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History Repeats Itself: Learning From Transistor Radios

Steve Outing points to a new piece by Poynter blogger Rich Gordon, which describes the fall of the U.S. electronics industry to cheap Japanese radios, and how newspapers are making the same mistake.

Newspapers and malls alike are focusing on their existing businesses because that's where they get their money. Gordon is absolutely terrified because he sees how much money online operations are making...and despite the very clear trends in the growth and influence of online media, how little it is affecting the way these companies do business. 

Follow the money, follow the power.

Outing goes on to quote Gordon: "Thinking back to the lessons of rock 'n' roll radio, portability may be the most important media attribute for young people. And a new generation of portable devices -- cellphones, iPods and PlayStation Portables -- might be today's transistor radios."

Silicon Valley: Supreme Court "Doesn't Know Jack"

Editorial or news? I get mixed signals when I read SiliconValley.com's analysis of today's MGM vs Grokster decision. You'd think the author of that blog, John Paczkowski, had an interest in staying on the good side of the VC community or something.

Agreed, the study is decidedly non-alarmist in tone, and does conclude that the impact of file sharing on the music industry is unclear. However, it appears the Court ruled that just knowing about noninfringing uses of P2P wasn't enough to offset actively encouraging people to steal files. Lots of us - Grokster, Streamcast and Paczkowski included - knew what kind of reputation Napster had. So after Napster went down, why did some marketing genius at Grokster decided to promote the service as a Napster alternative?

The American way of life includes an approach to English law that provides incentives for entrepreneurs. Paczkowski and I have won the genetic lottery, living in a time and place of tremendous opportunity. Value is created by understanding how many forces, including regulatory ire, factor in. You may be upset that the guys who manufacture air bags for autos basically won a license to mint money when laws to mandate air bags went into effect. But to someone's credit, someone saw a need, took some risk, and the rest is history.

Maybe I'm looking at this the wrong way. Maybe I should be egging authors like Paczkowski on, in hopes that more people will come to the wrong conclusion. I'm sure that's exactly what Shawn Fanning, Jordan Mendelson and Ron Conway are doing at this red hot moment.

Congratulations, guys. You learned, and you're in a far better place for all that.

Link: FTC P2P Study (Adobe Acrobat required)

MGM v. Grokster: Inside the Supreme Court's Decision

GroksterReading today's Supreme Court unanimous ruling, I think Grokster lost simply because they wanted it both ways. They wanted to be a passive operator like AOL without having to monitor the (il)legality of what their customers do. Yet they want to operate their business like a network and collect affiliate and transaction fees. And they're still in denial - their home page still celebrates the Ninth Circuit ruling that was reversed today.

P2P progress is hampered by so many flawed arguments. Tim Armstrong's blog of the case is one of the highest rated citations on Google - and yet, what he says about the iPod and his supporting arguments seem somehow incorrect. Steve Jobs knew what he was doing when he negotiated with MPEG-LA to get the MPEG licenses, and the entire iTunes business model was based on legal music online delivery. The Open Mobile Alliance knew what it was doing as well when it negotiated a similar license. You can't be in the business of online music and not understand the significance of copyright.

It makes it much harder when decisions like this are used by people to reassure themselves that the suits and the courts "don't get it". Armstrong argues that MGM suits don't believe that people can legally rip their own CDs. Hello? The 1992 Audio Home Recording Act attempts to shield consumers for home copying for noncommercial use and provides limited protection for companies from infringement liability. Did Grokster pay the 3 percent statutor blanket license fee required by the Act? I doubt it. For them, it would be like paying a tax. Or paying the rights holders.

People like Corante's Ernie Miller are right when they argue that the notions behind the mechanical reproduction compulsory are dated. Ernie also points out some useful updates to the P2P discussion on GrafoDexia.

An Early Peek at Microsoft's RSS Strategy

LuckymagMicrosoft is showing off Microsoft Internet Explorer 7.0 at Gnomedex, with an emphasis on its RSS capabilities. Despite several observers being underwhelmed by the actual deliverables, Dave Winer had an interesting insight into Microsoft's strategy:

"...There were applications of RSS that aren't about news. Like Audible's NY Times Best Seller list, or an iTunes music playlist, or lists of Sharepoint documents, or browser bookmarks. Lists are all over the place, and people are starting to move them around via RSS, and they are not the usual kind of data that has been carried by RSS in the past."

Techies know list support has been long established through standards like OPML. Microsoft's implementation of an API (application program interface) to enable RSS on all sorts of applications across a multitude of devices, mobile or otherwise, as well as its support for enclosures (click on a list item, read the article or watch the video) is a prerequisite for making lists really useful.

There's the table of contents in the latest issue of Lucky magazine. There's the store directory at the local mall. There's the list of all of your best friends that you share your life's experiences with. All of these lists, if synched up properly, aren't going to change the world in the way Google did. However, they just might help you find something cool at the store that you want to share with your friends.

In a media-obsessed world like ours, that one thing may be more than enough.

Supreme Court Rules 5-4 For Eminent Domain

Magic8ballIn a victory for city planners, the Supreme Court ruled 5-4 on Thursday to give local governments the discretion to take private property for economic development. They ruled that the transfer of land to private investors for projects promising to bring jobs or commerce was a public use, just like building a park or paving a road. This decision upholds an earlier 4-3 decision by the Connecticut Supreme Court. 

Most stories focus on the human interest side of the story - people like Susette Kelo and her neighbors, some of whom have lived in the tony New London for decades. It is tougher to accurately describe the looming challenges facing the city, which like other cities is facing the cumulative weight of decisions made over decades.

There are indications that not all is being handled fairly in New London: a notable exception to the plan to clear-cut the neighborhood is the Italian Dramatic Club, a politically connected "social club" of Connecticut's political establishment, which is located in the very same neighborhood as all the homes targeted for destruction.

There are an estimated 10,000 cases of condemnation or threatened condemnation for the benefit of private parties occurred between 1998 and 2003, according to a study for the libertarian Institute for Justice. Shopping center industry group ICSC has taken no side on this issue, noting that while it “...is a strong advocate of private property owners' rights, (they) recognize that eminent domain is an important economic development tool. However, it should be used only when all standards and safeguards for property owners have been applied.”

In the medium term, expect to see a tough fight between telecoms and municipalities over the municipalities ability to override state and federal regulatory bodies like NARUC to overbuild local broadband networks. Cities may now have the authority to overbuild marginally useful networks that the local exchange carriers have neglected to maintain, in favor of deals with newer companies like ill-fated Richochet Networks, which promised to build 21st century broadband networks that were free of the mistakes of the past, only to fall under the weight of the empty promises of its executives.

In an era of shortages, there will be no easy answers.

Link: Kelo v. City of New London (Adobe Acrobat required)

Hope For IPTV: Inside SBC + EchoStar

Nokia_tabletxlNetwork World reports a $500 million exclusive partnership between SBC and EchoStar to deliver voice, video and data. The deal helps establish a standard value per subscriber and establishes a foundation that looks more like mobile broadband than rehashed personal video recorders.

The announcement indicates the companies will develop something called HomeZone, perhaps resulting in a mega set-top box that integrates satellite TV, DSL Internet access, and home wireless LAN, and unnamed next-generation services.

Analysts were already starting to share my rather dismal view on the short-term potential of IP TV. Todd Chanko of Jupiter Research dismissed the SBC HomeZone as a "wacky" idea in the same league as Akimbo.

Yet for all that, there is some light at the end of the tunnel. The SBC/EchoStar deal helps establish a value for each subscriber that has been missing from earlier definitions of the IP TV service. 

Better, the planned HomeZone functionality sounds more like the Nokia 770 than the 2wire box. Future growth in broadband subscriber values are going to come from incremental mobile broadband services, not TiVo-like services which have already become commoditized.

From the sound of things, while the SBC/EchoStar combo may not be all that in the short term, both SBC and EchoStar CEO Charlie Ergen are no strangers to patience.

Link: SBC HomeZone Presentation (Adobe Acrobat required)

Six Months Later: Bloggers vs Mainstream Media

RedcrossIt's been six months since the deadly tsunami struck 11 countries and killed 200,000 people. At that time, I challenged the viability of blogs in providing perspective, and just maybe getting aid to places after the mainstream media has decided to shine the spotlight elsewhere. 

So what's the latest?

As far as actual aid, a Boston University survey revealed that 46% -- nearly half -- of US adults gave an average of $174 per household for a sum of nearly $1.5 billion in private aid.

Looking through the blogoverse, the last update on leading blog South-East Asia Earthquake and Tsunami Blog was on June 10, when there were five new entries. There are fifty different contributors listed, which seems to provide some contrast. Typical entries focus on graft, updates on early warning systems, and human interest stories. There is a wikipedia entry, but one gets the sense that even with more contributions, the description there today will not change much over time.

Reviewing mainstream media in comparison, there are a variety of recaps including a summary from Reuters and an assessment from President Clinton published in the New York Times (registration required). As the special envoy for tsunami relief for the United Nations, President Clinton mentions his efforts to get tsunami relief workers to agree to a four step agenda, centering on (1) the need to coordinate efforts, (2) finance reconstruction efforts to restore livelihoods, (3) move people from tents into decent transitional shelters (not even real homes yet!), and (4) ensure that all affected parties have a voice, especially those groups who have little political representation.

The difference between the two accounts is like night and day: a summary of the situation, followed by an action plan; or a series of missives describing misdeeds by junior level bureaucrats and feelgood stories about aiding the elderly. It seems the ability of the collective blogoverse to apply critical thinking to the tsunami problem is mirrored by the site traffic to the Red Cross website, shown above.

Scanning through blog entries, no matter how many, will not lead to understanding. Even Nick Denton, publisher of Gawker Media, acknowledges that blogs are "much better at tearing things down - people, careers, brands - than it is at building them up."

Newsrooms aren't given the charter to wreck lives (although coverage of certain issues often makes it seem otherwise). Newsrooms are composed of professionals who are chartered with making issues of the day understandable to their audience. In this vague new world of net journalism, these professionals are increasingly faced with novel challenges of how best to cover issues, free from conflicts of interest.

No one has a monopoly on the truth. Blogs like Zeyad's HealingIraq, Frederic Joignot's opposing views in his Journal of Ideas, and Debka's militant viewpoints provide ammunition for just about any argument, and indeed, help keep the mainstream media honest.

But like the parable of the blind men and the elephant, the presence of both US media and Al Arabiya in the Middle East provide citizens with the perspectives they need to understand issues that cannot be reduced to sound bites. Former CNN journalist Riz Khan cited the need to "provide a complete picture on global issues" as a major reason for his move to Al Jazeera International.

My take: put fifty blogging monkeys in a room full of typewriters, and after a hundred years you still won't get the kind of real thinking we need to keep this Republic of ours alive.

Link: Alexa.com analysis of Redcross.org traffic

Deconstructing Google vs PayPal

Analysts are looking askance at Google's plans for an electronic payment system, ranging from speculation that Google is looking at adding classified ads to its mix to an admission of a slowdown in its core advertising business.

In the beverage business, business is measured by occasions. For example, how many times do you consume Coke? At dinner? At lunch? On the drive home? Minute Maid for breakfast? PowerAde when you're working out? Coke has built its business on being wherever you are with an option that matches the mood and moment.

Google appears to be thinking the same way, especially with their plans for Google Print and Google Video. With these projects, Google has an opportunity to be there, in one way or another, every time someone watches a video or reads a document. To make this happen, their stated goal - of helping publishers sell more product - is currently hampered by the sheer complexity of fulfillment. An e-wallet is a requirement of an end-to-end solution for publishers.

At the end of the day, I think Google realizes classified ads are a much smaller business than content digital rights management.

Ephron on Getting People Involved

Ephron_1While Forrester Research makes its "Most Effective Online Ad Formats" report available for free for a limited time, media guru Erwin Ephron goes a bit further and provides a timely analysis of what makes people get involved with their advertising. (registration required for both)

Consumers have always had a different relationship with magazines than with media. Unfortunately, Ephron points out that research has been used to pit one magazine versus the other, as opposed to showing how magazines stack up against other media.

People vote with their dollars and attention to read their favorite magazines, and if you're an enthusiast, you'll even get a subscription. The advertising in a magazine like Lucky gets consumers involved     because of who they are, what they are reading and what is being advertised. In contrast, you could be a teenage girl, watching ABC's Lost and get an ad for Cialis. Or, as Ephron puts it:

"...It is a magazine’s combination of advertising relevance and reader   control that produces greater reader involvement with advertising. Just as   it is TV’s combination of less relevance and less control that can trigger   the viewer’s “nuclear option” . . . Which is dial switching. The opposite of involvement."

If Google has an Achille's heel right now - and history repeats itself - it is their pride in their particular business model. Some of their recent moves have been to ensure that the Google brand remains front and center in applications.

Paid Parking Via Cellphone in Coral Gables

Parking_metersThe Miami Herald reports an innovative system that lets people pay for parking using cell phone text messaging.

The automated system allows drivers who subscribe to simply dial in from their cell phone, punch in the number assigned to their parking spot, and the required costs -- plus a 25-cent usage fee -- will be billed to their credit card. When leaving, subscribers call back and end the billing cycle.

It reportedly takes just six-and-a-half minutes to complete the signup process, which involves entering a credit card, e-mail, license plate and telephone number. A competing service is reportedly operating at the University of California Santa Barbara.

Now that Coral Gables has found a way to increase parking revenues via SMS, how long until they start accepting other types of city fees - such as tolls or public transportation fees - using the same method? To see what may lie in the future, one need look no further than London, which has combined real-time monitoring with SMS-based payments so as to be able to tax literally anything that moves.

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