PS Consultants - ideas & solutions

Life imitates art; you couldn’t possibly invent it; stranger than fiction.
December 1998

All of the above seem to apply to present state of affairs in the world of e-anything.

The e-world has discovered something that some of it’s pioneers and sooth-sayers realised a while ago, but then failed to wholly rationalise in a commercial proposition. Those early visionaries of the net were still fighting their way past the legions of Luddites who simply refused to accept that everything that represented current commercial reality was irrelevant – overnight.

Banks were about marble floors, and hardwood counters. Booking travel meant a trip to an agent where you waited for hours while an assistant sat with a phone glued to their ear, struggling past a maze of hopelessly incompatible private online systems. Businesses needed to have things called “track records”.  “Directory enquiries” meant paying (yet more) money to BT, who were bare faced enough to pretend that it was only right and proper for the restaurant to charge its customers to look at the menu! And incredibly, BT is still getting away with it!!

But the dawning realisation is that banks, travel agencies and directory services are actually only web sites, and that there are now only two ways that money will be made in the information age, and they are, dear readers:-

  • Advertising revenues (including sponsorship)
  • Transaction revenues.

Just add “brand”, and the bizarre consequence of this is that anything required to garner one of these two prime factors will be given away free, or so substantially subsidised as to appear to be free. Initially this was information itself, correct you spotted the paradox. In the Information Age, the most notable thing about information is that it is plentiful, and mostly free.

Despite the notion that knowledge workers are the industrial power house of the next century, the subject of their labour is to be given away for nothing. The old Lancashire cotton mill owners would have a problem getting a handle on all this. But maybe if their cotton wares had been shirts and baseball caps with large banner adverts embroidered across them, then they might have caught onto the idea a bit ahead of the 20th century.

The world of publishing has known of this curious paradox for a while. After all, what is Computer Shopper if it is not a combination of all these factors..? Yes, I know Computer Shopper is not free, but I suggest you pop along to your local printer and get a quote for printing the magazine, and then see much of the cover price matches that cost.

Magazines and newspapers have been playing this game for years. Commercial Television is the embodiment of the scramble for attention at all costs; but the first really brutal commercial implementation of the concept that caused hard-bitten business folks who expected to sell stuff for money to learn how to give it away for free, started with Cell phones. Such are the rewards of the transactions to network operators and commission salespeople of those monthly bills of around £50 that even the most otherwise sane, careful and sober people seem willing to accept as part of the running cost of life in the nineties, that £400 handsets are regularly sold for £50 or less.

With more and more features that take the system beyond the simple realm of the phone call planned for cellular networks, you can expect to find Cellular operators actively paying cash bounties to have users switch to their services. If – sorry – when -  you buy a book or CD via your cell phone, (remember, the means of paying is set up and easily used) then Orange/Cellnet/Vodafone etc. will get their cut of the ticket price.

So it’s not really surprising that the way to make a fortune on the net is to start with a large fortune, and give it away… in the hope that an even larger one will be the result.

At the top of the information tree comes “deadline sensitive news”. Some seriously Big Brands have been built on this subject: companies like Reuters, the BBC, ITN, CNN, and Bloomberg are all now massive organisations, racing to present the news of events and happenings from around the globe. And (mostly) charging their subscribers loads (and I mean loads) of money for information that is by definition already in the public domain!

These operations built their businesses on sending reporters to the corners of the globe, equipped with  the tools necessary to get these stories back to the news center as quickly as possible. But these days, with such easy access to instant communication available around the globe (Iridium and Teledesic permitting…) all that these old-style news organisations folks have left to offer is the combination of archives and brand.

In this context, brand is the confidence factor that provides an assurance of objectivity– but the moment someone works out how tackle the issue of confidence on news reporting, even the big news brands could find themselves going the way of all other businesses who didn’t quite catch on to the power of the internet until it was too late.