I wouldn’t necessarily call The Economist “old media”, but it is a magazine after all. Still, their business model bucks the category trend in that it is growing its subscription base and has secured an audience of some of the most wealthy, influential people in the world. I’ll spare you further details of their rise to power - check out this NPR story if you want to know more about their business model.

Last Friday, The Economist continued to buck the trend by announcing the specifics of their newest business endeavor: Project Red Stripe.

Here is how they describe it:

After four and a half months of sweat and toil we are pleased to announce our idea:

We are developing a web service that harnesses the collective intelligence of The Economist Group’s community, enabling them to contribute their skills and knowledge to international and local development organisations. These business minds will help find solutions to the world’s most important development problems.

It will be a global platform that helps to offset the brain drain, by making expertise flow back into the developing world. We’ve codenamed the service “Lughenjo”, an Tuvetan word meaning gift.

In a nutshell, The Economisthas established a new instrument to harness crowdsourcing (see my article from June 25th for more info).

Much like InnoCentivehas harnessed the brainpower of the scientific community to help businesses solve problems across a range of industries, the folks at this magazine have decided that their current readership - a sizable chunk of the world’s C-level executives - needs to hop on the wisdom-of-crowds bandwagon.  However, unlike InnoCentive, Lughenjo will be designed as a nonprofit, non-compensated crowdsourcing web tool.

Some are praising this magazine, largely known as THE source for free-market capitalism, for its decision to enter the world of charitable giving.  However, a lot of peopleare questioning why the world needs Lughenjo.  It seems the free-market capitalists in the bloggosphere are scoffing at the very idea that The Economistwould be asking them to rally around the idea of providing intelligence - to anybody - for free.

A few quotes from Slashdot:

…Committee thinking is a disease. The bigger the committee, the worse it gets. Human collaborative efficiency for creative works tops out at around 4 or 5 people. If you hope to invent new paradigms, you’ll be hard-pressed to accomplish it with even as many a three people, and even two is pushing it.

…I’m sure as hell not giving a money-making idea to The Economist Group if I’m not getting a piece of the pie. If it might save the world, maybe; if it’s not money-making and helps folks, I probably would.

…I’m willing to bet that Project Red Stripe springs from their current advertising agency - BBDO.  Ad agencies are usually credited with such poor ideas.

Wow.  I don’t think The Economist saw this coming.  Sounds like the readers of the magazine - almost all indicated they were - didn’t like the idea of giving something for nothing.  Perhaps The Economist will have an uphill battle to get their capitalist readers to act, if only for a moment, as socialists.

Or, perhaps they know this already.  The announcement of Lughenjo came with a rather large caveat:

There are many questions, which we have thought long and hard over. Does the world need another volunteer-matching site? Will time-poor professionals donate their time? Do NGOs and other organisations actually need such a site? Can you make money on the back of charity?

Looks like the magazine admits they are entering the crowdsourcing pool nose first.  This will be a very interesting case to watch as it has implications much greater than InnoCentive or the like.  A few questions I have:

1. The Economistis trying to leverage an existing customer base - readers - and get them to organize in crowdsourcing…for free. To date, I don’t know of another “old media” channel that goes this route.  Most traditional media networks have opened up their business models to CGM - think of all the camera-phone shots you see on the nightly news - but few have asked their audiences to rally around a cause like this.  Could other media channels approach their audiences in similar ways?
2. When a person contributes to a client requested co-creation opportunity they get 15 minutes of fame in return.  Think of the guy who got his commercial on the Super Bowl.  This fame is incentive to contribute.  If Lughenjo isn’t going to provide a reward for ideas like InnoCentive and isn’t going to provide a chance for fame like other media channels that incorporate UGC, what is The Economist going to dangle in front of people.  Right now they claim the reward is props on the website and a subscription to the magazine.  Perhaps they need to blow this out a bit more - have a rewards ceremony or an idea of the year event.  Take on Nobel?  Why not?
3. More importantly for ad agencies and marketers (like me), can we finally approach a company’s customer base with a request to crowdsource?  Crowdsource what?  It seems that many agencies are trying to get their clients to open up their businesses for co-creation opportunities - create an ad, name a product, customize a t-shirt - but is there a client out there willing to cut from the pack like The Economist?