David Bowie and the Grateful Dead: the web’s real visionaries

This morning’s column in the new, rebooted Observer.

Psst: want to know the future of cyberspace? You could try asking a rock star. Why? Well, some of them have turned out to be perceptive futurologists. Eight years ago, for example, David Bowie said this to a New York Times reporter: “I don’t even know why I would want to be on a label in a few years because I don’t think it’s going to work by labels and by distribution systems in the same way. The absolute transformation of everything that we ever thought about music will take place within 10 years, and nothing is going to be able to stop it. I’m fully confident that copyright, for instance, will no longer exist in 10 years, and authorship and intellectual property is in for such a bashing.”

Bowie then went on to make one of the most perceptive observations anyone’s ever made about our networked world. Music, he said, “is going to become like running water or electricity”. To appreciate the significance of this, remember that he was speaking in 2002, a year after Apple unleashed the iPod on an unsuspecting world. At the time, millions of people were transfixed by the idea that they could carry their entire music collections around with them in a tiny device. But Bowie perceived that this blissful state might just be transitory– that iPod users were, in fact, the audio equivalent of travellers to primitive countries who carry bottled water because public supplies are unreliable or unsafe…

Bloggers: queue here for bus passes

Interesting insight from the Pew Project into the way the media ecosystem is evolving.

Since 2006, blogging has dropped among teens and young adults while simultaneously rising among older adults. As the tools and technology embedded in social networking sites change, and use of the sites continues to grow, youth may be exchanging ‘macro-blogging’ for microblogging with status updates.

Blogging has declined in popularity among both teens and young adults since 2006. Blog commenting has also dropped among teens.

* 14% of online teens now say they blog, down from 28% of teen internet users in 2006.

* This decline is also reflected in the lower incidence of teen commenting on blogs within social networking websites; 52% of teen social network users report commenting on friends’ blogs, down from the 76% who did so in 2006.

* By comparison, the prevalence of blogging within the overall adult internet population has remained steady in recent years. Pew Internet surveys since 2005 have consistently found that roughly one in ten online adults maintain a personal online journal or blog.

While blogging among adults as a whole has remained steady, the prevalence of blogging within specific age groups has changed dramatically in recent years. Specifically, a sharp decline in blogging by young adults has been tempered by a corresponding increase in blogging among older adults.

What we will lose — and gain

Thoughtful essay by Terry McDermott in the Columbia Journalism Review.

The point is that newspapers have been killing themselves slowly for a long time. So long as the monopoly profits rolled in, the death by a thousand cuts wasn’t paid any attention. When the Internet arrived to eliminate the advertising monopolies, the newspapers already had a foot in the grave.

That said, it wouldn’t hurt the Web triumphalists to acknowledge that there is something more than jobs being lost in the process of newspapers dying. Whether you liked the way they did it or not, monopoly newspapers often performed civic functions.

The real power of a big paper is most apparent in a couple of specific circumstances. The first is when something really big happens, usually a disaster, causing huge portions of the paper’s resources to be thrown at the story. This is a sort of a reserve power, there when you need it but invisible when you don’t. I often was assigned to rewrite on these stories. It was a frustrating, exhilarating job. I could sit at my desk for the whole day, watching the inanity of cable news and waiting for reporters in the field to file. Then, as deadline for the day’s first edition approached, I would suddenly be overwhelmed with more great reporting than I could possibly use. Reporters I’d never heard of were giving me incredible stuff.

The second circumstance is when breathtaking stories you knew nothing about, but that people had been working on for months or years, suddenly appear in the paper. The depth of the newspaper’s staff allows for this relative luxury.

These two quite different kinds of reporting power are both threatened as newspapers decline. Because of their irregular, episodic nature, readers will not necessarily know they are gone, but their absence will make a community’s news culture considerably poorer.

The future according to Deloitte

The Technology, Media and Telecommunications practice at Deloitte has announced its predictions for the media sector in 2010. Main headings are:

Video-on-demand takes off – but not how you expect
In 2010, the greatest revenue growth in this space will come from a surprising source: the vending machine. Although the web has already become the most efficient means of distributing short-form content, the volume of DVDs distributed via vending machine is expected to double in 2010.

Linear TV survives a bit longer
Though 2010 has been viewed as the beginning of the end for the linear schedule, the gap between linear and non-linear usage will remain substantial. Despite the growing range of non-linear options, most content will continue to be consumed according to broadcasters’ programming schedules, with over 90 per cent of television and 80 per cent of audio, respectively, being consumed in this manner.

TV and the web belong together, but not necessarily on the same screen
Melding web content with television programmes should intensify as concurrent use of the web and TV takes off in 2010. But don’t expect a surge in internet-enabled television sales or an explosion in the use of television widgets; converged web and television consumption is likely to be more pragmatic.

Publishing fights back: pay walls and micropayments
In 2010, the newspaper and magazine industry will continue to threaten to charge readers for online content, however that talk is unlikely to be matched by action. Publishers rumoured to be thinking about pay walls may ultimately decide against it, or are choosing hybrid models where most content is free, while charging only for a limited quantity of premium content. Publishers who use pay walls need to maintain and publicise the premium nature of their content. Excessive cost-cutting could devalue the brand. Online readers might be willing to become micropayment customers, but only if the content is good enough and worth the effort. For some, acquiring an article for 30 cents online may not justify the time taken to enter credit card details. Also, the value of the micropayment strategy to the content provider requires volume: one micropayment per customer every two weeks might result in transaction costs exceeding gross margins

Freedom to link

Terrific Guardian column by Jeff Jarvis.

Linking is not a privilege that the recipient of the link should control – any more than politicians should decide who may or may not quote them. The test is not whether the creator of the link charges (Murdoch’s newspapers will charge and they link). The test is whether the thing we are linking to is public. If it is public for one it should be public for all.

We in the media tend to view the internet in our own image. But the internet is not a medium. Instead, as Cluetrain Manifesto author Doc Searls argues, it is a place. Think of it as a public park. You may not be selectively kept out because of your association with a race, religion … or aggregator. “Linking,” says Bartlett [Struan Bartlett, founder of NewsNow, an aggregator that Murdoch papers are now blocking from linking to their content], “is a common public amenity.”

I fear that what is really in danger here is the doctrine of openness on which ­journalism and an informed society depend. Pertinent are the arguments around ­Google’s Streetview, which takes pictures of buildings and the people who happen to be in front of them. Some object that these photos violate their privacy. But they are in public. What they do there is public.

I understand that people caught on Streetview might not want us to see them strolling into a drug den or brothel. But if we give anyone the right to restrict our use of that image or information, then we also give the mayor the right to gag us when we want to publish a picture of him skulking into that opium parlour.

What’s public is public – that is, we, the public, have a right to observe, point to, share, and comment on it. And the internet is public.

Right on, man! (As we ageing hippies like to say.)

The Death of the News Package

Perceptive post by Adam Tinsworth about why newspapers have been so traumatised by the Net.

A discussion yesterday with some of the Cardiff postgraduate journalism students reminded me of one of the elements I think is missing from the paywall discussion: a really deep examination of exactly what people really paid for when they bought a print newspaper or magazine.

The reflexive journalistic answer is “news” as, after all, the clue is in the name “newspaper”. My contention, though, is that we journalists have a bias towards the news element of the publication that our readers do not share. We got into journalism to “do news”. They were buying a mix of news, features, comments, comics and crosswords that added up to a valuable package of information and entertainment in one handy portable product. And the cheaper bits of the paper to produce cross-subsidised the more expensive bits (ie: news). Oh, and the advertising paid for more of it than the cover price did…

So, in essence, we never really charged people for news. It was just part of a wider offer.

Spot on. Print newspapers are value-chains which linked unprofitable products (news) which have (or had) the capacity to attract readers with profitable activities (advertising) which earned revenues that were directly or indirectly proportional to circulation. In the old days, readers had to buy the whole package — they couldn’t have news without the ads, or vice versa.

But one of the features of the Net is that it dissolves value-chains — it enables profitable cherries to be picked off. Which is exactly what Craigslist did with classified ads, which in any event work better online than in print because they enable people to search for what they want rather than wading through columns of small newsprint.

The Net has had an analogous impact on other industries too. In the 1930s Ronald Coase showed that an important determinant of how companies developed was the transaction cost of doing things that were essential to supporting their core businesses. If the transaction costs were low, then companies outsourced the activity. If they were high, then they took it in house — and grew vertically, as it were.

The arrival of the Net radically altered that calculation. In many cases B2B transactions costs reduced, because they could be conducted online — and in many cases automated by software. As a result, vertical integration no longer looked so smart — and outsourcing became much easier to do. Thus was born what Manuel Castells calls the ‘networked enterprise’. The rest is recent history.

The banal network

Travelling over the Christmas break, we had lunch one day in a cheap and cheerful eaterie in the midlands. It’s a good, non-nonsense, inexpensive carvery which, on the day we visited, was thronged with families having lunch. The first thing I noticed on our table was this card. To me, it signifies how far the Internet has come from being something weird and exotic to being positively mundane. When restaurant chains like this take it for granted that many of their (mainly working-class) clientele have a Facebook account, then you know that something’s happened.

I’m reminded of an observation that Andy Grove, then the CEO of Intel, made in 1999. “In five years’ time”, he said, “companies that aren’t Internet companies won’t be companies at all”. He was widely ridiculed for this prediction. Was he really suggesting that every fast-food joint and shoeshop would have to have online offerings? No: what he was trying to convey was the idea that, by 2004, the Internet would have become a utility, like electricity or the telephone or mains water. Most companies do not, for example, generate their own electricity. But if they’re not on the electricity grid (or the telephone network) then they’re at a severe disadvantage. So every company would, Grove thought, have to come to terms with the new reality of Internet-as-utility.

As it happens, he was a bit optimistic about the time it would take. But this Toby Carvery ad shows how perceptive he was.

Googling for Sociopaths

I’m currently reading Ken Auletta’s forthcoming book about Google and was struck by something that Aaron Schwartz has written about it.

Many books have been written about Google, even though we’re all pretty familiar with the company to begin with, but what makes Ken Auletta’s Googled interesting is that it’s a history of the company as told by the incumbent sociopaths. These are the people Auletta has spent his life covering: the media moguls who tried to acquire and conquer their own empires of content and delivery. And to them what’s most shocking and galling about Google’s incredibly rapid rise is that instead of being engineered by a fellow sociopath, it was largely done by normal, decent people plainly applying the forces of new technology.

If you’re wondering what a sociopath is, then think Rupert Murdoch or the RIAA. Aaron has accurately nailed the sociopathic mentality:

It’s almost impossible to imagine life without Googling for something, checking your Gmail, or watching videos on YouTube — but sociopaths aren’t used to doing things that create value for people. They’re just interested in conquering more and taking control. When Disney bought ABC for $19 billion, it didn’t improve most people’s lives in any real way, but it did let Michael Eisner regain control of the company he once ran.

So naturally the sociopaths are outraged that their control is being taken away. Newspapers, book publishers, television companies, ad agencies — their businesses are all failing, while Google’s is on the rise. The sociopaths may be outraged, but this is exactly what’s supposed to happen. Most people don’t have a vested interest in whether ABC does well or even continues to exist. What they want are good television shows at a reasonable price, and if they can get those from Apple and Google instead of their local cable company, then bully for Apple and Google.

The thing that’s hard for the sociopaths to get their head around is that this isn’t because one of their rivals has outsmarted them — it’s just the march of technology…

Lovely stuff. Worth reading in full.