Tool Businesses Vs Content Businesses
There has been a bit of violent conversation, starting with The Social Network, but expanding to the question of whether Facebook is really a Media Company.
Here’s what I think…
Since the web started, there have been two very different types of sites/services, etc. One kind is driven by content over which the site/service has (for the most part) control. Content Businesses. The other is the Tool Businesses category, in which I would include Yahoo!, YouTube, Google (which has expanded into other businesses now), and really, the browsers, RealPlayer, QuickTime, etc, etc, etc.
The mega businesses are – though there must be an exception somewhere – the Tool Businesses that give people tools to use the web in a new, inventive, or significantly more convenient way. Invariably, they realize, after massive valuations, that they need something proprietary to hang onto if they are going to last longer than, say, a decade. And usually, that’s when they start slipping.
It gets very blurry, especially as Traditional Media moves fully into New Media. The thing to hang onto is that, for instance, The New York Times, has been and always will be a niche business. It’s a niche of a few million and it is influential well beyond its reader base. But be clear, if a movie being released relied only on every NYT reader going to see it on opening weekend, the gross would be under $15 million. It’s not nothing. But Facebook has over 400 million users… and if one in forty sees The Social Network, it is a $100 million movie. That’s the mindfuck that everyone seems to be trying to sort out. Facebook is much less influential than the massive size of its base… in great part because the purpose of the site is not to be an influencer… which is an inherent reason why it is so widely popular.
Content has a naturally narrowing effect. Tools are just tools. Everyone needs a hammer, even if everyone uses it differently. Content doesn’t offer a hammer, but it tells you how to use it.
Another example… YouTube is an important site and its existence is influential. But they did something quite simple. They made streaming video free to the public and to businesses. The public and businesses took care of the rest. It wasn’t brain surgery. It was a big light bulb idea and a hugely risky one at that. As the price of memory and streaming has dropped, YouTube has become closer to being a financially viable long-term operation. Had the cost of streaming/memory not dropped, they might not be in business today. But for all the content on YouTube, the site itself is a Tool Site, first and last. Giving people something they didn’t have before for free is not content creation… it’s offering a tool people want at a perfect price point… major… but not content.
Even The Huffington Post launched as more of a Tool Business pretending to be a Content Business. The Tool was this idea of aggregating more than a sample of content. They focused on a very specific market, stole most of their content from others by creating branded ad-ready pages that offered other people’s content, and did just enough original content to convince the public that it was a content play. But being The Liberal Site was limiting for a Tool Business, so they quickly expanded to soft-core porn, gossip, sports, etc… not their original concept at all.
HuffPo is now working hard to become the content site they promised, as they now face new challenges. Their Tool was not unique enough to dominate. And perhaps aware that soon the whip will crack and Traditional Media will start protecting their content much more aggressively, destroying their tool of choice. So they are down to Huffington’s strong suit… self promotion. In the current media culture, a dozen voices is enough to be real in the content world… so they are… now… even as they milk free writing from others and still steal content with seeming impunity, so long as they keep Mrs Huffington up front, regally claiming to have already won the war.
And by the way, this is not just a web business reality. Blockbuster was a “tool” business. It didn’t create the content it rented. It just came up with a better way to get it to people. It was followed, evolutionarily, by Netflix, first with subscription-based mailed DVDs and now with streaming. But as you have seen, Netflix is now trying to evolve from Tool Business to Content Business, as their idea of streaming is not in any way proprietary and subscriptions are driven by content, not by how cool Netflix is. They are grossly overpaying for content in a bid to plant their flag in the streaming business (still a Tool Business) so firmly that when the industry converts its libraries fully, the Tool is made ubiquitous, and post-theatrical relies on being a Content Business again (not as good a business), they will not be left out.
And just for fun, a note that Nikki Finke and Deadline Hollywood is 100% a Content Business… and will never grow past the narrow base. This doesn’t mean it cannot be successful in that context… though by trying to expand the business into something beyond the strongest personality to hit movie coverage in decades (for better or worse), there is jeopardy of spending more than can be earned. My sense of it is that the folks at MMC have confused Content with Tool and think they can convert to the much wider-based model. And who knows, maybe they are the geniuses who can change the game completely. Probably not. Going from Content to Tool is, it seems to me, almost impossible.
So… I wish I was in the Tool Business mindset. It is where all the real money is. It’s not some backhanded insult to Facebook to say it is a Tool Business and neither a media business nor a Content business. Neither was MySpace or Friendster, nor is Twitter. Rotten Tomatoes was and is a brilliant Tool Business… and frankly, the money they have spent on building their Content side is kind of a waste. They may make a success of it and it may be wonderful to spend time wandering through, but first and last, RT is what it started as… an aggregator and compiler. That business will always be worth more than any Content Business they can build under the brand. And this is likely true of Facebook and others.
You can’t get 20 million people to use a content site. One day for one announcement or something, sure. But in terms of an ongoing business, even 10 million is not a realistic expectation for Content Businesses. And, simply, none exist at that size now… or ever have. But Tool Businesses… sure. Because they serve a macro self-interest, not just a micro interest.
Maybe I’m not that interested in the distinction but, to me, the key fact is that Facebook has changed the way people interact and behave. It is game-changingly, life-shiftingly huge. And commensurately interesting.
Chris, it is neither game-changing or life-shifting, and it is that way because of MYSPACE. Myspace started all of that game-changing and life-shifting before anyone outside of a college campus had any idea what Facebook was. If you want to bring up game-changing and life-shifting, then that’s twitter. Twitter has broken more news in it’s brief existence then either Myspace or Facebook ever have. It is a true change in how people interact with one another and especially celebrities, and that is indeed revolutionary.
You sure have a hard-on for MySpace IO. Wasn’t Friendster around before MySpace?
About Facebook and “life-shifting,” my father-in-law, in his 50s and barely computer literate, has a Facebook page. People much older than that have them as well. None of these people were on MySpace and probably never even heard of it. Doesn’t the fact that so many people of different generations use Facebook to communicate in various ways with friends, family, and strangers make it a little bit life-shifting?
Paul, in this current incarnation of social sites, Myspace did what Facebook does first. Friendster was a completely different beast compared to Myspace and Facebook.
People like you, Paul, also seem to forget how big Myspace was five years ago and how everyone used it, and a lot of older people were on Myspace, Paul. The reasons not as many were is the layout. What did Facebook do better than Myspace? THE LAYOUT! There you go Paul. Facebook just got rid of all of the clunkiness of the Myspace layout and made it more accessible to more users. It is innovation but it’s not Twitter. Again, everything you folks want to give credit to Facebook for doing, Myspace did first. Everything else you want to give Facebook credit for in terms of the way people do things, goes to Twitter, which is a REAL INNOVATION IN HOW PEOPLE CONNECT WITH EVERYONE AND EVERYTHING.
Seriously, using Twitter in a half way competent way, and it’s a much more fulfilling and informative experience than Facebook, and that to me is true innovation. Especially given that it only comes from 140 characters and less.
I never said Facebook is better than MySpace, and quit with the idiotic condescension IO. I actually used MySpace and remember very clearly how popular it was, IO. I’m sure older people were on MySpace (pervs?), but I don’t think to the degree that they are on Facebook, sharing pictures and reconnecting with high school friends, etc. Can’t all of them be influential and important, IO?
I think IO is saying that they are important on some level… but transitory.
My thing is, telephone to texting to Twitter/facebook… faster and faster, but really, how different is it?
The tool business/content business distinction is much more apt than the tool/media distinction you used in the last post. But I would argue that the availability of Facebook as a place to advertise, on top of a place to create free marketing Groups/Events/Fan pages makes it more influential than you think.
Of course, not every person on Facebook is going to be notified of every new piece of content (unless Mark Zuckerberg changes the privacy agreement again), but the ability to reach out and communicate with large groups is certainly influential.
In the end, I guess we agree on most parts, semantics aside, except for the reach and influence of it all.
“You can’t get 20 million people to use a content site.”
Zynga would beg to differ. 40 million users per day, 230 million users per month – users that paid Zynga $270million last year and had paid Zynga $240million by May this year.
well, using the telephone IS different because it requires actual person-to-person contact/communication using our own voices in real time for a form of actual contact between people wherein intent and emotion can be conveyed and expressed clearly and fairly easily using tone/inflection, unlike the other detached and impersonal forms of communication mentioned, which with each step further remove people from genuine contact into a bogus house of cyberworld cards
(and NONE of this what i’ve said is meant to support or validate io’s attitude or opinion in any way re: this subject, as his treatment of commenters who disagree with him on this matter has been, just as i predicted and as usual, irrational and appalling, then passed off after the fact as ‘facetious’ by a backpedaling tool. i’m sick to death of it and i can’t be the only one)
Oh goodness! Leah is upset at me again! Again, if anyone believes I was mean in the previous thread, where Maxim still has one of the more mean spirited post ever put on this website. You are biased against me like Leah, and my goodness is that hokey.
more anal leakage. for some reason people bend over backwards on this blog trying to reason with you, clearly a waste of time
(oh and saying maxim still has one of the more mean-spirited posts ever on this website? go take your lithium nutboy because maxim is a mere skintag on the ass of your many abusive lunatic rants herein, go sell it to people who DON’T KNOW ANY BETTER and have no semblance of a memory)
Zynga is a Tool site, Foamy… videogames online. Not “content” as such.
People use Zynga content, which Zynga develops with a staff bigger than the NY times. They don’t use third party content, such as YouTube or Associated Press. You can argue that they key driver is being able to share that content with friends, but it’s still Zynga’s content that they’re sharing.
Fair enough, Foamy… but a rather different animal. Perhaps the exception that proves the rule.
I’m sorry for pissing you off in 2008, but get over it already!
Let me just throw out there, that Zynga have ripped off every idea they have ever had. Every game they have come up with, everything, has been ripped off from other people and that’s why they are currently in litigation and will most likely lose that case. Seriously, they might be making money now but like everything on the net, it’s going to come to an end sooner than later, and that end will be because Zynga lack an original thought in their collective heads.
This is entirely true.
http://brokentoys.org/2010/09/10/bobby-kotick-incredibly-grateful-mark-pincus-exists/
yeah no io, fuck that shit, 2008 my ass. this is not about me, this is about you getting into nonsensical, irrational scrapes here just about every day with various people who’ve had a gutsful of your bizarre, one-eyed inability to accept that your opinion is merely that of one person and not a universal truism, that you have no mandate to browbeat and insult people ad nauseum whose taste or POV may differ from yours (which usually boils down to people liking movies you don’t or not liking movies you do – often before you’ve even SEEN them – or liking the movies you decide to pit against each other like petulant child). your bizarre behaviour and denial of said behaviour, both past and present, is quite simply flabbergasting and really rather disturbing.
see also: your persistent use of the word ‘we’ when griping here (as if you speak for the entire blog), and your inexplicable belief that you can act like a prize twat and then justify it by trying to backpedal from your assholery with the absurd, ‘i was just joking so it’s your fault!’ bit, inevitably blaming others for even listening to you and responding. if you’re gonna be a drama queen just guts up and own it rather than trying to weasel out of it and blame others every time with the extraordinarily lame ‘just kidding!’ schtick after the fact. i’d bet few people are buying it. give it a fucking rest already. people have the right to disagree with your ‘world view’ and express a viewpoint without you raising a multi-comment indignant stink about how hard done by you are.
(and if you hate the new blog format so much, why are you still commenting? off you go to greener, better-formatted pastures!)
Yeah, Friendster started it all. MySpace was just a copycat. The first version of MySpace looked almost exactly like Friendster. MySpace succeeded because Friendster couldn’t handle the load and became unbearably slow. MySpace eventually became superhuge, but it didn’t innovate anything. It was a good copier and was lucky that Friendster’s tech guys couldn’t figure out the server issues.
BREAKDOWN!
“Yeah no io, fuck that shit, 2008 my ass.”
Uh no there Looney Box, you stated yourself on the old version of the blog that all of this fained bullshit, started with bringing up your son, and that happened in 2008. Ever since then, you have had a hard-on for me, and you know, at some point, you need to go to the doctor, and have them take care of that.
“This is not about me.”
Bullshit again. You stated as much at the last blog that indeed was about you and me hurting your feelings. I even apologized because Leah stated it would be a good idea, and it was, and you are still pissed off at me about some 2 year old bullshit.
“This is about you getting into nonsensical, irrational scrapes here just about every day with various people who’ve had a gutsful of your bizarre, one-eyed inability to accept that your opinion is merely that of one person and not a universal truism.”
You do get why this is wrong right? Do you get it? THIS IS THE HOT BLOG! We just had DON FUCKING MURPHY give David SHIT FOR THE PAST 10 DAYS for what you stated I do above. If anyone should be given crap for universal truisms it’s David, Murphy has been doing so, and you completely once again think that’s me. Sorry, bullshit called again.
It has nothing to do with you being right or wrong or me being right or wrong. It has to do with your ability to convey something and unlike everyone else, I convey shit HARD. I do not pussyfoot around. If that upsets you, again, too fucking bad lady. I have had enough about justifying myself to you. If you dislike it then just ignore it. I am only responding to your latest rantfest right now because I am in a good mood and feel like typing some curse words! MOTHERFUCKER, YEAH!
“That you have no mandate to browbeat and insult people ad nauseum whose taste or POV may differ from yours”
Browbeat? Ad Nauseum? You really do live in a fantasy world. It’s not brow-beating to come back at someone, whose typing some bullshit, and unload on them. It’s happened to me, it’s happened to you, and it will happen every second of every day to someone on the internet. The fact remains this: you think I hold some special power, which I do not, and I am more tolerant than you could ever grasp. Again, stop reading into what I write with your biases at the ready, and maybe then you will get why this paragraph is such utter fucking tripe, bullshit, and disposed needles.
“(which usually boils down to people liking movies you don’t or not liking movies you do – often before you’ve even SEEN them – or liking the movies you decide to pit against each other like petulant child).”
Again, it starts at the top, and David does this as much as I ever have. I am not the only one who even does this. It’s not my fault that you lack the ability to see how two films opening on a weekend are in COMPETITION with one another but this is you. You seem to not grasp a lot about where you have been posting the last few years. Seriously, this weekend, it’s The Social Network vs Let Me In. I have more faith in the vampire film. Excuse me for having an OPINION! Oh look! You did to me what you state I do to everyone else! AGAIN, IT’S MY FUCKING OPINION AND I HAVE A FUCKING RIGHT TO IT! That you seemingly believe of all the people on here I do not have that right, demonstrates why this entire fucking rant by you is still, pure and utter bullshit.
“your bizarre behaviour and denial of said behaviour, both past and present, is quite simply flabbergasting and really rather disturbing.”
Again, you had a whole thread where people were stating how mean and whacked out you are as a poster, and you denied it the whole time with the rage of a small child blindfolded to hit a pinata, and being unable to do so. They gave you examples. You denied it. This went on for an entire week and you simply refused to see yourself as being anything other than a virtuous poster. Which again, is bullshit. Not only are you a bit off when it comes to most discussions on here, given that you write like a teenage girl in Japan texting her friends in English for the first time, but you also like to think that everyone is wrong. We are all wrong, you are the right and true Leah of Arc, and you are doing god’s work. Bullshit.
Sure, I have said some mean shit and cursed on here, but I have never ever referred to anyone as a pederast, brought up incest, or referred to anyone as a baby-fucker. All of this has happened to me. I even had someone routinely joke about fucking my mom. Did that not happen Leah? Seriously, you are ignoring all the bad shit you and others have done to me on this blog, and getting pissed off for the response you have received. Again, too fucking bad. You got what you deserved.
“See also: your persistent use of the word ‘we’ when griping here (as if you speak for the entire blog),”
We? Sorry, I know that this is me against all of you, and I never ever forget that, white lady.
“and your inexplicable belief that you can act like a prize twat and then justify it by trying to backpedal from your assholery with the absurd, ‘i was just joking so it’s your fault!’ bit, inevitably blaming others for even listening to you and responding.”
A prized twat? Uh no. I was half joking with movieman. It’s not my fault you don’t get it and here’s where I really unload on you, you fucking loony. You have stated that you DO NOT BELIEVE ME when I state that I am JOKING. You have stated that I am LYING and there’s no why I am NOT LYING when I post something about JOKING around. Here’s the problem with that: I don’t lie. I am truthful to a fault and unlike Foamy (your boyfriend) who has admitted to lying on this blog to start shit. My intent is never to start shit. You folks are the one who start shit like you did with my innocent question about The Social Network making money. Where was the VIOLENCE OR THE RAGE in that question? I just asked a question and Paul and every other Fincher fanboy freaked out on me. Seriously, if you want to bring up a liar, who becomes a prized twat for lying and doing so to cause shit, look to Foamy. I am simply too VIRTUOUS to act in such a manner.
“If you’re gonna be a drama queen just guts up and own it rather than trying to weasel out of it and blame others every time with the extraordinarily lame ‘just kidding!’ schtick after the fact.”
Again, I have been here since DAY ONE. You have not. Seeing as how I have been here since DAY ONE. I figure that I can JOKE OR KID around with the same people who post here everyday. The fact that you and that douche Jeff never ever got this, implies more about you then it does me. I am a jovial guy. If I do not state that I am kidding around, then realize I am not but again, you think I am LYING all the time. Again, I am not Foamy, so do not accuse me of such behaviour.
“i’d bet few people are buying it. give it a fucking rest already. people have the right to disagree with your ‘world view’ and express a viewpoint without you raising a multi-comment indignant stink about how hard done by you are.”
Again, you type the above but when I post something that disagrees with all of your worldviews, where’s the tolerance? Seriously, I do not like that True Grit trailer and got shit for it because I went outside the collective COENS JOYGASM. You seemingly think that your viewpoints, that everyone might agree with, should go unchecked, but my viewpoints which I may hold alone, should be given shit too, and that’s bullshit. Seriously, you writing such a paragraph demonstrates how much of a huckster and a bullshit artist you really are. I am one man standing up to many and you want me TO CHANGE? FUCK NO!
You have the right to disagree with me but I apparently do not have the same rights as everyone else here, which again is BULLSHIT. You are a fucking weak for the above paragraph, that the thought of you believing the above, makes me want to laugh hard and long right in your fucking face.
“(and if you hate the new blog format so much, why are you still commenting? off you go to greener, better-formatted pastures!)”
No, that’s you. This is my flag, it’s planted in the ground, and the sooner you fucking realize that and leave. The better off this blog will be, you arrogant opinionated fascist ass.
Oh, so they’re the bastards whose applications I have to keep blocking. I hate things that require you to pester other people endlessly or spend money on to get results. And with no prize at the end, to boot. It’s like being slave labor to the Tower of Babel. That’s what people call fun, huh? I’ll stick to my Civilization games.
The worst part about the Zynga games and why I eventually just quit all of them, is their incessant need to make you bug people on your friend’s list to play them with you. I get that they are games connected to… THE SOCIAL NETWORK… but some folks just want to play a game. They do not want to bug everyone on their friend’s list or spend money to advance in the game. Seriously, you can’t get anywhere with those games. It’s impossible because unless you spend money and I mean a lot of money, you are going to be stuck doing busy work on a daily basis just to keep those bullshit games going.
It’s not a game if you cannot win, and Zynga have yet to rip off a game from another developer, where you can win at it. Everything is just useless leveling up and that’s just monotonous.
http://www.nytimes.com/2010/09/28/business/28sorkin.html?_r=1&src=twt&twt=nytimes
Wow. Anyone defending that guy after the above, just fucking wow.
Has someone here been defending Zuckerberg? Clearly his $100 million in Facebook shares is going to solve all of Newark’s education problems.
Yeah Paul, MAXIM DID IN THE PREVIOUS THREAD! Good lord, man. Good freaking lord. We also have no idea how much Facebook is really worth so once Facebook goes public, paper rich-money poor, might be able to get a nice house because seriously, the brother should at least have a nice house.
Oh OK. Sorry. I tend to ignore Maxim’s posts.
Gets Newark and the participants some nice PR, but that’s about it. $100 million represents approximately 10% of Newark’s annual education budget and about 25% of what New Jersey lost in Race to the Top money by forgetting to submit accurate numbers to the interview committee. A band aid on a band aid.
Again, I like that he offered the money, because more billionaires should be like Buffet and Gates. The whole giving them money, when you may not really be able to give them money aspect of it, is what bothers me.
IO the other thing Facebook did besides layout what encourage real names/IDs and transparency.
This is something that seems natural today but back then it was a massive shift and really as big a game-changer culturally as anything.
David, you’d be surprised. RT’s traffic didn’t start getting into the millions of users until we started padding the review links with content – plot synopsis, trailers, images, news, columns, etc… There’s a reason why aggregators eventually become content creators – HuffPost and your very own MCN. The only reason HuffPost is larger than Drudge Report is because they pad their links with blog postings and paragraph snippets (not really content, but…). If RT didn’t create content to supplement the review links, it would be the size of MRQE.
I love you, Leah, but the irony of posting this comment — “…unlike the other detached and impersonal forms of communication mentioned, which with each step further remove people from genuine contact into a bogus house of cyberworld cards” — on a mostly-anonymous Internet blog is priceless.
And IO: That 3:15 a.m. manifesto posting gave me chills. Douche chills. Relax. Breathe. Nobody cares.
(Said the guy who used to be Boonwell but is now just me.)
Thanks Kevin. Thanks a lot.
“WHITE LADY”?!?!
holy shit, io, you reveal your true colours!
hilarious, you are a far bigger jackass than i ever imagined. i’ve always considered you a bit of a nitwit and a nutjob (and thanks for proving beyond all doubt just how right i was with your epic PSYCHO SPLUTTER above, very nice), but what you REALLY are is a RACIST little brain-damaged fucker.
so shall i call you ‘brown boy’ from now on, esse? no? why not? if a venomous “white lady” is somehow acceptable coming from you…
nah, i think i’ll just call you cheese-dick to commemorate your favourite food
—
k. schoonover, yes the irony is not lost on me writing such a thing on a blog, i kinda shot myself in the foot there, didn’t i? i failed to make clear in my sentiment that i what i was trying to lament was the incremental loss of genuine contact between people in the cyber-age; as much as enjoy movie blogging and reading about others’ opinions and experiences and get attached to my fellow bloggers and their characters and get a kick out of the anonymous interaction between people (not just me), as real as it is for what it is, i guess i don’t consider it ‘genuine connection’ between real people, but that’s just my personal feeling.
Leah, leave it to you to completely miss a Blazing Saddles reference. Sure it’s not as obvious as it should be but it’s there, you missed, and watch you GOING CRAZY LEAH on me. Seriously, you need a hug.
go blow yourself cheese dick, enjoy the snack!
(and wait, did you just insinuate my little comment above was GOING CRAZY LEAH on you after your jihadist screed above? that is truely…something. you are out of your fucking mind. oh wait, it was all just a joke, right? ba dum dum. i didn’t miss a thing, cheese dick, you think your ‘white lady’ remark is excusable because it’s a blazing saddles reference in the middle of all that drek? dim, dim bulb)
Again, look at what you are posting woman. That’s some crazy fucking shit right there. It does not mean you are CRAZY but that response above is CRAZY. You just hate me for some stupid reason, you can’t get over it, and now you just have to continually insult me to make yourself feel better. What the fuck ever. Again, I meant it as a reference to “Whose ‘WE’ white man?” excuse me for not executing as well as you would want.
Oh yeah, jihadist screed? Really? If that’s what it means to respond to you in kind then that’s what it means to respond to you in kind, but I was going to delete the whole thing, but the blog would not let me.
I totally agree with you Leah, just couldn’t resist the poke (that’s what she said).
Hey look, kids, there’s Big Ben again, Parliament….