29 June 2009 @ 8:41AM >> PC World reports on a significant development in the evolution of new media:

A tectonic shift has taken place for the digital age: ad rates for popular shows like The Simpsons and CSI are higher online than they are on prime-time TV. If a company wants to run ads alongside an episode of The Simpsons on Hulu or TV.com it will cost the advertiser about $60 per thousand viewers, according to Bloomberg. On prime-time TV that same ad will cost somewhere between $20 and $40 per thousand viewers.

Online viewers have to actively seek out the program they want to watch, so advertisers end up with a guaranteed audience for their commercial every time someone clicks play on Hulu or TV.com. Online programs also have an average of 37 seconds of commercials during an episode, while prime-time TV averages nine minutes of ads.

David Poltrack, chief research officer at New York-based CBS, cited a Neilsen discovery that fewer online ads means viewers are twice as likely to remember a commercial they’ve seen on Hulu than on television, Bloomberg reported.

Despite higher ad rates, online viewing is not about to save television from declining ad rates and viewerships, because online sites like Hulu and TV.com do not yet have wide enough audiences to replace television viewers. Consider that 17.6 million people crowded around TV sets on April 6 to watch this year’s NCAA basketball championship, while online viewing for the entire March Madness tournament leading up to the championship game came to only 7.52 million viewers. The online audience simply isn’t there yet.

Even though the audience is small, higher online ad rates for The Simpsons means the digital ceiling has been broken. In the future, as more people gravitate toward on-demand Internet viewing, it’s entirely possible sites like Hulu and TV.com might, just might, replace traditional television viewing.

It’s interesting to note that sites like Hulu and TV.com are becoming successful simply by dusting off an old format and making it more palatable for online audiences. Instead of loading up shows with commercials, just throw in a few ad spots here and there. Instead of running shows at a specific time, put them online for a limited run and let people enjoy them at their leisure.

Reviving an old format is exactly what Apple did with the iTunes Store, an another online success story. Instead of going for subscriptions or some other newly-thought-out pay format, Apple just did away with the physical store, while still selling people something they could take home — a digital file instead of a CD or LP. There are some who object to buying digital music, since some prefer the tactile feel of having an album with cover art and liner notes. The quality of sound you get from digital files versus a CD has also been pointed out as a drawback. But the success and widespread adoption of the iTunes Store shows that a large segment of people are happy with Apple’s digital retail model.

13 February 2009 @ 9:32AM >> Stephen Bates at Slate suggests a new business model for the faltering newspaper industry: declare itself a religion. Although he refers to this idea as “a modest proposal,” it is far less obviously satirical than the Jonathan Swift essay those words reference.

The media covers politics with all the objectivity of a missionary describing his faith, and they treated the election and inauguration of President Obama with the sort of dispassion you’d expect of disciples who just witnessed someone rise from the dead.

Our press has been a religion for years. They might as well admit it now so they can claim the tax breaks.

1 February 2009 >> Here’s a TV report from 1981 predicting the future of newspapers. What’s interesting is how much of it misses the mark...and how much of it doesn’t.

20 November 2008 @ 8:43AM >> One week after admitting that the Washington Post’s election coverage showed a “tilt” that favored Barack Obama, the paper’s ombudsman discussed the importance of intellectual diversity in the newsroom:

Thousands of conservatives and even some moderates have complained during my more than three-year term that The Post is too liberal; many have stopped subscribing, including more than 900 in the past four weeks.

It pains me to see lost subscribers and revenue, especially when newspapers are shrinking. Conservative complaints can be wrong: The mainstream media were not to blame for John McCain’s loss; Barack Obama’s more effective campaign and the financial crisis were.

But some of the conservatives’ complaints about a liberal tilt are valid. Journalism naturally draws liberals; we like to change the world. I’ll bet that most Post journalists voted for Obama. I did. There are centrists at The Post as well. But the conservatives I know here feel so outnumbered that they don’t even want to be quoted by name in a memo.

Journalists bristle at the thought of their coverage being viewed as unfair or unbalanced; they believe that their decisions are journalistically reasonable and that their politics do not affect how they cover and display stories.

Tom Rosenstiel, a former political reporter who directs the Project for Excellence in Journalism, said, “The perception of liberal bias is a problem by itself for the news media. It’s not okay to dismiss it. Conservatives who think the press is deliberately trying to help Democrats are wrong. But conservatives are right that journalism has too many liberals and not enough conservatives. It’s inconceivable that that is irrelevant.”

[...]

The opinion pages have strong conservative voices; the editorial board includes centrists and conservatives; and there were editorials critical of Obama. Yet opinion was still weighted toward Obama. It’s not hard to see why conservatives feel disrespected.

Are there ways to tackle this? More conservatives in newsrooms and rigorous editing would be two. The first is not easy: Editors hire not on the basis of beliefs but on talent in reporting, photography and editing, and hiring is at a standstill because of the economy. But newspapers have hired more minorities and women, so it can be done.

Rosenstiel said, “There should be more intellectual diversity among journalists. More conservatives in newsrooms will bring about better journalism. We need to be more vigilant and conscious in looking for bias. Our aims are pure, but our execution sometimes is not. Staff members should feel in their bones that unfairness will never be tolerated.”

Bob Steele, ethics scholar at the Poynter Institute, which trains journalists, thinks editors should be doing “ongoing content evaluation of candidates and issues to provide scrutiny on photos, stories, placement of stories and what are the weaknesses and strengths of the candidates.” He also recommends “prosecutorial editing” as one way to “minimize the ideological bias and beliefs that all journalists have. It would greatly reduce the news content being skewed by beliefs.”

The Post and other news media can work harder on eliminating even the perception of bias while never giving up the willingness to follow stories that will inevitably tick off some readers.

Intellectual diversity in the newsroom is essential to the quality of the media’s product. There need to be people involved in the reporting process who challenge the assumptions of the dominant thinking in the industry.

Today, it’s clear that isn’t the case, and that’s one of the reasons for the sorry financial state of the news business.

19 November 2008 @ 9:02AM >> London’s Telegraph reports on the latest developments in global warming, sorry, climate change:

A surreal scientific blunder last week raised a huge question mark about the temperature records that underpin the worldwide alarm over global warming. On Monday, Nasa’s Goddard Institute for Space Studies (GISS), which is run by Al Gore’s chief scientific ally, Dr James Hansen, and is one of four bodies responsible for monitoring global temperatures, announced that last month was the hottest October on record.

This was startling. Across the world there were reports of unseasonal snow and plummeting temperatures last month, from the American Great Plains to China, and from the Alps to New Zealand. China’s official news agency reported that Tibet had suffered its “worst snowstorm ever”. In the US, the National Oceanic and Atmospheric Administration registered 63 local snowfall records and 115 lowest-ever temperatures for the month, and ranked it as only the 70th-warmest October in 114 years.

So what explained the anomaly? GISS’s computerised temperature maps seemed to show readings across a large part of Russia had been up to 10 degrees higher than normal. But when expert readers of the two leading warming-sceptic blogs, Watts Up With That and Climate Audit, began detailed analysis of the GISS data they made an astonishing discovery. The reason for the freak figures was that scores of temperature records from Russia and elsewhere were not based on October readings at all. Figures from the previous month had simply been carried over and repeated two months running.

The error was so glaring that when it was reported on the two blogs - run by the US meteorologist Anthony Watts and Steve McIntyre, the Canadian computer analyst who won fame for his expert debunking of the notorious “hockey stick” graph - GISS began hastily revising its figures. This only made the confusion worse because, to compensate for the lowered temperatures in Russia, GISS claimed to have discovered a new “hotspot” in the Arctic - in a month when satellite images were showing Arctic sea-ice recovering so fast from its summer melt that three weeks ago it was 30 per cent more extensive than at the same time last year.

A GISS spokesman lamely explained that the reason for the error in the Russian figures was that they were obtained from another body, and that GISS did not have resources to exercise proper quality control over the data it was supplied with. This is an astonishing admission: the figures published by Dr Hansen’s institute are not only one of the four data sets that the UN’s Intergovernmental Panel on Climate Change (IPCC) relies on to promote its case for global warming, but they are the most widely quoted, since they consistently show higher temperatures than the others.

If there is one scientist more responsible than any other for the alarm over global warming it is Dr Hansen, who set the whole scare in train back in 1988 with his testimony to a US Senate committee chaired by Al Gore. Again and again, Dr Hansen has been to the fore in making extreme claims over the dangers of climate change. (He was recently in the news here for supporting the Greenpeace activists acquitted of criminally damaging a coal-fired power station in Kent, on the grounds that the harm done to the planet by a new power station would far outweigh any damage they had done themselves.)

Yet last week’s latest episode is far from the first time Dr Hansen’s methodology has been called in question. In 2007 he was forced by Mr Watts and Mr McIntyre to revise his published figures for US surface temperatures, to show that the hottest decade of the 20th century was not the 1990s, as he had claimed, but the 1930s.

Another of his close allies is Dr Rajendra Pachauri, chairman of the IPCC, who recently startled a university audience in Australia by claiming that global temperatures have recently been rising “very much faster” than ever, in front of a graph showing them rising sharply in the past decade. In fact, as many of his audience were aware, they have not been rising in recent years and since 2007 have dropped.

Meanwhile, on the subject of global warming climate change:

A new Irish film claims that climate change guru Al Gore is an alarmist and that those who think they are saving the planet are only hurting the poor

IF THE ADVANCE publicity is anything to go by, Not Evil Just Wrong will do for Al Gore what Michael Moore’s Fahrenheit 9/11 did for George W Bush.

“This is the film Al Gore and Hollywood don’t want you to see,” declares the website for the latest work by film-makers Ann McElhinney and Phelim McAleer. The site even features a big picture of Gore, with his lips in the photograph seemingly digitally enhanced to make them look like Heath Ledger’s Joker from the latest Batman film.

The website goes on to say that their latest film - which takes on what are described as global warming alarmists - is “the most controversial documentary of the year”. Indeed, it could very well be the most controversial. And Al Gore and Hollywood may well not want you to see it. And in that respect, Gore and co are actually succeeding for the moment. Because there is no completed film. Not yet anyway.

McElhinney and McAleer have raised almost $1 million (EUR799,000) but need a total of $4.5m (EUR3.6m) to allow for a full cinema release. They say they were acutely disappointed at being turned down for funding by the Irish Film Board, especially its conclusion that it was “repetitive and creatively thin”.

Instead, they have gone onto the internet hoping to solicit donations in the style of Barack Obama. The finished product will be around 90 minutes long. Both film-makers rebut the Film Board’s criticism by pointing out that a near-complete version of the film has been chosen in the audience category at the Amsterdam Film Festival later this month.

I saw the couple’s previous release, Mine Your Own Business and found it quite illuminating.

I hope they’re successful in their fundraising efforts. I may try to raise money online to finance future film projects, and I’d like to see it work.

26 October 2008 @ 4:49PM >> People aren’t stupid:

Voters overwhelmingly believe that the media wants Barack Obama to win the presidential election. By a margin of 70%-9%, Americans say most journalists want to see Obama, not John McCain, win on Nov. 4. Another 8% say journalists don’t favor either candidate, and 13% say they don’t know which candidate most reporters support.

[...]

In recent presidential campaigns, voters repeatedly have said they thought journalists favored the Democratic candidate over the Republican. But this year’s margin is particularly wide. At this stage of the 2004 campaign, 50% of voters said most journalists wanted to see John Kerry win the election, while 22% said most journalists favored George Bush. In October 2000, 47% of voters said journalists wanted to see Al Gore win and 23% said most journalists wanted Bush to win. In 1996, 59% said journalists were pulling for Bill Clinton.

In the current campaign, Republicans, Democrats and independents all feel that the media wants to see Obama win the election. Republicans are almost unanimous in their opinion: 90% of GOP voters say most journalists are pulling for Obama. More than six-in-ten Democratic and independent voters (62% each) say the same.

For an industry that by all measures is in severe financial trouble, you’d think that reporters and editors would be a little more worried about the public’s perception of their output. But the media’s short-term desire to elect Barack Obama is apparently more important than their long-term credibility. That’s an exceedingly poor business decision.

30 September 2008 >> The Wall Street Journal’s James Taranto eulogizes The New York Sun, which published its final issue today.

Back in January 2005, the Sun was the first newspaper to cover the film project that ultimately became Indoctrinate U.

The Sun’s content was ahead of its time, in an industry that doesn’t seem to have much time left.

3 April 2008 @ 8:05AM >> Spam blogs, sometimes called “splogs,” are phony blogs set up to earn money by displaying ads. Splogs steal content from other sites so that they appear to the untrained eye as genuine blogs. When people conduct web searches, that stolen content drives traffic to the site, raising the revenue from advertising.

It’s a sleazy practice, and at times, I’ve seen posts from this site appear on splogs. Recently, I found a splog that copies text from this site, but it also does something new: it changes certain words in the post to modify the content slightly.

This page copied part of a post called Am I a Fair-Weather Friend of Free Speech?

I realize that by linking to the splog, I am helping them achieve their goal of increased traffic. Still, it’s an interesting development in the evolution of spam, and it seems worthy of note.

27 February 2008 >> The Economist has a fascinating article on how the Internet is changing Hollywood. Indoctrinate U gets a brief mention.

10 February 2008 >> Update: The review program has now ended. The offer below is no longer valid. If you’re interested in seeing the film, you can now download a copy from the Indoctrinate U online store.

---

Within a matter of days, we will be ready to launch the Indoctrinate U online store, where we will be offering the film for download as MPEG-4 files and ISO DVD files. MPEG-4 files are playable on Windows, Mac and Linux, and ISO files can also be used to create your own DVD copies of the film playable on virtually all home DVD equipment. All you need is a computer with a DVD burner, software capable of burning ISO files, and a blank DVD.

But before we open the store to the public, we will be offering free downloads of review copies to a limited number of bloggers who plan on publishing reviews of the film. If you’re interested in reviewing Indoctrinate U, please send your name (or online pseudonym), the name of your site, the site’s URL, and the e-mail address where you’d prefer to be contacted to this e-mail address:

reviews (at) indoctrinate-u (dot) com

When our online store launches, this offer will expire, so if you’re interested, e-mail us soon!

Oh yeah, non-blogger media folks are welcome, too.

14 January 2008 @ 8:26AM >> The Economist reports on the music industry’s woes:

In public, of course, music executives continued to talk a good game: recovery was just around the corner, they argued, and digital downloads would rescue the music business. But the results from 2007 confirm what EMI’s focus group showed: that the record industry’s main product, the CD, which in 2006 accounted for over 80% of total global sales, is rapidly fading away. In America, according to Nielsen SoundScan, the volume of physical albums sold dropped by 19% in 2007 from the year before-faster than anyone had expected. For the first half of 2007, sales of music on CD and other physical formats fell by 6% in Britain, by 9% in Japan, France and Spain, by 12% in Italy, 14% in Australia and 21% in Canada. (Sales were flat in Germany.) Paid digital downloads grew rapidly, but did not begin to make up for the loss of revenue from CDs. More worryingly for the industry, the growth of digital downloads appears to be slowing.

“In 2007 it became clear that the recorded-music industry is contracting and that it will be a very different beast from what it was in the 20th century,” says Mark Mulligan, an analyst at JupiterResearch. Last year several big-name artists bypassed the record labels altogether. Madonna left Warner Music to strike a deal with Live Nation, a concert promoter, and the Eagles distributed a bestselling album in America without any help from a record label. Radiohead, a British band, deserted EMI to release an album over the internet. These were isolated, unusual deals, by artists whose careers had already brought years of profits to the big music companies. But they made the labels look irrelevant and will no doubt prompt other artists to think about leaving them too.

The prime function of a record label is to scout, identify and promote talent. Distribution is obviously key to the business, but it’s largely a function of logistics and technology, and it’s tangential to the consumer’s interest in the product.

Talent identification and promotion is the real business value as far as consumers are concerned, simply because there are lots of people producing music, most of which probably wouldn’t appeal to any given person. So the role of record labels—first as a filter selecting talent, then as a megaphone promoting it—is a useful function. But this role doesn’t necessarily have to fulfilled by labels. Friends who share your musical tastes might do it, for example. But in order for your friends to turn you on to some good music, they have to be introduced to it somehow.

Social networking sites online amplify the ability of individuals to act as filters and as promoters of what they like. People list their favorite bands on sites like Myspace, and their friends can click over to the band’s profile and often listen to a few tracks for free. More people can be exposed to more music through their friends on Myspace than in real-life casual conversation, so an increasing portion of the role played by record labels is now be handled by individuals, online.

Market changes might force labels to become smaller, but the same technology that’s destroying their current business model will also let labels do more with less. If individuals are taking on more of the role of promoter, any promotion done by record labels will be amplified in a way that didn’t happen in the past. Special-interest niches can be targeted like never before, and the amateur music enthusiasts with influential online presences can be identified and courted by labels seeking to tout the next great act.

Record labels won’t disappear altogether, because there will always be a role for professional filters. Talent needs to be scouted, and promotion will always be helpful in connecting people to new music. But the balance of power in the music industry is shifting, seismically. Labels will be smaller, but they have the potential to be sleeker. And if this gives artists an opportunity to keep more of the revenue their work generates, that won’t be a bad thing.

12 January 2008 @ 12:21PM >> Matt Walliser writes in to say:

In your January 2 article titled “From Rainbows to Downloads” you suggest (emphasis mine)

when songs are stored as data and can be moved around like any other computer file, consumers will only ever need to buy one copy. As long as open formats are used, people will be able to play their music on any device devised in the future.

In February 2006 I wrote to you in regards to iTunes reaching 1 Billion downloads, loosely predicting that the music industry’s reluctance to evolve would only serve to strengthen Apple’s dominant position in the marketplace (or something like that). Recent anti-trust lawsuits filed against Apple with respect to monopolization of format simultaneously reinforce both your point (above) and mine. For clarification’s sake: I’m neither condemning nor condoning the actions Apple has taken that have brought about the lawsuit (predatory pricing of their hardware being the most credible, imho), I’m merely calling it like I see it.

Even though the music business has been fighting the trend towards Apple’s online distribution dominance since at least 2005, ironically, one reason Apple has so much power today is because of bad decisions made by the music labels themselves.

For years, labels have demanded that digital music be burdened with copy protection technology. In order to get permission to sell music through the iTunes Music Store, labels required Apple to implement copy protection, which they did. That technology, called FairPlay, is one of the less onerous copy protection schemes out there, but it does mean that music files purchased through the iTunes Music Store can’t be played by non-Apple devices (although they can be burned onto standard CDs, which can then be used in any standard CD player). In other words, the labels’ insistence on copy protection ended up giving Apple the ability to lock customers into its file formats, thereby making it more difficult for those customers to switch to devices sold by Apple’s competitors.

Steve Jobs has called on the recording industry to abandon copy protection, and after one label granted permission, Apple now sells some songs in MP3 format without copy protection. Competitors like Amazon are now selling music in unprotected MP3 format as well. Maybe the recording industry is slowly waking up.

Still, I can’t help thinking that Steve Jobs is secretly smiling to himself, knowing that the long-running short-sightedness of the music business is part of the reason that Apple enjoys such dominance in online music distribution. If music labels had allowed sales of unprotected MP3s right from the start, Apple’s iPod would probably be just as dominant in the market for portable music players, but the iTunes Music Store would likely be a different story.

10 January 2008 @ 6:37PM >> A few years back, I interviewed Michael Moore and asked him if Fahrenheit 9/11 should be considered a political advertisement, and if so, whether campaign finance laws should apply. Moore admitted the film contained his opinions, but that his film should be treated like an op-ed in the paper.

During the 2004 election, neither ads for the Bush-bashing Fahrenheit 9/11, nor the film itself were regulated under campaign finance laws.

But now that there’s a new film about Hillary Clinton, all of a sudden, campaign finance laws do apply to political perspective films:

The early reviews are in, and three federal judges appeared in agreement Wednesday that a movie lambasting Hillary Clinton seemed an awful lot like a 90-minute campaign advertisement.

Citizens United, a conservative advocacy group, is challenging the nation’s campaign finance laws, which require disclaimers on political advertisements and restrict when they can be broadcast. The group argues “Hillary: The Movie” and related television advertisements are not political advertising even though the New York senator is in the presidential race.

Attorney James Bopp argued that they should be considered “issue-oriented” speech because viewers aren’t urged to vote for or against the Democrat.

[...]

The movie is scheduled for two screenings in theaters, once each in California and Washington. It is also being sold on DVD. Neither of those methods are regulated under campaign laws. The advertisements, however, are scheduled to run during the peak presidential primary season and would be regulated.

Bopp, who successfully led a challenge to one aspect of the campaign finance system last year, compared the film to television news programs “Frontline,” “Nova,” and “60 Minutes.” That prompted Lamberth to laugh out loud from the bench.

“You can’t compare this to ‘60 Minutes,’” the judge said. “Did you read this transcript?”

The movie features commentary from conservative pundits, some of whom specifically say Clinton is not fit to be the nation’s commander in chief.

The content of the film is irrelevant; if the film merely expresses opinions, it is protected constitutional speech. And if it is factually inaccurate in a way that is defamatory to Hillary Clinton, she has legal recourse for that.

It shouldn’t matter whether a film is made by a Hollywood insider like Michael Moore or an issue-based outfit like Citizens United. Groups like Citizens United—on the right and the left—are formed by private citizens with a common goal of promoting their shared ideas. The speech of Citizens United should not be more regulated than the speech of any of its individual members—or any other private citizen for that matter.

All filmmakers—in fact, all citizens who value their free speech rights—should be concerned about this decision. Michael Moore should be concerned. Because even though he has the benefit of Hollywood’s infrastructure and support (and therefore has no need to become involved with an organization like Citizens United), his films are financed and distributed by corporations that may one day find themselves subject to the same regulations now being imposed on Citizens United.

Any attempt to regulate political speech is direct assault on the First Amendment.

2 January 2008 @ 8:57AM >> Two of my favorite creative minds in music—Thom Yorke and David Byrne—recently sat down to discuss the future of the music business. Last October, Yorke’s band Radiohead released its latest album, In Rainbows. But rather than releasing it through a traditional music label, Radiohead let fans download the music directly from its website. And rather than charging a fixed amount for the album, users were given the option of naming their own price—down to and including zero.

The sinking fortunes of the music industry establishment may have been instigated by technological change, but they are worsened by the industry’s unwillingness to let consumers buy music that isn’t locked to specific formats or media. It’s like peering into the future of the movie industry.

In both cases, you have industries whose fortunes have been protected for decades by the commingling of content and medium. Record albums weren’t just vinyl, they were vinyl with embedded music: the music couldn’t exist without the physical medium. As tapes replaced records and CDs replaced tapes, higher fidelity and increased convenience of each new format gave consumers a reason to re-purchase content that they already paid for in lesser formats. But when songs are stored as data and can be moved around like any other computer file, consumers will only ever need to buy one copy. As long as open formats are used, people will be able to play their music on any device devised in the future. There goes the upgrade gravy train.

Like the music industry, the film industry is rightfully concerned with piracy, because once music and movies aren’t tied to a physical medium, they can be copied endlessly. But consumers don’t care if this inconveniences the industry; people have shown that they want the convenience of digital content, and they are willing to pay for it. So the more that record companies lock down digital content in order to fight piracy, the less incentive legitimate customers have to buy the product in the first place. What good is the “music as a file” model if it is artificially burdened with the same limitations as physical media?

The movie business hasn’t been hurt by the shift away from physical media yet. But that’s only because technology hasn’t advanced far enough. It takes a lot more data to store a high-definition movie than an album’s worth of high-fidelity music. When a typical consumer’s Internet connection becomes fast enough to download high-definition full-length movies in a matter of minutes, the home market for movies will be subject to same technological dynamics affecting the music business today. And that future is only years away.

But that isn’t the film industry’s biggest problem right now. After all, people won’t pirate content that they don’t want to watch in the first place.

The problem with the film business is that too many insiders forgot that the rest of America doesn’t necessarily share the same view of the world as their friends in Hollywood. Instead, Hollywood has become its own echo chamber, which is why distributors keep pushing out flop after flop of military-bashing films. In Hollywood and at film festivals, such fare is highly praised. But in theaters around the country, the audience for films like Redacted is comprised mostly of empty seats. It’s almost as if Hollywood is producing films only for itself.

My experience in trying to get distribution for Indoctrinate U only confirms this. People in the film business just don’t take seriously the possibility that there’s a market for documentaries outside Hollywood’s typical Michael Moore/Al Gore worldview. I don’t know to what extent that’s out of political bias or the result of a simple Catch-22: they don’t see a market for anything different, but that’s because they’ve never tried distributing anything different.

That leaves us in the position of having to self-distribute Indoctrinate U. And because the Internet will allow us to put the film in people’s hands in the fastest, most cost-effective way possible, we’ll be able to conduct a little experiment of our own. Indoctrinate U will not be available on DVD right away. Instead, we’re going to focus our efforts on seeing whether the Internet can be used to route around the gatekeepers in Hollywood—without the shackles of physical media. (Although unlike Radiohead, I’m afraid, we’re not in a position to give our goods away for free.)

Who knows? Maybe the market can be proven without Hollywood’s help. I think it can. And once the market is proven, we’ll finally know who in the film business wants to serve customer desires instead of the dogma of Hollywood groupthink.

4 December 2007 >> There’s a little scandal brewing within Wikipedia.

The free online encyclopedia editable by anyone prides itself on being a meritocracy. The site successfully harnessed the wisdom of crowds to build what’s probably the largest, most quickly-constructed body of knowledge ever assembled in human history. Not bad for something that didn’t even exist when the decade began.

For much of its content, the Wikipedia model seems to work pretty well. Easily-verifiable facts like names, places and dates tend to be rendered accurately. And when they’re not, they’re easy to fix. With millions of eyeballs scanning everything, errors can be caught quickly.

But when the topic is a subject of debate or controversy, the natural human tendency to want to convince others of one’s rightness can lead to some nasty behavior. And when that happens in Wikiland, not only is the quality of the product degraded, so is the trust people place in the collaborative editing process.

A spat between contributors that recently became public demonstrated this weakness in the Wikipedia model, The Register reports (in a somewhat sensationalist tone):

Controversy has erupted among the encyclopedia’s core contributors, after a rogue editor revealed that the site’s top administrators are using a secret insider mailing list to crackdown on perceived threats to their power.

Many suspected that such a list was in use, as the Wikipedia “ruling clique” grew increasingly concerned with banning editors for the most petty of reasons. But now that the list’s existence is confirmed, the rank and file are on the verge of revolt.

Revealed after an uber-admin called “Durova” used it in an attempt to enforce the quixotic ban of a longtime contributor, this secret mailing list seems to undermine the site’s famously egalitarian ethos. At the very least, the list allows the ruling clique to push its agenda without scrutiny from the community at large. But clearly, it has also been used to silence the voice of at least one person who was merely trying to improve the encyclopedia’s content.

“I’ve never seen the Wikipedia community as angry as they are with this one,” says Charles Ainsworth, a Japan-based editor who’s contributed more feature articles to the site than all but six other writers. “I think there was more hidden anger and frustration with the ‘ruling clique’ than I thought and Durova’s heavy-handed action and arrogant refusal to take sufficient accountability for it has released all of it into the open.”

Kelly Martin, a former member of Wikipedia’s Arbitration Committee, leaves no doubt that this sort of surreptitious communication has gone on for ages. “This particular list is new, but the strategy is old,” Martin told us via phone, from outside Chicago. “It’s certainly not consistent with the public principles of the site. But in reality, it’s standard practice.”

[...]

If you take Wikipedia as seriously as it takes itself, this is a huge problem. The site is ostensibly devoted to democratic consensus and the free exchange of ideas. But whether or not you believe in the holy law of Web 2.0, Wikipedia is tearing at the seams. Many of its core contributors are extremely unhappy about Durova’s ill-advised ban and the exposure of the secret mailing list, and some feel that the site’s well-being is seriously threatened.

In a post to Wikipedia, Jimbo Wales says that this whole incident was blown out of proportion. “I advise the world to relax a notch or two. A bad block was made for 75 minutes,” he says. “It was reversed and an apology given. There are things to be studied here about what went wrong and what could be done in the future, but wow, could we please do so with a lot less drama? A 75 minute block, even if made badly, is hardly worth all this drama. Let’s please love each other, love the project, and remember what we are here for.”

But he’s not admitting how deep this controversy goes. Wales and the Wikimedia Foundation came down hard on the editor who leaked Durova’s email. After it was posted to the public forum, the email was promptly “oversighted” - i.e. permanently removed. Then this rogue editor posted it to his personal talk page, and a Wikimedia Foundation member not only oversighted the email again, but temporarily banned the editor.

Then Jimbo swooped in with a personal rebuke. “You have caused too much harm to justify us putting up with this kind of behavior much longer,” he told the editor.

If there’s a flaw in the Wikipedia model, it isn’t that the site relies on the wisdom of crowds too much, it’s that the site’s highest-volume contributors and editors—the people who effectively run the place—could succumb to the gravitational pull of groupthink.

The problem is that it’s difficult to engineer a way to allow for group-driven creation of content while dispersing certain responsibilities and decision-making tasks among the masses. It’s impossible to create a system that’s completely open to everyone without getting overrun by malicious vandals, so it’s hard to see how the site could avoid issuing bans or using some other form of group-imposed censorship.

But, to whatever extent is possible, Wikipedia would be wise to avoid greater centralization of power. Otherwise, it could lead to problems that could cause Wikipedia’s well-earned goodwill is going to melt away just as quickly as it was built.

30 October 2007 >> Today’s Quote of the Day:

[I]t’s kind of depressing if mobility and the human excretory process are the best arguments to be made for why the print medium won’t go way of the dodo, don’t you think?
—Paul La Monica, in response to comment from venture capitalist Roger McNamee.

8 October 2007 >> BBC News reports of a company getting sued for copyright infringement because their employees are listening to the radio and—gasp!—the radio “could be heard by colleagues and customers.”

17 July 2007 @ 8:46AM >> BusinessWeek asks, “Which major American newspaper should be the first to throw up its hands and stop publishing a print product?”

This could be the worst year for newspapers since the Great Depression. The double-digit revenue declines long forecast by doomsters have arrived. While nearly all the major papers still post profits, albeit smaller than before, a few prominent ones are losing boatloads. At Hearst Newspapers’ San Francisco Chronicle, according to a deposition given by James M. Asher, the company’s chief legal and business development officer, losses of $330 million piled up between mid-2000 and September, 2006, better—or should I say worse?—than $1 million a week. During negotiations with the Pittsburgh Post-Gazette’s unions, the owning Block family disclosed that the paper lost $20 million in 2006. Late last year, The Boston Globe was headed for unprofitability as well, according to The Wall Street Journal.

And 2007 does not look materially kinder than 2006 for any of these papers. One senior executive describes the climate like this: “If you told me 24 months ago that revenues would be declining as much as they are today, I’d say you were smoking dope.”

So, which paper should be the first to abandon print? Read the piece for the author’s opinion, which differs from mine.

14 May 2007 >> From Ann Althouse:

I keep reading about how hybrid cars and compact fluorescent lightbulbs can reduce the production of greenhouse gases, but I have yet to see an article about the savings that could be achieved if we were to stop delivery of newspapers and magazines and do all of our news reading on line.

17 December 2006 @ 9:49AM >> According to a government report, daily use of the Internet has become more common among Americans than newspaper reading.

13 December 2006 >> Some thoughts on the future of newspapers from The Atlantic Monthly:

[T]op reporters and columnists at major newspapers are realizing (or will realize soon) that their fates are not necessarily tied to those of their employers. As portals and search engines and blogs increasingly allow readers to consume media without context or much branding, writers like Thomas Friedman will increasingly wonder what is the benefit of working for a newspaper—especially when the newspaper is burying his article behind a subscriber wall. It will require only a slight shift in the economic model for the Friedmans of the world to realize that they don’t need the newspapers they work for; that they can go off and blog on their own, or form United Artists-like cooperatives to financially support their independent efforts.

So what should newspapers do? They could stop printing. It may happen eventually, or perhaps newsprint will find a financially sustainable market among the elite and elderly (or perhaps it will have a nostalgic vogue not unlike that of, say, heirloom tomatoes), but that’s not what I’m getting at. The current Web-publishing model that newspapers are using isn’t likely to become financially viable anytime soon. With few exceptions, the media businesses thriving on the Web either are low-cost blog-like efforts or follow a many-to-many model, in which communities create, share, and consume content. Publishing an article on the Web gets you one click; getting your users to write the article for you gets you a thousand clicks, and costs less to boot. In other words, turning your users into contributors increases their engagement with your site—each click is, after all, also an “ad impression”—while simultaneously generating more content that you in turn can sell to advertisers.

That, I’d venture, is how you start rethinking the newspaper business. Not only do you allow your reporters to blog; you make them the hubs of their own social networks, the maestros of their own wikis, the masters of their own many-to-many realms. To take but one example, Kelefa Sanneh is the pop-music critic for The New York Times. He is very likely the best music critic in the country, and certainly the best new Times music writer in years. Let’s say that Sanneh creates his own community around the music he likes. Or The Washington Post’s Dana Priest creates an interactive online universe around her intelligence reportage. With editorial oversight only for libel and factual accuracy, Sanneh or Priest are allowed to do whatever they want on their sites (while their mother ships pour their resources into marketing them). In Sanneh’s case, allow other people to write music reviews under the Times/Sanneh “brand.” In Priest’s case, turn the site into a clearinghouse for global intelligence information, rumors, conspiracy theories, and so forth (obligatory disclaimer: “The views of posters do not necessarily represent those of the Washington Post Company”). Go even further: incentivize the critics and reporters by allowing them to profit based on the popularity of their sites; make it worth their while to stick around.

[...]

Playing this logic out, the next task would be uniting the Sanneh or Priest site to the Times or Post whole. You could essentially self-syndicate, sending your regular Times or Post headlines to Sanneh’s and Priest’s sites, luring readers back to the mother ship while increasing the number of times each story is read. Indeed, the logic could be (and in some circles already is being) played out even further. What if you essentially exploded the central function of the newspaper and “microchunked” (to borrow a current term) the content, syndicating all of it to bloggers or other news sites in return for a share of any advertising revenue each site generates? The Associated Press has made this the centerpiece of its digital-age strategy: it recently signed a potentially breakthrough deal with Google, in which Google will pay the AP for access to its stories; and the AP has launched a broadband player that Web sites can use to access AP video content. Its content goes where the readers are, and the AP gets paid, no matter what. Remarkably, this most old-school of services is a lone bright spot in the MSM landscape. The AP’s revenues have increased from more than $593 million in 2003 to more than $654 million in 2005; its digital revenue grew at a rate of 66 percent from 2004 to 2006. Of course, the AP has always been a syndicator, so no conceptual leap of faith (indeed no leap whatsoever) was required to move the business from analog to digital.

30 November 2006 @ 8:52AM >> The CEO of the world’s largest music publisher is attempting to extract money from everyone who buys a digital music player.

Universal Music Group’s Chairman and CEO Doug Morris said of iPods and similar players, “These devices are just repositories for stolen music, and they all know it. So it’s time to get paid for it.”

By accusing everyone who bought a digital music player of piracy, Universal hopes to coerce manufacturers of these devices to pay a per-unit fee, a surcharge that is then passed on to the consumer. (Universal apparently figured out that running a profitable business is much easier without the burden of convincing customers that your product is worth buying.) That’s exactly what the music giant did with Microsoft, which now pays Universal for every Zune music player sold.

Now, Universal is targeting the iPod. And with 25% of the market, Universal has quite a bit of leverage against Apple. The company can threaten to pull all of its music from the iTunes Music Store unless Apple complies with a demand to impose a per-unit fee on all iPods. If successful, anyone who buys an iPod will be considered an assumed pirate, and Universal will receive money, regardless of whether any music from that label ever ends up on one of those iPods.

Is this really a road that music publishers want to go down? Aside from the obvious ill will it engenders from honest customers, such a move runs the risk of changing the purchasing calculations of people who own these devices. In effect, it legitimizes piracy in the minds of consumers.

If you’re an honest customer who purchases music today, your decision making may change if you know that record labels charge you simply for buying a music player. You’re already paying once up front—before you’ve even spent a dime to fill the device with music—so why pay again for the same thing when you want to download music? People will feel entitled to download whatever music they want, because they will know that they’ve already been billed for it.

Treating your customers like crooks is never a good way to encourage repeat business. And imposing a blanket music surcharge simply for buying a player is a surefire way to get people thinking that they’ve got a right to download music that they’ve already paid for.

If record labels wanted to ensure that paying customers today become pirates tomorrow, they couldn’t have designed a better way.

6 November 2006 >> In response to a post last week which cited a New York Post piece noting recent declines in newspaper circulation, reader Ari sends this possible explanation from the Freakonomics blog:

For the past several years, newspapers have been reporting on their own circulation declines with a strange degree of intensity. They write prominent, mournful, self-flagellating stories of their own decline that remind me of a friend who used to sniff his own underarm when he knew it was particularly randy. Every six months, when the circulation figures are reported, a new round of articles appears.

[...]

Not everyone is convinced that newspapers are dying, of course. Jack Welch wants to buy the Boston Globe; Dow Jones just managed to find a buyer who paid $282 million for six smaller newspapers; and of course several months ago, McClatchy bought Knight-Ridder. Circulation declines notwithstanding, these transactions suggest an underlying value that the newspapers’ own articles do not reflect.

The media executive Allan D. Mutter makes a very interesting point on his blog about circulation declines: a lot of them are essentially intentional. That is, circulation figures are falling in part because many newspapers�in response, I am guessing, to recent audit scandals at Newsday and elsewhere�have stopped distributing free or cheap copies of their papers, which used to be helpful in padding circulation figures.

This may be true, although I don’t see how this can be spun into a sign of health for newspapers. I also find it hard to believe that newspapers aren’t losing any readers due to competition from online (and other) outlets.

But let’s be generous and assume that 75% of circulation declines are a result of gradually eliminating deceptive circulation-pumping practices. What this means is that newspaper circulation is still declining several percentage points a year (depending on the particular paper) and that newspapers are obliquely owning up to the fact that they’ve been releasing artificially inflated circulation numbers for years.

This theory suggests that long-term declines in newspaper circulation won’t be as severe as current numbers indicate, but in order for this theory to be true, newspapers have to admit to yet another ploy that undercuts their credibility. Not exactly a face-saving trade-off.

25 February 2006 @ 11:38AM >> Reader Matt Walliser writes:

Evan,

Recent news about iTunes hitting their billionth download made me think a little more about your post a while back about the recording industry not adapting to new mediums. If they’re not careful, they’ll obsolete themselves to Apple’s iTunes. Apple has made it so convenient to get music onto your iPod, that people don’t seem to mind paying a buck for a song. The lawsuits brought forth by the RIAA agianst people who download music can only serve to push people towards iTunes. If Apple creates their own label and plays their cards right, they could have channel dominance from top to bottom. The best part is, it’s being handed to them by the very channel they’re about displace!

While I’d hate for any one company to completely control music distribution, the massive success of iTunes is a wake-up call to an industry that has been hitting the snooze button on every previous wake-up call since the dawn of the Internet era. Maybe this time, the industry will pay attention.

17 December 2005 @ 10:57AM >> There are many reasons why music CDs make unwise purchases.

But for those parents who still don’t quite get it, here’s a website that will help you make the right purchase for your kids.

15 December 2005 >> For far too long, newspaper websites have required that users register in order to read articles. Not only is it annoying for the user, it increases the chance that your inbox will become laden with spam. It also largely removes the newspaper from the global online discussion; bloggers are far less likely to point readers to a site that requires them to jump through hoops just to read an editorial or news item. On the web, if you can’t link to it, it might as well not even exist.

So I’m happy to report a welcome trend: some newspapers are seeing the light and doing away with the digital gates. Let’s hope that continues. In the meantime, for people who wish to keep their e-mail addresses private, there are other ways of crashing the gates.

9 December 2005 >> I remember seeing an old New Yorker cartoon years ago that had a guy in a bookstore telling a clerk, “I’d like a book on chutzpah, and I want you to pay for it.”

Out of that same mold comes this proposal from Joe Mathewson, a journalism professor at Northwestern’s Medill School of Journalism:

[N]ewspapers, as important to the civic health of our society as public transportation, have a claim on public allegiance that goes beyond financial measure. Does anyone believe that our society is better, our civic virtue enhanced, by the failure of the Washington Star and the New York Herald Tribune and the Chicago Daily News and all the other fine dailies that have perished for purely financial reasons?

Because declining readership and revenue threaten the newspaper industry, Professor Mathewson recommends converting newspapers into tax-exempt entities. In effect, taxpayers would be underwriting the publishing of newspapers by giving them a free pass on their tax bills.

Just imagine...not only would you have the privilege of choosing to buy the print edition of The New York Times or paying $50 a year for TimesSelect, under Mathewson’s scheme, you’d have the additional privilege of subsidizing the Times through tax breaks, which would underwrite an editorial page that consistently calls for higher taxes. You’d be paying taxes so the Times could lobby for you to pay even more taxes.

Chutzpah indeed!

5 December 2005 @ 12:59PM >> A systems analyst recently discovered that Sony’s CD copy protection scheme can damage your computer’s operating system installation and leave your system vulnerable to hackers. Recently, the Department of Homeland Security took notice, leading to a rebuke from Stewart Baker, the department’s assistant secretary for policy, who chastised Sony: “It’s very important to remember that it’s your intellectual property — it’s not your computer.”

4 November 2005 @ 12:16PM >> Three years ago, I warned about music CDs that were deliberately corrupted by manufacturers in order to prevent copying. Because such CDs were really not CDs at all—they violate the published standard for music CDs—some computers had trouble handling them, and the corrupted discs could cause those computers to crash.

Now Sony Music, in an attempt to stem piracy, is putting out a new form of CD containing copy protection code that hides itself on your computer. The software, which is technologically similar to spyware and computer viruses, has no uninstall feature, and attempting to remove it manually can render your CD drive inoperable.

The Washington Post reports:

The CDs in question make use of a technique employed by software programs known in security circles as “rootkits,” a set of tools attackers can use to maintain control over a computer system once they have broken in.

People may differ over what exactly a rootkit is, but the most basic ones are designed to ensure that regular PC monitoring commands and tools cannot see whatever has been planted on the victim’s machine. Because rootkits generally get their hooks into the most basic level of an operating system, it is sometimes easier (and safer) to reformat the affected computer’s hard drive than to surgically remove the intruder.

Sony’s anti-piracy program installer pops up when you drop one of these content-protected CDs into your drive. If you agree to install it, there is no “uninstall” feature. [Mark Russinovich, who discovered Sony’s rootkit software,] was able to use his knowledge of rootkits and the Windows operating system to zero in on the offending driver files needed to run the software. Unfortunately, he found that removing the program also erased the system files that power his CD-ROM drive, rendering it useless.

Russinovich also discovered that the Sony program drivers are configured to load themselves in “Safe Mode” (a diagnostic mode of Windows that is useful for fixing problems with the operating system), which he said could make system recovery extremely difficult if any of the program drivers has a bug that prevents the system from booting.

2 September 2005 @ 10:35AM >> In a posting aptly entitled “Recording industry announces plans to screw up remaining business model,” John Paczkowski at Good Morning Silicon Valley notes that some in the music industry are upset about Apple’s success with its online music store. Apparently, the store isn’t sufficiently bleeding customers dry, which may have something to do with its success:

The New York Times reports that some record labels, jealous of the profits Apple is making on sales of the iPod, are pushing the company to abandon the $.99 uniform pricing approach that has made iTunes so successful and instead adopt a multitiered model that would price songs by their popularity. New songs, they say, should be priced at up to $1.49; older, less popular songs at $.99 or less.

“I just think the music companies are now at a point where there’s too much money on the table not to insist [Apple accept variable prices],” Paul Vidich, a special adviser to America Online and former executive vice president of the Warner Music Group, told the Times. “The question is what do they want the profile of the business to look like going forward?”

Indeed. And beyond that, is the market for paid downloads established enough to sustain such a pricing adjustment in its dominant service? A sudden shift away from the $.99 sweet spot could send consumers fleeing back to the file-sharing networks.

Ironic, isn’t it, that the recording industry, which two years ago had no digital music strategy to speak of, is today trying to muscle the company that gave it a digital music revenue stream. “As I recall, three years ago these guys were wandering around with their hands out looking for someone to save them,” said Mike McGuire, an analyst at Gartner G2. “It’d be rather silly to try to destabilize [Apple], because iTunes is one of the few bright spots in the industry right now. [It’s] got something that’s working.”

For years, the recording industry has resisted the notion that its current business model is obsolete in the era of music-as-files. Even though the iPod and other MP3 players have effectively separated music from its physical medium, the industry itself has done little to embrace the mechanism that more and more people prefer for their music enjoyment. Instead, they’ve been busy suing teenagers who download music illegally and trying to prop up an outmoded distribution model. Music no longer needs to be trapped in circles of plastic, but the music business is so paralyzed by panic that they’re ignoring what customers want.

Is the industry so short-sighted that it would take the risk of knifing the most successful legal online music system? Probably. But disrupting the iTunes Music Store may just send many currently paying customers back to the illegal downloading.

If individual songs cost $1.49 each, many CDs would cost more if you bought them online than in a store. This doesn’t make any sense; the incremental cost of each album sold online is basically zero, whereas each CD obviously has the cost of materials embedded in the price. Many people will feel ripped off to pay a premium that provides them with nothing, so they probably won’t go back to legal online music buying. But it’s even less likely that they’ll go back to buying CDs, and that’s precisely the danger for the music industry.