Category: General

Dan Gillmor writes:

Technology and creative thinking have come to our rescue. Producers of audio programming have an array of inexpensive and easy-to-use tools, and much more flexibility in delivering what they create. Listeners are huge winners. From satellites in outer space to neighborhood broadcasting to our portable MP3 players and even our phones, we can get what we want, when we want it.

There will still be room, when the transition is finished, for traditional radio stations and networks — assuming they don’t successfully conspire with politicians and their entertainment-industry buddies to stifle the innovators, as they’ve pretty much done with Internet radio. The old guard will have to provide higher quality if it wants to survive.

Satellite radio isn’t just a mass-audience medium. It enables niche programming to succeed, when the niche can attract a national audience that would not be sufficient in a given community to support the program.

The niche a neighborhood can support is truly local programming, something that most commercial stations do half-heartedly at best. Despite the traditional broadcasters’ best efforts to erect roadblocks, we’re making slow progress toward small-scale service. Low-powered radio stations, serving neighborhoods as opposed to large geographical areas, are showing signs of emerging from the regulatory morass where they’ve been bogged down.

The broadcasters have insisted that low-powered radio would interfere with their signals. The evidence is otherwise.

One real value of traditional local radio for many of us is traffic reports and other truly local news. Even here, niche players will erode the franchise of the big broadcasters.

We can already get traffic reports on mobile phones, using services like TellMe and emerging competitors. As mobile networks get more sophisticated and start feeding data to in-car map displays and other gear, we’ll get real-time suggestions on the best personal routing to our destinations. Today’s radio stations should realize that mobile networks could also become the delivery systems for other kinds of news.

Meanwhile, down in the trenches of the technology world, some clever folks are creating something they’re calling “podcasting,” delivering audio programming to MP3 players like Apple’s iPod. The genre is at the distant periphery of radio today, but it has major potential.

Its significance is the flexibility it adds to the ecosystem. It helps us collect radio-like programming, some of which is being created by people using low-cost yet adequate audio tools, that we can put on our MP3 players and then listen to at our leisure. More intriguing, this is going to be a delivery system for gifted amateurs and, if they’re smart, professional programmers as well.

We can already save Internet radio broadcasts to our PCs and MP3 players. Now, devices designed to record radio straight off the air at designated times are starting to appear. Just as TiVo and other hard disk recorders are changing the way we watch TV, we can adapt radio to our own purposes, too.

It is interesting to see how a medium that was once written off is making a comeback aided by technology and creativity.

News.com writes about a panel discussion held recently to celebrate 10 years of Internet commerce:

The panelists offered an array of ideas about how e-commerce might evolve in positive ways during the next few years. Some of the ideas were new, and others have been discussed for years but have yet to take off. Most speakers agreed that the sales of music, movies, games and other digital products represent one of the most exciting and dynamic areas of e-commerce. Internet visionaries are also working on ratcheting up so-called personalization and localization technology to make Web sites anticipate a shopper’s every need wherever they happen to be.

Another holy grail is the prospect of luring consumers to shop over their cell phones–a big trend in Asian countries that hasn’t caught on as much in the United States.

Rosensweig and Bonnie predicted that Web logs and online communities such as Friendster would come to incorporate e-commerce features through “favorites” lists for music and games. The panelists agreed that online auctions and the migration of electronic transactions from proprietary Electronic Data Interchange networks to the Internet, will continue to grow and thrive.

Panelist Mary Meeker, an Internet stock analyst at Morgan Stanley, predicted that site outages would become more frequent during the next few years as the Web grows more complex. She also said the long-awaited rise of online “micropayments,” which are payments of only a few cents for goods and services bought online, is just around the corner.

Red Herring Blog writes that the “PC is no longer the center of the computational universe”:

This change is as important to understand as the shift from mainframe computing in the 1980s. PCs are just one of the devices in users lives that they expect to be intelligent and to perform a variety of functions on their behalf. In order to do this, PCs must be able to handle a wider variety of file types, especially media files, and recognize what to do with those files in different contexts. For example, just as people would be disappointed in a television that didn’t recognize a video signal, their expectation today is that the PC needs to be able to handle incoming video and the metadata that describes what is in the video.

All the guidance and interface functionality that has been developing on the web and in the personal video recorder market is converging (theres that word again), but the PC itself is just another conduit, like mainframe computers became in the enterprise when the PC was first introduced.

Convergence, it turns out, is a distributed phenomenon, not something that will happen within the narrow confines of the computer and television.

The real action is at the edge of the network, in sleek consumer electronics on the shelf at home or in the dashboard of a car and the palm of the hand. By migrating computational power into these systems, Microsoft is hoping to make the PC the hub of the personal media environment.

But Intel, which has squeezed profits out of the increased power in the CPU based on the well-worn ratios described by Moore’s Law, needs to invest more heavily in winning real estate in this new generation of devices in order to embed more of its application programming interfaces (APIs) into the media stream. Without those API hooks for developers to build on, Intel quickly will become obsolete on the desktop, because its chips will not be enablers of the media stream.

WSJ writes:

The TiVo video recorder, the iPod music player and the Xbox game machine all owe their existence to the same high-tech innovation: smaller, denser, cheaper disk drives. For nearly 50 years the disk-drive industry has driven advances in computers and gadgets by supplying new ways to store data.

But there’s one thing drive makers can’t produce: sustainable profits. Even during the tech boom, when makers of other high-tech innards like software and chips feasted, drive makers collectively lost money in 1998 and 1999. More losses followed during the bust.

For a few shining months last year, the $22 billion-a-year industry looked ready to pull out of its long slump. Sales and profits rose with the first whiffs of a tech recovery. A consolidation wave had reduced the field of competitors, and fertile new consumer markets were opening. Instead, the next 12 months became the industry’s latest debacle, as drive makers repeated their mistakes of the past.

Encouraged in part by aggressive sales forecasts from computer makers, they overproduced. Looking to recoup their investments in research, they began targeting each other’s markets. Inventories of unsold drives mounted, sparking deep price cuts that erased drive makers’ razor-thin profit margins.

The events of the past 12 months show just how tough it is to profit by selling disk drives, how fewer competitors can mean more competition, and how prices and revenue can fall amid improving demand.

Haig Shahinian writes:

Q: Why does every service provider want to own content these days?
A: I know why–unlike every other point in the digital multimedia value chain, content margins are actually increasing, while distribution and retailing are winding down towards nothingness.

Paul Kagan’s column gets it right when he says that buying content holders outright isn’t the way to go, leasing the content is. Didn’t anyone learn anything from the AOL-TimeWarner merger?

Here’s the thing: when VOD finally comes around to being a feasable service, it’s seriously going to change viewing dynamics in a big way. But one very important aspect for the VOD experience is a comprehensive library. Providers are going to need to allow access to a huge library of movies and shows from all over the content industry, not only from MGM or TimeWarner. If Comcast can secure a stake in every content company, then its strategy will work and more power to them, but realisticly that’s not going to happen and so if you don’t own a little of all, don’t own a little of any. Instead, lease it out like usual and stick to doing what you do best, distributing as much as possible, as convenient as possible, and keep your subscribers happy.

Reuters summarises comments made by Bill Gates recently:

The fundamental difference, he said, will be the demise of today’s concepts regarding channels and schedules. “The idea of just having that one linear thing — you don’t change your channel, so the local news leads to the whole lineup getting this great popularity — that’s on its way out,” Gates said. “But slowly.”

This change is being caused today by digital video recorders and by the breadth of available cable and satellite channels, he said. In the near future, however, the advent of Microsoft Windows XP Media Center Edition 2005 and other technologies will offer more options and flexibility to creators and audiences alike.

“The ideal for many content people would be that they just put their content on the Internet and then they have a direct relationship with the viewer,” Gates said. “That model for low-volume content is the future.”

Jon Udell points to an EPRI Roadmap, which writes: “The ultimate force pulling the electricity sector into the 21st century will likely be the technologies of electricity demand — specifically, intelligent technologies enabling ever-broader consumer involvement in defining and controlling their electricity-based service needs. As long as consumer involvement is limited to the on/off switch and time-of-day pricing, the commodity paradigm will continue to dominate the business and require regulation to protect a relatively weak consumer from cost-constrained suppliers.”

Jon Udell adds: “The EPRI roadmap takes a long view. The emergence of hydrogen as a complementary energy carrier, the decentralization of power generation, and the shift to renewable sources are seen as later-stage developments. The plan’s first priority is to modernize the power grid in order to ‘meet the precision-power requirements of the emerging digital economy.’ The expected payoff is twofold. First, to reduce the cost of power outages — both the direct cost of business losses, and the indirect cost of maintaining backup generating capability. Second, to maximize the efficiency of power use by making it responsive to price…It’s crazy, when you think about it, that your phone bill is exquisitely itemized but your electicity bill is a single number.”

Patrick Spain, the founder of HighBeam Research, writes:

As I look across the landscape of online content, I have observed some things that clearly work:

1. Users don’t care where the information comes from. They just want to know what is out there. So failing to include the free Web with your paid service is a big mistake.

2. Failing to provide premium for pay information on your free search is just as big a mistake. If the answer to a question relates to health or wealth, people will pay.

3. You have to be very clear and honest with users about what is free and what is paid. Don’t try to charge for content that is free elsewhere.

4. Users want a fast, intuitive interface to do their searches. Our typical users decide in a couple of seconds whether we are a useful service. When they first come, they will not take the time to tell us that they want results only in English and Turkish, as I had to do with Factiva.

5. Advertising on a for-pay site that does not interfere with the use of the site (as much of the advertising on free sites does) has no deleterious effects on sign up rates or retention. Done right, advertising enhances the attractiveness of a publication. Just ask The Wall Street Journal.

6. Free search and free trials are essential to demonstrate to users that you can be useful to them.

7. Enable the ability to save and repeat searches, store knowledge and convert that knowledgeable to usable form as a report, a contact, a spreadsheet or a presentation.

8. You can’t charge just for content. Charge for the convenience and delight of using your service. Why does Starbucks get 2-3 times what McDonald’s does for a cup of coffee?

Business Week has a special report: “From hybrid autos and solar panels to fuel cells and beyond, alternative energy is fast going from fringe to mainstream.”

Wired has a suggestion: “Forget squeezing millions from a few megahits at the top of the charts. The future of entertainment is in the millions of niche markets at the shallow end of the bitstream.”

Most of us want more than just hits. Everyone’s taste departs from the mainstream somewhere, and the more we explore alternatives, the more we’re drawn to them. Unfortunately, in recent decades such alternatives have been pushed to the fringes by pumped-up marketing vehicles built to order by industries that desperately need them.

Hit-driven economics is a creation of an age without enough room to carry everything for everybody. Not enough shelf space for all the CDs, DVDs, and games produced. Not enough screens to show all the available movies. Not enough channels to broadcast all the TV programs, not enough radio waves to play all the music created, and not enough hours in the day to squeeze everything out through either of those sets of slots.

This is the world of scarcity. Now, with online distribution and retail, we are entering a world of abundance.

This is the difference between push and pull, between broadcast and personalized taste. Long Tail business can treat consumers as individuals, offering mass customization as an alternative to mass-market fare.

What’s really amazing about the Long Tail is the sheer size of it. Combine enough nonhits on the Long Tail and you’ve got a market bigger than the hits. Take books: The average Barnes & Noble carries 130,000 titles. Yet more than half of Amazon’s book sales come from outside its top 130,000 titles. Consider the implication: If the Amazon statistics are any guide, the market for books that are not even sold in the average bookstore is larger than the market for those that are. In other words, the potential book market may be twice as big as it appears to be, if only we can get over the economics of scarcity. Venture capitalist and former music industry consultant Kevin Laws puts it this way: “The biggest money is in the smallest sales.”

Joi Ito and McGee have more.