My buddy Boris has an excellent recent post titled, “It’s not about you”. He argues that the rise of Web 2.0 businesses – which build communities around content users post to the sites – shouldn’t fool you into thinking that these companies care about you. They don’t – they care about your bits.
But that’s not what the bankrollers are on about. They don’t care about your newfound ability to publish your thoughts or your pictures. They are just glad that you are doing so. Why? Because in an information based economy, data is your primary natural source. And flow of data creates movement which can be harnessed.
Specifically, this content creates pageviews… and these pageviews can host ads, which make money for the site owners.
We are all working for them. For free. That’s how it’s “about we”. It’s not a “media revolution”, it’s a reversion to feudal medievalism.
Ah, the irony. As it turns out, I’m a recovering feudal lord, able to work on cool projects with Boris thanks to my past career exploiting and enslaving the peasantry of the web. Tripod – the company I helped found in 1994 – worked on exactly the business model described above. (Unfortunately, we called it “personal publishing” and we did it before RSS… had we thought of a nifty term like “Web 2.0”, we’d be rolling in ill-gotten booty.) After two years of producing professionally-written, elegantly-designed web content, we discovered that the ugly, ungrammatical homepages created by our users got roughly a hundred times as much traffic as the content we paid for. Call us crazy, but betting on the free stuff seemed like a good idea at the time.
But I gotta tell you, Boris – it’s hard out here for a liege. The serfs are way more demanding than you’d think. In the homepage hosting business – which is not unlike the blog business – the vast majority of users create crappy content that no one looks at. Despite their failure to make money for you, they demand customer service. And when you fail to provide it in a timely fashion, they complain to everyone they know, and sometimes to the attorney general.
The irony, of course, is that a good chunk of them are breaking the law – they’re using the space you provided – for free on the servers you paid for – to swap copyrighted software or copyrighted porn. Or they’re building vast link farms to rig search engines. You end up hiring an “abuse” team to chase these lowlifes off the land, allowing you to return it to productive purposes.
Your saleable ad views come from a tiny percentage of your users. Their pages/blogs/photos generate thousands of pageviews, making real money for you and allowing you to subsidize the other serfs. But these folks aren’t dumb – they quickly figure out that they could thrive on their own, and they move onto their own servers, taking their pageviews with them. You’re perpetually looking for new blood, convincing new serfs to till your land instead of the next guy.
(One of the smarter things we did at Tripod was create a homepage mover, which allowed you to enter a Geocities or Angelfire URL – it would suck down your pages and images and put them in the proper place on our server. And then we carefully created a directory structure to ensure the technique wouldn’t allow sites to be sucked off our server…)
The serf metaphor aside – companies like Tripod tried very, very hard to make our 15 million users happy, for the simple reason that we didn’t have a business without them. This included flying some of our most successful users to our HQ to meet the staff, talk about their homepages and what they wanted from our company. We started affiliate sales programs that let people sell from their homepage and shared the revenue with users. And we maintaned a customer service department that was significantly larger than any other team in the company, trying to answer all incoming email within 24 hours.
(This has evidently gone out of fashion in Web 2.0, at least if my recent experience with a prominent blog search engine is any experience. I’ve yet to have a customer service email responded to without escalating it to the CEO or the chief engineer.. :-)
But Boris is right – businesses that depend on user-created content are desperate to keep users from switching services, or setting up their own websites. A stupid way to keep loyalty is to make it difficult for users to switch – this creates angry users, and encourages them to keep backups of all their content, in case they need to move away from your service.
A much smarter way to accomplish it is to build communities. Boris has a switching cost in leaving Flickr not because they’re holding his photos ransomed – he’s got them cached in half a dozen other places – but because he spends half his waking hours commenting on other photos and checking out what his friends have posted. He can change photo-sharing sites, but the community won’t neccesarily come with him. The community, not the data, provides the lock-in.
Like Boris, I try to help my friends avoid lock-in when they begin blogging, sharing photos or generally contributing to the read-write web. But I have high hopes that someone will do the liege/serf thing right and turn the feudal model into something closer to a collective farm, where both the farmer and the landowner benefit.
One of the lessons I took from Tripod was that money – even very small amounts of money – mattered. Our users were hugely excited about generating very modest amounts of money from their homepages. A recent Christian Science Monitor article shows how much has changed in seven years – meaningful amounts of money generated by Google Ads represent a large portion of the monthly income for some authors in the developing world.
I find myself wondering how we would have dealt with Google Ads in a Tripod paradigm. It would have been easy enough to ban them from our pages and block them, but I’d hope we would have been smart enough to strike a deal with them – and with our users – where we integrated ads into the page creation process and gave the lion’s share of the revenue to the page author and took a small fraction as “rent”.
(Who am I kidding? We’d probably have paid users in scrip only redeemable at our company store, allowing them to trade a thousand Tripod bucks for a t-shirt. Or, better yet, billed them in Tripod bucks for their homepage and required they generate enough ad revenue to cover their costs before we’d reward them. “Saint Peter don’t you call me ’cause I can’t go – I owe my soul to the company store.”)
My point in all of this? Some portion of web users are smart and independent enough that they’ll start their own blogs/photo galleries/bookmarking services on their own domains where they have full ownership of their data. But most users won’t. They’ll ask people like Boris and me where they should store their photos or publish their pages, and we’ll have a moral obligation to help them find the sites least likely to hold onto their bits and refuse to give them back. (Not to mention a practical obligation, as those users are bound to ask us how to help rescue those bits at some inconvenient point in the future.) The good services have you hooked on the community and don’t need to hold your data for ransom.