How Much Harry Potter Does One Need?

Affliate Profit Machine, a website about marketing (specifically on the Internet), responded to a subscriber’s question of whether there is too much competition on the Internet. So what is being essentially asked is, ‘is the Internet market flooded with people selling the same or similar things’? Bob Bly, in a post entitled ‘Is There Too Much Competition in Internet Information Marketing?’, says no.

He says that Internet consumers, especially those who are interested in information products, don’t necessarily buy one of whatever they need. Rather, they will buy different products related to an interest on his/hers. Bly says this type of consumerism is similar to that of the video game industry (a kid will buy more than one video game) and is unlike that of the appliance industry (one dishwasher per household).

Bly then suggests to find a niche within a broad topic. Other sites advise finding a niche within a niche.  Why would you need to find a niche when the market is supposedly not flooded with like products? This seems somewhat contradictory.

From my research, the trend of success on the Internet appears to be linked with branding. That is, if people are familiar with your brand and have confidence in the brand, then they will be more likely to buy. Brands such as Noble, which sells Official Harry Potter merchandise online does very well. The Noble brand is regarded with confidence as it has been entrusted with selling merchandise for other big movies as well. The Noble brand also had a reputation before entering the Internet market. People knew and had confidence in Noble before it started selling online. This also seems to be true for other smaller companies. Once they have proven that they can survive in the physical market, they seem to have success in the virtual market.

Perhaps this has an element of security for consumers as well. I believe consumers will be more likely to buy online from a brand that exists in the physical world since the consumer knows who they are giving their information too and can physical reach the company should something go wrong. With brands that are purely virtual, there is no such security. Because the Internet allows for a degree of anonymity, the owners of the company could take a consumer’s information (credit cards and the like) and the consumer would have little to no way of holding the company accountable.

I agree with Bly on the matter of the Internet market being somewhat similar to that of the video game industries’, but I think I draw the line at comparing online consumers to ‘video game junkies’. I don’t believe that people will buy from within a broad topic because I don’t think that consumers buy related products online. I’m skeptical because Bly doesn’t give any evidence to support this idea, and while the other ideas seemed feasible, this one is a bit coincidental. Really, how much Harry Potter does one need? I draw the line at the books and dvds, and I didn’t buy them online.

Snooping Police

An article on the CBC website gives information about the Conservative Party’s bill to make ISPs allow the police access to information about its clients. ISPs (Internet Service Providers) in Canada may soon have to start allowing the police to snoop on subscribers. This new bill’s purpose is to allow the police to get information about subscribers (personal information and communications) in an attempt to catch online thieves, child pornographers, terrorists, and other criminal activity.

Concerns about the privacy of Canadians has already been expressed. Another concern is that ISPs will footing the bill for the proposed changes from the non-traceable software to traceable software. ISPs will also have to maintain and collect all communications about the subscribers, a hefty burden.

Internet surveillance in other countries (from the article)

United Kingdom

The Regulation of Investigatory Power Act of 2000 includes provisions to require ISPs to install systems to aid investigators in tracking electronic communications.

United States

The USA PATRIOT Act of 2001 expanded wiretaps to internet connections. The Bush administration authorized the National Security Agency to conduct domestic wiretaps without a warrant in 2001, possibly earlier. The Protect America Act of 2007 and FISA Amendments Act of 2008 extended that authority.

Australia

The Surveillance Devices Bill of 2004 allows Australian Federal Police to obtain warrants for the use of data, optical, listening and tracking surveillance devices. The Intelligence Services Act of 2001 covers the use of surveillance devices by the country’s security agencies.

New Zealand

The Search and Surveillance Powers Bill was introduced in September 2008 to update the surveillance powers and procedures New Zealand’s law enforcement agencies.

Sweden

Sweden’s parliament approved new laws in June 2008 to allow the country’s intelligence bureau to track sensitive words in international phone calls, faxes and emails without a court order. The law took effect in January 2009.

An article entitled, ‘Privacy advocates concerned about potential wiretapping law‘ came out several months later on the CBC website. Jennifer Stoddart, the Privacy commissioner, expressed her concern that this bill isn’t the last resort for the police and that there is no substantial evidence available that suggests that a bill, such as the one proposed, is actually warranted.

Others worry about the power of this information in the hands of the private sector since information, especially about consumers, is valuable to them. Privacy lawyer for the Canadian Internet Policy and Public Interest Clinic, Michael Geist, says, “This is going to recruit the private sector, whether it’s Bell, Rogers or whoever, to become agents of the state…[and because the police can look back at what people were saying, this looks like] a huge move towards the totalitarian state where everybody is eavesdropping on one another and handing over information to the police”.

Another issue about this proposed law is that it doesn’t require getting a court order despite what Minister Day told the media before the details of the bill were released. Meaning, that ISPs would have to hand over their subscribers information without judicial authorization.

Geist says on his blog: It is pretty much exactly what law enforcement has been demanding and privacy groups have been fearing.  It represents a reneging of a commitment from the previous Public Safety Minister on court oversight and will embed broad new surveillance capabilities in the Canadian Internet.

This new bill represents another party in attempt to control the Internet. While this control may not necessarily for monetary gain, it infringes on our rights. If the police want to search your home to gain information about you, they need a warrant. This proposed law would allow the police to search your online information, sometimes far more personal than what is found in our homes, at anytime, perhaps without you knowing. This reminds me of Orwell’s Nineteen Eighty-Four, where the people don’t know if they are being watched. In terms of privacy, this is analogous to giving the police the ability to at anytime, for any reason (or no reason at all), to surveil us, to search our belongings. And I think that’s something that we should be worried about.

Another thing to be wary about is the abuse of this information. Bell, and other companies have already started to amass information on their clients. Facebook recently got into some trouble as they were using the information from user accounts to choose which advertisements to have appear on each individual’s Facebook. Information about consumers are being gathered by a number of sources in order to make more sales to the consumers. So while we have nothing to gain from losing our privacy (and much to lose), companies have already shown that they have much to gain from this lack of privacy.

Perpetual Potter

A question that I have been trying to answer is, how does the characteristics of the Internet, in particular the time and space biases, allow for an idea/website/object to cycle through the Internet and become ‘popular’ or well-known. What I’m trying to get at is, how does the Internet allow for the perpetuation of certain things. Why do things go viral.

My thought on this is that the Internet’s web-like structure allows for ideas to last and yet still be easily attainable. Links, mentions, advertisements all play the role of connectors, connecting one idea to another, creating the web. The interconnectivity of the web allows for more popular ideas to be perpetuated this way. The ideas, through connectors, can penetrate diverse areas of the Internet while simultaneously receiving more and more links/connectors. Ideas spread like viruses. This is the space-bias of the Internet in terms of perpetuating ideas throughout the Internet.

However; unlike a virus, the ideas stay. Once connectors have been forged, some may break or unlinked, but still others are being created. When an idea hits an Internet and begins to be perpetuated, it is never erased completely.

The image picture here comes from Cybergeography Research Web page.

Taken from the website: This is an atlas of maps and graphic representations of the geographies of the new electronic territories of the Internet, the World-Wide Web and other emerging Cyberspaces.These maps of Cyberspaces - cybermaps – help us visualise and comprehend the new digital landscapes beyond our computer screen, in the wires of the global communications networks and vast online information resources. The cybermaps, like maps of the real-world, help us navigate the new information landscapes, as well being objects of aesthetic interest.

Still, it is difficult to determine why certain things are perpetuated in the Internet. Why has Star Wars Kid over any other video gone viral? Certainly, this must deal with psychology of individuals and sociology. Hopefully, by examining how things are perpetuated online, we can explore different possibilities as to why things spread online.

Companies Online

A problem that many online companies face is how they will make money. The success and survival of thes companies rests on gaining the answer to this question. For many, like EBay, YouTube, and Google a large portion of their revenue is generated from advertisements. What has been allusive for many companies is not how to make money off of other companies (advertising) but, how to make money off of Internet users/regular consumers.

The winter 2009/10 issue of Canadian Business magazine looked at the year’s winners and losers in the marketplace. I took a look at who seemed to be doing well online, and those who are struggling.

In Trouble?

‘New Skype Seeks Users Who’ll Pay‘ – Canadian Business Winter 2009/10, Joe castaldo

Skype was taken over in 2009 by Canada Pension Plan Investment Board alongside other investor groups such as Silver Lake (private-equity firm). Many were skeptical of the investor groups move since 90% of Skype’s traffic brings in no revenue. Skype only makes money when customers call an outside mobile or land line. The upside to Skype is that has a large amount of users, approximately 521 million user accounts. The new owners will have to find a way to increase revenue by making the user pay for the service. It seems, at least according to the article, that the investor group seems to be taking a cautious approach, making slow changes over radical moves such as making users pay every time they contact someone through Skype. They don’t want to loose their market share to Google, Google Voice being a threat to Skype’s business. The proposed method of bringing in more revenue is to have Skype integrated on mobile devices such as Apple’s iPhone, BlackBerry, etc. Nokia has already entered into a deal with Skype to integrate Skype into their network.

‘Netflix Being Sued by In-Closet Lesbian for “Privacy Invasion“‘ – Chowdhry, Pulse2.com

Netflix has approximately 10 million customers and has signed on with partners such as Facebook, Blockbuster Inc., CBS, Disney, and ABC. Consumers like having instant access to entertainment. Trends show an increase in video on demand services and TiVo, though there is also an increase in movie-goers which suggests that people are watching more movies and television. However, a lawsuit against NetFlix by its customers may create a problem for this company. Netflix created a contest where it gave information of about 50,000 customers to contestants who were trying to created a recommended algorithm for a search engine. Some of these NetFlix customers, including an in-closet lesbian, are suing NetFlix for breaking federal privacy laws and fair-trade laws. While this may only hurt Netflix a little bit, Netflix must be careful in future to better protect the privacy of their customers. Afterall, there are other services similar to Netflix and people won’t stay with a company that has little concern for the privacy of their customers. In order for Netflix to continue to be profitable, they must continue to foster a good reputation with their customers as their are a number of alternative companies like theirs.

‘Pimp My Ticket‘ – Andy Holloway, Canadian Business

Ticketmaster is under a lot of scrutiny lately. The online ticket-seller has been accused of marking up prices for tickets, that is, charging consumers more than the actual value of the ticket. Officials rhetorically ask “Do you call the beer vendor at the ball game a beer scalper or the restaurant that sells you lobster at the ‘market price’ a shellfish scalper?” (Pimp My Ticket, CBMagazine)There is a difference, argues Andy Holloway, and that is the the limited supply of tickets.

Ticketmaster is accused of diverting the public to TicketNow where the prices of tickets are extremely elevated over the face-value of the ticket and limiting the number of tickets sold at face-value on Ticketmaster in order to do this. While Ticketmaster does not actually ‘resell’ the tickets, but receives a service fee from those who want to sell their tickets.  What this creates is a scalpers paradise.

The laws and rules of the world apply online. The rules of capitalism and a free-market live online. Illegal just doesn’t always work on the Internet. As Holloway puts it, “screw customers enough and eventually everyone notices”.

The Winners

“The Lost Symbol on Kindle” -Bryan Borzykowski, CBMagazine

Amazon’s Kindle, an electronic reading device, often attracts customers by selling the e-version of books for less than the physical books. Borzykowski reports that Dan Brown’s follow-up novel of The Da Vinci Code series, The Lost Symbol, became the top-selling item on Amazon.com and became the sixth-best selling book of 2009. The e-version of the book retailed for approximately $9.99 as opposed to the $29.99 book.

Is Amazon really losing on this one? Not really, in order to actual buy the e-version of novels, you need the Kindle (retails for about $259).

Online dating services

Described as “cost-effective in recessionary times” (CBMagazine), online dating services such as eHarmony and Match.com have had tremendous growth in 2009. Many of these sites have seen record amounts of new membership for example, monthly registration at eHarmony is up by 20%. Marketed as being easy and inexpensive with high success rates, these services have prospered in times where other online companies burned.

Money Making Online

“Money never starts an idea. It is always the idea that starts the money.” -Owen Laughlin

If you have a website that is pulling in a decent amount of traffic daily. You may get approached by a marketing company who wants to advertise on your website. According to tools.devshed.com (a website about websites) the most common form of website advertising is Pay-per-click, where the website owner only makes money when someone clicks on an advertisement.

A problem that I see for the website owner with the pay-per-click form of advertising is that if the advertisement is not successful at drawing people in, the website owner makes no money. Television ads, unlike this form of advertisement, produce revenue for the network every time they are aired/viewed. Televisions, unlike the Internet does not have an interactive function. I would argue that pay-per-click advertising is not an optimal form of advertisement for the website owner, however, it is optimal for the companies. Companies get the same advantage of television advertisements; however, they only have to pay some of the time for the same amount of access to target audiences.

My advice for website owners would be to to use the Television model of advertising on your website. That is, companies should pay you for every hit on the page where their advertisement is situated, so they will be paying for accessibility to consumers. With today’s Internet savvy users, its unlikely that they will click on an advertisements such as the ‘Magic Weight Loss Pill’, and the website owner will make very little money with these types of advertisements. If you do decide to enter in a pay-per-click agreement with a company, try to make sure the ad is relevant/has to do with your website, to increase the likely-hood someone will click on it.

How Fandom is good for the Economic System

Good advertising is good audience identification. It’s why you won’t see ads for a Metallic CD on the W Network.

For some fandom borders on fanaticism, for others, its an interest. What binds them together is a unifying interest, which makes the media system of the economy very happy indeed. Why? It eliminates the tedious step of identifying audiences and, in the case of the Internet, eliminates the cost of having to pay for advertising through television networks, radio networks, etc. Fandom on the Internet allows for companies to easily identify which consumers would be interested in their product and the cost of advertising would be legitimated because the company would be consistently reaching its target audience virtually every time.

MuggleNet.Com, a Harry Potter fan website created by a 12 year old boy get, receives about a million hits daily. The revenue he receives from advertisements is in the six-figure range.

Other, more general, fansites such as Fanfiction.Net allows for multiple fandoms to exist on one webpage. Companies, which own the rights to several products with a known fanbase, can advertise to their audiences all within one website.

Also, if the advertisement is embedded into a video, for example, then if a Internet user were to link to that video or embed that video into his/her own website, then the video gains free access to their target audience on other websites. In this way, piracy is helpful to advertisers.

Fansites are useful tools for advertisers as they segment the diverse Internet audience into a select, identifiable groups.

Harry raised his wand and bellowed, “Decommodificus”

Harry raised his wand and bellowed, “Decommodificus” and the pieces of the Potter Pie became harder and harder to get hold of.

When companies such as Scholastic Corp., Bloomsbury, Warner Bros. are all making a killing off of the Harry Potter series, why are some companies such as Walmart, Amazon.com, and others failing to profit off of pottermania? An article of the 2007 Business Week magazine attempts to answer that question in an article entitled, ‘The Twisted Economics of Harry Potter’.

The article points to the decommodification characteristic of the Internet and marketplace. With so many trying to profit off Potter, consumers have the option of buying the Harry Potter books, merchandise, and movie paraphernalia virtually anywhere. With so many competitors, companies have had to find ways of getting Harry Potter fans to buy Harry Potter products from them. Usually this means cutting prices. Wal-Mart, Amazon, and others slashed their prices by 50% in  order to attract consumers.

This is a game where many try-out, but only a select few make the team. Individuals have made more off Harry Potter than entire companies, making some describe the phenomenon as similar to Napster and the music industry.

Companies that own the rights to produce Harry Potter merchandise to be sold online also have to compete with mimicking companies who may not own the rights, but have lower prices. Thus, the decommodification characteristic of the Internet has created a deluge of companies and individuals competing for consumers.

iPirate

Decommodification, its a characteristic of the Internet that’s been foiling the money-making plans of companies, corporations, and monopolies worldwide. The earliest, largest, and well-known decommodification entities on the Internet is Napster, the online music downloader and music sharing tool that allowed millions to download music for free. Napster, though fighting several lawsuits, became the starting point for P2P (peer-to-peer) file sharing and the creation of Kazaa, Limewire, BitTorrent, IsoHunt, and more.

These new-generation file-sharing tools allows for the free downloading of entire books, software, movies, images, and, of course, music. This online-piracy, as it has been termed, has hurt sales for both the music and movie industry. Suddenly a debate about the distribution of copyright material over the Internet entered the public sphere.

The music and movie industry have attempted to battle online-piracy through lawsuits and advertising urging people to support artists. On such advertisement attempts to appeal to the viewer by suggesting that stealing a car, purse, or product from a store is illegal so, why is it okay to steal online?

These advertising attempts have largely failed and seems to have had little effect on the public conciousness. While courts have continuously ruled in favour of companies over file-sharing services, “each successive victory has helped galvanize opposition to their actions among an increasingly vocal coalition of free speech advocates, programmers, and music” (The Handbook of Internet Studies by Robert Burnett, page 445).

The winner of this battle will indicate where the future of the Internet is going, whether the Internet will become normalized or a haven of free-content. One thing is for certain, Internet users prefer not to pay.

No Logo

Naomi Klein’s novel, No Logo, appeared in the February 2010 issue of Canadian Business magazine in an article written by Andrew Potter entitled ‘Naomi Klein: Marketer of the Decade’. The article looks at how Klein’s attempt to expose and combat companies from hurting the political and public sphere and dominating our environment actually aided companies in branding themselves better.

No Logo attempts to argue that because brands have integrated themselves into our popular culture and wield tremendous political force, they pose a threat to society. As a result, citizenship has eroded and consumerism has taken its’ place.

The political force that a brand wields is dependent on the brand’s financial power. The more money, the more power in the political landscape allowing brands to influence governments.

To fight against brands, Klein suggested the use of culture jamming, guerilla marketing, and reclaim the streets initiatives. However, these tools intended to fight against brands were used effectively by brands to further entrench themselves into society.

Accusations of gaps between what a brand says it is and what is actually does (ex: Nike sweat shops) taught brands that authenticity is largely sought after by consumers. This created greater corporate responsibility which in turn could be used as proof that the brand is authentic. Another way brands have attempted to show that they are authentic is by not putting a logo on their products, outlets, or stores. The idea in the ‘no logo’ strategy is that if people use products without a logo, which is eventually revealed to them, that consumers will realize that the actual products is what is important, not necessarily the brand. Two companies listed in the article who have successfully implemented this strategy are Starbucks and Absolut Vodka.

This article brings to light the creativity of companies as well as their ability to frame and manipulate the environment and messages in the public sphere. Tools that were originally intended to harm, were manipulated to the benefit of brands. While, this may be good for the companies, it may not be so good for democracy or the public sphere if consumers are unable to change or influence companies.

I can see that two possible ways for this to play out on the Internet; however, both are contradictory. Either the companies will be held accountable online as consumers will be able to form groups and amass support more readily. Or companies will also find a way to counteract initiatives to change or hold accountable companies found online. For more small and private companies that are starting up the internet, the anonymity and lack of branding can give the company an ability to manuever away from or hide from public scrutiny or criticism.

Train the Brain to Consume

“Advertising has [people] chasing cars and clothes they don’t need” - Chuck Palahniuk, Fight Club, Chapter 19

The idea put forth in beginning chapters of The Empire of Mind by Michael Strangelove is that we are molded and conditioned to want to consume and participate in the marketplace. It also puts forth that an important characteristic of capitalism and the economic system is that it manipulates human desire. Through this manipulation we are trained to consume and act as the marketplace wishes. So, the economic system is not only a system of production and distribution of products, but it is the system of production and distribution of meanings, values, and desired behaviour.

First, lets talk about the meanings produced by the economic system and why this production system is vital to its survival. If I go down to the supermarket to buy some hand lotion (which for argument sake, we’ll assume all the hand lotion for sale works equally well), why do I buy one brand (X) over the other brands even though the price is slightly elevated over another? The company who produces hand lotion X uses media in its production system. The role of media in this system is that of persuasion, and managing consumer behaviour. It does this through advertising and if the advertising is particularly successful, integrates the product into society and as part of society’s norms.

Good advertising produces and maintains the behaviour desired by corporations and, on a larger scale, the behaviour needed to support the economic system. As John Galbraith contested, we are a product of the economic system and adopt the values that support the economic system. As Dr. Strangelove mentioned in class, “if capitalism can’t manage the mind of the people, it can’t manage consumption”, or in other words, manage our behaviour. This means that without the media system aspect, capitalism would lose its ability to manage what people buy, how much they buy, what products they buy, etc.

The arrival and use of the Internet has put a cramp in the style of capitalism. Before, the media system was able to direct unfiltered messages to the audience (consumers) via television, radio, and print. Through the segmentation of audiences or consumers, television in particular enabled corporations to address niche audiences which resulted in smarter and less costly advertising. The viewer held a more passive role. Messages are delivered to the consumer, but there is no direct feedback from the viewer to the corporations. In this way, there is only a one-way flow of communication and corporations are then able to manage the meanings of things. The Internet has changed this.

The Internet has created different pathways of communication, different from the one-way flow of communication of television. Internet users are less passive as they are able to express themselves through a variety of mediums online and communicate.

However, corporations and the economic system does not want to lose its ability of producing and managing the consumer. So while, companies are rushing to be the next big thing online and make lots of money, they are also attempting to find a way to normalize the medium of the Internet. Normalization in this sense follows the notions behind the Normalization thesis, which puts forward that, as seen throughout history, mediums (television, radio, print) will be eventually controlled by corporate media systems.

Thus, we are in a battle with capitalism in the sense that it wants to normalize the Internet while the Internet users are resisting this attempt, preferring net neutrality.