How to Make Money with YouTube

This is a great story from Read, Write Web on how Sony, Amazon, iTunes and Google have taken a different approach to posting of copyrighted material in a mash up format.

A wedding video which in 2 weeks has over 13 million views using the song "Forever" as the soundtrack for the best wedding dance entrance I have ever seen.

Instead of having the video pulled read the link and see how they monetized it. Maybe this is part of what is to come.

Oh, here is the video...

New Measurements Show Online Growth Changing

A recent report from Universal McCann shows new trends in Internet usage.

Social networks are the big winners this time. Two thirds of all Internet Users spend time managing their online profiles.

96% of active social network users have visited their friends pages.

In the U. S. 60% of active Internet users are active managing their online profile - last years number was 43.2%

At the same time a new Forrester Report shows Internet usage leveling out.

As this reports notes, this is more about a saturated space maturing than - definitely not a decline in usage.

What does this mean? I am guessing it means that as more and more people get used to being online, they form habits and tend to use familiar sites more than exploring new sites. It also looks as if they like to have more general purpose sites like Facebook for activities they used to use single purpose sites such as Flickr for.

You think that means you should make your site or service a Facebook app?

Shatner, Palin, Poetry and Twitter

See the genius and power of Shatner - the beat poet. (Especially like the sandals in the Twitter poem)

Here is the first poem - Shatner's rendering of the Palin Farewell speech.

Here is the Twitter feed as beat poetry...

Looks like a great career move for Priceline Bill.

Posterous

Once again I have learned something new from Wayne Sutton. In this post on a site called Posterous .

As they say on their site - the dead simple place to post everything.

Here is my first post - just something to test the service with.

http://williduke.posterous.com/

No sign up. I emailed them a short note with the video as an attachment. Within less than a minute I had an email back with a link to my post.

Fascinating idea. Give it a try.

I just finished reading Louis Gray's post on Crunch Pad. Here is a short video on the prototype...

Do you think there is room for a tweener device? Between the full computer - laptop or desktop and phone or game device?

My wife likes my netbook. She calls it her iPhone because the screen is big enough for her to read.

I suppose the Crunch Pad could be your phone using Skype.

I don't see it as a Kindle on steroids - but I am not a Kindle user.

I will be interested to see if I am interested enough to try anything in this category. Now - if it were an embedded device in my head - then...

Airlines as a Business

This past week I had the pleasure of attending the High TECC Summit in Vail, Colorado. Then I had the displeasure of flying American Airlines back.

I mention American Airlines only because this was a specific flight, but my thinking here applies to all airlines and the industry as a whole.

Years ago I adopted the attitude that once I entered the airport everything about my trip was out of my hands. I took the attitude that I would never expect to arrive on time anywhere and only moderately expected to live.

This week I found I could no longer stay so emotionally unattached.

The flight from Denver to Dallas was delayed, but since I had two hours before my connection to my flight to RDU I had no issue.

We boarded on time for the RDU leg. I thought things were looking up.

Then we sat. And sat. And sat.

There were no weather problems. No mechanical problems. We were good to go. But we sat.

Finally the Captain told us we were waiting for about 15 folks on a flight that was late from San Francisco. He said it would be about 10 or 15 minutes.

I was OK with that. American has held flights for me for that long and I appreciated it. Plus, that much of a delay in departure is always easy to make up by flying faster.

We sat for 1 hour and 20 minutes.

So here is what American Airlines did - to make 15 customers happy they disappointed 60 customers.

No wonder they have money problems.

So I started thinking about this issue. I mean I don't think the folks at American are stupid. I do think they have lived in the airline culture so long they don't even see alternatives. Well, I do, so here they are for what they are worth.

Here is my quick list of public transportation industries:

1. Airlines
2. Buses
3. Ferries
4. Trains

Only airlines has this constant problem with on time.

I admit weather has a larger impact on airlines. But that is not the major cause of delays in my personal experience of 40 years of flying commercially.

The major cause may be overbooking of airport access - maybe.

Regardless here is my thinking.

I would be glad to pay a 50% surcharge for an airline that absolutely guaranteed on time departure. If I am late the doors are closed. Trains, buses and ferries do this all the time. Heck, it is the norm.

If the airport is closed, I will accept the delay.

But if the airport is busy I want my flight to have priority access to departure. The airline should pay more to the airport for this access - maybe 50% more.

I rarely fly first class because you still are on the same plane that was not on time. That is of almost no value to me.

I would always fly guaranteed on time. That is of great value to me and I will happily pay for it.

Plus, guaranteed on time is a true marketing differentiator. I have been in sales and marketing all my life. I could sell that difference in a heart beat.

I would also want a financial penalty to apply to the airline if it did not leave on time for any reason other than the airport being closed. Maybe a double my money back - and not crappy airline dollars but those real United States cash dollar bills kind of dollars.

So to recap, the airline increases it's cost, increases it's revenue, the airport increases it's revenue, I pay for a better value.

That is change I can believe in.

Oh, by the way - here is what American Airlines should have done.

They saw the options as making 15 people happy or making 60 people happy. They apparently never saw the option of making all the people happy. They should have let my flight leave on time and trotted out another plane and crew for the late crowd.

I can hear the hollering about the cost now. I can tell you for a certainty, the cost of providing terrible and inexcusable service to those of us who were held up for 1 hour and 20 minutes is many times the cost of the second plane and crew.

You can never save your way to growth and health. You have to make yourself worth more. I suppose the most common mission statement in the airline industry is "We are no worse than the other guy."

You reap what you sow.

The March of Technology

Fantastic video on the progression of information technology, researched by Karl Fisch, Scott McLeod, and Jeff Brenman, remixed.

What Will People Pay for?

Another benefit of reading Dan Bricklin’s recent post on New Interaction was finding the link to his post from July 11, 2000 titled What Will People Pay For?

With all the conversation about Chris Anderson’s new book Free, I thought a look back might add some interesting touchstones.

First, Dan didn’t think eCommerce was where the Internet was headed.

From 8 years later I would have to say eCommerce has done OK.

But he was very prescient in his next thinking…

“Look at how regular people use cellphones, especially if the cost is low like it is in many countries outside the USA. Listen to cab drivers with their own cellphones, bus drivers, mothers, kids, etc. They mainly talk to their friends and loved ones for very personal, mundane things. "I finally left the office, but traffic is light", "Yes, I can pick up a pizza on the way home", "I've got a free minute and thought I'd say hi", "Did you find it yet?", "Where are you?", "No, I didn't do it, I thought you were going to do it", "Well, tell him Daddy says no, too", "What's up? Wanna do something tonight?", etc.”

“People like to interact with people they care about. The interactions are often simple, but personally important. They are willing to pay money for this. That's why they pay for cellphones, for Internet access, and for postcards and postage, and for souvenirs. It gives them emotional satisfaction. They pay money to travel to visit family and friends.

I get an image in my head when I see people on the street having these simple interactions on the phone. It's that image of primates sitting next to each other grooming one another. Simple, kind interactions with the ones close to us are innate.

People also pay money for other forms of emotion that aren't through other people directly: listening to music, watching movies (usually with other people -- doing it alone with TV they won't pay for), seeing something beautiful or interesting.”

//Here Ends Quoting//

The Internet – MySpace, Facebook, Twitter, etc – made these things essentially free. This is Anderson’s premise. So Dan missed on paying for everyday interactions. But he did not miss at all in understanding this would be the primary value of the Internet. And where there is value, some folks will find ways to make some kind of business around that value.

The phone comparison is such a fine analogy for the additional reason that the telephone industry is in so delicate a balancing act of losing voice to VOIP but gaining Internet on mobile. Too bad newspapers, record companies and video content providers do not have semi monopolistic control of a distribution channel.

I suppose the challenge for Disney and Spielberg, CBS and FOX , The New York Times and the Statesville Record and Landmark, is to learn to compete with our family and friends and loved ones dominating our time and attention “for very personal, mundane things.”

Dan Bricklin and New Modes of Interaction

Dan Bricklin published a wonderfully thoughtful paper titled New Modes of Interaction. To best explain the post I will let his opening paragraph carry the load…

“Every decade or so there has been a change in interaction styles between computers and their users. This change impacts both what the user sees and what the programmer needs to do when architecting an application. This change is brought about by innovations in both hardware and software. At first, mainly new applications are created using this new style, but as time goes on and the style becomes dominant, even older applications need to be re-implemented in the new style.”

Dan is addressing most of the things that have been rolling around in my head for the past couple of years as I have begun to understand just how much of a watershed we are at in computing.

Dan focuses on the technologies in Microsoft’s Natal and Google Wave. But to me his list of “other technologies” is the jewel in this paper.

Here is his list…

1. Pervasive inclusion of webcams
2. Online video
3. Latency of responses using the Internet
4. Ubiquity of access to shared data during conversations
5. Screen size and number through price drops
6. Acceptance of gesture-based systems
7. Direct manipulation systems
8. Movement away from using a mouse
9. Real-time mixed streams
10. Tagging
11. Inexpensive disk and portable (flash) memory
12. Consumer-level installation of IT infrastructure
13. Notification in stream
14. Seamlessly move to mobile
15. Battery life
16. Mashups
17. Plug-ins and external APIs
18. The decline of paper (and not just the newspaper) - Rather than having paper as the ultimate destination, the screen is now the ultimate destination

This is a heck of a list.

Towards the end of the paper, Dan mentions that "social" is a driving force and that "social beats out the mechanical."

To avoid simply repeating the paper, I urge you to take the time to read it. It takes a while. But if you are involved in where computing is going this is a goldmine.

To be clear on my thinking, I do not believe the goldmine is yet in the PAUI interface of the Natal technology. I believe it will be, just not yet.

I do believe the immediate future – 1 to 5 years – is in the need to create systems that work the same on all devices, especially mobile, and that are based on working from a single source document.

My small effort to contribute a tool to this new generation is SehHey. The touchstones I am trying to build on are these…

1. A user is just a user is just a user. We are trying to build a tool based on people instead of documents and hierarchical structures.
2. Who do you want to share / work / interact with?
3. What do you want to share / work on / interact using?

Here is a 3 minute and 46 second video of where this effort is as of July 10, 2009. It is exciting to us. It has a ways to go. But what a thrill to be going.

You will notice another of our services in this video - Cap Dat ACORD. At the moment SehHey is an extension of this service. We will be breaking it out and creating API's to allow it to interact with any other system.

Thanks Dan for making me feel am not to far off.

Mark Lazen Thinks Facebook is Dying

A post from socialmediaschool from May made the claim the the Facebook Deathwatch has officially begun.

The basic point is Facebook is trying to be all things to all people and will fail as a result.

Mark Lazen does concede that Facebook will make tons of money while dying.

So if Facebook is making this grande mistake, what opportunities does that open up? What is the next big thing?

My personal opinion is that we are in the deathwatch for Microsoft, Google and Facebook. But we have been doing the same for IBM and General Motors for a long, long time.

Maybe The Who were right in My Generation - hope I die before I get old. But I think there is just too much money to be made during the death watches of these companies to worry to much about it.

More on Freemium

Since writing about the "free" business model yesterday I have spend extra time reading other bloggers thoughts.

Phil Wainewright has a good set of thoughts going over at ZDnet in his post Free is not a business model - thanks to Dan London - Dan-london.com - for making me aware of this post.

Wainewright notes there are three alternative revenue sources to charging your users directly.

1. Advertising
2. Freemium - my favorite
3. Syndication

He links to a post by Fred Wilson titled Freemium and Freeconomics - I have to be honest, it is nice to have a break from made up words based on Twitter, twisn't it.

Fred has some very interesting numbers on Facebooks revenues and sources of revenue. I quote his post...

"Earlier this week, we spoke to several sources who each have some insight into Facebook's financials (none of them know precisely). Taking the sources' input together, we'd estimate the company's expected 2009 revenue this way:

• $125 million from brand ads
• $150 million from Facebook's ad deal with Microsoft
• $75 million from virtual goods
• $200 million from self-service ads.

These numbers are similar enough to others that I have heard that I feel comfortable republishing them here. Facebook has 200mm+ monthly active users worldwide. Let's say they are doing $50mm per month in revenue. That's a revenue per monthly active user of $0.25. Low for sure, but enough to operate at breakeven."

This is an interesting look at revenue per user based on advertising.

To compare this to Freemium businesses of which I have a personal knowledge, they seem to have a monthly revenue per user of $1.00 to $5.00. This makes freemium much easier to run profitably at fewer than 200,000,000 users. It may be a better fit for the business that has a more niche focus and a limit of 100,000 to 1,000,000 total users.

Of course I feel the need to add a word of caution about start up times and cost. The source of high margins in online ventures is based on the relatively true statement that the marginal cost of each additional user is almost zero. The flip side of that is the cost of your first user is your total development and operating cost. It can take a significant period of time to attract an adequate number of even free users.

I have read the typical runway to this break even point should be planned as four years. My experience is your doing great if you get there in three years. It is possible with very strict attention to cost controls.

As a final comparison, in the pure software model where nothing is free - in a niche like property and casualty insurance, Applied Systems, an Insurnace Agency specific back office system - the average monthly revenue per user may be $100 to $250. This is a slower sales model, but each sale covers it's unique cost from day 1 - minus of course development and probably direct selling cost.

How is all this relevant if you make your money from selling things you can offer for free?Examples...

• Amazon with books
• An insurance agent with insurance policies
• A lawyer with legal advice

These are all products that have proven to be profitable online for many companies. I guess you can make money online without giving everything away for free afterall.

Maybe I should spend some time getting me some of that knowledge and understanding.

Free and Selling on Price

I have been following the media controversy - could it be manufactured ( how cynical have I become?) - surrounding the Chris Anderson book Free .

It is interesting, but what really interested me was the discussion of an experiment by M.I.T. behavioral economist Dan Ariely, the author of “Predictably Irrational.”

Here is the quote...

"Ariely offered a group of subjects a choice between two kinds of chocolate—Hershey’s Kisses, for one cent, and Lindt truffles, for fifteen cents. Three-quarters of the subjects chose the truffles. Then he redid the experiment, reducing the price of both chocolates by one cent. The Kisses were now free. What happened? The order of preference was reversed. Sixty-nine per cent of the subjects chose the Kisses. The price difference between the two chocolates was exactly the same, but that magic word “free” has the power to create a consumer stampede."

Why did 75% of the folks choose the more expensive option in the first case? Product differentiation?

Why did 31% continue to choose the paid for product in the second case?

Anderson's focus is on the different market once "free" is a price. Of course chocolates are not digital goods so offering them for a price of "free" changes the premise of Anderson argument to an extent.

The Internet - especially Google and Facebook - have made many of us think "free" is a new and wonderful business model. While it may be wonderful, it is certainly not new.

Still, what is most interesting to some one who wants to make money is what is it about the Lindt chocolates that made 31% decide to pay instead of taking the free alternative. Figure that out and I want to hear about it.

Web Side Story

Found through http://www.twitter.com/siegelagency

See more funny videos and funny pictures at CollegeHumor.

Truer than most might think.