Why Your Web 2.0 Business Plan Doesn't Work

Opinion: That which works best online is that which can only work online.

A fairly innocuous posting on Slashdot caught my eye recently while trolling around for tech news. It seems that WOXY, one of the Internet's largest online-only radio stations, is moving to a subscription model after years of promising to keep their feeds free. Mildly interesting, but not earth-shattering, right?

I thought so, too. But then I started to think about online radio and the publishing of multimedia content in general. Some researching led me to discover that online radio is projected to have a pretty big future, a fact that makes perfect sense to me, a big online-audio consumer.

It seems to make sense. Internet radio offers literally hundreds (if not thousands) of choices, is free, and is more or less "on-demand." But if it's such a good idea, then why would WOXY be having problems? After all, podcasting is growing by leaps and bounds. There are even podcast-programmed radio stations such as KYOURADIO and its broadcast sister station KYCY-AM. What's WOXY's problem?

My search for an answer continued, and after poking around a bit, I came across a couple of services that seemed like amazingly cool ideas. First was Pandora, an outgrowth of The Music Genome Project, which creates custom online "radio" stations based on your own musical preferences. Next I found Last.FM, a free service that lets you set up your own online "radio" station and network with other folks who use the service. Cool stuff.

I cast my net further. Would this kind of social media networking work with other types of media? Some more poking around landed me on Videobomb, a new venture by the Participatory Culture Foundation folks that allows anyone to grab Internet videos and then publish (or "bomb") them on the site. Much like the system on Digg, visitors to the site can rate videos and decide what goes on the homepage. Not only that, but Videobomb also lets users create their own "TV Station" online that shows the videos they've found and want to share. Cool stuff.

Videobomb cool. Pandora cool. Last.FM cool. WOXY for pay? Not so much. All of a sudden it started to make sense to me: The models for publishing online that are gonna work are the ones that are only possible online.

Think about it: Could Videobomb, Pandora, Last.FM, Digg, Slashdot, MySpace and eBay exist offline? Of course they couldn't! Could WOXY exist offline? Um … duh! Of course it can: It's called "radio," and it's been with us for around 100 years now. Sure, being online offers a few minor perks for a station like that, but overall, it ain't doing something that couldn't be done with older technology and, I might add, more conveniently. Until we've got ubiquitous Wi-Fi, taking Internet radio on the go is kind of tough. And even if we did have ubiquitous Wi-Fi, the quality of a good connection is still going to be less than the quality of a bad FM radio. It's just the way things work.

Taken together, it all comes down to a simple axiom: That which works best online is that which can work only online. Call it what you will (I prefer "Carton's Law of Online Publishing," but that may be seen as a little immodest), but if you look around the Web, this axiom holds true. From e-commerce to e-zine publishing, sites that offer no benefit beyond their "old media" counterparts fail while others that offer additional value in the form of features old media can't emulate (such as multimedia, social filtering, RSS feeds, on-demand content, constantly updated content, etc.) thrive.

It explains the popularity of blogs, on-demand video downloads, pod/videocasting, online dating, auctions, social networking and many of the other services we've seen pop up over the past couple of years. It explains the appeal of AJAX-driven sites (try doing Google Maps-like actions with the printed map in your glove compartment!) and many of the more interesting "Web 2.0"-like services.

So next time you think about publishing, think about this: Is what you're doing something that could only work in an online environment and something that takes advantage of the medium? If so, go for it. If not, you may belong in the analog world.