From an investing point of view, old-school media stocks don't intrigue me. They seem old-fashioned in the face of current disruptive influences, and the business model often caters to mediocrity, since that's what's often easiest to peddle.
As is the case when an industry is ripe for disruption, though, entities can pick up some slack. Amazon.com (NASDAQ:AMZN) and Borders (NYSE:BGP) are both holding literary contests to mine for new talent -- and leverage the power of their customers and communities -- and that's a step in the forward-thinking direction.
You decide
Amazon.com's Breakthrough Novel Award will give a publishing contract with Pearson's (NYSE:PSO) Penguin Group, a $25,000 advance, and an array of gear from Hewlett-Packard (NYSE:HPQ) to the lucky first-place winner. Entrants must register by Nov. 5, when Amazon editors and top Amazon customer reviewers will weed out semi-finalists, whose manuscripts will be judged by Penguin. Then Amazon customers will choose a winner from the top 10 entries, which will be posted on the site.
Borders' contest is a little less grandiose, although it has similar spirit. It's seeking genre fiction, looking for "The Next Great Crime Novel," and will award the winner $5,000 and a publishing contract through Borders. It's run by Borders, its social media partner Gather.com, and Time Warner's (NYSE:TWX) Court TV. The contest also has a community element, since members of Gather.com will evaluate the entries.
The write stuff
Being an aspiring writer is tough. Consider the importance of having connections, editors' personal tastes, and what small groups of people at publishing houses expect will sell, which can often diverge from merit or cutting-edge works. That last factor is why paying markets have been rarely willing to bet on unknowns. (Legend has it that J.K. Rowling's first Harry Potter book was rejected by a dozen publishers before it was picked up by Bloomsbury in the U.K. and Scholastic (NASDAQ:SCHL) in the U.S. She received a paltry advance of 1,500 pounds.)
I thought that News Corp.'s (NYSE:NWS) HarperCollins recently giving James Frey a book deal for his new novel was a bit demoralizing, considering the author had a high-profile fall from grace when it came to light that his memoir had been largely fabricated. But it sure sounded like part of the motive was that his name recognition would probably produce a blockbuster. Given traditional media's business model, they can barely be blamed for that decision, but that doesn't mean we consumers have to buy it.
It's not all bad news, of course, because the Internet's ability to increase distribution and exposure without the help of traditional media backing is significant and figures into current theories of commerce. For example, The Long Tail. (Radiohead may be a music group, but its recent decision to allow fans to pay what they like for the newest album could very well be a sign of the future, where big media might be cut out of the formula in many cases.)
That brings us back to Amazon's and Borders' contests, which are clearly trying to harness the power of community. These are just a few more examples that star-making power is being taken away from the few. James Surowiecki's The Wisdom of Crowds is another argument in favor of the theory that the group intelligence of crowds of people very often beats the intellect of the chosen few.
Crowd control? The crowd's in control
Community sentiment isn't always perfect -- take mob or bubble mentality -- but still, the more people there are who contribute their efforts, the better the collective intelligence should be. Here's an interesting thought: Would a large crowd of regular readers have spotted the allure of a story about a boy wizard and his friends before it was rejected by 12 major publishers? I tend to think so, given the outrageous success of the series, which crossed demographic lines.
It's a great idea for retailers that have an Internet presence and rely on distributing media to pick up the slack when it comes to highlighting talented newcomers and letting their customers decide. Personally, I think Amazon's got a better shot at being a great talent scout, with its massive, engaged customer base. And of course, Amazon.com was one of the first companies to recognize that the Internet's reach into the obscure and undiscovered had great potential, and that community has the power to expose great unknown works.
Last but not least, giving your customers something to care about, soliciting their opinion, respecting their talents -- well, that's a brilliant move for any retailer that wants to look ahead.
