Over the past month or so I’ve found myself listening to more podcasts than I normally do. In addition to my usual Guardian Tech Weekly news fix, I’ve been enjoying TechDirt’s practitioner centred discussions on issues such as reforming the copyright and patent systems as well as the more academic musings of the Berkman Center for Internet and Society.
I’d love to put my renewed interest in podcasts down to my restless intellectual curiosity but, if I’m honest, I’ve probably also been attracted to the way podcasts at their best allow you to shut out the demands and distractions of daily life, not to mention the still-lingering pain of Labour’s election defeat. I’ve had lots on my plate lately, both inside and outside of work, and I’m grateful for the podcasts mentioned above for giving me a space to relax, listen and think.
One of the best things to come out of my recent podcasting binge has been the discovery of Nicholas Lovell and his excellent business book, The Curve. I heard Nicholas being interviewed on the Tech Weekly podcast back in April and and was sufficiently interested by what he had to say that I put my objections to DRM to one side and bought a Kindle edition of The Curve.
I just finished reading The Curve late late last night and would like to use the rest of this post to tell you a little bit about the the book and share some initial thoughts on how Lovell’s thinking could be applied more widely, in this case to the Labour Party, which I actively support.
What is The Curve?
The Curve sets out to answer a question that more than anything is at the centre of so much of the discussion about the internet and the disruption it is unleashing:
How do you make money when everything is going free?
Lovell’s answer is for creators to focus their efforts on converting ‘freeloaders’ into ‘superfans’ who are happy to spend lots of money with you on things which they deem valuable.
Lovell describes the spread of interest in any given product or service as a curve. At the bottom of the curve are the freeloaders, those who will tend to access your service for free (whether legally or illegally). At the top of the curve are the superfans, the kind of people who identify very strongly with what you do and see value in spending lots of money with you.
Lovell analyses the economic and technological forces at work which are driving more and more products towards a price point of either free or, at the very least, extremely low cost (think of all 99p and lower prices ebooks, apps, music, etc.)
What’s refreshing about Lovell’s approach is that, that unlike many of the loudest voices working in the creative industries, he does not seek to present digital piracy (and the ‘coming soon’ world of 3D printing-enabled physical piracy) as an existential threat to western civilization as we know it. Neither does he vilify everyday people for the rise of casual piracy that we have witnessed in recent years. Instead, Lovell encourages all businesses to see the freeloaders not as evil pirates but superfans in the making (or at the very least paying customers) and to concentrate our efforts on making it easy for people to spend lots of money with us.
Real Life Examples of The Curve
The book is chock full of interesting case studies of how businesses of all sizes, from individual musicians through to creative teams with 60+ members, are applying the curve in real-life. Some notable examples include:
- Music. Trent Reznor of Nine Inch Nails. Instead of simply selling an album in a conventional way, Reznor made digital versions of his album freely available via Torrent sites, generating interest in his music. He then focused his money making efforts on selling expensive ‘limited editions’ and other premium products to fans at different price points.
- Movies and television. Nicholls believes movies and television will be slower to adapt to curve business models due to system features such as the cinema theatre distribution infrastructure and the strength of existing broadcast networks. Nonetheless, Kickstarter projects such as the actor Zach Braff raising $3.1 million to make Wish I Was Here show the potential for a business model based on multiple price points and fan engagement to support filmmaking in a world increasingly accustomed to freely accessing digital copies of movies.
- Fiction. Science fiction author (and digital activist) self-published a collection of stories called With a Little Help. The ebook version of the book is freely available via his website and Doctorow encourages fans to share his book in order to grow his fanbase. Instead, Doctorow has made money from selling special edition hard copies of the book to his fans, including a $275 limited edition wrapped in a burlap sack so that purchasers would get the scent of fresh coffee when they opened their package.
What can the Labour Party learn from The Curve?
While The Curve book is focused on applying curve to existing and new businesses, I believe other organisations could benefit from applying the same principles. One area I would like to see embrace the curve would be politics.
Speaking from personal experience as someone who this year went from being a fairly passive member of the Labour Party to a supporter/activist in the run-up to the general election, I see parallels in my journey to those Lovell has described in his book.
From looking at the national Labour Party website, there are some signs the party is embracing curve thinking:
- ‘Keep Up To Date’ newsletter option. First time Visitors to the Labour Party website can submit their email address and they will be kept up-to-date with developments. This is a good first step to engaging people and technically it meets the definition of ‘free’. Less good, however, the option is not very prominently displayed and the offer of receiving email newsletters is not very enticing. The ‘free’ tier needs to be more functional and give visitors something they value.
- New ‘Supporter’ schemes. Until a few years ago, you were either a member of the Labour Party or you weren’t (excluding for the moment the hot potato issue of trade union affiliation). Under Ed Miliband’s leadership, new affiliated and registered supporters schemes were introduced with lower pricing than full membership. In theory at least, this lowers the barrier to joining the curve. In practice, it is much more difficult to locate the supporter schemes than the regular membership option, which surely serves to discourage Supporter sign ups.
- Multiple donation points. It is no secret that political parties of all persuasions rely on donations to fund their activity. The Labour Party is no exception and has a donations page where individuals can decide on the amount they wish to donate. The page includes buttons for common donations such as £10 right up to £1,000 and then a free text box for higher donations. Looking at this page, the Labour Party has made a good start towards making it easy for ‘fans’ to ‘spend’ lots of money with them.
In short, there is lots more the Labour Party (and other political parties) could do to embrace the curve. Focusing for now on the initial membership gateway of the Labour Party website, I would suggest the following:
- Introduce a ‘free’ membership scheme. The ‘Supporter’ scheme is a good first step towards lowering the barrier of entry but more can be done. At present, the only freebie people who have bothered to visit the website can expect to receive is a newsletter. I believe people should have the option of joining the Labour Party for free without being labelled a ‘freeloader’.
- Provide a social and operational context for donations. At the moment, visitors to the Donations page receive the message: “Let’s build a better Britain: Donate to the Labour Party now”. The website should more clearly explain what your donation will help accomplish. Fundraising charities do this well when they say £X will pay for an hour of a nurse’s time. The website should also share an accurate average donation figure. If I knew the average visitor donated £20, I would be unlikely to give less than that. At the moment, I lack a context for giving.
- Utilise social standing and self expression to reward ‘superfans’ who give their time and expertise to the Labour Party. Democratic politics has been tarnished by scandals over donations and accusations of cash for access. I believe we need to extremely cautious about encouraging a big donor culture and instead look at ways of encouraging a large number of ‘regular’ supporters to give more. To achieve this, the Labour Party should think about how it could reward and motivate supporters in ways that the value. One option might be for politicians to give ‘shout outs’ on Twitter to supporters who made a difference on the door step. Another idea might be to give superfans early access to the latest news and then encourage them to disseminate it within their network.
Embracing The Curve
Nicholas Lovell acknowledges that curve thinking is not intended to be a one-size-fits-all solution to the challenges of doing business in a digital age. Nonetheless, I believe the thinking Lovell sets out in the book is sound and could benefit individuals, companies and organisations far beyond the digital tech and creative industries sectors.
Regardless of whether or not you agree with Lovell’s advice on how to succeed in an increasingly free world, I hope you’ll agree with me that it is refreshing to see someone present an optimistic assessment of our future which acknowledges the opportunities that we stand to gain as the internet and digital technology becomes an integral part of our society.
I for one will be continuing to bang on about the curve to anyone who will (half) listen to me. I will also be looking at how I can apply curve thinking to both my day job in communications as well as my outside interests. Apologies in advance if I become a broken record.