Month: January 2008

The New York Times has a piece in Sunday on Gawker, and how it may have “jumped the snark.” It’s a look at some of the turmoil that the site has seen in recent weeks — including the departure of writer Richard Morgan after just one day, and the sudden resignations by former editor Choire Sicha and writer Emily Gould not that long ago.

Of Morgan, Nick Denton has said he “didn’t so much quit as splutter out. We did manage to get two publishable posts out of him before that happened. I wish him luck at a more leisurely institution” (for bonus points, you can read a transcript of an instant messaging conversation that Morgan and Denton had before he started.

In any case, the Times notes how recent stories in New York magazine and n+1 were rather unflattering, and talks about how the quality of the writing at Gawker has declined (according to some). The story also throws in some numbers about the traffic the site is getting now compared to the “glory days,” and just to pour salt in the wounds the writer calls up Tina Brown and Kurt Andersen and both say they no longer read it. Oh, snap.

For his part, Denton has a post in which he notes that Gawker has reportedly jumped the shark at least twice before — once in 2004 and once in 2005. Meanwhile, the site’s pageviews have continued to climb, according to a chart included in the post. Gawker’s views are now double what they were when the last shark-jumping comment was made.

It’s romantic in a way, the image of “citizen journalists” with their trusty cellphones, capturing news events around the world and allowing everyone to see instant photos or videos. But it can also be very dangerous, as a story out of China shows. As reported by CNN and at TechCrunch, a man who took pictures of a confrontation between townspeople and a company dumping waste was beaten to death by private security guards.

Although many stories describe Wei Wenhua, 41, as “a blogger,” he appears to have been a construction company official who merely started to record the fracas on his cellphone. A group of more than 15 “chengguan,” or private security contractors — sometimes referred to as “city inspectors” — reportedly attacked him and he was dead before he reached the hospital. In a press release, Reporters Without Borders calls Wei the first citizen journalist to die in China.

There’s a nice overview of the music industry’s dilemma in the current issue of The Economist. Nothing that surprising, but some worthwhile points — including a telling anecdote to start the piece, in which one of the major record labels has an epiphany about where the CD business is going:

“At the end of the session the EMI bosses thanked them for their comments and told them to help themselves to a big pile of CDs sitting on a table. But none of the teens took any of the CDs, even though they were free. “That was the moment we realised the game was completely up,” says a person who was there.”

There are also some numbers, of the kind that should make many a label stop and think, if they aren’t already:

“The volume of physical albums sold dropped by 19% in 2007 from the year before… For the first half of 2007, sales of music on CD and other physical formats fell by 6% in Britain, by 9% in Japan, France and Spain, by 12% in Italy, 14% in Australia and 21% in Canada.”

And some perceptive points about the slippery slope that the major labels find themselves on at the moment:

1. “Because sales of CDs are tumbling, big retailers such as Wal-Mart are cutting the amount of shelf-space they give to music, which in turn accelerates the decline.”

2. “Artists are receiving far less marketing and promotional support than before, which could prompt them to seek alternatives.”

3. “Record companies face such hostile conditions that their backers, whether private equity or corporations, are loth to spend the sums required to move into the bits of the music industry that are thriving, such as touring and merchandising.”

But perhaps the best point in the piece is the observation that the industry could have saved itself a lot of the pain it has seen over the past several years, and likely become stronger to boot, if it had shown more flexibility when digital music first became a reality, instead of deciding to sue everything that moved and call that a strategy. Now, they could be too far down the slippery slope to irrelevance to recover.

Some more details from Liz Gannes over at NewTeeVee about the efforts of movie writer Aaron Mendelsohn and some fellow striking writers to put together a mini-studio to produce Web content. They’re looking for VCs to put up $30-million or so to launch their studio, Virtual Artists — a name that appears to be a reference to United Artists, the seminal 1920s studio founded by Charlie Chaplin and others.

Incidentally, it’s worth remembering, as Paul Kafka points out at Silicon Alley Insider, that United Artists didn’t work out so well, in part because movies became longer and more expensive to produce. Most of those who formed the studio were also well-known actors — in other words, the “talent,” and not just a bunch of writers whom most of Hollywood (rightly or wrongly) assumes are a dime a dozen.

So will Mendelsohn and his gang be able to follow through on what Marc Andreessen recently described as the remaking of Hollywood in Silicon Valley’s image? That remains to be seen. Kafka worries that the economics of Web video are uncertain at best and there is certainly some evidence that that is true. But why does it always have to be a black and white question of Web vs. traditional TV and movies?

With Quarterlife, Marshall Hersovitz and Ed Zwick have shown that there can be a lot of overlap between TV and Web video, in both directions. Meanwhile, some comedians, actors and directors who started with short video clips — Andy Samberg and the Lonely Island crew come to mind — have managed to extend that into more traditional (and presumably lucrative) spheres. To me it seems a lot more like a continuum than a black and white separation of worlds.

Allen Stern of Centernetworks has a post up about how to get rich — theoretically at least — by coming up with a popular Facebook app. The numbers he has are from Adonomics (formerly Appaholic), an advertising analytics service aimed at Facebook developers, which is owned by a venture fund called Altura (“the first only-Facebook VC”). Adonomics will also guarantee a certain number of installs of your app for a fee.

According to Adonomics, the top Facebook app is FunWall, with 22 million installs and 3.6 million active users — or 16 per cent of the total. It’s not clear how the service defines active users. This app, according to Adonomics, is worth almost $30-million. If you do the math, that works out to about $8 per active user. Where does Adonomics come up with this figure? That’s also not clear. Apponomics is more than a little coy about the methodology behind its calculations.

I’m betting the numbers come from a place in Silicon Valley known as “Thin Air.” Is a Facebook app worth something? Sure it is. But is FunWall in any real sense “worth” $30-million? Maybe in some alternate universe. As an example of how Adonomics does math, the site says that Facebook has 60 million active users and a valuation of $18 billion, which “translates to $300 per active user.” Except that valuation for Facebook is hypothetical, and as a result virtually meaningless. (The script the company uses also likely violates Facebook’s terms of use).

Jeremy Liew of Lightspeed Partners says there are a number of factors that determine what a Facebook user is worth. Greg Thomson of Toronto has developed a number of apps — including My Aquarium — and says he now has more than 8 million installs. In this video from FacebookCamp, he says an active user is worth about $3 per year. Favourite Peeps was worth 4.5 cents per user, while RockYou says it thinks the average app user could be worth between 30 cents and a dollar.

“Bullets and machine guns cannot hurt me — I am already an immaterial being!” Francois “Papa Doc” Duvalier, former ruler of Haiti.

According to the Wall Street Journal, the Swedish authorities are close to launching charges against the founders of The Pirate Bay, perhaps the single most popular site for links to Bit Torrent files. The Pirate Bay offices were raided in 2006, and prosecutors say they have enough evidence to charge the founders with contributing to massive copyright infringement, for hosting index files that point to copyrighted material.

As others have also pointed out, this is a lot of sound and fury, signifying virtually nothing. Not only does Sweden have relatively lax laws on such things (although they have been tightened recently), it also has a political party that actually promotes piracy — known, not surprisingly, as the Pirate Party — and even some of the politicians who aren’t members of the Pirate Party seem pretty forward-thinking when it comes to the issue, as Mike Masnick notes at Techdirt.

Not only that, but the article eventually gets around to noting (down at the bottom) that very little can be done to dismantle The Pirate Bay even if the founders are charged, since the servers that run the site have already been moved elsewhere. Maybe the Pirate Bay bought the independent “nation” of Sealand after all? In any case, the company only consists of index files on servers — and therefore is virtually impossible to shut down. And even if it were, someone could easily replicate it.

Lots of sturm und drang in the blogosphere today over what Gizmodo pulled at CES: as editor Brian Lam confesses on the blog, they wandered around the giant tribute to commercialism and technological excess with a TV-B-Gone remote TV killer in their hands and had some fun with it. Plenty of people are claiming that they have ruined things for other bloggers — despite the fact that, as Valleywag points out, Gizmodo weren’t there as bloggers, but on regular old media passes — and Jason Calacanis in particular has been twittering about how this is a new low for Denton and gang.

Puh-leeze. Not surprisingly, Denton is unapologetic (although Lam says he’s sorry about disrupting the poor Motorola guy so many times during his presentation). Most of the events in the video are completely harmless, with TVs winking out as people are staring at them in the big hall — so what? I find it hard to get too excited about the whole thing, and much like Nick I find it refreshing that someone is standing apart from the slack-jawed and drooling coverage that CES gets in other places.

Was it childish? Sure. Sophomoric even? Undoubtedly. But it was still pretty hilarious, and Nick makes a good point: it shows a lot more life than anything CNET has ever done/said/written. It’s not as though the Gizmodo team was smashing TVs with hammers, for pete’s sake. This response is completely over the top. And John Biggs’ long post on the topic is kind of sanctimonious but has a point in there somewhere — just for the record, I am not in favour of puking on sales people, although some of them probably deserve it.

Via Mike Masnick at Techdirt, I came across a great post at TorrentFreak by Matt Mason, the author of a new book called The Pirate’s Dilemma. In what amounts to a preview of some of the arguments in his book (I assume, since it just came out), the former pirate-radio staffer talks about the idea that in many cases — not all, but many — piracy is actually a sign of an inefficient market, and thus the “pirates” are simply innovating where a given industry refuses to (or can’t, for whatever reason).

I happen to think that Mason is dead right, and that if the music industry had done more innovating (this is a start, but still rather late) and less suing of its customers, artists and labels would both be a lot better off than they are now. Are many downloaders shameless thieves who would never pay for anything anyway? Sure they are. But many more are music fans who are telling the industry through their actions that it’s not giving them what they want, or at least not how they want.

As Mike has pointed out many times at Techdirt, and points out again in his post on The Pirate’s Dilemma, the music industry is just one of the many industries that are struggling with the fact that they can no longer maintain the position of artificial scarcity that used to exist — in other words, they have lost much of the control they used to have over production and distribution. Time to stop whining and start innovating.

Being open — or at least wanting to appear open — seems to be gaining some traction: senior execs from LinkedIn, Flickr and SixApart have joined the Data Portability working group, the same one that representatives from Facebook, Plaxo and Google joined a couple of days ago. And according to TechCrunch UK, there are other moves afoot: Google, IBM and Verisign are said to be close to joining the group behind OpenID. One is designed to make it easier to move your data from place to place, and the other is aimed at making it easier to use a single sign-in for different services.

When I wrote about the Facebook and Plaxo news, I got some criticism in the comments and elsewhere for making too big a deal out of it. The companies in question were just joining a working group, many people said, not making any actual changes — and it’s true that such industry groups can become a little like the Bermuda Triangle, with good ideas circling in an endless spiral, unable to escape (there are some good tips on fake openness here).

Still, I think having them join is better than nothing. Marshall Kirkpatrick also notes in his post that these aren’t just deputy assistant coffee-fetchers from Google and LinkedIn and the other companies. Brad Fitzpatrick, the Google guy, was the creator of LiveJournal and is also involved with OpenID and Google’s OpenSocial effort. The Facebook representative is the guy behind Facebook Platform. Are they just joining as window dressing? I suppose it’s possible, but I doubt it.

One more point while I’m writing about data portability. Like many others, I’ve written about this — and the Scoble affair — as a case of who “owns” the data. Ed “Freedom to Tinker” Felten makes a good point in this post, which is that no one actually “owns” this data in any real sense. It’s shared by people with companies, who often share it with other companies through APIs and so on. I think Ed’s point is that it isn’t really helpful (and could actually be dangerous) to think about it as “owning” that data.

There’s a great interview with Trent Reznor of Nine Inch Nails up at CNET, in which he talks about his experience with the Saul Williams album he recently released as a “pay what you want” download (which I wrote about here). He says if he did it again — and he’s thinking of doing so for the next NIN album — he would offer a physical product as well as the download, and he talks about how music is essentially free now.

I say it’s a great interview, and it is — but Trent also says something that I think is pretty dumb: he says that he’s in favour of an Internet tax, in which everyone would pay their service provider $5 extra and that money would then be distributed to artists to compensate them for downloading. He’s not the only one who thinks this would be a good way to solve the problem, either; the Songwriters Association of Canada recently came out in favour of the exact same thing: i.e, a tax on ISPs.

This idea is appealing primarily because it seems so simple. In reality, however, it would be horrendously complicated to administer, on top of being wrong. Why is it wrong? Because imposing a tax on a broad range of people for the behaviour of a small percentage isn’t just unfair, it’s bad policy and in most cases doesn’t work (and please don’t compare this to the taxes I pay to provide medical care to smokers or whatever; that’s life and death, and this isn’t).

Why should everyone who uses the Internet — even those who just use it to get their email once a week, or to send a web link to their bridge club, or better yet to legally download songs from iTunes — have to pay a fee to compensate artists for the fact that less than 10 per cent of Internet users commit copyright infringement on a semi-regular basis? It makes no sense at all, despite how appealing it seems at first glance.

I sympathize with Trent, and with other artists who are struggling to find a way to adapt as traditional business models fall apart around them, but coming up with new taxes is the wrong solution. As Mike Arrington points out at TechCrunch, it is a both a dumb and dangerous idea for the industry.