The Future Place Blog

Music as the hook, not the product

Chris Anderson’s Long Tail blog has a thought provoking article where he puts forward the proposition that many bands may be better off giving their music away (via downloads) and making their money from live appearances.

Anderson starts off by reminding readers that the marginal costs of production and distribution are close to zero for music, something which Anderson has termed the economics of abundance. Revenues from legal downloads are growing, but they are not compensating for the drop in CD sales. By contrast the prices of tickets for live performances have been growing. Anderson quotes the average US major gig ticket in 2006 as $61, up 8% on the year before.

Anderson collects various other stats to back up his argument. For example, the share of music revenue accounted by live performances in North America was at an all time high in 2006, at 16% of the total or $3.6 billion.

Anderson also pointed out that 92% of the Rolling Stones revenue comes from touring, not from record sales.

So, live music might be part of the answer for bands, with downloaded music, at marginal prices or even free, becomes a method for creating the demand for live music. One group of people do not care for this vision of the future. Generally, the labels make their money from record sales not from live performances.

Things may not turn out as Anderson predicts, but his article does ask questions that need answering, and highlights the need for marketers to keep re-evaluating what is the market (just as manufacturers of computer printers changed the profit stream from the printer to the consumables).

McDonald’s and France – the dangers that lie behind the stereotype

This week’s Economist (unfortunately in the subscription bit) has an interesting article about McDonald’s and the head of its European operations. Although the article was interesting and informative, the main thing that hit me was the danger of the stereotype.

We all use stereotypes because they make world a simpler place. If I am pretty sure that I don’t like Rhythm and Bass then I feel safe in not listening to a whole bunch of bands that have been labelled as Rhythm and Bass – I may miss a few bands I would have liked, but I have avoided listening to lots I would not.

Market researchers can also fall into stereotyping issues, assuming people over 50 are old, assuming MySpace users are young, assuming that the competitive array for a soft drink is non-alcoholic.

So, why did this article about McDonald’s stir so much angst on my part about stereotyping? The myth or stereotype about France is that it is the most anti-American country in taste (and the UK is by contrast the poodle of the USA). Most Europeans are aware of farmers protesting in the 90s about McDonald’s and many of Jose Bove attack and destruction of a McDonald’s in 1999 – leading to the stereotype that France rejects “le burger” whilst the UK is simply USA mark II.

The Economist article was about how the boss of McDonald’s Europe is Denis Hennequin, a Frenchman. Hennequin was made the head of Europe in 2004 after being successful as the head of France, making France the most profitable market for McDonald’s in Europe! Indeed, the Economist asserts that the country in Europe where McDonald’s is weakest is the UK (but even it has been doing better since Hennequin assumed the helm of Europe). One difference in amongst the countries is the pattern of ownership. In the US McDonald’s only owns about 15 of its outlets, the rest being franchises. In Europe the average figure is higher, about 40%, but in the UK it approaches two-thirds.

And to finally raise the prospect of all the stereotypes being smashed, the Economist says that Monsieur Hennequinn is already being tipped to be the first European for the company’s top job in Illinois.

AMSRS – Ahead of the Rest?

On Friday I set off for Perth, in preparation for a workshop I'm leading next week at the AMSRS (Australian Market and Social Research Society) Summer School. The two-day workshop is entitled “Research Opportunities Using the Internet and Emerging Digital Technologies”, and will contain a significant element looking at Web 2.0 and Research 2.0.

Although the slides (by which I mean the PowerPoint) have been submitted for some time, I am busily updating my case studies, examples, jokes, and tasks for the syndicate sessions. In doing so I have been struck by the impressive speed that AMSRS has seen the need to for an updated course in this area. International organisations such as ESOMAR and national organisations such as the UK’s MRS have been very quick to facilitate conference papers and sessions, but I think the AMSRS is probably ahead of the game in putting training in place for Research 2.0 issues.

I am firmly of the belief that Web 2.0 and Research 2.0 is not a niche, it will impact most aspects of our business and will be a transformational change. If you get the chance to attend a conference or better still a workshop I would firmly recommend it.

And just to be uncharacteristically commercial for a moment, I am available to do bespoke courses and workshops for your organisation.

I also particularly like the non-sublte way that AMSRS has combined the encouragement to study with a reminder that the workshops are being held in a leisure destination - see below.

What is the best medical breakthrough since 1840?

Wired reports that the BMJ (the publish division of the British Medical Association) has published the results of a poll to find the most important medical advance since 1840 (the year the BMA was formed).

The most important improvement was Sanitation (clean water and sewage removal), with 16% of the votes. Second place went to antibiotics with 15%, third was anaesthesia with 14%, and fourth vaccines with 12%. Near the bottom of the list was the discovery of the risks of smoking (1.6%), computers (3.6%) and last place in the 15 options selected was Tissue culture (0.4%).

For me one of the interesting things about this study is that the organisers had the foresight to add an option as non-drug and non-modern as clean water to the list, particularly as the project was made possible by a grant from drug company AstraZeneca.

The online poll was conducted mostly amongst health professionals such as doctors, with a bias toward developed economies, particularly the UK.

GapMinder – Cool Ways to Visualise Data

As the amount of available data grows we need ever more flexible tools to help us understand it and communicate the messages within it. One of the ways we can set about understanding data is to use data visualisation approaches. One really interesting organisation in this area is GapMinder.

The GapMinder website has several interesting approaches to visualisation, both for understanding data and for communicating findings, but the coolest is GapMinder World. GapMinder World links to data from Google and allows the data explorer to pick X and Y axes from a range of data sources, such as Life Expectancy and Income Per Head. The chart then displays countries on the chart as bubbles, where the size of each bubble reflects the population size. At the bottom of the page there is a slider which allows the data to viewed for the range of years capture by the data. By gently moving the slider from the earliest date to the newest you can watch as the bubbles move around the page, and since the bubbles represent population sizes you also see the bubbles grow.

The chart above shows a plot of Life Expectancy against Income Per Capita, in 2004. There is a strong trend that links wealth with life expectancy, but there is also a clear link with being a blue bubble and lower life expectancy. The blue bubbles are Sub-Saharan Africa, where war, Aids, and civil strife have dramatically shortened life expectancy. The richest country with a low life expectancy is South Africa, and the country with the lowest life expectancy is Botswana, even though it has quite high income per capita.

The second chart shows the picture in 1992, when income was even more closely linked with life expectancy, and when life expectancy in South Africa was 63, instead of the 45 it had become by 2004.

Tools such as this point the way to much better ways to visualise data and to use the brain to spot patterns and meaning in the data. However, I do not think that these tools are, in general, a way of communicating data. Individual charts, even better some recorded sequences of charts, might be good at communicating insight, but the whole tool is simply a bucket full of answers, it is a tool for the analyst not the end user.

It’s the Median not the Mean

For many years one of my many hobbyhorses has been how important it is to use the median not the mean for some types of measurement and in particular for income and wealth related measurements. The Mean tends to be distorted by high outliers, whilst the Median gives a better understanding of the numbers relate to people.

The week the Economist has an interesting feature looking at executive pay, and defending the high levels that many of them are paid. In the article it stresses the importance of using the Median rather the Mean and illustrates it with the chart below.

 

The chart shows the relationship between average wages and the wages of top executives. From about 1943 to about 1983 the Mean and Median were fairly close together and shows that executives in the US earned about 20-30 times as much as the average worker. However, since 1983 the Mean and Median have diverged. The peak difference was when the Mean earnings were 320 times higher than the average, whilst the Median was a still excessive, but very much lower, 120 times higher.

The chart below from New Economist shows a similar discrepancy between a Mean and Median.

 

So what is the message, the same as it was when you were a student. Check the Mean AND the Median, if they are the same then you can use the Mean. If they are different then you need to understand the difference and use the one that explains the data best.

[Many thanks to Andrew for pointing out the typo in the first sentence, now corected]

The Danger of Clever

One of the themes I have been pursuing in my research over the last few months is how to use video to make presentations more effective in communicating insight. Part of my premise is that Infotainment has the potential to get the message across better. However, a recent post by Lee McEwan highlights the danger of something which looks very clever and is superficially quite entertaining, but which distracts to deceive.

The post is about a YouTube video (see link below) which links a twisting narrative together in a beguiling but nonsensical way. As we move towards Infotainment we need to ensure that we do not descend into the clever but meaningless.

Generating Ads Algorithmically

TechCrunch has an interesting post highlighting the AdGenerator. The AdGenerator is a project created by Alexis Lloyd as part of her MFA thesis at Parsons The New School for Design.

What the AdGenerator does is remixes and randomizes existing corporate slogans and combines these with images from Flickr (presumably by using tags). Alexis’s proposition is that the language of advertising is both deeply meaningful because it represents cultural values and desires, whilst at the same time being utterly meaningless in that these ideas have no relationship to the products being sold.

I am not so sure that Alexis is right, as the purpose of brand building is to take these relationships and then to link the brand with those values and desires in a way that adds value to consumers’ experiences of the product.

Looking at the images and slogans developed by the AdGenerator I think it would be fun to combine the generated ads with some online research, showing them to consumers, finding out what messages they convey and perhaps trying to assess their consonance and dissonance with specific brands.

Using Webinars to Spread the Message

Over the last two-to-three weeks I have been involved with several Webinars with Virtual Surveys clients, looking at the impact of Research 2.0 and other current trends in marketing research. In general I was really happy (as were most of the attendees) with the Webinar process. The way Virtual Surveys tend to organise their Webinars is to invite 5-10 people to log in at the same time, at the end of the presentation the attendees then take part in a Q&A session (more attendees would be fine for the presentation, but not so good for the Q&A).

Presenting via a Webinar is a slightly unnerving process as there is almost no feedback from the audience during the presentation phase. In a face-to-face presentation the presenter can and should monitor the body language (e.g. yawns, leaning forward/backward, smiling, frowning etc.). In a Webinar all of this non-verbal feedback is missing, and there is effectively no audible feedback.

In terms of the presenter experience, it is more like conducting a radio broadcast and phone-in than any other comparable activity. Just like working on the radio the job is made much easier if there is somebody else in the room, and particularly if they smile, laugh, and frown to a pronounced degree.

I think Webinars have a great future in presenting in market research. They are currently used for conference type presentations, training, and I would expect their use to expand. This in turn means that we all, even those researchers who are considered expert presenters, need to update their skills and learn the nuances of new and expanding media.

People do not ‘Value’ their Privacy and Security

A report from ChoiceStream discussed on Clickz underlines the point I have made before about many (perhaps most) people’s attitude to handing over their details.

Ask a question to citizens about whether they value their privacy and security and they will say yes, and often lobby legislators. But, when citizens are offered some small service they appear all to ready to exchange valuable and sensitive information.

The ChoiceStream study, based on US citizens, found that 62% of people were worried about divulging personal data to obtain personalised services, almost unchanged from the 63% in 2005. But the number of people willing to provide personal information to get personalised services was 57%, up from 46% in 2005. Similarly, the number of people willing to let sites track their clicks and purchases (including in https areas) was 43%, up from 32% in 2005).

The important lesson here is to be careful about the question we ask and the interpretation we put on answers. Choice based questions, where respondents make trade-offs are likely to correctly predict the sort of apparent paradox shown by the ChoiceStream report. People’s preference is for privacy, but the value they place on they preference is very low, and is readily traded-off to gain other more interesting benefits.