The Great American Meal

Here it is: the great American meal.  On a recent trip to Texas, I was served the meal which you can see in this photo.  I asked for “water” and was given what appears to be almost one litre (more than a quart) of water, filled with ice – for $.25.  I am not certain how many people have recently drunk a litre of cold water, but for most adults it is virtually impossible to do that … and eat.  It simply fills your stomache.  The Dr Pepper gives some scale.

The Great American Meal

Free: The Business Model

(I originally wrote this review article in 2009; as it is still relevant I am reprinting it here in an updated form.)

I am a great fan of Chris Anderson.  In July 2007 I presented a conference paper at the Australian and New Zealand Communications Association conference in Melbourne about it his book The Long Tail, where I analysed the Rural Health Education Foundation’s “long tail” effect of watching and listening to our programs online.

Anderson’s has a book entitled Free: The Future of a Radical Price.  As with The Long Tail, Anderson has done a great job at capturing a certain “cultural moment”, in terms of how we relate to information, entertainment and our connected world.  His basic concept is that if give people lots of real value free items, there are a number of business models that will allow you to make money.  Anderson summarises it thus in his book (page 3):

Therein lies the paradox of Free:  People are making lots of money charging nothing [Google being the prime example of this].  Not nothing for everything, but nothing for enough that we have essentially created an economy as big as a good-sized country around the price of $0.00.  How did this happen and where is it going?

In the Prologue of his book (pages 1 & 2), he points to the example of the Monty Python team:  claiming to be exasperated as to the amount of digital piracy of their programs, in November 2008 they posted lots of their high quality archival video material free on YouTube.  But they asked for:

…. something in return.  None of your drivelling, mindless comments.  Instead, we want you to click on the links, buy our movies & TV shows and soften our pain and disgust at being ripped off all these years.

And according to Anderson, they were wildly successful, with their DVDs climbing “to number  2 on Amazon’s Movies and TV best-sellers list, with increased sales of 23,000 percent”.

The point that Anderson is making is that providing free information and entertainment is the way the world now turns – having the “force of economic gravity”, and that organisations will need to adapt to make money off of the “free”.  Giving away lots of free samples will encourage purchase, provide training instead of selling software, sell merchandise and concert tickets and don’t worry about the free downloading of music, but instead charge for extras and add-ons and up-sells.  He makes the point that the difference between something which costs and something which is free is enormous, even if the cost is small.  An example:  Amazon’s offer of “free shipping” for orders greater than $25 (alas, not available in Australia, but that’s a whole other discussion) is wildly successful.

“Give a product away, and it can go viral”, Anderson writes.  I know this to be true.  At the Rural Health Education Foundation, where I have worked since early 2003, we give away large numbers of health and medical educational DVDs (about 23,000 in 2009/10 alone, and that was not an unusual year).  But when the Foundation offers the same product/s for sale at a price, even at extremely low prices, the orders fall away dramatically.  The business model of the Foundation is, interestingly, also based on “free”, although not the commercial model which Anderson discusses.  The model is to receive funding up front to produce and distribute the educational programs and then give as much of it away free as possible (with as little cost).  When the “free” is digital (Internet delivered) or via television (satellite or national broadcast), it’s pretty cheap to add lots of users – although in the Foundation’s experience it is not exactly zero:  there is a cost to free giveaways.

It is important to note that, like his “Long Tail” concept, Anderson builds directly on the work of others, updating it to the very current present and near future.  This sort of futurist writing – explaining what we have just done and are about to do, can be very exciting, and Anderson is a master of this, even if he is often so excited about his concepts that sometimes he sounds more like an evangelist than anything else.

The context here is important:  print editions of newspapers are disappearing in the USA, the Google search (and advertising) model is killing many of them (see the July 14, 2009 article by Peter Osnos entitled “What’s a Fair Share in the Age of Google?” at the Columbia Journalism Review or the Century Foundation (still current).  (Drawing on my work with the Rural Health Education Foundation, I presented a paper on new media business models in Brisbane in July 2009 at the Australian and New Zealand Communications Association conference.)

In his article, Osnos discusses the concept of “information wants to be free”, noting that it originally came from Stewart Brand – who said it at a computer programmer’s convention in 1984 and later detailed in his book 1987 The Media Lab: Inventing the Future, writing the following:

Information Wants To Be Free (note: capitals by the author).  Information also wants to be expensive.  Information wants to be free because it has become so cheap to distribute, copy and recombine – too cheap to meter.  It wants to be expensive because it can be immeasurably valuable to the recipient.  That tension will not go away.  It leads to endless wrenching debate about price, copyright, “intellectual property”, the moral rightness of casual distribution, because each round of new devices makes the tension worse, not better.

And remember this was written more than 22 years ago.

Esther Dyson (see http://www.edventure.com/ for her latest activities) was also another pioneer of thinking in this area, particularly with her December 1994 article (from Release 1.0) entitled “Intellectual Value” (available at Wired magazine archives).  Dyson wrote at the time:

Chief among the new rules is that ‘content is free’.  While not all content will be free, the new economic dynamic will operate as if it were.  In the world of the Net, content (including software) will serve as advertising for services such as support, aggregation, filtering, assembly and integration of content modules, or training customers in their use.

Discussing media and entertainment, she accurately predicted the rise of Google:

The payments to creators are most likely to come not from the viewers, readers, or listeners, but from advertisers….  The challenge for advertisers is to make sure that their advertising messages are inextricable from the content.

That was now seventeen ears ago.  Like Brand, she too was an early evangelist.  And her predictions were wildly optimistic:  they were not wrong, just way too early.  As Nobel Prize winner Paul Krugman pointed out in the New York Times on June 6, 2008:

The predictions of ’90s technology gurus are coming true more slowly than enthusiasts expected – but the future they envisioned is still on the march.  In 1994, one of those gurus, Esther Dyson, made a striking prediction: that the ease with which digital content can be copied and disseminated would eventually force businesses to sell the results of creative activity cheaply, or even give it away. Whatever the product – software, books, music, movies – the cost of creation would have to be recouped indirectly:  businesses would have to ‘distribute intellectual property free in order to sell services and relationships.’

There is an interesting rule here:  the predictions of “technology boosters” (Dyson, Brand et al) are almost always overly optimistic (has broadband reached all of rural Australia yet?), but most do come good … eventually, however only if you wait long enough.

Mark Cuban has an interesting (July 5, 2009) blog post on the topic of “Free” entitled “When you succeed with Free, you are going to die by Free”, where he points out that “The problem with companies who have built their business around free is that it is far from free to remain successful.”

Cuban’s point is that the more success there is, the harder it will be to stay on top.  All “freemium based content plays” will have a company that replaces them, their “Black Swan” (from the Nassim Nicholas Taleb book of the same name) competitor that will appear and replace them:  Myspace to Facebook, even Google:

We don’t know who their Black Swan company will be.  But we all know it will happen don’t we?  The only question is when.  Of course Google knows it as well.  Which is exactly why they invest in everything and anything they possibly can that they believe can create another business they can depend on in the future.

Do you think Cuban is wrong?  Remember AOL (also known as America Online)?  Some years back it was so big it bought Time Warner, movies and all.  And where is AOL now?

Reportedly, Anderson’s book Free also made The New York Times list.  And Anderson truly “puts his money where his mouth is” (as they say) – offering it, as they say, totally FREE, through SCRIBD.  According to Anderson, by late July 2009 the free digital version had already been downloaded “between 200,000 and 300,000 times”.  And yet people were buying it as well, helping Anderson to prove his point that “free” can be an effective business model.

By the way, Free is NOT available “free” in print form for those of us who live in Australia – and presumably in most other places outside the USA.  Back in July 2009 I went to the “Free” download page on SCRIBD and was given the following message:  “Sorry, this content is geographically restricted.  Due to our agreements with our publishing partners, the document you requested is only available to users located in the United States.”  So “Free” is not necessarily … free after all.  It was also offered free for a brief period on Amazon’s Kindle (not available in Australia at that time), Sony Reader and iTunes.  You could, however, download the audio book free (I did this, so it works, note 285 MB zip file – not an insignficant file size) by going to Wired magazine of 17 July 2009.  As far as I can tell, as of this writing (19 May 2011), there is still no preview available on Google books.

By the way, SCRIBD has a little sting to its website tail.  Once you are on it, the site will not let you go back to your previous website if it was in the same browser window.  It’s irritating.  So open a new window every time you go there.  You’ve been warned.

Broadband in Australia part 1

Here we go.  I live in an upper middle class suburb of Sydney and recent upgraded my ADSL Telstra service, technically to 20 megabits/second (mbs).  Except, guess what:  the Telstra people tell me that because of my distance from the nearest Telstra exchange I won’t be able to get more than about 6 mbs.  My modem tells me we are running about 5.1mbs and one of those websites that tells you the speed of your connection comes in at about 4.5mbs.  That’s the best we can expect.  We have fibre running past our home, but that’s our limit.  So much for the fast networked digital economy in Australia.  We have an awfully long way to go, so don’t expect that new digital frontier of unlimited downloads and the Internet replacing the TV (see previous post) to arrive any time soon.

There’s an elephant in the room … Mel Gibson

The new Jodie Foster film, The Beaver, starring Mel Gibson has recently opened in the USA (early May 2011), and reportedly is one good film indeed.

Part of the discussion is all about Mel Gibson.  Back in February, it was reported that the film’s opening was being delayed from March 23rd (and indeed from late 2010), on a “backburner when Gibson became embroiled in a nasty domestic dispute with his ex-girlfriend.”

Writing for the Boston Globe (May 1st), Ty Burr starts his article thus:

There’s an elephant in the room and its name is Mel Gibson.  The elephant is travelling everywhere with Jodie Foster these days…. The only thing weirder than the film’s plot is the public firestorm around her star’s offscreen behaviour.

It seems no one can write about the film without writing about Gibson’s trials and tribulations: Rex Reed’s New York Observer article (May 3rd) is entitled “Could The Beaver Resurrect Mel Gibson?” and starts off:

Watching Mel Gibson’s relentlessly reckless self-destruction has been about as much fun as standing by helplessly, observing a truck jackknife on a crowded turnpike.  This is what it must have been like in the old days, when Fatty Arbuckle ruined his career with a Coke bottle and Frances Farmer went from Cary Grant’s leading lady to being dragged, kicking and handcuffed, to the insane asylum.  If Mr.Gibson has any fans left, now’s the time for them to rally. The occasion is The Beaver, a brave and unusual film directed by his longtime friend Jodie Foster, and a good reason for his defense team to say, “I told you so.”

Heavy stuff, being compared with Fatty Arbuckle and Francis Farmer.

The Beaver is not slated to open in Australia until July 21st.  More that film and the Mel Gibson controversy closer to the Australian release date.

Number of TV sets falls in USA

On May 3rd of this year, Brian Stelter reported in The New York Times that the number of homes in the USA with television sets has dropped – for the first time in 20 years.  Using figures supplied by the Nielsen Company, it was reported that 96.7 percent of American households now have TV sets, compared to 98.9 percent previously.  Nielsen gives two reasons for this decline: some low-income households cannot afford the new digital TVs, and some young people “who have grown up with laptops in their hands instead of remote controls are opting not to buy TV sets when they graduate from college or enter the workforce.”

The latest Australian figures (from Screen Australia) are that “more than 99 percent of Australian metropolitan households had one or more television sets, 68 per cent had two or more, and 31 per cent had three or more.”  But it will be interesting to see whether or not this phenomenon is replicated here.  I suspect that eventually it will, although it will probably be the latter reason (the young) and almost certainly not the former – and may take a few years to manifest, as our broadband speeds (and costs) are not simply what people can use to replace TV with … yet.  The Australian Government’s recent announcement (in the context of the Budget earlier this month) that it will provide digital set top boxes for the elderly to transfer over to digital TV will certainly ease the less technologically proficient – many of them not very well off – into the new digital TV age.  This certainly does not happen in the USA.  Click here for a recent (May 18th) Sydney Morning Herald article defending the Government’s decision.

Lonely Planet Melbourne jobs go

Most international travellers are familiar with the Lonely Planet guidebooks series, and some read nothing but.  We in Australia were also rightly proud that it was founded by two Australians in 1972 – Tony and Maureen Wheeler – and has been headquartered in Melbourne ever since.  In October 2007, the company was purchased by BBC Worldwide, the commercial arm of the British Broadcasting Corporation.

And this past week, that Melbourne headquarters continuation has been thrown into real uncertainty, with the announcement on May 13th that the online division would be moving to London.  Lonely Planet’s chief executive, Matt Goldberg, reportedly told the Sydney Morning Herald that “the strong Australian dollar” was one reason for the move.  One (anonymous) staff member was quoted as saying that:

The relocation is a surprise, but it was fairly clear there were going to be some fairly savage cuts.  I’ve had the feeling that the BBC has been wanting to move the online publishing side of things to London anyway, and maybe they were just waiting for an excuse.

Just wait for it.  How long will it be before the rest of the headquarters is moved to London?  The high Australian dollar reason seems pretty obscure.  Have you been to London lately and seen how expensive things are there?  And all of this provides resonance of the never-really-gone “bad old days” when British publishers ruled Australia like the fiefdom they have always regarded it as being.  Truly, the BBC – a national broadcaster – is behaving like any commercial publisher.  Watch out, Australia.

And here’s the thing:  If I were the Wheelers back in 2007, would I have also sold my company to the BBC?  Chances are I would have, too.

Sidney Lumet obituary

The following obituary on Sidney Lumet was published in the Australian Jewish News on 21 April 2011.

With this month’s passing of Sidney Lumet at age 86, the world has lost one of the greatest Jewish film-makers. Lumet was born in Philadelphia on June 25, 1924 to Yiddish theatre actor Baruch Lumet and his wife, dancer Eugenia Wermus, and moved to New York when he was four, making that city his primary home for the rest of his life. Like Woody Allen, he avoided working in Los Angeles, and was famously quoted as saying “I don’t feel organic life there”.

Lumet was married four times: to actress Rita Gam, heiress Gloria Vanderbilt, African-American journalist Gail Jones, and Mary Gimbel. Lumet had two daughters with Jones – who in turn was the daughter of famed singer Lena Horne. Daughter Jenny wrote the screenplay for the recent (2008) film Rachel Getting Married and appeared in some of her father’s films.

Lumet began his career as a child actor on the New York stage and radio in the 1930s, and had a big break in his adult acting career when he replaced Marlon Brando in Ben Hecht’s 1946 Zionist play A Flag is Born and later acted in the utopian Holocaust drama Seeds in the Wind. Lumet studied acting with Sanford Meisner, formed his own acting troupe, but later observed that had “I stayed in acting, the best I could hope for was getting the part of the little Jewish kid from Brooklyn who got shot down … and then Clark Gable would pick me up with tears in his eyes.”

Instead, Lumet turned to directing, and crafted directed some of the most notable films of the last fifty years, starting with 12 Angry Men in 1957, about a jury that is slowly swayed into changing its decision, and which Obama-appointed U.S. Supreme Court Justice Sonia Sotomayor cites as one of the reasons she decided to become a lawyer.

Lumet was well-known for being an “actor’s director”, and the actors who appeared in his films read like a “who’s who” of greatest twentieth century acting: Peter Finch, Faye Dunaway and Beatrice Straight all won Oscars for their performances in Network (1976), and Ingrid Bergman won her third Oscar for Murder on the Orient Express (1974). Acting Oscar nominations for Lumet films also include Al Pacino for Serpico and Dog Day Afternoon, Rod Steiger for The Pawnbroker, Paul Newman and James Mason for The Verdict, Jane Fonda for The Morning After and River Phoenix for Running on Empty.  Others who appeared in his films include Henry Fonda, Sophia Lauren, Marlon Brando, Joanne Woodward, Katherine Hepburn, Jason Robards, Walter Matthau, Sean Connery, George Segal, Jack Warden, Vanessa Redgrave, Omar Sharif, Anthony Perkins, Albert Finney, Lauren Bacall, Richard Burton, William Holden, Robert Duvall, Ned Beatty, Michael Caine, Anne Bancroft, Ron Silver, Richard Gere, Julie Christie, Gene Hackman, Jeff Bridges, Dustin Hoffman, Nick Nolte, Melanie Griffith, Andy García, Ian Holm, Lena Olin, Richard Dreyfuss, James Spader, Sharon Stone, George C. Scott, Glenn Close, Philip Seymour Hoffman and Albert Finney.

Lumet never had the sort of acclaim that many other directors have had (and remarkably little literature devoted to his work), in part because so many of his films have been adaptations and he has ranged so widely, working in theatre, television and film.  His films have also been so different, and – to the dismay of his many fans – maddeningly inconsistent in quality.  Unlike Woody Allen, Lumet never adopted an identifiable style or “signature” flourishes and never tried to create warm and likeable films, preferring gritty realism. He ascribed this to his Jewish background, telling an interviewer in 2007 that “Growing up Jewish — I lived in every borough but Staten Island — if I walked a few blocks one way or another into another neighborhood, I got beat up. So you learn to pay attention.”

Lumet kept returning to a number of favourite themes, particularly police dramas such as Serpico, Prince of the City and Q & A, although he did dabble with the black musical The Wiz, based on “The Wizard of Oz”. While Woody Allen’s films have been criticised for their almost total absence of blacks and Hispanics, Lumet’s films were filled with them.

In their 1993 book American-Jewish Filmmakers: Traditions and Trends (University of Illinois Press), film scholars David Desser and Lester D. Friedman declared Lumet to be one of the four most significant American-Jewish film-makers (along with Woody Allen, Mel Brooks and Paul Mazursky), and devoted a substantial essay to his Jewish work, entitled “The Memory of Guilt” – in other words, the Jewish injunction to remember. They termed his films “celluloid Haggadahs”. Lumet’s 1965 Holocaust drama The Pawnbroker was one of the most significant Jewish films of the 1960s, but remains controversial because of its supposed “universalising” of Jewish suffering (Lumet’s father Baruch appears in the film as Mendel, an elderly Jewish man). His film Daniel (1982), based on the Doctorow novel, told the story of Julius and Ethel Rosenberg. Close to Eden (also known as The Stranger Among Us, 1992) was a murder mystery set in New York’s Hasidic community. While Running on Empty (1988) had no explicit Jewish themes, the lead character played by Judd Hirsch – an American radical on the run from the authorities for “Weathermen”-type actions – was one of the most nuanced Jewish film characters of that decade. Lumet’s other significant Jewish film was the bittersweet Bye, Bye Braverman (1968), in which a quartet of New York Jewish intellectuals mourn their dead friend.

Although Lumet received four “Best Director” Oscar nominations, he never won and finally obtained a “Lifetime Achievement” Academy Award in 2005. His most recent film – Before the Devil Knows You’re Dead, a crime drama shot when he was aged 82 – was released in 2007 to extensive critical acclaim but limited box office.