The Content Bubble and the Greater Fool
Not long ago a vendor asked a friend of mine to speak at a conference. Analysts speak at conferences all the time so the request was not unusual except in the conditions attached. There would be no compensation for the effort and the analyst would need to provide transportation and housing out of pocket. So the invitation was a money-losing proposition from the get go. I don’t know if the offer was accepted. There are times when an analyst might speak for no fee such as when plugging a book. But this was different, the vendor had the budget to pay for the service but just chose not to.
This happened around the time that Taylor Swift had her now famous disagreement with Apple over its attempt to recruit new listeners to its streaming music service. You can read the New York Times article about it here. Apple planned to offer 3 free months of service to new subscribers and intended not to pay the artists for the use of their music.
I wasn’t a Taylor Swift fan before because I am not very musical—I need a permit to carry an iPod. But I’ve become one because of Swift’s classy approach and principled stand. In her open post to both fans and Apple on Sunday, Swift explained that she was pulling her latest album, 1989, from Apple so that it couldn’t give away her work for free. There was no ranting, no cussing or questioning anyone’s parentage or species—just cold hard facts. I thought that was just right.
Artists earn a living, or at least try to, by making art for sale in the marketplace. They are quite comfortable with letting the market decide whether and how much to pay and sometimes that’s nothing. You can say much the same for any content provider. But such decisions are personal and not corporatized–appropriating a product and making money on it without paying the primary producers has become a form or legalized (so far) theft. I see Swift’s principled stand and my friend’s speaking invitation in a similar light.
The logic—if you can call it that—behind appropriating content without paying for it appears to be a variant of, Hey, we’ll make you famous and you can charge big next time. But next time never comes. It’s really the logic of an economic bubble and it sometimes goes by other names like the greater fool theory. Ten years ago speculators paid silly prices for real estate because it was assumed that there was a bigger fool out there ready to pay even more when you flipped the property. Every bubble has the greater fool at its core and, as we saw with real estate, it works really well until it doesn’t work at all.
I think a version of the greater fool theory is invading the analyst space. Well-paid PR firms chase analysts to take briefings from companies that pay for the PR consulting but not for the advice they get in the briefing. They very often don’t engage further than the briefing.
They seem to think we’ll look so prescient if we just write about this up-and-coming company that others will want to pay for our sage advice later. As we’ve seen others try to recruit speakers at their conferences stating up front that they won’t pay anything and that your travel expenses are yours. But consider all the exposure! The obvious problem with the greater fool theory is that it eventually ends—the music stops and the greatest fool is always left holding the bag.
I hope my friend turned down the speaking gig, I haven’t asked. Speaking for no fee is one thing, we all do it especially if there’s something real but intangible involved. For instance, I speak at CRM Evolution every year for no fee and I write a column for the magazine too. But my expenses are paid for and the magazine really has set itself up as one of the arbiters or real information about CRM. In this case our interests align because we’re both in the same business trying to disseminate information about CRM. The vendors I’ve described are, to put it nicely, looking for an endorsement.
The music business is such an economic wasteland today that songs are not being written and people are looking elsewhere to make a living. But the opportunity to write those songs will not come again. To my mind this is a dangerous time in the content business because fewer and fewer people are making a living and that’s true anywhere a form of content gets made and distributed whether in publishing, blogging, or music and it’s always been true in acting and visual art. There’s an old saying: if you can’t make money at your business then you don’t have a business, you have a hobby. What happens when we have an economy of hobbyists?