The conversation about what contributes to the success of online entities such as MySpace, del.icio.us, and YouTube, continues with Paul Boutin’s article ‘A grand unified theory of YouTube and MySpace’.
If its the only piece you read about this conversation, then I think it’s an appropriate argument - though I’m obviously trying to make this very post the only one worth looking at, if for nothing else, for it’s brevity.
Two key things to pull out is where in one place Boutin disagrees with the common opinion on the success factor of these sites, in that they have seen such success because of their “collaborative nature” and Boutin posits that it is because “They’re easy to use, and they don’t tell you what to do.”
The other is where Boutin suggests MySpace’s immense traffic numbers have something to do with its “puppylike accessibility”, and he agrees and quotes JJG (who wrote in BusinessWeek here) who said that the undesigned layout/format of the pages “sends a “we’re just like you” message to newcomers”. Boutin adds:
If tech builders want to hand the controls over to their users, shouldn’t they presume they haven’t thought of everything?
And he wraps up the article by giving us the secret to success:
The secret to success is to make everything one-button easy, then get out of the way.
Now I’m inclined to agree with Boutin, where he pulls together two very good points about design: Make it as easy as possible to use: no friction between the user and product. And 2, make it extremely accessible: completely relevant and meaningful to the user.
But his rules are only applicable to a certain kind of online entity, and so far limited to ones that have no hint of a business model. Besides selling ad space. So while the success of these sites has an immense amount to do with these things Boutin explains - what is going to happen when the need to create a profitable and sustainable revenue stream is forced upon these organic and overnight successes?
Flickr may have peaked in it’s numbers/traffic for now, but it has the advantage of a revenue stream paid by subscriptions (as well as advertising) that will fund further feature and product development to encourage new waves of adoption. Sure it’s not bootleg TV or homemade videos - but it already has a paying subscriber base and as we have all seen (in 2000) switching on pay-for services to what was once free, dramatically reduces further adoption and can drive all traffic to the next free and maybe even not-so-easy-to-use online entity.
So I’d like to add, that MySpace and YouTube’s success in maturing as online entities, now relies in their deliberate yet extremely sensitive integration of monetizing their services if they want to last anywhere nearly as long as Flickr or even Slate has.
Jason Kottke weighed in also here.
All true, but I think the business model problem is understated. YouTube is burning $1m/month in bandwidth and hosting, and survives only because of an up market. If it can’t get bought or develop a business model that works, it will just be Napster all over again (now on business model number 4 and increasingly desperate), not iTunes.
May 1st, 2006 at 7:46 pmIt strikes me that no matter how big the brand is, without the lifeline of a revenue stream that supports it, the brand can’t survive. And I think the danger is that these new collaborative/social ventures forget that its one thing to be free and an open playgrown, but it’s entirely different to be a paid-for service that has to keep on giving.
1m a month is outrageous - and surely adds up to more than the 11m in funding they’ve raised and any extra for special promotions or advertising.
I came across this blog post by Jason Calacanis.
May 3rd, 2006 at 9:16 amThe whole genre of ‘me-too’ community sites reminds me of a colleague I used to work with: he was obsessed with the ‘clockwork business’ - build it, wind it up and leave it to run without any intervention. I never understood how this kind of business could succeed without a subscription model of some sort - even in 1999, inward advertising revenue usually barely matched outward advertising spend.
I assume that the good people of YouTube are looking - doe-eyed and coy - at the VPs of the various traditional media groups (what *are* Havas buying nowadays?), busily looking up synonyms for ‘eyeballs’ to use in their pre-sale approach docs.
It’s an oddity of the web that (often) the companies that create the communities online are the least able to monetise them. I wonder if this is due - in part at least - to the fact that so many of these online community sponsor companies (Flickr, FriendsReunited and so on) present themselves as being *a part of* the community rather than the *owners of* the space in which the community exists; their attempts to monetise the community is then seen in the same light as the party host who suddenly starts charging their guests for the wine and cheese they’d previously enjoyed for free. There’d be an interesting academic survey on the use of the personal pronoun in web community sites - I wonder if YouTube, Flickr and delicious are going to regret writing in the friendly, chummy (and ultimately un-saleable) first-person.
* Life is too short to write de.li.ci.ou.s.or.wha.tev.ersi.lly.pun.ctua.t.ion they want me to use…
May 7th, 2006 at 1:54 amHmm - I am a little familiar with that ‘clockwork business’ model approach too. To push the metaphor a little further, I figured the success of such approaches relied on a product/service or brand that was as well built, reliable and useful as a Swiss watch. Invariably, these things rarely were and therefore never quite delivered on their potential.
I think you bring up an interesting question - does it make a difference to position yourself as part of the overall community or that you’re the owner of the community. Surely, online gaming doesn’t have this kind of problem? They can’t be the only ones on the planet.
I do think that the relationship changes when you ask for money and the silly thing to do is start a community without asking for it, pushing a free-for-all and we-love-everyone-equally story, to suddenly create hierarchy and walls to do so.
Do you see the possible future where (specifically in their case:) Flickr and delicious (… put them in yourself) actually just become Yahoo! and therefore putting an end to their overtly pronoun-led positioning? Lending a little to your concept that it’s hard to encourage monetizing such a friendly, first-person relationship, and recruit more eyeballs?
Thanks for commenting.
May 8th, 2006 at 9:44 amHeh. That response made me laugh out loud.
I think that maybe the ‘new companies’ of Flickr, Delicious et al will meet a crunch point where the people-in-charge-of-the-cash-flow will demand that the eyeballs are monetised - and I’m just not convinced that the audiences of the social software sites will play ball. One problem is that - as the owner of ‘the space in which communities exist’ - your space is replicable by a thousand different companies. What is Flickr’s differentiator? The number of users or the relevance and portability of the Flickr brand? Well, I think it’s currently 50/50. But what happens when Flickr start charging everyone a rental fee of their ‘virtual space’? I think they’ll lose more than the 50% audience that business wisdom tells them they’ll lose.
Historically, landlords have profited because real estate is at a premium. When real estate is valued by traffic rather than location and quantified by gigs per month rather than pounds per acre, the power shifts more (tho’ not entirely, of course) toward the tenant. In the case of Flickr/YouTube/MySpace, I’m just not sure that the brand they’ve created by weight of numbers can survive when those numbers are able to relocate so easily and painlessly.
The cost of re-location in these examples is minimal - in many ways, I agree with your original article - all a YouTubeMeToo site has to do is cope with (a) re-coding of submitted videos and (b) an audience that provokes extreme peaks of traffic. These aren’t simple problems, but they’re certainly not insurmountable. The cost of entry is relatively low. That smells of a market where the first-mover advantage is slight at best.
On the other hand, the potential of these first-mover sites is real: my advice to Flickr et al would be to establish a relationship with a single existing brand which has some resonance with the existing (intended?) user group: at the moment, the aspirational value of the “YouTubeMeToo” companies is hugely limited: it shines during the exclusive “Invite a (maximum of 6) friends” stage, but as soon as everyone has the previously-coveted memb ership, the novelty quickly wanes. Marry Flickr to (say) Lomo and you have a whole different proposition - where membership = an expression of a ‘unique and inneresting” personality.
Of course, the choice of the brand relationship is difficult and fuzzy - but that’s where our favourite brand strategist make his big bucks…
May 8th, 2006 at 10:30 amThe headline of this post mentioned “Internet Hotties”. There was nary a mention, let alone an actual, Internet Hottie to be found in the post itself.
Color me disappointed.
June 12th, 2006 at 11:20 am