future

Record companies really are screwed…

October 13, 2008 By Dan Thornton

If there’s one industry that is poised on the precipice of destruction in a time of financial crisis, I’d predict it’s record companies that are about to imitate the myth of lemming suicide.

Good Morning Lemmings! (pic by Snowrunner - CC Licence) — Good Morning Lemmings! (pic by Snowrunner – CC Licence)

I’ve been thinking about it for a while, and I’m not the only one, as Jamie Burke’s presentation shows (hat tip to Dave Cushman). Or the sometimes profane and provocative Bob Lefsetz, found via Seth Godin.

But the biggest proof that the record industry is a blinkered carthorse in an electronic age comes from Doug Morris, the CEO of Universal Music Group, who have a 32% market share of the legally provided recorded music sector (Notice how specific I have to be for clarity!). From an original interview in Billboard, Rafat Ali wrote about the comedy highlight on the Paid Content blog.

Now, to be fair, Doug does make some sense, and even promotes the fact that a good product is essential:

“There are certain rules in the business that never change. Now, you get people who enter the business at later stages in their lives who never believe that. They believe that if you get a record played a lot, it’ll sell more . . . it’s all nonsense. If you get a hit record played three times, it’s like it lights up, it’s like magic.”

And considering his success so far, that’s a pretty good endorsement of getting a good product out there for people to pick up and run with. But then it goes horribly, horribly wrong:

On RIAA lawsuits:

“It was an act to try and publicize that this is stealing and this is wrong. That’s one way to look at it. Did it work? I don’t know. Maybe it stopped some people from stealing, maybe it didn’t . . . Did they deserve to get caught? Probably. People don’t like policemen. I understand that. And maybe they’re right. But when you see all the stores close and you lose half your employees and you can’t sign bands to record them because people are stealing, we do things to try and stop it. You have a lot of people who think that things should be free. I don’t know how they think we should produce it for free, but there’s a lot of people who aren’t logical.”

If you want to know how a free business model works, speak to Chris Anderson! And then it gets worse…

“What I take seriously is the fact that we’re people who create art. Whether you like our art or not, it’s what we do. My whole point of view is this problem we’re in, which is caused by technology, will be solved by technology. Some genius on the other side will figure out how to stop the piracy that seems very logical to me.”

I’m not sure how good you have to be at business for it to become ‘art’, but I’m fairly sure the creators of art in the music industry are generally musicians, producers, video directors, graphic designers etc. I’m also sure I haven’t seen an Excel spreadsheet on display, even in the Tate Modern.

The only possible way that technology might be able to have a serious effect on digital piracy is if it’s supported by a totalitarian government and an army of state workers monitoring everything you do online *ahem* China *ahem*.

For anecdotal evidence, somewhere in my possession is a bootlegged cassette, a pirated vinyl LP, and my favourite, a pirated triple CD boxset with a hastily printed booklet inside! Strangely I don’t have any illegal MP3s that I know of, because I made the conscious decision to support bands that make them available legally for free, and to listen to the rest via Last.fm or similar alternative.

This ‘War on Piracy’ will be about as effective as the ‘War on Drugs’ and the ‘War on Speeding’. So not particularly effective at all. Mainly because it’s not going to have an effect on the mass populace who are shaping the entertainment industry in the way they want it to be usable for them – and the mechanisms to do this have become far, far more accessible and easy to use than in the 20th Century.

That’s why free music is provided by Nine Inch Nails, Radiohead (for remixes), Marillion, Everclear, etc. (I’m not including bands making freebies available for a limited time, like the Charlatans. Or the 1000s of great individual bands and musicians just making stuff free.

In fact, as I tenously looked for historical examples to make myself seem more intelligent, the Prohibition sprang to mind.

It gave rise to gangsters including Al Capone, who had 10,000 outlets in Chicago alone. And we have a booming business in sites offering illegal downloads, alongside P2P software.
Cost of enforcing Prohibition was high. By the same token, the cost of protecting the Recording Industry (i.e. record companies) is high enough to need increased royalty rates, targetting online radio by jacking the rates as high as possible.
The benefits on Prohibition were always debated. Some doctors even prescribed alcohol for certain ailments. By the same token, the merits of targetting individual downloaders are an often-argued topic.
Prohibition became increasingly unpopular during The Great Depression and was repealed in 1933. At a time of economic crisis and personal expenditure on entertainment evaporating, could this be the end?

There’s a future for musicians – the ones that create everything.

There’s a future for music producers, video directors, graphic designers, make-up artists, recording engineers, lighting engineers, music shops, guitar builders, etc, etc. All the people who provide tools, or add value within the music creation and distribution process – although some might find their options are reduced.

There’s a future for music distributors and influencers – Magazines (phew!), Radio, TV. And Internet Radio, Online Video, Blogs, Forums, Fan sites, Fanzines, Official sites, MP3 providers.

What I can’t work out is how the value that Record Companies offered (Up front money effectively ‘loaned’ to artists, and contacts at broadcast media) are now essential, or even important.

Can anyone help explain it to me?

(Funnily enough, I’ve been listening to great music during writing this. All on Last.fm!)

More on Digg – will business kill the community?

October 9, 2008 By Dan Thornton

It’s been interesting following recent events concerning Digg, especially considering my previous posts outlining the personal and idealogical problems I have with Digg, and the alternative ways available to get crowd sourced news.

I just read a great summary post by David Chen on Mashable, ‘Digg’s recent bans and the limits of crowdsourcing‘ which is a comprehensive look at what David calls ‘building a flawed system’, and the lessons learned – as well as looking at why Digg has banned top users, and how the business strategy is changing.

It reminded me of something I’d noticed recently. Here’s a graph from Compete, comparing Digg (blue line), with an alternative social content site, Mixx.com (red line).
Now, while it’s obvious that Digg is massively ahead at the moment, it appears to have levelled off significantly – and at the same time, notice how Mixx has grown around the same time as the Digg banhammer started making an appearance?

Now look at Mixx in detail:
Anyone else see something kickstarting some growth around Apri/May 2008?

Hmmmm.

Two things spring to mind. One is that Digg has vocally supported the community, and allowed top users a longstanding reign over the rest of the site – which means changing things, particularly without a clear warning, is always going to lead to problems – the question will be how big the problems will become?

And secondly, so many web services which seem to embrace, support and provide a Web 2.0, social media type approach, actually fall down on the Customer Service which is preached by those using them. I’ve always found Digg support to be incredibly varied, but always anonoymous. And the fall back is always on ‘the best for Digg users’ without ever explicitly saying what that means.

Other social news aggregations and voting sites like Reddit have also seen some growth, although in Reddit’s case, it may be down to other factors, such as opening up their service to Open Source installations.

But the fact that the high profile, long term devotees of Digg could be powering the rise in a close rival (in terms of the type of service provided) could prove to be a very interesting case study – if the very people Digg banned turn out to be able to power the rise of a challenge.

How CNN and Citizen Journalism can move forwards…

October 5, 2008 By Dan Thornton

I’ve already covered why the fake Steve Jobs heart attack story published on CNN’s iReport shouldn’t be seen as a fault of Citizen Journalism as a whole, and why we should all be encouraged to verify and fact check articles before we take them as gospel, or reprint them.

The Silicon Valley Insider has published a defence of their repeition of the story, but for me, it does little to convince me that they did anything other than repeated the story quickly to grab page views.Especially when they appear to justify reprinting any rumour that is possibly credible enough to be worth publishing.

‘Sometimes this information is fact. Sometimes it is rumor or scuttlebutt. Sometimes it is speculation. Always it is information that we believe is credible or interesting enough to bring to our readers’ attention.’

In their defence, the original story did contain a disclaimer: ‘We’re making calls, but as yet we have no idea whether it’s true. Confirmation/denial the moment we get it.’

Anyway, in my opinion, as someone who has worked on websites with User Generated Content, and various levels of moderation, I think there are a few ways that sites containing Citizen Journalism can evolve.

Scott Karp covers one method. Rather than a totally open system that just requires an email address and solving a Captcha code – effectively meaning anyone can publish fairly anonymously, CNN and other site owners could actively search out anyone already publishing content, and select people who demonstrate a verifiable responsibility/ability. Increasingly this will be the role of professional Editors online, and although it goes against the ‘open ideal’, the main downside is that it costs organisations time and effort. Scott goes into more detail, and the restrictions he’s applied to Publish2 in a post well worth reading.
Sam‘s post on my previous article highlights the legal dilemma – moderate everything at a huge cost, or let it be a free for all. I disagree that we shouldn’t blame a company that encounters problems because they’re not willing to pay for the resources to moderate a service – but I think there is a third alternative – crowdsource the moderation. An effective rating and reputation system would indicate reliability and past success rates in the hands of fellow Citizen Journalists. And although it will be tough to make a system than cannot be ‘gamed’ to a large extent, it would have avoided an event like the CNN one – where an account is used to make one fake story then disapear. The better the system and the more effort it takes to game it, the smaller the amount of fraudulent users that will make the effort.
Increase the private identification of users. One easy way is to offer a small payment for articles, which requires bank details/paypal account details etc – or even some proof of identity before being allowed to post. It may add to the need for resources – but it’s less work than moderating every article, and would also weed out many of the fraudulent accounts.

That’s three possibilities with a bit of thought. I’ve actually been thinking about this problem for a while, and I’m working on some ideas which may help to increase the reliability of Citizen Journalism and Blogging, whilst also removing some of the barriers the citizen journalists and bloggers undoubtedly face – if I heard Steve Jobs had suffered a heart attack, would I know who to contact for a fast response, and would they be likely to respond? Or would my attempts to verify the facts mean I get scooped by a larger site or mainstream media and miss out on the benefits of getting the news first?

In a 24 hour, second by second online world where every moment counts if you want to break a story first, we shouldn’t blame people for falling for the idea that accuracy can be discounted in the rush to publish before anyone else – especially as the result of it backfiring can be a loss of respect, authority and readers.

But I also don’t think we should excuse it as a necessary byproduct of online journalism which can’t be evolved and solved. That’s just laziness. And many of the comments on the Silicon Alley Insider story pick up on this. In our efforts to evolve online journalism, it’s just stupidity to disregard all that preceded us in ‘dead tree’ publications simply because the digital world offers new opportunities and challenges. In my next post, I’ll outline some of the things that should make the transition from ‘traditional’ to ‘digital’ journalism, if the online world wishes to base itself on solid foundations and be taken seriously in terms of reputation as well as numbers and revenue.

Worth repeating?

September 26, 2008 By Dan Thornton

Writing about how the election coverage on Twitter and C-Span points to the future of media coverage, I came up with a little gem that I thought might be worth repeating:

‘aggregation of sources of information provides a starting point for a media company to add its own expertise and reason to provide something of value.‘

That’s it really. A mainstream media source can’t just aggregate content. Anyone can do that and the winners are decided by those who obtain a reasonable community and audience. And there’s already plenty of people out there, from Yahoo Buzz to Digg, to Mixx, to Sphinn, to microblogging.com.

But by aggregating and adding interpretation, it not only creates dynamic changing content, but actually opens up and highlights the expertise that a good journalist can bring on top of raw information. One of the mistakes we’ve continued to make in mainstream media is to underplay how good many journalists are at going beyond raw data, and the myraid ways in which they add value to it.

I’ve long believed it, but not managed to sum it up quite so succinctly before. And it’s not a new idea for plenty of notable people, e.g. Scott Karp, Jay Rosen, Pat Thornton (still no relation!), Howard Owens, Jeff Jarvis, David Cushman. And there are many, many more people I could name, and I’m sure that’s just a small proportion of a collective wisdom which suggests numbers and expertise big enough to hopefully break out of the social media echo chamber. And we can see it with the adoption in growing ways by a small number of titles (I mentioned the LA Times and The Guardian, here). Now we’re adding C-Span to the list.

The Twitter election and a glimpse of the future

September 26, 2008 By Dan Thornton

As an Englishman (albeit one with a degree in American Studies), I’ve followed the U.S presidential nominations with a fairly casual interest, and with a slight leaning towards one candidate, but not enough that I’m going to talk about it.

Instead, I’m going to proclaim this the ‘Twitter Election’, and the sign of how news and reporting is changing for the better. First up is Twitter’s own Election 2008. It’s fascinating to watch the opinions and messages appearing every second, although the fact that it seems to be based around the keywords of candidates names means I’m tempted to tweet about McCain oven chips and see if it appears!

What’s interesting is how public service broadcaster C-Span has integrated Twitter, Blog coverage, Video, a Debate timeline and a keyword list into the ‘Debate Hub‘. It’s a great example of how ‘aggregation of sources of information provides a starting point for a media company to add it’s own expertise and reason to provide something of value.‘ Sorry, thought that sentence was worth highlighting, although other people have been saying the same thing for a while.

I’ve talked in the past about Twitter providing a news mechanism that trumps mainstream media for events like earthquakes. And I’ve taken a look at what mainstream media needed to do to utilise the new tools available or become increasing irrelevant.

But events like the death of Heath Ledger, or the various earthquakes around the world had a much more striking effect for those that were on Twitter at the time than for the majority of non-microbloggers waking up hours later and being perfectly happy with the coverage they were broadcast – because they weren’t up at 2am to witness how radically different it could be.

This time, it’s an event which has been flagged up in advance, allowing the word to spread – and it’s increasingly being adopted by various mainstream media sources to a greater or lesser extent, allowing far more people to see the benefits of microblogging over traditional coverage.

And I predict we’ll see more and more of this in the coming months, even with controversies like the decision from an U.S. newspaper and website to Twitter live from a child’s funeral. Whether or not it was the correct way to treat that particular situation at the current time, it’s a sign that the boundaries are shifting, and going past simply acknowledging Twitter coverage. And for microblogging to hit the mainstream, the boundaries need to be a long way further down the road than the mass adopters.

I think it’s also the reason for Twitter moving towards grouping, as much as for users. It’s why I was interested in the previously posted quote by Ev Williams, saying that groups are coming. I don’t think it’s necessarily about just Twitter for enterprise as an inward facing tool. I think in Twitter’s case it will also be about groups and tools for outward facing use by companies, which is why they’ve been seemingly slow to respond to Yammer, Present.ly etc.

It’s about raising routes to monetise from enterprise, but also providing the tools to grow the userbase to drive significant revenue. Facebook does OK at 100 million active users per month – Twitter has about 2.5 million registered used. And that mainstream exposure could be the push it needs.