What you know, what you do, and what you own.

I was discussing what we do at Storythings recently with Ben Lunt, and we were talking about a interesting pattern we’d seen in some of the agencies and companies we really admire. Traditionally, creative businesses focused on delivering services for clients or consultancy work, but many of the most interesting companies also have products, events or services that they run themselves.

For example – BERG have the excellent Little Printer (the first part of the bigger BERG Cloud idea); Hide and Seek are launching Tiny Games on Kickstarter in the next couple of days; RIG started the brilliant Newspaper Club years ago; Mint Digital have launched a few products, including Stickygram;  Telegraph Hill have recently launched their own Youtube channel The Fox Problem; The Church of London started by running excellent magazines like Little White Lies, and have now spun out their own agency Human After All; John Willshere’s Smithery makes the lovely Artefact cards, and Clearleft run numerous events including the excellent Dconstruct. At Storythings, we have been running our event The Story for four years now, and have recently published our first book - hopefully the first of many.

These aren’t just ’20% time’ projects, or one off things the companies are doing to jump on a bandwagon and get a quick bit of profile in the design press – they’re ongoing commitments to making and running something that feels core to the work they companies are doing. These projects aren’t just ways to rehearse ideas that you might then get clients to pay for – they’re fully realised things in themselves, wholly owned by the companies, not their clients.

The advantages of owning projects that you run for a long time are many. You get to learn about all sorts of interesting logistical and regulatory issues, whether that’s working with manufacturers across the globe, shipping products from warehouses to customers, running a crowd funding campaign, or making sure venues are suitable for audiences at an event.

Most of all, you get to deal with people – customers or audiences – directly, regularly, and for a long period of time. Rather than seeing people as numbers reported back to you by a client at the end of a project, you learn what it means to build a loyal user base, how to respond to people’s questions and demands, and what to do when something goes wrong.

This isn’t the short burst of contact you get on a campaign. It’s a deep relationship that only gets more interesting and valuable over time, as the feedback you get starts to change your ideas about the project. Your projects start to become things that are owned jointly by you and your audience/users/customers, creating their own velocity and momentum. These Long Projects pay off in lots of ways that aren’t measured in commissions, funding or awards (although they sometimes lead to all these things).

It feels like this is an integral part of running a creative company now. Alongside the things you know (your consultancy/strategy skills), and the things you do (your making/producing skills), there are the things you own – the long-running projects that help us understand what it feels like to make culture now, and that in many ways define who we are and what we do.

 

 

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What we do we mean when we talk about ‘TV’?

This could be a slightly obvious and pedantic post, but something keeps niggling at me when I read reports about changing audience behaviours around broadcast media. A lot of reports are using the word ‘TV” very loosely – sometimes to refer to specific broadcast models, sometimes to refer to all video watching in general. We’re seeing big changes in the way audiences find and consume video, and this sloppy use of the word ‘TV’ isn’t helping us see how the industry is changing. So I wanted to write up some notes on what we mean when we use the word ‘TV’, and how we need to be more specific in our language from now on.

The recent Telescope report on TV Viewing in the UK reports that we own fewer TV sets than 10 years ago (1.83 per household, down from 2.3 in 2003), yet we’re watching over four hours of ‘TV’ per day, up from 3 hours and 36 minutes in 2003.

This is a really interesting report, looking in detail at changing behaviours in media consumption, and with a very innovative ‘TeleHappiness’ report that shows what kinds of content makes us happy in different parts of the UK (sport in Wales, comedy pretty much everywhere). But the news coverage of the report uses the word ‘TV’ to describe three different things, a mistake made by many people analysing the current media market, not least in similar reports about the the TV ad industry body Thinkbox’s recent report on on-demand viewing.

For most of the last 50 years, the phrase ‘TV’ was a useful catch-all phrase covering three things – the business model of broadcast TV, the content commissioned by TV broadcasters, and the box in the corner we used to watch broadcast TV. Over the last 10 years, those three things have started to split from each other, and the split is getting more pronounced every year. The risk is that research or analysis of audience behaviour that doesn’t take account for this split will be increasingly inaccurate, and will make it harder to put emerging audience behaviours in the correct context.

So I think it’s time we started being more specific with our use of terminology when talking about audiences and their media consumption:

TV
Televisions are the boxes in the corner. They are still mainly used for watching broadcast  content, but they’re also hooked up to games consoles, the internet, and other non-linear sources of content. We might own fewer TVs in our homes, but this is partly because we’re using other devices, like laptops, mobile and tablets, to replace the secondary Televisions we used to have around the home. The market for selling TVs is starting to flatten out after years of growth as customers switched to large flat panel digital TVs. With the ongoing financial situation looking bleak, and 3D not driving sales as much as predicted, its likely that UK TV sales will continue to plateau.

Video
Video is the content itself – the audiovisual content that we consume on an ever-increasing number of different devices. The combination of broadband adoption and smartphone/tablet sales has hugely increased the consumption of Video on devices that aren’t traditional TVs – for example, 23% of iPlayer content is delivered to mobile phones or tablets. Online video is probably the fastest growing media sector at the moment, and this is driven by social circulation and other emerging behaviours, not traditional distribution. For example, AdAge reports that 85% of the audience for M&Ms’ 2012 Superbowl ad was driven by social circulation, not traditional paid media. If you’re a production company making video things are looking pretty rosy –  there’s never been more people looking to invest in making video – eg Youtube or Netflix –  or more places to put video so it can be found and shared by audiences. This is only likely to increase in the next few years.

Broadcast
Broadcast is the traditional business model for delivering video content to TVs in people’s homes. It relies on huge investment in distribution technologies over digital transmitters, cable or satellite, requires regulatory approval, and involves commissioning or acquiring content to fill separately branded channels that usually run for 24 hours a day. Commercial broadcasters rely on selling advertisements inserted into broadcast content to fund their business models. Broadcast TV’s share of the total ad market has been broadly flat in the last few years, with fluctuations based on major events like the Olympics. Current predictions are for a small contraction in the market in the UK after a modest growth in 2012. The trend for individual channel share has been downwards, as overall viewing has split across channels as UK audiences switched to digital TVs with many more channels available. Most broadcasters have managed this transition through launching portfolios of channels to keep their overall share up despite this fragmentation. Channel 4, for example, has seen its overall share go up from 10.3% to 11.2%, whilst the BBC and ITV portfolios have seen a reduction in share. This increased portfolio brings with it increased costs, as each new channel in the portfolio means more marketing and commissioning expenditure. New players like Lovefilm, Netflix and more recently Tesco’s Clubcard TV offer archive content from broadcasters and film producers on demand without having the regulatory or scheduling requirements of traditional Broadcasters. As a result, outlooks for growth for traditional broadcasters is mixed. Increasing ad sales inventory usually means launching new channels, which adds huge ongoing costs, whilst overall ad prices are being squeezed as media buyers shift investment to digital and other platforms. Only broadcasters with a direct transactional relationship with the customer – such as subscription channels like Sky or HBO – have some insurance against the flattening digital ad sales market. Put simply, if you’re reliant on traditional display advertising around free to air linear channels for your broadcasting business model, you’re looking at flat growth in the next few years, and possibly decline.

So – TV is the box in the corner, Video is the medium, and Broadcast is the business model. When we talk about the state of our industries, and their potential futures, lets be more specific in our language. If you’re talking about broadcast media (as Thinkbox and BARB do – their stats only refer to content produced by the major broadcasters, not Youtube, Netflix or other VOD providers) then use the definition ‘Broadcast TV’, not just ‘TV’.

The thing that we’re all watching more of is Video – online, on TVs over broadcast channels, on our phones and tablets, on Xbox’s, or whatever. TV is increasingly too small a definition, with too much historical baggage, to capture the way video consumption is growing.

And yes, I’m quite aware that I made the same mistake myself in an earlier post on Storythings. I’ll make sure it doesn’t happen again…

Spooky Family At A Distance*

Miss You Letters

I don’t travel abroad for work a lot, but when I do, it tends to be for a fair bit of time – at the moment, I’m away for a fortnight in New York. One of the hardest things about travelling is missing your family, especially when you have young children. Over the last few years, though, there’s been more and more lovely little bits of technology that make that gap shrink just a little, and make being so far away a bit less painful.

Mobile phones were the first, of course, and tech companies have long spun utopian visions of how mobile tech connects us seamlessly and perfectly, as if we were in the same room again. The reality is less impressive, especially with roaming call and data charges making it incredibly expensive to do anything more than have a quick chat.

Skype, Facetime and Google Hangouts are awesome, coming closest to the tech companies idea of perfect telepresence. But its the playfulness that makes the tech really work – my 8 yr old daughter spinning around with the iphone so the facetime call takes on the look of an 80s rave video, or my 6 yr old holding her school homework right up to the webcam so I can see her drawings.

But the things that really seem magic are physical. The photo above is the two notes that my daughters slipped in my luggage before I left. I’ve been responding by sending them messages daily via BERG’s Little Printer, and their excitement at seeing the message print out, as if by magic, as we chat on Skype is a delight to watch. We’ve been playing with what to send – I started with just saying hello!, and then sending a good night message before they went to sleep. Then I started sending jokes – first the set up line, and then after they’d read it, the punchline. Little Printer is perfect for short, serial messages like this, so I might play with it further, and tell them a story about New York, a few messages a day.

We don’t have teleportation yet, but these little physical messages feel like a step on from the glass screens we’ve been using to talk to each other for the last 10 years or so. They are bits of me they can keep, pinned up on the wall or kept on the bedside table, like the short notes they slipped into my luggage. It feels like teleportation, to be able to make something print out in Hove from my computer in NY, to make a message typed out on my screen manifest itself as a physical object many thousands of miles away.

We’re gradually getting there – first we could send voice across the miles, then SMS texts, then MMS photos, then live Video, and now, actual things. We’re not in the seamless perfect future of the tech companies visions, but the patchwork telepresence we have from all this little bits of tech is much more emotionally satisfying.

*The title of this post refers to Einstein’s dismissal of Quantum Entanglement as ‘spooky action at a distance’

 

 

What BARB’s error reveals about the bizarre world of TV ratings

UPDATE: Jack Knight has written a fantastic comment on this post, giving a lot more background to BARB and sampled ratings in general. I highly recommend reading the comments after the post. If you’re interested in the history of audience ratings, I highly recommend reading ‘Rating The Audience: The Business of Media’.

 

BARB – the organisation that measures ratings for UK TV channels – has admitted that there were errors in its tracking system, and as a result some Channel 4 and ITV shows have ended up with false ratings. Broadcast Magazine’s article says that one of the programmes given false ratings was ITV’s X Factor – their highest rating show, and one of the biggest advertising targets in broadcast television:

“The entertainment show originally recorded an overnight audience of 8.96m (33.6%) on ITV1 and ITV1 HD in figures released last Monday, but this has now grown to 9.84m (36.91%) under the revised data. Meanwhile, C4 shows including 999: What’s Your Emergency and Grand Designs have also experienced audience uplifts. However, others have fallen, such as the 22 September episode of The Comedy World Cup, which dropped from 1.8m (7.9%) to 631k (2.76%) on the back of the gaffe.”

How can mistakes like this happen in a multi-billion pound industry reliant on accurate audience metrics? Looking for an answer to that question opens up lots more questions about why such a huge and influential industry relies on relatively crude measuring techniques that haven’t changed much in decades.

TV ratings are measured using mechanical devices that record the presence of viewers in the room when the TV is on, usually by the viewers pressing a button to register that they’ve entered the room. So it really registers presence, rather than attention – the viewer could be reading a newspaper, doing the ironing or using their iphone, but for the sake of the ratings they count as an avid viewer.

Ratings technologies have been refined over time, but the basic concept hasn’t changed since it was invented by Arthur C Nielsen to measure radio audiences in the 1930s. BARB is the UK version of TV ratings, using a panel of 5,100 homes to represent the UK TV viewing public.  So each percentage point in the examples above stand for a measurement sample of just 51 homes. The amount of people in these homes is around 11,300, so each percentage point stands for a maximum of 113 people pressing their buttons when they walk into the living room. It’s often a lot less, as the percentages above are share of the total viewing audience (BARB calls this the ‘universe’) at that time – many BARB panellists might be out of their homes, or might not have the TV on at that time.

If we take the numbers of viewers in the sample above, we can work out the size of the TV viewing universe watching when these errors occured. For example, the 8.9m audience originally reported for X Factor was 33.6% of total viewers that night, so one percentage of that audience is 8.9m/33.6% – 264,880 viewers. This means that the BARB’s estimate for the total UK TV viewing audience on a Saturday night is around 26.4m people, which is 39% of the UK population of 62m people. So we could transfer this to roughly work out that the number of BARB Panellists registering themselves as viewers that night is 39% of 11,300 – 4,407 people.

Still with me? Lets now take the share of X Factor’s reported viewing to work out how many BARB panellists registered themselves as watching that programme. The original share reported was 33.6% of total viewers. We know the total BARB panellists watching TV was 4,407, so the number watching X Factor according to the original report was 33.6% of 4,407 – 1,481 people. So BARB measures 1,481 people watching a TV programme, and extrapolates that number to report an audience rating of 8.96m viewers. No matter how scientific and representational the survey, is remarkable to think that multi-billion pound creative decisions are made on such a small sample size.

Now lets look at the error size. BARB under-represented X Factor’s ratings by 3.31 percentage points, which was a difference of 880,000 viewers in the reported ratings. Again, if we take the total panellists viewing X Factor that night as 1,481 people, 3.31% is 49 people.

An error in measuring 49 people pressing a button when they walk into a room means that one of the UK’s largest media businesses under-represented the performance of their most important programme by 880,000 viewers. Is it just me, or is that completely insane?

The 30 year switch

When I started working in broadcasting in 2001, the idea that digital technologies were changing the media industries was pretty much a fringe debate. Most people had barely any experience of the internet, and many of the people I was working with were planning long careers in broadcasting, publishing or advertising – industries that had hardly changed in the last half-century. By the time I left broadcasting in 2011, everything was different, and digital had transformed these sectors beyond recognition.

Instead of denial, the tone of conversation in traditional media industries now is weary submission, as each sector sees the tidal wave of digital change break over their old business models, and hopes that they can find enough high ground left to survive. But I think that we’re barely halfway through, and there’s evidence that most significant shifts in culture take around 30 years to fully play out.

The reason for this is that cultural change is not just about technology or economics, but about changes in behaviour. The important phase of cultural change is not the adoption of new technologies, but about the way those new technologies change the way we consume or engage with culture. Its often the case that the first cultural products for new technologies merely mimic old forms, and it isn’t until the majority of audiences have changed to the new technology that new behaviours emerge clearly enough to sustain new forms of culture, and in turn new business models.

For example – the CD is 30 years old this week. Reading accounts of the development and launch of the CD as a technology, its interesting how much it was defined by traditional ideas of what listening to music should be like – ie listening to albums in their entirety, a behaviour learnt through years of buying and listening to vinyl records.

In fact, even the earliest CD players contained the seed of a radical shift in listening behaviours that would change the economics of music forever. This was the idea of random access to tracks – the ability to shuffle and skip through albums in ways that weren’t defined by the track listing set by the artist. Although this was a minor feature of early CD players, the new behaviour was a significant shift in how we listened to music, and developed over the next 30 years to create a new industry based around individual tracks, streams and playlists, dominated by companies like Apple that were not even legally allowed to be in the music industry in 1982.

Just as the CD contained the seeds of a new behaviour that would eventually change the music industry 30 years later, new behaviours around books and TV on platforms like Kindle and Youtube are starting to sow the seeds of disruption for the publishing and broadcasting industries. We’re only just beginning to see what behaviours might emerge, like the shuffle, to change these industries beyond recognition. Rather than being at the end of a decade of digital change, we might only be at the end of the beginning – by 2030 we’ll be looking back at Youtube and Kindle like we do the early CDs, marvelling at how much they resembled the media platforms they were only just beginning to replace.

 

 

 

 

Is Youtube a TV Channel?

In an interview with Broadcast Magazine last week, Simon Cowell suggested that Youtube could soon be considered competition for traditional TV Channels:

“There’ll be a point in the not-too-distant future when we’ll be able to watch TV and YouTube will be Channel 6. When we reach that point, they’re going to be serious competition.”

The comment comes just after the X Factor channel on Youtube joined Syco’s Britain’s Got Talent to become one of the few UK channels to top 1 billion views, closely followed by the BBC. Taking into account Youtube’s 2011 redesign to focus navigation around channels and the launch of its Original Content channels in the US and Europe, is Cowell right? Is Youtube becoming more and more like a to a ‘traditional’ TV Channel?

What is a TV Channel?
To answer the question, we need to remind ourselves what we mean by a TV Channel. Nowadays, channels are navigational elements – brands that convey to the audience a set of values about their programming schedule. But originally, channels and schedules were a solution to a specific problem – when you could broadcast content over a network all day (rather than the limited duration of a theatre or opera programme), what kind of structure would help audiences know when your content was available?

The first people to have this problem were the early ‘telephone newspapers’ created in the late 19th Century. They thought that telephones would be used to broadcast, not just for person-to-person conversation, and invited users to subscribe to content available on special one-way telephones installed in their homes.

The Telefon Hirmondo in Budapest was one of the most successful telephone newspapers, with around 15,000 subscribers at its peak. They solved the problem of how to organise content for their 12hr daily broadcasts by creating ‘issues’ – what we would now call ‘schedules’, carving the day up into chunks of hours or part hours. Here’s a sample of a Telefon Hirmondo ‘issue’:

2:30 PM 3:00 PM Parliamentary and local news.
3:00 PM 3:15 PM Latest exchange reports.
3:15 PM 4:00 PM Weather, parliamentary, legal, theatrical, fashion and sporting news.
4:00 PM 4:30 PM Latest exchange reports and general news.
4:30 PM 6:30 PM Regimental bands.
7:00 PM 8:15 PM Opera.

As the broadcast technologies of radio and then television emerged, they adopted the structure of these ‘issues’, and over a century later, we’re still organising broadcast content in pretty much the same way. The complex art of organising content for optimal viewing – the art of ‘scheduling’ – became one of the critical skills in broadcasting, defining the success of one channel over another, and therefore the price of advertising on that channel. A traditional TV channel is, in essence, its schedule.

What is a ‘channel’ on Youtube?
Youtube has traditionally been seen as a platform, not a channel. Rather than an editorialised schedule of content, it’s an open, searchable platform, allowing users to upload as much or as little content as they want, and for audiences to view content on those same terms. As the platform grew over the last 10 years, video views emerged as the most common metric of attention, with success seen purely in terms of the highest number of views. Reaching 1bn views is a significant milestone, one that only 50 channels have currently achieved.

But since the redesign, Youtube have pushed for subscribers to be the core metric, and for creators to focus on channels rather than individual videos. But Youtube videos are shared and circulated in lots of different ways, and the patterns of attention around videos are way more complex than broadcast viewing. Channel subscriptions are not yet the most popular way to find content on Youtube, with most viewing sessions starting with organic search – Youtube is the second biggest search engine on the internet. Youtube’s channel strategy is an attempt to change this, and to try to encourage more loyalty and ‘channel-like’ behaviour in its audience. The aim is to get longer viewing sessions, and to raise the channel brands on Youtube above individual videos, making it more suitable for the kind of viewing patterns expected on smart TVs in the living room. But this transition to a channel strategy is still in its early days.

What makes a successful Youtube channel?
As Youtube makes the transition from videos to channels, its worth comparing the list of most viewed videos to the list of the top 50 most subscribed channels on Youtube. The top of the most viewed list is dominated by mainstream content brands and talent-branded VEVO channels. Here’s the top 10 channels by video views:

Universalmusicgroup 6,911,136,702
Machinima 3,668,308,520
JustinBieberVEVO 2,860,897,761
RihannaVEVO 2,756,231,298
expertvillage 2,568,074,626
LadyGagaVEVO 2,270,263,760
AtlanticVideos 2,050,668,530
EminemVEVO 2,030,339,362
RayWilliamJohnson 1,984,191,369
IGNentertainment 1,935,914,288

Whereas the most subscribed is dominated by Youtube-native talent channels – Rihanna is the only VEVO channel to make the top 30 most subscribed. Here’s the top 10 most subscribed channels:

RayWilliamJohnson 5,900,000
nigahiga 5,700,000
smosh 5,400,000
Machinima 4,800,000
collegehumour 2,900,000
realannoyingorange 2,500,000
BlueXephos 2,400,000
thelonelyisland 2,400,000
RihannaVEVO 2,360,000

This illustrates the different strategies being using to make successful Youtube content. For some, the brand or talent is established enough outside of Youtube to drive views through organic search alone – this explains the number of VEVO channels in the top 50 video views list. Channels without other sources of traffic have to work harder to get attention to their content – this is why the top 10 most subscribed channels are Youtube-native comedy and games channels.

What’s interesting is when you look at the amount of work people put in to get subscribers. If we divide the number of subscribers by the number of videos uploaded to the channel, we get an unscientific, but interesting statistic – the average number of subscribers added per video. Here’s the channels that have done the least work to get their subscribers:

LMFAOVEVO 58,621
nigahiga 45,238
RihannaVEVO 32,329
KatyPerryVEVO 30,508
thelonelyisland 28,916
Universalmusicgroup 26,324
JustinBieberVEVO 25,085
JenniferLopezVEVO 24,344
PitbullVEVO 23,404
smosh 21,429
ChrisBrownVEVO 20,021

And here’s the channels that have worked the hardest, sometimes only adding a handful of subscribers per video upload:

rajshri 2
Associated Press 4
CBS 6
expertvillage 8
muyap 15
IGNentertainment 24
BBC 42
clevverTV 59
Spinninrec 153
Machinima 224
barelypolitical 261

Its interesting how many ‘traditional’ broadcasters are in that second list – AP, CBS and the BBC. And just out of this list, The Ellen Show comes in at number 12, TheXFactorUK at number 14, and BritainsGotTalent09 at number 16.

There are so many competing strategies on Youtube right now that comparisons like this are not hugely revealing, but there do seem to be three kinds of channels emerging:

Talent-led channels – broadly music based, views driven by organic search, very few uploads
Broadcast-led channels – linked to existing TV shows/channels, lots of uploads, (mainly clips), views largely driven by organic search, but few subscribers
Youtube-native channels – lots of subscribers, lots of uploads, most traffic driven by links within the Youtube platform

So, will Youtube become a TV Channel?
It’s early days in Youtube’s channel strategy, but at the moment, its hard to see the different strategies that talent, broadcast brands and native Youtube creators are using merging into something as coherent and consistent as a traditional TV channel brand. When Simon Cowell looks at Youtube and recognises it as a ‘TV Channel’, he’s seeing it from the perspective of someone who has been immersed in broadcast TV for years, and is more familiar with those patterns of attention than some of the new patterns emerging from native Youtube talent. To a man with a hammer, everything looks like a nail, so a man with some of the biggest broadcast TV brands will look at Youtube, which sometimes look like traditional TV, and assume that it will eventually become like the things he has spent his life building.

I think its more likely that TV channels will become a bit more like Youtube. If Smart TVs and other VOD boxes take off, we’ll start to see some new user journeys around content on our TV – organic search, subscriptions to channels/shows we love, social and algorithmic recommendations, etc. This will change the way that schedulers think about TV channels as much as the rise of multichannel satellite and cable did in the 1990s. Channel 4′s 4/7 channel on Wikipedia – scheduled partly in response to online buzz about Channel 4 shows – is an early indicator of this trend. Simon Cowell might be looking at the right thing, but from the wrong perspective – its not about Youtube becoming more like TV Channels, but about TV Channels becoming more like Youtube.

The Groupon Shop

The Groupon Shop

Just around the corner from where I live is this shop. Its in a small parade opposite Portslade train station, along with a couple of barbers, a greasy spoon cafe, a bric-a-brac shop and a newsagents. The parade is typical of the kind you find at the fringes of suburbia, where town centres dwindle to broadly residential areas with a few clusters of shops squeezed in between.

This shop used to be a record store, with a couple of rare items on the wall and the usual bargain bucket MOR in the shelves. After that, it sold second-hand white goods, and then about 6 months ago it had a brief refit before re-opening as a place to get your feet nibbled at by small fish. My daughters found this fascinating, and would peek in the window whenever anyone was getting a treatment, at least until the owners put up blinds to stop them gawping.

I was fascinated for a different reason. The shop seemed to generate business solely through Groupon promotions, and was doing alright for a while, with a steady stream of feet walking in for the Garra fish to nibble. Then, a couple of months ago, the blinds were open more often, the fish looked like they were getting hungrier, and the only thing to see was a bored-looking assistant.

A few more posters started appearing in the window for other services – photo printing on banners or canvases, and OoNaNa body and bath treatments. I imagine the owners were picking up other business ideas from Groupon that had that magic formula – small up front investment in stock/equipment plus niche demand times groupon promotion equals a profit marginal enough to pay the rent on a small shop in a fringe suburb. The window started to look like a physical version of the ads you see on bad websites – it was only a matter of time before teeth-whitening or simple weight-loss remedies starting appearing.

I wonder if this is the future of retail for some shopping areas in these austere times? It feels like the hipster-led ‘pop-up shop‘ idea has trickled down to something approaching a Demand Media business model for physical shops. The Groupon Shop feels like a brave, but slightly clumsy, attempt at algorithmically-driven retail, in which a tiny cost base can be the justification for a series of iterative attempts at creating a viable business model. Previously, only charity shops have had a cost-base low enough to take over the empty high st in a recession, but perhaps Groupon shops are a sign of things to come?

This feels like James Bridle‘s New Aesthetic pushing through into suburbia, in the most vernacular way imaginable. The future of retail is not malls full of check-out-less Apple Stores and immaculately groomed geniuses. Its marginal profits promised by multiple algorithms indexing millions of search queries, emerging like weeds in the gaps in the High St vacated by chain stores who have themselves been eaten by the remorseless efficiency of the Internet.

Or at least it might be, if the Groupon Shop wasn’t closing, perfectly mirroring the bubble of Groupon itself. What will appear there next? I’d like to think the owners will have another try, learning to iterate quicker, and discovering another couple of dozen business models that they can pick up and discard based on the algorithms of coupon sites. Maybe they need to be more like Zynga, who are the current masters of extremely rapid iteration. I’d quite like to buy our milk and eggs from a Farmville shop.

[Update: Just after I wrote this, NESTA tweeted a link to this high-end version of The Groupon Shop]