Digital Music Primer

WSJ has a primer by Walter Mossberg and Katherine Boehret.

The main difference is that Apple has created an entire end-to-end digital media system around the iPod, and it works. In our view, and those of most other reviewers, the combination of the iPod’s design, the iTunes music software, and the iTunes Music Store, provides a superior experience to buying a player separately, using software from Microsoft, and buying music from an unaffiliated store.

As a result, the iPod, and the iTunes store, dominate the legal music world, with shares of more than 70% of the market, depending on how you measure it.

Google Turning Inventor

The New York Times writes:

[Google] is stubbornly sticking to its do-it-yourself approach to technology. Even as it spends more than $1.5 billion this year on operations centers and technology, most of the hundreds of thousands of servers it will deploy are being custom-made based on Google’s own eccentric designs.

To be closer to its users and speed response time, it is building a worldwide string of data centers, including a huge site in The Dalles, Ore., with technologies it designed to reduce its ravenous need for electricity. These computers in turn use software developed with advanced tools that Google also designed itself. There are signs that Google is even preparing to create its own custom microchips.


TechCrunch writes about Marc Canter’s new service: will be a fully functioning online social network in and of itself, but it will share information with other services through common identity standards for our profiles and through APIs (application programming interfaces) for our writing, multimedia and contacts.

Perhaps most important, PeopleAggregator will also provide new social networks with hosted software and later next month will offer downloads of the software for organizations who prefer to host it themselves. Licenses will be free for nonprofits and will cost commercial ventures a one-time sum after they successfully monetize the system.

What this means is that it will be easy to come and go from new social networks, instead of being locked in to one just because youve put the time and energy into using your account there. Instead of being at the mercy of one centralized database and service, if Canters vision succeeds then countless social networks will proliferate with unique styles and function but with interoperability.

Advertising Industry Upheaval

Jeff Jarvis writes:

Advertising is the next big industry to suffer huge upheaval thanks to the internet. They may think theyre already there, but theyre not, not by a long shot. In fact, it is the ad industry that is holding up the progress of other industries newspapers, TV, radio, cable that are already getting tromped on by that elephant. Advertisers can get away with moving slowly for now because they are the ones with the money. Funny how that works. But this wont last for long, as one client and then one agency discovers that the lazy, traditional, one-stop-shopping of TV upfront and the big-media lunch circuit is inefficient, wasteful, untargeted, irrelevant, and ultimately damned irritating to your customers. Once that tipping point comes, dollars will start flowing to the upstarts online not as many dollars concentrated in a few places as before, but spread out far and wide. As Bob Garfield pointed out in Ad Age and on On the Media, the upstarts arent quite ready for it, but once they see money sitting on the table, theyll get ready fast. The day of reckoning nears.

The New Publishing Model

Jason Calacanis writes:

Here is the new model:

1. Start a blog with adsense and make spare change.
2. Scale a blog to 250k to 1M pages a month and become big enough for Federated Media, AdBrite, and Blogads to care about you (i.e. sell your inventory)–now you’re making a living.
3. Scale over 1M pages a month and become big enough that you can afford your own sales group and fire Federated Media for taking 40% of your money because your cost of sales will be 15-20% as a stand alone business.

This is exactly what happened at the start of the Internet. DoubleClick used to do ad sales just like Battelle is doing at Federated Media. They got out of that business because the reward for helping a client to phase three was that they fired you–it sucks as a business (I still can’t understand why John got into it… I think he actually wants to help authors, which is noble, but I think as a business it doesn’t scale).

TECH TALK: Video on the Internet: Tomorrows TV

So, does the emergence of video on the Internet mark the passing away of the idiot box that has entertained us for so long? The New York Times suggests that TV isnt going away anytime soon:

The point of all these new video-content deals being struck by networks and studios is, of course, to avoid making the mistakes of the music industry, which focused too much on rear-guard actions like lawsuits and not enough on figuring out new ways to give the fans what they wanted.

The music analogy only goes so far, however. The way music is promoted and sold and listened to bears scant resemblance to TV and video products. Ventures like the one announced by Warner and the big networks are not really an alternative way of receiving conventional TV, but rather an alternative to buying or renting DVD’s coupled with an intriguing new market opportunity to reach viewers on their desktop or mobile devices.

David G. Sanderson, who heads the media consulting practice at Bain & Company, offers four reasons most people won’t be downloading their favorite shows onto their TV’s any time soon: limitations in broadband infrastructure, the degree of readiness among electronics makers to provide a product with mass appeal, the behavior of consumers and the agenda of the players in the TV ecosystem.

Mark Cuban believes there are technical limitations:

The last mile into our homes wont have enough bandwidth to support all that we will want to do via our internet connections at home. There is no moores law for bandwidth to the home. THere is a huge misconception that bandwidth will just continue to experience unlimited expansion for every broadband household. Its what we are used to with hard drives, processors, all technology. It gets faster, cheaper, bigger. Thats not the case for the next decade with bandwidth
The net result is that TV is going to be TV, delivered like TV for a long time to come. (I consider IPTV to be regular TV). There wont be enough bandwidth for it to be any other way.

The problem is that our consumption of digital media at home will continue to grow. The bandwidth we want to consume will many times exceed the bandwidth available to us at that time.

The viewing of internet video will continue to grow. We will upload and download more and more video, consuming increasing amounts of bandwidth. We will want to download movies in High Def quality. Digital pictures will increase in resolution, and we will upload and share our lives through digital pictures that consumes multiple mbs per picture. Too do all of the above without limit, where and when you want to do it just cant happen. For the vast majority of us, there wont be enough bandwidth for at will, unlimited downloads.

Next Week: Video on the Internet (continued)

Continue reading