[This post was originally published by HBR blogs on 8th October 2012]
When the band, the xx, wanted to promote their latest album they chose a unique marketing strategy. Consistent with many artists today they released their album as an online stream before the general digital and physical release a week or so later. But how they did it was new: they released the stream to just one fan, gave them tools to share it with friends, and took a leap of faith it would spread.
According to the Guardian newspaper having selected their Fan Zero, the xx waited a nervous hour while Fan Zero kept the work to themselves. But then it was shared, and from that point quickly moved around the world with millions listening in. This is what the xx had hoped would happen — so much so that they got Microsoft to sponsor and build a website that showed in real time how the sharing evolved.
The xx’s strategy represents a new extreme of a old strategy. Many information or content providers, as I’ll term them, see themselves as the Node Zero in marketing their content. A book publisher, for example, puts out a book and then manages who receives copies. Film distributors want to control who sees movies, and herds viewers into theaters. In each case, the content providers are happy for others to communicate how wonderful a book or movie is, but word of mouth is as far as it goes. Want to follow up that enthusiasm with the actual content? Too bad, you have to go back through Node Zero. That kind of friction can be enough to dampen enthusiasm.
Friction matter when it comes to user-to-user referrals. One such friction is, of course, price. It was for that reason that so many have taken Stewart Brand’s 1984 notion that “information wants to be free” to heart. It is easy to recommend a book, song, or movie to a friend when they don’t have to do anything to access it and you don’t have to worry about whether they can spare the money. But giving something away would force content providers to relinquish their role as Node Zero, something conservative content providers are reluctant to do. If sharing equals free, then it’s reasonable for providers to take a pass (as they have).
The good news is that, with a little imagination and some clear-headed economic thinking, you can see that sharing is not the same thing as free. When information is expensive, a recommendation from a friend carries more weight. Here’s why. Even free information still faces a battle for attention, so a strong recommendation may matter more than a casual one. To really matter, recommendations from friends need a little hurdle to be meaningful.
This is the same reason that it matters when authors go through mainstream publishers who have to actively choose what content to invest in. Since these publishers opt not to publish everything, their choice of what to publish tells the market something about quality.
But once a friend wants to make a recommendation and has decided something is worthy of your attention, he or she does not want more frictions in the way. Getting out a credit card can be costly as can dealing with digital rights management or device specific content. Your friend and you want to spend your time and attention consuming the information not dealing with other stuff. And that means the publisher has to step back from being Node Zero. Information wants to be shared and giving it what it wants makes it more valuable.
Imaginative ideas as to how information providers can embrace sharing while still getting paid are emerging. With respect to music and video, Cory Doctorow has envisaged ISPs paying content providers when their users actually consume content while allowing those users to share freely. With an open platform, ISPs will be able to charge consumers more for their entire service. With respect to the news, the New York Times was careful not to lock shared stories behind its paywall. See an item from someone you follow on Twitter and you don’t have to decide if it’s click worthy, you can just click away.
There are also opportunities for book publishers. They are increasingly opting for DRM free models to avoid readers being locked into devices (HBR Press being the latest example). But there is even more opportunity there when thinking about novel ways of pricing. As I suggested sometime ago, publishers may offer a different price for books that can be easily shared (something HBR will be doing for my latest book, which explores these topics more fully).
More experiments and successes (like those of the xx) will emerge as content providers turn away from seeing themselves as Node Zero in the defense against free information and toward handing the status of Node Zero over to consumers in an embrace of shared information. Far from being hard to imagine, in the future, we will wonder how business models could survive without taking account of sharing.