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I just love me them trees — the launch of PandoDaily

Earlier today, long-time friend Sarah Lacy launched her new site PandoDaily. As was covered in many places, I am one of the angel investors in the round Sarah raised to help start her company. In addition, I am going to join the board of parent company PandoMedia along with Michael Arrington and will be pretty actively involved in helping Sarah build her company. It is an exciting time in the web media space and Sarah is one of the most talented journalists I have known. The strength of the team she was able to bring together before even launching a site is a testament to her abilities and reputation. Her completely unsustainable output on day 1 a testament to her drive to make the site wonderful.

Thinking back to my earliest involvement with Wired magazine and then launching HotWired (amazingly, almost 20 and 18 years ago respectively), I am continually impressed with how much fun the business of media can be. Media sites make for inherently cyclical, constantly transforming businesses where you’re only as good as the last story you pushed out. The people who contribute are the ultimate product — the media are just the messages. If I’ve learned anything in my few decades of experience in media, the hard part is hitching yourself to the right star. Sarah is taking very seriously her goal of building the site of record for Silicon Valley and has the network, smarts and focus to reach that goal.

In other words, those who can launch web sites. The rest of us are happy to be involved. I’m very happy to be involved with Pando.

 

Your company is a TV show

I’ve been watching and buying a lot of video on the Apple TV over the holidays and musing on the convergence of web company creation infrastructure with video production. An app on my iPhone and a video program on my AppleTV are increasingly looking like two sides of the same coin to me and as I worked my way upstream from that thought, incubators like Y Combinator quickly become the Endemols or Bad Robots of our web world. I’m just not sure that building a consumer internet company is too different from launching a video franchise anymore.

I don’t have any numerical proof of this but I will bet the total gross of an average video franchise over its lifetime is still significantly better than the total revenue of the average Silicon Valley start-up over its life. We can take out the statistical anomolies in both industries — Harry Potter and Google don’t count — but I think we could do worse as an industry than to aspire to building a similar scale of company building infrastructure as exists in video production. And vice versa I might add, I’m not sure video producers are iterating through business models as fast or creatively as internet incubators. We each have a lot to learn.

I realize the convergence of Silicon Valley and Hollywood isn’t even close to a new idea and am not professing to any huge novelty here. Plus, I can torture a metaphor with the best of them and won’t take this one any further. But I do think the two industries are learning from the other as technology, video distribution and platform wars change the dynamics of launching a consumer facing web company or a video franchise. And of course, increasingly Apple and Google are in the middle of both.

Lots of interesting reading on the subject recently, it’s a nascent subject for me that I’m just digging into (mostly trying to better understand the television production side of things). A few suggested links:

• PBS Takes On The Premium Channels - The success of shows like Downton Abbey along with the cuts in federal funding is causing PBS to increasingly fight against the premium networks for dollars. Needless to say, this is a good thing. And Downton Abbey is a wonderful show, watch it if you haven’t already.
• In Speaking for TLC, the Least Said Is Best - A fun look at the day-to-day grind of reality TV. We’ve known for awhile that editors have replaced writers as the creators of the story arc but I hadn’t realized to what extent you’re only as good as your PR person. Influence is the name of the game whether on the web or TV. And if your social media outreach folks have it hard, ask them to watch Sarah Palin’s kids while she camps with Kate Gosselin.
• Why the Winter TV Hiatus Makes No Sense - Jeff Alexander writes about the missed opportunity that continues to be the network television production schedule. Renée and I spent New Year’s Eve downloading and watching season 1 of Portlandia, which rocked a whole lot more than anything Dick Clark has done in decades. Yesterday we started watching Breaking Bad. I’m happy for the hiatus from my other television shows but my Apple TV has been seing a lot more use as a result.
• I am done with the Freemium Business Model - Yet another web developer realizing that free costs money. Free is just another cost of customer acquisition model that doesn’t make sense for everyone. I read this story through the eyes of a video content creator and wonder when we’ll hit a point that pay revenue can completely fund video programming. Would I pay more to see a less censored version of Breaking Bad? Easily, but there’s probably not enough of me yet to finance something like that. But I hope we’re not far off either.

The best parody of our political system today

For those of you who are not Stephen Colbert fans, you are missing an amazing story: he is pulling off one of the best parodies of all that is wrong with our political system today. More than just talking to his viewers every night, he has hired lawyers, created a Super PAC and is openly mocking the system by demonstrating exactly how much one can get away with. I can’t remember any example of the media taking the joke as far as he’s taking it and it is at once fascinating, hillarious and scary.

I strongly recommend you read the letter he just posted here (there’s no permalink that I can find so hopefully this will stay live on the home page for awhile). In essence, Colbert is doing everything Karl Rove is doing by way of pointing out the ridiculousness of what is allowed in today’s system. Here’s one choice section:

Americans for a Better Tomorrow, Tomorrow agrees that "fully coordinated" ads shouldn't be counted as "coordinated communications." The candidate would merely be appearing as a paid spokesperson, who, coincidentally, is closely aligned with the candidate that he or she also is.

For example, an ad in which the Kool Aid man decries our nation-wide childhood thirst problem would not necessarily be an ad for Kool Aid brand juice drink. That being said, would a tall glass of Kool-Aid solve that thirst problem? To quote one expert: "Oh, yeaaahhhh!"

There’s some real funny and yet serious shit happening here. I’ve been both amazed and horrified watching it. If you’re missing the story, please trust me... it’s worth following.

We are our own editors

“The threshold to have literature printed and distributed — the cost structure went down to zero dollars. Thereby, there is no gatekeeper of the truth. We are our own editors, and we are our own publishers. We are our own printers.”

Ashton Kutcher gets it exactly right before ruining his pithiness with continued talking (read the story for the rest of the quote)

Felix Salmon on e-books

Felix Salmon (who has been doing some great media blogging lately) writes about e-books, Kindle Single pricing and Gothamist’s first foray into the market. The pay-off — which I totally agree with, natch — is that this is an important new market:

We’re still in the very early days of micropayments for books, but my gut feeling is that people are increasingly willing to pay small sums for shorter pieces in the 5,000 to 30,000 word range — much as they’re increasingly willing to pay small sums for apps. And the pricing models are, of course, still very much in flux.

Also interesting in the piece is the back and forth on pricing between Apple and Amazon. I’m not finding myself using iBook at all to purchase books since I’d like my DRM-ed media in one place and I trust Amazon more than Apple for books. But I love the fact that iBook is also a PDF reader and have read a number of books with it (I have a fair number of book author friends who send me stuff). The pricing anecdote does show how much all of these new e-content markets need competition.

Let’s hope an Apple/Amazon duopoly ends up being competition.

via David Jacobs

Yes, we’ll pay

Paul Carr on the explosion of crapola content and a growing willingness to pay for quality again. A great piece well worth reading.

The fact that the Economist’s North American circulation has just reached its highest ever level tells us that the audience for quality content isn’t going away. It also suggests that those of us who prefer our content unsullied by payola, and who appreciate the beauty of a well-crafted headline are turning our backs on the web. Increasingly the best writing and reporting is to be found in books and Kindle Singles, where readers are happy to pay directly for high-quality information and entertainment. As web content continues to get dumber, and more ethically compromised, the market for high quality content away from the web will continue to grow.

Fanfic and crowd sourcing A&R

Last week I had coffee with a friend who is shopping his enterprise cloud company on Sand Hill. He was bemoaning the fact that VCs have started to do in enterprise what they have long done in consumer — let the market choose the winners. As far back as my own venture days (1998 - 2003), it had become inexpensive enough to launch a consumer facing website that it was rare for anyone to fund a company based on a PowerPoint alone. We’d send entrepreneurs with good ideas along to go find a technical co-founder, launch a proof of concept and then let the market decide what was interesting and what wasn’t. Lazy yes, but a lot more effective.

Until recently, it was much harder to bootstrap an enterprise facing company. The software was more complex, price points significantly higher, sales channels required substantial investment and quite frankly, no enterprise would buy software from an unfunded start-up. Cloud computing changes these dynamics. Mind you, no company is going to shift its storage from Amazon to unfunded start-up. But it’s much easier for an enterprise to trial new cloud-based technologies because the upfront commitment is much lower (versus a multi-million dollar enterprise software stack) and it seems that the venture world is starting to require the same “go show me” approach to funding the next wave of enterprise companies.

As goes the venture industry, so goes media. The fact is, crowd sourcing innovation can be much more cost effective than making big bets on gut feel. When the crowd works — here’s looking at you Justin Bieber — it works big. Now publishing is jumping on board, please meet Amanda Hocking:

If Hocking seems a bit blasé about signing her first deal with a traditional publisher, and a multimillion-dollar one at that, it’s hard to blame her. Since uploading her first book on her own last spring, she has become — along with the likes of Nora Roberts, James Patterson and Stieg Larsson — one of the best-selling e-authors on Amazon. In that time, she has grossed approximately $2 million. Her 10 novels include the paranormal-romance “Trylle,” a four-book vampire series that begins with “My Blood Approves” and “Hollowland,” which kicks off a zombie series whose second book will come out in the fall. Her character-driven books, which feature trolls, hobgoblins and fairy-tale elements and keep the pages turning, have generated an excitement not felt in the industry since Stephenie Meyer or perhaps even J. K. Rowling.

Fanfic was hugely popular on LiveJournal, it was unfortunate that my only run-ins with the genre as the (temporary) owner of LJ was the more sordid aspects of the genre. Still, I can’t imagine a better training ground for learning the market dynamics of content creation. E-books now have enough mass to allow anyone to publish and some to thrive, upending the publishing process much as the mp3 did for music. The more the crowd gets in the middle of any medium, the better off we’ll all be.

Can the bots run a front page meeting?

The last 10 years has seen the complete disassembly of all we know in media. Google — that great indexer in the cloud — turned integrated media sites into a collection of entries in its large content database. Remember the battles of yesterday to protect the home page? Companies actually tried to prevent a deep link to a single page inside a website, bypassing the almighty front page. Now rather than fighting it, media companies hire SEO experts to help grow their traffic and do everything they can to optimize around Google’s crawler.

The social web has only exacerbated this trend: every Tweet/Like/Stumble button is a small cry for traffic. Writers are paid on their ability to get their stories to go viral and much time is spent picking just the right link bait headline. In the same way that iTunes put the final nail in the coffin of the album (why buy the whole thing when you only want the one song?) the web has taken away media’s job as arbiter of importance… and given it to an entirely new set of players.

Unless you’re ready to turn media over to the robots. Google News is pure algorithm — find a story, cross reference a bunch of other related stories, add some meta data, link, rinse and repeat. It’s the Google of aggregation, natch. Krishna Bharat, the father of Google News, was recently quoted as comparing his product to the Yellow Pages, not exactly an example of a great media product. On the other hand, I think his analogy is dead on and explains why Google News just doesn’t work for me (and increasingly others).

All of the really interesting aggregators are powered by people, not software (although software certainly helps out a lot). Hacker News fits into the Slashdot/Digg/Reddit mold of crowd sourcing the problem. TechMeme and its sisters are heavily assisted by human intervention. Flipboard and the new wave of aggregation apps let my friends be my editors. The fact is, there’s just way too much content out there to trust software to do the job, especially if serendipity is high on your list of important things. My own favorite aggregator is a person — Jason Hirschhorn — who happens to wonder about a lot of the same things I do but with a much more voracious appetite for reading.

Aggregation is only interesting when it starts to have a point of view, there’s way too much content out there already and I want a filter not a data dump. In the newspaper industry, the front page meeting used to be the most important meeting of the day — what are the critical stories that go above the fold, what is the headline that is going to sell the paper. Can software really be trusted with that job? 

(Massive tip o’ the hat to friend of the show Michael Sippey who did a major edit on the first draft of this post as well as to Troy Young who asked the first question that inspired the post.)

Aggregating the wrong thing

I still don’t get content apps but I think I finally understand why. I was reminded recently of the early days of the internet when a number of companies were created to build online shopping malls. It was a classic situation of bringing the wrong metaphor online. In the physical world, a real estate company builds a big building, gets a lot of retailers to take space in that building and then people come in droves. But in the online world, aggregating the merchants didn’t add any value — the hard part was aggregating the consumers. These internet malls died very quick deaths whereas the portals which had built the most popular front doors (Yahoo, AOL, MSN) collected the most amount of influence with consumers and were able to send traffic to any merchant willing to pay.

We’re seeing the same thing happen with content apps and that is why they will all fail. Back in the days of printing presses and physical distribution costs, a magazine or newspaper made sense as an aggregation of content. If I’m going to pay for one package on my doorstep every morning, it better give me news, sports, weather, stock quotes, comics and a bunch of other stuff (even if I don’t read most of it). Easier to send me a lot more than I want and let me pick.

But now thanks to micro payment models for content, we’re able to buy just what we’re interested in and useless aggregations of content around a generic brand are much harder to sustain. We’ve already seen what the disaggregation of content has done to the music business, I won’t rehash that story here. But with very few exceptions, all of the content apps I’ve played with are heading down that same path.

In fact, the break down is happening already. I do think there is a model for content aggregation that will work but in keeping with my own personal dictum, I will save that for another piece.

Michael Arrington, voice of reason

“But the really important thing to remember, as a reader, is that there is no objectivity in journalism. The guys that say they’re objective are just pretending.”

Michael Arrington calls bullshit on his entire industry (and he’s 100% correct). The other quote I almost used — “I have little hope for this industry until the last of the old guard have finally been put down.” — is just as good.