Jun 062011

Aiming to add value by repackaging products and services is a dangerous game.  It can even lead you to the unconscionable crimes of plagiarism – crimes which no one is ever happy to commit, even when by accident (and the Lord only knows, in our multidimensional and hyperlinked worlds, how these are accidents just waiting to happen).

Some recent examples I think would be useful now.  Firstly, Fifa’s latest wheeze: employing “politicians, celebrities and former footballers” to clean up the mess that currently reigns (at which point I am minded to remember MPs’ expenses, irrelevant buckets of tittle-tattle galore and superinjunctions not a million miles away from the British Isles).  I’ve already discussed how salespeople and environments can prejudice bodies such as world football’s highest.  This is just another example of how those predisposed to melodramatic gestures run their businesses on the basis of inflating expectations, in the hope that future promises become concrete through the sleight-of-hand of marketing spiels.  As the Guardian report in question points out:

Fifa’s sponsors may have brought about the corporate governance rerforms. Adidas, which lavishes more than $40m a year on Fifa as its sportswear partner, was the first to speak out last week. Later Coca-Cola, Emirates and Visa also expressed their dismay.

“You live by the sword, you die by the sword” is the phrase that comes to my mind.

Meanwhile, another example of how the desire to make money out of repackaging what already exists can lead to unfortunate results has just reared its ugliest of heads once again:

A new private university college founded by the philosopher AC Grayling and staffed by celebrity professors will teach exactly the same syllabuses as the University of London, which charges half the price, it has emerged.

Students of the New College of the Humanities will pay £18,000 a year to take courses in history, English literature and philosophy that are already on offer at Birkbeck, Goldsmiths and Royal Holloway for £9,000 or less.

Academics complained that syllabuses listed on the New College website appeared to have been copied from the University of London’s own web pages in a move some said amounted to plagiarism.

And I can see quite plainly what is operating here.

And it’s not a million miles away from Fifa.

I was once contracted to give ESL classes in a private university someone who claimed to be my friend set up with a group of individuals I later refused to touch with a bargepole.  This business proposition had little to do with wanting to educate people – rather, what fascinated the group of businesspeople I mention was the following very simple idea: heavy start-up costs in the first year, double the number of students for the same infrastructure in the second, captive markets in the third, exponential growth in the fourth – the sky, indeed, would then be the limit they promised to anyone who cared to listen.

It seems to me that the New College of Humility (not) is making the same foolish assumptions.  And committing the same mistakes I describe above.

Incidentally, the private university I worked at for a while eventually closed down under the weight of its own contradictions.  As this tweet pointed out yesterday:

A university is what a college becomes when the faculty loses interest in the students :).

Repackaging is all well and good – but when it leads to plagiarism (and, as I have already pointed out, this now so easily takes place) it is hubris clearly squared. 

A final thought – and we come back to Internet freedoms.  Charlie Booker has a piece going the rounds at the moment, also on the Guardian, which seems to berate us for not wanting to pay for anything we stumble across through our PCs.  Thus he argues:

Anyhow. I’m not claiming five quid a month is insignificant: it’s more than many can afford. But in this case it’s bloody cheap for what it gets you. The problem for Spotify is that no one wants to pay for anything they access via a computer – and when they do, there’s a permanent level of resentment bubbling just under the surface. Hence the anger about “only” getting 10 hours of free music.

Look at the App Store. Read the reviews of novelty games costing 59p. Lots of slaggings – which is fair enough when you’re actively warning other users not to bother shelling out for something substandard. But they often don’t stop there. In some cases, people insist the developers should be jailed for fraud, just because there weren’t enough levels for their liking. I once read an absolutely scathing one-star review in which the author bitterly complained that a game had only kept them entertained for four hours.


And so we see, as is often the case, that a commenter provides a far more succinct explanation than the original post of why Internet monetisation is fraught with so many pitfalls:

 @muggwhump Actually the internet already sits behind a paywall, it’s called your ISP.

It’s not that we’re not prepared to pay for anything on the Internet, Charlie.  It’s that we’re not prepared to pay any more.

As I pointed out a while ago at a different place:

Distribution was always the key to making money in publishing – always will be. In a world where the content is neither printed nor physically moved from one place to another but replicates itself as if by magic through downloads that allow access from virtually anywhere to virtually anywhere, there will always be money to be made somewhere along the process. It just so happens that this place will shift from time to time, as technology evolves, as consumer habits change, as the hierarchy between consumers and producers modulates. Amazon’s Kindle shows us that the wonder of sitting in a neighbourhood coffee bar and downloading – on impulse – a book you’d really love to get your hands on actually works. Translate this opportunistic way of purchasing content to the field of newspapers and I’m sure we’d see an about-face in the world of journalism.

I’m paying not for the content itself but for the communication channel that allows me to access it. That’s the mad thing about this. We perceive an added value we are prepared to pay for in a multi-product provider like Sky or the phone operators; an added value we no longer perceive in the content itself that they piggyback off. I’m happily paying £20 a month for 600 minutes and free Internet on my mobile. I know plenty of people who pay £40 or more for their cable and satellite television.

These days we’re absolutely used to paying for the access; we’re not looking any more to pay for the films or articles themselves.

So it all depends on how you bill it. Bill your online subscription to all the major newspapers as part of your Internet deal and no one will notice the difference. The papers will then have a business to business relationship with their distributors. Direct customers will be kept at an arm’s length.

It has to be in the interest of the service providers to keep the content providers on their feet – without decent content, people will simply move on to other, greener, pastures.

If people get greedy, if the distributors insist on taking a greater percentage of the (now available) cake than is their due, which is what is happening at the moment (all that money flooding into the coffers of the ISPs, all that money flooding out of the war chests of the big newspaper and magazine publishers), the authors and editors will simply disappear.

This relationship, often hard-nosed and bordering on the pig-headed, has been true of publishing throughout its history.

It’s not going to change now, not even in a digital world.

Digital worlds, for all their differences, are still analogous worlds – even where they are not analogical.

In conclusion, then: those of you who wish to add a potentially spurious value through a simple repackaging of existing tools, services and products should be very careful of savvy producer-consumers who know the true cost of all things these days.

Jun 012011

I wonder if there aren’t any similarities between what is happening to Fifa at the moment and what happened to the banks – and by extension the rest of us – three years or so ago

It’s been reported that a number of high-profile sponsors are expressing their reservations about the allegations, even as those at the very top of the organisation deny there is anything critical going on.  We have, therefore, yet again a situation where a massive infrastructure run by the very biggest money on the planet shies away from what appear to be self-evident truths.  The parallels between what took place during the almost-financial-meltdown of 2008 and the current situation in world football could not be closer.

So why is this?  A simple answer exists: where money believes that there is future in a sales pitch, sales pitches and their mindscapes will – in any organisation – end up ruling over proper risk management. 

In a sense, the high-level sponsors only have themselves to blame.  They make money out of the dreams and aspirations of hundreds of millions across the globe – how can they honestly criticise Fifa for doing precisely the same thing? 

Dreams and aspirations are beautiful things when tied to individuals and their families.  They do, however, become dirty button-pushing mechanisms of control when they are multiplied by big money for its own ends.  The credit crunch came about through a systemic understanding that the service sector of complex financial products was worth more – that is to say, added more value – to the economy than the manufacturing bases on which they parasitically operated.  And Fifa’s own credit crunch – that moment when its powerful image became a Berlin Wall-like puff pastry of a structure – is a straightforward consequence of a business built on the tricks of marketing.

Fifa is, in fact, a futures market – just like any other.

And that’s the real problem: it’s just like any other.