Posts about beta

The Gapper gap

(Note: I’m going to link to the Financial Times three times in this post. You’re allowed two views a month at FT.com before being forced to register. If you’re conserving, I suggest you read the second two FT links.)

The Financial Times’ John Gapper gave my book a bad review because he refused to go along with its organizing premise and principal: that our economy and society are undergoing fundamental shifts as we move past the industrial age and that Google is a worthy totem to use to understand that change. Gapper instead treated the premise with surprising literalness (for a Brit) and decreed that Google is not a good example for business; Apple is.

I got some insight into Gapper’s worldview in a good piece he wrote last week on the death of Bertelsmann mogul Reinhard Mohn and, with him, the media moguls of his generation. Gapper does acknowledge fundamental change but he still explains it in the old, expired terms of the old economy, in terms of control.

The challenge of the internet is that it blows up the control of distribution, ensuring that all content owners – from Rupert Murdoch to the lowliest blogger – compete on equal terms. Moguls can no longer exploit its scarcity by buying television spectrum or by owning printing presses.

That is why media moguls have been pushed on to the defensive by a new breed of technology moguls such as Steve Jobs of Apple and Sergey Brin and Larry Page, co-founders of Google. Control of distribution has passed to people who make the software through which content passes.

He’s half right. Control of distribution was how the old moguls prevailed. But that is not replaced, one-to-one, with new control of distribution. The internet makes us all distributors. That is why you want to be open and part of the conversation so the people formerly known as the audience distribute you.

Google is not a distributor. Indeed, its greatest misstep to date, the book settlement, came in part because it uncharacteristically was going to control and distribute content (that it didn’t own). Google doesn’t distribute. It organizes. It links. Google is not in the software business. It is in the platform business (advertising being its primary platform). Apple, too, isn’t in the software business. It’s in the hardware business and that is what gives it control of distribution: we, the cult, buy its great products and take Apple’s control as the price. That, I realized, is why Gapper admires it, because it still has control, like the old media moguls. He defines and measures value in their old media terms.

Gapper is hardly alone. I’m using him as a convenient totem for media’s insistence on viewing the world through old media lenses. Both media and the world around it have changed in many more ways that I tried to outline in WWGD? That’s what I wrote in this post the other day about media’s blind spots to the realities of the new-media economy:

…the imperatives of the link economy, the need and benefit of giving up control, the advantages of creating open platforms over closed systems, the value of networks, the post-scarcity economy and the art of exploiting abundance, the need to be searchable to be found, the deflation innovation brings, the value of free, the triumph of process over product….

Now here’s the bigger question: How does this willful worldview affect the business analysis performed by business journalists? Gapper’s boss, FT editor Lionel Barber, predicted that “almost all” news organizations will charge for content within a year. That was in July. The clock’s ticking. I snarked at the time that if this same analysis were applied to GM, Barber would predict that the car company would simply raise its prices just because its cars cost more to make. There are no simple solutions to such fundamental change. Every industry has to remake itself under the new realities of the new economy. That is the story business media should be covering. But if media people refuse to – if, like the moguls Gapper eulogizes, they insist on holding onto their old ways – how good will they be at analyzing and predicting the future?

That speaks to the key recommendation in the good Luke Johnson FT column Gapper quotes in his Mohn piece. Johnson argues that lamenting change in media is futile and that media companies need to hire the digital natives who understand the new age.

The only answer is to hire as many bright young things as you can afford and hope their dynamism will counteract the inevitable conservatism of an existing institution. The media trade could learn from the technology industry, which is subject to wrenching structural upheaval at regular intervals.

Right. And Johnson also says that’s why the legacy companies are the least likely to see and build for the new world.

Unfortunately, a chief executive only a few years from retirement is hardly motivated to sack loyal colleagues to bring on board lots of teenagers to turn their company upside down. Psychologically, we are congenitally opposed to tearing down what we have helped create in order to build anew. Hence the status quo prevails, even if it is the demoralising task of managing decline with no salvation in sight. And so all efforts are applied to preservation in spite of a realisation that the economic model is broken – because no one is forcing the company in a new direction.

Right again. On this week’s On the Media, Ava Seave, coauthor of The Curse of the Mogul, told Bob Garfield that the media businesses that media reporters love to cover are and long have been bad businesses. But we don’t hear that – because, one assumes, they don’t want to hear that.

So how well equipped are reporters in legacy media companies to analyze the upheaval in the industries they cover? Where are their bright young things who see the world in new ways? Who is the Google of financial reporting?

: Later: Gapper responds.

Sidewiki: What Google should do

I spent yesterday marking the dangers around Sidewiki. Today, I’ll say what I think Google should do with it: close the toolbar app, open it up to the entire conversation, and turn it purely into an API. And probably buy Technorati.

I read a great deal of the discussion about Sidewiki yesterday: much of it in the comments on my blog post, much found through search in Technorati and Google News, much through trackbacks, much on Twitter, much through links on sites I read, and a tiny bit on Sidewiki itself (sorry, can’t find a URL to link to that).

Some of the comments said the conversation is already fractured and my trail would seem to prove the point. That was the common word – fractured. But I’d quibble with the choice and argue that the conversation isn’t broken; that it is occurring just where it should be: in the cloud, where it is controlled by no one.

I did complain about bifurcating the conversation on my own site and that’s because Google presents a second opportunity to comment from a site with comments and I do not see how that adds value there; it separates people. We should be doing the opposite.

I also complained about losing control of the comments and some folks, not surprisingly, thought they had me in a gotcha moment: “Hey, Jarvis, you tell newspapers to get over it and give up control but when it comes to you … heh, heh, heh.” OK. I, too, chose the wrong word. I should have complained instead that Sidewiki robs sites of the responsibility for comments. Many of the people who joined in my crusade yesterday said they work hard on the conversations on their sites to make sure they retain civility and quality – as good sites do – but now they can’t exercise that responsibility with Sidwiki comments that will appear essentially on their sites. Google promises an algorithm. Algorithms may be good at killing spam – albeit with syncopated delays – but they will not be good at policing the subtleties of trolls, prejudice, unfair competition, grudges, pettiness, and hate; those are human sins and it takes humans (and perhaps God) to see them.

The Guardian spends a great deal of resource on Comment is Free doing just that and when the conversation is about the Mideast, it knows from sour experience that it has to add extra precautions. There were no open comments on its Blogging the Koran. But now, with Sidewiki, there will be. Let’s say the Guardian gets too restrictive. Then there’s always the cloud. You can go to one of its competitors or create your own site and complain about what’s said on CiF and no one – except your hosts there – can stop you. That’s the essence of free speech on the internet.

It’s perhaps inconvenient that the conversation is distributed but wherever there’s such a problem, the wise see opportunities. Technorati saw that years ago and tried to bring the conversation together not by creating the ultimate conversation site but by adding organization and thus value to the conversation across the blogosphere. That was very Googley.

Google’s mission is to organize the world’s information and make it accessible – not take it over and centralize it. That’s what so many fear about Google book search: that is it not just linking to books but serving and thus controlling them (I still believe the settlement can cope with that). That is what I fear about Sidewiki: that it is not adding value to the conversation by organizing it but instead trying to hijack it. I’m surprised how tonedead [a happy typo I’m holding onto] Google is in this case. David Sleight called Sidewiki “a failure of empathy.” Or as a father says to a little kid: “What were you thinking?” One more metaphor: Google thinks its Snuffleupagus – big but cuddly and good – and just doesn’t realize that some people see it as a potential bully and so it has to act accordingly. With size comes responsibility.

So I think Google saw a problem where there wasn’t one: The conversation is not broken and doesn’t need fixing. It saw an opportunity to enable people to comment on sites that do not have comments – and to gain more beloved metadata from us about those sites – but it bigfooted the entire conversation trying to solve that; it went for a fly but put its fist through the wall. It wasn’t Googley.

Now I suggest that Google stand back and have that don’t-be-evil conversation about its mission and how it can add value to the conversation and to our collected knowledge about sites and entities without trying to take it over. Start by following Dave Winer into the cloud.

Google could try to organize – but not hijack – the entire conversation; no one has really done that yet. It could analyze comments on sites and understand them better and perhaps even try to find quality in them and their authors. It could use Friend Connect and Facebook’s APIs, as it has started to do, to enable those authors to establish and collect – on their own, via APIs – and burnish their identities across the web. It could bring together conversation about sites, whether those are blogs or companies’, as Technorati has done with blogs (that’s why I think buying it and putting it out of its strategic and technology misery would be the neighborly thing to do). It could then release an API (as it has done for Sidewiki) that doesn’t draw the conversation into one place but enables anyone to put up the conversation. So rather than starting another conversation, Google organizes it.

So I could finally put the broader conversation about the ideas in Buzzmachine on Buzzmachine, adding functionality that let my readers follow links and authors. So I could create a consumer site tracking what people are saying, good and bad, about, say, computer makers. So I could use apps to track conversations about topics that mattered to me. So I could track authors and what they comment about across the web.

Google would add value to the conversation – as I firmly believe it adds value to news – without competing with its creators. That is what I argue to news creators: that Google doesn’t want to become one of them but instead wants to succeed by helping them succeed. It’s a great argument, so long as it stays true. Books bring the same opportunity and challenge for Google.

In a sense, Google thought too big, bigfooting the conversation everywhere. But the real problem, ironically, is that it thought way too small, creating a new conversation instead of trying to organize the conversation that is the internet itself. That would have been so much Googlier, don’t you think?

: LATER: I neglected to cover the question of the toolbar app itself. If Google doesn’t create a separate conversation, then there would be no means to add comments via the toolbar. I’d suggest that a toolbar app could display content about a site or its topics; there’s nothing to stop Google or any toolbar or browser plug-in maker from doing that. This still means that malicious content could be associated with a site but Google wouldn’t be in the position of enabling and hosting it, only displaying it. I would suggest, however, that anyone who thinks they can use this to display advertising associated with a site atop that site should look up the Gator link in my post below: danger and lawyers await.

Did we ever pay for content?

In an essay that, on first blush, ranks near to Clay Shirky’s seminal thinking-the-unthinkable think piece, Paul Graham argues that we never paid for content:

In fact consumers never really were paying for content, and publishers weren’t really selling it either. If the content was what they were selling, why has the price of books or music or movies always depended mostly on the format? Why didn’t better content cost more?

A copy of Time costs $5 for 58 pages, or 8.6 cents a page. The Economist costs $7 for 86 pages, or 8.1 cents a page. Better journalism is actually slightly cheaper.

Almost every form of publishing has been organized as if the medium was what they were selling, and the content was irrelevant. Book publishers, for example, set prices based on the cost of producing and distributing books. They treat the words printed in the book the same way a textile manufacturer treats the patterns printed on its fabrics.

Information – Bloomberg terminals, stock newsletters – is a different business. Publishers flatter themselves when they argue they are in it.

What happens to publishing if you can’t sell content? You have two choices: give it away and make money from it indirectly, or find ways to embody it in things people will pay for.

The first is probably the future of most current media. Give music away and make money from concerts and t-shirts. Publish articles for free and make money from one of a dozen permutations of advertising. Both publishers and investors are down on advertising at the moment, but it has more potential than they realize.

I’m not claiming that potential will be realized by the existing players. The optimal ways to make money from the written word probably require different words written by different people….

The reason I’ve been writing about existing forms is that I don’t know what new forms will appear. But though I can’t predict specific winners, I can offer a recipe for recognizing them. When you see something that’s taking advantage of new technology to give people something they want that they couldn’t have before, you’re probably looking at a winner. And when you see something that’s merely reacting to new technology in an attempt to preserve some existing source of revenue, you’re probably looking at a loser.

The public life

The Guardian asked me to write a column about the transparent life and my writing about my prostate cancer. Here it is:

* * *

In the company of nudists, no one is naked and there is nowhere to hide. In this space and on my blog, I have been arguing that with the internet, we are entering an age of publicness when we need to live, do business and govern in the open. So I was left with little choice when I learned I had prostate cancer. I had to blog it.

So far, no regrets. Oh, one troll tweeted that in my blog post, I had merely used my cancer to plug my book (which, by the way, is entitled What Would Google Do?). But my Twitter friends beat him up on my behalf. I got emails pushing nutty cures on me – yes, there is cancer spam – but Gmail’s filters killed them for me. And I have had to be mindful not to bring my family into my glass house; my transparency shouldn’t necessarily be theirs.

But it has all been good. On my blog, on others’, in Twitter, and in email, I received an instant and lasting shower of good wishes and some good advice about my choice of surgery. My brothers in malignancy have shared their experiences with generous candour. I even inspired a few of them to blog their own stories. They joined me in urging men to have the PSA blood test that revealed my cancer.

After my blog post sharing the diagnosis was republished last week in the Guardian, I heard from Emma Halls, chairman of the UK Prostate Cancer Research Foundation, who said the disease affects almost as many men as breast cancer does women, but it gets less funding and little attention.

That stands to reason. We men don’t like talking about penises – certainly not when they malfunction. Discussing one’s incontinence and impotence post-surgery – both temporary, we hope – well, it doesn’t get much more transparent than that. It’s one matter for me to disclose my business relationships, politics, religion, and stock ownership on my blog’s “about” page; it’s another to do this.

So I think I’ve become about as transparent as a man can. I am living the public life. There are dangers here. I risk becoming merely a medical and emotional exhibitionist. And I know I have violated my own privacy to an extreme.

But I think we need to shift the discussion in this era of openness from the dangers to privacy to the benefits of publicness. It’s not privacy that concerns me, but control. I must have the right and means to keep my disease secret if I choose.

By revealing my cancer, I realise benefits, and so can society: if one man’s story motivates just one more who has the disease to get tested and discover it, then it is worth the price of embarrassment. If many people who have a condition can now share information about their lifestyles and experience, then perhaps the sum of their data can add up to new medical knowledge. I predict a day when to keep such information private will be seen by society as being selfish.

Collectively, we will use the internet’s ability to gather, share and analyse what we know to build greater value than we could on our own. That is the principle of transparency that I want companies and governments to heed: that openness in their information and actions must become their default, that holding secrets only breeds mistrust and robs them and us of the value that comes from sharing.

I believe this openness at the source will become a critical element in a new, linked ecosystem of news, as institutions and individuals will be expected to provide maximal information on the web. Such open intelligence also allows an unlimited number of watchdogs on those in power, helping to bring about a new, collaborative – and ultimately, I hope, more effective and efficient – system of journalism.

So for me, transparency is a necessary ethic of the age. That is why I used my medium, my blog, to share my prostate cancer. If I believe in the value of publicness, how could I not?

The death of snail mail & Sunday papers

The Washington Post reports that “in the past year alone, the Postal Service has seen the single largest drop-off in mail volume in its 234-year history…. That downward trend is only accelerating. The Postal Service projects a decline of about 10 billion pieces of mail in each of the next two years, going from a high of 213 billion pieces of mail in 2006 to 170 billion projected for 2010.”

No, physical delivery won’t ever die. (Like a good newspaperman, I lie in headlines to get attention.) Indeed, we’ll get more ever deliveries of more stuff that used to be on store shelves but are now ordered online. That’s what UPS’ and FedEx’ businesses are built for. But, as the Post says, we’re sending fewer messages to each other; we have much better means to do that now. And companies are trying hard to reduce their cost of dealing with us – billing, bank statements – by taking that online.

There is still a business to be had in distributing coupons and circulars (aka junk mail); this is why newspapers are holding onto delivery a day or two a week. But that’s transitional; it won’t last forever.

As volume decreases, costs to users will increase as deliverers try to cover fixed costs that just can’t be cut anymore. Newspapers like to think they, too, have fixed costs and that’s why they keep whining that readers “should” pay their bills. But they don’t; for their core business – content and advertising – papers have new efficiencies online that the Postal Service doesn’t have. Except for those trucks and presses. They are fixed costs and that puts them in the same sinking ship as the mail.

At some point soon, the couponers will desert both the Postal Service and newspapers because they’ll be just too expensive. But consumers still want coupons; they have real value. (I often tell the story of coming back from a strike when I was Sunday editor of the New York Daily News. We didn’t have coupons because our new owner, Robert Maxwell, was feuding with Rupert Murdoch, who controls coupons – aka FSIs or free-standing inserts – in the U.S. When we got them back, circulation went up more than 100,000. Those readers weren’t buying news. They were buying ads.) Coupons are creeping online but it’s still a pain to deal with them digitally. Mobile devices may be the solution, but they’re not there yet.

So physical coupons and circulars are still great business – if you can get them into consumers’ hands. And it occurs to me that someone will craigslist – that is, undercut – both newspapers and the Postal Service in the delivery business. It’s in the interests of Murdoch’s coupon empire to do so and work with large retailers that produce circulars to come up with an alternative. Or an entrepreneur could establish a network to make it happen. I see the return of the paperboy (oops, the world has changed since then; pardon me: the paperyoungperson): networks of small agents who can deliver this material, which isn’t wildly timely (get it there this week) without the cost structure needed for individualized delivery – the Postal Service – or with a time wrapper of expensive content – the newspaper. Again, it’s transitional, but it’s a nice business for some years.

Here’s what happens then: The cost of mailing an old-fashioned letter will become prohibitive as the Postal Service covers its fixed costs for a system we won’t kill.

And the economic benefit of distributing a Sunday newspaper will all but disappear and news organizations – the ones still standing – will have no reason to hold onto the presses and trucks.