How New Media Is Using The Oldest Ad Model Ever

hey there it’s David H Lawrence the 17th
and I noticed something really
interesting the other day that you know
you ever had this kind of feeling like
oh that reminds me of this I mean
obviously being reminded of things is
pretty common but like it’s a moment we
go that I haven’t heard of in a long
time that ties in everything old is new
again and it was a discussion of how
Netflix is very close to the vest with
the data on their subscribers and the
time spent watching and how many people
see things Facebook deals in data as
well as actual cash coming from
advertisers they sell their data and it
really I realized as I was paying
attention to this sort of thing with
Hulu and with Amazon and Twitter and
Facebook you know for all the the
modernist of new media companies digital
companies and everything is new and
revolutionary and all that they’re
actually following a very old model and
they’re following the model of
advertiser support now it’s not you it’s
not sometimes advertising support the
way this came up is I had a very very
typical angry letter I’ve received maybe
a half dozen over the 10 years or so
that rehearsal Pro has been an app just
screaming at me why would you charge $20
for an app because yeah they’re used to
apps being free and my response is well
I could put ads in but if I don’t have
some way of making money I can’t keep
the app in development and support it
yeah the person was having none of it
and that’s another that’s that’s for
another video but I had a choice I made
direct cash from the people who use my
app that’s what I do that’s the model
there’s no advertising we don’t
accumulate data we don’t sell data but I
will come back to this in just a moment
because it’s really important when you
get something for free on the internet
know that it’s not really for free
sometimes it’s very obvious they have
ads at the
bottom and if you click an ad they make
some money and so that’s how they
support themselves
that’s how casual games support
themselves if you ever played candy
crush right you know there’s ads or they
or there’s in app purchases that get rid
of the ads and sell you extra levels
they get you to a point where you can’t
really play the game anymore
unless you pay some extra money right
and they even advertise some some apps
even advertise you can be successful
even without paying don’t pay a dime you
know I think I don’t know what the name
of the game is but it’s where they show
the the armies going at each other and
then somebody wins I don’t know anyway
so I’m looking at how all these models
are being used by Facebook and Twitter
and Apple tea their new Apple uh
Network where they’re doing content
Amazon and Hulu and Netflix and it took
me back to when I was first being
introduced to how radio works and how
television works as a DJ there was often
the urge to do something that the
listeners wanted us to do but I was
reminded very early in my career by my
program director and by the sales
manager of the station that the
listeners get what we do for free not
because they pay for it because they get
it for free they don’t pay for it
somebody else pays for it and that
somebody else is advertisers which means
we had a two-pronged model and that is
that we have consumers the people that
listened to the radio station and loved
the music or loved the talk shows
whatever late consumers and we had
customers the advertisers and without
those advertisers giving the station
money those consumers had nothing to
listen to same thing happens with
broadcast television you have typical
commercial networks like NBC ABC CBS FOX
etc and you have supposedly non-profit
independent networks like PBS but they
still have the exact same model they
just call advertising
under writing you know sponsorship and
they have some different rules around
what can be said during those
sponsorships but you see where it is
it’s available to you for nothing
because somebody else is footing the
bill the same thing happens with new
media Facebook is free because somebody
else is footing the bill it’s not only
advertisers that buy ads on Facebook
they make millions and millions of
dollars on ads but it’s also them
selling the data that they gather about
how you behave on the site they so we’ve
seen them sell that data with regard to
elections and with regard to marketing
and companies have agreements with each
other Apple and Facebook had an
agreement Google does this all the time
and it’s the oldest trick in the book
oh here you can have our network for
free it’s awesome but that data that
they’re selling is really important and
it’s something that needs to be
safeguarded in fact when I started
rehearsal Pro I went to all of the
networks and Studios that would take a
meeting with me and their security teams
and I said look we’re about to offer an
app that is going to put your
intellectual property out there in the
same way that it’s put out there by
casting directors but it’s going to be
put out there and we want to protect it
and we want to show you how that is
I set it up so that it was a blind box
our server when you send a script to
rehearsal Pro it immediately gets
encrypted and we can’t even if somebody
breaks in moves mostly about people
trying to break into the server if they
break into our server they will find a
whole bunch of encrypted files they
can’t do anything with it in fact I got
a call from a very very famous person
once who’s like how are you protecting
you know my script and I told her how we
were doing it and I was surprised that
she actually was familiar with Blowfish
encryption at the time anyway um that
data is really tempting I’m not tempted
to see the scripts that people are
sending because I don’t really care I
got enough problems with them with the
scripts that I have for my auditions but
it’s tempting and it’s tempting for
people like Facebook to know everything
they can about individual people rather
than an aggregate that data becomes a
product that is really really valuable
and they need to safeguard it and that’s
why you’ve seen you know data breaches
like with Equifax and others that can
really be frightening for people their
passwords their social security numbers
the the security question answers that
they have you know this model is based
on okay we won’t charge you for the
actual consumption of the product but we
are going to get it paid for somehow
and that needs to be protected all that
data that is there needs to be
safeguarded but don’t think that these
companies are so hip and trendy and new
and everything is new they’re not new
when you get Hulu for free it’s because
it’s ads supported it’s exactly the same
as broadcast radio exactly the same as
broadcast television or
subscription-based like HBO or Netflix
or Amazon Prime or Hulu the the upper
level the premium levels you’re still
being there being compensated for having
this big infrastructure of content the
content is not free so when somebody
sends me a note why do you charge 20
bucks for rehearsal because without it
rehearsal wouldn’t exist I wouldn’t have
the money to pay my developers or my
buddy Steve who does our our server work
or me to take the time away from what I
do otherwise to support the app the next
time you see something that’s free as
opposed to a little bit of a charge for
it ask yourself the question how are
they making money how are they doing
that what what’s happening and if you
can’t figure it out the default answer
is they’re selling your data they’re
gathering your data they’re analyzing
your data they’re creating reports for
marketing companies that allow those
marketing companies to market to you and
people like you they’re selling your
data so my question for you is how do
you feel about all that would you rather
just pay cash you’d rather just pay a
subscription fee you know rehearsal Pro
is not a subscription fee it’s a
one-time payment so when I hear people
say wow 20 dollars for an app you’re out
of your mind like really okay I bet at a
really nice restaurant you spend 20
bucks for lunch
and here you have the opportunity to
make your rehearsal and your auditions
and your work on set and in studio that
much better and awesome and the
opportunity to book something that could
make you thousands of dollars and you’re
concerned about twenty bucks not sure
that’s a great decision well everybody
else is free they’re not really free
they’re not so how do you feel about
this how do you feel about the way
companies gather information about you
and sell it or being subject to ads
because we bitch about that sometimes
too it’s like why do I have to sit
through these ads why can’t I just watch
the stuff you know somebody paid to have
that stuff created maybe somebody paid
you to act in that stuff and what I’m
trying to do is give you a framework
around why this business works the way
it does
and why there are ads why there’s cash
payments why there are subscription
payments and why they end up selling
your data tell me how you feel about
that in the comments below I’d love to
know what your personal feelings are
about how ads work and how data being
sold works and gathering of data and
privacy I wonder what you feel about
that I’d love to know tell me in the
comments below if you’d like to
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really good at I’m David H Lawrence xvii
I really appreciate you watching these
videos and we’re doing one a day I’ll
talk to you tomorrow.