Post-Gutenberg World
From an article by Richard Stacy
Discussion
"This article seeks briefly to expose the extent to which the Gutenberg principle has shaped our world before turning its attention to the likely characteristics of the post-Gutenberg era – the world of what is currently called social media – identifying both the ways in which organisations will feel its impact and also the ways in which organisations will have to adapt in order to survive where power will not lie in the institutionalised capability to control access to information."
From pre-Gutenberg to post-Gutenberg
The pre-Gutenberg world
"In the world before the introduction of the printing press it was not possible to distribute precise replicable information to a large number of people. Information could be captured, in the laborious and time consuming process of hand-produced books, scrolls or tablets, but access to this information was restricted to a small elite group. Transmission of knowledge thereafter had to rely on purely word-of-mouth channels and the form of information that was prevalent was therefore the story, this being the form best adapted to surviving the process of ‘Chinese whispers’ that mass communication involved.
Institutional development was limited and society tended to be dominated by religion and feudal political systems, institutions which were well adapted to the use of narrative or hierarchy as means of propagation or control.
The Gutenberg revolution
It is widely acknowledged that the introduction of the printing press was revolutionary in its impact. It was credited as being the catalyst for the Renaissance, the development of science and creating the pressures which forced power to slip from the hands of monarchs and religious orders and become shared across a much broader section of society. However, there is a temptation to see all of these shifts as history and fail to see the extent to which, what might be called the Gutenberg principle, continues to play an active role in the shape and operation of society and institutions today.
Simply put, the Gutenberg principle can be expressed as the fact that mass distribution of information is possible, but expensive. The effect of the Gutenberg principle was the rise of institutionalised and mediated channels to create the efficiencies and scale necessary to manage the interaction between people with information and needs on the one hand, and the people who wanted that information or could satisfy those needs.
The most obvious example of an institution which emerged was the media but in reality almost all of the institutions that have emerged since Gutenberg owe their existence in some part to the operation of the Gutenberg principle: a bank, for example, at its most basic is simply a way of creating the efficiencies and scale necessary to mediate information about people with money and people who want money.
While the technologies and channels for the distribution of information have developed significantly since the Gutenberg press, the basic structure of the Gutenberg principle has not: it still costs lots of money to distribute information to a mass audience.
The post-Gutenberg world
The emergence of the internet and the World Wide Web in the 1990s was initially hailed by many as ushering in new democratic age, driven by much greater access to information. In reality, while the internet had a dramatic impact, the revolutionary shifts predicted did not occur. This is because, in its earliest days, the World Wide Web still conformed to the Gutenberg principle. Building a web site, accessing server space and publishing information required both money and technical expertise and was therefore still the preserve of institutions rather than individuals. The reality of much greater access to information was not matched by a greater ability to publish it.
Speed of access also limited the ability of the internet to be a channel for all forms of media, restricting its use to text based and transactional forms. As a result, much of the initial investment in the web went into servicing and creating institutional opportunities, with e-commerce emerging as the major new web-based phenomena.
This changed with two developments. First, the spread of broadband internet access made it possible to easily both upload and download all forms of media: video, images and audio as well as just text and transactions. Second, tools emerged which made it simple for people to publish or spread information. Blogging was the first example, followed by social networking and distribution and sharing sites like YouTube and Flickr.
There has been a third trend which is gathering significance, based around attaching relevance and context to all of the otherwise random pieces of information now being published. This concerns practices such as tagging, rating and commenting, as well as services such as social bookmarking and news-sharing sites which allow individuals to store and share information. This trend is responsible for creating forms of collective intelligence and what has been called ‘crowd wisdom’ and is probably the most important area to watch going forwards because of its ability to allow individuals to create the trust and connections necessary to transact and communicate amongst themselves without any institutionalised intervention.
Information can now flow between one individual and all of the potential individuals for whom that information might be of relevance, without any form of significant institutionalised intervention (except the provision of a freely available technological infrastructure). This is what could be called the post-Gutenberg principle although perhaps a better term would be the social information principle.
In very general terms the social information principle is likely to generate a very powerful disintermediating or de-institutionalising effect which, in theory, could have consequences for society at least as significant as those generated in the first instance by the development of the printing press. This is likely to play-out over many years since institutions and practices which have been the foundation of our society for 500 years are unlikely to disappear over-night. However, there are some significant effects of the social information principle which are already upon us, and it is these which are examined in the next section.
Understanding the post-Gutenberg world
There are essentially three ways in which the post-Gutenberg world is already intruding.
These are:
- The decline (or slide into irrelevancy and obsolescence) of institutions and businesses for whom information mediation is their principle function
- The rise of transparency and the challenge to institutionalised trust
- The challenge to markets posed by reduced costs of entry and the ability to service niche demands.
The end of institutionalised mediation models
As noted earlier, the Gutenberg principle is hard-wired to a greater or lesser extent into almost every institution that has emerged over the last 500 years because it controls the way in which information flows within organisations and society as a whole. However, it is the businesses which deal with information or content in its purest and simplest form – those that were the first to emerge following Gutenberg’s discovery – that have also been the first to feel the impact of the end of the Gutenberg era.
These are the media, music and film businesses and an examination of their decline is important, not just because of the clues it gives as to how other sectors may be affected, but also because of the role and importance of the media – the news media in particular – in business and the wider society.
Almost all time spent by individuals with forms of social media is achieved at the expense of time spent consuming traditional media. There are many estimates of how this is developing, but one very credible source, Ron Bloom, CEO of Mevio (formerly PodShow) made the case in 2006 that within 5 years 50 per cent of the media consumers consume would be produced by other consumers (i.e. social media)[1]. While this may be an estimate at the higher end of the scale, almost no-one has seriously challenged the view that participation in social media is significantly reducing consumption time of traditional media – and consumption time directly equates to the available revenue pool.
This obviously has huge commercial implications for the traditional media (if Bloom’s prediction is correct this will equate to a 50 per cent market reduction), but more generally any organisation which relies heavily on the traditional media for communication or distribution of information will find their ability to communicate severely restricted and they will be forced to enter the social media space simply in order to maintain profile or share-of-voice. This alone could be the factor which forces organisations to engage with social media, especially since organisations which can successfully exploit this space will gain a significant competitive advantage.
What is highly instructive about the decline of the traditional media is the way in which it happening. Many in the media still have a false sense of security based on the idea that the content of social media is not ‘as good’ as the content of traditional media: it’s not written as well, produced as professionally or to set standards of ‘journalistic integrity’. Therefore the idea that a newspaper could ever be replaced by ‘the narcissism of the blogosphere’ or television by ‘the rubbish on YouTube’ seems to them absurd. In reality, their definition of ‘good’ is shaped by the requirement for it to be of mass appeal and, of course, the social information principle dictates that individual relevance rather than mass appeal is what dictates the distribution of information. This belief is underpinned by the false assumption that one form of institutionalised access to information (a newspaper) will be replaced by another institutionalised form of access. Instead what is happening is that the process of information sharing within social media is replacing much of the function of information provision organised by the institution of traditional media. This shift from institution to process is one of the defining characteristics of the shift from the Gutenberg to post-Gutenberg world. This is not happening because social media is doing ‘news’ any better – rather it has changed the definition of news, shifting it from a definition restricted by the economics of expensive distribution to one based on individualised preference. People still want national and international news and content of mass appeal, but in terms of priority, this frequently sits below information about family, friends, work, leisure interests, gossip and neighbourhood.
As Clay Shirky puts it, in his recent book ‘Here comes Everybody’[2], the media, and the profession of journalism “has been created as a result of scarcity (the ability to publish) … the professionals are often the last to see it when that scarcity goes away. It is easier to understand that you face competition than obsolescence”.
Almost certainly the traditional media will not be the first business to be challenged by obsolescence rather than a traditional competitor. Managers of businesses in many other sectors are going to find their customers deserting them and their market contracting, not because they are doing anything wrong, but simply because their customers have found better ways of doing things or spending their time – usually by cutting out middle-men and transacting amongst themselves.
Transparency and Trust
In the Gutenberg world, trust was institutionalised. Organisations worked to establish reputations such that people would trust anything and everything they did without feeling the need to interrogate it for themselves.
This worked because it was efficient, from the organisation’s perspective and because individuals recognised that they couldn’t (or couldn’t be bothered), to comprehensively interrogate all the organisations they dealt with. They would accept an organisation’s ‘institutionalised representation’ of itself (its brand) – provided they could have a level of reassurance that this representation was reasonably accurate. The one flaw in this model was that if anything caused people to doubt this representation, this would undermine their confidence in the whole institution and cause them to lose trust. However, this could be mitigated against by the fact that, for example, one instance of poor customer service tended to live and die with the individual concerned and maybe the group of friends they discussed it with, and if it did come to greater prominence this tended to be through channels which could be controlled – either sidelined by effective PR or drowned-out by advertising.
In other words, the effectiveness of the model of institutionalised trust rested on two assumptions: people couldn’t easily interrogate all aspects of an organisation’s activities and behaviours nor could they easily publicise examples where the reality of corporate behaviour was found to be inconsistent with its institutionalised image.
Social media is undermining these assumptions. Now that the tools of mass publication are available to any it is possible to expose inconsistencies between claim and reality. Every customer is potentially an investigative journalist, equipped with sound and video recording equipment (i.e. a mobile phone). Forums are springing-up specifically to allow these experiences to be logged and promoted. And even if examples that highlight flaws in institutionalised trust don’t ‘go viral’ or get widespread promotion, neither do they lie dormant or fade away as they used to. Nothing, in the digital world, goes away or lies dormant. It gradually gets linked to other bits of information and pulled into the digital halo or storm-cloud that is slowly building-up around organisations (and individuals) – their ‘digital identity’.
But perhaps the most critical thing is that this new transparency does not demand that everyone takes the time to use these new tools to interrogate organisations – the power of the crowd comes into play. The fact that someone is taking the time to do this and you know it is happening and can interrogate the process if you wish is sufficient. As soon as sufficient numbers can be brought to bear a form of crowd intelligence can be generated very quickly – Wikipedia being the classic example.
Trust within social media is not vested in institutions it is vested within visible process. The best way to explain this is to look further at the Wikipedia example and its battle with Encyclopaedia Britannica. The Encyclopaedia Britannica is a classic example of institutionalised trust. You trust its entries based on your knowledge of the reputation for accuracy it has established and carefully nurtured over the years. You don’t feel the need to look behind or interrogate this reputation in any way. Wikipedia is totally different. You trust its entries purely on the fact that it has made visible the way that entry was produced and refined. Even if you don’t choose to examine the history of every entry, the simple fact that you can do this and there is a process in place which means somebody is doing this, gives you a level of trust. Critically, an element of this trust is based around the need for you to make your own assessment of the process and how much trust you will decide to allocate to it.
It is not that people are going to reject institutionalised trust, but the task of sustaining institutionalised trust is going to become much harder in the world of transparency brought about by social media. Organisations will therefore find that ultimately the only efficient way to maintain trust is to switch to a model based on process, which will mean creating the ability to see in much greater detail how an organisation goes about its business.
Mass markets disrupted by niche effects
This effect probably has fewer implications in the short term for most organisations, but in the long term has the power to be the most disruptive. At the moment there is only one business that is really feeling its impact and that is the music business which has not only lost the power that came from control of the means of distribution (via the rise of music file sharing and downloading) but is losing further relevancy through the sharing of musical tastes and preferences via music blogs and the subsequent loss of ability to channel musical tastes through a restricted number of channels otherwise known as rock or pop stars or bands.
Social media is making it easier to target or relate to much smaller consumer or customer segments and this is making it possible to create businesses that target niche markets that were previously not viable. In the past, it was difficult to be a niche brand and it was very difficult, if not impossible, to be a niche brand that could challenge the big players in terms of scale or ability to operate in the markets within which these players operated. This was because, rather obviously, niche implies that customers are spread out in such a way as to make them difficult to access or aggregate and because the costs of entering a market and then competing with big brands for attention and retail or distribution space are significant, you need to attract a large number of people to make this viable.
This is changing. Much of the costs of establishing and maintaining a mass brand are invested in what could be called Gutenberg assets, i.e. buying the channels and media to reach your consumers or customers. But within social media, distribution is free and if you know how to communicate within social media this levels-out the competitive playing field between big and small brands. In fact, it can often tip the bias in favour of the small, because they are often more flexible and responsive and can adapt to the behaviours and practices within social media far more readily than big organisations. Social media also opens up the economics of the ‘Long Tail’ [3] providing access to and the ability to aggregate market share from parts of the tail not previously available.
At the same time, the costs of product development and market entry are coming down as organisations learn how to leverage the power of the crowd. The concept of ‘crowdsourcing’ or ‘open sourcing’ is advancing, whereby the ability to design and develop products and services, or at least contribute to this process, is shared across a large group of people: people who may then become the eventual market, thus further saving on marketing and market entry costs.
The rise of the niche is also further empowered by an existing trend – that of separating out the economics of product design and marketing from product manufacturing. Most big brands already outsource their product manufacture to China or parts of the developing world. While this seemed to make sense in the short term, it also meant surrendering any competitive advantage that lay within the process of manufacture. This didn’t seem to be an issue at the time and the brands that did this surely didn’t realise that they were essentially levelling the playing field for a huge new set of competitors – creating a high quality manufacturing capability available to all.
These new niches are unlikely to create totally new markets, instead they will succeed by taking tiny bites out of the markets created and controlled by mass brands. The net result is that many mass brands are going to realise that large chunks of what they thought was their consumer or customer base are only aligned behind their brand or product out of necessity or convenience and because there was nothing else available. They are not there out of any fundamental loyalty or commitment and as more tailored alternatives emerge, they will simply drift away.
The increased ease of market entry combined with lower costs of competition will mean that new brands can spring-up and then die-off relatively quickly, potentially creating a segment within a category that is in a continual state of flux, populated by temporary ‘category squatters’. This could also be hugely disruptive to the more established category players.
Adapting to the post-Gutenberg world
In this section we look at the more specific implications of the post-Gutenberg world and start to chart the steps all organisations can take to mitigate their effect or profit from their development. But first, a word of caution. The unpalatable truth is that many business models may find they have very little long-term future in the post-Gutenberg world. The fact there have been only two significant casualties to date, in the traditional media and music business, is because these businesses operate as pure play content mediation services and are thus exposed to the basic, entry level, forms of content sharing and distribution that social media has currently developed. However, social media is in its infancy and has yet to develop the structures that will allow it to bring to bear collective and crowd-based mediation and brokerage into more complex areas such as banking and financial services. Thus, while it is possible in theory to construct a world without banks or institutionalised mediators of financial services, this remains a world some way-off, even if the initial signs and clues are already there as to how this might develop with things like peer-to-peer lending via Prosper.com, the management of financial information in sites like mint.com and the sharing of financial information and advice in sites like wesabe.com. None-the-less, this should not induce complacency. The time that it will take for the transformative impact of social media to affect sectors like financial services is, in itself, a critical asset that must not be wasted. The changes involved in adapting to the post-Gutenberg world will be substantial and can only be managed through progressive, long-term and sustained effort. The organisations that succeed are likely to be those that start the journey earliest.
In terms of starting this journey rather than try and peer too far ahead into the future and make significant strategic decisions against outcomes that it is still very difficult to predict with any certainty, the best approach in adapting to the Post Gutenberg world is to start the process of shedding investment and asset in areas that might be called Gutenberg dependant and developing assets and competencies that have value in the social media world.
The principal shift to make here is away from ‘hard’ investment in Channel and into the three ‘soft’ spheres of Content, Conversation and Community.
Looking at this in more detail: in the Gutenberg world the key to success generally lay in control of channels, be they channels of information, content or transaction. Social media is giving control of channel to individuals rather than institutions and allowing information, content or transactions to become non-channel dependant. Therefore, rather than try and own the channel the opportunity now lies in the things that will flow through the channels and in understanding what it is that the channels will connect.
The new channels will broadly speaking contain two things. First a vastly increased load of information or content brought about by the fact that everyone has the ability to publish and distribute information and secondly conversation, in the sense of direct interaction between individuals. The connectors or nodes in the new model will not be institutions, rather they will be digital communities where individuals coalesce and where much of the process of mediation and knowledge sharing will take place.
In very brief terms these new assets or competencies can be described thus:
- Content – the ability to start seeding and colonising your digital space with a broad range of discoverable content and information, tailored to niche interests, which will draw the relevant people to you and help generate trust
- Conversation – the ability to engage your key audiences and allow them to start to make a contribution to the products and services you provide – i.e. not simple to be passive receivers
- Community – creating or supporting the ability of those people whom you have engaged in conversation to start to talk and transact within themselves about the issues relevant to the products and services you provide."