Access over owner- ship

Access
over
ownership
- about the trend of wanting access
to things instead of owning them
a pocket guide from Media Evolution
INTRO by Media Evolution
Follow behaviour carefully
A
t Media Evolution we usually say that
there are three main factors that affect opportunities for media companies:
customer behaviour, available technology
and the business model.
”people want to have access to
things instead of owning them”
People’s change of behaviours doesn’t
always begin in the media industries. But
they almost always reach us. When they
do we need follow them as soon as possible, preferably before it happens, to grasp
new opportunities in the market.
In this publication, Lauren Anderson
writes about the importance of niches,
Lisa Gansky about what business models
can look and Kalle Magnusson gives his
perspective from the music industry.
Media Evolution
This publication is published by the media cluster Media Evolution. We are working to boost growth in the
media industries in southern Sweden. One of our key
areas is gathering intelligence to monitor what’s going
on in the media industries across the globe. We take
that information and use it to highlight opportunities
and business models that our members, and media industries in general, can exploit and develop.
www.mediaevolution.se
4 Owning access – collaborative consumption 6
Services that give us access – from cars to music 8
Create a community to secure supply 10 The interest graph – what’s it to you? 12 Buying and selling
longevity 14 Seriously better things, easily shared
16 Mythbusting: “Spotify doesn’t give any money to
artists” 18 Are we ready for Collaborative Consumption? 20 Power to the people 22 Glossary
Access over ownership
June 2012
Publisher: Media Evolution
Editors: Caroline Lantau, Sara
Ponnert och Martin Thörnkvist
[email protected]
Design: You Us and Them
WHAT by Martin Thörnkvist
Owning access –
collaborative consumption
I
n the last couple of centuries, we have increasingly accumulated our own tools, household goods and media in
our homes. Most of us own a drill and, until very recently,
we bought music and film pressed on plastic discs.
It is relatively easy to build a platform that creates trust between people who do not know each other using statistics
and social graphs. This ensures that there is sufficient supply and demand for the service to be interesting.
Something is changing. We humans are changing our behaviour. Not because we think it is ugly to own things, but
because access can give us so much more than ownership.
Instead of owning 300 records, we can get access to 15 million songs.
In area after area, we are abandoning ownership and instead
paying for access. At first thought, it feels like a new trend.
But thinking about it again we find that it is human behaviour that is old and a very nice approach to gadgets and
media consumption. Before money existed we exchanged
things with each other. Before we had money left over each
month to consume we borrowed things from each other.
Collaborative consumption
The collective English name for the platforms that make
up this trend is collaborative consumption. It’s about different ways of using the idling capacity of things, of letting
your neighbour use something instead of it lying unused
on a shelf. The classic example is the average electric drill,
which is used 13 minutes in its lifetime.
You can divide collaborative consumption into two rough
parts. The first are platforms that help people make their
things available, and to tie them together with people who
need them, peer-to-peer platforms. The second is when a
company buys a stock of things or rights which they then
sell access to. (B2C)
flickr.com/passetti CC BY-NC-ND
Three factors make this old behaviour take on renewed
importance for how we do business, technological innovation, economic decline and environmental awareness
”It’s about different
ways of using the
idling capacity of
things.”
The recent economic crisis has also led to people having
less money and it makes even more sense to have access
to things instead of owning them.
In the media industries
Thanks to the Internet, many of us have developed a desire
to share things when we surf across something interesting.
We share links, and services that bring people together
around common interests are growing by the day. Sharing
is caring is a comparatively well used phrase that goes well
beyond the pirate world.
The reinvention of behaviour where people want to have
access instead of owning things may have started with
apartments and cars, but it won’t stop there. The success of
streaming services has resulted in a full-swing shift in the
music industry, and similar services for TV programmes
are growing in the United States. We have been borrowing
books from the library since time immemorial.
The behaviour is not new, but models for how the media
industries will do business using it will need to be.
Martin Thörnkvist is a media market analyst at Media Evolution
and runs the music company Songs I Wish I Had Written.
A different era.
WHAT by Martin Thörnkvist
Services that give us access –
from cars to music
O
ne of the main reasons why the collaborative consumption trend is happening now is the ability and
ease of connecting someone’s assets to someone else’s
needs on Internet-based platforms. Instead of being limited to one’s own little network of friends, platforms become
well-stocked marketplaces.
Services first grew out of the things we want
that are most difficult and expensive for us
to obtain. An overnight apartment in New
York (Airbnb.com) or a car for weekend
excursions (Zipcar.com and Sunfleet.se).
But the number of aggregating services has
quickly emerged that aggregate cheaper
things, as well as things that we don’t use
so often. A circular saw to build a wardrobe
(Uniiverse.com) or a bicycle in a city where
you don’t live (Spinlister.com).
Time is another asset that we sometimes have lots of, but at
other times it’s very scarce, so why not ask others for help
to do things on sites like Taskrabbit.com and Hinnerdu.se?
Creating trust between people who don’t know
each other
One of the biggest challenges – and merits – of these sites
is to create trust between people who haven’t previously
met yet can lend someone their apartment for example.
People do this by the classic internet method of ranking
both those who own assets and those who want to access
them by measuring history and voting. Several sites use
the social graph that Facebook provides which shows
whether people are a friend or friend of a friend of the person who owns something.
Flexidrive.se and Whipcar.com are services that let people rent their cars to one another. They have traditional insurance cover on top of the owner’s regular car insurance
so you don’t have to worry about no-claims bonuses, etc.
15 million arguments for access
It is not difficult to understand why people like services
such as Spotify, Wimp and Rdio. That someone else collects all the world’s music and makes it available for a few
Euros a month is a pretty unbeatable deal. Owning media
on plastic and paper quickly becomes irrational.
The music industry was the first to launch this type of
service. But that’s just the beginning for the media industries. In the United States, Hulu.com aggregates TV
programmes from a number of companies in a subscription service, Netflix.com does the same for films and it is
rumoured that Amazon.com has plans to do the same for
books.
It’s not our behaviour that prevents the existence of subscription services for books. Libraries have been places offering access to texts and knowledge for centuries.
In the era of service sites, Skillshare.com closes the circle
well. The platform can be used by anyone to describe the
knowledge they possess and offer local training.
”one of the service’s
greatest merit is that
they create trust
among people who
do not know each
other”
HOW by Lauren Anderson
Create a community
to secure supply
C
ompanies like Airbnb, TaskRabbit, Whipcar and
Skillshare are changing the way we think about the
things we own, whether physical stuff or intangible skills,
and how we get access to the things we need.
Two-sided marketplace
Despite the growing popularity and success of Collaborative Consumption business models, these marketplaces
are not without their challenges, especially early on where
decisions around how to launch and scale can make or
break the business.
While the idea of a two-sided marketplace is not unique to
Collaborative Consumption, it is one of the biggest hurdles
to gaining traction in the early days of a business. How can
you ensure there is enough (or the right kind of) supply
to meet demand? There is nothing worse for a member
who visits your Sporting Supplies Rental site looking for a
baseball bat, when all you have to offer is tennis racquets.
After an unsatisfactory first-time experience, chances are
they won’t come back a second time.
Focus on a niche to get the benefits of a community
To tackle the problem from the outset, it is important to
hone in on a niche area to focus your inventory on. Not
only will this enable you to market your offering effectively
and manage expectations, it will also enable you to attract
the right kind of user from the outset.
By focusing on a type of product, a specific geographic
location or a particular interest category, you can build a
strong community base and ensure a higher guarantee of
positive experiences.
“By focusing on a
type of product you
can build a strong
community base”
GaBoom, a UK-based video game swap site launched by
21-year-old Jess Ratcliffe, initially launched offering three
different ways to swap games: Secure Swap, GaBoom Escrow and Forum Exchange. While a strong community
built around the initial site, Ratcliffe realised that the best
way to scale was to simplify the offering even further, so in
late last year they stripped back to a single direct memberto-member swap method.
Through reducing the complexity in how members use
the site, Ratcliffe and the GaBoom team have been able to
hone in on the user experience in one single area, giving
them a luxury of focus they didn’t previously have.
Once a strong following has been developed in this particular niche area, it’s time to consider scaling up to new
territories or adding new product offerings – but don’t do
everything at once! Use the relationship you have developed with your community to get feedback on what new
services they would like to see, or which new location
would have the greatest chance of success, given the number of expressions of interest you have received.
By tapping into the people who love your business and
seeking their input, you will be able to make well-informed
decisions on where to grow next and build an even stronger community in the process.
Lauren Anderson is the Community Director for Collabortive
Consumption and will speak at The Conference 2012.
Lauren Anderson
HOW by Tine Thygesen
The interest graph –
what’s it to you?
T
o get people engaged on peer to peer market places
it’s important, as Lauren Anderson wrote, to harness
their interests by focusing on niche products.
Last decade marketers learned to use the
social graph to establish a closer connection between a person and their message.
It’s based in the assumption that if someoTine Thygesen
ne you like likes this then you’ll like it too.
Sounds silly? It is. Because the fact is that
just because you’re connected with random old school
friends who you probably haven’t seen for a decade, its
very unlikely their taste and preference say anything
meaningful about what you’ll like.
Reach your most likely fans
The interest graph begins with who you are, your existing
taste and preferences and tries to connect you with only if
you fall within the scope of the product. The theory is that
you reach less people, but you reach them on a deeper level. It’s simply too hard and too expensive to try to change
people’s tastes, so instead you focus on reaching the kind
Tobias Björkgren
As people are bombarded with more and
more information they become more
and more fatigued, harder to engage and
picky about what they’ll listen to. That represents a challenge if you’re a marketer,
a product builder or you have anything
to sell. The interest graph might be your
answer. It is the next step in our human
mission to filter, curate and make sense of
the information overload.
of people who are already interested in your kind of product and create a proper, deep engagement with them.
Personally I am a product builder, and my company Everplaces is built around the interest graph. The keyword
for us is relevance. Let me explain; Everplaces’ industry
is travel info and recommendations. We want to fix the
problem of 90 % of the info in guidebook being irrelevant to you as an individual, because when services like
Tripadvisor tries to serve info that’s a little bit useful for
everyone that means it’s perfect for no one. We believe we
can offer more relevance by using the interest graph to
personalize, in our case on top of the social graph.
Interest is a trend
We’re not the only company to have seen this change as
an opportunity. The interest graph creates business opportunities in niches that weren’t financially viable before.
This is because services now can become so narrow that
they hit a target group perfectly. And that can become big
in these days when distribution is digital.
So you can hit a narrow segment in a huge geographical
area. Most people think crowd funding like Kickstarter is
too risky, but because there’s 1 % who loves it, it’s a great
business. The Foodspotting app is the same.
The strength is the narrowness.
Tine Thygesen is the founder and CEO of Everplaces
“the theory is that
you reach less
people but you reach
them on a deeper
level”
WHY by Martin Thörnkvist
Buying and selling longevity
R
In the media industries
This long-term approach is also becoming relevant for the
media industries. As we move from a structure of owning
media, that is to say that we buy copies of a book, a movie,
a game or a music album, to buying access to a platform
that owns the distribution rights to stream media content,
the time perspective for earning revenues for media producers is also changing.
ecently, I realized I’m increasingly buying longevity.
I think it’s so inspiring to see companies who put real
effort into adding long life to what they produce.
For me the trend is clear, companies that know they are
creating products with high quality add repair and service as an integral part of their business. It serves as a
proof that their goods have a long life.
The Finnish furniture manufacturer Artek
had an interesting project the other year
when they repurchased used furniture,
gave it some TLC and resold it. Recently
the company made the concept permanent
by opening a shop for their used furniture.
Marco Melander
Proven business
The automotive industry realised this a
long time ago. ”Authorized” and ”original”
have a strong link to the warranty, durability and resale value. It is natural that there
is a service book in the glove compartment
and the car should be serviced at regular
intervals. The State checks that all vehicles
on our roads are well taken care of.
We are moving away from an era of strong hit culture. One
where backup from a strong marketing machine invested
everything to focus attention on a release date, knowing
that you have just a few months to recoup production costs
and make profit on it.
With platforms that sell access to media, media producers
earn money when customers use the product. There isn’t
one purchasing instance, there are lots of user instances
where people listen, read and watch.
Renovated Alvar Aalto stools from Artek.
The Swedish furniture company Norrgavel has a section
on its site that is a second-hand market for its furniture.
Of course they want to sell new furniture, but by creating
a market where they can show that the expensive furniture
you buy has value even when you get tired of it, or grow out
of it. Other customers see it as great value for a customer
when they make an investment.
Payment per usage is naturally significantly lower than
what people received per purchase. So, to reach reasonable
levels of payment you need volumes. Large volumes. So
much volume that you need time and a constantly growing
media catalogue.
Suddenly, it is important that media producers create content that is relevant for a long period.
I am convinced that this creates a good basis to work with
exciting, niched productions. A lot like most media industries worked from the beginning.
”There isn’t one purchasing opportunity,
there are lots of user
opportunities.”
WHY by Lisa Gansky
Seriously better things,
easily shared
M
Why is the Mesh growing so fast?
There are a few significant reasons: population growth, the
recession and that we are living in a time when anyone,
almost anywhere, can reach a person, company or market
faster, with far less capital required.
ost companies have stubbornly stuck to various
twists on a single tried-and- true formula: Create a
product or service, sell it, and collect money. Just sell the
guy a dishwasher, and watch him walk out the door. Few
businesspeople, including most entrepreneurs and investors, have imagined creating wealth or customers any
other way. Though they may use social media to market
their products, their minds are still stuck in a 2-D buyer/
seller/own-it world.
We now have an enhanced ability not only to leverage existing platforms, but also to refine and test our offering more
quickly and inexpensively than ever before through social
media networks, popup shops and galleries and apps.
Yet around this entrenched way of thinking, a new model is
thriving, one that I call “the Mesh.” Enter the Mesh. That’s
what I call the rapidly growing network of sharing-based
goods and services. The Mesh is based on having convenient access to what you need and want, without the expense and hassles of owning more stuff.
Network-enable sharing
Fundamentally, the Mesh is based on network-enabled sharing—on access rather than ownership. Mesh businesses
understand and cleverly exploit the perfect storm of mobile,
location-based capabilities and social network growth to
give us convenient access to what we want and need, just
when we want or need it. In my view, a major theme of the
Share Economy is ‘unused value = waste’.
In a nutshell, we, as a global community have a lot of excess
capacity: cars and bicycles sitting around, offices, factories
and tools idle and, of course, talent. As access continues to
triumph over ownership, we will continue to identify and
make available ‘unused value’ as a major fuel for our local
and global economies. This shift to the Mesh is rapidly changing the way business is done, and it’s picking up speed.
“In a nutshell, we, as
a global community
have a lot of excess
capacity.”
Some of these Mesh businesses are international enterprises (Like ZipCar.com and LoveFilm.com). These services
own the inventory of products or facility which they then
make available to their customers via a ‘share’ or membership model. Many other Mesh companies are two sided
marketplaces which are peer-to-peer or community based.
In other words, marketplaces which allow us to borrow,
swap and rent things from one another. These businesses
take advantage of local peer-to-peer (P2P) platforms like
Facebook and Foursquare, which make it easy to be connected while mobile.
There are now over 6,500 share-based companies in the
Mesh community directory at Meshing.it. The competitive advantages for Mesh companies are so enormous that
the new model has become the major driver for businesses
old and new.
Lisa Gansky is the author of The Mesh - Why the Future of Business is Sharing
“There are now over
6,500 share-based
companies”
CASE by Kalle Magnusson
Mythbusting: “Spotify doesn’t
give any money to artists”
”
Spotify doesn’t give money to artists!” I do not know how
many times I’ve heard it. And yes, running record labels or
music companies in the 2000s has its problems. But if people
only knew what Spotify’s latest six months has meant for Swedish musicians and music companies they’d be surprised.
”Almost 80% of our
revenue comes from
Spotify.”
Hybris was founded in 2004. Music file sharing was really
popular by then. The CD grave had already been dug. We
had no money and no contacts. What we did have however was good music and great ideas about how to spread
things on the Internet. Our idea is to work as hard as we
can to get as many people as possible to like our music.
Many loyal fans make a difference
Today, a huge fan base and lots of attention mean lots
of plays on Spotify. And lots of plays on Spotify means a
good income. These are exciting times for Hybris and our
artists. We will soon have 500 songs in our catalogue, and
Spotify has become by far the most profitable stream for
us - almost 80% of our revenue comes from Spotify. And
payments are increasing all the time.
Music out 2005, money in 2012
Vapnet’s 2005 debut single ”Kalla mig” is a prime example
of the fantastic development in the music industry in recent years.
As of spring 2012, Vapnet has not released an album for 4
years. ”Kalla mig” hasn’t received a big boost, hasn’t been
part of an ad campaign or used in an awesome TV show.
If it weren’t for Spotify starting to flourish, we would not
have noticed anything. Nowadays, 4 out of 5 people using
Spotify in Sweden pay to use the service, which means that
payment to artists and companies is higher than if they
only listened to the advertising-based service. Revenue per
play has nearly tripled for us in the last 12 months.
For ”Kalla mig” it means that we get more revenue per
quarter from Spotify today than the single sold in its entire
first successful year.
We quickly became an established pop label, but it took
until the autumn of 2011 before there was a revenue model
that suited the way we work with music.
When we released the single we printed 1,000 CDs and
encouraged fans to spread the music. A few months later,
”Kalla mig” became a summer hit. When people summed
up 2005 ”Kalla mig” was one of the top ten most played
songs on the popular Swedish radio programme P3 that
year - and the band has tens of thousands of fans. But not
surprisingly, sales did not materialize.
But it’s still a good song, and people have continued to listen to it and it’s attracted new listeners.
Vapnet 2005.
We’re not back in the 90s yet, but if you hear someone
complaining that streaming services don’t work, that they
don’t replace the artists or companies, that accessibility is
not the model - ask them to contact us. We can show them
that the trend is very positive, and that we mainly have
Spotify to thank for it.
Kalle Magnusson runs the music label Hybris that released the
debut albums of artists such as Jonathan Johansson, Familjen, El
Perro del Mar, Vapnet and Korallreven.
”We can show them
that the trend is very
positive, and that we
mainly have Spotify
to thank for it.”
CASE by Sara Ohlsson
Are we ready for
Collaborative Consumption?
O
ur service HinnerDu.se works better in cities than
in rural areas. Maybe it’s because you don’t need Internet to connect people in the countryside. That’s despite
the fact that neighbours are geographically further away,
the obstacles for asking for help feel less than in the city.
This anonymity in cities and on the web is also our greatest challenge. How do you create the same trust between
people who only met online as among people in rural
areas. How do we get these people to feel
that getting help from a private person
rather than an established company works
equally well, perhaps even better?
To build confidence in private people let’s
highlight Jonas, father of two, who enjoys
DIY, and has put together a lot of IKEA furniture, and 25-year-old Cecilia who’s studying to be a landscape architect and gladly
helps with weeding or chopping wood.
Asking for help from a private person rather than
a company
A few weeks ago it dawned on me how much more confident you spontaneously feel when you use a large company. I needed to find someone who could go to IKEA in
Copenhagen and buy, deliver and install a green Billy cabinet that was sold-out in Sweden. I took the opportunity to
try one of the larger online quotation services. I put up my
ad and thought I would be flooded with calls from different
companies who wanted to help me.
After three days and I still hadn’t heard anything, I asked
the same question on HinnerDu.se. It took just an hour
or two and I had a reply from Fredrik who really wanted
to help me. On his profile page I could see that he carried
out lots of tasks in the past and his reviews were excellent.
We agreed on a price and time and everything went very
smoothly.
Some lessons learned
The most common requests are quite traditional. It has
been shown that many people need help with walking the
dog and the dog-sitting category is now our largest category. Craftsmen are most in demand on our sister site in
Denmark, DenLilleTjeneste.dk. That’s possibly due to that
fact that there is no tax deduction for craftsmen in Denmark (as they do in Sweden and Finland) which makes it
very expensive to hire a craftsman in the traditional way.
Mind you, people are not as careful in making sure the dog
to get its daily dose of exercise.
What we see is that you mainly get help with things you
can’t do yourself. You can’t be a dog-sitter for your own
dog, you need help. It’s less common to ask for help because you feel you can’t do something yourself or want to buy
your free time. Maybe it’s because it’s still seen as a bit of a
“no-no” Sweden if you don’t do everything yourself. Unfortunately, asking for help is something we are bad at, which
is a shame because we see that people who do the job do it
to feel needed, to be helpful and to make new contacts. Giving another person an opportunity to help and also make
a small income is something that should be encouraged.
Sara Ohlsson is CEO and founder of the HinnerDu.se platform
“to give another
person the opportunity to help another
should be called”
CASE by Markus Wiklander
Power to the people
W
It gives fans the opportunity to influence
which artists have the chance to play, gives artists more gigs, and at the same time
reduces the financial risks that concerts
today put on venues. If the concert doesn’t
happen, everyone gets their money back
directly.
The fans have the power
The challenge of changing behaviour
We work in close relationship with music venues, artists,
agents and consumers to design and develop the service.
We are currently operating in Sweden and Denmark. Our
challenge lies in changing behaviour in the music industry, and for the people who want to experience music. One
reaction I often come across is ”Can my friends and I really
book a concert?”
But we see that fans throughout the world are not content
to just consume. We want to be more involved than that.
Creative people are posting projects on platforms like
Kickstarter that become reality because there are people
who are interested in contributing money and commitment in the early stages. That’s just how Emues works, except it’s for concerts and tours. Just like Lauren Anderson
writes, we believe that the music niche raises commitment
even more.
flickr.com/jesuspresley CC BY
e have built a platform where music fans can influence and develop the offering of live music, concerts, shows and clubs. By fans suggesting concerts with
artists on dates when venues are not booked for a function,
we can match the desire for more gigs from artists with the
spare capacity of venues, that is to say the
evenings when venues are not booked. The
service is built as a crowd funding model, if
a proposed concert has sold the minimum
number of tickets within a given time, the
concert will go ahead.
At the same time we see a great need from the industry for
more live gigs. As music sales fall, the need for artists to
get income from live shows has increased. Fees have not
risen for most artists, instead they simply need to perform
at more concerts.
Breathing life into the music industry
With the pressure we are seeing from artists and audiences nationally and internationally to participate in and influence on more concerts, I see no reason why music venues
and arenas have to be empty one single day in a week.
To get concerts in more alternative environments, and
even in faster, more flash mob-like ways, we are working
with music venues such as public environments, industrial
buildings and apartments.
With Emues we want to create new, open attitudes and exciting solutions within the music industry and boost creativity. Concerts are booked where the audience is! Our goal
is to provide well-established artists with the opportunity
to secure longer periods of more gigs globally. That upcoming artists can reach and play to their right audiences
much more quickly. And that all of us who want to watch
and experience music are able to influence who will play.
Markus Wiklander is founder and CEO of Emues.com.
“Concerts are
booked where the
audience is!”
Contemporary buzzwords by Media Evolution
Glossary
Collaborative consumption
The collective name for the rapid explosion of platforms
for lending, the exchange of goods or services, or access
to media. It can be peer-to-peer marketplaces or business
to consumer services.
Idling capacity
”Idling capacity” is the English term for the assets we own
when they are not being used. For example, when a car is
parked outside work for eight hours, or CDs sits unused
on the shelf.
About this publication
This publication comprises texts previously
published at www.mediaevolution.se. The
idea is to repackage our regular analysis as
focused in-depth looks at areas that we think
the media industries need to understand a
little bit better.
We release four publications annually. At
our web site you can download or order mail
copies of previous and future editions.
Access over ownership is published under
the Creative Commons licence by-nc-sa.
Read more at creativecommons.se
Contact Media Evolution
[email protected]
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211 19 Malmö
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