Ft.com is swinging from their chandeliers with 120,000 paying online club members. But is a closed community a long-term play?

Getting people to pay for content is the major focus for online. The Financial Times is taking a big lead in this area with more than 120,000 paying customers forking out £4 a week = £500k/week revenues . They claim to have 1.9 million registered users as well. The FT is an interesting case study as it has a very loyal following, is globally respected and customers have money.(ok, so WoW has 11.5mm paying customers paying £7/month)

This move raises some interesting questions? Is 120,000 a large or a small set of customers? More to the point is £25 million in revenue a year a  big enough number? For the FT as a publisher any cash has got to be good cash. They post 480,000 daily paper readers. They claim 55 million pageviews and 2.7 million unqiues. As a guess maybe the can monetize 75 million page impressions and yield £2.5 which is less than £200,000 month. The New York Times said back in 2008 that they needed 1.3 Billion pageviews to make online interesting– they only had 173mm at the time.

What is the trade-off? Blocking traffic will certainly reduce pageviews big time. Fewer pageviews  reduces click related ad revenue. Anyway for the Ft.com even if they lose 50% of their pagewviews–they only need 25,000 new customers in a year to break even on their paywall–which is less than 1% conversion on their uniques. The FT is really a sort of financial club, so is losing a bunch of non-payers even negative? More likely it will make their paying customers feel like they are getting inside track/info.

A bigger issue for FT has to be the cannibalisation of the newspaper subscribers. The better the ft.com offering, the less likely it is that busy jet-setters, captains of industry will buy the physical paper and just take the iPad versions. Probably 80% of the 120,000 paying ft.com customers also are within the 480,000 paper subscribers.  Do you want the FT twice?  Do those customers care? Or are the delivery mechanisms useful for different purposes?

The New York Times, which is not clubby and has much larger circulation and online viewership,  is launching a premium content plus special viewer offering called the Times Reader 2.0. It is an interesting move to make the paper more interactive online — cool enough crossword puzzles!  Maybe they will have special first person shooter games soon — play the Obama administration game of hunting up votes in Congress?

Dropping the free access also expands the market for their competitors–like Economist or Yahoo Finance. Economist is still trying to get their own paywall gambit lined-up.  Bloomberg is free on tv also.

The dual track access via google search is perhaps ok as tech solution to peek and pay, but really looks like bait/switch. Hitting the excerpt is more frustrating and I don’t think will help FT eat their customer cake and sell the crumbs to the unwashed public.

In terms of online community — is there something to consider about a closed community versus a public one?  Perhaps this paywall strategy will do quite a bit of damage to the randomness of comments and the dynamic nature of what the ft.com could be otherwise?

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Our web-oriented event and content series -- the Ancient World in London -- will run for 3 months. It is an example of how online communities to use a broad mix of media and tools to create new, popular content.

The Community Challenge

I don’t expect that just because we will make more web content and tools that those efforts alone will generate meaningful community effect. We will need to meet people live and mix events and contests into the action the online content. Part of our mission with Heritage Key is to make history/archeology more accessible and allow people to participate (somehow).

Visitors will be invited to join:

• Contest and Quests in London and in new 3d online virtual areas — and of course win cool prizes
• Contribute articles, images, video clips (and get paid a little)
• Attend lectures, discussions
• Help us complete a massive listing of places, artefacts, key people, timeline events and publications
• Share their ideas on good tours of London

Getting the balance between local London and sharing that online = globally will require attention. We are also excited about the Grand Finale event which will be live in London and webcasted/virtual simulcasted. It will be an ancient world costume party.

The content will be hosted using our Rezzable Real-time Community Platform which is comprised mainly of Drupal and Opensim plus a bunch of code of our own. More about our tech here.

Event Partners Still Needed

We have the main sponsor in place, but still are looking for Event Partners to support events and offer relevant prizes or services to the events/content series. If you might be interested please drop us an email at info@rezzable.com. It should be a great opportunity for a range of companies that might be interested in understanding more about the social web, online video and virtual 3D online.

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London Eye-Pods. The wheel goes round and round on the web also as AOL makes latest flight to the web future as "Aol." . Will it be retro-chic to have an @aol.com email? Yikes.

“Bricks” and “Bricks and Clicks” just were at the mercy of the “pure play” internet machines, creating epic enterprise value and trading easy money and easier stock for established (perhaps troubled) businesses.  Well of course, we know how that all played out now. I must have missed somewhere that eBay unloaded Butterfields to Bonhams for a lot less than $260mm.  CMGI went down the drain in a huge sucking sound. Now we have the final coup de grace on AOL/TimeWarner. Yes, Ted Turner was right all along–it takes a lot of skill, experience and brainpower to run a big global enterprise. Internet companies mainly don’t have a clue on this and shouldn’t be allowed to mess around with live ammo–unless they are Google (or maybe Amazon).

Decoding Aol.’s Vision of the Future

So, what about all of this? Well, think about the future. Here’s what the ex-Googler now boss at AOL says about their path to redemption:

“Our new identity is uniquely dynamic. Our business is focused on creating world-class experiences for consumers and AOL is centered on creative and talented people – employees, partners, and advertisers. We have a clear strategy that we are passionate about and we plan on standing behind the AOL brand as we take the company into the next decade,” said Tim Armstrong, Chairman and Chief Executive Officer of AOL.

You need to take a look at the new AOL logo to understand some of this corporate spew. The brand is “Aol.” and has a slew of rotating images–that immediately reminds of the ill-fated BA tailfin ethnic art  designs boondogle championed by Sir Rod Eddington. When a brand is lost in the woods, they can reach out to people that don’t know them–or at least pay some very expensive branding firm to justifying their “clear strategy.”

Is there any hope the “Aol.” will be cool? Can you exist online without a cool/techie brand? AOL was never cool and always seemed to appeal to the web-newbie-scaredy-cats hiding in their walled garden. Does anyone actually use a @aol.com email address? Seems a symbol of cluelessness online? Hey, maybe it will become retro-chic to have an @aol..com email? Nah.

Yet, even in AOL’s morass–they have some revenues, some customers and a new management team. Looks like they will try to shed some business units (ICQ, Bebo on the block and MapQuest likely) and get focused and more cash to work with. So where do they see some hope? Looks like next generation “user experiences” online.

Again according to AOL boss:

“the next wave of the Internet will really be about content.”

Which PCWorld reports in response:

“I don’t agree with that,” Sterling said. “Content is very important and Aol has some good sites, but there’s a lot of content that’s commoditized, especially around news. It’s a more nuanced issue, more complex.”

Still, Aol is jumping feet-first into original content creation. The company now has 3,500 full-time and freelance “content creators,” like writers, photographers, videographers and journalists, and 80 percent of content on Aol sites is original.

I suppose it is a good sign that the analyst disagree–wtf do they really know. It is of course ironic that Aol. alone is trying to do what it was unable to achieve as part of TimeWarner. But if Aol. can become cool enough, well maybe they can create interesting content for the new online post-convergent metaverse?  But, I generally think that big companies don’t really innovate or at least are never disruptive enough to do something amazing–so if Aol. is going to do something, perhaps they are right to get a lot smaller and a lot more aggressive.

Why is cool important btw? Cool companies are either profitable and can do what they want, how they want or are so cool that people love them faster (=low cost for marketing) or love to work for them (=work at lower costs points). So if Aol. is neither cool nor profitable–well they are not gonna make it too far.

No Guts, No Glory (No Chance for Aol.?)

Will Aol. have the guts to dramatically cut and run from old world business (like anything that worked more than 3 years ago)– like portals and selling banner ads in a fierce and visionary manner like the Intel/Andy Grove’s boldest ever DRAM move in 1984?  No guts, no glory?

I think on of Aol.’s biggest challenge is getting back to some level of trust/respect with users. Content is not in fact a commodity–or perhaps quality content isn’t. And this is more than about news content–which Aol. never did anything too useful about anyway. And is it even imaginable the Aol. would try to compete with CNN now? Could they even take a shot at Current Tv?  So what kind of content will the smart new management team at Aol. start to develop? = community content and engaging online experiences. And can they make this content at the right costs? Web content needs to be lower cost than broadcast by a long way.

I would assume the Aol. has already done a good enough customer segmentation to understand where they have some profitable ISP support. Now they should be looking at how to build communities around these dedicated users. Probably it will look like a bunch of retirement online type communities (ok, that’s a random guess because I think only older pe0ple use AOL). But enabling a community is a very different role than being a media powerhouse crushing the competition and cranking out scalable content 24/7/52/100

Assuming Aol. can organize it’s resources it should be able to attack the kind of $5mm deal CNBC and WTTC announced for content co-creation and community. Here why I think brands will look seriously at content co-creation deals and dump banners as they reallocate their 2010 spends.

And brands do need to advertise heavily in 2010 — ask Google who is spending big time right now here in UK to promote Chrome. Yup, not even Google can make a big enough impact with their own pr machine.  Community is a great way to mix the online with the real world.

Net Net on Aol. = Help for Heritage Key! (thanks guys)

Aol. has an incredible challenge to be something exceptional. They have a shot (more than a start-up by far) to do something bold and game-changing. Will they take that shot–my guess is yes. They have an ex-googler who has the taste for online blood and (unless he gets neutered in some corporate nonsense) should only want to deliver big and make is his own name in the hall of internet fame.

We’re excited about what the new, emboldened Aol. means for us–anyway! If they go down the content+community path then they are framing the marketspace for our projects like our Heritage Key–which is already there in some sense and trying to establish itself there.  Deals like the $5mm CNBC/WTTC content co-creation packages are the monetization foundations to support this direction. And we will be a offering those deals at much lower price points while delivering equal results in 2010.

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Visit King Tut's Tomb online now and make your own discovery of the most amazing artefacts ever discovered.

Tech Radar did a nice little piece on Heritage Key recently saying:

It’s a mainstream application of a once niche feature that reminds us why we all thought it was such a good idea. While Heritage Key is predominantly an educational website aimed at amateur historians and fans of archaeology, its heart is the 3D virtual exhibit.

They hit the key point really here, about what will bring virtual online to mainstream users.  At the core of any community-site there must be something to do and for Heritage Key that is about exploring and understanding more about ancient world places.  The virtual online experience will give people a great insight into places, artefacts and the overall history.  Virtual Tourism is becoming an interesting area also. It allows for a better visit or give a sense of place you may never have the chance to really go to. When people GoVirtual they will also meet other explorers and then the real-time social interaction kicks in.

Dinah Greek commented about Heritage Key for Computing.co.uk:

An interactive website devoted to historical studies offers visitors more than the chance to explore ancient civilisations using historical recreations.Wonderful those these 3D reconstructions are, the Heritage Keysite also offers people the chance to join live online lectures, ask questions and join forums where they can meet like-minded people.

Dave Bailey in his write-up about us asked a question more about how virtual online can be used by CIOs in future:

So the question for businesses is how big is the opportunity to monetise commercial web sites by introducing a virtual world of online activity?

UK firm Rezzable is one company pushing the boundaries of virtual world technology, both technically and in identifying how such a business model could work.

virtual online environments can deliver high photo-realistic objects and immersive activities now.

What are some of the issues blocking mainstream adoption for online virtual experiences?

So why isn’t everyone with a computer and good broadband trying out a virtual online experience? Well, they are doing other stuff online that sucks-up a lot (maybe too much even) of their time. More specifically there are some issues in the way:

• Lack of quality 3D content – 2.5D just isn’t good enough for non-kids. We think there are some interesting changes in flow now that will make it easier/faster to create photo-realistic content that can be streamed online. Watch Unity. Watch for the SL mesh viewer. Watch Web Alive.
• Variety — one thing that SL sorta has right is the way in which you can zap between different experiences. People don’t want to have to log-in/out and remake their accounts just to look at something for a quick blast. We are looking at this issue now and expect to have a good enough solution to move between our grids = Rezzable and Heritage Key with one identity and consistent avatar. Once this is in place we can extend to other grids.
• Something fun enough to do – We have released King Tut Virtual on our OpenSim-based grid and in general someone can wander around for 1-2 hours checking out some of the most amazing objects ever discovered. They can be seen in incredible detail. But we also think mainstream users and gamers need more goal oriented activities, like quests or contests.  Our new work on Stonehenge Virtual is starting to address this, but I think there is still a long way to get the mix of realistic content and activities right.
• The Avatars are not good enough — sure they move around in a jerky way that actually you can get used to. But the avatars are not the online proxy for real people ye. Mainly they are not expressive enough or smart enough to do stuff.
• Tech Stack is still unstable — it has gotten dramatically better, but we still suffer from random crashes and lag and generally high enough levels to exhaust enthusiasts. It seems clear though how to make the tech work better. It will just need focused work to improve key things like physics, viewer, scripting. See my OpenSim issues list here.

Visit King Tut online here.

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More brains the better? Sorry this is sorta disgusting. But the point is about getting more people involved via online communities. (French brains, not human btw).

It is of course ideal to have community members enrich content–but is UGC to hard to deal with online? Is it too random and too much spam? How to get to the next level = Community-Inspired-Content (CIC).

What is Online Community Content Co-Creation?

There are 3 main participant groups need for a co-creation program: 1) Brand 2) Community Manager 3) Community Members.  The Community Manager (which is how we see our role at Heritage Key) needs to create the focus and deliver the program.

The Brand and the Community Manager should frame the focus of the content and outline the mix (video, articles, interviews, virtual, real world events). The real new area is to get the right balance between commissioned work and user generate content (UGC).  UGC needs to be on-point with the focus, but more importantly needs to allow the Community Members their own space to participate.  I think the real world events are an important part of this.

The Co-Creation program should run over a period of time like 3-6 months. We think of it as a sort of series. People can then catch if from start or  catch-up through referrals or web buzz around the activity.  You can also have an endpoint where you can convert content into a final package.

Benefits to Brands

• New Relevant Web Content – Content is unique and will fit major interests of the community members. It should also be branded and embeddable off the main microsite (via widgets or YouTube players).
• No Other Brand Interference — it would be exclusive to the sponsoring Brand. No noise, no unexpected placement. And the microsite area would be much more engaging than an Brand controlled site.
• Community Interaction — program should offer people chance to contribute (for free or payment), share opinions, contests, join real w0rld events.  Ideally there should be some time-based momentum designed into the program.
• Leverage Existing Brand Assets – Brands can repurpose or simple use existing assets and place them in proper context/linking to new content.
• Fresh Ammo for PR — Program should give PR/Marketing teams new materials to work for customer and media outreach.
• Destination to Drive Promotions — Brands can use their existing email lists to drive customers/prospects to microsite for targeted promotions. Surveys can also be very useful to learn more about customer needs.
• Speed to Market – Community Manager should be able to deliver program rapidly and across 3-6 months time period to build momentum.
• Innovation – Brands should seek Community Managers that offer web site, websphere, and interactive applications that when combined with new content will be very exciting.
• Lower total costs — Co-Creation should not be massively expensive. It will have potentially high CPM metrics, but you would expect reasonable total costs and good CPA downstream.  It is key to understand that co-creation right now is a way to access the early adopters and thought leaders within the communities, so it should also be considered as a strategic play.

We are working on Content Co-Creation programs for Heritage Key that will be focused on visting/experience history of ancient world sites. These programs  will mix video, virtual and article content.  More info will be shared soon!  Get RSS or follow us on twitter @xlent1 or @heritagekey or for virtual content @rezzable .

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Trust Me, Only the First Bite Hurts. Many Brands have lost trust with consumers, so entering a Community is not a positive move as perceived by the members. In fact some Brands almost seem to hate or be at war with their customers. So what can a Brand do to get back to Trust? Drive CIC.

Probably every Brand manager is looking at some online social media project right now–thinkin’ omg I gotta do something.  For the ones that haven’t already made a mistake plan for social media — they should get into bed with Cali Lewis, well at least watch this interesting video interview (in a bed)  with Chris Brogan.

Brogan makes the xlent point that many Brands are not trusted these days — some for obvious reasons, like banks, car companies, fast food etc. Others have a more subtle, but perhaps more strained relationship with their customers/prospects like Ryanair or mortgage lenders like Halifax where the consumer is actually an adversary.

There seem to be a lot of issues around all of this, but the fundamental point is that if you don’t trust a brand — it won’t be a positive part of an online Community. It just annoys everyone or is a blocker to getting Community Inspired Content (CIC) rolling. Brogan seems to make a living working with corporates to use social media tools in a positive way to make the personal connection between company and individual–seems like he should have an un-ended need for his services (pls get over to EasyJet Chris!).

So, back to the challenge of the Brand manager trying to figure out how best to play in the social web.  The two obvious moves have significant issues:

• Traditional online advertising noise/interference : Buying ad programs may not get the brand above the noise–or the brand could find ads actually sitting in areas where it being attacked. Online programs also have big costs and are they really delivering the bang for the buck?
• Building A New Community is Hard: This is a bold, most likely pointless activity for a Brand with a battered reputation.  First of all it is an expensive enough risk, and most likely the Brand does not have any skill/experience in doing this type of thing. Worst though, the Brand is exposed directly to the Community members which is in fact an off-balance situation between individuals and an impersonal corporate entity. We saw a lot all the Brands that stepped into Second Life beat a retreat when they understood that their risk/costs for engaging with individuals in a fast-moving, unpredictable community was high and in fact their reach/value was trivial.

So in the face of a bad choice and a worse choice, what should Brand managers be considering? Basically they need to navigate a course back to Trust by finding their role in driving CIC.  Short answer = Co-Content Creation programs.

Why is Co-Content Creation the Way to Go?

Co-Content Creation is new content that is produced by an online Community in concert with the community members on some level. It is of course funded by a Brand or the Community itself. I think largely it should be a mix of commissioned, curated and UGC. Importantly, co-creation should frame a useful activity where  Community members see value. Most of the new online communities (like of course our Heritage Key or Demand Media’s Livestrong.com) are further multi-channel — allowing a concept to be packaged and delivered across site as well as media/social platforms like YouTube, Facebook, Twitter and of course iPhone.

The Brand can Benefit  a lot in a Co-Creation Program:

• Unique, relevant content that the Community will appreciate and engage with. Content should also be media rich, diverse and web-dynamic.
• Perhaps not banner level reach, but deep community penetration across web, mobile and even real-world (as most Communities have physical reach).
• Speed to live — usually new content is already in a the community content pipeline, so it can be tuned to fit quickly. Certainly setting-up a micro-site is a few days work, no more.
• Association with innovation if there is a relevant app to combine with.
• Co-creation should run over a 3-6 month timeline minimum, year is better. So there is also the momentum as the content becomes richer, it will gain exposure.
• Brand can fully leverage their own promotion, email muscle to drive their customers/prospects/stakeholders directly at an online area that will be on message, without other brand interference.  There should be some PR lift as well.
• Zero risk — (ok a little risk) the Brand does not need to do much to make this happen — ok, pay is a good thing. But there is no management of the Community or issues with production. The Brand just needs to do what Brands should already be good at — promotion and promotion.
• Brand can choose how to engage with Community members and use the Community as an appropriate focus, rather than have the direct exposure.

Basic Framework for Co-Creation Programs

The Program should run for minimum 3 months but 6 months or longer is best. The main idea is to get a consistent flow moving onto the site and that there are some time-definite events to catch live. Content should also be sourced from the Community as much as possible.

Basic formula (but expect many variants):

• Frame a video series, with mix of community members and respected figures. Video is key as it will drive traffic and generate links to a lot of site content. Video should hit site 4/week or so.
• A bulk of new, inter-linked content — so feature articles, blogs, image galleries, maps, listings. Something new on site everyday to pump the flow across web — use RSS as well
• Interactive features — good be something simple like a quiz/game or more complex applications that engage/add value to Community. We have a virtual experience on Heritage Key as an example.
• Contests — but these should involve content that will hit site, ie photos, blogs, group activities
• Real-world events — again a good chance for the Brand to actually meet people and make personal connections (which also can be in virtual experiences).

Probably in the first wave of serious Co-Creation it will be fairly expensive proposition, but not expensive for a major Brand.  I can already see how this could be rolled-out on a micro-level (probably so does Google somehow ;0 ).

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Example: UGC problems at YouTube. While they are serving 1.2 billion streams per day how much of it is worth watching or not infringing?  YouTube has a commercial partner program to try to sift out the good from the bad and reward stuff that adds value. It is hard to imagine just how many take-down notices they process each day? Millions? When YouTube kills an account for breaking the community standards,  there is a flare of angst against them.

CIC = Community Inspired Content . How to get some of that?

UGC is random (which is most interesting) and repetitive, dumb and/or unrelated (which is not at all interesting).  UGC is also full of problems like spam, hate, porno  and copyright infringement. In fact, I think the days of UGC as an objective are over as Media Convergence heats up.

We did a lot of work in the Second Life virtual world environment where we created and ran in-world brands, sold digital goods and hosted more than 2.5million avatar visits (our Greenies Home is still there).  SL claimed to be a online environment created by its users. This was a powerful concept. Some people came and made their own stuff, their house, art, avatar clothes but also made a lot of useless crap (UGG = user generated garbage). Not fun junk, but broken, incomplete, uninspired and boring digital leftovers.

Yet, as SL was also a microcosm for the larger online dynamic—we noticed something else more interesting than the obvious UGC headache. We began to understand that some people really cared quite a lot about their status in an online Community.

Identity, role, assets and recognition have significant value in the online realm. I think the virtual world crucible accelerates this as you come into real-time contact with people, make friends and perhaps engage in some activities that enhance (or destroy) your online identity. (If you are a noob—get an alt if you are going to do something out-of-character.). Your online trail is easy to catch and easy to follow in most cases. So actually rather than seeing people hide behind their online identity, we began to understand how important that identity is as a part of your real self. Hence, how other people respect you and understand you within a Community is very important.

People who care about being in a Community then will make a special effort to contribute to it and even regulate it.  This is both content creation on one side and moderation on the other. This is the virtous circle—but it isn’t without effort and attention.

I seem to think of it as Community Inspired Content (CIC). CIC is not random, it is complimentary to the Community. People add comments to express something that displays their online persona so they are in fact sharing something of at least marginally value—and on occasion some serious insight. CIC also implies some respect for other members where UGC is more often about screaming really loud. Is CIC the mature version of UGC then?

Net net = CIC is more valuable on-site and should be scalable. If it is relevant, it should also be better to monetize.

My point is this really, if you want to get CIC you need to run your site very differently than if you only want UGC (with a little moderation on the side). UGC works well enough in the traditional make–>push content creation model. Either your commissioned staff “make–>push” content or you get the users to “make–>push” content from their side.  It is one-way with a little feedback in the comments.

CIC I want some on my site!

So how to get CIC rolling then? Well, we are trying to figure that out right now as you can see over at Heritage Key with some of the lessons we picked-up at Rezzable.com. There seem to be some basic drivers worth noting now though.

5 Top CIC Drivers

• Content-oriented site. CIC is around specific content—ie cool motorcycles, exotic travel. Some domain where people want to learn, interact and share their experiences. Something to do is essential. Check Livestrong.com

• Quality core. Quality inspires more quality. So you need some commissioned core content that raises the bar. You can pay the Community members btw, which might be a good game plan—if you can get the monetization flowing to keep the cash flowing. But be careful, most people don’t really do it for the money, so the ones that do will also leave when the money is better elsewhere.

• Star Power. Find some well-known, outspoken people from the domain and get their presence into the mix. Also though, video killed the radio star—so beware false idols and find ways to popularize your native Community members. The biggest stars of Media Convergence have not been discovered yet.

• Fun Events. You can focus people on something time-based where they can make an impact or just share the experience. Events also deliver the most important online element – meeting new people. A good event will mix a lot of people together if done properly.

• Reward the right UGC. It could be as simple as sending a note or giving some site points. You could do a lot more—like send members on exotic trips or send them real gifts. Online in the age of google has become impersonal—change that and drive CIC.

The other big issue for CIC is can big brands even begin to be a home for it? Do the people that run a CIC site actually need to be very visible/active on it? Ultimately the web while making somethings scalable, still might be bound by the limits of what people can do—actually that doesn’t seem like too bad a thing!

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