The razor and the blade have taken on largely metaphorical meanings in the era of “Free.” Products and services are bundles of threads, some free, some advertising supported and others with a variable or fixed price. The razor itself is free or low cost, and the consumer pays for disposable blades which subsidizes the cost of the handle. Cellular phones use this pricing model. Chris Anderson posits that this model will become dominant, with a digital component naturally tending toward a price of zero.
If we take a moment, and look—not at the metaphor, but at actual razors and blades, we’ll learn a great deal about how the “Free” business model will develop. The Holy Grail of the shaving world is the “close shave.” And, of course, the close shave imbues the shaver with extraordinary attractiveness and social power. It becomes the almost unattainable object of desire. The companies that make shaving equipment have brought together the world’s best scientists and storytellers to create a compelling narrative. The road to a closer shave can only be achieved through multiple blades and high-level engineering. The five-blade razor has emerged as the pinnacle of shaving science.
The simple razor and blade have been transformed into a technology experience beyond the understanding of the average Joe looking to rid himself of five o’clock shadow. Along side the production of the physical product is the production of desire. The act of shaving requires ever greater efforts, continual progress— we’ll pay any price, bear any burden, meet any hardship, support any friend, oppose any foe, in order to assure the survival and the success of the close shave.
The world of shavers has been tightly wrapped in the dream narrative of the progress of shaving and its technology. It turns out the “Free” part of the product is not the critical factor, it’s the production of desire. The essential ingredient is the creation of a strong narrative beyond which the consumer cannot see or imagine.
Every extreme engenders a backlash, and the five-bladed razor may have tipped the scales. Step outside the dream of the technology of the “close shave” for a moment and consider a double-edged single razor blade that performs better than the latest five-bladed technology. Could “one” be superior to “five?”
Of course, we need our dreams, our goals, our destinations— the humble razor and blade provide an excellent example not just of the economics of a business model, but of how the production of desire influences the engineering of the product. “Free” is the taste, the invitation to the dream.
I first became aware of Nancy Sinatra when her song “These Boots Were Made For Walkin'” climbed up the charts in the 60s. The song was written by Lee Hazelwood, and I had the sense that it was a kind of novelty rather than being representative of a body of work. The song was released in February of 1966, and featured a back-up band known as the “wrecking crew“— they were made up of first call session players in Los Angeles.
Ms. Sinatra caught my attention again recently with her editorial in the New York Times regarding the inequity of payments for songs played on the radio. Composers and publishers receive payment each time a song is played, but performers get nothing. The presumption is that the performing artists receive promotion when their songs are played and that serves as their compensation. Ms. Sinatra notes that the practice of mentioning the title and artist of a song just played is no longer common practice. And she reveals that ten years ago Clear Channel was asking $24k per title, to mention a song’s meta-data. A radio mention is meant to serve as a kind of link to a commerce service point.
Just as the telecom industry is coming to terms with the fact that voice is indistinguishable from any other kind of bits traveling through the series of tubes, the radio/music business is learning that there’s no such thing as a ‘sound only’ Network. Recorded music needs an extensible interface, sound is only one of the channels. Video, text, images and commerce are some of the channels that need to be included in the digital bundle. When you ‘right-click’ on a tune, what options will you see? If you look closely, you can see the distinction between the player and the thing played is beginning to disappear.
The music industry has responded to this opening with the CMX file format. As currently defined the format will allow playback and viewing of multiple media types, transactional capabilities have not been mentioned. Apple has rejected CMX in favor of its own format called Cocktail. Early rumors are that the Cocktail format will be playable on a new generation iTunes player, although it may also work as standalone software with an incorporated runtime.
Rolling up the various media files associated with a music release into a single new format will create a new container that can be sold to the music buying masses. If all goes according the plans of the record labels, the public will be thrilled to restock their music libraries with new containers of the same music. After all, the public has done it a number of times before. Presumably, the new format will also feature stronger DRM as an attempt to re-establish the old sales model. The most intriguing part of Apple’s Cocktail format is the rumored integration of a social media layer into iTunes.
Some think the record business was destroyed by the MP3 file format. Because an MP3 is simple to digitally copy, the theory is that sales suffered as the listening audience simply distributed free copies of music over the Network. While there’s a grain of truth to this, ventures like the iTunes music store could not have been successful if it were the dominant behavior pattern. The real threat to the music industry was the return of the single and the rise of the playlist.
The record album became the standard unit of sale for music some time after the Beatles managed to fill their offerings with hits from the first track to the last. Once the public stopped buying singles and started buying albums, the goldrush was on for the record companies. The album also served as a kind of filter, bands that couldn’t sustain a level of quality over an entire record didn’t last long. The album became a canvas, a programmed static playlist of music that eventually lead, for better or worse, to the concept album.
The high cost of recording music combined with the album format resulted in a batch production mode for music—also known as the recording session. Batch mode production is closely related to the kind of production done in factories. A special environment is created, set away from ordinary life. Real life is what you return to when you’ve finished your shift working in the factory. With the cost of recorded music production plummeting, the batch mode becomes less and less necessary. Real-time production occurs in-line with real life, the process might look more like the basement of Big Pink instead of the specialized and fully-equipped recording studio.
A bundle of static files wrapped up in a new format is an attempt to get some additional mileage out of the album format. There’s a sense in which this is a duplication of the shrink-wrapped software model. The music industry should look to the recent strategic shifts made by the king of shrink-wrapped software: Microsoft. Microsoft has shifted to a software + services model that includes the full interoperability and the integration of public social media streams. Some of their product will be free, some ad supported and others will be fully paid. And just as the batch mode of software production has been deprecated in favor of real-time, in-line code updates over the Network, music (and all digital media) will eventually move toward this new model.
The battle that Nancy Sinatra is waging on behalf of the performer will not be won in the landscape of radio. That playing field is receding, becoming a small piece of the puzzle, rather than whole ballgame. The new canvas for the digital performer and recording artist is starting to emerge and the examples provided by Microsoft, Google and Apple will lead the way.
While the shouting over whether Twitter has any value is largely over— there’s still some question as to what that value is. The search for a single qualitative value to which Twitter can be reduced is, of course, futile. It would be like trying to identify the single value of ink/paper, email, telephones or http.
When looking for meaning and value, there are a number of routes we might take. The denizens of Forrester, Gartner and Red Monk might take one direction; the host of burlesque performers and vaudevillians hanging out shingles as ‘social media’ experts may take another. Generally the process involves modeling what a business might do with ‘social meda’ (Twitter). The Profit/Loss in these models generally operates in the realm of public relations, marketing, good will and social capital. There is some argument for Twitter as a customer service channel, but while it’s optimal as a hailing frequency, it’s inadequate as a customer solution medium. This soft approach has some chance of success during a bull market, and a better than even chance during a financial bubble. While some, like Umair Haque, argue that these soft social revenue streams ultimately must provide a context for hard revenue streams, at the moment the stock market doesn’t agree. Positive sentiment on Twitter doesn’t translate into more demand for an equity. Adoption is currently limited to businesses that either can afford the luxury, or have replaced existing marketing and public relations modes with the Twitter channel.
On the hard revenue stream side of the ledger, we might look at how algorithmic stock traders are beginning to use Twitter. In trading, the asymmetry of the dispersion of news is a trading opportunity. We’ve seen how flash traders can create algorithms that determine the market’s direction from real-time data before the rest of the trading fraternity can even open their eyes.
Wall Street & Technology Magazine’s Melanie Rodier is reporting that algos at hedge funds are starting to consume data flow from Twitter to gauge the direction of sentiment toward an event or stock. The compact size and real-time nature of the tweet makes its ingestion and analysis particularly attractive. StreamBase Systems, a vendor of a complex event processing (CEP) platform, has announced a Twitter adapter that allows its applications to both consume and publish tweets. The designated (tracked) twitter streams are spliced with market data, financial ratios, newswire information and other data streams to build a more fully dimensional picture of a particular stock (company). Waiting for news to be collected, digested and emitted by Reuters can add too much latency to the news/information release pattern.
Just as reading the early reports from a newswire requires an understanding of context, history and the politics of news construction and distribution; reading a tracked Twitter stream as a part of a data complex requires a particular interpretive skill set. If the old adage ‘buy on the rumor, sell on the news’ has some truth to it, Twitter has just added a deep data layer to the ‘buy’ side of that equation.
It’s a behavior pattern that has emerged in a number of realms and many are taking note. Michael Kimmelman, of the NY Times, noticed it while he sat and sketched in the Louvre. The visitors to the museum weren’t actually engaging with the art work. They either walked blindly through the galleries or were primarily focused on their personal digital machinery. Rather than directly experience the work in front of them, they seemed to be under the impression that paintings and sculptures can be collected in a digital camera for viewing at a later, more convenient time.
There was a time when people making the grand tour of Europe’s cultural treasures would prepare themselves by learning to make pencil sketches. Their sketching and painting were not primitive modes of recording images— they were, and are, modes of seeing and understanding (in the sense of making connections). We are not allowed to touch paintings in a museum; we can’t take our fingers and trace the shapes to feel their relationship to the entire composition. We can, however, accomplish this touching through seeing with a pencil and a sketch pad.
As we wander the world and only act as digital sample (sound/vision) collectors, we are not present in real time. We act today for the future time when we can look back on the present. As McLuhan said, we live our lives in the “rear view mirror.” We mechanically collect the digital artifacts of what might have been our own experience. We exclude ourselves from the real-time moment in favor of standing apart and playing the role of the recording machine operator at the service of the great digital archive (the Simulation).
The tragedy is that many miss the real experience because they’re busy collecting, and then they never even go back to reflect on what was collected. They don’t even bother to look in ‘the rear view mirror.’ They miss the sound and its echo, the image and its afterimage. They’re caught in the shadow between the motion and the act, losing all contact with our life in real time as mortals on this earth.
