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How Can You Measure Real Value?
It’s been a while since my last post, but then nothing much has changed, perhaps because, in real terms, a few weeks is really not that long, even in the fast-paced world of digital technology and innovation. However, it could just be proof of that old saying: “the more things change, the more they remain the same”, right?
Although, on the surface, it might not appear that much has changed, there are evident signs of continuous progress in several areas, including: technology and innovation; user experience and social networking / media / business; mobility and data of the large variety (aka big data). Many other experts and analysts, across various media and other channels, do a great job of observing / commenting on these topics and trends that I won’t bother trying to rehash them here.
In any case, the point I really wish to explore is that such developments, trends and indicators seem to point towards a new value exchange paradigm and/or system, sometime in the not too distant future. This notion is clearly described by Tim O’Reilly, at the last Strata Conference, where he talked about a fundamental need to find better ways for “measuring the economic impact of the sharing economy”. Among other things, he asks the key question, in my opinion, of how to measure the real value of sharing, particularly where traditional economic value yardsticks, (e.g. typical financial metrics), are no longer adequate for the task. He also described the often unmeasured benefits to be derived from the sharing economy (e.g. enriching an ecosystem of which you are part), versus the sometimes destructive impact of a profit-led, financially measured system (e.g. the contribution of global financial institutions to the current economic shambles). It would appear in this new paradigm that the way forward would involve “creating more value than you capture”, which, somewhat counter-intuitively, actually works to your advantage.
Perhaps this paradigm shift will be most realisable, (at least for the content industry), via a strategy of diversification and multi-publishing, which together increases the likelihood of better traction / success for content, via multiple touch-points, partnerships and hooks to end consumers. A couple of examples, which describe real life scenarios in e-book publishing and music licensing, are outlined below as follows:
- E-Book Publishing: A recent post on CopyrightandTechnology.com discusses Harry Potter’s DRM Free e-Book offering, which runs somewhat counter to conventional wisdom for publishing such valuable properties in fully DRM’ed electronic formats, for fear of piracy. However this works for Harry Potter on many levels, especially considering how this would complement and create further opportunities for their existing and future merchandising initiatives.
- Music Licensing: An article in the Berklee Music Business Journal examined the pros and cons of Coca-Cola’s equity stake in a music licensing startup. On the one hand, a major global consumer brand partners with a music outfit to source original musical content for its marketing campaigns; on the other hand the artistes, (often independent, unsigned and eager to be heard), get an opportunity to gain access to Coca-Cola’s global marketing might – which beats anything a record label can provide these days. Verdict: Win / Win!
- Streaming Movies: The key players in on-demand video streaming services, e.g.: Netflix, Hulu, Amazon (i.e. Prime and LoveFilm), and latterly Sky, all offer different value propositions to the consumer, but in my opinion, the winner/s will likely emerge from those that are willing to leverage multiple customer propositions / channels / formats (e.g. books, music, DVD and perhaps devices).
In conclusion, it is becoming increasingly harder to ignore such trends / evidence / indicators that suggest a move towards multiple consumer propositions (including pricing), multi touch points (channels / interactions) and multi-formats is rapidly gaining ground. This makes it even more imperative to find a better yardstick for measuring the real value of content, products and services for both suppliers and consumers. It seems to me that we’re likely heading for a post monetary value exchange and recognition system, and hopefully one that is more in keeping with the post-global realities of a digitally connected planet. I remain optimistic, and fully convinced that money is not, and perhaps has never really been, the best yardstick for measuring true value.
The Multi-Everything Approach to Creative Business and Innovation
Clearly, 21st century business is a crazy mixed-up world of multi-platform, multi-channel, multi-format, multi-device and multi-revenue (oh, and don’t forget mash-up) business models. Most brands, businesses and individuals must learn to adapt, compete, survive and perhaps even excel, in this challenging environment, but the key question is how best to go about it?
Once upon a time, it was the admirable thing to be able to “do one thing, and do it well”, however, in these crazy mixed up times, it seems like anyone and her uncle’s dog are attempting to do multiple things and, in some cases, they seem to do them very well indeed. So how can an ordinary, garden variety, business or individual even hope to compete in such a world? The answer, incredible as it sounds, is to be able to do one thing well, but that one thing is nothing less than the ability to handle change – a whole lot of change. Ok, so this isn’t a lightning flash of brilliance or originality, after all evolution has shown that highly adaptable generalists, such as omnivorous mammals, are more likely to succeed than their single purpose, built-for-speed and all things bling, counterparts.
For a business or individual to compete, survive and excel these days, it must have inbuilt, DNA level, capability to change. Nowhere is this more true and important than in the creative / knowledge industries of the digital age. If I had a five year Private Equity fund to invest as I saw fit, my one yardstick for judging a proposition would be based on this one quality (i.e. how change-ready is the individual, start-up or established business) in everything from business model to individual outlook. Basically, I propose using a stakeholder prism to analyse the change-readiness of the proposition from the point of view of five key stakeholder groups. So how might this work for example with new video, music or publishing venture?
First of all, we’ll need a standard way to establish the overall clarity of vision for that proposition, and for this, I’d suggest using the excellent Business Model Canvas (as described in the book Business Model Generation), to provide comprehensive articulation of the business model / proposition in no more than a single poster. This is a near perfect template for most circumstances, and the book provides model patterns for various types of businesses (you can also see the relevance to Enterprise Architecture in a recent CTO Blog post by Andy Mulholland).
Having established completeness and clarity of vision, we can then proceed to analyse the change-readiness of the proposition from five key perspectives (i.e. from the creator, technology, commercial, governance and customer stakeholder groups), loosely based on current and emerging trends affecting the creative industries:
Figure: Five Key Stakeholder Groups*
- Content creators – In a multi-everything world, creative artistes must also be multi-talented. It is no longer enough to just sing for your supper – look what this author has resorted to doing. The content creators in the proposition must be capable of applying their creativity to the entire lifecycle
- Technology providers – This current situation (and this blog post) is a direct result of disruption caused by Internet and mobile technologies, which enable the multi-everything paradigm of multi-format / multi-channel / multi-platform offerings and experiences so capably delivered by devices such as the iPad etc. The proposition must be able to take advantage of these enablers throughout the entire content lifecycle
- The commercial stakeholders – The Creative industries are starting to embrace the multi-everything philosophy, and to paraphrase one speaker at a recent publishing event, the future of multi-publishing is one-third physical, one-third digital, and one-third live events. The commercial model in the proposition needs to be flexible enough to handle all three if necessary
- Legislative and governance stakeholders – The recent spate of IP Reviewsare testament to the fact that a creaking Intellectual Property (IP) system is woefully inadequate to handle the multi-complex threats and opportunities on offer today. The proposition must show how it aims to address challenges presented by a far-too-slowly evolving IP environment
- Customers / end users – Finally, this group of stakeholders encompass all others, and as it is their judgement that really matters to any business, the prime goal of any business venture must be deliver value as early as possible to this group. The ultimate change-readiness test is to demonstrate how the proposition can fail fast and often without losing its hold on the customer / end-user.
Any business proposition that can provide satisfactory answers to the above tests is bound to do well, even without support and investment from my mythical PE fund. However, there are still a couple of very tough but related issues that compound an already perilous creative business environment i.e.:
- Piracy – and I mean real industrial piracy, (not the “we-have-an-outdated-business-model-so-let’s-just-sue-the-people-formerly-known-as-customers” variety), needs to be addressed at a global level. A recent UK Government report put the cost of cyber crime at £27bn, (of which some £9bn was attributed to IP theft), in the UK alone.
- Copyright – and all other Intellectual Property systems must evolve to something better able to handle digital complexity. In other words, we must start to simplify and facilitate the whole end-to-end process of IP Rights. Several promising events / debates have and will continue to take place until a workable solution can be found – e.g. the World Copyright Summit and Berklee College / Midem’s Rethink Musicevent each provide an exemplary forum for such worthwhile discourse.
- Territoriality – is fast becoming an outmoded concept in a globally connected mobile digital world. Creative businesses are increasingly looking to reduce the headache caused by historical remnants of territorial boundaries in a global digital environment.
To conclude, in a multi-everything world, the best approach to creative business innovation is to be fast, flexible and adaptable to change, but also keeping in mind the global reach of digital and mobile technology. It is no different than the business of evolution, except that it is probably happening right this minute on a device near you.
*Image Source: Adapted from The World Beyond Digital Rights Management, BCS 2007
Predicting 2010: Wisdom of Sheep or Silence of the Crowds?
“The wisdom of crowds” is a phrase that often evokes lofty thoughts of how collective wisdom and collaborative effort can be harnessed to achieve truly remarkable outcomes. However, like most things, there is a fine line between hype and reality, especially when it comes to online content and social networking.
The Wisdom of Crowds concept does not purport to be a cure for everything, and even its most ardent supporters will readily admit that sometimes the crowd can get it wrong, but it is a proven phenomenon that crowd wisdom can make far more accurate predictions, and better decisions, than the typical individual or expert. Such is the popularity of the crowd concept that it has spawned other related neologisms like “crowd-sourcing” and “crowd-funding” which both have key elements of social networking.
However, there is such a thing as too much of a good thing, and it easily gets to the point where such crowd-based allusions start to resemble the bleating of sheep, or the rush of cliff-bound Lemmings. With that in mind, I wonder what the crowds, (wise or otherwise), will make of the following predictions for 2010, and beyond:
- Privacy is a luxury that the Internet Age can ill-afford. Openness will be the new private, and hopefully soon this tired generation of privacy-sensitive individuals (including yours truly), will either learn to accept this fact, or eventually die off, in order to realise the enormous potential and necessary mind-shift of a truly-connected world, populated with privacy-desensitised social networkers.
- Speed is of the essence. Ideas are a dime a dozen and failed ideas are worth much more. The increasing trend for most ventures to learn fast and fail quickly, (i.e. on Internet time), only lends credence to the emerging school of thought that an ever-accelerating pace of innovation will bring us to that tipping point in the near(er) future.
- Mobility is the way forward. The humble mobile device will continue to evolve into its rightful place as the key device through which people around the world will access digital content and interact with each other. It certainly appears that the approaching decade will be all about mobile, location-based / contextual services. Period.
- Economic evolution. The sharing economy (i.e. of content and information) will continue to grow in parallel with existing commercial money-based models for a while yet. Piracy, or what is currently regarded as such, will eventually decline, but only perhaps with even wider acceptance of a more flexible and open access and usage models (i.e. think evolved global copyright scheme).
- Money is so yesterday. The underlying system of values we currently use to judge success and failure of a venture will undergo drastic re-evaluation, especially in the face of continued challenges to extant economic models. Money may no longer be the best yardstick to measure wealth in the world of tomorrow. There, I said it!
Ok, that ought to be enough to start a minor stampede among the traditionalist, just-say-no-to-change, crowd, and a chant of “yes-we-can” from the ne0philes among you, but what about the rest? Do they even care? I suspect that this silent majority will decide which side emerges victorious from this debate; therefore it would be most interesting to understand what they think of it all. Perhaps we ought to run a Yes / No poll on the above five predictions, in order to gauge the response from the silent crowd, but the key challenge would be how to go about it given that they are so damned quiet.
PS. Just out of curiosity, what do YOU think about the five predictions and why?
Copyright, Digital Content, and the Internet
The second World Copyright Summit, which took place last week, at the Ronald Reagan Conference Centre in Washington DC, was a well attended and successful event that drew great interest from all key stakeholders in the 21st Century’s fast-evolving, global creative economy.
Note: This post is taken from the executive summary of a report I have written about this event, which can also be found here:World Copyright Summit 2009 – Report.pdf
The main objective of the Copyright Summit was, as stated on the conference tag-line, to explore “New Frontiers for Creators in the Marketplace”, and this was achieved by providing a platform for the stakeholders (represented in both speakers and audience) to engage with each other in a series of dialogues, interviews, discussions, keynotes and general networking. One immediate outcome from this has been the wider recognition of a few key messages, which are outlined below as follows:
1. Time to Change Copyright
Right from the very first keynote, on day one, to several sessions on the second day, it became increasingly clear that most stakeholders are in agreement over the need for some far reaching changes to be made on the current copyright system before it can become more effective in protecting and incentivising creative works in a dynamic digital environment.
2. Need a Central, Unified and Authoritative Global Rights Registry
The above was identified in several of the sessions as a key enabler towards a more appropriate and effective rights management mechanism in a global digital context. The key issues are global / technology related, therefore the solution would appear to lie in taking a unified approach to implementing what some refer to as a global database for content rights
3. Accelerate the Shift towards New Business Models / Mindsets
The Google Books Settlement was repeatedly held up as a prime example of the art-of-the-possible in reaching a constructive and satisfactory outcome for all stakeholders. This model may be more difficult to accomplish in other media formats, but the fundamental requirements of an open, collaborative approach / mind-set by all stakeholders is mandatory for success. It is also becoming clear that content in digital / non-physical forms may be more appropriately positioned as a collaborative service, instead of the product-unit-centric worldview of the pre-digital content world.
In conclusion, and on the above terms, this summit can be deemed a success, and CISAC -the event organisers, deserve a hearty congratulation for their commitment in putting it all together. However, it might even be more of a success if and when the mid – longer term outcome of this Summit leads to some concrete changes in the world copyright system; and perhaps in the evolution of an authoritative / unified global rights registry; as well as the adoption of a more collaborative approach, in both business models and mindsets, by the content industries and all other stakeholders.
It is this author’s sincere hope, and recommendation, that the next version of this Summit will see the inclusion of more representatives from the developing world, as well as the much over-looked consumer / end-user stakeholder group, (which includes: ordinary citizens, students and the younger, next generation of users), that will ultimately deliver the verdict on any / all future initiatives on copyright..
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Jude Umeh is a senior consultant and enterprise architect within Capgemini, and is something of a rights management evangelist. You can follow his Tweet-stream here
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Note: This post was previously published on my BCS DRM Blog, where you can find the original post, and reader comments, in the archives. Also published at: http://www.capgemini.com/technology-blog/2009/06/copyright_digital_content_and/
Leadership in tough times
The recent Leaders in London event brought together some great business leaders (e.g. Jack Welch & Muhammad Yunus) and inspired speakers (e.g. Rudy Giuliani & Carly Fiorina) to share their thoughts on the main topic du-jour for most CxOs, i.e. how to lead their organization through the current economic crises.
This two day event, chaired by author / business guru, Rene Carayol, succeeded in delivering immense value to attendees, (ranging from newly minted MBAs to seasoned CEOs), and included additional master-class days by business thought leaders like Dan Pink and Daniel Goleman. Key messages from my attendance on day two includes:
- The former mayor of New York City, Rudy Giuliani, emphasized that the role of leadership in times of crises was about motivating people, fostering & recognizing teamwork, and remaining visibly present and optimistic even during the toughest of times.
- Legendary CEO, Jack Welch, gave a moderated interview / Q&A session, (via satellite link), with his classic forthright opinion on a variety of topics e.g.: the current economic crisis (a breakdown in the financial industry); management theory (only pundits think new management models are the answer); and emerging markets like Nigeria (challenged young leaders to change the game). I could not resist asking if there were any applicable lessons to be learnt from the recording industry’s own crises. His answer: It was caused by technology innovation; therefore need to respond with innovation, in the business model.
- Richard Reed, Co-Founder of Innocent Drinks, described their journey from start-up to becoming a successful company with firm values of fun, sustainability and focus on doing one thing well.
- Inspirational leadership helped retired US Naval Commander, Captain Michael Abrashoff, to turn his ship from the worst to best performing ship in the US Pacific fleet. His mantra: give up control, achieve command.
- Prof. Vijay Govindarajan (Tuck Business School) stated that organizational strategies should be focused on creating “next practice”, and not adopting current best practice. Also that strategy architecture should address five key areas of: non-linear shifts, strategic intent, core competencies, growth playbook and new competencies
- According to Prof. Gary Hamel, (London Business School), management has stopped evolving and most companies now have more or less the same management models. His hierarchy of desirable management outcomes covers traditional qualities like: Obedience, Diligence and Intellect, as well as the emerging need to inspire Initiative, Creativity and Passion in employees.
Overall, this was one heck of an event, even if only for the quality of invited speakers, but the key message from most of the sessions I attended was about the critical value of inspiration and motivation as the best way for leaders to engage people into delivering above and beyond the call of duty, particularly in these most turbulent of times.
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Note: Originally posted on Capgemini’s Technology blog. You can see the original post, including comments, at: http://www.capgemini.com/technology-blog/2008/12/leadership_in_tough_times.php
The Analog Prince
Last Saturday I attended a Prince concert which was part of his exclusive 21 nights in London’s O2 Arena. In addition to an electrifying performance, attendees were also treated to a copy of the album, for the single ticket price of £31.21. Judging by the mixed reactions on the decision to give away free copies of the album in the Mail on Sunday, it would seem that some parties (i.e. consumers, media and the artiste) are happy, while others (i.e. music retailers and record companies) are livid. Remarkably there is not one mention of DRM in this scenario. Could this be the way of things to come?
A significant and recurring theme in Prince’s performance, and on the promotional website and blog, can be summed up in his exhortation of the band’s performance as “Real music by real musicians”. It strikes me that this may just be the beginning of a resurgence in performance oriented music, and that established artistes (e.g. Barbara Streisand and the Rolling Stones) are now returning to their original mainstay of live performances and providing direct concert experience to their consumers.
This analogue world uses digital technology strictly as supporting cast –perhaps as it should be. Doubtless the aim of the concert and CD giveaway is focused around promotion (of Prince?), and this has being done without the help of traditional record industry players like the labels and retailers. It also gives lie to the much hyped position that illegal downloads are killing off the CD, because over 200,000 free copies of this CD album are in circulation in the UK, along with an untold number of ripped tracks now resident in personal MP3 players and file sharing networks.
According to a Time Magazine article, there is also a sound business reason for taking the free CD route in the UK since Prince stands to make more money upfront (via the newspaper and advertisers) than if it had been released in the conventional manner. His last album, 3121, sold only 80,000 copies. You can do the math. It would seem that the once mighty CD album has now become merely an enabler, or loss leader (akin to the CD single of yore), and no longer a bona fide product in its own right. The artiste, or at least an experience of his art, has now become the real product.
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