Media Web 2.0

The Beeb notes that Amazon has entered the lists to joust with Apple for Music Downloads in the UK.

Amazon MP3 will sell tracks from 59p and albums from £3.

The new music store will offer more than 3 million songs that will work on any digital music player, including Apple's iPod.

The move puts Amazon in direct competition with Apple for a stake in the growing market of online music sales, which in Britain alone was worth an estimated £163m in 2007.

With Apple at a gouging 79p in the UK, its great to see competition - especially with a DRM free model - and its interesting to see Amazon taking the "Microsoft" role to Apple in the music game. The real shame is on Planet Mobile, whose market this should have been before Apple, and who could still have played the Amazon hand 3 years ago.

Ball, dropped......... I wonder whether Planet Video will drop the same balls today?

As to how useful it is - I use the "Roderick Falconer Long Tail Test", which Amazon passes with flying colours*.

To explain - Roderick Falconer is a little known today (micro-cult?) late Glam/early new wave 70's musician who had a brief bit of fame in my Uni days (alt.disco.thank_god). If a system is mining the long tail as far as him, then it is likely to be interesting enough to be worth bothering with as a source of music (Napster got to him in about late 2000).

Now I happen to like some of his stuff (ie if you like Bowie, Roxy, Talking Heads etc ), but pick your own Roderick if you don't - be fascinated to know who you would test for as your micro-cult....

* and 79p a song.....premium for the micro cult customers

From the FT this morning:

Once strange bedfellows, corporations and rock stars are increasingly acting as co-conspirators, cementing what used to be loose partnerships with lasting tie-ups that help maximise visibility and profit.

The trend has been boosted by the proliferation of television channels, independent film houses and internet "rich media" (with streaming graphics and sound), all of which are constantly on the hunt for unique music.

Not to mention market failure of the traditional ways for musicians to get paid!

Anyways, we put our analytical hats on and realised there wer a number of business models that can be applied here:

Firstly, direct sponsorship - why sponsor a concert when you can tie your brand to a band - Wrigley's Pink Floyd say, or the Colgate White Stripes. I mean, Queen's already done it.....

Secondly, branded song titles - imagine how much better the world could have been with such classics as "I can't get no Satisfaction (without a Camel), or maybe Welcome to the Hotel Hilton

And of course there is in song placement - one can imagine such immortal lyrics as:

- "Walk on the Tuff-Flo Carpet side"
- "Hello Nestle my old friend"

or even

- "Never going to give (insert your product here) up"

...and the opportunities for Rap are boundless

The joy of this latter model is that you can leave little spaces so whichever channel is playing the song can insert the brand of their choice into lyric - the Google Adwords model of Music advertising.

The buzz on Twitter this morning as been the mashups possible based on the "mislayed" database of the British National Party's (a UK far right party) database - such as linking to Google maps to see where they live (see the picture).



Mike Butcher put the scoop out so deserves the link for the analysis:

The implications of this action are pretty big. I speculated on Twitter this morning that a mashup which identified the actual locations of BNP members would be highly problematic, and possibly even subject to vigilante attack. However I still believe that a map which showed more general areas, like towns and cities, could actually be helpful to local authorities for creating policies to tackle attitudes towards diversity. If you were a local councillor and had been made aware that there were lots of BNP members in your area, you may be able to do something about the attitudes which lead to support for such a far-right political party.

But now this more accurate map is out of the bag, and others are probably planning similar maps, the implications are far reaching. What no-one would wish is for a witch-hunt to begin.

My contribution on Twitter, tongue in cheek this morning, was that if they think this is bad wait till the telemarketers get this data

However, there is a more sober point, re vigilantes etc as Mike notes. 3 weeks ago I was at the Berlin Web Expo which was held in the AlexanderPlatz, the centre of Old East Berlin. To get into the mood I read, along with Marx et al, a book called StasiLand - about the experience of life under the Stasi (secret police). Did you know at the end 1 in about 80 people was an informer fo the Stasi? This drove a society of doubt, paranoia and odd behaviour. And this is a potential dark side of social media as well, as the above example shows.

Where will it all end? I don't know, but clearly the value of your data is valuable not just for positive benefits, but also negative (by the way, am I the only one who is wondering why so much valuable user data is getting "lost" right now?)

If Barack Obama can live up to a tenth of the hopes, prayers, special interests and agendas that others have foisted on his shoulders, he deserves to be canonised while still alive. Typical of the Tasks of St Barack is now to live up to the over-egged beliefs the techgeek industry had vested in him ( What - Tech overhyping something - nevah! ) - from the BBC:

Now some in the industry think it could be "pay-back time" as they looks to the country's first tech savvy President to do his bit to push technology into a new era.

"He is the first real president who seems to understand technology and the needs of the industry," said Tim O'Reilly, the man credited with coining the term 'web 2.0' and who is generally regarded as one of the industry's visionaries.

"The guy's my age," said commentator and founder of Wired magazine John Battelle

" This guy grew up knowing what an apple is besides the thing you eat, and using e-mail and Twitter. He understands what Facebook is and he has young kids that are completely digital.

"I think there is a general sense that he and the people he will employ totally get the web."

This would of course be why the Barack Obama Twitter address, active in those heady days when they wanted your spare change to create change, is now dormant. It's last post (trumpeted voluntarily) was:

We just made history. All of this happened because you gave your time, talent and passion. All of this happened because of you. Thanks

Or translated - "so long, and thanks for all the cash"

He "gets it" only too well - let the chatterati go on babbling to themselves now - they got the Conversation, he got the Loot

Its morbidly fascinating to watch all the diverse special interests being lobbied for under the general heading of the "US CTO's" role, and a worrying but quite widespread general lack of concern about what is actually strategically critical rather than tactically profitable to this or that lobby.

Well, here's a big one that does matter - broadband pipes.

We are in the process of finishing a major piece of research on the future of online video, and one of the fascinating things you will find is that the countries pulling way ahead (Japan, South Korea, France, Nordics) - on both size of pipes ( with 16 Mb/sec+ speeds ), and low cost of access - have strong government involvement.

And the US actually has quite low mean speeds and mean broadband penetration, and pricing above that of the frontrunners - and that means low competitiveness in the critical future area of digital logistics. If St Barack did just One Big Thing in the techworld in his first term of office, just getting the US to France or Finland's level of performance (never mind Japan or Korea) would be a major achievement - and like the highway and dam building programs of the New Deal, a large amount of good would flow.

There is an interesting report out today on the game theory of the music industry (See here on El Reg - though I saw it first on TechDirt). This led me to thinking about how this music game theory may be applied to online video. Consider their economic analysis for music:



What the model shows is that the current situation is non optimal. The distributor, by underpricing the broadband assets, is incurring extra traffic (X axis) without being able to attract the revenue for it that exists in the market (Y axis). While this effect is "interesting" for Audio, it gets into the "Catastrophic" mode for Video, as the bandwidth impact for underpricing video is far, far worse.

Sadly, the game theory the report outlines for the players (aggregators, rights collectors, distributors) is non optimal today, as there is very little chance that they will collaborate to increase the market value - the inclination to defect is more likely. This leads to a broken supply chain with value (and new content creation) leaking away.

Now again, this is "interesting" for music - but as an industry its a fraction of the size of video - so if the same were to occur there it would be....well, you got the picture.

The (half a) trillion dollar question of course is how one can incentivise them to "play nice" together - clearly some form of extracting that revenue and allowing (i) The Distributors invest in capacity and (ii) some revenues to move back into content creation would help. As the authors note:

"Fixing the broken supply chain between content and connectivity provides more reasons to invest... Not only does the market become more buoyant, due to less leakage and more reward, but it also becomes more diverse - as those songwriters, publishers, artists, and record labels currently contemplating leaving the industry choose to stay, whilst more parties - be they rights holders or rights users - outside of the industry they choose to enter."

El Reg notes that there are 4 possible scenarios to fix the market:

The first option, "do nothing", means the negative externalities simply pile up. The second is to step up litigation and prohibition. However,the paper notes, "there is little evidence suggesting the costly process of pushing down on the black market will indeed raise up the demand for the licensed market."

The other two options involve licensing file sharing networks: pulling services like the old Napster or Oink into the legitimate market. There's a flat tax or levy approach to charging for this - sticking (for example) £2 on everybody's monthly broadband bill. However, this may cause more problems than it cures, the authors caution - since nobody has an incentive to invest in creating or promoting new music services.

But there's also a voluntary subscription method of offering these. More work is needed on this too, the authors recommend, such as calculating the effect on today's players such as iTunes and the displacement costs. But the inference we are invited to make is that this is the most attractive of the four, provided the incentives can be lined up.

Techdirt has a point I think when they note that a bit more thinking may be needed, as the authors:

....don't seem to take into account the idea that (a) there are other players in the market that should be considered in the ecosystem and (b) one of the three legs of the stool set forth in the premise (the collections societies) may not be needed. If you take them out of the equation, but plug in other components of the market (say, the musicians themselves) you can quite easily see the model working quite differently than what's described in the report.

Interestingly, I see that today a UK company is offering a deal with as much music as you can eat for £100 per annum. Now if that were to happen for Video, and a proportion of that surplus were returned to the pipe providers and new content creators in both cases, it could have the makings of a market structure.

Disclosure - This is funny - after writing this post I read that one of the report's authors is Telebusillis / STL Partners' Keith McMahon, who I'm working with on the Future of Online Video Distribution (I'll be presenting some of the findings as part of the Telco 2.0 Initiative next week next week) - I didn't know he was doing the music report - and he doesn't know I've written this - yet

On my Yahoo reader page today this mid-day - the news of the travails of ePorn:

[Bill] Tancer, general manager of global research at Hitwise, an Internet tracking company, said one of the major shifts in Internet use in the past decade had been the fall off in interest in pornography or adult entertainment sites.

He said surfing for porn had dropped to about 10 percent of searches from 20 percent a decade ago, and the hottest Internet searches now are for social networking sites.

"As social networking traffic has increased, visits to porn sites have decreased," said Tancer, indicated that the 18-24 year old age group particularly was searching less for porn.

"My theory is that young users spend so much time on social networks that they don't have time to look at adult sites."

Yeah right. (Actually, I'd argue that the pornification of our culture over the last 10 years, and the sort of stuff some people are putting up on their SocNet pages makes it largely unnecessary to hunt down peek-a-boo pornsites )

More seriously, Porn is suffering from the same problems of all other Mainstream Media - YouTube-alikes like YouPorn are allowing User (de)Generated Content and pirated movie clips to be uploaded, thus destroying the credit-card economics of Porno 1.0. Added to that, the competition for wallet and attention from other adult sports like gambling, gaming and gene tracing.

The Porn industry has typically been a bellwether for other types of mainstream media and online technology, so it will be fascinating to watch (as it were) what the industry does next.

More seriously, at the end of the article, Tancer notes the increasing need for filtering, something we have been banging on about for quite a while:

But Tancer said the speed at which information spread on the Internet had meant in some cases it was consumers generating the story and the media is last to record it -- or fact-check it.

"With the explosion of this type of false information on the Internet I think we will see someone come forward and develop a new type of software that can filter for the most accurate information," he said.

"Maybe accuracy is the next thing we will all search for."

After the United debacle, that would be a very good idea.

Matthew Ingram wrote a piece today that raises an issue that we've also become more and more aware of - the shoddy state of online news.. Matthew was talking about the way Techmeme attracts volumes of PR regurgitating clamp-ons to every story, and - in my opinion anyway - the stories themselves are increasingly "PR product pimp" driven - shiny gadgets etc rather than the harder analytics.

The above 4x4 matrix serves as an attempt to explain what seems to be the dynamic today, albeit a bit simply. Mainstream media has (had?) a combination of revenues from subscriptions through classifieds to pure Ad funding, which allowed them to run independent "hard" news as well as the good old PR pimps etc - and even there they typically used to put in at least some analysis and balance.

The Internet is different. The dream was that it would free up chained content providers and a utopian cornucopia of content would flow. The reality, as Matthew is articulating, is that there is a huge amount of crap, and its (probably) getting crapper. There are 2 main reasons for this we can see:

(i) Direct Economics - the money comes from Advertising and PR - but the Internet Ads are based on clicks or direct relevance - so they reward focus on stuff that (a) drives traffic and (b) drives purchasing behaviour. There is an extra cost to providing higher quality "hard" analysis, but the last thing a PR pimp wants is a good, hard, honest look at the shiny shiny thing they're flogging. No, they want the mass clamp ons, the uncritical praise, the hype merchanting. Thats where the funding will go / is going, and those that pay the piper....... so even the "hard analysis" will increasingly be "Spinalysis". You've seen it all before elsewhere, I know, but that just reinforces the proof.

(ii) "Indirect" Economics - In any market when there is little (or no) economic benefit to providing quality, cr*p drives out good quality products, and it gets even worse. This is a fairly well known economic law. In this case, as everything is near free if it is uncritical and on message, its clear that "hard" and "off message" stuff will wither on the newsvine

But, I hear you cry, what of the gentle readers - they will go elsewhere, to better, nicer content. To this I riposte that if that were true, we firstly wouldn't have the current emerging situation and secondly who, precisely will pay for the right stuff?

So how does this trend get reversed?

- One way is to get "high end" advertising to sponsor a higher quality type of content, reaching higher quality people (ie fewer of them, but higher disposable income)

- Finding a way to attract subscription to desirable content. At the moment, the dilemma is no one will subscribe unless they know the quality is good, but to show people the goods before subscription risks copying and distribution by content piracy.

Given that the latter has proven extremely difficult to date, then the formers is probably the only viable option today except for very niche content, but even then many of those advertisers will want to steer clear of very contentious stories - the true independent hard edge stuff - hence, in this model, the sort of journalism that made the Times, the New York Times, the Washington Post etc famous is likely to be consigned to the Online Deadpool. The only other hopes are legislation and "forced subscription"

- Legislation that puts a floor on the level of cr*p players can sink to

- Ironically, tax funded services - such as the BBC - have a saviour role here, simply because they can afford to produce a higher quality online content than the "commercial" market can afford, they will potentially drive some of the cr*p out the market simply by giving a large enough bunch of users an alternative source.

Sadly of course, in many subjects people want prejudices confirmed rather than balanced reporting, so the forces pulling towards a race to the bottom are still fairly strong.

By the way, this is where I read Jeff Jarvis's diatribe against the Ad Anti Trust with some amazement - as a newshound who is watching his industry being ripped apart by precisely these commercial dynamics I am somewhat surprised he is against an investigation into anticompetitive pressures and any attempts to force competition back into this market.

It is a fact (usually downplayed for public consumption) that there is a lot of por...Adult Content* on the 'Net. Also downplayed is that as an industry it is very cutting edge in its use of new technologies, owing to the surplus funding it gets from its eager customers. It is often the "early adopter" of many later standards. However, the industry has been going through the same travails as the Mainstream from enthusiastic amateurs making free user generated content, and new services like YouPorn following in YouTube's wake and being vast services for posting up copyrighted content.

And now it looks like its forging the way in determining how this issue will evolve - from TechCrunch:

...the U.S. District Court in the Northern District of California, threw out adult entertainment company IO Group’s 2006 copyright infringement case against Veoh today. At the time Veoh had some user-uploaded porn on its service that belonged to IO Group. Despite quick takedowns from DMCA notices, IO Group sued anyway.

A key issue of the case turned on whether or not Veoh should lose DMCA safe harbor protection because they transcoded user uploaded videos to the Flash format, something every online Flash video site does as a matter of course.

IO Group argued that the transcoding made Veoh a direct infringer and that the materials were under their direct control. Lloyd disagreed, saying “Here, Veoh has simply established a system whereby software automatically processes user-submitted content and recasts it in a format that is readily accessible to its users. Veoh preselects the software parameters for the process from a range of default values set by the thirdparty software…But Veoh does not itself actively participate or supervise the uploading of files. Nor does it preview or select the files before the upload is completed. Instead, video files are uploaded through an automated process which is initiated entirely at the volition of Veoh’s users.”

It will be interesting to see how this ruling reflects on the much higher staked Viacom / Youtube spat.....

*in fact, porn is now having to compete like never before for attention and wallet with other Adult vices like gambling.

A slow day on Techmeme (in that so much of the news wasn't really new today - leading to a short discussion on Twitter about where the Zeitgeist had gone), so here are some snippets from it that were more interesting:

In Bronze position - the Pew Internet Centre with the news that we are taking news from conventional and online sources. Actually, to be fair they've come up with some convenient "tribes", so its great for that page on the Powerpoint when it finds finds four distinct segments in today's news audience:

- Net-Newsers (13%), relatively young, who only use the 'net for news
- Integrators, who comprise 23% of the public; older, who integrate the 'net and traditional sources
- Traditionalists - the oldest (median age: 52) and largest news segment (46% of the public);
- Disengaged (14%), less educated and affluent, who stand out for their low levels of interest in the news and news consumption.

Not hard to predict from standard demographics and adoption curves, though - which is in itself interesting, as it means the outcome of the game is in itself fairly predictable. Full PDF is over here

Secondly, in Silver - Microsoft is trying to compete with Google by differentiating its search:

Specifically, the company believes examining a full sequence of user queries can lead to more useful results. Today, the company only keeps track of the immediately prior search, but often users use search engines to explore subject areas broadly, said Satya Nadella, senior vice president of Microsoft's search, portal and advertising platform group, at the Search Engine Strategies conference here

This story is actually part of a line that started running a few weeks ago (we covered it here) and using deeper context based search as a Google antidote is hardly news - but hopefully it shows real intent.

But lastly, and for Gold - from the Telegraph, comes the astounding news that we find attractive people of the opposite sex - er - more attractive!

"We found that shorter, slimmer females with long slender legs, a curvy figure and larger breasts are more attractive," said lead researcher Dr William Brown of Brunel University.

Conversely tall men with broad shoulders and relatively short legs in comparison to the length of their upper body are the most attractive to women, say the researchers.

Who would have thought......

From the BBC:

Six of the UK's biggest net providers (BSkyB, Virgin, Orange, Tiscali, Carphone Warehouse, and BT) have agreed a plan with the music industry to tackle piracy online.

The deal, negotiated by the government, will see hundreds of thousands of letters sent to net users suspected of illegally sharing music.

But the music industry wants people's internet cut off if they ignore repeated warnings, something the web firms say they are not prepared to do.

No change there, then - so what is different?

The plan commits the firms to working towards a "significant reduction" in the illegal sharing of music.

It also commits the net firms to develop legal music services, the BBC has been told. The BBC has been told that the firms have agreed to ensure their customers know it is illegal to share copyrighted music. It is believed that the memorandum also requires net firms to go further in their attempts to tackle illegal file-sharing.

At the same time the government is also expected to start a consultation exercise that could result in laws that force net firms to tackle music piracy.

We heartily endorse the formation of legal music services to compete with iTunes, and are delighted the government will tackle music piracy. A good start to tackling piracy would be to examine the absurd prices music companies goug.... charge for online music, when most of the cost of physical reproduction and distribution has been stripped away in the online model.

This is not a one sided game, the music industry is as much an actor in its own travails as are those evil and venal members of the public. In fact, as iTunes showed, if you charge reasonable prices for a decent service there is a market to be made. Failure to address this issue will make any law an ass.

But you know all this - and as Al Stewart once sang, the more it changes, the more it stays the same. (You can buy that legally over here)

Update - the Indy suggests there will be a £30 flat fee licence for music downloading:

Internet users could face an annual charge of up to £30 to download music, under plans to be unveiled today that aim to tackle illegal file-sharing.

Ministers are backing proposals that would enable millions of broadband users to pay an annual levy which would allow them to copy as much – previously illegal – music from the internet as they wanted. The money raised would be channelled back to the rights-holders, with artists responsible for the most popular songs receiving a bigger slice of the cash.

Some are wailing and gnashing teeth of course but that seems quite a sensible compromise. So long as the creators do see it.....