The Root Trend

Brands in Crisis During a Social Correction: The 'Toyota Quality Crisis thread'

This Toyota story thread and post has been monitored and updated daily since begun and is being offered in a flowing format with links from major news outlets in an expanding link thread at the bottom. In ten days we've gone from multiple recalls to a worldwide brand crisis that will not be fixed with any one move at this point:

My premise when beginning this post was to document the unfolding brand crisis for Toyota following their multiple recalls worldwide and to correlate it with the idea that brands expose parent companies to significantly more downside risk during periods of social correction (now).  It may be tempting to dismiss this as either obvious or not offering specific value in terms of "what to do with it" but before we can go there it is important to document that this is what happens to parent companies of significant brands in crisis during these corrective days.

I first suggested this idea two years ago by looking back at the brand crisis encountered by both Tylenol (1982 & 1986) and Perrier brand (1990) and offering a revisionist perspective on their divergent outcomes based on the imposing effect of social mood and whether we are expanding or correcting (in a macro sense) at the time. Because of the size of this social correction now developing multiple consumer brands in various industries are facing this effect and the implication in the years ahead can already be called dramatic. It is tempting blame the specifics of a crisis for the damage to the established brand but as we will see over time, it is the combination of both the crisis and the developing social mood that need to be considered. It is a human chemical reaction of sorts the demonstrates how the oppositely characterized periods of social expansion and social correction work to produce wholly different experiences when managing a crisis.

Link for my earlier thoughts on this subject:

Perrier & Tylenol:the revisionist lessons of social mood for brand managersManaging Brands in Crisis:

America's Financial Brands (an update is in progress)

Brands in crisis during a social correction - an updateSocial Corrections: shinning a light on the little parts of the larger process

The crisis thread accumulated over ten days is below. You may choose to skip down to the list of links for stories from major news outlets. Below that is an excerpt from Wikipedia about the eerily similar Audi recalls in the late 1980's and their American decline in a smaller period of social correction. The parallel is not in how the issues were similar but in how they were allowed to linger and inflict damage on a brand that previously had positive momentum in the US. Take note of their sales decline in that period. 

The next post in this series will be an overview of the "what now" aspect of these observations. For now, brands serve companies by offering an emotive connection with both current and potential customers. This edge can cut both ways and social mood has a lot to do with this dynamic.  Dave

Original post from 1-28 10:

My last installment on this subject was somewhat indirect in that it offered a familiar personal (sports)brand.   The Tiger Wood's brand may be characterized as inconsequential to anyone but his sponsors now that he has temporarily retreated from public life for a re-boot, (as is so common) in the world of celebrity. 

Now, Toyota's well crafted brand has its turn in the glare of crisis during a social correction.

Last week I recall seeing word (2x in a few months) of their unfolding floor mat recall problem and I dismissed it because every car company has had recalls. Even a quick Google search shows the other Japanese car model I own has been recalled three times in eight years for minor things; so recalls by themselves do not have to be a true brand crisis.

Toyota's problem(s) was all over the headlines yesterday afternoon and this AM in the US (Europe too probably). I must admit that, at first, it felt like the biased opinions out there were piling on to a problem that is eminently fixable. Sliding floor mats can be secured, right? I am pretty sure many Toyotas have metal snaps on floor mats. In any case, the discussion in the Bloomberg article I noticed yesterday was about the accelerator cable/pedal assembly. It remains undetermined in large mainstream media accounts if it is a cable issue, which would be more severe, or/and if it is simply floor mats.

Then this morning, we get an example of why a brand in crisis during a social correction is such a critical time....and every hour and move counts.

My New York Times email this AM with their top headlines included a story about Toyota's brand problem. It was the third story listed under "Top Stories". My point here is that I am sure it is a high percentage read.  After 20-something short paragraphs and an impressive graphic showing the growth of their sales figures, and a picture of a top exec scratching his head, the only mention of the actual problem in the NYT article was this quote:

Toyota said Thursday that it was extending the recall to Europe, and that "the models and exact number of potentially affected vehicles is under investigation. It added that "details of corrective action and implementation will be communicated directly to customers with vehicles potentially affected."

What's the problem?!  It does not matter that this problem began in November with a very specific issue and has expanded to now include a potential specific mechanical issue and it includes 8 models of north American and European cars sold by Toyota.

The real problem is that as of this AM Toyota lost control of the conversation in a world that demands immediate communication. I have no doubt the competitive forces are spinning this for all it is worth at the moment. The Bloomberg article yesterday afternoon was filled with obviously biased opinion (quotes) against the company. It was very transparent, in fact but, politicians and pundits of all kinds know that negative advertising for the competition is effective in moving perceptions in the short term. The first time I ever wrote about this topic I discussed how Perrier in 1990 lost its dominant market share in a wildly competitive business in the span of a month. That is not likely to happen in this case but that does not mean extensive damage can be done to Toyota's 2010 sales in North America.

I wrote this in my last update on the subject of brands in crisis during a social correction:

The premise in my first post in the series is that brand equity is at greater risk during periods of social correction (now). If you are an owner or manager of a valuable brand this is a very big responsibility. The premise of this post is to fine tune that point further by showing how the violation must be something that is correlated with the brand's interaction with the customer.  If it is, the implications are critical and likely to be long lasting.

Toyota's problem with sliding floor mats or sticking accelerators (or both) got away from them as of this AM. I am posting this now because it is a great real-time case study of this premise. We'll watch in real time.  I have no idea how this is going to turn out but can already tell that extreme risk surrounds the company right now in North America and that any further delay could be very costly to 2010 sales and maybe beyond depending upon how this is handled going forward.

The Drudge Report has a CBS story (one paragraph) of a little old lady driving into the side of a laundromat building in her Toyota saying she does not know what happened. This is lousy reporting and journalism to say the least and it is almost intentional piling on by some PR firm somewhere. Business can be rough and tumble...we all know that well. My deeper point is how right now, and for the next few years, we are in the midst of a deep social correction where the natural proclivities of people will be to accentuate the negative and potentially tear down well built brands (and people) that are not 100% proactive in communicating the details of problems associated with brands (as they pertain directly to their customers) in an instantaneous manner.

Moreover, in a world where social networking on-line has increased the immediate nature of communication (in two directions), this only makes this mandate that much more critical now for brand managers when the problem touches the core of your brand's utility. 

I have no idea how Toyota's crisis will turn out (in my thinking) because right now because I am not even sure if it is a cable problem with the accelerator or a floor mat problem being spun out of control. No matter which it is time is of the essence as it pertains to the general car buying public. When I first sat down to write this post I was thinking to myself there is no way that my image of Toyota quality could be permanently damaged by something of this nature....at this point. My own personal assumption has to be qualified however; I've bought several cars, foreign and domestic. The American car I did own was a POS in the early 90's.  The Japanese brand car I now own is not without glitches and if I were in the buying cycle I would be considering many brands looking for quality because I see cars as depreciating assets....not status markers. That's just me. Many less informed people are liable to simply pass by the Toyota dealer if they are shopping this month or next. Heck, they recalled eight models; doesn't that mean they don't have many cars for sale right now anyway?!

Like I noted, time is of the essence for the Toyota brand right now. Even if this does not produce a death blow to the brand because all those Toyota dealer buildings across the USA are good advertising by themselves, it can screw up the entire sales year in just a few weeks. Brands in crisis during a social correction are worthy of a full court press, every time.  

Friday AM 1 29 10:

The story to the public has been made more clear if you choose to read everything available. The problem is really two problems that are, as yet, not completely understood. The manufacturer of the accelerator cables (a supplier to Toyota) came out and said it is a cable/component design problem. Apparently, the floor mat issue is separate. (I wonder ?!)

The leader of Toyota, Akio Toyoda, has made the monumental decision to halt production on eight models around the world guaranteeing a big slowdown in revenues for the sake of stopping the brand's reputation from bleeding over this critical quality issue. An undefined problem is an even bigger problem when your competitors behave as they have. (Ford and Hyundai offer cash bonuses to Toyota customers was in the headlines last night)   

This is definitely a brand crisis. What is not clear is the magnitude of the crisis. Industry insiders (competitors) seem to have sensed immediately that it will not go away quickly because the nature of the real problem got away from the company and is now being discussed by unrelated parties without Toyota's involvement. Is it one problem or two?  I saw a video segment yesterday on how to stop you car if it accelerates by itself. Toyota was not mentioned once. I cannot help recalling a somewhat similar crisis Audi had many years ago. I do not remember Audi's crisis having a definitive conclusion other than a secondary brand stepped back even more for a while as its reputation was tarnished with American car buyers. How will the world leader in quality respond to a crisis at the core of their brand?  Let's stay tuned.

The point of this thread is to monitor the status of a leading brand in crisis during a period of social correction. My plain contention is how the state of our consolidating/correcting social mindset (a collective state best seen as a moving average of sorts) will affect this particular brand in a way that is as negative in an opposite direction as when good events conspire to dramatically lift a brand during social expansionary times. This morning's positive GDP report is not an indication of a return to an expansionary state for the US. The time frame that this perspective works around is considerably larger than that. Toyota has big problem that may become a monumental problem if not handled decisively and immediately.  The perceived leader for quality in middle market cars is facing a crisis of that core perception (utility).  Combined with the overall competitiveness of the industry, the potential for an intermediate term setback is dramatic. If you were to compare this to the crisis that Perrier experienced in 1990, two critical parts are potentially different:

1. Perrier did not control their distribution channel (like Toyota does) and the swift loss of distribution was outside of their control in the beverage market and led to their almost instant decline.

2. The outcome of this crisis for Toyota is still in front of us even if we know time is precious right now.     

later installments noted:

Tonight (2 05 10), a Bloomberg article suggests that regulators in the US are now looking at electronic components as a problem source. Just the mere suggestion takes us from floor mats, to pedal assemblies, to circuits for a potential cause or causes. The brand crisis deepened on this news. The main problem right now is the lack of certainty has caused Toyota to lose control of the conversation and the political realm is owned by American competitors. Is this really justified? There's no way to know right now, we'll have to wait till much later but consider this: When the first American Toyota plant gets shut down and a few thousand people get fired, only later will we know if the lobbying tail is wagging the dog. Right now, Toyota's core brand is in crisis during a social correction.

Today (2/04/10)we see another widening, on a new front, of the brand crisis for Toyota. The Prius may be recalled for brake concerns in Japan. A quote in the report by a securities analyst suggests that " this could be fatal". I do not offer this quote thinking that could be the case in just a week's time. It does pay respect to the dynamic of social momentum working against the company's brand right now. The point of this discussion, here, is to show that social correction dynamics are working as hard (or even more intensely) against the brand right now as they did on the company's way up the quality perception scale in consumer's minds. Brands in crisis during a social correction are exceedingly vulnerable and the main message here is how any mistakes are magnified by the social environment.

The thread of links at the bottom of the post has built steadily everyday as the company lost control of the process. It seems to have its own life that is related to media's need to produce compelling content and this type of controversy fits nicely right now. It is time for heroic effort on the part of the management team as well as seamless cohesion in corporate communication on a global scale.

as of 2/02/10 the recall has expanded to include 7.6 million cars (worldwide) and American media seems very irritated at company executives not being engaging. Yesterday (Monday)it felt like the announced solution was about to begin working. This afternoon it feels very different. This is the nature of real-time crisis tracking.

1 31 10 update:  The link posted for the Sunday NYT article below claims that Toyota is ready to announce today or tomorrow that a fix is in place and that two separate problems are being addressed. First 4.1 million cars worldwide were recalled for accelerator pedal issues. An additional 5.4 million cars in North America were recalled for floor mats that affect the accelerator pedal. There is overlap in the two recalls. Tonight's media release (link below) tells of a massive media blitz to communicate actions. Is this over?

Here's my position as of right now: In four days (1/28-1/31)we went from not being sure what the problem was exactly to the planned implementation to two fixes related to gas pedals and floor mats. So far it is a good flow. Now for the talk and the implementation. The speed with which the problem was addressed outwardly was good for non-Toyota owners who might be potential customers.

The point of this thread is to observe in real time and not inject too much other than what potential exists for a deeper and protracted brand crisis. Implementation is everything.

Daily flow of headlines on the thread   (newest last):

Toyoda Shrinks World’s Biggest Carmaker for Quality Control

Toyota Owners Frustrated With Massive Recall (Bloomberg) (sales hit and perception damage coming no matter)

Toyota U.S. Dealers May Lose $2.47 Billion a Month (Bloomberg) (distribution Channels will suffer)

Toyota Owners Frustrated With Massive Recall (CBS) (uncetainty)

Toyota safety recall spreads to Europe  (clearly an accelerator issue) FT 1 29 10

With Recall Expanding, Toyota Gives an Apology NYT 1 30 10

Toyota to Issue a Fix for Recalled Cars  NYT 1 31 10  A Solution is ready says the NYT

U.S. Doesn’t Object to Toyota Plan for Pedal Repairs BB 1 31 10

Toyota Plans Media Blitz After Stockholders Lose $21 Billion BB 1 31 10

Toyota’s Slow Awakening to a Deadly Problem NYT 2 01 10

With Eye on Its Reputation, Toyota Issues Repair for Pedal NYT 2 02 10

Toyota’s President Eludes Media Amid Ballooning Vehicle Recall BB 2 02 10

Toyota’s Electronics Said to Be a Focus of U.S. Recall Probe BB 2 03 10

Toyota Recall Crisis Mounts as U.S. Steps Up Pressure BB 2 03 10  (Amer. politics gets involved)

Toyota May Recall Prius After Japan Orders Probe BB 2 04 10

LaHood’s ‘On the Fly’ Toyota Statements Accelerate Confusion BB 2 04 10

In a Prius Preserve, Shaken Fans NYT 2 04 10

In California, a Rebuke to Toyota NYT 2 05 10

Toyota's payback for stealing from the Gods Op-Ed WP 2 05 10

Toyota Has Pattern of Slow Response on Safety Issues NYT 2 07 10

Toyota Is Expected to Add 2010 Prius to Recalls NYT 2 08 10  (add 300,000 more cars to the 8 million total now under recall for multiple reasons)

Toyota recalls 437,000 Priuses, hybrids globally Wash Post (headline) 2 09 10

Toyota recalls Prius over brake problem FT (headline) 2 09 10

observation 2 09 10....notice the last 4 days of headlines. The Prius recall was anticipated and then sustained across major new sources extending Toyota's stay on the front page of the key sources with a constant and resounding "recall" attached to their brand name. It makes one additional recall look and feel like three. In periods of social expansion the headline space would be more valued for the big deals happening that were successful or the people and ideas that are creating the new success. Instead, during a social correction people collectively value the information about failures, letdowns, and relish the blame. If you really read these stories it is easy to take note of Toyota's quality questions go back many years. Did it really take a family in a runaway accelerating Lexus that could not think to shift into neutral and brake in order to make this a runaway headline theme of recalls?...or a little old lady running into the side of a laundry building in her Toyota? Right now, like it or not, the Toyota brand is a magnet for speculation that is not favorable and the social momentum surrounding the story has tremendous energy (enough to make one non-critical Prius recall feel like four days of brand pain and look like three recalls in staggered banners in key mastheads.  ouch.  

Audi: A Similar Case in the mid-late 1980's?

For starters, this was pre-electronics era but it is fascinating how it began very similarly.

For those interested to consider if the series of Audi recalls in the late 1980's are worthy of comparison, I saw this short excerpt at Wikipedia. My main observation is how from the mid 1980's to 1990-1991 sales of Audi cars int he US fell almost 80%. The most significant observation is to be made outside of the recall specifics: The last part of those years included a social correction. The problem developed during a social expansion as the company endeavored to grow quickly in the US and left undiagnosed, it lingered until it collided with the sharper social tones of 1988 and again in 1990-1991. Here's the few related paragraphs to the recalls.  Brands must be managed differently during periods of social correction. This upstart brand crisis necessitated a complete do-over for Audi's launch in the US.And while I do not expect that for Toyota, I do expect more downside to American sales than most others suspect at this point primarily because the issues are not clearly defined and the legal process to follow will move slowly.

http://en.wikipedia.org/wiki/Audi 

Reported sudden unintended acceleration

Audi's U.S. sales fell after a series of recalls from 1982-1987 of Audi 5000 models^[14] associated with reported incidents of sudden unintended acceleration linked to six deaths and 700 accidents.^[14]

A 60 Minutes report at the time featured interviews with six people who had sued Audi after reporting unintended acceleration, showing an Audi 5000 ostensibly suffering a problem when the brake pedal was pushed.^[15][16]

The National Highway Traffic Safety Administration (NHTSA) concluded that the majority of unintended acceleration cases, including all the ones that prompted the 60 Minutes report, were caused by driver error such as confusion of pedals.^[17] CBS issued a partial retraction.

The first fix Audi implemented adjusted the distance between the brake and accelerator pedal on automatic-transmission models.^[14] Later repairs, of 250,000 cars dating back to 1978, added a device requiring the driver to press the brake pedal before shifting out of park.^[14] A legacy of the Audi 5000 and other reported cased of sudden unintended acceleration are intricate gear stick patterns and brake interlock mechanisms to prevent inadvertent shifting into forward or reverse.

Audi’s U.S. sales, which had reached 74,061 in 1985, dropped to 12,283 in 1991 and remained level for three years.^[14] Audi subsequently renamed the affected models/ with the 5000 becoming the 100 and 200 in 1989 — and only reached the same sales levels again by model year 2000.^[14]

A 2010 Business Week article — outlining possible parallels between Audi's experience and 2009–10 Toyota vehicle recalls — noted a class-action lawsuit filed in 1987 by about 7,500 Audi Audi 5000-model owners remains unsettled and is currently being contested in county court in Chicago after appeals at the Illinois state and U.S. federal levels.^[14]

Social trends reflect the polarity of shared values

This is not just a blog about explaining social mood or some me-too effort at what other people call socionomics.  I have considerable regard and respect for those efforts.   They are distinct in many ways from what I am doing**.  Having spent years within earshot of those on Madison Avenue and having always appreciated behavioral science, this approach to "seeing" social mood is, at the very least, a required effort for two reasons: First, the goal of any good science effort is to break down an area of interest into the basic structural components so that the general understanding surrounding the subject has greater utility.  Second, the general approach I suggest is really an adaptation of watching those use the original tool from market observations that generated this subject of social herding relative to social mood. 

In my own thinking, behavioral expressions by groups (markets) of people that exhibit polarity are critical to better understanding of how to use these ideas in a practical setting.  When I distill the ideas I've collected over four years on a cork board, this is where I am at currently. It's not quite clear enough yet, but, it's getting closer:

Social trends are threads of shared memory as they relate to key (shared) values.They have form and follow a path.  Shared social values have a base polarity that swing over different time horizons from one relative extreme to another in a manner that reflects (some degree of trend) of the larger social mood and these influence social trends we see around us.  Trend lines visible in data driven depictions are evidence of the shared memory of crowds (markets) and can (when properly used) be early evidence of how changing shared values will impact specific markets. This is the usable aspect of what I call the Root Trend or (the behavioral shadow projected by us as a result of our natural expression of social mood). How we value many things changes as social mood changes.

Stated up in the mast of the blog too: This matters to marketers. 

Alas, it remains (for now) a little too hip for the room. And while changing social mood may assist the current mindset by raising the need to know during the next phase of the social correction, I also am endeavoring here to offer another very specific example of how polarity among shared values within trending issues can guide outcomes.

The media thread in the right column became its own blog 18 months ago and is also a developing book. I've mentioned this before and am still hard at work on it.  (It's definitely not in danger of being late though 2010 is a firm goal.)

In the meantime, here's a specific example of an important social trend with polarity that we may all watch develop. 

Two posts ago I wrote:

More on the link between social mood and consumer behavior: the most basic social expressions

In this post I discussed the polarity of trust from the group perspective. (You really do have to see that post, and most everything here, from the perspective of groups or else it can be misinterpreted.) As social animals we naturally employ trust as a tool but, as social mood changes how we specifically apply the tool changes with the polarity being differing degrees of cooperation and control. "Cooperation" and "control" are the polarity in the social trust trend and so how groups of people express this polarity depends upon the degree of trend of the larger social mood and how much change occurs in this central social state (of Americans). 

Let's take it a step further and identify one more trend with polarity of expression in two dimensions. 

Even if you are not in the media business you cannot help be aware of how much trouble the industry is having because of the disruptive effects of the internet upon the basic business model. Businesses are social tools we create to deliver both personal value and social utility.  There are two trends running through the media business and social sphere right now that may seem different but they are really different expressions of the same core value.  IP or intellectual property rights are, according to media companies (content businesses), under siege. Technology has conspired to un-protect their business model when it remained naturally protected for many decades. Adaption to this disruption has come slowly and in the meantime profitability has declined. Many blame what they call theft of their IP.  I submit it is a natural reaction to supply and demand issues where we are collectively re-pricing the socially recognized value of content. (admittedly, it is hard to use a macro trend to square any one experience)

The second trend to recognize is the erosion of personal privacy of individuals in the US due to this same technology expansion. This trend became a big issue at the social nadir in 2003 and 2004 then it began receding. It will come back as the larger social trend is expressed and, in time, we will see the IP trend as a business expression of the same general trend that the personal privacy trend represents. The core shared value in this case is how we value Ownership rights (towards intangibles). To me, this is the key to using what I call the root trend. Identifying social trending issues using changing shared values (that have obvious polarity) can also help determine what degree of trend carries what implications (historically). Using our history as a guide, we can pair developing issues to likely directional outcomes over larger chunks of time. By approaching trending issues from this broad angle, it is less about prediction and more about understanding the present social momentum better (in a larger/longer framework)..."what really matters to the market".

It is my conviction that many businesses get lost in the white noise of the moment in order to service their immediate needs and can lose touch with their most relevant constituencies by trying to maximize the moment. Since I know enough about the media business to appreciate how this happened, I offer an example of why this trend viewing method should be learned and applied for better strategic outcomes in times of social change. (like right now)

The typical publicly owned media business serves three masters. The share holder, the advertiser or sponsor, and the consumer of their content. The conflict of interest is too much in a changed world with a digital environment. Fundamentally, you can say that there is balance missing from the business structure. Trend-wise, you can say that the new trend where consumers of content exert their need for Choice is paramount (The Era of Choice is media's dominant trend). The psychology of the market for content tells us, if we listen closely, that the social trend is more powerful than the legal issues surrounding sharing content (Media is a higher order social tool).   Structurally, the market for content is forever changed absent significant new technology. 

So, where does that leave us right now?! Ownership rights. Eventually the IP concerns of media companies will be somehow paired with personal privacy concerns and the market for content will respond with solutions that address these needs as one trend when it matters enough in the macro social environment. <The fact that it will is a benefit of seeing what is called the degree of trend as it relates to aggregate social mood.>

This observation highlights why trend studies must focus upon societal boundaries. Ownership issues, when they arise, will be discussed as they relate to the laws in a specific country.I also suspect that the laws of different states in the years ahead will matter to both people and businesses a great deal too. Google's China issues this week are a great example. (The third link below is good for these general kinds of discussions)

For now, just try to see how issues like personal privacy concerns and IP can be two differing expressions of the same shared value, and why this issue may become as central to people in the US now as it was 233 years ago when we created our founding agreement.

Large periods of social correction are all about groups focusing on those issues <shared values> that matter most and bind a people together.They must be changed or reaffirmed.  Shared values, in a social context, guide us on how to see trend issues more clearly in markets of people.   Dave

**ps. After reading this post you might wonder again where this may be going. Eventually, this work can and will be broken into small enough pieces so as to create a distinct subject called social trending dynamics. Eventually, many good things can grow from that effort.

as always, here are links for those interested in looking deeper at where these ideas began:

Socionomics  by Robert R Prechter 

The DVD

Progress in socionomics

The original observations that lead to socionomics

Brands in crisis during a social correction - an update

A while back I suggested an update for this series was in order.  Until now, the perfect opposing example to the major US bank brands in crisis was missing. Thanks Tiger.

The point of this update is narrow and brief: The perception of Broken Trust by a brand during a social correction only matters if the trust violation impacts the core utility or shared values associated with the brand. Put another way: if a firm's brand violates trust in the eyes of their customers, in a manner directly associated with your interaction with the customer, then the natural state of social affairs during a social correction will punish the brand considerably more than during periods of social expansion. The point is deceptively simple and straightforward but since the idea of social mood and periods of social correction are not yet commonplace, it is worth tuning into as the social correction we are experiencing may deepen and last years, adding considerably to this challenging reality associated with one of the most powerful corporate tools.   

More on the link between social mood and consumer behavior: the most basic social expressions

These pages are about how social mood, the primary social trend, influences all others we see at work in the markets we serve as enterprises and marketers. In order to see this chain of causality correctly, how you focus upon social mood and work from that broad basis, matters a great deal. Often, when in conversation discussing the idea of social mood, I find those I am talking with applying it as if it is a personal experience. This is natural but not helpful because personal experiences tend to magnify the issue being observed and it becomes very easy to lose a proper perspective. 

Social mood is a reflection of the fact that we are all part of a herd or flock of people with specific social tendencies. We are social animals and that broad fact has predictive qualities. Social mood is polarized....positive or negative, expansive or corrective. From these two basic primary states we can see it affect (very broadly) the three basic social expressions of trust, social unity, and growth (in the chart below).

My favorite of these three social expressions to look at (right now) is trust. Why? Right now we can see so many examples of how the changing polarity of trust is being expressed by groups of people very large and small, and not just in obvious places related to financial issues.  From the perspective of social mood it is both predictable and obvious.  We can see the most macro circumstances affected by changes in our shared perception toward each of these basic social expressions, and we also can see it manifest in our smaller (informal) group settings. This is what I mean when I suggest that social trends are a group process. If we avoid personalizing experiences attached to trends we observe then it is easier to get a feel for the relative size (importance)of the social trend we are watching. I began thinking it helpful to see these three basic expressions as "least common denominators" a few years ago. They tend to manifest as social impulses and that means they are primary parts of overall shared behavior...of the creative expression of groups.  This is important because it helps the observer begin to appreciate if overlapping expressions might be combining to create change in a specific social endeavor (a trend). This analytical endeavor is no different than a mechanic pulling something apart to see how it works. Businesses do this everyday in the realm of marketing. Yes, this remains in the realm of 'soft science' but the analytical documentation that is possible runs deep inside of each industry built to serve people and this creates opportunity to see what really matters to our market on a new level of depth. That is why I call this the root trend. One potato properly cut into quarters can produce four plants each with the potential to produce as many as 8 to 13 new potatoes.  The same can be said of social mood as it directly influences three of the most basic social expressions (by groups or markets) below.  

Are there more than these three least common denominators that can be seen to react directly to social mood?  Yes. Each basic social expression is expressed over time having a polarized dynamic. What is most helpful to me in looking at these three is how they can be objectively measured if you think about how to properly capture the basic expressive nature. Each of these expressions, however, is also processed personally alongside emotional content that we produce naturally as a part of who we are when operating inside as part of a social group. Expressions of trust, social unity, and our perspective toward growth are seen/experienced emotionally by us on some level as soon as we participate in a formal or informal social group that encounters issues related to any of these three basic social expressions.  They are foundational expressions of groups of people (markets) in social settings. 

How does this affect the market your enterprise serves? How might this affect the position of your brand over time? It's worth approaching your market from this broad perspective as you build ideas to test over time.

Posted addendum 9 29 09: Bloomberg announced plans by the Federal Reserve today to no longer allow credit cards to be issued to people under 21 without a parental co-signer. We can draft them to fight legally but credit worthiness, now, does not seem realistic until after 21 years of age. Appreciating this from the outside is easy. Applying it to solutions meant to serve changing markets is another matter. Both detachment and engagement are needed to put these kind of observations to work. History is always valuable in this regard.

Exploring The Link Between Social Mood and Consumer Behavior

The Root Trend is three years old this month. It's existed as a sketch on scrap paper for two years before that as a coffee coaster. I posted a similar diagram in the pages section of the blog a while back.

This is the root trend as I see it:

Why it matters is because consumer behavior and social mood are constantly interacting but never more noticeably than during inflection points like the one we are (collectively) navigating now.It's a great time to stop and look closer.

Over these three years there were several important social trending patterns I've noticed the most. The first became its own discussion and is about how media tools are being changed endlessly now by a combination of technology, social momentum, and the and developing social mood. It makes sense to me because I am able to combine three sets of understanding to better see the forces driving  the industry. I call it the (industrial) (r)Evolution of Media. The second is even more general and related to branding issues. Brands, as I see them, can be highly subject to changes in social mood. This is a potentially big topic and another post I continue to work on is how financial brands are emblematic of an important challenge in the branding universe right now. This post is still being written but right now let's look a more immediate brand issue that is reflecting social mood. This thread also touches media issues too so it is timely and relevant. 

I might have taken time to improve the diagram (above) a long time ago but since the trending issues I write about here qualify as the least understood "hobby" I've ever had, I tend to offer only the examples from the outside world that seem to shout the loudest.   I've watched (and am watching) a lot of trends develop with the always developing social mood in mind. It is a remarkable platform from which to appreciate social trending. In this diagram (above), in the disc representing consumer behavior, is what I suspect is a deeper inherent value to those focused on consumer behavior. I have not yet clearly reflected it in the diagram but the point is clear to me. Maybe this developing Face Book thread from the past two weeks will help explain some of what I mean:

Face Book is a social phenomenon because it has positively reflected more than one core social value shared by many people at the time of the mass adoption (these past few years). Up till now, however, it has not reflected the social correction in a very predictable manner.

Then, in the Sunday NYT Magazine 8/30/09, ran a story called Face Book Exodus.  The story was likely chosen because it would be controversial and grow legs as Google searches now reveal how the very idea that Face Book is in decline was being fought, emotionally, by both sides of the argument. There's always an emotional argument in the digital universe.

From a social trending perspective, (using social mood), Face Book is destined to morph into something very different. Why?

Much ado about nothing? (Getting clearer on what "Free" means)

There are many references in the media universe this month to Chris Anderson's new book,  Free.  <Wired mag link for overview>  Chris has interesting ideas and is usually a good read.   I've not read the book quite yet but the Wired magazine article discusses the broad ideas.  Yesterday, I read a thoughtful reprise from Malcolm Gladwell in this month's New Yorker. 

I am not sure how either would respond to this perspective but, the developing social mood offers us valuable insight on "free" indirectly that I have addressed in a series of posts on the (iroM) media site lately.  I'd like to broaden this thought significantly here, while keeping this short.

The word "free" inspires a specific idea in my mind related to the digit 0 (zero).  Free implies it costs no money but, the use by marketers often evades the reality that while requiring no money, there are meaningful other requirements.  Does this seem like too fine a point in how they discuss the topic? The authors might think so. So might the producers of various content in the world of old media but, in the months and years ahead I figure that anyone using the term "free" is more likely to be using outmoded scales for a world that has gone well beyond this old way of seeing. "Free" requires we use a new ruler to measure its subtleties, otherwise it is increasingly likely to be considered a partial (one-sided)truth:

In years worth of notes related to social trending dynamics, social mood's basic message to me is that as social mood changes, how we (collectively) value things changes. This means things of all kinds and especially those not related to money. I see our shared values of all kinds changing very rapidly these days as the social correction progresses. That is the point of social corrections. We must go through an experiential group process of sharing and deciding what we (Americans), collectively, value most <what really matters> and continue on with our smaller group endeavors in a manner that reflects those agreed upon shared core values. Whether the bulk of the process is conscious or unconscious is less relevant than what actually happens. And while not all social corrections are as pervasive as this one, that distinction is a topic for another post. Instead, let's consider the example media enterprises are offering us right now and compare it to the broader social universe as implied by the notion that businesses are being forced to offer so much for free digitally these days.

Media posts on better metrics    Here, Here, and Here

During May through July, I posted three parts (links above) about why one of the immediate top priorities at old media enterprises, is to design and employ more detailed and sophisticated metrics that describe consumer engagement with content. It's not just a good idea that it be done. It is essential. New media companies have metrics that characterize what is best described as a revolution in marketing information related to consumer engagement. The old Don Imus-ism of "I Talk, You Listen" is a worn out pair of shoes seeing its last wearings on older demographics more resistant to change. 

There is a deeper implication to this particular period  of "free" unfolding in the digital universe that is worth seeing from a broader perspective. The best analogy is to compare it to when the electron microscope came into existence and our shared consciousness of the world changed. When this happened an entire new world of structures was revealed, as if they were brand new, and immediately inspired new ways of seeing and creating with regard to the new structural reality.(though it had always existed)

So my conclusion is simple. I believe "free", as it is being discussed, is today almost always an oversimplification and that marketers need to make much finer distinctions during this new technology driven Era of Choice as to what Free really means.  In the same way that metrics describing engagement with content must now become more sophisticated with a finer focus,  so too must our appreciation of what "cost" means to consumers.  For more than a generation the formula for marketers talking to consumers has been to roughly ignore any costs beyond those measured in dollars and cents unless it was an obvious inconvenience being removed and sold as added value.  Channels were more limited compared to today and by definition, so was the level of Choice available to consumers.

Think about two examples: Products that limit or add features and because of this they require consumer adjustments and exact incremental costs from consumers whether purchased or not (think cars). Then there's media content consumers waiting through long sets of commercials for what they hope will be worth it. These are very specific "costs" <read as a form of "uncertainty">that can be avoided today by incurring additional costs using technology. These kinds of costs are more often time oriented after initial purchases of simple technology. Feel free to see the new level of organization required on the personal level as a microcosm of the social reordering that is happening in the world of content monetization.

It is no surprise that all this is happening in a period of broad deflation in the American economy. The social correction dynamic is the highest order consideration in seeing trending. From there we may go on to see how during this period of deep social correction we are experiencing <collectively> deflation in many forms. Deflation is a psychological group state; one that implies specific needs than cannot be met by a bank adjusting interest rates.  Deflation is a mandate from us, to us, to prioritize core values and re-allocate social capital <and other kinds of capital> accordingly. This particular social correction is requiring a completely changed focus that will allow us to see small things much more clearly so that together we can become more efficient at a higher level.  Down the road, these efforts will take us another step in our collective union as a people...to engage in another period of social expansion once everything is in order.It is one giant process with many little components that parallel the larger process.

This is obviously worthy of a much longer post but free to me is something requiring exactness these days, and I do not think the discussion has been attempted yet, nor do I think the "free" many see today is thought of as the same "free" as those offering it.   Free, as it relates to content in the digital universe is an incredibly narrow perspective on what has been the most dramatic development in our nation's history. The white noise surrounding the discussion focuses mostly on negatives even when attempting to state them as positives. Social resources are being freed up because we can now be three of four times as efficient. I am certain blacksmith's felt the same way once upon a time as people stepped off of train cars in their town without the need for a sew set of horseshoes. Blacksmiths did not die off. Their creative skills were employed differently in a changed world and the mechanic was born.

Free is a very different kind of conversation for marketers in the presence of a digital universe. It requires precision and focus associated with broadly seeing a new permanent world of two way marketing communication conversations.  Ignoring non-monetary costs is no longer sensible if marketing is to be applied as an evolving quantitative discipline. With this changed perspective must come changes in how we value other things closely associated to both media and marketing best practices. All of this is the work of a social correction <in just one or two corridors of our complex society> and marketers must seize this perspective or risk missing a lot.  

Lastly, it is essential to remember this conversation is not a negotiation. No one needs to win or lose a point about "free". The Era of Choice is showing us how consumers of everything are in control like never before and that has to be respected....especially their perspective on what is free and what is not. Accepting this does not mean giving up valuable ground. Accepting this notion promises a wealth of insight and future prosperity. Dave

Managing Brands in Crisis: America's Financial Brands (an update is in progress)

Back at the end of February I posted a discussion (following up a post from a year earlier) of what I think is a very important idea about brands and how a market's perception toward established brands may change over time and sometimes very quickly.  I generated the original idea between two and three years ago by first looking all the way back to the circumstances of both the (two) Tylenol and (one) Perrier brand events in the years 1982-1990.  To some people, my follow-up post in February seemed like an opportunistic pounce onto America's bedrock financial brands when they were down and an easy way to seemingly make a point by piling on the social acrimony. I can point out, again, that my original argument had nothing to do with financial brands, was constructed in 2007 and posted very early in early 2008, then edited and updated months later because I do this in my spare time, all of which was well before this past fall's events with our financial brands.

That stated, it is a great time to share my developing thoughts using America's financial brands as speculative fodder for the larger universe of American brands because right now, this month, we find ourselves collectively wondering if the big mess might be behind us and we can get back to extrapolating the old trends that were much more comfortable to follow.

Managing brands that individually face crisis (or even when an entire industry does because of a specific issue-think Tylenol) is a very important topic for the years in front of us because of the important distinction between periods of social expansion and social correction. As I will discuss, the distinction between these two periods holds dramatic insight to how markets perceive both the positive and negative traits associated with relevant brands and the implications this has to the enterprise holding these brands. This is an important topic.  This post will be up shortly. Dave

What does risky uncertainty feel like during a social correction?

Social Corrections: shinning a light on the little parts of the larger process

A few weeks back I posted a follow up on the idea about managing brands in crisis during a social correction. In my own thinking this general thread is an efficient way to focus attention on the larger subject of "what is a social correction and why should I care?"

I took my last post down about Jim Cramer's PR problems(which highlighted the same point), because piling on was not my intention with the post. So let's go at a social correction from another angle in this post:

Today's Washington Post has a George Will op-ed titled "Demon Denim".  In it he makes the case that some Americans' obsession with the fabric is tantamount to a sign of (social) weakness of character owing (in many cases) to distant agrarian roots. In my mind it indirectly feeds the developing mindset of class warfare but then I am not offering this op-ed as an example of anything other than suggesting it has a very small place in a very large (macro) process called a social correction.  I pay attention to things like this because over time, they shed light on details that businesses can use to understand the myriad considerations of their changing operating environments. As people, this is very interesting but then my goal in developing this insight is to create competitive advantage with a new, broader awareness of the times our market is living through--right now. I file these observations in my own folders of specific trend threads so that I can add to them or eliminate them (from significance) over time. It is very helpful to stack these discussions as they come up intermittently rather than rely upon only Google.

Fashion issues are about as perfect an expression of social mood as one might imagine. Unlike birds, we can change our feathers a few times a day to reflect whatever we wish to "communicate". Social mood is a constant current running through these (creative) fashion expressions. Rather than look at details (of changing fashions), of which I personally care little about, let's consider how changing social values are reflected in a social correction. The value in doing this is to see how changing social mood influences what and how we create when gathered in our "groups". (also known as markets)

America's bedrock financial brands in crisis during a social correction (lessons of Perrier & Tylenol revisited)

an updated discussion of these points was posted 12 18 09

addendum: 5 4 09 lot's of great generalized reading on this topic lately. One in particular is Time Magazine's article What Banks Are Still Missing: Trust  (the last paragraph says it all)

Last year, right about this time, I posted a revisionist perspective on the troubles encountered by the Perrier and Tylenol brands many years ago. My intention in correlating these two different brand cases separated by years was to offer a simple comparison of how social mood impacts the shared perceptions of established brands in times of crisis. What distinguished these cases in some people's thoughts was how the events that precipitated each brand's individual crisis were of dramatically different kinds of circumstances but, the lessons drawn for managing brands instruct us differently. Perrier's brand crisis began small and grew exponentially (in a very short time horizon) because of an internal error and was worsened by inaction. Tylenol's recurring episodes of tampering led to crisis and were randomly imposed upon the brand from outside, so some people naturally threw their hands up and asked 'how can these completely different circumstances be compared?' 

My conclusion (then) was how what really matters can be seen by stepping back and viewing how the markets surrounding the brands were perceiving the events and especially, the brand in light of the public perception of the two primary states of social mood (social expansion and social correction). This was my opinion then and it remains that way a year later.

If we use these two historic cases and my larger point here as a platform from which to see the unprecedented events today, it both confirms this perspective and offers some updated instruction about how top brand managers might incorporate this insight today.

In lieu of a longer post, here are the threads in a helpful order that will make this point productive for your consideration. 

1. read the first post again in this series about how to re-frame the Tylenol/Perrier brand experiences
2. give two minutes to the broad social trend threads of a social correction (the period we are now in)
   
3. Read the latest post at the media blog about Trust and What Characterizes the idea of Partnerships during a social correction
4. Then come back and read the few paragraphs that follow...a more universal image of this idea should develop. 

how we value things collectively changes with the developing social mood

When I list a must read story it is because when I view the details through the lens of social mood's changing influence upon how we collectively behave and I think there is an opportunity for profound insight.

In today's NYT story What is Free about Free Markets?

The implications in the article seem to suggest troubling long term issues embedded deep in our way of being American as we have come to know it in our lifetimes. Here's the payoff in seeing social mood (socionomics) for what it is and how it operates in our society and our economy. Seeing events through this lens does not promise easy answers but it does offer a better view of cause and effect in a time when blame is passed around like a party favor.

How We Value Things Changes with social mood. Not just strange and misunderstood financial derivatives. We are willing right now to forsake free markets to save us from unknown danger. Our shared perceived value of what free markets offers us (socially) has declined in the face of perceived danger.  The future is uncertain always and yet now we fear terrible things will result. Practical people might scream back at me "You fool!, The financial system is about to collapse!"  To that I ask the following: What was happening with regard to all of this just three years ago as many American flipped condos and measured their kitchens for granite counter tops? Plenty of very smart economists were writing about all of these excesses then but they were labeled perma-bears, Danny dooms, and pariahs, even. These days, anyone who tells "smart" people this was foreseeable, it is not only agreed with but, you are likely to be told 'why bother having the conversation'. Well, the value of free markets is a great reason among many!

Social mood, is part of our nature as it relates to social behavior when in large groups. We choose to focus on individual needs and wants <in our society> but how we behave, how we create, how (social) trends can best be seen, is through the lens of the developing social mood and the group dynamics that result from this perspective.

Check out this flow chart I posted a long while ago. It is a simplified visual interpretation of the foundation of socionomics called the wave principle. All of this is very relevant now. How we relate as individuals to this process is also very relevant to businesses and marketers because a changing social mood affects demand in the markets we serve. My new web site about media is just one example of how this can be applied specifically along with a providing healthy respect for free markets and what they can teach us about competing effectively...versus what managed markets taught us  re the media business during the past 70 years. Old media is crumbling because it was never prepared to compete widely. Stronger competitors make better products that sell for competitive prices. These are just a few of the many of the benefits free markets bestow upon a country.

If you run a business then consider this diagram. Understanding social mood will not make decisions for you but it will tell you better which questions matter most.    Dave

Perrier & Tylenol:the revisionist lessons of social mood for brand managers

A follow up discussion of this post's topic has been posted here (2 23 09)

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I am re-posting this example from March of this year....the message is becoming more relevant and timely everyday. If you are new to the subject of social mood and socionomics here's a link for the book to describe in detail what was noticed many decades ago. As always these days, there are many more sources that can take you very deep on the subject too. Dave 

Most posts here at the Root Trend have focused upon identifying social trends and the implications for consumer behavior using social mood (from the socionomic perspective). Since so much of the value of using social mood as a guide involves looking back first, here's another trending issue twist using social mood that can be valuable to brand managers in the years directly ahead.

I drew the diagram in the thumbnail file (you'll need to click on it) a few years ago. This is social mood's relationship to marketing. (yes, this is a very general sketch with limitations)   Spend a little time considering it and you'll want to know more about social mood and possible (actionable) ways business strategists and marketers may use the perspective.

In order to fit into a post, this is a speedy fly-by of two classic brand case studies I took the time to look into more closely than offered here.

What you are about to read is a revisionist perspective compared to the unanimous opinions in countless text books, and articles available on the internet. This perspective is possible by seeing different kinds of trends out of the context of time and specifically by looking at periods of distinct social mood as a unit.  The different conclusion here will not change the world but it will, maybe, just maybe, will change the way you think or use what the pundits have to say about assigning reasons, blame to circumstances unfolding, (real and imaginary) as reported in the sources that matter to us in our verticals.   More specifically, this post is intended to offer a basis for better "risk exposure assessment" for brands relative to the changing perceptions associated with the developing social mood. By looking back to these two settled pieces of brand history, we can look forward with an awareness adapted from these two different lessons.

In 1990, Perrier was the best bottled spring water you could buy as measured by market share and opinion.  Then, a lot of change began after a small-ish production problem was mismanaged and became a really big deal. Why it did (why momentum shifted so notably) should be in question as much now as it was back then.

In 1982 and again in 1986 Tylenol capsules that had been tampered with and filled with poison and were shown to have killed a few people across the nation in these two distinct episodes. Both episodes for Tylenol were very difficult (being such trusted brand) and spread fear in public widely, if you remember those days.

Keep in mind that it is my intention to be very brief, not intentionally coarse about tragic details. That stated, consider the big picture: a little dirty water (measured in PPM), physically hurt no one and then permanently wounded (loss of dominant share of market in a very competitive category) a strong brand, and a few dead people were miraculously looked past by their markets because the hero management team of the day "handled it correctly"? These two case studies are considered lore for marketers and PR folk alike. Let me be clear: blame for Perrier's circumstances was on the managers at the plants and beyond for the poor reaction, and that Tylenol's circumstances were purely imposed on the business from the outside. With these circumstances in mind (and securely in history), here's a very different view and why the root trend matters to brand marketers.

What does it mean when business models of venerable industries break down?

The changing media environment (consumption patterns by consumers) has forced strain upon the decades old business model. The investment banking business model, created many decades ago is seemingly experiencing drastic, sudden change.  The software business model is beginning to feel threatened by open source but not so much that it is pervasive yet.   Daily deliveries by milkmen are distant memories. The blacksmiths and coachmen of the 18th and 19th centuries were ubiquitous once and each lost social empowerment at a different rate of speed. It's not only technology that drives social change. Steam engines and systems for labor organization for detailed manufacturing were known long before the sudden boom in industry after the civil war in the US.   Social momentum is an essential component of change in how we do things when gathered in groups. How we view an uncertain future (collectively, and seen as a moving average) is indicative of social mood. What is the larger meaning of the changes happening all around us right now to both business and even socially? And can this be applied to specific challenges and circumstances to create competitive advantage in our enterprises?

defining social mood for marketing

I've been working on the root trend for two years now. One of the main points of good blogging is also the greatest challenge in my effort to make this trending perspective accessible. How do you create sound bites of trending discussions when the work (the social science) behind it also needs to be explained? The answer is that it must be slowly honed down to easy to use ideas. This is really what these pages are about to me.

The point of a sound bite is to convey useful information in a thought, not to explain the future or be credited for "seeing it" or especially to hammer instructions without offering a thorough understanding. As I've studied the work of many different forecasters I've seen many combine skills and express them in as many varied ways as there are people doing it.   

So while I knew most of what I know now two years ago, blogging about it has forced me to get better at articulating it more succinctly and differently. And yes, there is still a way to go but I have a bigger intention in these pages. For now, those of you who are willing, there is a lot to see here of your own business' future needs. This is a unique period of time we have entered as a society and besides seeing valuable insight through this perspective, it is an excellent time to adopt the basic ideas into your business perspective. Besides seeing social contrasts being stronger than usual and in short periods of time, it will lead us to new ideas that are based on sound insight. And while this is a meaningful promise, it'll require more than scanning the pages here.

In the (right column) pages section there was one titled <What is social mood?>. I wrote it two years ago and it is filled with detail that is all true but expressed poorly so I've been rewriting it. That was two years ago. I put it in one paragraph now. The detail I offered previously was not wrong, just TMI.

The definition of social mood: social mood is the aggregated representation of how a society responds to uncertainty. It hinges upon a shared emotional state where people collectively respond to the future's constant uncertainty with a varying sense of either optimism or pessimism. All our rational thinking is filtered through this emotional state and it especially affects us in the social units we belong to.  We join together to create businesses and all kinds of social associations exchanging our shared emotive outlooks until the combination becomes a societal moving average known as social mood. When our creations are seen from this perspective and then chunked up, they can be (in many cases) tracked as trends by identifying the behavioral least common denominator. Social trends, imo, reflect some degree of the developing social mood, and in this broad light, business can use this perspective to see markets, supply and demand in them, and business opportunity more purposefully during times of social change. Like right now.

Business policy is affected by business' outlook to the uncertain future

“The environment is still challenging. We see no reason for optimism and are managing our business accordingly.”
Glenn Murphy, chairman and CEO of Gap Inc., Aug 22, 2008

This quote offered by a favorite blog today.

when media became customizable, we all began changing, a lot

in case you missed this read in the NYT a few weeks ago:

Literacy Debate: Online, R U Really Reading

The Era of 'Choice' for consumers of content is defined, in part, by the behavior discussed in this article.  The picture caption at the top of the article offers a snapshot of the generational dynamic too.  If you are feeling adventurous on the topic of how media consumption is evolving, and us along with it, here's a three part series from the recent RT past discussing social media. Each of these goes deep into behavioral issues but the actionable dynamics are close by depending upon your own needs.

What is social media telling us and where are we taking it? Part 1 (of 3)

What is social media telling us and where are we taking it? The Generational perspective (part 2 of 3)

What is social media telling us and where are we taking it? Part 3 (of 3) The era of Choice is about specialization

Generational Thinking that Squashes Innovation and how it is justified by politics (for now)

*updated with new links at end of post*

This post is the closest I've ever felt to controversy with my old professional environment when writing the root trend. Onward anyway:

This AM's Wash Post has a discussion of how Internet radio is struggling to survive. The story is characterized underneath as a battle of political wills and lobbying strength in that arena. The issue is made by both sides to be one of fairness.  It is offered indirectly by the writer that upstart competitors face many challenges...as if this disparity in treatment is not surprising. Maybe not but, the issues at stake are tremendous and transcend anything about music, the nature of competition in media, and politics in general. That no discussions of the very long term view (the secular trend) is available is disappointing but, not surprising. This issue will, one day, be framed as a generational conflict of interest. That is when this will be resolved and only then. I recently wrote about this topic (link above) but this update will frame it more briefly...I call it the (industrial) (r)evolution of media.

What follows will briefly frame this discussion in a very different manner than you see it told in the news today(Saturday 8 16 08); one that allows for both a changing social mood (the primary social trend) and our inexorable demand for information (content of all kinds).  The generational divide must be breached in order for this conflict to be resolved. Killing off the competition will not make old media's struggles better....nor will it serve the evolving needs of the market for content.

The first me-too suit against Google-YouTube (mirrors Viacom's)

Update: Copyright battles heat up on Web  Washington Post today 8 02 08

...""People are moving online and there are going to be more questions raised about how moving things online subjects people to copyright," he said. "The Internet works through copying things, that's just how digital technology works."
As a result, copyright law is coming into play much more than it once did. "Copyright law used to be this obscure thing that only publishers were interested in," Siy said. "It's something that now affects everyone. When you change copyright law now, it affects everybody who owns a PC." ...

These issues today seem different from Google Viacom but as the quote suggests, they are not really. How we share anew in the digital environment and create  new levels of productive social experience is what this is all about. In order to do this we'll need to re-write the social contracts forged by the previous two generations and start over digitally speaking. The Boomers and the Millenials will clash hard as this generational rift prepares us for what is next. This is not theory. This is a secular pattern of generational change playing out one more time. See the category of posts The (industrial) (r)evolution of media for lots more factors in this process. Dave  8 02 08

I was sure there would be more complaints like this and suspect many more will follow. In a Bloomberg blurb this AM the Italian company headed by Italy's former leader (no less), the technological blame game was intensified. Why does this matter to all media executives? It does. (short read follows)

Google/YouTube v. Viacom legal update? or not?

Is this development as important as I think? (I am not a good source of legal insight) You decide and let's watch together as it develops.  Today, a landmark ruling was announced in favor of EBay vs. Tiffany. The case had to do with counterfeit brands being sold on EBay. Was EBay responsible as Tiffany had claimed, to police Tiffany's brand for them?  The message seems to have come back that brands are responsible for their own protection.  Is it possible this could be stretched to include makers and sellers of content too?

What the You Tube suit by Viacom is really telling us -- one year later--about where the media business is going

Back in June 2007 we were first made aware of the Viacom lawsuit of You Tube for not protecting Viacom's content from being posted on their free site. The bold assumption in Viacom's suit is that if they cannot protect their content products themselves, then Google-You Tube must be responsible for protecting their content.  What are the You Tube suits really telling us was apparent a year ago and is triply so today, as the trend advances socially and also in business channels. The harshly clanging noises in the background are indicative of the developing social mood.  This social dynamic <social mood> is leading the process.
This suit and others to come are lagging indications of larger trends well under way. Understanding how technology and social mood mix is the key to seeing the bigger picture. These are dramatic days for everyone in the media universe, even if this topic is simply thought of as something 'legal' that needs to be "worked out".  In the really big picture, this issue will not be worked out for a long time and these circumstances will persist. No amount of regulation, or social finger wagging will put the Choice genie back in the bottle. In the human struggle for knowledge, business' right to turn a profit will come second to the natural human need to share knowledge. This truth puts business squarely in its place...as a purposeful tool of human endeavor and not having the quality of human life itself. <Many of us in the older  generations feel big business is somehow more important by how it is afforded such clout in the legal realm, but the reality is that businesses either serve us what we want, or they die off>

The human impulse to share information of all kinds includes sharing content as we explore the new human invention of the digital environment. People are attracted to expansive spaces and that media's front lawn is being trampled in the broad social rush is only a symptom of the importance of this trend. The only things that can fix this business development is more ground breaking technology or new approaches that create incremental value for the consumer of content (ie. new business models). Absent the development of being able to broadly protect content using technology, this issue will define the next decade (or two). In the meantime, players in business will either be very flexible in their business models or they will be naturally selected for extinction. This can be made obvious when you see the true social trending priorities in these developments. 

This post is intended as a limited update on a longer discussion about trends in media in the US. It is based on a new wrinkle published today in papers worldwide about a judge's decision to expose You Tube's customer privacy in order to demonstrate Google is somehow negligent for Viacom's own shortcoming. And while it sounds like I am taking a definitive position, it was only a few years ago this position would not have been necessary because technology to share was harder to come by.....and history shows how technology changes the world. Fighting this truth is like spitting into the wind. In the same way we might stop to consider our very freedoms on a day like today (7/4), we should consider the responsibility that comes along with that freedom. Is protecting the ideas and work of others essential to freedom? What if those ideas are now easily reproduced? Is it worth less? Is the responsibility to protect their ideas now less than before?  What's a story in the newspaper worth? What's a song worth? What's a current movie worth? Is it worth less on a cell phone screen than in a theater? How about a book?  What if it took a long time to produce? What if it took five weeks but was based on years of experience?  This sounds very difficult to do but the market will always give you an answer. The market is always responsive to such matters if we listen. It also can be shown that the market for shared human values changes with social mood. Join me for the rest of this short discussion.  It matters, no matter what kind of business you are in: Dave