business

A wireless router with 2 networks: 1 secure, 1 open

business, technology / /

From Bruce Schneier’s “My Open Wireless Network” (Crypto-Gram: 15 January 2008):

A company called Fon has an interesting approach to this problem. Fon wireless access points have two wireless networks: a secure one for you, and an open one for everyone else. You can configure your open network in either “Bill” or “Linus” mode: In the former, people pay you to use your network, and you have to pay to use any other Fon wireless network. In Linus mode, anyone can use your network, and you can use any other Fon wireless network for free. It’s a really clever idea.

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Anonymity and Netflix

business, security, tech in changing society / /

From Bruce Schneier’s “Anonymity and the Netflix Dataset” (Crypto-Gram: 15 January 2008):

The point of the research was to demonstrate how little information is required to de-anonymize information in the Netflix dataset.

…

What the University of Texas researchers demonstrate is that this process isn’t hard, and doesn’t require a lot of data. It turns out that if you eliminate the top 100 movies everyone watches, our movie-watching habits are all pretty individual. This would certainly hold true for our book reading habits, our internet shopping habits, our telephone habits and our web searching habits.

…

Other research reaches the same conclusion. Using public anonymous data from the 1990 census, Latanya Sweeney found that 87 percent of the population in the United States, 216 million of 248 million, could likely be uniquely identified by their five-digit ZIP code, combined with their gender and date of birth. About half of the U.S. population is likely identifiable by gender, date of birth and the city, town or municipality in which the person resides. Expanding the geographic scope to an entire county reduces that to a still-significant 18 percent. “In general,” the researchers wrote, “few characteristics are needed to uniquely identify a person.”

Stanford University researchers reported similar results using 2000 census data. It turns out that date of birth, which (unlike birthday month and day alone) sorts people into thousands of different buckets, is incredibly valuable in disambiguating people.

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If concerts bring money in for the music biz, what happens when concerts get smaller?

art, business, history, law / /

From Jillian Cohen’s “The Show Must Go On” (The American: March/April 2008):

You can’t steal a concert. You can’t download the band—or the sweaty fans in the front row, or the merch guy, or the sound tech—to your laptop to take with you. Concerts are not like albums—easy to burn, copy, and give to your friends. If you want to share the concert-going experience, you and your friends all have to buy tickets. For this reason, many in the ailing music industry see concerts as the next great hope to revive their business.

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It’s a blip that already is fading, to the dismay of the major record labels. CD sales have dropped 25 percent since 2000 and digital downloads haven’t picked up the slack. As layoffs swept the major labels this winter, many industry veterans turned their attention to the concert business, pinning their hopes on live performances as a way to bolster their bottom line.

Concerts might be a short-term fix. As one national concert promoter says, “The road is where the money is.” But in the long run, the music business can’t depend on concert tours for a simple, biological reason: the huge tour profits that have been generated in the last few decades have come from performers who are in their 40s, 50s, and 60s. As these artists get older, they’re unlikely to be replaced, because the industry isn’t investing in new talent development.

When business was good—as it was when CD sales grew through much of the 1990s—music labels saw concert tours primarily as marketing vehicles for albums. Now, they’re seizing on the reverse model. Tours have become a way to market the artist as a brand, with the fan clubs, limited-edition doodads, and other profitable products and services that come with the territory.

“Overall, it’s not a pretty picture for some parts of the industry,” JupiterResearch analyst David Card wrote in November when he released a report on digital music sales. “Labels must act more like management companies, and tap into the broadest collection of revenue streams and licensing as possible,” he said. “Advertising and creative packaging and bundling will have to play a bigger role than they have. And the $3 billion-plus touring business is not exactly up for grabs—it’s already competitive and not very profitable. Music companies of all types need to use the Internet for more cost-effective marketing, and A&R [artist development] risk has to be spread more fairly.”

The ‘Heritage Act’ Dilemma

Even so, belief in the touring business was so strong last fall that Madonna signed over her next ten years to touring company Live Nation—the folks who put on megatours for The Rolling Stones, The Police, and other big headliners—in a deal reportedly worth more than $120 million. The Material Girl’s arrangement with Live Nation is known in the industry as a 360-degree deal. Such deals may give artists a big upfront payout in exchange for allowing record labels or, in Madonna’s case, tour producers to profit from all aspects of their business, including touring, merchandise, sponsorships, and more.

While 360 deals may work for big stars, insiders warn that they’re not a magic bullet that will save record labels from their foundering, top-heavy business model. Some artists have done well by 360 contracts, including alt-metal act Korn and British pop sensation Robbie Williams. With these successes in mind, some tout the deals as a way for labels to recoup money they’re losing from downloads and illegal file sharing. But the artists who are offered megamillions for a piece of their brand already have built it through years of album releases, heavy touring, and careful fan-base development.

Not all these deals are good ones, says Bob McLynn, who manages pop-punk act Fall Out Boy and other young artists through his agency, Crush Management. Labels still have a lot to offer, he says. They pay for recording sessions, distribute CDs, market a band’s music, and put up money for touring, music-video production, and other expenses. But in exchange, music companies now want to profit from more than a band’s albums and recording masters. “The artist owns the brand, and now the labels—because they can’t sell as many albums—are trying to get in on the brand,” McLynn says. “To be honest, if an artist these days is looking for a traditional major-label deal for several hundred thousand dollars, they will have to be willing to give up some of that brand.

”For a young act, such offers may be enticing, but McLynn urges caution. “If they’re not going to give you a lot of money for it, it’s a mistake,” says the manager, who helped build Fall Out Boy’s huge teen fan base through constant touring and Internet marketing, only later signing the band to a big label. “I had someone from a major label ask me recently, ‘Hey, I have this new artist; can we convert the deal to a 360 deal?’” McLynn recalls. “I told him [it would cost] $2 million to consider it. He thought I was crazy; but I’m just saying, how is that crazy? If you want all these extra rights and if this artist does blow up, then that’s the best deal in the world for you. If you’re not taking a risk, why am I going to give you this? And if it’s not a lot of money, you’re not taking a risk.”

A concert-tour company’s margin is about 4 percent, Live Nation CEO Michael Rapino has said, while the take on income from concessions, T-shirts, and other merchandise sold at shows can be much higher. The business had a record-setting year in 2006, which saw The Rolling Stones, Madonna, U2, Barbra Streisand, and other popular, high-priced tours on the road. But in 2007, North American gross concert dollars dropped more than 10 percent to $2.6 billion, according to Billboard statistics. Concert attendance fell by more than 19 percent to 51 million. Fewer people in the stands means less merchandise sold and concession-stand food eaten.

Now add this wrinkle: if you pour tens of millions of dollars into a 360 deal, as major labels and Live Nation have done with their big-name stars, you will need the act to tour for a long time to recoup your investment. “For decades we’ve been fueled by acts from the ’60s,” says Gary Bongiovanni, editor of the touring-industry trade magazine Pollstar. Three decades ago, no one would have predicted that Billy Joel or Rod Stewart would still be touring today, Bongiovanni notes, yet the industry has come to depend on artists such as these, known as “heritage acts.” “They’re the ones that draw the highest ticket prices and biggest crowds for our year-end charts,” he says. Consider the top-grossing tours of 2006 and 2007: veterans such as The Rolling Stones, Rod Stewart, Barbra Streisand, and Roger Waters were joined by comparative youngsters Madonna, U2, and Bon Jovi. Only two of the 20 acts—former Mouseketeers Justin Timberlake and Christina Aguilera—were younger than 30.

These young stars, the ones who are prone to taking what industry observer Bob Lefsetz calls “media shortcuts,” such as appearing on MTV, may have less chance of developing real staying power. Lefsetz, formerly an entertainment lawyer and consultant to major labels, has for 20 years published an industry newsletter (now a blog) called the Lefsetz Letter. “Whatever a future [superstar] act will be, it won’t be as ubiquitous as the acts from the ’60s because we were all listening to Top 40 radio,” he says.

From the 1960s to the 1980s, music fans discovered new music primarily on the radio and purchased albums in record stores. The stations young people listened to might have played rock, country, or soul; but whatever the genre, DJs introduced listeners to the hits of tomorrow and guided them toward retail stores and concert halls.

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Today, music is available in so many genres and subgenres, via so many distribution streams—including cell phones, social networking sites, iTunes, Pure Volume, and Limewire—that common ground rarely exists for post–Baby Boom fans. This in turn makes it harder for tour promoters to corral the tens of thousands of ticket holders they need to fill an arena. “More people can make music than ever before. They can get it heard, but it’s such a cacophony of noise that it will be harder to get any notice,” says Lefsetz.

…

Most major promoters don’t know how to capture young people’s interest and translate it into ticket sales, he says. It’s not that his students don’t listen to music, but that they seek to discover it online, from friends, or via virtual buzz. They’ll go out to clubs and hear bands, but they rarely attend big arena concerts. Promoters typically spend 40 percent to 50 percent of their promotional budgets on radio and newspaper advertising, Barnet says. “High school and college students—what percentage of tickets do they buy? And you’re spending most of your advertising dollars on media that don’t even focus on those demographics.” Conversely, the readers and listeners of traditional media are perfect for high-grossing heritage tours. As long as tickets sell for those events, promoters won’t have to change their approach, Barnet says. Heritage acts also tend to sell more CDs, says Pollstar’s Bongiovanni. “Your average Rod Stewart fan is more likely to walk into a record store, if they can find one, than your average Fall Out Boy fan.”

…

Personally, [Live Nation’s chairman of global music and global touring, Arthur Fogel] said, he’d been disappointed in the young bands he’d seen open for the headliners on Live Nation’s big tours. Live performance requires a different skill set from recorded tracks. It’s the difference between playing music and putting on a show, he said. “More often than not, I find young bands get up and play their music but are not investing enough time or energy into creating that show.” It’s incumbent on the industry to find bands that can rise to the next level, he added. “We aren’t seeing that development that’s creating the next generation of stadium headliners. Hopefully that will change.”

Live Nation doesn’t see itself spearheading such a change, though. In an earlier interview with Billboard magazine, Rapino took a dig at record labels’ model of bankrolling ten bands in the hope that one would become a success. “We don’t want to be in the business of pouring tens of millions of dollars into unknown acts, throwing it against the wall and then hoping that enough sticks that we only lose some of our money,” he said. “It’s not part of our business plan to be out there signing 50 or 60 young acts every year.”

And therein lies the rub. If the big dog in the touring pack won’t take responsibility for nurturing new talent and the labels have less capital to invest in artist development, where will the future megatour headliners come from?

…

Indeed, despite its all-encompassing moniker, the 360 deal isn’t the only option for musicians, nor should it be. Some artists may find they need the distribution reach and bankroll that a traditional big-label deal provides. Others might negotiate with independent labels for profit sharing or licensing arrangements in which they’ll retain more control of their master recordings. Many will earn the bulk of their income from licensing their songs for use on TV shows, movie soundtracks, and video games. Some may take an entirely do-it-yourself approach, in which they’ll write, produce, perform, and distribute all of their own music—and keep any of the profits they make.

There are growing signs of this transition. The Eagles recently partnered with Wal-Mart to give the discount chain exclusive retail-distribution rights to the band’s latest album. Paul McCartney chose to release his most recent record through Starbucks, and last summer Prince gave away his newest CD to London concertgoers and to readers of a British tabloid. And in a move that earned nearly as much ink as Madonna’s 360 deal, rock act Radiohead let fans download its new release directly from the band’s website for whatever price listeners were willing to pay. Though the numbers are debated, one source, ComScore, reported that in the first month 1.2 million people downloaded the album. About 40 percent paid for it, at an average of about $6 each—well above the usual cut an artist would get in royalties. The band also self-released the album in an $80 limited-edition package and, months later, as a CD with traditional label distribution. Such a move wouldn’t work for just any artist. Radiohead had the luxury of a fan base that it developed over more than a dozen years with a major label. But the band’s experiment showed creativity and adaptability.

If concerts bring money in for the music biz, what happens when concerts get smaller? Read More »

China’s increasing control over American dollars

business, history, politics, security / /

From James Fallows’ “The $1.4 Trillion Question” (The Atlantic: January/February 2008):

Through the quarter-century in which China has been opening to world trade, Chinese leaders have deliberately held down living standards for their own people and propped them up in the United States. This is the real meaning of the vast trade surplus—$1.4 trillion and counting, going up by about $1 billion per day—that the Chinese government has mostly parked in U.S. Treasury notes. In effect, every person in the (rich) United States has over the past 10 years or so borrowed about $4,000 from someone in the (poor) People’s Republic of China. Like so many imbalances in economics, this one can’t go on indefinitely, and therefore won’t. But the way it ends—suddenly versus gradually, for predictable reasons versus during a panic—will make an enormous difference to the U.S. and Chinese economies over the next few years, to say nothing of bystanders in Europe and elsewhere.

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When the dollar is strong, the following (good) things happen: the price of food, fuel, imports, manufactured goods, and just about everything else (vacations in Europe!) goes down. The value of the stock market, real estate, and just about all other American assets goes up. Interest rates go down—for mortgage loans, credit-card debt, and commercial borrowing. Tax rates can be lower, since foreign lenders hold down the cost of financing the national debt. The only problem is that American-made goods become more expensive for foreigners, so the country’s exports are hurt.

When the dollar is weak, the following (bad) things happen: the price of food, fuel, imports, and so on (no more vacations in Europe) goes up. The value of the stock market, real estate, and just about all other American assets goes down. Interest rates are higher. Tax rates can be higher, to cover the increased cost of financing the national debt. The only benefit is that American-made goods become cheaper for foreigners, which helps create new jobs and can raise the value of export-oriented American firms (winemakers in California, producers of medical devices in New England).

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Americans sometimes debate (though not often) whether in principle it is good to rely so heavily on money controlled by a foreign government. The debate has never been more relevant, because America has never before been so deeply in debt to one country. Meanwhile, the Chinese are having a debate of their own—about whether the deal makes sense for them. Certainly China’s officials are aware that their stock purchases prop up 401(k) values, their money-market holdings keep down American interest rates, and their bond purchases do the same thing—plus allow our government to spend money without raising taxes.

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Details on the Storm & Nugache botnets

business, law, security, tech in changing society, technology / /

From Dennis Fisher’s “Storm, Nugache lead dangerous new botnet barrage” (SearchSecurity.com: 19 December 2007):

[Dave Dittrich, a senior security engineer and researcher at the University of Washington in Seattle], one of the top botnet researchers in the world, has been tracking botnets for close to a decade and has seen it all. But this new piece of malware, which came to be known as Nugache, was a game-changer. With no C&C server to target, bots capable of sending encrypted packets and the possibility of any peer on the network suddenly becoming the de facto leader of the botnet, Nugache, Dittrich knew, would be virtually impossible to stop.

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Dittrich and other researchers say that when they analyze the code these malware authors are putting out, what emerges is a picture of a group of skilled, professional software developers learning from their mistakes, improving their code on a weekly basis and making a lot of money in the process.

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The way that Storm, Nugache and other similar programs make money for their creators is typically twofold. First and foremost, Storm’s creator controls a massive botnet that he can use to send out spam runs, either for himself or for third parties who pay for the service. Storm-infected PCs have been sending out various spam messages, including pump-and-dump stock scams, pitches for fake medications and highly targeted phishing messages, throughout 2007, and by some estimates were responsible for more than 75% of the spam on the Internet at certain points this year.

Secondly, experts say that Storm’s author has taken to sectioning off his botnet into smaller pieces and then renting those subnets out to other attackers. Estimates of the size of the Storm network have ranged as high as 50 million PCs, but Brandon Enright, a network security analyst at the University of California at San Diego, who wrote a tool called Stormdrain to locate and count infect machines, put the number at closer to 20,000. Dittrich estimates that the size of the Nugache network was roughly equivalent to Enright’s estimates for Storm.

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“The Storm network has a team of very smart people behind it. They change it constantly. When the attacks against searching started to be successful, they completely changed how commands are distributed in the network,” said Enright. “If AV adapts, they re-adapt. If attacks by researchers adapt, they re-adapt. If someone tries to DoS their distribution system, they DoS back.”

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The other worrisome detail in all of this is that there’s significant evidence that the authors of these various pieces of malware are sharing information and techniques, if not collaborating outright.

“I’m pretty sure that there are tactics being shared between the Nugache and Storm authors,” Dittrich said. “There’s a direct lineage from Sdbot to Rbot to Mytob to Bancos. These guys can just sell the Web front-end to these things and the customers can pick their options and then just hit go.”

Once just a hobby for devious hackers, writing malware is now a profession and its products have helped create a global shadow economy. That infrastructure stretches from the mob-controlled streets of Moscow to the back alleys of Malaysia to the office parks of Silicon Valley. In that regard, Storm, Nugache and the rest are really just the first products off the assembly line, the Model Ts of P2P malware.

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Google PageRank explained

business, law, technology / /

From Danny Sullivan’s “What Is Google PageRank? A Guide For Searchers & Webmasters” (Search Engine Land: 26 April 2007):

Let’s start with what Google says. In a nutshell, it considers links to be like votes. In addition, it considers that some votes are more important than others. PageRank is Google’s system of counting link votes and determining which pages are most important based on them. These scores are then used along with many other things to determine if a page will rank well in a search.

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PageRank is only a score that represents the importance of a page, as Google estimates it (By the way, that estimate of importance is considered to be Google’s opinion and protected in the US by the First Amendment. When Google was once sued over altering PageRank scores for some sites, a US court ruled: “PageRanks are opinions–opinions of the significance of particular Web sites as they correspond to a search query….the court concludes Google’s PageRanks are entitled to full constitutional protection.)

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Virtual kidnappings a problem in Mexico

business, law, security, tech in changing society, technology / /

From Marc Lacey’s “Exploiting Real Fears With ‘Virtual Kidnappings’ ” (The New York Times: 29 April 2008):

MEXICO CITY — The phone call begins with the cries of an anguished child calling for a parent: “Mama! Papa!” The youngster’s sobs are quickly replaced by a husky male voice that means business.

“We’ve got your child,” he says in rapid-fire Spanish, usually adding an expletive for effect and then rattling off a list of demands that might include cash or jewels dropped off at a certain street corner or a sizable deposit made to a local bank.

The twist is that little Pablo or Teresa is safe and sound at school, not duct-taped to a chair in a rundown flophouse somewhere or stuffed in the back of a pirate taxi. But when the cellphone call comes in, that is not at all clear.

This is “virtual kidnapping,” the name being given to Mexico’s latest crime craze, one that has capitalized on the raw nerves of a country that has been terrorized by the real thing for years.

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A new hot line set up to deal with the problem of kidnappings in which no one is actually kidnapped received more than 30,000 complaints from last December to the end of February, Joel Ortega, Mexico City’s police chief, announced recently. There have been eight arrests, and 3,415 telephone numbers have been identified as those used by extortionists, he said.

But identifying the phone numbers — they are now listed on a government Web site — has done little to slow the extortion calls. Nearly all the calls are from cellphones, most of them stolen, authorities say.

On top of that, many extortionists are believed to be pulling off the scams from prisons.

Authorities say hundreds of different criminal gangs are engaged in various telephone scams. Besides the false kidnappings, callers falsely tell people they have won cars or money. Sometimes, people are told to turn off their cellphones for an hour so the service can be repaired; then, relatives are called and told that the cellphone’s owner has been kidnapped. Ransom demands have even been made by text message.

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No money changed hands in her case, but in many instances — as many as a third of the calls, one study showed — the criminals make off with some valuables. One estimate put the take from telephone scams in Mexico in the last six months at 186.6 million pesos, nearly $20 million.

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Tim O’Reilly defines cloud computing

business, technology / /

From Tim O’Reilly’s “Web 2.0 and Cloud Computing” (O’Reilly Radar: 26 October 2008):

Since “cloud” seems to mean a lot of different things, let me start with some definitions of what I see as three very distinct types of cloud computing:

1. Utility computing. Amazon’s success in providing virtual machine instances, storage, and computation at pay-as-you-go utility pricing was the breakthrough in this category, and now everyone wants to play. Developers, not end-users, are the target of this kind of cloud computing.

This is the layer at which I don’t presently see any strong network effect benefits (yet). Other than a rise in Amazon’s commitment to the business, neither early adopter Smugmug nor any of its users get any benefit from the fact that thousands of other application developers have their work now hosted on AWS. If anything, they may be competing for the same resources.

That being said, to the extent that developers become committed to the platform, there is the possibility of the kind of developer ecosystem advantages that once accrued to Microsoft. More developers have the skills to build AWS applications, so more talent is available. But take note: Microsoft took charge of this developer ecosystem by building tools that both created a revenue stream for Microsoft and made developers more reliant on them. In addition, they built a deep — very deep — well of complex APIs that bound developers ever-tighter to their platform.

So far, most of the tools and higher level APIs for AWS are being developed by third-parties. In the offerings of companies like Heroku, Rightscale, and EngineYard (not based on AWS, but on their own hosting platform, while sharing the RoR approach to managing cloud infrastructure), we see the beginnings of one significant toolchain. And you can already see that many of these companies are building into their promise the idea of independence from any cloud infrastructure vendor.

In short, if Amazon intends to gain lock-in and true competitive advantage (other than the aforementioned advantage of being the low-cost provider), expect to see them roll out their own more advanced APIs and developer tools, or acquire promising startups building such tools. Alternatively, if current trends continue, I expect to see Amazon as a kind of foundation for a Linux-like aggregation of applications, tools and services not controlled by Amazon, rather than for a Microsoft Windows-like API and tools play. There will be many providers of commodity infrastructure, and a constellation of competing, but largely compatible, tools vendors. Given the momentum towards open source and cloud computing, this is a likely future.

2. Platform as a Service. One step up from pure utility computing are platforms like Google AppEngine and Salesforce’s force.com, which hide machine instances behind higher-level APIs. Porting an application from one of these platforms to another is more like porting from Mac to Windows than from one Linux distribution to another.

The key question at this level remains: are there advantages to developers in one of these platforms from other developers being on the same platform? force.com seems to me to have some ecosystem benefits, which means that the more developers are there, the better it is for both Salesforce and other application developers. I don’t see that with AppEngine. What’s more, many of the applications being deployed there seem trivial compared to the substantial applications being deployed on the Amazon and force.com platforms. One question is whether that’s because developers are afraid of Google, or because the APIs that Google has provided don’t give enough control and ownership for serious applications. I’d love your thoughts on this subject.

3. Cloud-based end-user applications. Any web application is a cloud application in the sense that it resides in the cloud. Google, Amazon, Facebook, twitter, flickr, and virtually every other Web 2.0 application is a cloud application in this sense. However, it seems to me that people use the term “cloud” more specifically in describing web applications that were formerly delivered locally on a PC, like spreadsheets, word processing, databases, and even email. Thus even though they may reside on the same server farm, people tend to think of gmail or Google docs and spreadsheets as “cloud applications” in a way that they don’t think of Google search or Google maps.

This common usage points up a meaningful difference: people tend to think differently about cloud applications when they host individual user data. The prospect of “my” data disappearing or being unavailable is far more alarming than, for example, the disappearance of a service that merely hosts an aggregated view of data that is available elsewhere (say Yahoo! search or Microsoft live maps.) And that, of course, points us squarely back into the center of the Web 2.0 proposition: that users add value to the application by their use of it. Take that away, and you’re a step back in the direction of commodity computing.

Ideally, the user’s data becomes more valuable because it is in the same space as other users’ data. This is why a listing on craigslist or ebay is more powerful than a listing on an individual blog, why a listing on amazon is more powerful than a listing on Joe’s bookstore, why a listing on the first results page of Google’s search engine, or an ad placed into the Google ad auction, is more valuable than similar placement on Microsoft or Yahoo!. This is also why every social network is competing to build its own social graph rather than relying on a shared social graph utility.

This top level of cloud computing definitely has network effects. If I had to place a bet, it would be that the application-level developer ecosystems eventually work their way back down the stack towards the infrastructure level, and the two meet in the middle. In fact, you can argue that that’s what force.com has already done, and thus represents the shape of things. It’s a platform I have a strong feeling I (and anyone else interested in the evolution of the cloud platform) ought to be paying more attention to.

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6 reasons why “content” has been devalued

art, business, history, law, technology / /

From Jonathan Handel’s “Is Content Worthless?” (The Huffington Post: 11 April 2008):

Everyone focuses on piracy, but there are actually six related reasons for the devaluation of content. The first is supply and demand. Demand — the number of consumers and their available leisure time – is relatively constant, but supply — online content — has grown enormously in the last decade. Some of this is professional content set free from boundaries of time and space, now available worldwide, anytime, and usually at no cost (whether legally or not). Even more is user generated content (UGC) — websites, blogs, YouTube videos — created by non-professionals who don’t care whether they get paid, and who themselves pay little or nothing to create and distribute it.

The second is the loss of physical form. It just seems natural to value a physical thing more highly than something intangible. Physical objects have been with us since the beginning of time; distributable intangible content has not. Perhaps for that reason, we tend to focus on per-unit costs (zero for an intangible such as a movie download), while forgetting about fixed costs (such as the cost of making the movie in the first place). Also, and critically, if you steal something tangible, you deny it to the owner; a purloined DVD is no longer available to the merchant, for instance. But if you misappropriate an intangible, it’s still there for others to use. …

The third reason is that acquiring content is increasingly frictionless. It’s often easier, particularly for young people, to access content on the Internet than through traditional means. …

Fourth is that most new media business models are ad-supported rather than pay per view or subscription. If there’s no cost to the user, why should consumers see the content as valuable, and if some content is free, why not all of it? …

Fifth is market forces in the technology industry. Computers, web services, and consumer electronic devices are more valuable when more content is available. In turn, these products make content more usable by providing new distribution channels. Traditional media companies are slow to adopt these new technologies, for fear of cannibalizing revenue from existing channels and offending powerful distribution partners. In contrast, non-professionals, long denied access to distribution, rush to use the new technologies, as do pirates of professional content. As a result, technological innovation reduces the market share of paid professional content.

Finally, there’s culture. A generation of users has grown up indifferent or hostile to copyright, particularly in music, movies and software.

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Amazon’s infrastructure and the cloud

business / /

From Spencer Reiss’ “Cloud Computing. Available at Amazon.com Today” (Wired: 21 April 2008):

Almost a third of [Amazon]’s total number of sales last year were made by people selling their stuff through the Amazon machine. The company calls them seller-customers, and there are 1.3 million of them.

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Log in to Amazon’s gateway today and more than 100 separate services leap into action, crunching data, comparing alternatives, and constructing a totally customized page (all in about 200 milliseconds).

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Developers get a cheap, instant, essentially limitless computing cloud.

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I for one welcome our new OS overlords: Google Chrome

business, technology / /

As some of you may have heard, Google has announced its own web browser, Chrome. It’s releasing the Windows version today, with Mac & Linux versions to follow.

To educate people about the new browser & its goals, they release a 38 pg comic book drawn by the brilliant Scott McCloud. It’s a really good read, but it gets a bit technical at times. However, someone did a “Reader’s Digest” version, which you can read here:

http://technologizer.com/2008/09/01/google-chrome-comic-the-readers-digest-version

I highly encourage you to read it. This browser is doing some very interesting, smart things. And it’s open source, so other browsers can use its code & ideas.

If you want to read the full comic, you can do so here:

http://www.google.com/googlebooks/chrome/

BTW … I don’t think Chrome has the potential of becoming the next big browser; I think instead it has the potential to become the next big operating system. See http://www.techcrunch.com/2008/09/01/meet-chrome-googles-windows-killer/ for more on that.

I for one welcome our new OS overlords: Google Chrome Read More »

Dropbox for Linux is coming soon

business, tech help, technology / /

According to this announcement, a Linux client for Dropbox should be coming out in a week or so:

http://forums.getdropbox.com/topic.php?id=2371&replies=1

I’ve been using Dropbox for several months, and it’s really, really great.

What is it? Watch this video:

http://www.getdropbox.com/screencast

It’s backup and auto-syncing done REALLY well. Best of all, you can sync between more than one computer, even if one is owned by someone else. So I could create a folder then share it with Robert. It shows up on his machine. If either of us changes files in the folder, those changes are auto-synced with each other.

Very nice.

So check it out when you get a chance. 2 GB are free. After that, you pay a small fee.

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Russian music sites

art, business, technology / /

I just had a student email me asking about Russian music download sites. Here’s what I told him:

http://www.mp3sparks.com isn’t accepting payments. Dunno why. They haven’t for a long time, so they’re out of the picture, as far as I’m concerned.

I recommend looking at http://www.mp3fiesta.com now, as well as http://www.mp3sugar.com.

There’s a huge list of Russian music sites here: http://www.squidoo.com/russianmp3sites

Lots of good info there.

Oh, and don’t forget the Amazon MP3 store. It’s actually nice – cheaper than Apple, but not as cheap as the Russians!

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Web design contrasted with graphic design

art, business, technology / /

From Joshua Porter’s “Do Canonical Web Designs Exist?” (Bokardo: 14 November 2007):

… web designers necessarily approach design from a different perspective than graphic designers.

Graphic designers can judge by looking. Web designers cannot. Web designers must judge by doing (or observing others doing). The problem is that too many people judge web designs without actually using them. Instead, they look. When you use the shortcut of looking, you tend to judge what you’re looking at: the visuals. But when you use something, your relationship to that thing necessarily changes. I wonder how often Armin uses Google.

That’s why web design is different. Peer production, in particular, is extremely different. When I buy a book on Amazon, when you buy a book, we change the way the site works for someone else buying books, which is in turn changed by the reviews we write afterward. Is this not amazing design?

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What Dell learned from Wal-Mart

business, technology / /

From Fake Steve Jobs’ “Why Dell will not bounce back” (11 May 2008):

On the manufacturing side, Dell figured out faster than the others in its space how to squeeze component suppliers and play them off each other. They brought in loads of former Wal-Mart people to refine this practice. One example: If you want to sell parts to Dell you must agree to ship your parts to Round Rock, Texas, and store them in Dell-owned warehouses (paying rent to Dell!) and to hold them until the very moment Dell needs them at which time you drive your tractor trailer to the Dell manufacturing facility and unload your parts through the shipping bay — and only then, as the parts go across the threshold, does Dell take ownership of them. Thus you, Mr. Parts Supplier, end up paying rent to Dell for the privilege of carrying its inventory on your books. Nice, right?

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How Google motivates employees

business, language & literature, technology / /

From Larry Page’s “How to Motivate Your Staff” (Business 2.0: December 2003: 90):

We wrote a program that asks every engineer what they did every week. It sends them e-mail on Monday, and concatenates the e-mails together in a document that everyone can read. And it then sends that out to everyone and shames those who did not answer by putting them on the top of the list. It has run reliably every week since we started, so for every week of our company’s history we have a record of what everyone did. It’s good for performance reviews, and if you’re joining a project team, in five minutes you can read what your team members did the last few weeks or months.

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Why brands are declining

business / /

From Brian Gibbs’ letter printed in Wired (January 2005):

The explanation that the decline of brands is due to competition, informed consumers, and constant innovation is insufficient. There’s another factor wreaking havoc. Over the years, brands have lost their meaning because advertising campaigns developed by creative types have been clever and witty, but often not relevant.

Once, brands defined the meaning and mode of civilization: fresher-smelling laundry, tastier tuna, et cetera. Tide used to “get dirt out.” Now it “works wonders,” a vacuous, unprovable claim. Do Tide customers think that getting their laundry clean is a miracle? Do they have an unmet psychological need to deify their detergent? Of course not. Creative-led marketing has wrought the empty brand.

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