Aggregate or be aggregated

An idea has been floating around in my head ever since we began working with Workstreamer.  Or maybe not just an idea as much as the seed for a manifesto.  Perhaps just a strategic principle.

Aggregate or be aggregated.

It's been bugging me for months, with roots in the portal wars of the mid-1990s.  At the time every internet company's obsession was eyeballs.  AOL, Excite, Yahoo!, Lycos, et al. were busy fighting to become your browser's default web page by aggregating the best content.

Then we had the rise of e-commerce.  I built and managed PUMA's online stores, watching comparison shopping engines like MySimon and Froogle fight for attention as one-stop product information aggregators.

Most recently, social networks have become relationship aggregators.  Friendster, then MySpace, now Facebook.  Maybe Twitter will continue its meteoric rise and topple Facebook.  It actually doesn't matter.

Here's why.  The path to maximum value capture for all of these companies is by pwning a space.  The more you dominate, the more money you make, and the less you want someone else siphoning off your eyeballs, affiliate clicks, or active users.  So services establish barriers, API limits, etc. - and they ultimately end up as walled gardens, valuable only to those who don't eat apples and are content to frolic inside.  This won't work in the long run because information wants to be free.

And Google is the master aggregator.

All those portals that didn't work out?  Google.  Need click-throughs to product listings?  Google.  Walled garden social network?  In 2007, Facebook opened up to public search.  Earlier this year, Twitter changed its title structure for better search indexing.  Here comes everybody...no wait, it's just Google again.

There's a lesson in here for brands, and it's not "bow down to your Gmaster."  Fred Wilson recently blogged, "aggregation is the central element of distributing content on the web."  Steve Rubel hails the end of the destination web era.   Jeremiah Owyang lets you know about your irrelevant corporate website.  Let's face it: your corporate website is sunk cost.

An answer is inherent in social business design.  It's not command-and-control, nor is it inmates running the asylum.  It's a measured approach to how people, process, and technology can be applied to create value.  It's about proactive aggregation, not reactive right-click copy protection.

Aggregate or be aggregated.

Comments

[Chris Hall]

Gerard,

I really like this concept of content being a byproduct of the transaction, instead of content being the need for the transaction. My head is swimming with ways this applies to individuals self organizing around niche topics.

-chris

[Greg Matthews]

I've been chewing on this for 3 days, because I really DIDN'T see #hcoc as an aggregating function . . . but I probably should have. It's aggregating many of the "social minds" of a 26,000 person company into a single hashtag, and throwing in some interested voices from outside as well. Great insight, Peter.

[Brian Hayashi]

I think the growing prosumer model will give rise to content as a destination in and of itself, and a custom publishing model where it does the things you describe.

My current business helps organizations aggregate, organize and track third party content that adds value to their experience. If you're the Hyatt Embarcadero, you might find value in aggregating content that corresponds to the interests of your guests, along with a linking strategy that helps you get credit for referrals. (http://go.twavl.com/boulettes) Having thought through that gatekeeper model, I can see quite a bit of insight in your comment.

I confess that I am at a disadvantage when it comes to extending these thoughts into music and movies. I can see, via American Idol, how the wisdom of the crowds can be better at identifying the next top pop singer. When it comes to movies or episodic drama, it seems like there's a lot more production risk at stake, especially when developing a slate of product and not just a "LonelyGirl" one-off. Are you implying that future film patrons might have similar roles and responsibilities as, say, the owners of professional NFL teams?

[Gerard Babitts]

Having spent the bulk of my life creating and marketing in the music and video industry, I have definitely felt the sting of "stolen" songs, art, and videos. I eagerly await the magic pill that will solve the content business' continuing and worsening problem of the public being able to access and take their content for free. Unfortunately I think people have and are continuing to be conditioned to not having to pay for much of what they can take for free. Sure people still pay for iTunes downloads, watch cable TV, and go to the movies, but the free online content smorgasbord is not going anywhere.

I believe the content future will be run not by the traditional content businesses who are not culturally or institutionally equipped to deal with a completely new business model worldview but rather by companies that are interested in using, creating, financing, and distributing content as a means to an end that has nothing to do with content. It is a future where content is a value-add. Where it is used to enhance and sell physical brands and products. Where it is used to shape brand perception and equity. Where it used to sell the non-digital tertiary businesses connected to content. Where content is created solely for the love of the content. Where content is created by large, crowdsourced groups. Where it is funded by patrons. Where the goal is not to sell the content but to simply use it for other purposes.

Check out what musicians Sigur Ros and Prince have done with UK newspapers, what Corey Smith has done with his free music, the web, and touring, and what Webkinz have done with a great, free virtual world that is unlocked by buying their physical toy.

[Brian Hayashi]

In a previous life in a large MSO, I started at the state level selling services targeted to apartments and hotels. From time to time, I'd be asked to step in to look at bars who were engaging in "signal theft" - i.e., displaying HBO and Showtime boxing matches using a personal license and not the proper commercial one.

I suppose that's why I appreciate what Hulu.com has done -- it has made online video a reality; not just from the user's POV but the license holders. It's not available outside the US, it supports the scheduling of distribution windows, and it provides a 30% ad split to the rights holder. Hulu.com was a welcome breath of air compared to its predecessors; companies that either wanted to be the next YouTube or the next Napster of video. All of those companies made the same argument that added exposure magically transmuted into value. In short, Hulu.com did a great job of making it easy for people to "swipe" content and reuse it elsewhere. I suppose you could find expressions of this same argument in the early days of MP3s, VHS, and even wayyyy back, in photocopying.

IMHO fundamental media economics need to be a lot smarter about syndication: securing the rights for all instances; developing distribution technology that complements Creative Commons or other licensing agreements; and simplifying deal terms and overall terminology so all of the stakeholders agree what an 'impression' is. If media syndication can do all of this then the industry can be in a position to "fail fast"; find those media distribution opportunities that work.

[Peter Kim]

Not sure I agree with the point that "making content to sell is done." Audiences may not aggregate the way they used to, but I see a lot more people lining up to see Wolverine or hear Taylor Swift vs. any UGC. In fact, the most popular content on sites like YouTube are from the mainstream - TV shows and music videos...

[David]

The creation process takes on it's intended role when distribution costs are removed from the end user, that is, they do it because they have a need to make, not a financial incentive. Artists (creators) rarely (tail of the longtail) make income from their 'work', it's the additional services (talks, education, writings), that pay the way.

How media economics works with 'wide open distribution' is to review what marketing and advertising is for. Marketing is about listening, advertising is about telling. Where we once used advertising for telling, we now have the opportunity to use the media arts to enhance and amplify the listening processes. With this approach, all 'brand' development upon listening (normally, building upon existing/emerging conversations) must be with an open licence, such as Creative Commons Attribution & Share Alike, so that the developing brand does not syphon off the audience into a cul-de-sac. We tend to call this piracy.

With these dynamics, the audience is the co-creator of the media, and thus, participants in what I'd call Story Space, rather than watchers of Broadcast space. This plays havoc with demographics, because the range of participants will be diverse and flirting - on the otherhand, this makes for diversely rich, cross-community development, something akin to mass markets.

Making 'content' to sell is done - making content that is part of the evolution of a product, is just starting.

Aggregation is just the leading edge of what is to come; Track is the word. Being able to see (and participate) within editorial threads (not chunky verticals) in real-time opens everyone to better transparency and time shifting.

[Peter Kim]

Good question Gerard.

Have you ever had content "stolen" from you? Back in the late 90s, I found a couple songs I had recorded on Napster. At PUMA, it was unlicensed images on eBay. At Forrester, I had non-clients asking questions about syndicated research report details. Experiencing this personally lends perspective on the issue.

In all cases, a common response was, "so what? you're getting exposure that you wouldn't have gotten before, for free!" The problem with that sentiment is the shift of monetization down the value chain until it disappears. Content industries appear to be in a spiral of creative destruction and until new, non-advertising based business models come in to play to stabilize things, old brands will continue to disappear.

I don't have an answer to your question. But it's clear that something about fundamental media economics needs to change. From another perspective, expert content creators need incentive to create, i.e. compensation. I'd prefer NBC and Tina Fey getting paid millions to create 30 Rock versus surfing YouTube for skateboarding dog videos. But how do we do this in a world where wide open distribution appears key to success?

[Peter Kim]

Yes, to be clear, I meant sunk cost in the finance sense. The money is spent, no use in worrying about what's already there. Time to move forward and build for the future. A hub is a great way to think about it.

[Gerard Babitts]

Couldn't agree with you more. Having spent time at a large media company, I found it interesting to see the internal arguments against and in favor of knocking down the walls and letting the content go free. Ultimately their decision was a hedging half-in and half-out approach that was allowed only in the hope that it would lead to users needing to come to the walled garden to get the quality, mass material. The issue that is still unresolved is how to get corporate content creators -- entertainment, media, newspapers, etc. -- to allow for this when their cultures have been built on the basic idea of being compensated for their content either via licensing fees or via on-site advertising revenues built on large amounts of eyeballs coming to their walled garden?

[Josh Hallett]

I don't necessarily think that the corporate web site is sunk cost. If you can balance a good content plan with the proper syndication then it can become a hub in some ways. It's just that you have to think of it more as part of an ecosystem, not one unto itself.

[Peter Kim]

Greg, I'd say you've got it right with Humana's current approach. As you point out, it's about distributing content into the readers and aggregators.

From a another angle - and I'm curious if you see it this way - you're doing the aggregating with #hcoc.

[Greg Matthews]

I think that this whole issue probably looks like a bigger deal to smaller companies than to bigger ones (I happen to work in a bigger one). And that makes the debate interesting from an academic perspective more than a practical one. What I mean is that, although I have a web site, I don't really care if people visit it or not - at least not right now.
What I do care about is that they see my content. Because I'm not necessarily using my web site to sell a product or service; I'm using it to spread an idea and a vision that others will build on. Alltop is a particularly interesting aggregation model for me, because it's not done by algorithm; it's done by people. At first it was Guy and Neenz; now ANYONE can use Alltop to aggregate their desired content. And that has value for me as an individual consumer of information. I'd like nothing better than to have all my internet health buddies add the RSS feed from the CrumpleItUp.com blog to their personal alltop (or feedly, or google reader or whatever).
I love the concept of open source with regard to ideas; the more people start to "come into my world," the more chance I'll have to eventually sell products and services in that world. When that day comes, I may change my mind - but for now, I'm perfectly happy to be aggregated!