June 21, 2010
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June 12, 2010
The recent book “Sounds like branding” by Jakob Lusensky, a Swedish DJ and executive at the branding agency Heartbeats International, focuses in on the opportunities and potential value creating prospects in the intersection of music and brand identity.
He looks at this from two ways, both that the brands by for instance through offering music CDs in the stores, as Starbucks, increases the distribution channels and for some even cuts out the record labels fully. The other aspect, which I find much more intriguing, is how brands can tap in to the credibility value built up by the artists, both directly to their fans and also more generally in society.
The four Es
Music is of course only one of the ways in which a brand can take a more strategic approach to its brand image, and as Jakob puts it:
“Music is something that people connect with, enjoy discussing and sharing with others. Music preference relates to and can reveal a person’s personality. Brands are becoming aware of the possibility to emerge as an ambassador of this social media, the positive effect it can have on their brand image, and how it can attract the attention of people in product and brand marketing.”
He bring in the concept of the four “Es”; Emotions, Experiences, Engagement and Exclusivity to position a brand and guide it in their efforts to collaborate and connect with fans and customers. A concept he uses to guide us through the book.
Consumers become fans
The interesting transition where the consumer more and more becomes a fan to a brand, is something that we already have seen with for instance Apple. The computer hardware company has since the launch of iPod, [video pres with Steve J] become more of a movement with dedicated fans being both advocates of the brand but even more so committed followers of a lifestyle where the white headphones just are one of the style signifiers.
Package a feeling
One of the things that I find especially interesting with this book is how a brand can capture and communicate the core values or feelings that is connected to the brand identity. Jacob Luensky exemplifies with the hotel chain Clarion Hotels which put together a soundtrack to be played in the lobbies and also via the internal sound system in the hotels. A representation of this soundtrack was then sold on a CD for the customers to bring back home.
One other example of a customized music and branding experience is Absolute’s “Sound of Ice” radio channel that Absolut Ice Bars are playing, irrespectively where in the world you are. It was created to give the bar goes a consistent and enhanced experience in all their locations.
To say something more specific about this book which was sent to me for review, I find it interesting but slightly too focused on the processes that a brand should use when thinking about introducing music in to the branding mix. This is however not that surprising since I understand it as a way for Heartbeats international to inform about their services.
As a brand owner or artist, either thinking about these issues on a daily basis will find the book highly useful For the rest of us, more generally interest in the concept, the two white papers on the book’s homepage will bring you far along the way.
White paper 1 - Social music revolution
White paper 2 - Sounds like branding
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April 25, 2010
In March, I wrote about how personalized medicine is becoming an increasingly important concept in the biotechonomy worldwide. This development is now becoming more apparent and actors seem to be moving in this direction. One of the driving actors pushing this development certainly is insurance companies. Against this background, it is interesting to reflect upon how the U.S. health reform that President Obama signed into law last month. This is certainly one of the most comprehensive legislations concerning healthcare provisions in U.S. history. Obviously the health reform will have a tremendous impact on innovation for its many stakeholders, although some may feel more that they will reap more benefits than others will.
Health reform impact on new biotech business
April's edition of Nature Biotech (Vol 28 No 4) reports that "In return for supporting the bill and stumping up $90 billion in fees and discounts on Medicaid and Medicare pricing, the drug industry receives tax breaks, a biosimilars pathway and a massively expanded drug market." A key question for the Biotechnology Industry Organization (BIO) has been the exclusivity term for biosimilars, which in the reform was left intact at 12-years exclusivity. Another advantageous factor for pharmaceutical companies was that the industry managed to avoid suggested restrictions on drug price and drug importation. It is easy to conclude that all these factors will provide economic drivers for private biotech innovation. Much of the health reform, however, targets - a widely discussed subject in the U.S. - which is health insurance.
By enfranchisement of the many U.S. citizens previously uninsured, not only does the health reform provide societal benefits by progressing towards universality of healthcare access - but it simultaneously expands the U.S. healthcare market with more than 30 million people. For biotech and pharmaceutical companies such a market expansion is very good news and The RPM Report industry newsletter estimates that it could result in $115 billion in new business over 10 years.
How the bill drives the demand for life science innovation
Business models of health insurers in the U.S. have - ironically - been the most profitable when these actors successfully have circumvented the difficult and expensive burden of dealing with sick people. But the new bill prevents insurance companies from excluding coverage to children with pre-existing disorders and it forbids insurance to be dropped when a person becomes ill. I don't think it is far-fetched to say that this is somewhat of a game changer for these actors since their business models now will have to bear more of the financial risk and burden of the sick and vulnerable. This - at least to me - is very interesting from a business model building perspective but perhaps more interesting is the new demand that these actors will create for reducing costs associated with life science innovation.
From an insurer's point-of-view, a number of demands are likely to result;
- Innovations to diagnose patients at an early-stage
- Innovations to effectively prevent patients falling ill in the first place
- Innovations to reverse disease
- Innovations to effectively select patients that are likely to benefit from treatment at all
- Innovations to effectively select which patients that are the most likely to benefit from which drug
To me, the bullet point list above shortly translates into some of the most common biotech products such as diagnostic tools, screening methods, drugs, and vaccinations. But it is interesting that more or less all of these have a personalized medicine touch to them and it doesn't seem unlikely that this will be of the major effects of the new health reform. Naturally this will stimulate creation of new biotech assets such as biomarkers, drug targets and candidate inhibitors/activator molecules, which in turn will lead to new life science innovation (six of the 26 FDA approved drugs during 2009 are personalized medicines).
New development towards personalized medicine in the U.S.
Against this background, Medco Health Solutions provides an interesting business model to learn from. In February, it acquired the San Francisco-based genomic medicine company DNA Direct to strengthen its commitment to personalized medicine. The acquisition has similarities to the strategic partnership that was signed between CVS Caremark of Woonsocket and Generation Health, at the end of last year. Medco's aim is to help physicians and payors better match individuals to therapeutics and improve clinical outcome while saving money, by becoming a one-stop health service shop. Nature Biotech reports that several trends help draw pharmacy-benefit companies into personalized medicine. Firstly, there has been an explosion in the number of genetic tests. Medco estimates there to be a 1000 genetic tests, which in many cases the full benefits are not extracted due to inappropriate interpretation and lack of knowledge. A second factor - closely connected to the discussion above - is a growing interest from payors. CVS Caremark states that "To our clients, the insurance companies and self-insured employers, being able to provide tests that target drugs to individuals is of great interest". Thirdly, the main driver is cost reduction. The need to cut healthcare costs is most likely behind the surge in personalized medicine. PricewaterhouseCooper estimates that the core market for personalized medicine - diagnostics and therapeutics - is already worth $24 billion and expected to grow 10% annually, reaching $42 billion by 2015.
What will big pharma say?
What I find particularly interesting in all this is the predicament that this new focus on personalized medicine creates for pharmaceutical companies. Personalized medicine will transfer the control position for how and when drugs are used, something that used to be controlled by drug-label indications and physicians (in consultation with big pharma). Will big pharma remain on the sidelines or will they enter the arena?
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March 16, 2010
However, the discussion yesterday circled much around if and how internet users could be cut off or suspended from their internet connection because they had been involved in illegal file sharing. The issue is an important one and I have trouble seeing the proportionality in restricting access to internet for what in many cases are small amounts of direct loss in sales revenue, which apparently is one of the suggestions in the bill. Jim Killock from the Open Rights Group, did also point out that downloading was more like trespassing than theft. This is true, but it is still illegal in the system that we have today. The discussion about changing the copyright system is partly a different and much bigger one.
I do however believe that the discussion we are having today about illegal file sharing and how to enforce it will pass over as a result of technical development and new ways of consuming content.
Carrot and stick
The industry representative, Richard Mollet of British Phonographic Industry (BPI), did go about quite hard on why enforcement was important. It was an expected point of view and he had a fair point in that enforcement is part of a system where that is the stick in one end and legal services, such as Spotify, are the carrot in the other end. Both sides need to exist.
Richard Mollet’s argument continued in the lines of that the rights holders were to scared to put out content in this uncertain environment without strong enforcement measures. This is where I do not agree.
Business model innovation
One of the first portable MP3 players was released some 12 years ago. Steve Jobs presented the first iPod in 2001. This is of course all known and the discussion about the rights holders not understanding the potential in the technology and that the old business model of selling content on physical carriers was and is outdated, that discussion is not new. What still surprises me however is the total lack of innovation in new business models and product offerings when it comes to rights intense industries such as publishing, film and music.
Intellectual property in the form of copyright is one of the most easily distributed forms of property. It lacks the need to be bundled with physical carriers, it can be packaged in various forms and the legal wrapping can be crafted in just any way.
To be fair, there are several services and platforms offering copyrighted material digitally and with consent from the rights holders. Spotify and Hulu are two examples of this.
I do however believe that there is much more that could be done, if just the interest was there. The technology is there, the consumers are there. The content is not nearly there.
The legal dimension
The issue has of course also a legal dimension, something the third speaker, Graham Smith of Bird & Bird, pointed out. It is far from certain from a legal perspective what is actually legal and what is not and how to enforce it. It is even harder from a consumer’s perspective to do this distinction. It is can be argued that this becomes the result if you let the development happen by itself and not being part of crafting the norms in the marketplace.
As I pointed out earlier, IP in general and copyright in particular are well suited to be developed in to new contractual models. The content can without any particular problem be packaged in just about any way. To look at the problem from the perspective of enforcement of content that has been distributed and copied by norms created by the users themselves, will probably almost always be messy. Especially when the behavior of consumers has been more or less accepted for over 10 years.
If the rights holders on the other hand are the directors on the distribution end and take advantage of the versatility of the content and distribution methods that could be used, I believe that the need for enforcement would be radically less and the revenues would be greater. It just takes someone to be brave enough to let go of the known models and revenue streams and focus on how to embrace the technology and meet the consumer need in a legal way.
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March 14, 2010
Personalized Medicine is a frequently discussed concept in healthcare thought to hold great value for the future. Since I am currently involved in a project where the technology could provide utilities for personalized medicine while at the same time co-authoring a paper on open IP platforms, I thought that a blog post that combines the two worlds could be interesting to write - so here it goes.
What is personalized medicine and why does it matter?
Medical practice relies on evidence-based medicine - the development of standards of care based on epidemiologic studies of large cohorts - a practice that has been around more than 50 years. The rationale is that a statistical approach to large cohort studies enables reduction of background noise, i.e. ignoring individual differences in the data points. Traditionally, individual care by a medical practitioner is built on the patient's family history, social circumstances, environment and behaviors - meaning that the doctor's personal observations, skills and intuition have been crucial factors.
Personalized medicine seeks to provide an objective basis for consideration of individual differences by the systematic use of genetic information about each individual patient to select or optimize the patient's preventative and therapeutic care. A simple example would be to be recommended to take a genetic test before being prescribed a certain drug to shows whether you have a genetic profile that makes you more responsive to drug A or drug B (used for the same disease). Obviously tremendous health-economic gains could also be expected where one example is hypersensitivity to gluten (for which Phadia is developing diagnostic technology) that currently takes an average time of eleven years to diagnose in the US according to Phadia.
Two examples of business models personalized medicine could enable in the future
1. Insurance model: Let's say that you consider buying a life insurance. Obviously, it is in your best interest as well as in your insurance company's best interest that you live a long and healthy life. With the latest advances in genomics your insurance company provides you with a voucher to get your genome sequenced and get access to a web portal where you can see your genetic profile - without the insurance company having any access to your data! This means that you can make dietary and lifestyle changes to improve your chances against your genetic predisposition toward obesity, diabetes, high blood pressure, dyslipidemia, etc. while lowering the risk for your insurance company. A win-win situation!
2. Diet model: Your latest cholesterol checkup suggests that you should reconsider your diet. At the dietist's office, your current diet is matched with your genetic predisposition to absorb nutrition. The results show that the diet is not the issue, it is your body that does not handle some of your daily intake very well. Consequently, your dietist recommends you to ask your doctor for drug X to enhance your nutrition absorption.
Personal Genome Project (PGP) - an Open IP Platform
The Human Genome Project provided the first drafts of nearly complete human genome sequences in 2001. This "generic" human genome sequence is now being used to advance medicine, human biology and knowledge of human origins. The available information, however, is not enough to determine individuals' risk profiles for disease. PGP - led by George M. Church, Professor of Genetics at Harvard Medical School - was launched to create a platform to do just that.
The cost to extract all the information during the human genome project was close to US$ 3 billion, which has decreased all the way down to US$ 1500 per genome by now (although most sequencing companies charge US$ 30-50k to sequence a genome). PGP aims - as its first milestone - to collect genomic information from 100 000 people together with their trait information (i.e. phenotypic data such as diseases). Sample collection is entirely built on samples contributed by volunteers all agreeing on their personal information being open for access to the public, mainly providing two utilities;
- Profiles of patients getting their genomes sequenced can compare their genetic profiles to the genotypes of risk profiles
- Statistical correlation of the data can provide novel gene-trait associations leading to new drug targets
The platform is open in multiple layers and several IP transactions take place in an open innovation fashion. Core R&D data making up the platform is - as mentioned - donated by volunteers by collecting cells that are then cultured in cell line libraries for future reference pooled together with written trait data collected via a virtual interface. Genomic data is available for download and cell lines are available to order. Analysis of the data is conducted through open source software to ensure that users can help develop the tools in case something seems to be missing. Sequencing technology and tools are inlicensed from commercial sequencing companies. PGP is conducted at nominal cost and most of the financing is raised through donations.
So what about IP ownership? The Material Transfer Agreement states that: " i) the Provider retains ownership and title to the Materials (including any Materials contained in any Modifications) and ii) the Recipient retains ownership and title to the Modifications (except that the Provider retains ownership and title to any Materials contained in any Modifications). The Recipient is free to file patent application(s) claiming inventions made by, or on behalf of, the Recipient through the use of the Materials, but agrees not to file any patent application containing a composition of matter claim on the original Materials or an Unmodified Product.".
To me, the PGP initiative exemplifies an extremely interesting example of an open IP platform with the potential to create value for both society and knowledge based companies leveraging diagnostic tools, drugs and preventative medicine and I may come back to do a deeper analysis in an upcoming blog post.
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February 14, 2010
The publication last month of her novel about a 16-year-old exploring Berlin’s drug and club scene after the death of her mother, called “Axolotl Roadkill,” was heralded far and wide in German newspapers and magazines as a tremendous debut, particularly for such a young author. /…/
That is, until a blogger last week uncovered material in the novel taken from the less-well-known novel “Strobo,” by an author writing under the nom de plume Airen. In one case, an entire page was lifted with few changes.
From the New York Times.
Sampling and litterature
This could of course have been the end for this otherwise talented and promising German writer. Even though sampling by now more or less has been accepted in music industry, to use material from other writers has previously not been taken lightly.
The quite recent case with the Swedish writer Fredrik Colting using the character Holden Caulfield from J. D. Salingers’ book Catcher in the Rye is an illustrative example of how serious copyright and plagiarism is taken in the publishing business.
Mr. Salinger, who has not published any new work since 1965, has sued several times to protect his writing, including successful efforts to stop publication of some of his personal letters in a biography and to halt a staging of “Catcher” by a college theater company in San Francisco.
From the New York Times.
The interesting twist to the German story is that the author, Helene Hegemann, seems to come out on top after the initial discussion has settled. But it also raises interesting questions about copying and sources of inspiration as well as attribution; because the lack of attribution to her sources is one of the key discussions afterwards.
“I myself don’t feel it is stealing, because I put all the material into a completely different and unique context and from the outset consistently promoted the fact that none of that is actually by me,” Hegemann told the daily Berliner Morgenpost.
From The Local.
I think we in the future will see more and more of mixing and borrowing inspiration from different sources. Not only because “everything is already written” but also because the technology makes it possible in a totally different way than for instance in the 1980’s.
This might seem as a cliché, but I also believe that it is important that we really think through how we should face this new era of easy access. Technology is developing and that is something we cannot hinder. I am quite convinced that we should not hinder the development either. It is therefore important to be prepared for the changes that are coming, both in our own mindset but also legislatively. I have no solution just yet, but I am quite convinced that we have much more to gain by adapting to the changing society that to try to keep some parts in a pre-computer-era state of mind.
Techdirt writes an interesting piece about the phenomenon and concludes:
In the same way that remixes and mashups often drive people to buy the original music, it seems like remixed/mashedup books can do the same. It may be a big cultural leap for those who think there is "a way things must be done," but it seems that the younger generation has other ideas.
But, and this might be where I eventually will end up personally, the fact that information is readily available and collaboration in the creative space can be both with and without the consent of all involved parties does not mean that it should be without rules to follow.
A first step in this is definitely to fully credit the sources used. Something which Helene Hegemann has had trouble with.
"I think there are good ethical grounds for giving sources for a book - and the fact that I neglected to do so reflects my thoughtlessness and my narcissism," Hegemann said in an interview with Die Welt, adding, "But for me personally, it doesn’t matter at all where people get their material - what matters is what they do with it.”
From Deutsche Welle.
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[Via Svante Weyler in “Godmorgon, Världen!" Sveriges Radio P1.]
February 9, 2010
His works on the Gridlock Economy comes from the time when he was working for the World Bank on post socialist property in the aftermath of the fall of the Soviet Union. The state had little experience in private property and ended up in many cases dividing the property in too small and conflicting pieces for anyone to be able to use it.
He published his experiences in the 1997 article "The Tragedy of the Anticommons: Property in the Transiton from Marx to Markets". From this came 2008 the book The Gridlock Economy. Heller writes in the abstract to the 1997 article:
"When there are too many owners holding rights of exclusion, the resource is prone to underuse -- a tragedy of the anticommons. Anticommons property may appear whenever new property rights are being defined. For example in Moscow, multiple owners have been endowed initially with competing rights in each storefront, so no owner holds a useable bundle of rights and the store remains empty. Once an anticommons has emerged, collecting rights into private property bundles can be brutal and slow. This article explores the dynamics of anticommons property in transition economies, formalizes the empirical material in a property theory framework, and then shows how the idea of anticommons property can be a useful new tool for understanding a range of property puzzles."
To understand the concept of the tragedy of the anticommons one can think of a piece of land divided in to so small pieces that in order for any one person to farm one acre he would need permission from hundreds of property owners. The cost and effort needed to gather all of those property owners and negotiate agreements with each would take more time and cost more than what it would be worth farming the land. In the terms of Heller this would be the opposite of the tragedy of the commons where for instance a pond is fished dry of fish since there is no owner managing the fishing in the pond.
The effects of the gridlock can rarely be seen even though they might be most significant. The New Yorker puts it as that
...the effects of underuse created by too much ownership are often invisible. They’re mainly things that don’t happen: inventions that don’t get made, useful drugs that never get to market.One of the clearest examples of tragedy of the anticommons today is patent gridlock. The fact that there is in a specific are so many patents that you can not in any meaningful way use the technology without infringing on potentially hundreds or thousands of patents. This could be the way with for instance mobile phones which might be covered by some 5000 patents or new drugs which could have similar patent thickets laid out.
A similar situation is present when it comes to the documentary series "Eyes on the prize" from the late 80s. Heller talks about that the series which portraits the African-American Civil Rights Movement to a large extent is built on archival footage and contemporary songs, met problems when it was to be broadcast again and also released on DVD since it was too costly to track down each rights holder to get permission for the new release. Further on this can be read here.
One way to get around these problems with too fragmented rights can be to pool the rights. This is commonly used for patents, where it for many products would be an impossible task to evaluate each patent and track down it's potential rights holder. Collection societies such as ASCAP and BMI can provide the same function for copyrighted works, for instance music played on the radio.
But as Michael Heller concludes in a Newsweek article we still have a big challenge in the gridlock economy.
A survey sponsored by the National Academy of Sciences found that scientists now routinely respond to gridlock by becoming patent pirates, just like students who illegally download music. Commercial drug developers, of course, cannot risk disregarding competitors' patents. Many of the world's leading drugmakers simply redirect investment toward less challenging areas and innovation quietly slips away. The dearth of new blockbuster drugs should prod Big Pharma off its longstanding position that the existing patent regime must be defended no matter what.Commons and Anticommons
The ideas of commons and anticommons are not new and Michael Heller does not claim to have come up with the concepts, though he has coined the term "tragedy of the anticommons". It is in this rich idea tradition the newly published anthology "Commons and Anticommons" edited by Heller, takes an in depth approach trying to understand the relation between overuse and underuse of property.
Heller has collected 35 articles over a total of 1,192 pages in two volumes. Contributors ranging from Aristotle and Carl Shapiro to the 2009 Nobel laureate Elinor Ostrom and Michael Heller himself.
To me, the book's contribution lays in that it collects most of the relevant research on the tragedy of the commons and anticommons in one place and thus challenges the reader to understand the broader picture as well as the specifics of for instance spectrum allocation and the fishing industry.
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Audio and video
Authors@Google: Michael Heller on YouTube
Heller on Gridlock and the Tragedy of the Anticommons on Econtalk
Tragedies of the Gridlock Economy, an Economy Information Project conference on the Gridlock Economy hosted by George Mason University School of Law, with a discussion by Michael Heller and Richard Epstein. The conference is discussed here and some of the papers from the book Commons and Anticommons can also be found on the conference website.
Hearsay Culture interview with Michael Heller
Are patents and copyrights making innovation impossible? Out-Law Radio interview with Michael Heller
Gridlock Economy on Amazon.com and Amazon.co.uk
Commons and Anticommons on Amazon.com and Amazon.co.uk