Digital Media Business Models

MIT's Technology Review published a really good article this week in response to Facebook's IPO (who hasn't commented on this?). But the article, The Facebook Fallacy by Michael Wolff, offers a perspective I hadn't seen addressed. Wolff uncovers the inherent problem of Facebook's reliance on ad-revenue as their business model. Believing such a model is doomed, he predicts,

"the fallacy of the Web as a profitable ad medium can no longer be overlooked. The crash will come. And Facebook—that putative transformer of worlds, which is, in reality, only an ad-driven site—will fall with everybody else."

I worked for a website that relied on ad-revenue and witnessed the resulting cyclical ups and downs. I'm not convinced it is doomed, but the long-term viability is definitely unclear.

When I present or talk to people about location-based services or geosocial networking apps, I often get asked about their business models and their likelihood of financial success. People like the apps or websites, but aren't clear how they make money, why the ads are so prevalent (or annoying as I frequently hear), and whether or not they'll be able to stick around.

I'm not an MBA-type, but here are the ways, I've encountered for digital media to make money:

1. Advertising & marketing - sell ads or run campaigns on your digital service (although noting how flawed Wolff believes this to be and I'll add that in months my Google ads on this blog have made me under $2)
2. Sell user data - this is going hand-in-hand with advertising, but how companies will pay to learn more about your customers and their habits (e.g. foursquare, I believe)
3. User fees - charge for use either upfront (per apps), per use, or by subscription
4. Bundled package - offer digital services for free to sweeten the pot of items that you can charge for (e.g. WebKinz)
5. e-commerce - sell things or charge a commission for selling, or helping to sell, (such as referrals) other people's things
6. Ancillary sales - offer free services and hope users will buy your related products or services (e.g. photo hosting sites and Amazon with user reviews & lists)
7. Teaser - similar to above, offer a free version and try to up-sell to a paid version (e.g. SurveyMonkey)
8. Brand awareness & loyalty - don't make money directly on digital efforts, but hope by creating a positive, branded experience it'll inspire people to purchase your other products (e.g. Disney or blogs promoting one's expertise to draw consulting gigs)
9. Donations - ask users/members for financial support or rely on endowments (e.g. per Wikipedia or the Cancer Society)
10. Subsidies - consumers get the service, or a portion thereof, for free, while someone else pays for it and subsidizes it, (e.g. Craigslist & LinkedIn)
11. Taxation & grants - rely on the government for funding, either directly or through granting agencies (e.g. arts-based, special projects) (e.g. CBC)
12. Start-up funding - don't make money, receive funding through venture capital, rich parents, student loans, second mortgages, etc.
13. Altruism - don't worry about money as a side gig pays the bills (e.g. blogs, open access journals) or just keep on doing it for some sense of a larger purpose/compulsion

I'm sure I'm missing several ways, so let me know.

Google Drive is a Wreck

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Diagram & Use Case of Location-Based Service System

I'm not a systems' theorist, but I do think to understand technology it helps to place it in relation to the larger technical picture. As such to help understand the various facets of how location-based services function, I developed a system-type diagram and a couple use cases.

Although they both simplify the actual technical and individual processes, I think they help explain how the various functions work together to deliver locative content.

Diagram: System perspective of location-based services (a digital library can be any database of digital content)

Use Case A

In the first case, a user opens an application on a mobile device and submits a query. Queries may be general, such as “What happened here?” or “What’s here” or specific, such as “trees” or “architecture style”.

This query, along with the geographic coordinates of the user, which has been automatically or manually identified, is sent over the Internet to a digital library or information repository system.

The system then queries its database to determine which entries match the search criteria and the geographic location of the user. Automated indexing, manual classification, or author-supplied metadata can be used to determine the geographic footprint of an information object.

A method then determines the match between georeferenced information objects and the user’s query. Algorithms determine matches and sort the results, using geographic relevance and keyword analysis, information retrieval relevance factors, or a combination.

So a search for trees would return information about the specific trees found at the user’s location.

Use Case B
In a second case, the technical infrastructure is the same, but instead of a user querying the system directly, a user arrives at a location, accesses a location-based service to see a list of proximal points of interest (POI). These POIs could be businesses, attractions, landmarks, public spaces, etc.

To see these POIs a user may directly enter their location into the system (known as a check-in) or may have the location automatically determined.  The user then sees information concerning the POI, either facts (e.g., contact information, photographs) or user-generated content (e.g., reviews, ratings).

The user may elect to share their location with their contacts or add their own content about the POI.


As mentioned, this diagram and use cases offer a brief overview of the underlying and interconnecting topics. Although my future research looks at the individual meaning-making process upon receiving geotargetted information via a location-based service, there is certainly a need for research that examines the system as a whole.

Types of Mobile Media

I've blogged previously about my defintion of mobile devices. Suprisingly, there is little consensus in industry and academia on exactly what is a mobile device, so I hope my definition will be of some use in this regard.

While research the usage and potential of mobile devices, I have found a tendency to view mobile devices as the first form of mobile media. And thus, many writers further the sense that what we are experiencing with mobile device usage is an entirely new phenomenon. Humans have a long history of mobile media, pretty much as soon as written language was invented, texts were carried around whether in clay, vellum, or papyrus.

So since I love lists and typologies, I thought I'd offer a list of other forms of mobile media.

I think it is important to distinguish between portable and mobile. Portable means that a medium is capable of being moved, while mobile means easily moved (see Dictionary. com).

So although a television set can be moved around (hence portable) it isn't easily mobile.

Ghetto blasters, for example, blur this distinction - as this picture from Wikimedia, circa 1987 demonstrates.  Carrier pigeons while helping extend communication over large distances at least since 2000 years ago are not that easy to carry with one so were probably one of the first portable communication mediums were not quite mobile.






Mobile mass media:

• books (paperback more so than hardcover)
• newspapers
• maps
• magazines
• transistor radios (e.g. to beach)
• print-outs & photocopies
• wristwatch televisions (launched in 1982) and possibly smartwatches soon
• Walkmans & MP3 players
• game consoles
• GPS devices
• e-readers
• tablets
• netbooks

Mobile communication media:

• personal digital assistants
• walkie-talkies
• CB radios
• pagers
• car phones (they had them on Charlie's Angels, remember?)
• cell phones

Let me know if I missed any...

My Fondness and Frustration with foursquare

I've been using the mobile location and geosocial app foursquare soon after it was available in Canada. Having used it for a couple years now, I'm intimately familiar with it.

I love it - but it also pisses me off regularly!

They are just some inexcusable problems and limitations that should have been fixed by now. To be fair, foursquare does continue to offer product updates and their user base is growing despite challenges (see my prior post on this Have Check-ins Checked Out? ). Also, I use foursquare on an old device, so some of the problems could be the result of the limits of my device. I'll be upgrading to an Android device in September when my 3-year contract ends (no more contracts for me).

Still, I believe some of the problems I have are consistent across platforms and regardless they are so damn annoying they should be fixed!

I've been a loyal foursquare user, but if something that comes along to address the problems and/or satisfy my needs better, I'll be eager to leave and have less frustration in my life. Still, my beefs below can be taken as key areas for foursquare developers to improve to make me (and millions of others) even likelier to be a loyal user.

Before complaining, I'll offer what I think they do currently do right, so they can extend the positive.

Likes:

• Friends' recent check-ins at a glance on homepage
• Venue tips from friends and others (particularly when they are specific)
• Genuine rewards from businesses
• Self check-in (versus automated, uncontrolled by user check-ins as some apps offer)
• Ability to find cool new business
• Personalized recommendations of sites and businesses
• Badges (dorky, but surprisingly fun)
• Personal history list (it's like a handy travelogue)
• Curated, individual lists of recommended places to share
• Finding out a friend is at the same place as you at the same time (or at any time for unusual places)
• Only locative app that achieved a viable critical mass

 Dislikes:

• Too many clicks to check-in, they could easily eliminate one step to make the process faster
• Once check-in can't go back and edit - e.g. to add comment or post to Facebook
• Doesn't remember very well the places I frequent (to make repeat check-ins easy)
• Their "deals" feature while promising in theory has been completely useless for two years - first what they consider to be a "nearby deal" is often vast distances from where the user has check-in (really 10+ kilometers often - this in a major metropolitan area) and then the deals are often bogus, either a deal that everyone gets (e.g. a normal sale or something that is otherwise free or just incredibly crappy - they need quality control for this to have any value)
• Often doesn't pull up places actually closest to user (it seems that a simple sort of results by proximity should be easy, but it often doesn't work)
• Result often don't pull up popular venues, but even worse...
• When searching for a venue by typing it in, it will frequently says there is no place, but then once  I go to add it, the app then finds it in their database. So if it is there,why doesn't it come up at the first request or at least when searched?
• When adding a venue, the app stalls or often fails completely when trying to designate the venue's category (a required field)
• Search for venues must be incredible precise to work (does not allow short forms, synonyms, common misspellings, etc. - basis search features)
• Often says there are no places nearby and have to refresh 3-4 times for it to work (if this is a network access issue then the error message should be worded as such)
• Shows friends check-ins on homepage even if they haven't used the app in over a year - set a cut-off of a few weeks
• Brands (for example TV channels, celebrities, etc.) can be added as "friends", but they all appear to be doing a really boring and pointless job at using it
• "Mayorships" (i.e. title given to the person with the most check-ins at a place) are a neat idea but with so many users now they are essentially unattainable to the vast, vast majority of users and are thus pointless and frustrating - they need some other titles (Council member?) or method to determine mayors
• Should have a ratings button for venues rather than just comments as ratings features are more apt to be used and thus more reliable and useful

Problems that aren't foursquare's fault, but are still damn annoying:

• No indoor positioning
• No cell coverage in basements or urban canyons
• Most of my friends (and me) mostly check into really boring places (e.g. work) and don't add interesting commentary often enough
• Insanely-high roaming fees (on my trip last month to Hawaii, I paid over $40 recently to read a few emails and for several foursquare check-ins)

I think overall foursquare has been a compelling, fun, and useful product, so I'd like to see it improve and expand.  

Lexicon of Place Studies and Locative Media

I'm in the process of preparing for my PhD comprehensive exams (or rather my faculty's equivalent). So I'm currently enmeshed in the literature related to my topic - how people use location-based services to make sense of their places.

The only thing academics love more than using big words is coining a new term.  As such the literature becomes baffling with jargon.  However, this problematic jargon belies what are often fascinating and useful concepts. So I started keeping track of the jargon as I think it offers brief snapshots into how location-based services function and their possible role in shaping sense of place.

I have already blogged on terminology related to mobiles and locative technology. This blog post will focus on how such technology might affect our relationship and meanings of our world, with some background terms added.

Below, I offer my simplified definitions, with a key theorist in parenthesis.

• authenticity - how "real" a place is, offers genuine experiences, popular turn with humanistic geographers (per Relph and Tuan)
• autobiographical insideness - high degree of integration of one's lifestory with specific places (per Rowles)
• chora - early notion of existential space (per Plato)
• cyburg - technology enmeshed with urbanity (per Cuff)
• deep map - mapping a place through through thick, multifaceted description
• dérive - unplanned, open-minded exploration (per Debord)
• détournement - creating new meanings & representations of places to counter dominant representations (per Debord)
• digital cities - visionary concept of technology embedded and aiding city life
• dwelling - existential and contextual engagement and living with place (per Heidegger)
• ecotopes - distinct landscape
• Everyware - similar to ubiquitous computing
• field of care - feeling of protection for specific place (per Tuan)
• flâneur - person who wanders to city to experience and appraise it (per Baudelaire)
• gazetteer - geographic directory
• genius loci (also spirit of place) - a sense that a place that has a distinct identity
• geographic behaviour - how humans behave in and in relation to space
• geographic experience - event in space/place significant to an individual
• geosymbol - a structure(s) or area that represents a larger, meaningful concept (per Bonnemaison)
• humanistic geography - branch of human geography that place individual experience at the centre of meaningful engagement in the world (per Relph and Tuan), similar to existential geography
• hybrid space - the enmeshing and inter-dependence of space/place, people, and technology (per Gordon, de Silve e Souza, Kitchen & Dodge)
• insideness - personal connection with a place, being an insider (per Relph)
• landscape - physical features of an area
• lifeworld - the world we live in, experience, and create meaning (per Husserl)
• lived space - similar to the lifeworld but also the space where social meanings take form (per Lefebvre)
• local knowledge - body of knowledge that a specific, co-located people have particularly regarding their places and landscape (per Geertz)
• locale - the natural and human form of a distinct space (per Cresswell)
• location - a specific point in space
• motility - ability to move, free and by one's own efforts (in contrast to mobility, which implies only geographic movement)
• mobilities - field of study looking at how and why humans move through the world and the resulting meanings, including the tools they use (such as mobile devices)
• neogeography - movement using new digital, often collaborative, tools, methods, and artistic forms to map and understand our world
• network locality - hybrid space meets place (per Gordon)
• non-place (also placelessness) - a space, often a building or area, that lacks "authentic qualities" that is it is bland, generic, derivative of other places, examples include malls, airports, and suburbs (per Relph, Augé)
• non-representational theory - belief that meaning in our world is constantly in flux, our social world is a process and thus best conceived through performance rather than as a representation (per Thrift)
• personal geographies - individual sense of their places and areas, including individual or friend-based playful interaction with places and mapping
• place - space made meaningful
• place attachment - emotional attachment to a specific place
• place dependence - usually reliance on a specific place (either based on its utility or proximity), can also mean such a high degree of connection that one is emotionally dependent on a place
• place identity - the role places having in shaping and projecting human identity (but can also include the belief that places have an identity, see genuis loci) if this identity is shared it is known as "collective identity"
• place loss - feeling of loss when removed from a meaningful place (e.g. refugees)
• place-making - efforts to make a space/place more pleasing, harmonious, meaningful or memorable either through physical efforts (e.g. landscaping, architecture) or marketing  
• placemarker - a distinct physical structure that aids one's memory of a space, essentially a bookmark for a place
• psychogeography - creating new awareness of our places and foster new experiences  (per Chtcheglov and Debord)
• rootedness - feeling of connection and a historic link to a place (per Hay)
• sense of community - feeling of familiarity and attachment with the people of a given area
• sense of place - meanings and feelings related to a place
• sites of memory - physical features that are created or given meaning to represent and honour collective history (per Nora)
• social objects - objects (but could be places, e.g. restaurants, monuments) that spur conversation and socializing (popular in social media theory)
• social production of space - theory that our world is constructed by social processes (per Lefebvre)
• space - the physical world (often used as free of human meaning)
• spatial cognition - human ability to comprehend and visualize euclidean relationships between spaces
• Third space - a physical site or forum for free public discourse (per Oldenburg), similar to the public sphere (per Habermas)
• toponym - a place name
• topophilia - love of a place (per Tuan)
• topophobia - fear or negative feelings towards a place (per Tuan)
• topos - the physical features of the world

I would love to hear from others on their take on these terms or terms I should add to this list.