Along with the phenomenon of micro-lending to the poor, the idea of social lending is starting to emerge. What’s the old saying? Banks only lend money to people who don’t need to borrow? Both of these trends require that we change the way we think about trust and risk. It also may change the way we think about financing. By using a dutch auction to set interest rates in a new online market, we may see loans that a bank would never consider, and higher interest rates to cover the additional risk. This is securitization of debt at a micro-level. If the long tail of the debt market is as large, or larger, than the head — social lending is a trend that bears watching.One Comment
The network will benefit from Jason Calacanis’s recent departure from AOL. While it takes a very talented executive to take a closed network and bring it into the open — while transforming the fundamental economics of the business entity — the politics of such an endevour can be soul crushing. The power in this type of situation always resides with the entity that must be changed and ultimately destroyed. Power rarely cooperates with its own destruction.
Jason has two qualities that the current crop of Web companies need to learn. He takes business personally. He wants to compete and win. Defining an opponent can focus creativity and innovation. The second quality is that he believes in paying for value. Paying Netscape Navigators to be editors and gatherers is the beginning of an important new economy. Building platforms where this kind of value can be created and where people can be compensated is the most important building block for the next generation of the commercial Web. We need to put an end to the idea of building for profit companies on the back of free user generated content. If the content has value, there needs to be a mechanism for compensation. The network needs Jason Calacanis to fill this hole.Comments closed
I missed the stream of Brian Eno and Will Wright’s talk at PopTech. But through a link I found on Jon Udell’s RSS feed I ended up on the Long Now Foundation’s Web site, and found the podcasts of their seminars. And what do you know, Here’s a podcast of Eno and Wright talking about Spore (Wright’s new game) and generative systems. Why did I have to take that circuitous path to find the audio I was looking for?Comments closed
Steve Gillmor writes that “TV is Dead.” Clearly the concept of broadcast television as an event-based, time-anchored schedule is dead. The VCR, DVD Player and the DVR took care of that. YouTube ends up being a TiVo that just records everything and you find your programs through search. But I’d contend that Television is a social activity, many people to one viewport. The computer tends to be one person to one viewport.
Television isn’t dead, centralized broadcast schedule programming is dead. The user now decides today’s line up of shows, and does it fresh everyday. The business of televsion is aggregating audiences around popular shows and attaching advertising for a fee. When a clip becomes a big hit on YouTube, it’s potentially a powerful advertising vehicle. But will an advertiser want to attach its message to the 2 million viewers of LonelyGirl15?
As the number of content modules explodes, the individual’s capacity to consume such content remains the same. There are still 24 hours in the day, we can talk multi-tasking all we want, but we aren’t going to be watching 10 Web videos at once. With the cost of production going down, it’s possible for niche audiences to support the creation and distribution of digital media products.
The interesting economics emerging out of this have to do with scale. Spending tens of millions of dollars to produce a media product and then selling it to the masses has been a fine business model. But it requires the product be sold to large audiences, preferably audiences that will buy more than one viewing and the attendant merchandise. It’s a business with normal margins. But what happens when a cheaply produced digital media product becomes a hit with a mass audience? If it has the business model and monitization schema in place it becomes an incredibly high margin business.
Oddly enough, that’s the way the software business works. Once the software has been produced — if you can get everyone to use it, the margins are incredible. See Microsoft.Comments closed