Kogt i Roen is a Danish comedy band based in Skive, a town situated in northwestern Jutland in Denmark. The band name is difficult to translate directly. It is Danish slang which could imply that the band members have stayed out too long in the sun… So far the band have made three CD’s of songs and acts, of which all tracks are available from their website.
Mikkel Christensen, who incidentally also run the hosting company which hosts Kaplak.com, is a member of the band, and we caught him between two jobs to get his take on what kind of project Kogt i Roen is.
Kaplak : Can you tell us a little about yourself, your niche community and/or business?
Mikkel Christensen (MC) : Our music is solely for fun. We basically want to have some fun and want to share our joy with others. If we can get people to “donate” a few Danish kroner each time they download our music, it only makes us happy. We don’t expect to get rich from it. We call our genre for Standup Rock. I think we spend no more than a few weeks every year on our hobby.
My company is the complete opposite. We are professionals and among the best. We don’t compromise with quality, and when we engage in something, we do it wholeheartedly, or not at all.
Kaplak : How did you get involved with your community/business?
MC : I really don’t remember. I have been in this business since my early teen-days.
Kaplak : What kind of digital product do you produce (if any)?
MC : We produce digital entertainment :)
Kaplak : What constitute the greatest opportunity for your business on the internet? What is the greatest challenge?
MC : Nothing really, we don’t expect to earn any profit from our music but if the opportinuity emerges we will certainly take advantage of it.
The first thing that strikes me from Mikkel’s answers is that Kogt i Roen is a completely different type of niche producer, in comparison with DigDoc Film Production, which we met last week. Where DigDoc is a professional “expert-driven” company working hard to create documentaries which do sell, Kogt i Roen is a completely hobby-based project, which do not critically need to earn money on their music and acts.
We’ve seen, that DigDoc’s end products were directly and entirely digital in their nature, i.e. films, videos, audio and photography. Kogt i Roen’s digital product (the music and acts) may perhaps be said to be almost a biproduct of the band getting together for a lot of fun. The “real product” is the gig. The music files are also used on the band’s website to “sell” the gigs. As both a biproduct and something used to promote the band, the band apparently can afford to give the music away for free. Or perhaps more simply, because it doesn’t cost the band anything extra to put up the songs anyway.
It’s difficult to estimate the global appeal of something as “local” as Kogt i Roen. However, there are Danes everywhere in the world, and the band’s humour may find appeal anywhere, especially if the word is spread by likeminded, exiled Danes from northern Jutland via networks of interlinked personal websites, forum posts and social networks such as MySpace or Facebook. The website is in Danish only, however, as well as most of the band’s lyrics and acts, which supposedly limits it’s audience to Danes and Danish-speaking almost exclusively, although some songs such as the English-worded, Iraq War-critical Mr. George Bush may find broader appeal.
What’s more important however, is that there’s a lot of likeminded bands globally. A lot of people simply play and enjoy music (and standup) as their hobby. It just so happens, that the internet makes it very easy to make your music publicly available while you’re at it. While the band do not necessarily need to make a million on their music (those days of the “hit economy” seems counted anyway), their product (and many, many other products, which are similar to it in “localness”) may help contribute value to other products, so much so, that it may turn in some extra income. Even though Mikkel understates any need for this, even an amateur band has costs to pay, including the website and gear for the band, so a little extra may not be what drives the band, but may come in handy, while they’re at it.
To create a surplus of value, which goes beyond the “cost per song” economy of the industrial model, the trick is to reach the creative audience who need to tap into this wealth of material. And then to give them access and allow them to rip, mix and burn what they like. In some cases this creative audience are hobby producers such as Kogt i Roen themselves, but it could also be more professionally oriented producers, who are able to ask a higher price for their product, and therefore to pay a higher price for their “material” in return. We’ll have to see if this analysis holds up, when we put it further to the test.
Kogt i Roen is not an ideal first customer for Kaplak. The band doesn’t feel the “pain” too hard - there’s no imminent need for greater visibility or financing. However, the band is a shining example of the creativity being unfolded all over the internet, simply because it can be made accessible very cheaply. They, however, and the many, many other hobby producers of the web could be slightly better off, if they were able to tap into the surplus of value they create by giving away their music for free.
Kaplak need not motivate a hobby producer customer like this band so much (it won’t work anyway, as they don’t do it for money or fame) but rather simply demonstrate, that it is possible to earn a little extra just as easily, as it is to make their product publicly accessible.
We’ve had a number of questions via email, and I’d like to answer and expand on some of them here. The type of question which tops the list is this one :
When is Kaplak ready? When can I start downloading films?
We usually distinguish between two phases of development, Kaplak v1 and Kaplak v2. Kaplak v1 is the first, simplest working solution, which helps meet the two key challenges (so we think) for digital niche producers, visibility and payments. Kaplak v2 is the construction of a backbone structure which utilizes p2p technology, and can be used by our customers for very fast transportation of data. Kaplak v1 has a timeframe of 1-2 years, unless our key assumptions prove to be misguided in the process, and we have to start over or redo parts of our development. Kaplak v2 has an estimated timeframe of 3-4 years.
In the fall of 2006 we initiated a lengthy process of researching and developing our product, organization and market. And we have only just begun. Last month we launched this website in order to reach out towards potential customers. How longwinded our process will be from here, we really don’t know. There’s a lot of financing, consulting, educating, recruiting, data analyzing and software engineering ahead. However, we believe it will pay off to take our time to do this kind of dedicated development, and do it well.
If you want to sell toothpaste, people already know what your product is, and you can go ahead producing, marketing and selling your product right away. Nobody knows what Kaplak is, just yet. Kaplak is not simply about ‘downloading’ stuff, even though we hope our product will make this a very simple (and fast) matter.
Therefore, we have to work very carefully to develop our product, while we simultanously get to know our customers and their key problems. We may think we know a lot of things, but we need to document every last one of our assumptions in order to build the right product, sell to the right customers, create the right business model, recruit the right people and construct the right organization and right type of company. To that end, we need your help. Not to buy our product (just now) but to inform us; to educate us about your product, your business and your needs.
The first potential customer to test our assumptions about what niche businesses look like is Hilke Elisabeth Saggau of DigDoc Film Production, which (among other things) have specialized in documentaries on archaelogical digs. In 2006 she produced the remarkable documentary So süüt dat ut - Ausgrabungen in Hüsby (English title That’s the way it is - The excavation at Hüsby), which follows the dig of a bronze age burial mound through more than a year.
Elisabeth agreed to answer a few questions, and I’ve decided to quote her at length, because her answers give great insights into the life, work and challenges of an expert documentary producer.
Kaplak: Can you tell us a little about yourself, your niche community and your business?
Hilke Elisabeth Saggau (HES) : As a media producer I see myself not sitting in a niche but walking barefoot on a rocky yet scenic path. My various current clients have one thing in common: they can pay me only little or no money at all. Among others my topics are history, archaeology, ethnology, arts, religion and politics.
Kaplak: How did you get involved with your business?
HES : Growing up in the 50′es on a remote estate in Holstein, TV was my only window to the world. I always wanted to climb through that window and become a filmmaker myself. But I was born too early – film cameras were still expensive and unwieldy, and filmmaking was men´s business anyway. At least plan B worked out and I became an archaeologist. When video equipment eventually became affordable I bought a camera and an editing programme and started filmmaking in the late 90′es. In 2004 I got a chance to take part in FilmTrain, a two year’s German-Danish Interreg project for media start ups. In 2005 I founded DigDoc Film Production as an independent filmmaker.
Kaplak : What kind of digital product do you produce?
HES : I produce mainly video documentaries, but also music clips, image films and experimentals. Recently I started producing audio files for a digital tourist guide.
With co-producer Moses Merkle I just finished a 1h documentary “From Kiel to east of Warsaw” on the Australian musician Phil Conyngham. Also with Moses Merkle I am editing footage which we shot in Kosova. With editor Imke Scholvin-Watts I am working on a 1h documentary on the revival of a historic ferryboat on the Eider river. With Ahmed Rashid Mohamed I am working on Arabic subtitles and an additional Arabic booklet for my documentary “That’s the way it is” (2006). Moreover I am doing a very time and energy consuming research for a new documentary on the history of Buddhism in Schleswig-Holstein.
Kaplak : What, in your opinion constitute the greatest opportunities for your business on the internet?
HES : The distribution of my products will be easier. No need for burning DVDs, buying envelopes printing covers und bills, buying stamps… I could probably save time, sell my products for less money and still have a better profit. Probably much more people will come across my products and have an easier, direct access.
Kaplak : What is in your opinion the greatest problem for your business on the internet?
HES : Right now there still seem to be technical problems in launching my films. The access via mobile phone has to be improved, especially with regard to my audio tourist guide. People who are interested in the topic of my products tend to be very old fashioned when it comes to digital equipment and are reluctant to buy or to use it.
Elisabeth is an example of a niche producer who fits our customer profile near perfectly. She is an expert in her field. She has a recognizable problem, and one we’d like to help out with (earning enough money). She produces high-quality films. She has a website and seeks to promote her productions online, yet it is difficult to find information about her film and subject matter (visibility problems). She has interested markets globally (there are archaeologists, film festivals (of which So süüt dat ut has participated in a handful) and historically interested audiences all over the world), and therefore potentially could connect to and open new markets.
In addition to these things, there are a few other important insights to note. The first is the old-fashionedness and resistance of her market, which could be a problem. Are her customers currently using the internet to obtain films like this? No. Will they?
It’s also obvious that she is involved with a lot of different projects, so there’s something which will or could appeal to different kinds of markets, which means there’s a greater chance at least some productions will fly. It’s also interesting to note the conception of the internet as a means to save time, and the technical infancy of some product solutions, which reflects the insecurities of a new media landscape : what technologies will fly, and how? What formats should be used, so that customers will be able to receive and get the picture in the other end? This is also related to the need for subtitling, for translating a local language to languages spoken and understood at the receiving end (in this case, audiences in Arabic-speaking countries).
Lastly but not least, Elisabeth bears witness to the media revolution which has made digital cameras and other means of production so inexpensive and accessible, that it is even possible to create the films she produce.
At Kaplak we’ve adopted the use of the term ‘niche’ in order to describe an aspect of the industrial economy, even though it is quite insufficient to describe the changes and challenges we mean to describe. We’ve already gotten a clear definition of ‘niche’ from Chris Anderson, which is that ‘niche is something which interests few people passionately’, in contrast to mainstream, which is what many people are moderately interested in.
However, this is looking at things from the viewpoint of an industrial economy, not from the perspective of the people and businesses who live and experience a particular field of expertise, meeting and selling to particular customers.
Inevitably, to begin with we’ll have to use the vocabulary of the industrial economy to describe what’s happening in the new economy of a digitally connected world. Along the way we’ll find if the meaning of the terms we use change to mean something else, or if we need to invent completely new concepts to describe what’s happening.
If we want to understand how niches work, we need to get in touch with you, who may be our future user and customer. What do your online activities entail? What do you produce? How do you sell it? What are your greatest opportunities and challenges? To paraphrase Steve Blank, “opinion is inside the building, data is outside the building”. This is what we need our mailing list for. We hope to obtain your help to give us a refreshing reality check on “what life is about on the slim end of the long tail”. If you’d like to help out, you can do this, by signing up on our mailing list here. We’ll get in touch.
This blog will keep on investigating the challenges we face, not just theoretically. With your help, we’ll seek to unfold more examples of online niche communities and businesses which shed more light on the day-to-day methods, practices and challenges in what we (so far) refer to as branches of a global “niche” economy.
Steve Blank, who we hold dearly at Kaplak, spoke in December at a Google conference about the history of Silicon Valley. This talk provides some fascinating insights into the intersection of war, technology and business, which shouldn’t be missed, if you’re interested in the history of technology :
I found this email in my mailbox today and thought I’d share it, as Amazon’s latest move is an interesting one to note in relation to the Kaplak project.
Amazon.com has been around since the very beginnings of the web, pioneering online mail order business, with all that this entails. Amazon also owns Alexa, which indexes and provides information on global website traffic, ranking the most visited websites in the world. As early as 1996, the company launched their own affiliate marketing program on the web, where participants earn as much as 10% for providing links to Amazon products on their website. Late last year Amazon launched their own online music store (for now available in the US only), and now comes WebStore. To quote the email in plain text:
WebStore by Amazon gives you a branded e-commerce site backed by the support, selection and expertise of Amazon. You can be confident that your WebStore is going to be up when your customers come clicking. Better yet, WebStore is easy to set up and comes with a number of great marketing features so you can start selling in minutes!
It has been comparatively easy to set up and run one’s own online business for some time, with several strong open source solutions around, osCommerce being a prime contender. What’s new in Amazons Webstore is making it a lot easier, and additionally giving users the opportunity to use Amazons payments and recommendations systems. Great move! I can’t believe they didn’t do it sooner. Amazon’s price tag is not so great however, even though it may include reducing parts of the “hazzle” of running your own webshop. It excludes everyone who has not already established a business model, i.e. effectively most on the slimmer end of the ‘long tail’, which means that Amazon loses out on a lot of long tail business. Still, it’s a great move, which no doubt will be embraced by lots of medium-sized to smaller niche-oriented businesses.
I’ve previously referred to a phenomena, which I’ve chosen to term the mainstream problem. The mainstream problem describes the effect that distribution of information and cultural expressions acquires “hitlist” characteristics, when subjected to limited space, time or attention.
Chris Anderson, spokesperson for the advantages of the online niche economy in his book The Long Tail, describes ‘mainstream’ as that which many people are moderately interested in, while ‘niche’ describes that which passionately interest few people.
In industrial mass media such as the publishing, newspaper or television industry the scarcity of ressources means that one produces the product which sells well enough to finance it’s production. Since most people collectively demand the mainstream product, this product sells best and is therefore the one produced. This does not imply, however, that the mainstream product is the best. But it is the best possible product given a specific set of economical conditions, borne by specific means of production, which are too expensive to fulfill the needs of the niches.
A limited space (such as a webpage, the frontpage of a newspaper, television air time or the size of a screen) leaves space for just some information, in place of other information. Given the economical constraints discussed above, this space will be distributed according to ‘most popular’ hitlist criteria, meaning that the mainstream information, i.e. the information which hits the most people moderately, but none passionately, takes up the space.
The effect of displaying information this way is often amplified, since more people will take a closer look at the contents of the frontpage and further strengthen the visibility of the mainstream information. On the web, social recommendations strengthens this hit economy, in what has been termed the Justin Timberlake effect. On websites such as YouTube it has the effect, that few videos have millions of views, while millions of videos count below one hundred views.
As the amount of information on the internet grows (millions of new websites are created every month globally) the mainstream problem becomes a greater and greater problem for our access to relevant information on the web. The information may well be accessible somewhere on the net, but it is no good, if noone sees it or is capable of finding it - or rather, if people who wants it doesn’t see it or is capable of finding it.
Even Google will have a problem showing search results which are more than just moderately interesting for the websurfer, unless he or she has the patience to trawl the search results for the results which are passionately interesting. A main component of Google’s PageRank-algoritm is how many incoming links a given website has. This makes Google vulnerable to the same problem. The more who link to a website, the more visible the site will be on Google, all other things equal. The more visible it becomes, the more people will likely link to the site.
What is interesting to us, is what happens, when the economics change. Because they have already changed, and they are changing fast. There are no expensive means of production, which justify the limitations imposed on cultural production. The means of cultural production today equals the costs of a computer and an internet connection. But it is only slowly dawning on us. We have become so accustomed to the economics of limitations, that it is difficult adjusting to the economics of abundance.
This Wired article provides some interesting insights into the intersections of an old corporate tradition such as the LEGO corporation and online fan communities of the hacking, open source breed. (Found it via Jake McKee’s blog).
It’s an interesting read, which also sheds some light on the dilemma facing businesses and individuals who walk the delicate balance between salaried, financed “work” and volunteer “fan” input; when are people paid to do work for you, and when aren’t they?
Peer production, as coined by Harvard professor Yochai Benkler, is basically a method to build something using the internet and a lot of people’s spare time and spare expertise. It utilizes the effect a lot of connected computers can create via the internet. It makes possible the creation of value of such different projects, companies and products as peer-to-peer filesharing, Wikipedia and even Google, whose value lies almost exclusively in the cached pages of websites, brought together in “search results”. As of now, most if not all such collaborative efforts are unpaid, based on volunteer work.
One assumption of Kaplak’s is that a lot of people are kept out of the peer production loops on the internet, because they simply do not have as much “spare time” to spend on their interests, as college students and rich geeks do, to put it bluntly. Most people with a fulltime dayjob and a family with small children, for instance, wouldn’t ever find time to contribute even to Wikipedia. Where can one find the time for something like this? Unless, of course, one leeches on the “paid time” and so the “spare time” is really lost production time from the wasteful, industrial workflow. This requires that one’s job has a reasonably frequent use of computers connected to the internet, and that management is not too tight.
My point is not that online collaborative efforts as a result are unreasonably unbalanced as they are dominated by young people and geeks (who else can find time to redo one’s edits on an article day in and day out, so that one eventually have to give up?). My point is, that put against “unpaid time” and lofty ideals, “paid time” makes the difference in the end, all the time, as it puts the food on the table. It may be possible to create an online encyclopedia with the voluntary help of thousands of college kids and unemployed geeks with too much spare time on their hands. And it may be possible to develop open source software projects, with the participation of much the same segment of the world’s population. But what about the rest? What happens when the working family man gets released from his daytime job (which he could care less about), because he is able to finance his hobby (which he is passionate about) with a little help from the internet?
This is already happening in some places of the world, among other things thanks to Google’s Adsense program. It is not felt or appreciated quite as much in the West, as it is in Third World countries, where AdSense dollars makes a felt difference. For most, the higher living standards in Europe and USA make AdSense earnings a welcome addition to a regular daytime business or job - in countries such as Egypt or India, it finances a business, a career - or a new car.
These are the financial undercurrents of the new online economy, and it is and will be moving our way, if and when we can build the right products and online architectures to help us take advantage of this economy.
I have been looking around for a way to start Kaplak’s looking into the workings of online niche communities. We have some great examples in our own local backyard, but I wanted something, which showed how the internet has come along and changed things.
Looking around I stumbled upon this video by Jake McKee on what we may simply term the “LEGO community”. Everybody knows LEGO, but few know that LEGO is not just a children’s toy. LEGO has a large following of playful adults around the world. See the video and judge for yourself.
One of the interesting points of the video is that all these scattered individuals passionate about LEGO have been connected with the internet. Where many of these people were isolated before, the internet has made them aware of each other’s existance, globally. One gets the impression that this has helped spur a new vitalization and outburst of their creativity. New possibilities to show off creative endeavours (like this video, shared with YouTube, is an example of) and get inputs back, has caused something we may term an “awakening”, with an expression borrowed from Lawrence Lessig.
Personally, I’ve recently refound a lot of joy myself in my old LEGO’s and have been surfing around on sites such as Brickset, which offers an online database on most of the LEGO models ever produced. I’ve also played around with LEGO’s official Digital Designer. This program engages LEGO fans to help design new models, which can also be “uploaded” and sold via an online marketplace. The LEGO Digital Designer and marketplace is one of Chris Anderson’s examples of how a company can utilize the long tail of interests in different LEGO models. If, that is, the program was not artificially limited to a specific range of bricks, which it is, for industrial reasons… In order for LEGO to be able to sell the models you build with the Digital Designer, you have to use bricks currently in production. You can’t use ‘outdated’ bricks. It seems odd to me, that one should re-experience that old problem one always had building things with LEGO, that you always missed a particular piece, in a 100% digital product.
What’s more interesting to Kaplak, though, is the exchanges taking place between LEGO fans themselves, and the eventual capabilities of fans to share and eventually sell their creative endeavours to other LEGO fans. There’s nothing more than trademark issues (i.e. the protectionism of a traditional business model scared of copying, which we’ve touched upon before) to prevent users from creating their own models, trade in bricks on eBay, and share or sell their construction instructions, in spite of anything LEGO has to say. And maybe even issues like these won’t stand in the way. The awakening of this niche community is in many ways also an empowering of individual fans and entrepreneurs, who is so far perfectly capable of building their own databases and wikis.
“By the end of 1992 there were only 50 web-sites in the World and a year later the number was still no more than 150. … In 1994 there were 3,2 mln hosts and 3,000 web-sites. Twelve months later the number of hosts had doubled and the number of web-sites had climbed to 25,000.” (Griffiths, 2002)
In this way, internet historian Richard Griffiths accounts the explosive growth of the web from 1994 onward with the development of the first popular graphical browser, Mosaic. Mosaic was created by Netscape-founder Marc Andreessen, who went on to other projects after the browser wars. In recent times he’s begun writing a terrific blog on entrepreneurship, and he has co-founded and funded social networks service provider NING, a project and company we’ll keep a close eye on and get back to later, as NING opens up vast new opportunities for niche communities.
I recently wrote about attributing value to the context of finding information, rather than on any particular piece of information (which is what copyright is based on). One type of company and services, which so far has been very good at attributing value to the context of finding information, is search engines. Search engines have so far provided great ease and comfort of obtaining information online, which have given them a prominent position on the web.
What search engines has so far been able to deliver, however, they’ll find increasingly more difficult, as the amount of accessible information increase. Here’s what search engines has to deal with :
Total Sites Across All Domains August 1995 - December 2007.
Netcraft is a well-respected British internet company which among other things performs regular web server surveys. One of the nice side results of this work is a pretty decent idea of how many websites there really are in the world.
‘In the December 2007 survey’, Netcraft reports, ‘we received responses from 155,230,051 sites. This is an increase of 5.4 million sites since last month, continuing the very strong growth seen during this year; the web has grown by nearly 50 million sites since December 2006.’ The curve of the ‘active sites’, excluding Blogger sites and MySpace accounts, shows an even more solid exponential tendency. This kind of growth in accessible information on the internet spells huge challenges for search engines, which already now shows, especially if you do ‘weak’ searches on little known subjects.
If, for example, you do a search for the girl name ‘Britney’ on Google, 9 out of 10 results relates to the popsinger Britney Spears. This relates to what we may term the mainstream problem, which is basically the problem of a hit-driven industrial economy : limited shelf space. Google can display only a limited number of results on the first page (10 results as standard). The more interesting Britneys down the search results may hide the one page you’re looking for, but you won’t find it with any ease and comfort. But let’s say, which is not unreasonable, that this girl’s name is the one piece of information, you’re in possession of, before you search for something a Britney did or someone named Britney (but not Spears). If one has to browse 17 pages of search results before finding their particular piece of information (as is not rarely the case if you often look for obscure information online), one real quickly loses one’s patience with “search” as an effective means of finding information online.
Thus, you have a great market for social bookmarking services such as del.icio.us, Digg, Reddit, and to some extent, Wikipedia and other great collaborative databases of ‘further information’. Kaplak will add to this pallet of services, by attributing value to the context of finding information. This happens when a producer consciously designates a percentage of his price in Kaplak to pay for the context, in which his product is sold.
Please enjoy this recent video with Chris Anderson, introducing the ideas of his forthcoming book FREE: The past and future of a radical price, at Nokia World 2007 in Amsterdam :
Thanks for the tip to Guy Kawasaki. You can find the video in a slightly better quality here (where you may be better able to pick out Anderson’s slides).
I venture to say, that the ideas of Anderson’s next book at a first glance seem a lot less radical than those of his first (The Long Tail (2006)). By giving something away for free, which is abundant, you can sell something else, which is scarce. This is not a new business model, but just one, which can help create interesting and astonishing things, when used cleverly in combination with the internet. According to Anderson, technology have opened this model up to a wide range of industries - this is what makes it interesting. Nokia and the rest of the mobile phone industry can give away their phones, because there’s money to be made on talk rates and services connected to the phones.
Anderson’s model on the scarcities of the economy on the internet seems, however, too simplistic. He divides these into four broad categories : time, money, attention and reputation, in which the attention and reputation (hyperlinks + PageRank) converts into traffic and money to be earned on advertisments. True, this is the ‘conversion mechanism’ used by Google and others today. But I’m not sure I buy that attention and reputation are really scarce ressources, independently of the technological architectures, which shape attention and reputation on the internet now or in the future.
The attention span of any individual may be limited, but then we may be attentive towards very different things. This is a central point of Anderson’s first book. And reputation may simply, also according to The Long Tail, be a question of technological architecture, of ‘bringing customers down the tail’, as Anderson puts it, in the way Amazon recommends titles ‘other users also bought’. Attention and reputation on the internet are artificial constructs. Our current architectures make something more visibile to someone, than something else. This is only a problem, in so far, that the someone wants the something else before the something.
Kogt i Roen is a Danish comedy band based in Skive, a town situated in northwestern Jutland in Denmark. The band name is difficult to translate directly. It is Danish slang which could imply that the band members have stayed out too long in the sun… So far the band have made three CD’s of songs and acts, of which all tracks are available from their website.
