Poverty and Violence- The vicious cycle

I just finished reading the book "Las Mujeres en la Guerra", a series of testimonials of women who have been affected by Colombia's guerrilla warfare, written by journalist Patricia Lara. It's a great glimpse into the lives of women who were part of the guerrilla and paramilitary groups, as well as those who have been kidnapped by the guerrilla, and family members hurt by the war. It's an excellent book and I only regret that, as far as I know, there's no English translation of it.

Reading this made me realize once more how close poverty and violence can be. The guerrilla groups were formed at a time when the Cuban revolution and communism was thought to be, by some, models of a life of equality in a country with so much poverty. But their civil war, which has lasted over four decades, has not come close to that. Like the Cuban revolution, it has led to generations of violence, death and the violation of human rights. Lara uses stories of different guerrilla groups and the paramilitaries. When you listen to each view, you realize how horrible the "ends justifies the means"-attitude of these groups have been. The paramilitary groups appeared as a form of defense of poor farmers (but also rich land barons and drug lords) against guerrilla groups who killed, kidnapped and looted in the countryside to fund their cause. Massacres have been common, and done by both guerrilla and paramilitary groups. For groups who were created with the illusion of eliminating poverty, how could they end so many lives? They have resorted to long kidnappings, and even rounding up a town in a church and setting them on fire.

As a Venezuelan, I am especially touched by this story. Though Venezuela has been the "rich neighbor" of Colombia and other countries in the Andes Region (the north area of South America) because of its oil wealth, we have not solved poverty. On the contrary. Poverty increased during the peaceful years of the second half of the 20th century, as the Venezuelan government reaped the wealth of oil more than ever before and the country enjoyed the peace and freedom of democracy, in a time when most of South America was dominated by dictatorships.

And under Chavez, for all his talk of ending poverty, wealth, economic progress, and most importantly, human rights, have struggled. Chavez has used oil wealth to give away money, but hospitals and public schools have little funding overall. He is a savvy communicator, and picks a handful of pet projects to put money into and film in his weekly radio and TV show. But it breaks my heart to see so many young people still so far from being able to start a real, prosperous career, and start a family later in life. Teenage pregnancy is higher in Venezuela than some sub-Saharan African nations.

But most of all, this book me makes me think how Chavez and his so-called socialist agenda is also tied to violence and a lust for power, much like guerrilla and paramilitary leaders in Colombia. He is a good friend of the guerrilla, which he purportedly funds and sends arms to. He also believes in violence, and has political prisoners, dead protesters and closed TV and radio stations to show for it. The saddest and most enraging for me is to think that his real end is not so much poverty, but power. He has said he will rule until he is over 100 years old. His family already controls much of the country, including businesses... no complaints of capitalism and "neo-liberalism" there from him.

Violence can never be a means to an end. Equality is a beautiful end to aim for. But instead of using violence as a mean, how about creating opportunities by not spending on pet projects inside and outside of Venezuela, corrupting the army to stay in power, and imprisoning the opposition? How about funding all schools and hospitals, and not just the ones manned by Cuban doctors, who put aside the talent of Venezuelan doctors? Education, health and incentives to the private industry should be the means. I pray to see that day in Venezuela.

*The book is about the Colombian civil war and does not mention Chavez

iPad & publishers: The pricing dilemma… and what a dilemma it is

I have to make a confession. Though my background is in Communications, the P that most fascinates me when it comes to eMarketing is Pricing. And I’m especially interested in seeing how tablet-like devices like the iPad, eReaders and smartphones will change the pricing game on the internet, which is dominated by free content and applications.

The internet has changed the rules for pricing, and not necessarily in a way that benefits companies. Ironically, one of the industries that has suffered the most in these past 15 years, since the Internet became increasingly mainstream, is also the industry that set the rules in the first place: The media/publishing industry.

When the internet began to become mainstream, the average, not-very-technologically-savvy user used the internet to look for information. Content was king. So companies that already produced content found it easy to become some of the most visited sites: Newspapers, magazines and television stations. Media companies have long relied on what economists call two-sided markets. On one hand, there are the readers, who usually pay a low, subsidized fee to read the content via newspaper subscription, cover price, etc. In the case of public TV, no fee is paid by viewers at all to view content. The media companies make the lion’s share of their profits from advertisers.

The biggest mistake made by the media conglomerates was to believe that the internet was just another media channel. (Of course, it is hard to blame them for not having seen the possibilities of the medium, which still surprises us with its possibilities). These companies tried to beat each other and gain as many readers as possible by giving the content away for free, seeing display advertising on the web as the next big thing.

Clearly, a lot has changed. In the age of Web 2.0 (some even say we’ve moved onto Web 3.0), users are less interested in just reading content online, and are increasingly seeking interactive experiences like creating content themselves and interacting with each other on Social Media sites, chat applications and games. Offline, media and entertainments have suffered, as more people entertain themselves online. Last year, during the recession, media and entertainment companies especially felt the blow. Popular magazines like BusinessWeek and Forbes have made headlines for nearly going out of business, and other niche magazines have been shut down completely. As readership and viewership of traditional media channels fall, advertisers have found new ways to engage users, and more and more of their campaigns consist of communicating with them directly, and not through ads, but in the form of web-based and mobile apps, email coupons and interactive campaigns.

A fresh start?

Media companies and book publishers are hoping that the increasing popularity of mobile devices like the iPad will give them a fresh new start. Even before the iPad had been launched, some publishers even had demos of tablet versions of their magazines and websites. Their hopes are based on two assumptions: that more and more users will be reading content through reading applications on mobile devices like tablets and eReaders, and less and less through browser-based services; and that the revenue model adopted on these mobile devices will be more like eReaders, where users pay for almost all the content they use, as opposed to browsing on the web, where they usually read for free.

But both assumptions are big questions marks. It seems very feasible that mobile devices will continue being increasingly popular, especially in developing countries, where mobile phones are becoming the main channel for internet connection, especially among a new generation with more disposable income in India and China. But most mobile devices include a browser, which has become an indispensable feature on smartphones and even on the new generation of eReaders. While apps can restrict the source and type of content used, browsers (and especially search engines) open a world of possibilities for news, videos and images (much of which is free). And GenYers and those large, promising emerging markets really love free stuff. They’re also increasingly technologically savvy and better at finding content on the web.

The second assumption may be even shakier. The Kindle has become the model for eBook distribution. Though Amazon and its competitors offer free books, most of the content is not free. Amazon has two sources of revenue (as will Apple with its iBooks): the revenue from the hardware (the eReader) and from the content (the eBooks). The second is shared with the publishers. With more users on mobile devices, publishers are hoping that iBooks will be to content what iTunes was for the music industry. But there are some key differences that will make this very difficult. First, music is pretty cheap on iTunes, with singles around $0.99, enticing users to download quick, quality-guaranteed tracks on iTunes, rather than risk viruses and long download times on pirate applications. But eBooks will be a lot more expensive. Even if iBooks tries to compete with Amazon on book price, books would be around $10. This might not seem much if you’re an avid reader with an income that allows you to spend on books continually. But consider that a huge portion of iTunes users are price-sensitive students who buy as many used things as they can… including books. Second, eBooks have a series of barriers to adoption that are hard to overcome, as I mentioned in a previous post. News articles have an even tougher challenge: there’s so much of it free online. And like I mentioned, two key markets in the coming decade for devices (and content) like this are very price sensitive: the now twenty-something GenYers and the booming middle class in emerging markets.

What to do?

The truth or fallacy of these assumptions will be proved in the next few years as mobile adoption increases, and especially as devices like tablets and eReaders, which are still niche products, break into the mass market. But if publishing companies really do think that the iPad and eReaders are the only salvation for their industry, then it’s likely that we’ll continue to see more cities without a paper newpaper and the great names of the media industry disappear.

Jumping on the iPad wagon is one great way to innovate. But it can’t be the only one. These companies will have to reconcile free and paid content, which is not an easy job to do. The New York Times is a perfect example, with its confusing attempt at price discriminating for its content beginning next year. News sites will also have to find a way to create original content, which they can better control, if they don’t want readers to jump on the web and find some other source reporting on the same event. And like so many companies in the age of social networking, media companies will have to find new ways to relate to audiences and distribute and receive information, to avoid becoming one of 3,000 search results on Google.