Web 2.0: Who controls the 'conversations'?

John Battelle dives into his promised Part II of 'Packaged Goods Media v. Conversational Media' pointing to my analysis of his Part I: In stark contrast with Battelle, I believe 'Digital media is not in inexorable conflict with traditional IP.'

John Battelle dives into his promised Part II of “Packaged Goods Media (PGM)  v. Conversational Media (CM)” pointing to my analysis of his Part I: “Web 2.0: Who needs business models?


In stark contrast with Battelle’s pronouncements, I put forth that “Digital media is not in inexorable conflict with traditional IP.”


It is, in fact, a good thing that executives in charge of interactive initiatives seek to leverage all of the IP assets of the corporate parent, just as executives in charge of a corporation’s “traditional” media assets should seek to leverage all of the IP of the corporate parent, including digital assets, I underscored:


Online or off, digital or traditional, ownership and control of IP, distribution, advertising and subscription are shareholder-focused operating principles. At the end of the Web 2.0 day, the corporate shareholders are in control, not non-paying users.


Battelle, however, continues to assert a fundamental “conflict” between old and new media, suggesting the Web 2.0 “users are in control” mantra forces traditional media companies to act in “unnatural” ways:


If you have a major company based on PGM, succeeding in the world of CM is going to be exceedingly difficult, because it forces you to embrace entirely unnatural acts. Not owning or controlling the content? Not owning or controlling the audience? Not having total control of your advertising and subscription revenue? Impossible! 




Battelle underestimates the ability of others to “get it,” as I put forth in my Part I: 


Battelle uses the recent departures of interactive execs from AOL, Fox Interactive Media and CBS Digtial Media, to support his theory that not only don’t stodgy corporate parents “get it,” they are deliberately sabotaging future interactive riches by retrenching into their “old media” cocoons.


Wired John Web 2.0 Battelle has traversed from old media to new and back again, with flying, and profitable, colors. Battelle puts forth, however, that the titans of Time Warner, News Corp. and CBS, have tunnel old media vision, incapable of grasping what he deems to be “radically different economic and business models” in new media. 


Contrary to Battelle’s beliefs, his three “unassailable” corporate pillars--or sound business practice--of old media are not “unnatural” to new media:


1. Ownership or control of Intellectual Property by the corporation.

2. Ownership or control of expensive distribution networks.

3. Established business models based on highly evolved approaches to advertising and subscription models.




Controlling Content


Battelle suggests new media companies are not “controlling the content”; I submit that Google’s YouTube controls all of the content of others that is uploaded toYouTube:


By submitting the User Submissions to YouTube, you hereby grant YouTube a worldwide, non-exclusive, royalty-free, sublicenseable and transferable license to use, reproduce, distribute, prepare derivative works of, display, and perform the User Submissions in connection with the YouTube Website and YouTube's (and its successor's) business, including without limitation for promoting and redistributing part or all of the YouTube Website (and derivative works thereof) in any media formats and through any media channels. You also hereby grant each user of the YouTube Website a non-exclusive license to access your User Submissions through the Website, and to use, reproduce, distribute, prepare derivative works of, display and perform such User Submissions...


YouTube does not permit copyright infringing activities and infringement of intellectual property rights on its Website, and YouTube will remove all Content and User Submissions if properly notified that such Content or User Submission infringes on another's intellectual property rights. YouTube reserves the right to remove Content and User Submissions without prior notice. YouTube will also terminate a User's access to its Website, if they are determined to be a repeat infringer. A repeat infringer is a User who has been notified of infringing activity more than twice and/or has had a User Submission removed from the Website more than twice. YouTube also reserves the right to decide whether Content or a User Submission is appropriate and complies with these Terms of Service for violations other than copyright infringement and violations of intellectual property law, such as, but not limited to, pornography, obscene or defamatory material, or excessive length. YouTube may remove such User Submissions and/or terminate a User's access for uploading such material in violation of these Terms of Service at any time, without prior notice and at its sole discretion.


Owning Audience


Battelle suggests new media companies are not “owning” the audience. An audience can never be “owned,” old media or new; I submit new media social networks, nevertheless, do benefit from audience “lock-in,” as I put forth in “Web 2.0 ‘users in control’: Of who, and to what means?”: 


What power does a Facebook user have over the free-to-use site? The threat of packing up a personal profile and moving to a different free Web 2.0 social networking service.


Given the “maturity” of the market penetration of Facebook, however, an exodus seems unlikely due to several hurdles:


Entrenched scale of existing network,
Social capital invested in service,
School specific relationship,
Inability to move entire personal network,
Interia and resistance to effort required…


Web 2.0 non-paying “users are in control”? No more, and undoubtedly less, than old school paying customers. 


Controlling Revenues


Battelle suggests new media companies do not have “control” of their revenues; I submit MySpace, Facebook, even NBC, are “controlling” their free-to-the-user services in support of corporate revenue objectives, as I put forth in “MySpace, Facebook, NBC: Brands rule, not users” and “Can Google, Fox turn YouTube, MySpace buzz into cash?”: 


But are users really in control at MySpace, Facebook, YouTube, Digg…?


MySpace’s user profiles certainly look as if the users are in control. Each of MySpace’s 100 million plus “friends” Web pages reflect Tom Anderson’s founding philosophies:  anything goes and everyone is my friend.


The individual free-wheeling MySpace profiles, however, are not where MySpace’s value resides, except in aggregate.


John Trimble, SVP Branded Sales, FOX Interactive Media, says that MySpace is where the “sizzle” is and puts the “best” MySpace face forward, a sanitized one; Trimble offers that MySpace conveniently offers “protected areas” within MySpace to provide marketers with a “trusted environment.” Trimble cites the MySpace homepage and brand sponsored sections underscoring there are areas in the site that "are not fully user generated."


Facebook is also leveraging professionally produced, mainstream, branded content as a lucrative sponsorship strategy, while out sourcing the text-ads it places against Facebooker created profiles.


In “Facebook on social media: ‘active sharing’ boon to brand marketers online,” I present Facebook’s message to brand marketers, you can “use your brand to define their brand” via Facebook “Sponsored Groups.” 


At Facebook, MySpace, YouTube… are users “in control,” or are users being controlled by multi-million dollar corporate brand messages?


As I underscored yesterday vis a vis Time Magazine’s 2006 ‘Power to the People’ issue: WEB 2.0: ‘THE MEDIA’ STILL IN CONTROL