CrowdRules Blog

CrowdRules: A Distinction and a Difference

I went to the Millennials Conference yesterday at UCLA put on by Digital Media Wire. Thanks, Ned Sherman and Tinzar Than Sherman for another great conference! And thanks for the invite!

A number of highlights:

Ted Cohen of TAG Strategic (formerly of EMI) saying that paying for music is going to die, and that music as a service is the future.

Pete Markiewicz of IndieSpace hitting the Millennial nail on the head in describing that parents and teens are making a lot of their buying decisions together.

Megan Healy of Nettwerk Music Group describing how they are using multiple concurrent campaigns, online and off, that get artists and fans really connected while promoting artists such as Barenaked Ladies and Avril Lavigne.

For those of you who haven’t yet heard, the Millennial generation are people anywhere from 12 to 20 years old. I know, because I’ve got two of them at home. They like to stay constantly connected with text, IM, cell phones, and MySpace. They love music and videos, and don’t particularly care about high fidelity or who owns what. (Well, not completely true: they love exquisitely rendered graphics in movies and games, and they can tell the difference between a poorly produced demo and a well-recorded track.) They grew up with all this technology and connectedness and entertainment as part of their everyday lives. But here’s the big catch: they want all of it for free.

So, what to do? And how does this relate to CrowdRules? Well, we recognize that everyone wants stuff for free. But someone has to pay, somewhere. By letting most people use CrowdRules tools for free, there’s a big crowd that’s available to participate in campaigns put on by those who do pay. So, that lets people who couldn’t afford any tools or services before to run their own casting calls, film festivals, video contests, and ask and answer questions.

But how does CrowdRules differentiate itself from a site like, say, Yahoo!Answers, where everything is also free? From an everyday user’s perspective - if they’re simply asking or answering a question – there’s not much difference. Knowing that CrowdRules removes Information Cascades and is focused on getting unbiased answers is, as my friend David Goldsmith is fond of saying, "a distinction without a difference". But nobody is betting any money on whether the answers at Yahoo!Answers are correct.

However if you are going to put money your behind something, you want it to succeed so you can at least get your money back, maybe even make a profit. And you want to know if people like it so you can tweak it before you throw too much money at it. And that’s called media research. People pay a lot of money for that right now; so much money that it locks most businesses and individuals out of doing it. They just go ahead and release their video, or song, or product, and hope for the best.

By running a Challenge on CrowdRules, we provide a free or less expensive way of doing media research. We provide the tools for people to forge the collection of people they have on their MySpace, Facebook and other sites, into a real, working collective. Which means a lot more people get to do media research. And that raises the quality bar on the Internet, at a time when there’s almost no quality control at all.

So we see CrowdRules as a way for anyone who wants to find out what people really think about something before putting their money on it. And that gives CrowdRules a distinction and a difference between other question and answer and contest sites.

Best,

DM

Sir, can I have another business model, please, sir?

Regarding what "doesn't" work: I was rather negative in my last blog, wasn't I? A reader’s email inspired me to address the business models in Web 2.0 that seem to be working. (Thank you, Sophy.) I see many of them as B2B2C models. These three-way relationships - with a sponsor a host and user generated content (UGC) - seem promising. And they are all essentially content and talent searches. That’s good, as there’s so much content that the only way to sift through it is to use the audience itself to find the best stuff.

Jumpcut worked with Doritos on the UGC Superbowl commercials, attracted additional traffic and attention to its own site, and made the audience part of the solution. Some great commercials came out of it. The irony there was that none of the finalists actually used Jumpcut to create their commercial!

Eyespot working with Paramount on the recent Mark Wahlberg "Shooter" mash-up trailer promotion is another good example, though again I'm not sure which, if any, of the entrants actually used Eyespot's software.

Yahoo Groups is taking audiences that organically grow from interaction over a discussion topic or passion - such as Battlestar Gallactica - and bringing in sponsors whom the audience will embrace without damaging the integrity of the group. The content remains user-generated. Facebook does the same thing with sponsored groups. The Apple group is very active and independent, and is of course sponsored by Apple.

I remain an optimist, despite my post. I believe the open nature of Web 2.0 can and will be embraced by traditional applications, thereby bringing them to a much larger audience. I think the greatest potential for monetization is in facilitating collective action. Amazon and Aggregate Knowledge are doing this passively by amassing vast databases of user purchases and offering "if you like this, then you might also like..." to increase average check-out. WalMart has been doing this for years, starting with putting the potato chips next to the beer.

But that's passive. What's really promising is software-as-a-service that facilitates active participation in collective action. The services can be free, subsidized by the value of the analytic data produced by the collective; or at one-off or subscription cost, where a sponsor pays to get objective outcomes.

With this approach, services where cost was previously a barrier can now be accessed by everyone. An excellent example of this is Mturk, where people are paid pennies an hour to accomplish simple tasks; however, the facilitation there really only happens in the exchange of money for work, but it's a great start.

The next wave is actually facilitating complicated tasks such as online panel-based media research, where people are currently paid for their time. To date, a traditional approach has been adopted by media researchers, in that they've simply used being online as a more efficient method of finding and compensating panelists. Yet with Web 2.0 applied, where the applications themselves become available to everyone, we have a whole new world.

That's the area I'm working in with CrowdRules, so part of this is of course self-fulfilling prophecy! But I do think that achievable new business models are just around the corner. Just like Spring.

Best,

DM