Controlling Content

Some discussion from DevHawk and Scoble around owning/renting music. 

One problem I experience around rental is the anxiety of non-ownership. 

• What if the content provider wants to charge a much higher rental for my favourite content?
  

• Do I have to pay content providers whenever I upgrade media?
  

• What if the content provider restricts the media on which this content is available? (For example, forcing me to use a more expensive or less flexible format.)
  

• What if the content provider forces me to upgrade to a new version when I prefer the old version? (For example, I understand that Mike Oldfield regrets the haste with which the original version of Tubular Bells was produced, and would probably prefer us all to listen to the new perfectly engineered version. For my part, I prefer the original version.)
  

Scoble comments that most music isn't worth owning. Of course that's true. Some people like to listen to the same rubbish over and over, while others prefer a constant stream of new material (within a predefined genre). There are loads of radio stations that can satisfy both sets of people. (See my previous post on Shuffle). 

Of course, these risks don't only apply to music. I have lost track of several large repositories of useful material on the Internet. Have they been renamed/relocated, merged into something else, disappeared behind a subscription barrier, or taken down altogether? Perhaps I should have kept copies of some of the papers? 

Conversely, there is some content I'd prefer not to manage. Lots of fiction isn't worth reading more than once, so why do I keep so many novels? 

These are important questions in a service economy - the control and governance of the service and its content. Service dependencies in business dependencies; so service reliability/durability has an important bearing upon business risk. In some contexts, we may need some kind of service/content escrow to protect the consumer. 

Heartbeat Economy

An interesting variant on the Support Economy.

The key principle of the heartbeat economy is to avoid doing anything that raises your customer heartbeat. The key observation is that our current experience of services regularly irritates and frustrates, and causes raised blood pressure.

The Heartbeat Principle is related to the Pleasure Principle, which I identified in my 2001 book as one of the key principles of the service economy. Obviously there are services where we actively seek excitement - for example, a children's party. But for the most part, we want our services to be calm, predictable and unobtrusive.

BBC Radio Four broadcast a useful half-hour programme in the InBusiness series on the HeartBeat Economy (Thursday January 13th, at 20:30 GMT, repeated Sunday January 16th at 21:30 GMT.) 

The programme contained some great examples - a few companies that are starting to operate services that don't cause added stress for their customers - and also interviews with several leading thinkers and practitioners, including James Maxmin.

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Further Discussion: Two Questions

1. Whether the demand for heartbeat-friendly services exists. My response is that its existence is problematic - you cannot discover it by clipboard survey or focus group. Customers are not demanding it, and work their lives around the lack of heartbeat-friendly services. It exists in a hypothetical space, which perhaps can only be accessed by providing these services and finding out what happens.

So why should anyone believe in the existence of this demand, and why should service providers respond to something whose existence is problematic? We can try and answer this in two ways. Firstly, there are some service providers who are experiencing increasing difficulty in grasping onto any coherent picture of customer demand, and are casting around for new ways of making sense of demand complexity. Secondly, there are some exemplary service providers who are winning deep and loyal relationships with customers by offering heartbeat-friendly services. However, to make this argument more convincing, we need lots more examples in both categories.

2. Whether the response to this demand falls into a consumerist trap. I agree that some of the examples in the radio programme were coloured by consumerism, and there is a valid concern about this. I think the way to address this concern is to make explicit the ethic of service provision. Service providers may indeed be seduced into hyperconsumerist niches where the consumer remains passive - but these niches are arguably unsustainable and certainly unscaleable. Hyperconsumerist remains within the domain of directed composition. In contrast, collaborative composition is based on an ethic that converts a passive consumer into an active user. Not every service provider is going to make it - but it would be nice to think that those who do will ultimately gain an ecological advantage.


Related Post: Support Economy (January 2005), Pleasure Principle (March 2006)

Support Economy

Review of The Support Economy, by Shoshana Zuboff and James Maxmin
Viking Penguin, 2002.

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This book is a detailed and persuasive account of the distributed service economy, which the authors call Distributed Capitalism. The background is familiar. An ever-greater share of Western economy is occupied with services rather than products. And yet our experience of service is generally bad - and getting worse. Service providers are trying to achieve economies of scale and cost-savings, while maintaining or increasing revenues. Service staff are under increasing pressure and scrutiny, and "empowerment" is eroded by targets and other narrow initiatives. Consumers are subjected to the indignities of call centres, the persistent nuisance of "courtesy calls", and the inflexibility of business processes that have been tailored to fit an internal corporate agenda.
The promise of eCommerce was that it would offer a genuine alternative for business and consumer relationships. With some honourable exceptions, this promise has failed. Many early eCommerce efforts were coloured by naivety and amateurism ("if we can get a small cut from every purchase made by every large manufacturer, we'll be rich, rich, rich"), or by cynicism ("if we can persuade our customers to do their own admin online, we can get rid of half our staff"). General consumer experience of eCommerce is poor - often because the service details (good logistics, prompt and effective troubleshooting, and so on) have been neglected. And what has happened to all those B2B portals?

What Internet shopping encourages is something the authors call ninja shopping. If a consumer can easily compare prices for flights or car insurance (but cannot so easily compare other characteristics, including service quality), then selection will be based on price, and prices will be driven downwards. Initially this seems to work to the consumer's advantage. But the providers retaliate with an increasingly impenetrable array of extras, excesses and surcharges, which aim to recoup profit margins while making accurate price comparison near-impossible. (I call this Complexity-Based Pricing.)

Consuming services becomes an incredibly time-wasting activity. You have to wait in line to hire a car, because the clerk is obliged to try and sell an array of options to every customer. You have to check-in hours before a flight, and you still may miss the connection. You have to review all service bills carefully for unexpected charges and other errors. You have to wait for everything. (This waiting is an almost inevitable consequence of traditional process thinking: if a customer ever gets immediate attention for anything, this rings alarm bells in the process office, indicating that the relevant function is over-resourced.)

The authors argue that there is a huge potential wasted value locked up in these dysfunctional service relationships. They advocate a form of deep support, that will release/realise what they call relationship value, and they paint an attractive and detailed picture of the way it might work. They go on to argue that the realization of relationship value calls for a new enterprise logic: distributed, federated, dynamic, infinitely configurable; technologically supported by digital media and infrastructure convergence. From an SOA perspective, this sounds very familiar.

The book is not just an eloquent argument for the service-based business, but also a powerful vision of how it can and must be done properly. Recommended reading for everyone interested in the service economy.

Review first published in the CBDI Journal, July/August 2004.

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The Support Economy Website

See also Shoshana Zuboff, Creating value in the age of distributed capitalism (McKinsey Quarterly, September 2010)

Related Post: Heartbeat Economy (January 2005)

Updated 14 May 2014