p2pnet - rss feed: Social networks: Billy Bragg’s lament
p2pnet news | Advertising | Music:- “Social networking will become a ubiquitous feature of online life,” says Line One in the lead-in to an article in Britain’s The Economist.
But that doesn’t mean it’s a business, it says in Line Two.
It goes on >>>
A large but long-in-the-tooth technology company hoping to become a bigger force in online advertising buys a small start-up in a sector that everybody agrees is the next big thing. A decade ago, this was Microsoft buying Hotmail - the firm that established web-based e-mail as a must-have service for internet users, and promised to drive up page views, and thus advertising inventory, on the software giant’s websites. This month it was AOL, a struggling web portal that is part of Time Warner, an old-media giant, buying Bebo, a small but up-and-coming online social network, for $850m.
Both deals, in their respective decades, illustrate a great paradox of the internet in that the premise underlying them is precisely half right and half wrong. The correct half is that a next big thing - web-mail then, social networking now - can indeed quickly become something that consumers expect from their favourite web portal. The non sequitur is to assume that the new service will be a revenue-generating business in its own right.
Billy Bragg is worried —- very worried —- about revenue generation. Or, rather, the lack of it.
In a New York Times OpEd, he says Bebo founder Michael Birch and his wife and co-founder, Xochi, “walked away with $600 million for his 70 percent stake in the company,” news Bragg heard, “with a particular piquancy” since he’d cited Bragg, “as an influence in Bebo’s attitude toward artists.”
Birch approached Bragg, “after I took MySpace to task over its proprietary rights clause,” says the latter. “I was concerned that the site was harvesting residual rights from original songs posted there by unsigned musicians.” He goes on >>>
In our discussions, we largely ignored the elephant in the room: the issue of whether he ought to consider paying some kind of royalties to the artists. After all, wasn’t he using their music to draw members - and advertising - to his business? Social-networking sites like Bebo argue that they have no money to distribute - their value is their membership. Well, last week Michael Birch realized the value of his membership.
I’m sure he’ll be rewarding those technicians and accountants who helped him achieve this success.
Perhaps he should also consider the contribution of his artists.
Back to The Economist, “The big internet and media companies have bid up the implicit valuations of MySpace, Facebook and others,” it says. “But that does not mean there is a working revenue model.
“Sergey Brin, Google’s co-founder, recently admitted that Google’s ’social networking inventory as a whole’ was proving problematic and that the ‘monetisation work we were doing there didn’t pan out as well as we had hoped.’ Google has a contractual agreement with News Corp to place advertisements on its network, MySpace, and also owns its own network, Orkut. Clearly, Google is not making money from either.
“Facebook, now allied to Microsoft, has fared worse. Its grand attempt to redefine the advertising industry by pioneering a new approach to social marketing, called Beacon, failed completely.”
‘Archaic and quaint‘
Facebook, MySpace, and so on, may not be the money machines corporate interests had been banking on, but they’re still enormously popular, becoming more so every day.
It’s almost as if the P2P communities, musicians and other artists are taking the money hungry venturists for a ride instead of the other way around, shamelessly using the corporately funded social networks for their own purposes while the companies try desperately to figure out a way to get their hands on all that personal information so they can cash in on it, advertising-wise.
But, “What’s at stake here is more than just the morality of the market,” says Bragg. “The huge social networking sites that seek to use music as free content are as much to blame for the malaise currently affecting the industry as the music lover who downloads songs for free.”
Like, if they weren’t sharing tracks with each other, they’d be buying them in the millions. Right? Stands to reason. Right?
Ask Warner Music, EMI, Vivendi Universal and Sony BMG’s RIAA (Recording Industry Association of America) which, on behalf of the Big 4, is currently trying to sue consumers into buying corporate ‘product’.
Meanwhile, “We will look back to 2008 and think it archaic and quaint that we had to go to a destination like Facebook or LinkedIn to be social,” The Economist has Forrester Research’s Charlene Li stating.
Future social networks will, she believes, “be like air. They will be anywhere and everywhere we need and want them to be.”
News will come straight to your online inbox, RSS reader or instant messenger. “No need to upload photos to Facebook to show them to friends, since those with privacy permissions in your electronic address book can automatically get them,” says the piece, adding >>>
The opening of social networks may now accelerate thanks to that older next big thing, web-mail. As a technology, mail has come to seem rather old-fashioned. But Google, Yahoo!, Microsoft and other firms are now discovering that they may already have the ideal infrastructure for social networking in the form of the address books, in-boxes and calendars of their users. “E-mail in the wider sense is the most important social network,” says David Ascher, who manages Thunderbird, a cutting-edge open-source e-mail application, for the Mozilla Foundation, which also oversees the popular Firefox web browser.
That is because the extended in-box contains invaluable and dynamically updated information about human connections. On Facebook, a social graph notoriously deteriorates after the initial thrill of finding old friends from school wears off. By contrast, an e-mail account has access to the entire address book and can infer information from the frequency and intensity of contact as it occurs. Joe gets e-mails from Jack and Jane, but opens only Jane’s; Joe has Jane in his calendar tomorrow, and is instant-messaging with her right now; Joe tagged Jack “work only” in his address book. Perhaps Joe’s party photos should be visible to Jane, but not Jack.
This kind of social intelligence can be applied across many services on the open web. Better yet, if there is no pressure to make a business out of it, it can remain intimate and discreet. Facebook has an economic incentive to publish ever more data about its users, says Mr Ascher, whereas Thunderbird, which is an open-source project, can let users minimise what they share. Social networking may end up being everywhere, and yet nowhere.
Where will music fit in all of this?
It’ll be shared even more widely and, to the horror of Warner Music, EMI, Vivendi Universal and Sony BMG, the members of the Big 4 organised music cartel, ever more discreetly.
And, “while we wait for the technical fixes to emerge, those of us who want to explore the opportunities the Internet offers need to establish a set of ground rules that give us the power to decide how our music is exploited and by whom,” says Bragg in the NYT.
“We need to do this not for the established artists who already have lawyers, managers and careers, but for the fledgling songwriters and musicians posting original material onto the Web tonight. The first legal agreement that they enter into as artists will occur when they click to accept the terms and conditions of the site that will host their music. Worryingly, no one is looking out for them.
“If young musicians are to have a chance of enjoying a fruitful career, then we need to establish the principle of artists’ rights throughout the Internet - and we need to do it now.”
Not to worry, though, Billy.
Cream always rises. It doesn’t matter what kind of bottle it’s in. And somehow, the people who create it always survive, with or without MySpaces, venal record labels, or anything else.
Also See:
The Economist - Everywhere and nowhere, March 19, 2008
buying Bebo - AOL buys UK’s Bebo, March 13, 2008
New York Times - The Royalty Scam , March 22, 2008
took MySpace to task - Billy Brag wins MySpace fight, June 30, 2006
failed completely - Coca-Cola says NO! to Facebook Beacon, December 4, 2007
Ashley Alexandra Dupre - Ashley Alexandra Dupre, March 14, 2008
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