To subscribe, or not to subscribe?

The late Frank Thring once voiced a radio ad for Melbourne’s famous radio station, Triple R, dragging out his vowels and consonants in a very “Thring-esque” manner: “Subscriiiiiiiiiibe to 3 Triple Rrrrrrrrrrrrrr or dieeeeee a mis-er-able deathhhhh!”. So many companies want us to subscribe to their services, but what’s in it for us anymore?

The advantages for companies can be broken down into three major elements. Firstly, they have revenue certainty over the subscription period. Most subscription services are based on a minimum time frame, six months, twelve months, two years at a fixed cost per month.

Secondly, they understand who their customers are (we often hand over a heap of details when we subscribe).

Finally, they’re also guaranteed higher revenues if they bundle – forcing us to buy a heap of editions / channels / products / services that we wouldn’t ordinarily buy if they were unbundled. This is one of the biggest advantages for these companies. For example, Pay TV makes us subscribe to various channels in packages, even if it’s just a handful of shows we’re actually interested in. We might not buy a newspaper seven days a week, but subscriptions guarantee that we get the newspaper 7 days a week.

The past reasoning for bundling was that the cost of transmitting a single TV show to a single person would be so expensive as to make it a ridiculously low value proposition for the customer. If billions of dollars of pay TV infrastructure, satellites and digital set top boxes solely consisted to deliver four Collingwood matches and “On The Couch” just to me every month, it would be economically unfeasible. However, to amortise the cost across one hundred channels bundled up and sold to millions of Australians, then it makes more sense for all parties (although four Collingwood matches and “On The Couch” is the only good content on Foxtel). Similarly, I might only be interested in a single section of a newspaper, but the act of unbundling and offering for sale, for example, HiT or EG alone would be economically unfeasible for News Limited and Fairfax respectively.

Digital platforms are forcing content, products and services to unbundle. Let me describe it with an example from the music industry. Albums were the ultimate “bundle”. To get access to the three hit singles, you had to buy the full album, including filler. Record companies would “delete” the physical single after a period of time to ensure sales of the album were guaranteed, and demand for the brand/band was high, versus demand for the single product. iTunes commercialised (and legitimised) the unbundling of content by allowing people to buy individual singles from an artist at any time, and have them digitally delivered instantly. Even the lesser tracks on an album, those that weren’t economically viable from a production and marketing perspective, are now viable. The costs of distribution are almost negligible. Digital has obviously changed the business model.

Now, many other organisations are bypassing collectivism and distributing content, products and services through their own channels / platforms, at marginal cost. The iPad is one such supporting platform. So who will suffer, and who will gain?

Middle men will suffer. Content aggregators that act to simply distribute via a lowest cost business model, will thrive. Organisations who attempt to add value through elaborate, high overhead marketing and fixed distribution (like current record companies, book publishing houses and department stores) will suffer as they will attract less willing suppliers (who won’t be sold on their benefit) and less customers (who won’t be convinced to pay a premium).

Consumers will benefit. Amen.

The Viral Plague – Why "viral" videos are a waste of time and money

The Virus of Viral
A new, virulent plague has afflicted communications agencies and marketing departments all over the world; one that’s based on the flimsy notion that consumers can’t wait to latch onto branded content and share it with their friends.

In fact, there seems to be a prevailing thought that some sort of “consumer sharing pipeline” exists, all of them eagerly awaiting for their weekly dose of “Old Spice”. Do people really sit around on a Friday afternoon, scouring the interwebz, looking for a corporate video to fulfil their obligations and scratch the “viral” itch for the week?

Realistically, we know it’s not true. Despite all the chat about social creativity or shareability, sharing is something people do for two reasons alone:

  1. To benefit their friends
  2. To make themselves appear smarter/funnier to their friends

Just because your company thinks it’s important, it doesn’t make it true for most consumers. YouTube is littered with the detritus of agency and client attempts to create “virals” that have gone miserably – and expensively – wrong as a result of ignoring these fundamental principles.

Sharing is good
Sharing is a core part of the human existence. Socialising and discussing information and ideas can be mutually beneficial, while improving the welfare of our friends has a strong intrinsic value, and may also have the beneficial side effect that our friends start thinking better of us. Increasing the esteem we’re held in may act as the major motivator to share for some people, but is often merely the unintended benefit of sharing.

The two criteria listed above should be used to test the appropriateness of the content created by communications agencies and marketing departments. Ultimately, if they want their message to be shared, companies must provide content that adds value. That’s important not just because they want it to be, but important because it really is genuinely “arousing”: interesting, emotional, rational, relevant and salient. Or just laugh-your-arse-off funny.

Hurdles to Sharing
In order to create content that people will actually share, it must at least be objectively brilliant, and should also satisfy all of these criteria:

  • Access – The content must be extremely simple to access
  • Consumption – It must be very easy to consume
  • Comprehension – It must be self-contained and easy to understand
  • Benefit of sharing – It must be beneficial to my friends and/or make me look better
  • Cost of sharing – weighing up the ease of sharing against the benefits of going through with it. It should be ‘worth it’.
  • Currency – It must be new – or at least carry the high likelihood that it is fresh to the receiver / future receivers
  • Perceived benefit of receiving – when the person receiving it thinks it’ll be good, they’re more likely to investigate it
  • When they benefit and/or think better of you because of it
  • When they think their friends will benefit and/or think better of them by passing it on themselves

The Long Tale
Even if it’s great, it doesn’t mean it’ll be rapidly shared. Viral is an outcome, not a strategy. There are many excellent examples of brand information and other video storytelling that aren’t “viral”. Good content that’s well executed and is always there, always on, always accessible, will always be viewed, slowly but surely. This kind of content simply makes sense. It’s an effective way of extending communications across media; less about the short term-high burn, and more about the “long tale” of storytelling over time – where a single YouTube video can achieve reach and be of benefit for years to come.

As an industry, we need to stop getting over-excited by the lure of free distribution and rapid spikes in viewers and realise that, just like any other medium, social media has costs. Only then might we be cured of this epidemic.