Let’s Talk About Revolutions (in media)

Image by Pop!Tech via Flickr

I reread this morning Clay Shirky’s great SXSW piece about the media business and i wanted to share some of his thoughts here.  Let me go through the end of the article a bit.  He starts:

Elizabeth Eisenstein’s magisterial treatment of Gutenberg’s invention, The Printing Press as an Agent of Change, opens with a recounting of her research into the early history of the printing press. She was able to find many descriptions of life in the early 1400s, the era before movable type. Literacy was limited, the Catholic Church was the pan-European political force, Mass was in Latin, and the average book was the Bible. She was also able to find endless descriptions of life in the late 1500s, after Gutenberg’s invention had started to spread. Literacy was on the rise, as were books written in contemporary languages, Copernicus had published his epochal work on astronomy, and Martin Luther’s use of the press to reform the Church was upending both religious and political stability.

I want to draw the obvious parallel to today’s revolution in publishing and in technology. I belive that just having email and IM has increased the literacy in America (maybe the world).  Not 15 years ago no kids were daily expressing themselves in written words, now they do all the time.  In 1996, i would frequently get emails in ALL CAPS and poorly written.  Now it’s a must-have skill.  But let’s continue with the speech….

What Eisenstein focused on, though, was how many historians ignored the transition from one era to the other. To describe the world before or after the spread of print was child’s play; those dates were safely distanced from upheaval. But what was happening in 1500? The hard question Eisenstein’s book asks is “How did we get from the world before the printing press to the world after it? What was the revolution itself like?”

Chaotic, as it turns out. The Bible was translated into local languages; was this an educational boon or the work of the devil? Erotic novels appeared, prompting the same set of questions. Copies of Aristotle and Galen circulated widely, but direct encounter with the relevant texts revealed that the two sources clashed, tarnishing faith in the Ancients. As novelty spread, old institutions seemed exhausted while new ones seemed untrustworthy; as a result, people almost literally didn’t know what to think. If you can’t trust Aristotle, who can you trust?

I find this same thing is happening with columnist and journalism.  Poor articles just get overlooked or debunked in comments.  The threshhold for well researched facts is higher as the audience is double-checking you every step of the way.  What happened with Aristotle is happenign today with every sports, politcal, and news writer in the world.

During the wrenching transition to print, experiments were only revealed in retrospect to be turning points. Aldus Manutius, the Venetian printer and publisher, invented the smaller octavo volume along with italic type. What seemed like a minor change — take a book and shrink it — was in retrospect a key innovation in the democratization of the printed word. As books became cheaper, more portable, and therefore more desirable, they expanded the market for all publishers, heightening the value of literacy still further.

Sound familiar to anyone? Can you say BLOG or TWITTER – such a simple concept.  Take publishing an article on a web page and shrink it to a blog or 140 characters.  What seems like a minor change has some profound responses.

That is what real revolutions are like. The old stuff gets broken faster than the new stuff is put in its place. The importance of any given experiment isn’t apparent at the moment it appears; big changes stall, small changes spread. Even the revolutionaries can’t predict what will happen.

Old stuff is indeed getting broken. Newspapers are gone or going fast.  Magazines are next.  Paper is being replaced by netbooks, iPhones and Kindles.  These devices are embracing different technologies and shorter-form content.  This is the real revolution that’s happening in front our face.  That Time Magazine you have in your mailbox will be a story you tell your grandkids about, “hey kids, get this, i used to walk to the mailbox and pick up a ‘magazine’ that had stories in it written down, printed once a week and sent to me.” and they will look at you the same way i look at my grandparents when they talk about a world with radio programs only and no TV.   Our new world has more content, better content, that is more easily shared and discussed – and it’s a beautiful thing.

Related articles by Zemanta

• This Is Our Media Revolution. Who Will Be Our Manutius? What Our Octavo? (snarkmarket.com)
• Gutenberg was a blogger (trishussey.com)
• The printing press as an agent of change (randomthougts101.blogspot.com)

4 Reasons Twitter Makes My Life Better

Image via CrunchBase

There’s an article i read today (thanks to Lizard) about how Twitter can you a better and happier person.  The reasons listed in the article are:

1. Transparency & Values: Twitter constantly reminds me of who I want to be, and what I want to stand for
2. Reframing Reality: Twitter encourages me to search for ways to view reality in a funnier and/or more positive way
3. Helping Others: Twitter makes me think about how to make a positive impact on other people’s lives
4. Gratitude: Twitter helps me notice and appreciate the little things in life

I find all of these true.  Sometimes i want to post a tweet about my life and i have to reflect about what i’m really doing and how it’s interesting to others.  It often makes me adjust what i’m actually doing – and if i don’t do that then it makes me realize how i’m actually living my life.  In that respect, it’s quite helpful.

Image of Twitter’s History

I think this is a great image of how Twitter got going.  Click here to see full size

From here

The iPhone and the world of computers

I’m an iPhone users and i love it.  It has transformed my mobile phone usage and dare i say, my life.  With the internet at my fingertips, i no longer go more than 10 seconds without knowing the answer to a question.   I have come to realize that the world of computers and the internet will always be with me, following me around and enriching my life.  It also makes me realize that my relationship with my computer is going to change.  Because i can Google, email, YouTube, Facebook, and check sports scores from my cell – my desire to have my computer near me is dwindling.

The new iPhone 3GS makes me think about the landscape of the computers out there.  If you don’t know it, there’s a new type of machine that’s becoming popular called The Netbook.  It’s a $200-400 machine that is quite small and sometimes comes attached to a wireless contract so it can be connected at all times.  In this regard, it is very similar to a cell phone purchase except in a bigger form factor. (click here to check out HP’s 200 dollar machine)

When i think about the machines out there, i think of this continuum:

One thing that is interesting is how Apple is has high priced machines in their Macbook Pro’s and Air devices and “lowend” machines in their iPhone.  Whatever market you’re at, Apple will have the slickest machine.  Microsoft, on the other hand, has less slick highend machines, and netbooks on the lowend.  Personally, i like Apple’s direction more but it’d be even better if they had a tablet or smaller sized laptop that was an iPhone/laptop hybrid for $400. I think the regular PC starts to disappear and all sales are Netbook sales.  Why would anyone pay $1000 when they can get a decently powerful machine for $200?

What will be great is the day day when all i have is my cell phone and i just plug it into monitors and keyboards when i want to work at a desk.  My iPhone cradle gets a lot more functional and my need for a second machine disappears.

Newspapers & Craigslist

As everyone talks about the death of newspapers, i’d like to remark on one of the majors elements in this death spiral: Craigslist.  To me the two major killers of the newspaper are:

1. Decrease of authority & differentiation
2. Lack of classified revenue

First, the decrease in authority and differentiation.  Every web site and publication needs to be an authority on something, anything.  Newspapers in the past were authorities for:

• local news
• international news
• sports
• entertainment

Over the past 8 years, they have no become the authority for only one of those: local news.  International news is dominated by CNN, Reuters and others who focus explicitly on that area.  Similarly, sports is dominated by ESPN and Fox News and Entertainment has a variety of outlets that provide much more in depth coverage and reviews than newspapers ever did.    This decrease in authority minimizes the importance of newspapers to readers.  For most categories listed above, it’s a nice piece of reading material to have but by no means necessary.

The second piece is Craigslist.  In 2000, newspapers pulled in $20 billion in revenue from classifieds. That went to $10 billion in 2008.  So, in 8 years revenues for newspapers got chopped in half (stats here).  Where did this money go, most of those services are now free on Craigslist.   Craigslist took $10 billion out of the industry and pocketed about $100 million of it.  To be exact, Craigslist is pulled in $80 million as of April ‘08 (stats).  Who knows what that will be for 2009 but prob at or around $100k.  With a  staff of 28 people so that’s pretty damn good.

Imagine that, a staff of 28 people is decimating an entire industry.  That is the true power of the internet.

Related articles:

• Rupert Murdoch on the future of newspapers (vator.tv)
• Newspaper ad revenue plummets! (ceoworld.biz)

Facebook Photos app is kicking ass

They are doing an absurd amount of photo content at 40 million photos uploaded a day!  A good video about it here

The movie Crash is #1 on Netflix

I read a really interesting article today.  It turns out that since 2005 the movie Crash has been the top rented movie from Netflix.  That’s 4 years of renting.  Crazy to think about.  The article interviews the writer/director Paul Haggis about this phenomenon. He has no idea why this is the case and has some funny quotes:

“I just assumed it was some sort of anomaly,” Haggis told the Tribune recently. “I have no idea why anyone went to the movie in the first place, let alone rent it. It was a little independent film, and when people started to see it, I was amazed.”

“It doesn’t make it any better of a film. I just know that these were things that were upsetting me, and I wanted to get them out,” said Haggis. “I happened to like my second film ['In the Valley of Elah'] better than ‘Crash,’ but no one went to see it.”

It doesn’t mention that maybe it’s because it won the Academy Award for Best Picture and nobody saw so everyone put it in their queue.  I wonder how many people got it delivered to them and sent it right back so they could get disk 3 of House a little bit faster.

Fred Wilson’s Take on Twitter

There’s a good video by Fred Wilson about Twitter and what he, as an investor in it, thinks about it.  What he boils it down to is three points:

1. “the single most important is that twitter from day 1 is a platform that others can build upon”
2. “it is very one-dimensional…it doesn’t do anything that is not in the timeline….It’s power comes from that – it’s straightforward”
3. “Twitter is the news feed for the web” as people embed links in their tweets and it’s now an alerting system

What else is interesting is that Twitter wasn’t pitched to Fred but rather he was an early user of it and he pitched to them to try to get them to take money from Union Square Ventures.  This is why i think Fred is one of the best VC’s in the business because he uses the products.  The web is all about product.  It’s not like the industrial revolution, it is a consumer facing which means that the usability is extremely important.  He is an early adopter and gets into the weeds. I have a hard time imagining other VC’s using Twitter when it was still a part of Odeo.

I Don’t Agree with the Hog Pile on Facebook

There’s a growing trend in the media to attack facebook.  It started when their redesign got pretty bad reviews, continued when their CFO left, and now is gaining steam as mainstream outlets are questioning it’s core business proposition. There are three different things here and the media is pointing to them as an indication of Facebook’s failure.  I disagree.  Here’s why:

Product enhancements. One thing i’ve admired about Facebook is their ability to keep pushing their product forward.  They introduced a great photo experience before any of their competitors (and have grown to be #1 on the web).  Even as they were experience phenomenal growth (they hit 8 million student readers), they completely redid their home page when they introduced the News Feed.  While initially hated by their users (FB blog) and the media (Time article), it set the standard for how social networks should display user activity and is now seen as a stroke of genius.  And growth climbed even higher.  At 70 million users they then completely redid the profile page to be a feed-based page as this is the best way for users to continuously portray themselves (see Tumblr for an example).  This was hated at first too.  Now, they redone the Facebook Home page to better showcase conversations and user activity.  Is it like Twitter? Yes.  Is it hated by their users? Yes. But it is also an improvement.  More than any other company i know of, Facebook is constantly pushing to get better in all areas and doing it fearlessly.  Even if they misstep, I applaud them for it.  From my experience at AOL i’ve seen that when yoy have a large user base it’s very easy to become tentative and second-guess every move.  Not changing becomes the easiest path.  It also means you start dying.   This latest change is more an indication that they’re not dying but moving forward.

Valuation.  Facebook got an absurd $15 billion valuation from Microsoft when it sold them some equity.  That deal was more than just equity sales but it also solidified Microsoft’s relationship with them as their exclusive third-party ad provider (story).  That valuation has become a problem as every new raise that happens in the industry (Twitter,  FriendFeed) is evaluated against it.  Facebook is now raising at a more reasonable level at a $5 billion valuation.  I don’t think this is an indication of failure of FB but rather a reflection (a) that these raises are straight equity and not part of an ad sales agreement, and (b) the market is the worst it’s ever been.  I think it’s ridiculous to think that the environment is the same as it was in October 2007.

Business Model. The media talks about Facebook’s failure to make an ad business out of their inventory.   Time’s article this past week was called, “Facebook Takes a Dive: Why Social Networks Are Bad Businesses.” This is completely ridiculous.  First of all, MySpace is making money.  Let me repeat.  MySpace is making money.  They were bought by Fox for $580 million and they then immediately did a deal with Google to sell ads on their search page from 2006 to 2010 for $900 million dollars (details here).  That’s a quick profit of $320 million.  Everything else on top of that year-in and year-out seems to be gravy.  The article in Time continues to say:

What is true is that social network sites have had trouble making money. MySpace was supposed to be a big part of the revenue growth at News Corp. Wall St. thought Murdoch was a genius to buy it. Last year, News Corp had to admit that MySpace would not hit its revenue targets. That is usually not the hallmark of a property that is going to take over the Internet.  Analysts believe that MySpace rival Facebook had revenue of $265 million last year. That is astonishingly low for a company that had 57 million unique visitors in the U.S. last month. And, Facebook also has a very large international user base.

So let me get this straight, even though MySpace is profitable at $500-800 million dollars a year in revenues and even though it’s generated hundreds of millions of dollars for News Corp it’s a bad business becuase they missed their revenue target last year?  That is completely ridiculous.  Facebook is a differnt issue.  They have repeatedly said that they are deprioritizing ad revenue and instead focusing on growth and user engagement.  Since they started saying this (starting in late 2007), they have grown from 50 to 200 million users.  I’d say that’s pretty good execution.  Facebook makes about $275 million a year.  Could they make another 100-200 million if they started selling more ads on search pages and profile pages?  Absolutely.

All of these reasons above are why sensationalist articles discussing the demise of the social network drive me nuts.   Nobody knows what the future holds, but one thing that we can pretty much be sure of is that sites that have great user engagement and activity – and facebook has over 20 million users update their status at least once a day – will get the ad dollars.  Nick O’Neil has a good post on AllFacebook today on why he’s willing to pay a $34 CPM on facebook.  It’s not the silver bullet but it shows that there is a profitable end in sight for the company and it’s not necessarily the horrible business the media would like it to be.

Thoughts on URL shorteners

This week there was lots of buzz around Bit.ly, a URL shortener company from Beatworks that raised 2 million dollars.  Betaworks is an incubator started by John Borthwick who i had the priveldge of working with at AOL.   Bit.ly is pretty sweet. Check out the things it can do for you:

• It uses a cookie to remember the last 15 links you’ve shortened and displays that history on the home page when you visit
• It allows you to set up a custom URL ending for your link.
• It automatically creates 3 thumbnails for every page you save a link to.
• It saves a cached copy forever of every page you shorten a link to, on Amazon’s S3 storage (processing is done on EC2, as well, so uptime looks good).
• It tracks click-through numbers and referrers so you can see what kind of traffic your shortcut got and from where.
• There’s a simple API for adding Bit.ly functionality to any other web app
• It uses Reuter’s Calais to determine the general category and specific subjects of all the pages its users create shortcuts to.
• All the data, including traffic data and thumbnails, is easily accessible by XML and JSON feeds.

That’s pretty slick indeed.  I think it’s interesting to see that investors see a service that helps developers and others garner more value from the web as a legitmate business. I’m presonally not sure where the business is in there.

An interesting post i read related to this is Delicious Joshua Schachter’s blog post about URL shorteners.  As he states, there are 3 people involved in shortening: (1) the site the link refers to, (2) the site/service  – the transit – containing the shortened URL, and (3) the user clicking on the shortened URL.  In his view, ALL are harmed from this service.  As he states:

The transit’s main problem with these systems is that a link that used to be transparent is now opaque and requires a lookup operation. From my past experience with Delicious, I know that a huge proportion of shortened links are just a disguise for spam, so examining the expanded URL is a necessary step. The transit has to hit every shortened link to get at the underlying link and hope that it doesn’t get throttled. It also has to log and store every redirect it ever sees.

The site where the link points to has milder problems. It’s possible that the redirection steps steals search juice. It certainly makes it harder to track down links to the published site if the publisher ever needs to reach their authors. And the publisher may lose information about the source of its traffic.

But the biggest burden falls on the clicker, the person who follows the links. The extra layer of indirection slows down browsing with additional DNS lookups and server hits. A new and potentially unreliable middleman now sits between the link and its destination. And the long-term archivability of the hyperlink now depends on the health of a third party. The shortener may decide a link is a Terms Of Service violation and delete it. If the shortener accidentally erases a database, forgets to renew its domain, or just disappears, the link will break. If a top-level domain changes its policy on commercial use, the link will break. If the shortener gets hacked, every link becomes a potential phishing attack.

Those all sound hairy, although it seems that Bit.ly has taken care of the some of the problems of the site disappearing by caching the page.  Even still, is the additional metrics provided by Bit.ly worth the loss of SEO juice?  It will be interesting to see how services like this begin to change the linking landscape and whether their services of providing accurate gauges of what’s “hot” are useful

Related articles:

• Bit.ly API Contest: Shorten URLs, Win Prizes (programmableweb.com)
• No Through Traffic? Don’t Be a Roadblock! (converstations.com)
• URL Shorteners: Please Resolve (stoweboyd.com)