In sessions at #likeminds today, I had some fascinating conversations on the implications of an economy where people assume free access to content and services. James Whatley and Molly Flatt from 1000 Heads articulated well how the ‘problem’ of free is split:
(1) how do you monetise free networking platforms like facebook and twitter; and
(2) how do you get money for creative production.
These are, indeed, very different problems. And James and Molly were very clear about the fact that when you create something people want to buy they will indeed pay for those products. If you make a loaf of bread or a piece of art, people will pay for it if they actually want it. I’m going to extrapolate from their ideas and note that the manner in which you consume something (eating it/using it up/wearing it) will have a different value from something you keep (collections – antiques, print books, physical items), and something you experience (travel, music, film).
Much of the focus of the ‘problem’ of free is maintaining income from things that used to reside in the collections category and have now probably shifted (through digitisation) in to the experience category. This is why there is such concern about pirated videos and music. The trouble is it’s actually the wrong problem. people are talling about sustaining current methods of generating revenue rather than considering new methods of revenue.
It may sound flippant but what James and Molly said was crucial: you need to create something that people want to buy. But I think the solution of monetisation of free platforms and making money from things people want may actually be related.
I think it comes down to selling your friends.
Stay with me. It’s not quite as hideous as it sounds. It may appear like the ultimate form of betrayal, but it’s really a form of problem solving. Here’s the thing: you know your friends better than anyone else. You know what they want, what they need, where they work, what they like doing in their spare time, and you spend time celebrating, commiserating, and otherwise caring for them. You know them.
Customer Relationship Management systems might be able to tag, record and advise on people, but they are essentially dumb. They don’t understand sarcasm, they don’t keep up to date with changes in people’s lives without contacting them through professional channels and they aren’t terribly useful in making idea discussion appealing or even remotely interesting. The same goes for social CRM and business-created mechanisms for tracking conversations. the more conversations there are online, the harder it is to make individuals feel valued or respond to their needs. The more information you collect as an organisation, the harder it is to make the right decision about how to engage with individuals.
Frankly, the best person to make your friends feel happy, interested and communicate freely is you. And you’re also the best person to know who needs what services and goods at what point of time. That’s incredibly valuable. Not just for businesses, but for sustaining your value within your friendship networks. It’s just that you don’t have time or interest in letting Nokia know when you’ve just had a conversation with your mate, Mike, about the phone you got the other week, and Mike had said he might be interested in a new Nokia phone. But Facebook, twitter and other platforms do have the time and the tech to help individuals record that, and then let Nokia know what’s going on.
The people who keep talking about advertising as a monetisation strategy for social networks have got this all wrong. Social networks don’t need to sell advertising on their site. They don’t need to collect data and on-sell consumer behaviour practices. What they can do is facilitate connections between people who have expressed a need or desire, with organisations or other people who can provide those services. But they can’t do it without your conversations and without your knowledge of your friends.
So social networking platforms value you, because you connect with your friends and you communicate with those friends in a way those friends actually enjoy. So far the platforms have managed to get you to do all the work in terms of adoption and making conversations comfortable. They’re just not paying you for the valuable service you are providing them. But there again, so far those same platforms haven’t quite worked out how to establish the right kind of filters and algorithms to alert organisations that such conversations are happening, so they haven’t been able to convince businesses to invest in the narrowing gap between someone who wants something, and an organisations that can deliver something. So at the moment not much money is changing hands.
But in the next generation, I’m prepared to predict that individuals are going to start putting their hand out and saying, “if you want me to indicate which of my mates has identified what’s going on with their life, you’re going to have to pay me”. But they are also going to say, “if you let me keep stuff up there on (insert free platform, eg: google docs, facebook, twitter, spotify, etc), then maybe that’s how you can pay me”. But the more time an individual puts into connecting their friends with organisations, the more valuable they are to specific businesses, and the more reputation points they’ll accrue for use in other ways. I also think that businesses are going to find their use of traditional marketing media will shift and they want someone else to find them their customers. They won’t want to spend as much money on traditional marketing, and will instead focus on facilitating conversions. (That is, they will actually wake up to the fact that brand awareness does not necessarily equal increased sales.) And the best means of finding those conversions is using those platforms. And they are going to start paying for access to the instruments that will give them access to you.
This is essentially how every recruitment agent and networking consultant works. Making the right connections between the right people and organisations has a very high value. I just think it may actually go beyond professional networking and actually extend to friends. And I’m saying this isn’t a bad thing, but in fact a way of actually managing access to goods and services in a way people actually want.
As James and Molly said today: you make money when you produce something people actually want to buy. Only it doesn’t have to be the good itself that costs. Sometimes it’s the access that matters.