Friday, August 25, 2006

Hope for the indies

Progress toward the new information economy continues to surge and sputter in uneven ways, sometimes confusing us but other times pointing ahead to tantilizing possibilities. I found an example in September's issue of WIRED, in an article about Netflix's new role in creating distribution deals for independent filmmakers.

The article (not available online until Sept. 1) showcased the power of Netflix to connect unknown movies to actual movie theaters and explores the possibility that the company will expand its reach into actually producing independent films. But that's not what caught my eye -- rather, it was the story of how the company did a profit-sharing deal with the makers of a romantic comedy called Nice Guys Sleep Alone. Enter Neflix Chief Content Officer Ted Sarandos, who told the film's director "Send me 500 DVDs. Every time it rents, we'll pay you something."
"An awful lot of people started renting this no-name title with zero marketing budget," (director Stu) Pollard says. "As a result, it was picked up by HBO."
The article doesn't really linger on this point, but to me it said something of fundamental importance about the future of all sorts of independent media. Because what Netflix has done for independent film is what the Web needs to do for independent comment: apply informatics techniques to connect content to its natural audience.

We've already taken the first step, providing all sorts of ways for creative people to express themselves in public. We've got blogs and free websites that let us speak our minds, indulge our passions and share knowledge. We've got Flickr and Zooomr and others for sharing photos, plus YouTube and sites like to help us "publish" our videos and films.

But if a blogger rants and there's no one there to read it, did she make any sound? For all of Chris Anderson's talk about the future of niche media and The Long Tail, the volume of new content is so large that, even with the best modern search engines, I have no reliable way of finding the portion of that content that most interests me. Rather than finding new writers, I wind up wearing RSS grooves to a stock list of A-List bloggers. Because we lack the proper 21st century tools, 20th century mass-media business models continue to thrive on the Web and The Long Tail remains more of an abstract concept than a solid business plan.

As I wrote last month on Xark, the expansion of the read-write Web has created an un-met demand for real-time information tools that scale to the size of the modern mediascape. In other words, what I really need is a tool that spots content that will interest me, personally, as it is published, no matter who wrote it. Right now, when it matters.

Which brings us back to Netflix.

If you're a Netflix user, and you have been for any length of time, the service you get now is likely far better than the service you got when you first signed up. At sign-up, you picked movies for your queue the 20th century way: You browsed through lists of movies by genre, release date and critical ratings. There were lots of movies to choose from, but few of your choices were all that surprising.

But Netflix is successful because it asks you to rate the movies you watch, and it learns from your preferences. Other sites -- most famously, Amazon -- do something similar, but nobody does this as well as Netflix. This is in part a function of volume: the company has collected more than a billion movie ratings, with a per-person average of 200.
With rich data like that, the company can develop sophisticated profiles to anticipate preferences and tastes. "It can tell you that you like The Godfather because you love family immigrant pics, and I liked it because I enjoy gangster flicks," Sarandos says. "So the next film suggested to you will be Avalon, and the next one for me will be Scarface."
In other words, had Blockbuster agreed to let Pollard put a copy of Nice Guys Sleep Alone on its vast video store shelves, the odds are slim that the film would have ever found its audience. Nobody had ever heard of the movie or Pollard, and unless its box randomly caught someone's eye, it would be doomed to gathering dust. But by being included in Netflix's recommendation system, anyone with tastes that matched the movie's profile found out about it.

Not blanket, expensive, annoyance marketing in which money drives audience, but marketing as a service to the user.

Everyone wins.

This is the spirit of the web as it could be, but there are enormous hurdles involving privacy, technology, intellectual property, investment and pure, unreasoning human stubbornness between here and there. Yet there's almost no doubt in my mind that this is one of the fundamentals of the new information economy, a concept that cannot be avoided.

Not surprisingly, Dave Winer gets it, although he's writing about it in the context of advertising:
There's a big trend here, imho it's the difference between the 20th and 21st centuries. In the past the flow of ideas for products was heavily centralized, and based on advertising to build demand. In the future, the flow of ideas for products will happen everywhere, all the time, and products with small markets will be worth making because we'll be able to find the users, or more accurately, they'll be able to find us. "Targeting" customers is the wrong metaphor for the future. Instead make it easy for the people who lust for what you have to find you. How? 1. Find out what they want, and 2. Make it for them and 3. Go back to where you found out about it, and tell them it's available.
Guys like Winer made all this possible, but it's now time for the Informatics guys to step in and start building the tools that will make sense of the info-torrent Winer and others created. We can help them by thinking about the legal, ethical and economic issues that will surround these tools. We can pave the way.

There's a popular New Age axiom that says "We are our choices." In the future, on the Web, this will be literally true. And that's a good thing.