Monday, March 27th, 2006
What is the impact of user-generated content on the traditional business model?
Chair - Emily Bell, Guardian
Ben Hammersley, writer and journalist
Jon Snow, presenter C4 news
Fru Hazlitt, Virgin Radio
Worked for Yahoo! for 6 years, and that’s a long, long, long time. I resigned, that was amzing too. And there were a few things I did learn, because I left radio in 99, went to Yahoo! for six years and have come back into radio. Whilst I was at Yahoo! there was a lot of talk about the fact that if you really want to understand the advances of technology, watch the consumer because they konw what they want and what they are doing.
And I say to that, bollocks.
Henry Ford said ‘if I listened to my customers I would have invented a very fast horse’,. and that’s right.
The understanding of the consumer always lags behind the advance of technology, and they are all scared of it. As people were scared to get into cars, and they wanted the man who wound up a crank and made sure it wasn’t going to eat you, and that’s how it was. You felt safer on a horse. And that’s still the same today. There’s still that painful moment where you boot up a computer and think ‘is it going to work?’. It shouldn’t be like that. We do not and should never be conscious of the tech behind a thing we’re using and whislt we’re conscious of the tech it’s just not really working for us, and that’s the point I guess. That’s why all these things happen that I call ‘right idea, wrong time’, so for example, the rush of money thrown at the internet, none of which hit me, now I’m back in radio where there’s lots of money, obviously.
What is true is that people rushed to throw money at the net. Right idea, wrong time. Of course people weren’t going to go back - the email was here and here to stay, the internet was here and here to stay. But before we worked out how to monetise it, the money panicked and withdrew. We knew it was an extraordinary change to our time.
Same as in the phone inudstruy. Invested stunning amount of money in 3G, and no return yet. Not that it’s a wrong idea, it’s just a bit early. Because consumers don’t know what killer applications of 3G phones are going to be. But it’s going to take time.
Same with trad media owners, probably with exception of Guardian. Lots of media owners spent millions in the bubble, and didn’t see that it wasn’t the consumer bubble that burst, it was the investor bubble, so they panicked and withdrew.
Of course, now I would say that. Now is the time to do it, becuase it’s not going anywhere.
If you don’t watch the consumer what should you do? The consumer sometimes does do new things, e.g. text messaging which was driven by the young consumer. Not sure I agree with Sir Martin, but the thing I’ve learnt from Yahoo! is watch the kids.
When I look round this room, we are all too old. I remember a time when my parents had to learn to watch TV. Literally learn it. Came into the sitting room, and had to sit ther eand learn to watch it. And what they said was ‘we can’t watch this in the day time, we must watch it after 7pmj’ and they still do.
I did not have to learn to watch TV, I just watched it. What I have had to learn is the internet, and the new fangled phone, which I hate because I can’t use it and I can’t be botherede to read the damn manual. If it’s not instinctive peopel don’t do it.
it’s like learning a language. Learn it at 3 and you’re fluent. Learn it at 23 and you’ll always have an accent. And we will always have an accent. We remember pre-internet, but our kids won’t, and that’s when it is used instinctively.
The other day a DJ called Christian O’Connell complained about technology, and a mother rang in and said ‘didn’t you know all children today are born knowing how to use a Sky remote control’. It’s not about us, it’s about the kids. Most people in the world are boring. You can create wonderful things today with technology, tech democratises creativity, but it doesn’t destroy creators. But it does make damn sure that for once in your life your brand is saying what it should be saying. So make sure that the consumer isn’t laughing at you today, because the consumer can.
[Shows a bunch of slogan remixes - very, very funny.]
Jon Snow, C4
Emily: Jon, is this a threat to quality?
Jon: No, it’s an erosion of crap. There’s a lot of good stuff around, but biggest problem is processing it all. Problem of how you make yourself accessible to citizen media, but it’s a punishing consequence, the problem is that you come in every morning to 200-300 emails. I’m even thinking of getting someone in to process it because it’s a pity, but you begin to look back on what we were doing int he beginning and think it was so damned irresponsible, arrogant. People are producing material that there’s no other way of picking up on it.
People will dare to come out of the woodwork and do stuff, and suddenly you have material that you would never have got before. You calso get a lot of rubbish, and you have to learn to recognise it.
7/7 was the first time we ever used moving images shot on a mobile phone. Partly because images are better quality, but necessity is the mother of invention, and if you have stuff that’s unique you use it. And would never have had prospect of getting in the past.
I think Dr Ali Fadhil (sp?) in Iraq who gave us an insight into the barbarity in Fallujah. This massacre in the Suni Triangle has only been exposed because people have been able to get video, put it on the net and get it to us. It’s liberating. But we need to have to reconfigure our news rooms - our webmaster is our editor.
Through the formal channel of the web, I receive at least 20 direct communications every day.
I have no worries about it at all. We are into a new world, and the issue is how we manage it.
Emily: Ben, is there any need for any of this? Aren’t we all doomed?
Ben: Jon is right, there is a gatekeeping role. Bloggers get wound up about the idea that big journalism is dead. But there is enormous value in good journalism, and that will always be necessary. At the Guardian we act as a gatekeeper for an enormous amount of user-generated content, and more to come.
News media isn’t doomed at all. But general media, and general entertainment media, from waht I’ve heard this morning - which has made me very depressed… If anyone was waiting for Murdoch to say that it was ok to use the net… you are so doomed.
News is the only media that has a need for a gatekeeping role. But for general entertainment, if you’re not embracing user generated content, you’re doomed and have been for the last three years.
Jon: The peopel who are doomed are the crap merchants. The opporutnities are fantastic, and I can’t see the secret societies surviving, because peopel won’t put up with it. They are doignn something about it. We have entered an unprecedented period of anarchy.
Ben: The reason advertising fails on the web is that 99% is bullshit, and it’s proved to be bullshit. You can’t build a brand around a crappy product anymore, because Google will out you. People will kill your brand for you - whistleblowing happens all the time.
The days when you could just say ‘buy this, it will get you laid’ are over. Because people are searching to see how good the product is, and if it’s bad you’ll be outed immediately.
Jon: The conventional media shouldn’t feel threatened, but enhanced. It’s just about manpower. You can ask, if you are out there making KFC, can you tell me what you make it out of?
Our problem is knowing how to utilise this stuff. This morning I found a very angry missive about someone who sent me info on fake malaria drugs, and i had to email a plaintive reply apologising for how slowly they were following it up, because there’s too much stuff there.
Fru: It’s about this thing that people see this as a bad thing. Jon’s aboslutely right. This whole change can create some very, very good things. Stuff that would in traditional ways never have been found. But what I do think it should do is sweep away this notion of… if you go into a new company and you say ‘Oh, by the way I did some research and someone says there are really long queues in your shops’, and that’s brushed away, and you have to think, why not actually do something. You could sweep it aside before because it was myth, but companies should try to take notice. We use the people online to find out if the people online like what they hear. And it’s really cheap. All you do is stick out a question - do you like our new DJ - to the people that listen on a regular basis, and you get a really detailed response.
Ben: There’s a lot of data that you can pull out. There are definitely adverts that people don’t skip, but that they put online and share. But there is stuff that you don’t ifnd online. You don’t find Ant and Dec online, for a reason, because they’re shit. The answer is make better adverts.
The best online video sites show the best ads.
Fru: Launched a new thing, and did a top 20 every friday about office attachments, and got 2 million people a week in the space of a month, and most of these were ads that had been made, that hadn’t been tampered with that peopel thought were good. And that’s a real change.
Ben: There’s a Darwinism kicking in. If you make bad stuff you are going to die.
Jon: I’ve been unapologetically enthusiastic, but we need to judge people on whether they make themselves transparent, whether they post some mechanism for individual citizens to get back to them. They owe it to their readers and listeners to make themselves available for communication. There should not be a one-way-street in media.
The added value of material such as blogging, vlogging, podding, if it’s an extension of your day job and it’s not part of new remuneration, but the difficulty is that it’s easy to stack up a lot of activity and that erodes your day job.
Q: Why is traditional media so reticent to ask for and use user-generated content. Thinking of the tsunami. The first 12 hours of TV coverage was dire, didn’t include anyone from there. Katrina, very little coming in. It was day three before BBC and Sky asked anyone if they know what was going on.
Jon: We got so much stuff after the tsunami that it just swamped the newsrooms. But in Katrina the poor who stayed behind didn’t have mobile phones, and those who did didn’t want to talk about what was happening.
Coverage of 7/7 was ahead of the curve, it happened within minutes, so this will come. We are at the beginning.
Emily: Buncefield, all women with children because that was what time they were up. Sky and News24 only had UGC for the first 1.25 hours.
Q: Is this because it’s in the UK?
Jon: I don’t think we’ll see much UGC from the next flood in Bangladesh for example.
Ben: It’s also hard to do. The tsunami wiped everything away.
Also, if you are a senior journalist, and you look around, then suddenly the newsroom is full of shaven headed people in leather skirts. With Comment is Free, a lot of the user-generated stuff is as good as the lower end of the professional stuff, and it’s clear that if you’re not very good, you’re screwed.
Q: Heard a lot about the journalistic aspects, what about the business models? When will Virgin and C4 going to have user generated content up online?
Jon: Why do you want to ghettoise us? There’s a fantastic amount of content online.
Q: I mean what are the business models.
Fru: Virgin does a lot, but the trick is to monetise it properly. The issue is that the team have done the most incredible job of getting Virgin on a number of different platform.s The question is where is the radio listening habit going to evolve to and where to we monetise it. We have a huge amount of listening online, so we’ve brought online sales in-house. But what’s amazing is that we have 1/4 million people who’ve signed up to a VIP service who respond when we ask questions about new stuff. They are there, and anyone who’s not doing that is flipping mad.
Emily: If you don’t hold the conversation, you don’t hold the audience.
Fru: Radio is not going to be on an analogue receiver in 10 years. It’s going to be on multiple platforms, so your job is to make sure that your content is on as many platforms as possible.
Emily: Guardian are actually making a £1m online profit this year, all from advertising. Been investing in this for the best part of ten years. Losses peaked at well under £10m. So if you looked at how much it would cost to buy Guardian Unlimited now, that’s peanuts.
Ben: The big revolution that’s happening on the web now is that the cost of entry for developers… if you wanted to start Guardian Unlimited now from scratch, it would cost a fraction now. The start-up costs for start-up publishing is so slim that profit comes almost immediately.
You can give your content away for free and make your money from t-shirts. There are people making money from single-man models that don’t scale.
Q: On the commercial side, do you have guidance for brand owners who are fighting in Google against someone small.
Ben: It’s simple. Don’t make products that suck. It really does come down to the fact that Google will out you. If you have a bad products, you will be outed on the web. Same with politicians - don’t be corrupt, you will be found out.
Fru: I think there are still crap products that can be made and well promoted. If something becomes cool very quickly, it can be sent out to zillions of people very quickly, and it may not be very good. And although you’re right, Google will find you out eventually. But a cool thing that may not be a very good thing. The rules of the game have changed and brands need to learn how to play them.
Jon: We can’t forget that the human spirit has not changed. You can’t con all of the people all of the time, but you can con some of them some of the time.
Q: Around the world, there are some countries where citizen journalism is the only free press, and in some where they have become mainstream. Will there be network effects?
Jon: A lot of that journalism was crap to start with. Excellent journalism will win out, and it may professionalise professional journalism. 25 years ago, and I’m not against alcoholism, a lot of journalists just shouldn’t have been journalists. And there is a very sharp, exciting world there which will be made more vigourous by conspiring with the citizen, and I hope that the citizen will conspire with journalists for a long time to come.
Q: The idea that we need more creative ads reminds me of a lot of articles in the PR press. But the standard of advertising here is very high compared to the rest of the world. But the filtering of ads is increasing. Ads may go viral, but that’s because they’re funny not because they trust the brand or it has any credibility. Need ways of facilitating and building trust.
Ben: The point is very correct, there are brands to build. But the way that you build the brand is to make a
Q (me): Does fear of libel put people off?
Jon: Libel is an factor. Lawyers are now everywhere. 25 years ago you couldn’t tell who was the lawyer, now the newsroom is full of them. When I first started Snow-mailing, they didn’t think the lawyer would look at it, and then they started reading, now it has to go through a lawyer.
Emily: Judge in Yahoo! case recently said it doesn’t matter how many people could have seen it, but the fact that something is on the net is enough.
Ben: 80% of my daily work is anti-libel works. It’s the phone call at one am because a Nazi has posted something on the blog. It’s the thing that makes us sweat blood.
Jon: Going to have to sort out the libel laws. we can’t go on like this. This is not protecting anyone, it’s just fattening the lawyer.
Q: Question about astroturfing.
Ben: We know when people form other newsrooms are looking at our blog, when they are commenting. We don’t say so, but we know. So astroturfing is an easy way out, and but it will be exposed.