Professor Mark J. Perry's Blog for Economics and Finance
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oh that IS FUNNY!yes.. read the Forbes article on FB.. for one user they had 880 pages of information on that user.FB is for the the narcissistically stupid.
There is a lesson there for all the "customers" of our education and health industries.
This is really an eye opener...Facebook, gmail, twitter...they are free because you are the product!
"they are free because you are the product!"Well, yes. But thats not necessarily a bad thing.
the degree of instrusiveness ...matters...GMAIL sends you Ads but they do not "follow" the folks on your email contact to see who they are and what they buy...FB does that...not sure about Twitter...
soylent green is people.
People having that 'discovery' experience again and again they're learning that there is no free lunch...
Interestingly I read an article on HBO in the Economist just yesterday http://www.economist.com/node/21526314 with this quote “If you’re not paying for television, you’re not the customer,” says Jeff Bewkes, head of Time Warner. “You’re the product.”
This may be somewhat true for Facebook (the way they tend to hide their intentions makes them suspicious) but, as someone who works in the "free" broadcast world, that is not an accurate description of the way people (listeners/viewers) are viewed. Does Mark Perry view us as the product since this is a free site?Broadcasters have two sets of clients that we must strive to please, not exploit.
the problem with FB is that people do not read their terms of service nor read about it... from others.
From Seattle's PubliCola: Teen Beaten For Rejecting Girl On Facebook
"Broadcasters have two sets of clients that we must strive to please, not exploit."Thats why its not a "bad" thing to be the "product". Obviously, we chose to be the "product"...pigs for the slaughter, don't.
" Obviously, we chose to be the "product" "yes.. but are the folks who choose to be the "product" any more knowledgeable about the consequences their choice than the pigs on their way to slaughter?we have a big debate on what people "thought" Social Security was "supposed" to be... but what FB proves is that the average person is clueless - on purpose.
Think about that when you watch the news. Fox News, CBS, NBC. Who does own it? Mega corporations. Who are the customers? Mega corporations. What picture of the world would you expect to emerge from such an institution? One that serves the interest of the wealthy owners and advertisers.They cover Tea Party protests. Wall St protests? Not so much. Ask someone what they think of the fact that the Taliban repeatedly offered to hand over OBL in the run up to the invasion of Aghanistan and also following the invasion. Most people have never heard of it. And that serves the interests of wealth.
AIG,"That's why its not a "bad" thing to be the "product". Obviously, we chose to be the "product"...pigs for the slaughter, don't."I don't really disagree with you, I suppose it's a matter of my personal philosophy on the business that I'm in....but I don't look at listeners/viewers/readers as a product for one simple reason: They do pay a cost. That cost is based on the amount of commercial units they will bear to receive the product they seek. Increase the number of units on one radio station, listeners will select another, similar station with less.
Jon,You first must realize that broadcasters don't particularly care who their ad clients are, they base their rates on how many people are watching....if that cost per point is good enough, someone WILL buy it. The problem here is that there is a lot less programming conspiracy, and a lot more ignorant masses who'd rather hear about the Kardashians than you'd like to let yourself believe.Believe me, it bothers me, every single day, how little people care about important things.
"They do pay a cost. That cost is based on the amount of commercial units they will bear to receive the product they seek"Absolutely. I agree, which is why I put "product" in parentheses. Its not the appropriate description. "yes.. but are the folks who choose to be the "product" any more knowledgeable about the consequences their choice than the pigs on their way to slaughter?"Yes. Thanks for your concern.
It's quite funny to see some free market types come out for online advertising, when they'd go apeshit if the govt pulled the same crap with people's personal information. Generally they're arguing against govt regulation on the issue, which I do agree with them is unnecessary, but the fact remains that many of these companies are stockpiling mountains of personal information. Some even talk about it openly: guess why they want your age, sex, location, and all your other personal information. Facebook will pull in almost $4 billion this year, that's all from selling your personal information to advertisers. Twitter is trying to jump on the same boat. This will all shake out and these idiot companies will all go bankrupt, but users need to realize what is being done with their personal information. If they still decide to use these dumb sites- I have never used facebook, twitter, gmail, etc, and likely never will- that's up to them, caveat emptor.Steamboat, interesting article. HBO certainly does a better job than most and their recent resurgence has been welcome, but even they are too big to survive online.Mike, Mark isn't making any money off this site, or at the very least very little from the lack of ads, so that's a silly comparison. Broadcast is a dead model, because the internet enables entirely new models. Just like podcasting is killing off radio and blogs are killing off newspapers, all broadcast media will be dead within a decade. Paid subscription models, similar to what HBO has been pioneering for some time now, will dominate online.
Sprewell: "guess why they want your age, sex, location, and all your other personal information."Do people actually supply their actual information to Facebook or other online requests for personal information? Amazing!
Spre,"Broadcast is a dead model"You couldn't be more wrong about that. In fact the new ratings systems show there are FAR more radio listeners than previously thought. This is the one field that I can hold my own with all comers on this site...I've worked in and owned traditional broadcast companies for more than 20 years (now morphing into new media), I have a pretty good feel.Couple points:My guess is that you aren't buying Sirius/XM anytime soon....your point about paid media does not actually work with real numbers and consumers. They are, if fact, quite the opposite.The money made on this site (or any site) is completely relevant to the discussion...we don't pay, therefore, we must be the product.....unless you just want to toss out facts that don't support your 10-year prediction.With your logic, you can not own a donut shop unless it's Dunkin Donuts.
Mike, if you've been paying attention to the radio business, you know it's dying: there's no two ways about it. I used to download mp3 recordings of Adam Carolla's radio show out of LA- he was the west coast replacement for Stern- until they flipped the format of the whole station over to top 40, axing their entire talk format and all their hosts, including highly-paid syndicated guys like Carolla and Leykis. Carolla has rebounded with the top podcast online- I currently pay for the video version of his podcast- the other hacks not so much. Radio is filled with such hacks (Carolla rails against them all the time), most of whom will never be able to cut it in a truly competitive market, the podcast market online. Saying you've been in broadcast for a long time doesn't mean much, as those currently in broadcast are universally clueless about how to navigate the new online market, which is why the NYT is being put out of business by sites like wsj.com or the Drudge report or, god forbid, even the HuffPo.You're right that I don't pay for Sirius/XM satellite radio, but one mediocre paid model with very high costs (they overpay Stern and satellites aren't cheap ;) ) doesn't mean much for other successful ones. If you want a paid model that works, I suggest you read the Economist article above, HBO has 28 million paying subscribers. You are right that advertising is still ascendant, but that's only because the old broadcast tech is still ascendant and the internet guys are still figuring out their model: my prediction is that the internet guys will go paid and when they do they will finally kill off broadcast. The money made on this site is completely irrelevant because it is one man's personal site, with basically no ads nor apparently any desire to make money off of it. I've seen personal blogs that actually want to get paid, they are plastered with google ads or banner ads. To say this site is the same as Facebook or some other site plastered with ads is just silly. I have no idea what your donut shop comment means, I don't drink coffee and generally don't eat donuts.
"And that serves the interests of wealth."Wealth is Evil! Pure evil.
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Dr. Mark J. Perry is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan.
Perry holds two graduate degrees in economics (M.A. and Ph.D.) from George Mason University near Washington, D.C. In addition, he holds an MBA degree in finance from the Curtis L. Carlson School of Management at the University of Minnesota. In addition to a faculty appointment at the University of Michigan-Flint, Perry is also a visiting scholar at The American Enterprise Institute in Washington, D.C.
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