This morning I bum rushed the charts and purchased Mine Again by Black Lab on iTunes. I had never heard of the song until I found out about the “bum rush” plan awhile back. However, after listening to the song back then, I really liked it. Yet again, both the long tail and social music revolution in work. This is also basically what I term “social transactions” – transactions by which the social network decides to make (or withhold).

Why don’t you join by purchasing the single right now? (NOTE: this link will open iTunes and take you to the store for purchasing).

technorati tags: bumrushthecharts, socialmusic, itunes, mineagain, blacklab

The Commercial Music Industry just doesn’t get it. The decision under consideration by the Copyright Royalty Board is how to deal with new rate proposals and the appropriate royalty structure for performance licenses – for example, “webcasting” (or podcasting, streaming Internet radio, etc). Reading the legal brief, there does seem to be some consideration between the marketplace (termed the “Willing buyer/willing seller standard”) – but how that is actually defined in their “hypothetical marketplace” is what’s largely at dispute. And more importantly, the new royalty structure.

What’s scary is that Internet radio stations like AccuRadio would not be around anymore since their royalty payment would go from $50,000 to $600,000 year. Hard to make a living when you’re revenue is $100K less than your royalty payment – and that’s before all other expenses (Accuradio does $500K in revenue). Does creating a model by which Internet radio stations are eliminated actually help the commercial music industry – or better yet, the artists themselves?

It’s probably well-known that the commercial music industry is not a student in the long-tail marketplace economics. More accurate is that they choose to ignore its impact, even though most of their revenue comes from the royalties of older album and single sales.

I’m not a fan of copyright theft. I’m not saying that artists, labels and businesses that participate in the supply chain shouldn’t get paid based on their intellectual property. What I’m suggesting is that their financial viewpoint is completely backwards and limits their revenue opportunity.

Two simple alternatives in the macro picture:

1. The Music Industry “stays the course” to use a lightning rod phrase that is analogous to the War on Terror. In this situation, I believe that Chris Anderson’s long tail hypothesis about the decrease overall in hit-driven economics is going to severely kick-in and continue to reduce their new release revenue. As more and more buyers continue to strive for determining value based on digital marketplace economics, more and more music will continue to be shared (illegally in most cases) giving the rise to alternative forms of music distribution – the social media revolution. In this case, the commercial music industry will eventually be reviled (but not replaced) by alternative forms of music production and distribution – much as what’s happening in the news and software industry. People will just start finding, through their social networks, alternatives forms of content that is as-good.

2. The Music Industry gets smart and embraces the new media generation. They figure out how to take advantage of the long-tail theory and start to use it to broaden their distribution and find new sources of revenue. More importantly, they find new sources of customers that would neither normally buy their content nor recommend it. The new media revolution provides opportunity, as elegantly stated in Chris Anderson’s book, to find and be recommended new content that one might not normally find through normal distribution channels. Case in point. I found through Amani Channel’s blog 2 cool videos that were posted on Youtube. The videos were take-offs of 2 popular artists, both of which I’ve never listened to. After watching the videos and being exposed to their songs, which I liked, I looked up their information on iTunes and immediately bought both singles at $.99 per song. An instant purchase from a buyer that would have never purchased these songs through the commercial industry’s current business plan. Lost revenue or found revenue? In the Music Industry’s model, I would have never been able to gain access to the content since they’re most likely wanting to charge for me to watch the video (or charge the producer, which would have never produced it). In which case, I would have never purchased in this model. In the other model (sort of a “try and buy”), they gained both a new customer and found new revenue that would not have been possible otherwise. I thought maybe this was a completely one-off so I asked a colleague at work. Surprisingly, he said he’d discovered and purchased music in the same approach several times before. Not exactly a scientific survey, but anecdotally interesting. Also, I participating in two important forms of their commercial model. I told people about it (both verbally and through my blog) and I distributed it (by putting the videos on my blog) further increasing their reach and exposure.

But the commercial industry isn’t yet feeling the pain as they sit in their ivory towers. They need to feel some more pain and understand that this is a survival game for them. Maybe not tomorrow, but in the coming years.

I’m going to suggest that if you haven’t already heard about the significance of March 22nd, 2007 – called “Bum Rush the Charts” – you should check it out and consider participating. I am going to. I think it’s a great way to try and use social networking to effect the marketplace – a term I call “social transactions”. It’s time that the independent artists, the one’s that ultimately create the value we’re interested in, get a chance and that the music industry get’s a wake-up call. There’s a commercial model by which everyone wins.

technorati tags: music, radio, longtail, riaa, socialtransactions

I’m a big believer in Social Networks. I realize that they’re not perfect – and I admit, I’m no active Myspacer. But I do believe they have a place in our daily lives – and will become as common place as email. That being said, I think we’re going to see an explosion of what I call Micro Social Networks over the next year or so.

Micro networks will mesh together people and affinities in a much more succinct fashion than today’s Social Networks such as Friendster and Myspace. Social Networks 1.0 really start to bring people together in a collaborative fashion based on our social ties – which is how we largely operate in the offline world. They start to begin to model some human behaviors: the need to fit in, the need to be liked and feel important, the natural voyeuristic tendencies and the need to be part of something. I’ve heard recently from a number of people that the year 2007 will be the year of “Social Networking Fatigue“. I think this is partly true. I think at the level of MySpace and others who have attempted to overly commercialize their bases, this is probably a more than accurate assessment of what will start to take place.

What today’s Social Networks tend to misunderstand is that their constituencies are largely exportable. Not fully on a mass scale today, but with time and technology – this will start to happen. When the only compelling factor your offer is purely your address book of friends – as AOL found out – you’re in trouble. What MySpace and others lack are compelling features and value that address specific needs of interests. They’re largely cultural right now – it’s fun, it’s new, and it’s trendy. Everyone’s doing it so I will too.

I think 2 major things have the potential to rock the Social Networking 1.0 world – and start to create the Social Network 2.0 world:

• Federated Identify and Friendships
• Micro niche content

Federated Identity and Friendships

Part of my experience and personal fatigue with these systems is the need to create profiles, invite friends and do the work necessary to create presence in the system. Essentially, Myspace is capitalizing currently on the fact that people have friends connected and that they’ve invested time to build those links. That is also part of the problem. If the only value they create is that they have the connections – they’re not going to have staying power long term. AOL is a perfect study in this. Early on at AOL, as the Internet was in its early days, they offered easy access, high quality content, a point of collaboration and an ability to manage your social network – at least, others that were connected to the proprietary AOL network. They made it really easy to get people on board – I probably still have 10 AOL CDs in my basement – and they provided lots of great content when you arrived. They were the first to really make instant collaboration (via AOL Instant Messenger) across space – popular and easy. However, like a bullet train, as more and more people got on the public Internet – more and more value (from content to services to connections) was created – and AOL quickly lost its way. In an effort to protect their user base, instead of embracing the free and open Internet and the leverage they had with their user base, they instead tried to monopolize and hold hostage the very users who gave them the power. I personally spent many many hours trying to deactivate my AOL account at one point many years ago. I have so many friends that have had similar problems — they capitalized on the fact that they had the users, and the recurring revenue — and they really flubbed the chance to continue to create value and turn that into a Google-size business. Among a lot of other things they did wrong that I don’t have time to even mention, they failed. What I think AOL believed was that their user base, and their address books and email addresses, were non-exportable. They couldn’t be changed, moved or relocated. Until recently, the phone companies has a similar stance before Local Number Portability. They thought that the best offense was told “hold a gun to the head of the customer” – which never works. Eventually, people will leave and they will never forget.

Federated Identity is not a new concept. It is also not a practical solution today – at least not yet. I think this is partly because of the complexity of trying to create global standards such as the Liberty Alliance or worse, Microsoft’s Passport efforts. And this is precisely the opportunity that I think exists in this space. OpenID is a very interesting effort and something that I think could have a huge impact on Federated Identities. Federated Identity and Relationship should be lightweight, yet secure, distributed and decentralized. They should not suffer from ten-year standards efforts of complicated specifications – although they should be well specified and implemented. And, hopefully, they will start to address our relationships as well. Yet, there is a more qualified person I’d like to hear from blog about this topic more specifically. We we need the analogous to blogging for federated identity. Something, simple, easy and technological doable by everyone instantly.

Micro niche content

Myspace and Friendster are largely horizontal platforms that service everyone – and no one – altogether. I think what we are starting to see are vertical, niche specific networks that cater to smaller communities and have much more productive, effective and long-lasting bases. They also tie smaller cross-sections together on stronger bonds of affinity. My wife is very, very involved in a private professional photography community – and it’s not free, although available on the open Internet for a fee. It’s very active and very exclusive (not only do you have to pay, you have to be invited and you have to prove your skills to have the chance to give them money). She spends most of her online life in this community. But it’s not a traditional social network in today’s definition – you wouldn’t know about it if you were a Myspacer. And, from what I see, they are just fine with it being that way.

Flickr, while it is not a social network in a traditional sense, is just exactly that. Flickr groups, especially very niche specific groups, are very active and influential. People with similar interests in photography are meeting through Flickr and forming photography communities around interests – and they share something often lost on Myspace: common interests and valuable content.

What stands out with these two simple examples are that they put more emphasis and value on their content – and the members follow. They create value – of which a big portion of the value is the network of people itself – in ways that are sustainable and defendable. They service most, if not all, of the human social and behavioral needs we have – but in a way that serves us better. They’re not going to rival Myspace in their size, but their quality will always outweigh their quantity. And, while those users can easily use other micro networks, they have less to worry about a wholesale exodus when the next new trend comes along.

While I don’t think Myspace is going away and most likely will still tend to trend upwards, I do think you will see new types of Micro Social Networks that will start to take a more prominent role in our lives – even if they’re not called “Social Networks”.

technorati tags: social, networking, myspace, friendster, socialweb, federated, identity

If you haven’t heard yet, MacHeist is a very social idea – one that has crossed the $100K mark for charity all while packing some killer Mac OSX apps in a bundle.

This is what I wrote about awhile back called social transactions. Interesting things happen when the network effect is applied to community transactions – especially one’s that have a social conscience or where large groups of people commit to doing commerce collectively. Social transactions are going to be an important part of the next big trend in social networking and the global Internet enabled economy. We have yet to exploit them in a very large and organized way, however, slowly we’re starting to see individual acts like MacHeist emerge.

If you have a Mac and haven’t participated in the social experiment, MacHeist, I urge you to do so. Not only are the applications fantastic: Textmate, Newsfire and Disco – to name just 3 out of the bundle of 10 – the price is also unbeatable at $49. And, to top it off, eight great charities are getting the benefit.

technorati tags: macheist, socialtransactions, macosx