broadstuff

We had speculated the key issue was Cloud based security, possibly via man-in-the-middle type attack. It was all that, and more - quick update from a useful piece by TechCrunch.

Just to summarize the attack:

1. HC accessed Gmail for a Twitter employee by using the password recovery feature that sends a reset link to a secondary email. In this case the secondary email was an expired Hotmail account, he simply registered it, clicked the link and reset the password. Gmail was then owned.

2. HC then read emails to guess what the original Gmail password was successfully and reset the password so the Twitter employee would not notice the account had changed.

3. HC then used the same password to access the employee’s Twitter email on Google Apps for your domain, getting access to a gold mine of sensitive company information from emails and, particularly, email attachments.

4. HC then used this information along with additional password guesses and resets to take control of other Twitter employee personal and work emails.

5. HC then used the same username/password combinations and password reset features to access AT&T, MobileMe, Amazon and iTunes, among other services. A security hole in iTunes gave HC access to full credit card information in clear text. HC now also had control of Twitter’s domain names at GoDaddy.

6. Even at this point, Twitter had absolutely no idea they had been compromised.

Basic 80/20 lessons:

- Different Passwords for different accounts (use a naming convention to ddifferentiate)

- Don't use stuff you have in public arena as additional security questions

- Large, multi-app cloud services like the Google suite are more risky as a breakin to email breaks into calendars, office etc etc.

Is also worth thinking about password protecting key directories and files, and encrypting key data.

A prediction, by the way - within 3 months Twitter will have moved most of its internal comms, and certainly all its sensitive data, off The Cloud.

One of the risks of owning digital media is that in many cases the supplier's hidden claw is there long after purchase. This was made obvious when people realised that there was a reproduction limit on the number of times they could move their own (paid for) copy of iTunes songs, and was really brought to the fore when Microsoft and Google turned off DRM on media services, rendering a whole lot of (paid for) collections useless and offering scant recompense (See our coverage here).

The obvious conclusion there was don't buy digital music through any form of proprietary system - if you pirate it, or buy CD's it stays yours.

Next up in the digital media own goal stakes is the Amazon Kindle, which has turned off hundreds of users' (paid for) copies of George Orwell's books. Gloriously ironic, as the EFF notes:

In George Orwell's Nineteen Eighty-Four, the protagonist Winston Smith labors in obscurity to make information appear and disappear at the whims of the Ministry of Truth:

This process of continuous alteration was applied not only to newspapers, but to books, periodicals, pamphlets, posters, leaflets, films, sound-tracks, cartoons, photographs — to every kind of literature or documentation which might conceivably hold any political or ideological significance. Day by day and almost minute by minute the past was brought up to date.

It would appear the publisher changed its mind about offering an electronic edition of Orwell's books, and according to the NYT apparently Amazon, whose business lives and dies by publisher happiness, caved in.

Lesson for anybody that wants to learn it is don't buy a Kindle, either buy the book in (uncancellable) paper or pull it off the 'Net and put it on your PC/IPod/etc where it stays safe. By the way, the prices of eBooks vs their costs make music prices look positively tame.

Nice article by Jeremy Toeman about the recent hacking of Twitter Secrets, and the decision issue for for various blogs to publish or not treated as Game Theory - and the Nash Equilibrium being to publish. Referring to the diagram above he explains why the equilibrium is driven to be defective behaviour (where the top right and bottom left quadrants should be reversed in the diagram by the way):

But this is par for the course if your job is breaking news as fast as possible, as there is no reward for being late nor is there a penalty for being inaccurate.

In my opinion the race to be first is full of nothing but losers, as it is utterly unsustainable as there is no loyalty being built by readers who will simply follow a trail to the news, rapidly forgetting who was first yesterday or the day before. While the publishing industry has never exactly rewarded accuracy, modern technology and communications tools are clearly worsening the problem for us poor souls who simply want to be informed.

For any ambitious editor, the decision dynamic is "in the long term we are all dead" (or they at least have moved on, leaving some other sap to count the chickens coming home to roost)

This is actually a model of most "cheat" games, from purloined Twitter documents to greedy merchant bankers - and what it shows is that a system with these dynamics is incapable of reforming itself - hence the existence of laws and regulations.

Now, one objectionette - he has only modelled a 2 party game - in an N Party game, you can have a situation which "nudges" you towards ethical behaviour if the vast majority of other players decide that there is more mileage in heaping opprobrium on the defecting party/s. Not easy in a 2 party game, but let us - for a moment - assume that every other major blog and media operation called TechCrunch a bunch of skanks and called for mass boycotts.

Or, in an age of Social Media, if there was similar from a mass of Twitterers, small cap bloggers etc who are not bound by the same game rules, but whose kudos comes from being ethical.

Plus ca Change in that case........

But nice one - wish I'd written it.....

Last night was the Chinwag event on "Paying the Piper" - ie where is the money in the New Music market and who wins and loses. I must admit to agreeing with @grrrth from Apple who was sitting next to me, who noted that he heard little new since the days of the dotcom era - but in my view this was not the fault of the Chinwag session, or the participants - its more a statement of the condition of the industry, which is in itself an interesting phenomenon.

(Though one new thing I picked up was that Neanderthals could sing as they had had descended larynxes)

Anyway, here are some notes I took where I felt something was said that added value

Dave Haynes (of Soundcloud) noted that the uture of music is not same as future of music industry. I think this point is often forgotten, music has been with us before the current industry structure that is now being dismembered, and will be with us afterwards too.

Dom Hodge (Frukt) - believe in the value of music ie pay the players, or at some point they will exit - trying to find a way to "be helpful" by getting brands and advertising to fund stuff "not in crass way". I think that in the current rush to Freemium it is almost forgotten that apart from CD sales, the other big post war revenue stream for music was advertising

Helienne Lindvall (Guardian Journalist and composer) - Noted that one needs to beware of people who pretend to "liberate content" but are in reality fronting hard assed businesses that are trying to build the value up in their own bit of the value chain and beat it down elsewhere. (Billy Bragg made a similar point last year).

Jon Mitchell(Spotify) did a show of hands in the room - 1 person in the room oc c 100 people didn't use it, and only 1 person paid for it. 1% takeup rate is (i) pretty standard for any Freemium services and is (ii) not enough to pay for the 99 others, whatever the promoters of Free! thinking say. "Near Zero" is not Zero. He also noted that now they are getting to 2m users, they are becoming interesting to advertisers.

Richard Jacobs (MediaCom) noted that there are currently low audience levels and high fragmentation in online music services, which makes for low values for ads. Advertisers will pay in the long run, but won't fund small plays - thus there is need for aggregators (similar to the US style network models for TV and Radio, I think).

Steve Bowbrick who chaired the meeting hypothesized that the ability to sell physical recorded music was a "Golden age" and that the replacement industry will be far smaller, as there is simply not as much money in performances and selling T Shirts. Also, it may be dominated by existing players - for example Joni Mitchell is able to put out records because she can amortize them due to the millions spent on her brand in the days of yore, new players can't justify that now

As to Rights, we didn't get much on that but the aside that although Pandora is making money now it could not on early days, so by definition these companies have to ignore rights in the early days to set up. This is exactly the same "pirate" model we have seen in other media we studied (see diagram at top) where the early players make market share by robbing the rich and giving to the poor for Free! while building market share like billy-o, eventually though they too have to find business models or they go under.

There was an interesting point made by an ex-Grokster chap whose mname I didnt catch ("Just call me Daddy") who is soon to be at Pirate Bay, that screwing the artist was not new "even Little Richard got ripped off" - and that in music today much of the economic value is gone, but the emotional value remains and that is where new revenues are to be found. He also said that Spotify et al were doomed to fail unless they could get flat pricing models, which got him roundly booed (Spotify being the Current Noo Meedja Music Darling whereas Last.fm is so Last.year). But, as my Apple neighbour @grrrth noted:

Apparenly iTunes is going to have to adopt the Spotify model. What? Have no users and make no money?Wake me up when it happens...

(But as we know, hope springs eternal....besides, everyone knows the real game is not to make money from sales but to sell to a desperate Current Media Behemoth )

Also, did you know that:

- Old people who Listen to classical music are richer and worth more to advertisers
- More people watched classic concerts than pop in the UK last year

I call this the Rory Sullivan conundrum after a talk he gave at Telco 2.0 in 2007- essentially, no matter what consumer field you look in, all the money is with the Oldies, but advertisers continually search under the Yoof lamp-post.

But as always, the killer thoughts are the ones we had afterwards in discussions - a few of us were comparing the behaviour of our own teens and those we knew, (I know, I know - its very bad to use your Teen Anecdotes, after all its Not Data Dammit ) but here is the killer point in my view. Those of us above a certain age can remember fondly/embarrassedly/guiltily the First Record We Bought. None of our teens can, because they don't buy them.

What they can remember is the First Computer Game They Bought.

(Update - Rory Cellan-Jones also covered the event here, juxtaposing it with research that says people are moving away from piracy to ad funded models like Spotify. Hmmm......)

Story of the day is the hacking of emails and other documents from Twitter's systems. Now the big hullabaloo is the ethics of what to publish, but we think the real lesson is that if you store your data in The Cloud, you are far more at risk from these sort of occurrences.

As the BBC notes in its coverage:

But companies thinking of migrating all of their e-mail into the cloud might consider what Hacker Croll [The guy who hacked the Twitter systems] told Manuel Borne about the motivation behind his Twitter hack:

"J'espere que mon intervention leur fera prendre conscience que nul n'est a l'abri sur le net."

In other words, he hopes his "intervention" will make Twitter wake up to the fact that nothing is secure on the net. Companies promoting cloud computing - from Google to Amazon to Microsoft - are all confident that their systems just cannot be hacked.

But if you allow your employees - including very senior members of staff - to send confidential information on cloud-based e-mail then you'd better make sure their passwords are super secure.

Especially if its free, as we have noted before the only Service Level at zero cost is zero service, and that if you ain't paying, you ain't the customer. The server's priority is elsewhere, not on you as the client

Update - a number of people have pointed out to me that this was more of a man in the middle problem (see here) but I do think there is more chance of it happening in low budget cloud services than in owned infrastructure.

Two interesting articles on different approaches for media survival. Firstly, why the Economist is working whereas others are not:

Unlike practically all other media “brands,” The Economist remains primarily a print product, and it is valued accordingly. In other words, readers continue to believe its stories have some value. As a result, The Economist has become a living test case of the path not taken by Time and Newsweek, whose Web strategies have succeeded in grabbing eyeballs (Time has 4.7 million unique users a month, and Newsweek has 2 million, compared with The Economist’s 700,000, according to one measure) while dooming their print products to near irrelevance.

And on the opposite extreme, algorithm driven curation from the BNO, as blogger Mike Bracco put it on The Next Web today (from RWW):

, "Unlike their mainstream counterparts the service does a great job of only reporting news worthy of the 'breaking' label. I can attest to this as well as their ability to deliver breaking news before anyone else. I have found them to consistently report news 10-15 minutes before it hits mainstream websites or blogs and well before it is ever reported on TV." In the news game today, being best and first by minutes means it's your link that gets passed along. Breaking News Online is excelling at that game with its short, quick updates.

As to a business model:

The company is going to monetize its research flow, editorial judgment, distribution channels...and links to other peoples' content. If BNO is successful, there is a real risk of original content publishers objecting to the fact that someone else has found a way to make money off of (links sending traffic to) their content.

Both articles show how they are beating competitors from the moe "trad" media - the centre is clearly not holding.

According to Henry Blodget on SAI, Bing is Doomed to Fail

The reason almost 70% of folks use Google is that most folks like Google and most folks are used to Google. If there's a "better" search engine out there, most people probably don't know that it's better (because it's really hard to tell--in part because "better" is in the eye of the beholder), and many people who can tell probably don't care.

I recall similar said for Netscape, IE could never win.....lets see what happens when Bing is packaged as the default search in every WinTel machine.

Following on from the shock that a schoolboy intern at Morgan Stanley is causing the Meedja industry (see below) it seems only right to point out that the Guardian's article on the "Top 100 Movers and Shakers" in the Meedja is probably also a study of a world of large beasts soon before a major extinction.

There are about 10 "Digital Meedja" people in the list, (it even has one blogger, and also oddly a business card printer in this group) but the rest is basically a recitation of Big Media positional power seats, even as many of those positions are tottering as their underlying businesses crumble, as the small, furry, digital mammals of tomorrow's industry burrow away at their foundations.

But then it was put together by a committee - to quote "A panel of experienced media watchers from the worlds of politics, journalism, advertising and the internet judged entrants using three criteria: cultural influence, economic clout and political power of all candidates". Personally I'd have preferred a prediction market, committees being what they are

I'd bet if they went with a Wisdom of Crowds effort they'd get a totally different answer

Funnily enough, I know something of what I speak (for a change, I hear you cry ). The talk I gave at the Media Futures conference was directly on this topic, and how the Meedja is entering a 3-5 year "Creative Destruction" period which promises to shake it to its core. We have actually done quite a lot of research and scenario planning on this (that is an in-post plug for our services, by the way) but the diagram above illustrates the point. We are moving into Pirate World, where freebooters and cut-throats of every ilk will be busy dismembering these large cumbersome beasties. And I don't just mean Olde Media - Web 1.0 companies are also under threat, as Google is finding with its core search market coming under attack.

Just as with the 15 year old Morgan Stanley analyst's work, the data is all out there - you just have to look at it without due prejudice or undue preconceived opinion. It is, as they say, what it is.

Here's a prediction - that over the next 3 years, the changes in this landscape will be the most momentous that the Media industry has ever seen, and that - let me put a number on it - about 2/3rds - of these people won't be here in 2012 (more if the BBC loses its special funding streams). Inclusion in this list may well be akin to being featured as a Great Company in "In Search of Excellence" (most hit the skids within a few years of the book coming out)

There have, over the last few years, been a plethora of reports and pundits on teenagers and how they are purportedly using digital media. I must admit that I didn't recognise quite a bit of what they wrote (see here for example). I actually have teen kids, many of them I suspected didn't, and my empirical observations often were wide of their marks. I did actually begin to suspect that research was being skewed, or at least subconsciously fitted, to produce results that various industry pundits, academics, marketers etc wanted to hear. But a new research note out by Morgan Stanley, written by a 15 year old schoolboy working as an intern, seems far closer to the reality - as I observe it anyway. The Grauniad has published the note in full, over here. Key points are that Teens:

- Teens don't listen to the radio much, and when they do its for music. (I'd add they think DJs who prattle on are w*nkers too)
- Watch TV for specific programs and sports, know how to use the iPlayer, and don't own expensive HDTV gear
- Don't buy newspapers (doesn't mention magazines, which is surprising)
- Play lots of games (girls too, with the Wii) and use the online gaming systems to chat as well as game
- Use PCs, not Macs because thats whats at school and in most homes
- Mainly use Facebook, not Twitter for social networking
- By and large ignore advertising unless its pretty novel or (viral ads) helps them socialise
- Consume a lot of free music (though piracy is apparently receding in favour of streaming)
- Go to the Cinema
- Have cheaper mobile phones on PAYG and don't use expensive mobile services

In my observation the report misses out on IM, which they use very heavily for social networking, and some do listen to BBC Radio 4 for comedy (I'm sorry I haven't a Clue) etc.

There is also a "Whats Hot/Whats Not" bit:

What is hot?
• Anything with a touch screen is desirable.
• Mobile phones with large capacities for music.
• Portable devices that can connect to the internet (iPhones)
• Really big tellies

What is not?
• Anything with wires
• Phones with black and white screens
• Clunky 'brick' phones
• Devices with less than ten-hour battery life

But apparently this research piece "shook the City" - probably because it differs from a lot of the bullsh*t research done by said academics, marketeers and pundits noted above (just look at the comments to the articles linked for a masterclass in denial, by the way).

His report, that dismissed Twitter and described online advertising as pointless, proved to be "one of the clearest and most thought-provoking insights we have seen – so we published it", said Edward Hill-Wood, executive director of Morgan Stanley's European media team.

"We've had dozens and dozens of fund managers, and several CEOs, e-mailing and calling all day," said Hill-Wood, 35, estimating that the note had generated five or six times more feedback than the team's usual reports.

Now to me, the only surprise is that people are surprised, the real lesson to me though is that most of the "shaken and surprised" could have sussed the bulk of these "clearest and most thought-provoking insights we have seen" just by watching their own kids rather than reading a Morgan Stanley report. But it is a very scary lesson about just how little the Captains of Finance - and all their Analysts - know of what is going on. Chancellor of the Exchequer Nigel Lawson once criticized analysts for being "teenage scribblers" - but clearly they need even younger ones

Blimey - it even hit Bloomberg - now thats a surprise! I am wondering, if I let my teenage son write this blog, would it have far more impact with the same material (Probably!)

I was invited to a new event run by the Guardian yesterday, Activate09 (see the program here). It was probably the best conference I've been to in the UK to date* - TED quality with a bit more of a British "not being quite so serious about it all" air. I have made notes, but to be honest others have done a great job of covering it live (check the Twitterstream) and have already blogged copious notes, so I'm going to talk about my highlights, and specifically 9 Key Activations - things that I intend to look into in more detail:

1. Kate Lockhart - How can ICT help Failed States?

Kate was part of team sent to establish order from chaos after the Taliban was ousted from Afghanistan. It was interesting from a Collapsonomics point of view in that they found the UN, World Bank etc had no models with which to start building a state from nothing. Not only that, it seems these organisations are a bit corrupted internally - for examples with mobile phone access the UN tried to sell Ericcson, their "partner". They also found many circular problems eg security needs taxes, which needs security. Sadly, in the end warlords/criminals took over as foreign aid donors wouldn't pay for commercial infrastructure, security, and higher education to prime many of these circular pumps.

She noted that there are about 40 - 100 failed states globally, depending on your definition of "failed" and they have written a book on fixing failed states.

Can technology be used? Most failed states are offline and off-grid - what do you use ICT for? The highest impact is in:

- Market pricing
- telemedicine
- education

And how do we ensure they don't make our mistakes - she hypothesized a blend of design & market forces, and transparent accountabilty. Put budgets online!

2. Arianna Huffington - Digital Media is the only way to expose vested interests.

Arianna (of the Huffington Post) wondered how to clean up vested interests across globe and how does Tech help? Shinig light in dark places is the answer. The Sunlight Foundation was mentioned, putting government data online - but noted that data is not enough, you need to get the User Interface s right to get great data dusplay and get viral analysis tools up (she mentioned an example where a video pans around a room at a hearing and identifies each lobbyist and how much they have paid)

She feel that New Media has major role in fixing society, - eg the banks still in control despite the bailout owing to lobbying. Also she noted that "under the radar" smear campaigns get blanked on the net - Obama would not be president without the Internet for this reason, she argued. She felt new media was better able to deal with fixing the corruption of the b=vested interests as mainstream media suffer from ADD, whereas online media suffer from obsessive compulsive disorder and will carry on picking at the sores long after the mainstream have moved on. (I'm not sure - the mainstream blogosphere seems very similar to mainstream media to me).

3. Nick Bostrom - Existential risks, or how many ways Homo Sapiens can top itself.

Lest we forget, the Dinosaurs had one! Also, 75000 years ago the Toba eruption left c500 reproducing women from whom we all descend, and other homo.x's became extinct. When he looks at great human calamities (wars, massacres etc) - none are very big in scheme of things. We need a cocktail of stuff to finish us off, or a bloody great meteorite.

He then looked at the "what you have to believe" in 3 scenarios of the future Human Condition:

- Only way is up- a posthuman condition, and The Singularity?
- Disaster - we collapse and die or go back to earlier phase
- Cyclical pattern of ups and downs - but its hard to get this right without one downcycle knocking us off

No real conclusions except that you have to believe some hard stuff for the negative conditions to kill us - after all, we only need 500 wombs with a view to survival. Good news, I think....

4. Steve Papa (Endeca) - the Internet as a means of production in the hands of many and its impact of civilisation.

But he noted it could go to the fewer as vested interests will try and nudge it this way. Some points:

- Attention is scarce, (typically consumed by trivia) in abundant information worlds
- Economies of scale are different in Info Age – scale only really helps marketing and selling
- Absolute Power corrupts (Great men are nearly always bad men) - Unscrupulous pursuit of wealth eg TARP lobbying using taxpayer money to screw taxpayers, Google requires you to pay not to show competitors.

As he noted, in the First Industrial Revolution actually power/wealth got sucked up to top, US had to bust them all up in the early 1900’s. The Question for today is: Where is the Adam Smith & Teddy Roosevelt for the 21st century?


5. Matt Locke - Ch4 - - Coping with "Peak Attention"

Quoted Matt Webb saying in 2008 that we’ve hit “peak attention” – now need coping strategies. The Web is experienced as streams of content managed through a few key portals (Google, Facebook etc) – key is increasingly to get attention, which is the limited resource.

He also looked at teens organising campaigns for good eg vs knife/gun culture – “Swords into ploughshares” – “Knife into key”. Claimed that get more value outside what you control, and that "data becomes stories" (cf back to Huffington's Viral Data" - but how do you measure all this?

6. Umair Haque - Zombienomics and what ICT 2.0 can do

Umair talked about why this crash is different and why what comes next will be different too. Whats different? Everything is hyper-connected, new economics apply. (The historians among you may know that the pre-WW1 world was more connected trade-wise than at anytime until the 1980's again, so it may be deja vu......)

We are currently seeing the end of the Zombieconomy – can’t innovate or create value – its flatlined – dominated by the focus of its resources on producing cr*p (eg 6 bladed razor rather than 5). His view is that “(Linear) Strategy is Obsolete” – 20th century capitalism is not fit for 21st century world. On verge of shifting to new form of capitalism.

What wasn't clear to me (and I spoke to Umair afterwards) is how this all gets shifted given the compelling evidence that the vested interests keep their hands on the levers without fairly robust effort (Roosevelt or Lenin)

7. Tom Steinberg, “this new media revolution is not the revolution you’re looking for”

Practical thoughts - noted the difference between real and digital protestors:

"do you know the difference between the fall of the berlin wall and the twitter revolution in iran? The wall fell."

Very pertinent after the whole "turn your avatar green" thing on Twitter. Weak tell or what.

Also made a call for action, Amazon didn’t change the publishing industry by wringing its hands and filling acres of newsprint about industry travails - It just starting doing things better.

So, what actions could nudge politics and society the right way?

- the next generation of public servants could refuse to comply with current norms and conventions.
- change in computing usage which makes it harder to keep secrets (somewaqg noted the best way to do that was to give all state servants USB sticks to leave on trains ).
- some sort of law that introduces new ways of distributing and allocating power under the radar - radical social media?

8. Sugata Mitra - things to do with a hole in the wall

Amazing talk - essentially put a hole in the wall, stick a computer in it, and let kids rip with it. Amazing results:

- kids don’t need to be taught how to use computers, or even the language: “you gave us a machine that worked in English, so we taught ourselves English”
- sharing a computer was more effective for learning than having one each, as it forced discussion and learning
- This was amazing - put DNA theory on a computer in English in Indian rural village - 2 onths later, Indian kids had gone a huge wat to understanding subject and language. Came about as kids competed for status of knowing the most.

If thats what you can do with one hole in the wall......

9. Bradley Horowitz and the Darwinian Internet

Two key points:

- There is no master plan for the internet. It’s made up of billions of contributions, evolves more like an ant colony than anything else (Is Eugene Marais' "The Soul of the White Ant thus the best Internet book?)
* Ideas (or ‘memes’) are being selected for in natural selection, and great number of web 2.0 startups have not survived. Darwin did not say the fittest survived, he said the most adaptable survive.

We need to keep this in mind - start-ups are a primordial soup from which successful companies evolve. How do we enrich the soup?

Well done the Guardian team......looking forward to Activate10

*Update - MediaFutures, which I attended 2 days later, was pretty damn good too - and I spoke at that one so it must've been good too