Sunday, November 8, 2009

Meet the new boss, same as the old boss - Tara and Steven, the new middlemen may be worse than the old

It isn't often that I can call Steven Hodson a starry-eyed optimist, but I guess nobody's perfect.

Let's start at the beginning. Hodson was reading on the web, and he was inspired by something that Tara "miss rogue" Hunt wrote. Frankly, it's good to be inspired by Hunt, because she has an interesting and deep perspective on things.

Hodson was reading The Disintermediation Era. Now that is such a big word, but it hasn't quite been around since Richard the Third. (Sorry, had to do that; very old Human League song, if you're wondering.) But disintermediation means what it says. Here's a bit of what Hunt said:

There was a point not that long ago that the middle-man provided great value. The record companies brought music to the masses. The media created channels for the news to get through. The Blockbusters of the world housed thousands of movies for people to rent. Telephone companies laid the lines for us to connect with one another around the world.

But now these middle-men are our modern villains – using every desperate trick in the book to hold onto customers while we find creative ways to go around them, go straight to the source and sometimes just do it ourselves.

Hunt goes on to list the errors that the middlemen made, and then concludes:

And it’s only really beginning. We are at a turn. A shifting of an era. Entirely new business models were created during the Industrial era. These business models were created to help manage, distribute and promote to the masses. When everything was local, we did this through relationships. It was easy to manage on our own. But the internet allowed for inexpensive and simplified management, distribution and promotion for all. Farming these things out only makes sense if it truly brings value such as: convenience, money saving and peace of mind.

Hodson, after encouraging people to read Hunt's post, has a conclusion of his own:

As we discover new and better ways to bypass these dying middlemen and find a common ground with the content producers, the media creators, the product makers, we all will benefit and probably in ways we might not even grasp yet.

It’s no wonder the middlemen are scared shitless.

With all due respect to Hunt and Hodson, two people whom I respect and admire...they're wrong. And you only have to look at history to see what will happen next. Let me cite a few examples: France 1789. Russia 1918. Two cases in which many will argue that the revolution that did away with the old era ushered in a new era that was not better, but worse than the one before it. I'm sure that there are those that will add USA 1776 to my list above.

For a moment, let's assume that Hunt and Hodson are right in one aspect - the change in business climate is so dramatic that the old guard of businesses - the Tribunes, News Corps, and AOL Time Warners of the world - will simply wither away, like the Soviet Union did. I have my doubts about this, but I've been proven wrong before, and Hunt and Hodson may be on to something here.

But that does not necessarily mean that we are going to usher in a new era of direct connections and democratization and personal empowerment and all that.

Because, you see, the new middlemen are already here.

While it would be wonderful to assume that the emerging economy is intuitive, it is not. Tara, Steven, and I live in a cocoon of sorts, a world in which everyone understands how to navigate this new world. But most people do not live in such a world. Consider this: while we talk about the huge numbers of people on Facebook - 300 million, wow! - that simply means that there are, in the words of Carl Sagan, billions and billions of people who are NOT on Facebook.

Billions and billions of people who have not bought anything online.

Billions and billions of people who could not find a band website if their life depended on it.

But don't worry - while there are billions of people who don't know how to do these things, there are people who are more than willing to help them bridge the gap.

Let's dispense with the first group right off the bat - the SEO spammers. It's especially delicious to see people who claim to be able to get you large numbers of followers on Twitter...yet they don't have any followers themselves. It's obvious that they'll provide you with middleman services for a price, but the price is high compared to the services rendered.

Now there's a second group of people that I'd like to mention...and I count both Hunt and Hodson in that group. There are others that I'd put in that group, including Louis Gray, Robert Scoble, and Dave Winer. These are people who effectively act as middlemen (and Tara, I apologize for the sexism of the term) by guiding people through the maze of stuff that is going on around us. All five of the people that I mentioned, plus others, have blogs in which they provide their thoughts and advice to their readers at no charge. And they undeniably provide a valuable service. But if you want Robert Scoble or Tara Hunt to come speak at your function...there's a good chance that it's going to cost you. As well it should - these people have acquired a certain level of expertise, and they certainly should charge for their services.

The third group and the second group overlap, and you can argue about who belongs in which group. But my example for the third group is Jesse Stay. Yes, he blogs and provides advice for free - but Stay is in business to help people navigate the new environment. Perhaps you own a business, and you decide that you're going to set up shop on Facebook. You may ask yourself, "I'm on Facebook - now what?" Well, there's a book for that, and Stay co-authored it. Or maybe you want to use Twitter or Facebook effectively, but you need a tool to help you do that. Enter SocialToo, Stay's application that offers free services, but also has premium services for a price.

If you read the above paragraph closely, you should be able to pick out some of the members of the fourth group. These are the companies that were built to service this new economy...and to serve as the middlemen between people and enterprises. Facebook and Twitter are two of the platforms that are driving this new economy. (The links above don't go directly to the book or the application, but to the Facebook pages for the book and the application.) And if you want to make a direct connection with the Atmos Trio and buy their music, then you'll probably search for their website using a service from Google - or perhaps Microsoft. (I'll save you the search - But who hosts their website?)

Let's look at a personal example of all the middlemen I use every day. I use Google to blog and read, Facebook to farm, to listen to music. And to top it off, I use Verizon to get to all of those sites.

Now, I should be truthful and note that neither Hunt nor Hodson explicitly stated that middlemen were going to go away. But have we considered that the middlemen of the new era may be more tyrannical than the middlemen of the old age?

We complained about the three networks and their limitations - but what's going to happen if a content provider is induced to sign an exclusive deal with one phone manufacturer (Apple) - a manufacturer who has signed its own exclusive deals in this country with AT&T? (And I think the iPhone is exclusive to a single provider in Hunt-Hodsonland also.)

We complained about the RIAA and their ridiculous lawsuits - but what's going to happen when we decide that we want to hear the latest song from some indie sensation - and said indie sensation tells us to go shove it, she's not putting her songs on her website any more?

We complained about the Associated Press and the Wall Street Journal and everyone who puts up walls, and we awaited the day when "citizen journalists" would bring us the news directly. Well, I hate to break the news to you, folks - Barack Obama isn't going to grant exclusive interviewers to John Bredehoft, blogger. Or to Steven Hodson or Tara Hunt. Probably not to Robert Scoble or Michael Arrington. News depends upon information from newsmakers, and those newsmakers will continue to talk to only a few people - and those few people will be the ones who control the content that the rest of us will talk about.

Will these new "media elites" be more responsible than the old "media elites"? Again, we look to history. One can say that television news came of age in the 1950s and certainly the 1960s, but even then television was not as well respected as newspapers. If someone on television said something, people wouldn't consider it official until the New York Times or Washington Post chimed in. And lest we forget, both the Pentagon Papers and Watergate were broken by the newspapers, not television. In my opinion, it wasn't until the 1980s that television news was as well-respected as newspapers.

The above paragraph, of course, is a gross generalization. First off, there are gradations of television networks, just as there are gradations of newspapers and gradations of bloggers. I hardly expect the CW Network to contribute to the health care debate.

Second off, opinions on the credibility of various news sources varies widely. Is Fox News more truthful than MSNBC? Depends upon whom you ask. Did the New York Times and the Washington Post save the nation in the 1970s, or did they destroy it? Depends upon whom you ask. Is TechCrunch ethical? Depends upon whom you ask. And this extends beyond the media. Is "old guard" McCain better, or worse, than "new era" Obama? Depends upon whom you ask.

So, going back to my question, it's impossible to say that the new "media elites" - or, for that matter, the new middlemen - will be better or worse than the old ones. But I'm not expecting the coming years to usher in a utopia of democratization and personal empowerment. Someone will wield the power - we're just rearranging the chairs.

(Picture source, license)
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