Umair Haque / Bubblegeneration
umair haque  

 
 


Design principles for 21st century companies, markets, and economies. Foreword by Gary Hamel. Coming January 4th. Pre-order at Amazon.


 
Monday, July 25, 2005


Media 2.0, Preferences, and Strategy Decay

NYT piece about Spitzer ending Sony radio payola raises some interesting points..

A big part of Media 1.0's ongoing structural problems are of their own making. Most of you know centralized preference mechanisms (bestseller lists, radio playlists, etc) have been gamed for a looong time.

In the short term, obviously, you reap gains (equal to the value of the information asymmetry you've created). But in the long term, consumers aren't idiots. It becomes transparent that the information they're getting is gamed, and then you've got a big fat structural problem: a massive shift in consumer preferences, an inwards shift of the demand curve (ie, a loss of trust). Value creation isn't just minimized - value is destroyed, and, worse, stays destroyed for a looong time.

Now, this is interesting, because it's a straightforward reason for the sudden decline of traditional media, as the Net continues to cheapen the cost of accurate preference info.

How do we do this on the Net? Largely by leveraging the social: using things like collaborative filters (viz Amazon's rec system, last.fm, myweb). But of course, this begs a response from big media to begin gaming these mechanisms.

There's already quite a bit of evidence of minor-league gaming of Amazon's community. The point I really wanna make is that a huge tension to game communities is about to surface - and I think it's in nobody's interest to give in to it. That much, I think, is pretty clear from Media 1.0's experience gaming preference mechanisms...the inevitable result is (an epic case of) strategy decay.

-- umair // 11:22 PM // 0 comments


Comments:
Post a Comment
 

Recent Tweets







    input

    due diligence
    ventureblog
    a vc
    techblurbs
    tj's weblog
    venture chronicles
    terranova
    the big picture
    gigaom
    venchar
    bill burnham
    babak nivi
    n-c thoughts
    paidcontent
    techdirt
    slashdot
    london gsb
    mefi
    boingboing
    blort
    hardwax
    betalounge

    ing
    morgan
    chicago fed
    dallas fed
    ny fed
    imf
    world bank
    nouriel roubini

    portfolio
    contact

    mail.
    uhaque (dot) mba2003 (at) london (dot) edu

    skype.
    umair.haque

    atom feed

    technorati profile

    blog archives