What is Media

You think media means music, videos, TV and the newspapers, and thats true, but there is a lot more out there that you oftentimes don’t recognize as media. Media is a either a more or less unlimited channel of content (TV, internet in general, radio, a library) or a set size of content (a music album, a book, a video,  a videogame, a magazine, a blogpost, a newspaper). The “content” is what’s tickling your fantasy, mind, interests, thirst for knowledge, imagination, anxiety, … or just lets your brain consume  stuff so it is freed from the hard work of thinking itself. You could even argue that other people talking to you are a stream of content and therefore media. All these contents influence you and your ways of thinking.

photo credit: dearsomeone

The Problem

Technically, oftentimes you’ll find digital media bound to storage like CDs, DVDs or a lot of dead trees (formally known as paper). I never understood people hoarding their music-CDs, and their videos, be it on tape, VHS casette or DVD ar BD – even if I know a lot of people who do that. As a kid (when you watch movies dozens of times) I might have liked that myself, but since the dawn of digital media, I don’t see the point anymore at all.

The advantage of having collections of media around is that you can show off what you have, and what you’re interested in. It’s like wearing a T-shirt or your favourite movie or band: everyone instantly recognizes that interest of yours – that you’re into something. The opposite is like saying you’re a fan of Star Wars without having action figures, T-shirts or lightsabres around: people don’t instantly know.

The point of keeping books around that you might need for reference also diminishes quickly: you can keep digital versions of books and read them on screen, on your ePaper device or even your smartphone. Reusing music is common, but stories, news and movies are also not used much more often than maybe once or twice.

photo credit: jm3

Availability

Music is available through a multitude of services: either you rip them from your CD and keep it on a harddrive (or even in the cloud), sharing it with you game console and all your other household networked things. Or you buy them via iTunes and just stream them from there to anywhere. Or you use Pandora, Last.fm and all the other free music stations in the net, or the usual old radio stations which are all available digitally streamed.

Apart from music, nearly everthing else is available for download, be it in a paid version as with rented movies, music tracks or eBooks or in a free version as with a limitless source of information in form of blogposts or news. Having media bound to physical objects needs to to have them around in one place and to carry their weight if you need them somewhere else.

Prices

• Buying movies on disc isn’t too cheap. If you get a cheap 3 for 1 BD box, you might be paying 20€ if you’re lucky, but usually it’s more expensive. As opposed to renting it in a video renting service for 2,40€ per movie you can rent a movie for 2,99€ via online renting (and therefore not paying for fuel and use less time to get it) in iTunes, Playstation Network or a lot of other services I didn’t even try out.
• Buying music digitally is basically the same price as buying them in the real store. But here you can get the two songs you really like instead of the 12 tracks you don’t really want much cheaper. And you already have all the metadata included. I mean I don’t see too many people still walking around with “discmans”, so to get their stuff on their custom media player, they’d need to rip it and add all the metadata in a time consuming way.

• (Many people say they’d miss the artwork and booklet on the digital thing. To me, this is stupidity. Yeah, I also read the booklets back then, but times are changing. Enter the World Wide Web. Just head to the artists website, we’re not in the eightees anymore. There you’ll find much more artwork than you can ever hope to fit into some paper booklet. Oh, and you’ll find the lyrics there too.)

• Buying eBooks isn’t more expensive than buying a “real” book. Here the market still didn’t finish converting to the digital medium as often fiction books are still not avaible in open ebook formats, but you can see it happening faster and faster, and soon the rainforests can rejoice when all people have Kindles and iPads around and can easily obtain digital versions.
• News and information basically cost nothing. You can of course buy well researched or well authored stuff, but those authors have to fight the free price you get though the free news websites.
• Games are same price online or offline, if you can get them online. But games are a special case, because most of the publishers still stick to the old distribution model. If you’re looking at the Apple appstore, digitally distributed games might even be much cheaper than games bound to boxes, discs and paper, but that will soon be known when the Mac appstore becomes tested and when Microsoft copies the concept.
• (TV and Radio was always distributed in a way that wasn’t bound to physical objects other than the receiving machine. Not much change there, other than the quality of non-paid TV broadcasts diminishes while paid services are like a flatrate for content.)

And there’s another price people don’t think about: either you spend time getting your analog media, or you pay for postage and packing that wouldn’t be necessary if you downloaded the digital versions.

Conclusion

Digital Media does not rot. After about 10 years, a CD or casette might even be unreadable and thereby broken. Digital media can be copied an infinite number of times and you can create as many backups as you want.

The main point of this post is that analog media is written on three dimensional stuff that just takes up a lot of space. For that space, you usually pay rent (or pay interest on loans in my case). Therefore, your media should pay a part of your rent. But it doesn’t. So please understand that media is about content, and not about collections of paper, CDs, DVDs and such. The digital versions are much more economic, overall cost less time and money to obtain and are better for the planet’s ecological environment.

photo credit: purplemattfish

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Therefore I developed a kind of shopping that doesn’t cost much time. Firstly, I’m getting a lot of clothes online and send the unfitting 80% back. I’ll do this two or three times and I never invest much time in picking the stuff. My girlfriend tells me whether the clothes fit or not and my selfvision is impaired when it comes to clothing.

This usually helps getting shirts and shoes. For the rest, I acually need to go shopping. I always know what kind of clothes I need to buy, and I don’t look for anything else. When I’m in the shop, I pick the 3-10 bestlooking things and try them. My girlfriend again helps me watching for errors in my vision and then I just buy that stuff.

My girlfriend uses a different approarch: she likes shopping. She looks for everything she likes, and shopping usually takes 6+ hours. She also asks me if I like the clothes, but doesn’t take my advice seriously. Things like these will happen dozens of times a day:

She: “What do you think?”

Me (big eyes): “Whoa! I really love it … you definitely should buy it! Amazing!”

She: “Mhmm. Nah.”

Results and Costs

Well, I could go to much more detail here, but all I want to say is that the results (the stuff you bought and the fun you had buying it) and the costs (time and money) matter at the end of the day.This is the same equotation for work. Think of work. The results count, it counts if you have fun in your job and it counts how much money you spend and how much time it costed.

For me, the fun in shopping is always nonexistant. As I don’t have money problems I also value time higher than money. So I try to get best best stuff as fast as possible. I would rather work than go shopping as my work is more fun.

Optimize Shopping

This equotation doesn’t only count for shopping for clothes, but for all kinds of acquisitions. And shopping for everything that matters for you should be optimized, as that way you can save time and money and spare yourself from a lot of frustration. I already told you how I tried to optimize shopping for clothes. Optimizing your weekly shopping for food and the regular goods is another kind of work that should be optimized for everyone’s life, as its just another load of work you’ll have to do for your whole life.

I’ll usually do my weekly shopping once per week by car. I use an iPhone list of things to buy with me, where items can be ticked off and the whole list can be reused every week. Therefore, I only need to add items I never bought before and can just untick the things I need this week, leaving the ones ticked that I don’t need again this week. When I’m at the cheap supermarket, I’ll try to get everything as fast as I can, not looking for the other distractions and superflous offers I could find. After that I’ll get the rest of the things I didn’t get at the cheap store in the more expensive supermarket, where I also only go for the things I really need. This helps me getting this done fast, going only once per week saves a lot of time. I don’t buy more than the planned amount of sweets too, which is good for my weight.

The time invested could also be invested in work. Therefore, I see these shopping trips as work.

Big investments

Big investments need to be done with a completely other way of buying. I think about everything where you sign a contract as a big investment, be that a mobile plan, a flat you rent or a car you buy. When I watch the TV show where people want to rent or buy houses and flats, I cannot but slap my head each time I see it. Some estate agent presents two different houses or flats to their clients, and in about 80% of the cases the people just take one of the objects. What people in these shows don’t seem to get: Buying a house or a flat is a life changing investment. You’ll live there a long time, and your whole perception of your life is influenced by this. Additionally, the prices are often much too high.

If you’re doing a big investment, I will always pay off if you research for a long time about what it is and what are the alternatives of your purchase. Don’t shop big things like clothes.

It took my girlfriend and me one year of research and about 50 visits in flats and houses till we got a lucky chance to buy a very nice and big flat and get a cheap loan from one of the about 7 banks we asked and played off against each other. It will be paid off in about 15 years, is about 20% cheaper than the usual rent of such a flat is a retirement provision that we don’t have to buy additionally. Its 10 minutes away from both of our workplaces and its damn beautiful.

photo credit: Thomas Hawk

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photo credit: ATMOSPHERA and KOLORZ

Sometimes, I’m really convinced of something. Like in my research that the new iPhone will be a better pick than an Android Desire – where I scanned through 20+ reviews, had both devices in hands (okay, an older version of the iPhone to be true) and am generally well informed about technology and smartphones. Or that someone really shoulod try some framework or technology, that would maybe even change his life (like using Twitter for example, which is the most terrific communications change in the last 10 years). But even if I’m really convinced, I just fail to transport this emotion correctly.

Is it my fault? I don’t know. I think the examples above (Twitter, iPhone) are just mainstream thinking (more people than just me coming to the conclusion that they rock) and therefore people expect me to be an Apple fanboy or a fellow runner or a person without life for advocating for such mainstream choices. They just can’t think about someone being right who has not their own attitude.

When I played the card game Magic from 1999 -2008 I often experienced the same – and was like this at first too. Only a strategy or thinking that I had invented myself or that was really underground could work for me or was “cool” enough. Later on, I learned that the mainstream ideas were already proven good ideas and could just be improved a bit to have the ultimate advantage.

Somehow, its the same with all these services. If I would use the iPhone or Twitter like a mainstream person, I wouldn’t like it much. But Twitter has so many 3rd party apps that make it useful and fun, and with a Jailbreak I can tinker in my system more than all those “Google-Fanboys” with their Androids.

Well, I’m still researching about iPhone 4 vs. Android 2.2 … should make a nice blogpost in the next few days.

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Flattr is a service, where you (and everyone else) can spend a fixed value of money (like 2€ per month) for the high quality content you get in the web. Or for the stuff you really enjoy. Or so. By pressing the “flattr-button”, you direct some of your money to the maker of that content. If you’re on the other side and produce content for the web (may it be high quality or not), you can hope that people using flattr direct this money to you. Should you not flattr anything during one month, your money goes to some charity organisation. If you want more exact descriptions, you can find a good introduction on the flattr website and some thoughts of tante about the service.

But why exactly is such a service the future of high quality content on the web? First, there are different models of paying someone for content.

• Not. If someone doesn’t get a reward, he can’t pay the bank loan, he doesn’t feel his work is appreciated, he produces lower quality content or just stops producing content.
• The old way of journalism makes a magazine (this means a website since the last years) pay an autor for his writing. Today, content is free, and people don’t pay for magazines (other than generation pageviews for ads), so the author cannot be paid anymore.
• Another possibility is paid subscription. In this world, not many people would read the New York Times, if they took money, but some will. Sadly, this only solves a small part of the problem, as people wouldn’t pay much, and you can’t pay the authors of the Times with this small amount of money. Additionally, people won’t sign up for every other website they’d read – they would rather switch to free content (there’s enough of that). Also, people would likely want to pay different websites for different well-done posts, and not one site even if not everything on there is really worth it.
• The third possibility is paying the authors directly, giving them a donation or sending them a letter with money by oldfashioned (non-E) mail.

This third way seems to be the most fair, but paying people producing content on the web is a hard thing for multiple reasons:

• You don’t want to send old-fashioned (non-E) mail
• Every online transaction is prey to transaction fees (some are bigger, some are smaller). Usually, there’s also a minimum fee that is taken, so often you cannot give small amounts of money to an autor, as the paying service itself would take the whole pie. An you surely won’t want to pay 10€ for a nice post.
• Every transaction makes you type in sensitive data and needs keystrokes and mouseclicks – a tedious process.

Flattr tries to fix this. They play bank account without fees for you. You might think that paypal (or any other service on the web who can accept money) could have done the same thing – yes, they all could, but paypal (and those others) are greedy and don’t do free transactions. With Flattr, you know how much money you give away (for a good cause basically), but its not much and you can decide who gets it. That its a built-in more meaningful Digg is only a bonus, but it’s a good one after all.

This way, Flattr may be THE way to pay for online content based on free decision. How they’re going to make the service pay for itself isn’t all too clear, but I could imagine it to be the same model that a bank uses – you hold people’s money, so it can work for you till it gets redistributed – a nice model that doesn’t do no harm. The only real problem seem to be the old gatekeepers, like paypal, who want some money of people transferring money to Flattr – but as you can charge your account for 5 month with only 10€, this doesn’t cut in too badly.

Flattr is still in beta, hope you like the idea. You can sign up for a beta invite on their site if you want to try it. And from now on, you may also flattr my posts if you like.

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Since about 2 or 3 years, I’m registered on the german media-articles-exchange-platform Hitflip. Its a website where you can exchange media of all types, first and foremost videos and games, but also books and music CDs. There’s a certain virtual currency called “flips” to manage the exchanges, that you get by giving stuff away (or buying from Hitflip) and that you can use to get stuff from other people.

Hitflips Profits Skyrocket

Where we have a currency, and goods, we have a market. This is where Hitflip’s profit began – they created a market, and they can print the virtual money. This seems to be enough to rule the world. Imagine the possibilities: They could have expanded away from only exchanging media to all regular goods to become the second rise of eBay – with their own virtual currency where anyone is dependent on. Or they could have expanded to become a fully blown ClickAndPay clone.

Hitflip has a certain idea, of what things should cost.

But Hipflip wasn’t very creative to come to more profit. To be straight: they were just greedy. To be able to sell their virtual flips (they really wanted that!), they need to be sure that you can get something with those flips. This is the first time they failed badly. On a market, the price is always dependent on suppy and demand. They just cannot tell people, what their stuff is worth.

To not to give up a whole lot of money on this market, you (as Hitflips customer) will try to get things cheap (low amount of flips) and give things away for much more of this currency – its the natural way of approaching a market. This is the first factor that drove flip-prices to rise. If I got Super Mario Bros for 30 flips, I want to have at least 31 flips if I give it away.

The second factor is Hitflips greed. Instead of just having the profit of selling the flips to new members, they took 1 Euro for each transaction, and later rose this to 2 Euros for each transaction where a certain amount of flips changed the owner. This lead to me not wanting 31 flips for my Super Mario Bros, but 35. Oh, and lets not forget that I have to pay for the postage, so I’ll even want 40 flips for my game. Prices were spiraling up.

Image that todayI can pay 1 flip for 1 Euro and that a new Heavy Rain (PS3) costs 199 flips and God of War 3 (PS3) costs 289 flips. Usual other games with lower populatity like … say … the  nearly three year old Tekken 6 (PS3) cost 119 flips. On other markets, there are lower values. The popular (but now also quite old) Resident Evil 4 (Wii) costs 35 flips – and 10€ if you buy it somewhere else.

Hitflip forces lower prices for goods

Now for the reason I’m writing this post. About one year ago, they tripled all flips, for whatever reason. I guess they hoped that people would still put in their trading goods cheap, but of course everyone was now tripling the prices. A plain, meaningless fail. Then, they stocked up the pricing for each transaction that was above a certain flip-limit – hoping that this would keep prices below this limit. Which (of course) wasn’t the case. They just made me want 45 flips instead of 40 for the item I got with 30 flips, as transaction got even more expensive.

Yesterday, Hitflip began to use an automatic check for “too high prices” and took items, that were “too expensive”, in a pause-mode. I just put em active again, as what else should I have done? Next day, same thing. So they try to tell us, how high the market price of a flip is? They must have lost their minds! (Hint: later I’ll give you the solution they should use, as I like Hitflip … as it basically works).

Dear Hitflip: Why can’t all this work?

Three things:

1. Because there’s a certain amount of flips flying around. If everyone would just lower their “too high” prices, the cheaper items would gain in value and the more popular items would loose value. And I don’t want that, I got some good games lying around here!

2. Hitflip is printing money every time they give out flips for free (as when you begin on the platform or get an affiliate bonus for bringing someone on the platform) of for money (as when you buy flips). Printing money leads to loss of value of this currency. So, flips will be worth less over time … its just the way things are.

3. When everyone can better buy God of War 3 for 45€ and exchange it on Hitflip rather than buying 280 flips for 280€, it should be clear for Hitflip that noone will buy their flips anymore. Their flips aren’t worth 1€ and never will be, no matter how hard they try.

Dear Hitflip: Its hard, but not that hard

You have to accept reality. Don’t try to dictate the market. The market will correct itself. What you can do to sell flips again – and make new members happy?

1. You have metrics, how much an item is worth if I buy a new one, and you can find out how much people want on your platform for this item. Make an approximation over 10000 items of different categories and calculate the real value of a flip in €. Take into account the “age” and “condition” of that items. Put that estimation online, so every member (including the new ones) can transparently see that. Do that calculation every day or every hour, as the market might change.

2. Now that everyone knows, how much value a flip really has, make it possible to get flips by paying you that exact exchange rate plus a (very small) transaction fee (that might diminish for higher amounts of flips purchased). People WILL buy them, as they’re priced fairly. This might lead to people rising prices even much higher in the first few weeks, as much more virtual money will enter the market – but in the end you have no other options.

3. There will be grief. You must  pause all items of existing members, so they can adapt to the new market. As their flips aren’t worth the same anymore, I would advise you to grant them “real money” on their accounts according to how much flips they had as exchange for the lost value.  Say someone has 100 flips and the real value of a flip is only 0,25€ This would mean they can do a lot of transactions for free, but at least they don’t sue you for robbery.

4. Take away that higher fee for exchanging higher priced articles. It will only distort the market and let people take much higher prices than necessary.

Final thoughts

If you like Hitflip as I do, you know that something has to change. Please make them read this article. They have a german blog and they’re on Twitter. Dear Hitflip, please let me know what you think. If you want to hire me as a consultant, go for it. But don’t try to tell me that you understood that you have a (pretty free) market there and that you know how to handle it well.

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