The Power of the Network = The Power of We

Why Media is the new business ecologyDavid Cushman, August, 2007

In this paper I aim to describe and explain the emerging new ecology, why it ishappening and what that means for the business of business.I’ll discuss the things that are failing – and try to explain why.And I’ll offer a solution.In the spirit in which it is written, I also offer you the chance to edit this paper. Intime it will become its own example of the power of we.So you will also find it available as a wiki here(http://scratchpad.wikia.com/wiki/Media_is_the_new_business) where you are atliberty to add to, enhance, grow or challenge.I will regularly copy the latest version to the location you discovered it at.

The Church of Brands: A metaphor for control

Once brands were Churches. The good people of the parish needed our guidance. We kept telling them they did, and they had nothing to challenge thatworld view against.We preached from the pulpit. There was no q&a. The flock would only read onebook – ours! We owned the means of producing and dissemminating all relevantsources of information.And because the people valued this and had faith in this, they came to us – intheir droves – and very regularly. They paid our way, too.So our Church became the place to be – the place to organise the socio-economic fabric of the community around – the marketplace, the entertainment,where we lived our lives.

(http://fasterfuture.blogspot.com/2007/07/church-of-brands-and-marketplace-of.html)The power of the Church was vested in its control of information. Along cameGutenburg and his pesky printing press – and centralised control of informationwas over.It meant alternative messages, and alternative texts. It meant information couldbe created – and shared - without the need to build a huge stone edifice or ahierarchical priesthood. The power of the Church was instantly diluted. Its rolechanged for ever.The result was the biggest shift in thought since writing was invented - an end tocentrally created and dispersed information as the only source of knowledge.

The result was an explosion in brilliance; a new era of creativity; a fast-forwardfor inventiveness right across the board. Critically, the people had discoverednew ways of creating trust. They learned they could have faith in the informationof others – not just of the Church.

Biggest change since records began…

Well… at least since the arrival of the printing press…The arrival of the internet – and latterly the lowering of the technical barriers of using the internet (blogs) is as big a change in information control as Gutenburg’sprinting press.Now everyone can be a publisher. And they can do it for free.And that would be a pretty radical shift if that was all there was to it. But it’s not –not by a long, long way.Books are a broadcast and, essentially, a mass media model.Blogs are networks of information and, essentially, serve niche communities.It’s not just that people can publish – they can also self-select the nichecommunities they wish to engage with.

http://fasterfuture.blogspot.com/2007/05/famous-for-15-people.html In the process of one blogger linking to the work of another, new value emerges,for example:1.Two-way flows of information.2.The creation of trust, validation and reputation

Decentralised, self-forming adhoc communities of interest4.Zero hierarchy or silo restrictions.Reed’s Law (1) states: (1)

heutilityof largenetworks, particularlysocial networks, canscale exponentiallywith the size of the network because the number of possible sub-groups of network participants is , where

is the number of participants. This grows much more rapidly than either thenumber of participants,

, or the number of possible pair connections,(which followsMetcalfe's law)so that even if the utility of groups available to be joined is very small on a per-group basis, eventually thenetwork effectof potential group membership candominate the overall economics of the system.When the power of the blog meets the power of the network, rarely-predictedvalues emerge – conferences get organised, advertising models get engaged,new products are made, new thinking is stimulated, new peer-to-peer models of engagement derive. And as quoted in the opening chapter of Wikinomics (2), inthe case of

Goldcorp Inc – it transformed a $100m gold mining company

into a $9bn one.

Put very simply, the arrival of a networked world means effective access to thethe wisdom of crowds. None of us is as clever as all of us.

The death of mass media

Mass media has little remaining purpose. It fitted an industrialised massproduction world. It served the needs of advertisers selling mass produced items.It assumed that one size fits all.No wonder response rates in mass media are falling – we fast-forward past theTV ads, we tune away when the radio ones play, we ‘stop seeing’ the banner adson websites, and advertisers themselves are wobbly about print because theycan’t directly measure the response.But in a world of disaggregated content (ie each element of content, if digitised,can be served separately, to each individual) the demand for huge numbers of eyeballs (a mass audience) seeing your content in order for huge numbers of eyeballs to see adverts, is over.100% ad efficiency is available in models such as google’s cost-per-action. I sellan item – I pay google.

The rise of the community

I've grown up with the 6pm and 10pm TV news. It's hard for me to imagine aworld without it. And perhaps there will always be enough common sharedinterest between people for this bastion of the broad to remain.Perhaps.Broadcast - and news aimed-at-all is part of that - works on the premise that

you can't please all of the people all of the time

. So you try to please as many as youcan, for as much of the time as you are able. That's broadcast, that's massmedia.But in a world of digitised, disaggregated content, the available response to anindividual's requirements means they can be pleased all of the time. Thenetworked model the internet provides means

all of the people can be pleased all of the time

.The question for media companies is: Where is the news team which can servethis long tail of individual demand?Answer: All around us - in the form of user generated content - communities of co-creators pulled together by their shared interests.So what we used to call news needs to be redefined: