because we recognize that developers working on Web applications outnumber us and outgun us, so our only choice is to “give” them better content to work with. That begins with designing it for unbundled distribution and trusting that we will benefit in the end.

As I wrote in The Economy of Unbundled Advertising, ad snippets that are released into the stream can be reassembled to produce the sale paper of tomorrow:

If unbundled media is where we’re headed, then unbundled advertising must necessarily follow. This is a scary concept, however, for there is no command and control mechanism or manipulable infrastructure in the unbundled world. The upside, though, is that it costs very little to participate. All that’s necessary is the release what I call “ad pieces” into the seeming chaos of the Internet, where other businesses will take those pieces and reassemble them when summoned by customers who are trading their scarcity for information they actually want.

This is already taking place on a small scale with Twitter, but I suspect it will be the source of whole new business models downstream. We simply live in an unbundled world, although most of us don’t realize it yet.

Here are five things you can do today to get you moving down this path:

  1. Establish in your thinking that the Web is about abundance, and that your mission is to stand out, not control. Attraction always works better online than promotion, because consumers are in charge.
  2. Bring your RSS feeds to the top of your priority list and keep them there. Make them full feed. Refine them. Hone them. Put ads in them. This will be the content that you make available to “the Web” to distribute as it sees best, including GoogleTV.
  3. Build any unbundled content “apps” around your RSS feeds. Got an iPhone app? Is your RSS output its main content source? Work with apps like Flipboard to let them know YOUR content is available to them for distribution beyond your ability.
  4. Experiment with measurable ways to monetize unbundled content. Don’t know how? Read my 5-year old essay and then talk to me.
  5. Establish in your revenue thinking that the creation of new value — i.e. “making money” — is at least as important as growing revenue.

Above all, get it in your head that unbundled output is where you HAVE to be, no matter how that conflicts with your traditional instincts and training. We are just beginning to realize the reality of content separated from source, and it will dominate the media landscape in the years to come.

Don't touch my friggin' mouse!

trackpadSo everybody’s talking about today’s Apple announcements. That’s what geeks do, and I mostly don’t pay attention, not being an Apple fanboy. However, this new “Magic Trackpad” is giving me the shakes.

The trackpad is designed to take the place of a computer mouse for those who don’t use a laptop. Why? Dave Winer nails it:

Apple has a new operating system called iOS. It’s what runs on iPods (which they are phasing out), iPhones and iPads.

What doesn’t it run on? (Yet.)

Why not? Wellllllll. Cause for one thing, the Mac is built around a mouse as a pointing device and iOS is built around fingers as the pointing device. So if you want to run iOS software on Mac hardware don’t you need a little new hardware? Just a little?

That’s all well and good, but I use a laptop AND a mouse. Why? Because it’s what I know. I find trackpads to be time-consuming and awkward. “Terry,” you say, “you’re being a Luddite here.” Perhaps, but I can work faster with a mouse than with a trackpad, and that’s just the truth.

Apple’s spin is a little different than Dave’s. Here’s what a spokesman told MG Siegler at TechCrunch:

People love the trackpad. People love those characteristics. So we wanted to bring that kind of design to our desktop users.

Bullcrap! Apple is going touch, and I fear that everyone else will follow, but they’ll have to pry my mouse from my dead fingers. Grrr. Leave my mouse alone!

What our daughters are advertising

Every once in awhile I find myself drifting out of my general theme to comment about culture, and I usually end up in trouble. After all, I’m an old white guy, and we’re always the cultural enemy and, therefore, supposed to just keep our mouths shut.

14-year old Kendell JennerThe gorgeous photo on the right is Kendell Jenner, half-sister of the famous Kardashian sisters. You can see the resemblance. She’s following in her sisters’ celebrity shoes and recently signed a modeling contract with a big agency. This bikini shoot is getting a lot of press, because, well, Kendell is just 14 years old!

I had a discussion with a friend the other day, and I made the comment that, as a 64-year old guy, I can’t tell the difference anymore between a 16 year old girl and one who’s 25. That’s a problem, of course, because it’s okay for me to look at 25 year olds, but not 16 year olds. I know. I know. But malls are malls, and the eye wanders. It is disquieting on a whole bunch of levels, but mostly on this one:

Young girls don’t realize it, but they’re advertising. Hell, we’re ALL advertising, because that’s what we do. We “dress for success,” and so on. If I was producing a movie and asked a Hollywood designer to create clothes for a hooker, they would dress my actress the same way these girls at the malls dress. You can call me any awful name you wish, but you cannot refute the reality that girls are advertising a persona by the way they dress.

Now, I’m not one of those assholes who thinks we should blame the victims in sex crimes. I’m merely asking the cultural question of why it’s okay that our daughters and granddaughters dress in this manner? And here we have a 14-year old — admittedly gorgeous — girl dressed in a skimpy bikini for all to see and lust after (yes, that’s what we do). Why is this all right?

And if it IS all right, then let’s adjust the age of consent to reflect what’s being advertised here, instead of hypocritically going about our lives pretending that a girl posed like this has no clue about what’s being sold. This is, after all, the same culture that accepts a television program’s premise (To Catch a Predator) that pedophilia is the same thing as lusting after post-pubescent girls. How anybody can shake their judgmental fingers at those “predators” without examining the bigger aspects of our sexual culture is beyond me. I mean, c’mon. If this is an issue, let’s talk about it, but let’s not leave out half the story, because we don’t want to offend anybody.

And so I rant, because I have daughters, too. One of them lives in Amman and is Muslim. She covers herself up when she’s outside the home, because her religion demands it, but also because she believes in it. My son-in-law once pointed at a magazine ad and asked me if I’d rather see my daughters dressed like this or covered up. He also noted that this degradation of women would be our undoing. I wonder. Meanwhile, Islam is the fastest growing religion on the planet.

So good luck to Kendell Jenner. I’m sure she’ll do great in modeling. She has the pedigree and the right handlers, and, damn, she’s good looking. I only wish she wasn’t 14, because I don’t like what that says about me.

Adventures in health insurance

injecting a vialIs it ever better to NOT to use your health insurance? You betcha.

Readers who’ve been with me for awhile are aware of my past with health insurance. There was a 4-year period a few years ago when I went without health insurance, so I’m acutely familiar with its blessings and curses.

I learned, for example, that every single entity involved in the industry of healthcare will offer you a 30% discount if you pay cash. Why? Because it’s cheaper than dealing with health insurance companies. You want to know why healthcare costs are so high? Health insurance.

I had a new experience yesterday that I want to share, because I’m sure it will one day benefit somebody else.

I have an extremely low testosterone level (68) and have been working with my urologist to find a suitable treatment. It’s one of those tricky areas with a lot of options, nothing of which has really helped raise my level sufficiently to get my energy level up. Low T is a joke until you have it, and mine goes beyond what’s typically known as “male menopause.” I’m 64, for crying out loud; not dead.

So I take regular testosterone shots. My insurance provider covers the medication somewhat, but the “program” has restrictions on how much I can get at one time, so let me explain the dilemma and the solution I discovered with my pharmacy.

My doctor’s prescription is for a 10 ml vial of the medicine. I’m supposed to take 1 ml injections every other week. The policy, however, will not permit me to obtain more than a 30-day supply of any prescription, so the pharmacy has to give me two 1 ml vials, and those can be hard to come by. Generic versions often are not available, so I have to buy brand name, and I have to order it ahead-of-time. With insurance, the brand name vials cost me $50 out-of-pocket, or $25 per injection. Steep.

My doctor says this is nuts and that I’m the only patient he has with this problem, but there’s nothing he can do. I went round and round with the insurance company, but then my pharmacist, Joel, said, “Why don’t you just buy the generic 10 ml vial without insurance?”

“What? Without insurance? Are you kidding me?”

Turns out he wasn’t. The generic version in 10 ml is $95 without insurance, so I saved $155 out-of-pocket by NOT using my health insurance.

This business of not being able to obtain more than a month’s supply of drugs through insurance really needs investigation. Doctors trying to save people money by letting them buy a 3-month supply are cut off at the knees, and when this kind of nonsense happens in our culture, there’s usually somebody benefiting financially. Who would that be in this case?

The doctor? No. The pharmacy? Not likely. The insurance provider? Perhaps. The drug manufacturers? Hmm.

I know I bitch a lot about arbitrary rules in our culture, but this is one of those times when I think it’s justified. When industries that deal with consumers create rules with no wiggle room or exceptions, humanity itself suffers, and we fall deeper into the cold abyss of black and white, win or lose, all or nothing, and so forth.