Uniform Hieroglyphic

Tomorrow's Technology, Yesterday's Business Model

Ashlee Vance has an excellent feature today on Businessweek.com. Although the piece is burdened by the snappy, ambiguous title, The Tech Bubble Is Different, it's not the typical cyberutopian sermon you'd expect.

The gist of Vance's piece is this: the business model that underpins the social media bubble is advertising. This model has turned Silicon Valley into a magnet for the pure mathematicians who once went to Wall Street to develop trading decision algorithms; now they go to Palo Alto and design consumer behavior predicting algorithms and the Valley, instead of attracting the kind of hardcore computer scientists who once drove innovation, now just attracts quants. The quants, so Vance says, don't possess the kind of world-altering idealism of earlier generations of tech innovators. They're not looking to change the world, just to get you to click on an ad. As a result, Vance's reasoning goes, the social media bubble, when it bursts as all bubbles do, will leave behind no game changing technology infrastructure. The PC bubble put PCs into American households. The Internet bubble left behind the network infrastructure. The social media bubble will leave behind no such hard assets.

At least that's Vance's argument.

There's a lot of truth in what Vance has to say. The Internet--by connecting people and turning the computer, at least for consumer users, into, first and foremost, a communications device--has transformed the technology industry forever turning it into something that looks a lot more like the media business than the tech industry of old.

The horror and disdain this reality evokes from old-timers in the Valley is palpable in Vance's piece. Says one such person Vance quotes: "My fear is that Silicon Valley has become more like Hollywood--an entertainment-oriented, hit-driven business that doesn't fundamentally increase American competitiveness."

The quote captures the self-important, even sometimes delusional conflation of private business interests, public concern, and faith in science that has long characterized Silicon Valley, and which turned a simple observation about the pace of change in transistor manufacturing into "Moore's Law"--something with the whiff of basic physics as if inevitably planetary forces were involved. The quote also reveals the Goldwater conservatism that has always informed the basic presumptions in the Valley--increasing American competitiveness, there's a goal worth striving for, everything else is namby pamby hippie stuff.

But there's nothing wrong, of course, with entertainment and communications businesses. And they do actually produce innovative technology that changes not only the way we work (as if that were the only thing that matters) but how we play and, perhaps even more importantly, how we relate to one another. And one could easily argue that the role that Facebook, Twitter, and Internet telecom more generally played in, say, the populist revolutions in Tunisia and Egypt recently suggest that the social media bubble has already played a more important role in changing the world--and left behind a more important legacy--than, say, PowerPoint. Vance fails to measure or take any note of the kind of social change Internet communications and social media have enabled and, while not a legacy of hard assets, may in fact be no less important than PC penetration and the explosive group of Internet points of presence.

But in the end there IS something disappointing about how the advertising model has swallowed the world of computer technology. Back in the 1990s, when the Internet first began unwinding the world of traditional media, the dream for media technologist was not only about new ways of producing and distributing media, not only about community and user generated content, but also about a new business model that would support new media in a way that would allow for the continuing creation of not only pure entertainment media (like Farmville) but also new kinds of news products, and popular arts. Instead what has happened is that peer to peer file sharing and DIY media has driven the consumer price tolerance for media arts to $0; the movement of classified advertising from newspapers to the likes of Craigslist and Monster.com has hastened the demise of the urban newspaper, leaving us with the least well informed American population in a century; and, as Vance points out, Groupon--a cyber-coupon circular--is the fastest growing "tech" start up of the new bubble. Far from inventing a new business model for media, the Internet revolution has pushed the media business model into the world of technology, and the end result may well have been worse for the media sector than the tech sector.

 

 

Polls and the People Who Love Them

It's a popular rhetorical move among conservative pols to twist polling on issues they are concerned with into broad assertions that they, and not their political opponents, are the voice of the American people.

The list of things "the American people don't want"--determined by polls which inevitably proceed from one side of a debate or another and are packed with polemically slanted questions--according to Republicans in last election were the Obama healthcare reform package (continually mis-characterized as a government takeover of health care--if anything it's a government subsidy for private industry), gay marriage, economic stimulus, deficit spending, and liberalism itself.

Well, here's another thing that, by the same criteria "the American people don't want": public workers unions stripped of their collective bargaining rights.

According to a New York Times/CBS News poll: "Americans oppose weakening the bargaining rights of public employee unions by a margin of nearly two to one: 60 percent to 33 percent."

A Pew poll more specifically focused on the situation in Wisconsin found a a 41-32% split in favor of public workers (with a full 21 percent either not preferring one side or another don't know).

And among Wisconsin voters, a Public Policy Polling survey found that if November's election between Governor Scott Walker and Democratic opponent Tom Barrett were held today, Barrett would win big, 52 to 45%, mostly as a result of a shift among blue collar GOP voters.

It's actually Republicans, more so than Democrats or independents, whose shifting away from Walker would allow Barrett to win a rematch if there was one today. Only 3% of the Republicans we surveyed said they voted for Barrett last fall but now 10% say they would if they could do it over again. That's an instance of Republican union voters who might have voted for the GOP based on social issues or something else last fall trending back toward Democrats because they're putting pocketbook concerns back at the forefront and see their party as at odds with them on those because of what's happened in the last month.

Precisely the same kind of polemical polling--with the same sorts of leading questions, issues about the nature of those polled and the underlying agendas of the pollsters--produced the polls GOP candidates cited in November to claim they were the standard bearers for the will of the people.

But this morning, with exactly the same sorts of polls clearly showing the public favoring preserving the power of public unions, conservatives are up in arms about polling methods, cohorts, and the like--complaints the same folks never raise when equally colored polls return the results that they favor.

American politics and journalism have each become far too reliant on polls. Not only are polls themselves packed with inherent flaws--the inevitable biases, the small sampling sizes, the unreliability of respondents, the unwillingness of people to participate, the increasing difficulty reaching respondents through traditional means--but they see to serve, for journalists and politicians alike, as a new kind of ersatz class of facts, illuminating little.

Sure, polls can work fairly well in the context of simple yes or no questions, or even in elections between two candidates, where there are binary choices with none of the ambiguity, complexity, or subtlety presented when you try to reduce to a pollable question issues and attitudes that humans reflexively approach with nuance polls can't capture. If a respondent tries to answer a poll question with the real nuance and ambiguity most humans feel about more complex questions than Coke or Pepsi, all that happens is the response is invalidated.

But polls and surveys have come to govern our public lives. Politicans make all their decisions based on poll results. And increasingly new organizations use them as substitutes for substantive coverage. The New York Times off lead story today is the poll it conducted with CBS News, a glorified "man in the street" piece, a work of journalistic alchemy that has the impact of reducing complex social attitudes to simple opinions and then presenting those opinions as facts.

Look, I'm as fascinated with poll results as anyone. I write about them and use them to inform me about a range of topics. But I'm always aware of the limitation inherent in their methodology and would never be so bold as to proclaim that on the basis of the poll "the American people" can be said to want one thing or another. 

As a side note, last night I happened to catch Jamila Wignot's documentary about the Triangle Shirtwaist factory fire on WGBH's American Experience series. The film is terrific, replete with period photography from the tragedy that I had never seen before. The famous fire--in which 146 mostly teenage girls perished in a sweatshop a year after a strike led to concession like a 52 hour work week and 4 paid holidays but left the workers unable to unionize--was a galvanizing moment in the history of American labor. That 100 year old event is instructive in the history of the current disputes in Wisconsin and elsewhere. Sure, public employees today don't work in dangerous sweatshops. But America is at an historic crossroads and needs to decide how it is going to support it's aging population as it leaves or is pushed out of the workforce and left to live on precisely those meagre income streams that are continually under GOP attack--social security and negotiated pension benefits. Let's hope we don't need the spectacle of starving homeless retirees freezing to death in tent cities in the upper midwest to realize the workers have a point.

BTW, you can watch the documentary here. Highly recommended.

AOL Buys The Huffington Post: Into the Echo Chamber

Of the more than 100 discussion links Mediagazer has indexed on the matter of AOL purchasing The Huffington Post in the 11 hours since the deal was announced, there can't be more than a dozen original thoughts.

There are those that parse the deal itself, still best handled by the pros like Kara Swisher at the Wall Street Journal  who offers the best recap of the numbers;  or those that offer a play by play of how the deal came together.

There are those that speculate about what the deal "means" for AOL and its marketing  and business plans, for The Huffington Post, for other media properties AOL has launched or purchased in recent years (of which the Queen of all Media will now be editrix in chief), for the future of journalism, for the media industry, for blogs,  for Huffington's investors,  for personnel now in or out at the combined venture, for the legion of unpaid bloggers to which HuffPo redirects traffic.

There are insiders' takes--like Techcrunch's leaking of AOL CEO Tim Armstrong's memo to staff or Steve Case's compelling take on Huffington and Armstrong's synergy trope:

AOL to Buy Huffington Post; Tim Armstrong says "1 + 1 will equal 11" (NYTimes) http://nyti.ms/g3QFHN Really? That wasn't my experience, the AOL founder tweeted, before backtracking  to tweet that is was all in jest.

There are those that parse the politics of the deal. And others that cast a deliberately skeptical eye on the whole enterprise.

For the parties to the deal itself the acquisition looks like a no-brainer. AOL buys things it desperately needs: traffic, ad inventory, and perhaps most importantly, talent not least in the person of Huffington herself whose ubiquitous, Gaboresque presence on every global media platform has done more to drive traffic to HuffPo than anything else. For Huffington and her investors the $315 million deal, nearly all cash, delivers a huge payday at a 10X trailing revenue multiple that was perfectly described by MediaMemo's Peter Kafka as "a very pre-Lehman multiple."

Whether the deal works for the parties remains to be seen and will depend on the same things that matter in all mergers--how well the cultures of the two parties mesh, how effectively the principals can work together, what efficiencies can be wrought from a combining of sales operations--as well as the peculiarities of dealing with a media property so structurally tied to a single personality. Like her or not, Arianna Huffington is, to the portal that bears her name, what Martha Stewart or Oprah Winfrey are to their media empires.

There's also the matter of the particular challenge of Internet media itself. The Net is of course a participant's platform, not a consumer's platform, which makes sustaining a portal of any sort--even one that is as canny a mix of original and curated content as HuffPo--a little bit like trying to turn a tsunami into a hydroelectric plant. You can build turbines as quickly as possible, redirect the torrent as efficiently possible, but the water will flow where it will. Will unpaid bloggers, and media properties to which HuffPo links, continue to be satisfied with the traffic the portal sends their way?

Traditional media outlets have bemoaned the Huffington Post's habit of aggregating the first few paragraphs of other sites' stories, calling them traffic and revenue leaches. My experience has been just the opposite: getting picked up by the Huffington Post has lead to a huge number of readers coming to read our articles here at ReadWriteWeb, writes Marshall Kirkpatrick.

Or will they turn HuffPo's business model on its ear now that there's a deep pocketed sugar daddy writing checks? Or will some next gen frame for encapsulating DIY media just come along and eat HuffPo's lunch?

Emerging from all the arm chair punditry one fact is clear: nearly 20 years into the Internet media revolution, while new modes of communication and new forms of content have emerged, no new business model has developed. It's still all about the old verities of advertising--eyeballs and valueable demographics as Armstrong's staff memo made crystal clear.

And speaking of arm chair punditry, the most perverse take on the whole matter this morning came from veteran journalist and HuffPo employee Howard Fineman who offereda bizarre and defensive arguement in favor of  armchair vs. shoe leather reporting:

I've tried to follow my Columbia prof's advice, traveling in and reporting about 49 states (North Dakota, here I come); traveling privately and on fellowships to more than 40 countries; earning a law degree and writing a book on American history.

I have been lucky to ride waves of change in the business. I began in the days of three-ply copybooks, manual typewriters and glue pots, and have worked for a local community newspaper, a regional newspaper (The Courier-Journal in Louisville), Newsweek magazine, msnbc.com, CNN and now NBC and MSNBC.

When I succeed in doing anything worthwhile, it invariably was when I picked up the phone to make one last call, or read another document, or went to the Hill or the White House instead of calling, or got on a plane to get outside the Beltway, or drove across Des Moines or Little Rock or Austin for one more interview.

Today it's one more web site or tweet or video clip or email. But I'm still going there. You're welcome to come with me.

Can we really "go there" without going anywhere? That sounds like a lazy man's revolution.

Tablet Publishing--Will Less Equal More?

When I was working for Primedia Ventures--the now-defunct venture investment arm of the magazine publisher--we looked at a lot of "digital ink" sort of software and service providers with dreams of developing THE platform for magazine publishers looking to produce, and sell, digital editions.

That was a decade ago, and even then--looking at the glorified PDFs tarted up with animated navigation, and hearing about the revenue dreams of virtual kiosks--I thought a) why do users need a new platform when they already have the web?; b) why would subscribers pay for stuff that's on the web; and c) why do all of these digital magazines look so page-locked, no more advanced than the original CD-ROM based ezines of the early 1990s?

This weekend I thought I was having a flashback to those days reading Erick Schonfeld's vision of what a publishers iPad edition should look like.

What's scary for magazine publishers is how little has changed in terms of their ability to adjust to a network digital world. The one thing that perhaps has changed is the emergence of a mobile networked platform--be it derived from iPad-like devices or Kindle-like devices--that may offer a new opportunity. But to hear Schoenfeld tell it, publishers are locked into old ways of thinking as they approach this opportunity.

Writes Schoenfeld:

The New York Times iPad app, for instance, is gorgeous but crippled. All the links are stripped out of the articles, even from the blogs. Meanwhile, most iPad magazines are little more than PDFs of the print issues with some photo slideshows and videos thrown in. They end up being huge files—I recently downloaded a single issue that was 350 MB, some issues of Wired are 500 MB—with the same stale articles as in the print version. Replicating a dead-tree publishing model on a touchscreen is a recipe for obsolescence.

I'm not sure I entirely agree with Schoenfeld. Replacing dead-tree books with ebooks seems, finally, after nearly 20 years of trying, to have become a growth business thanks to the emergence of a device like the Kindle that works for end users, with little or no repurposing or reformating of the text itself. And the stack of guitar mags, comic books, shelter mags, fashion mags, newsweeklies and other such titles cascading down mine and my wife's night tables, brimming out of the baskets and magazine stands that litter my house, argue in favor of a tidy, device based substitution.

But it may be true that the killer media property for a tablet is a tablet native property that does look something like Schoenfeld's dream:

If I were creating an iPad mag it wouldn’t look like a magazine at all. It would look more like a media app, and there wouldn’t be any subscription or even distinct issues. New content would appear every time you opened it up, just like when you visit TechCrunch or launch Flipboard or the Pulse News Reader. In order to make it addictive, it would have to be realtime. But it would also be more selective than simply reading everything that anyone links to in your Twitter or Facebook streams.

Instead, it would present readers with a continuum from original articles and videos to curated streams by topic. The curated streams would combine Tweets from the staff writers and editors with those of other journalists, entrepreneurs, and experts for any given topic or section. These streams would be unpacked Flipboard-style into a magazine-like layout, but with more filters to show trending stories and highlight the ones which are getting the most buzz.

But maybe not. Maybe in a universe already teeming with interactive multimedia, crammed with links and buttons like a NASCAR racer crammed with ad logos, paradoxically there maybe be value to simplified tablet based content with somewhat lighter-duty interactivity and multimedia than Schoenfeld imagines, the value to end users instead being portability and convenience.

At VentureBeat, Peter Yared responds to Schoenfeld with an interesting take somewhere between Schoenfeld's perspective and my own, noting that mobile app design is leading to revamped web design which is actually resulting in a simplification of web design:

Think about how Web design happens in the real world. Does anyone really care about your mission statement? In a groupthink-friendly marketing meeting, it gets tacked onto the homepage. And then a social-media expert recommends a Facebook plugin and sharing links for a dozen or so popular sites. Then a recommended-content widget to drive more pageviews. Sales wants more ad inventory. (Startups like BrightTag have sprung up purely to manage this mess.)

Against that tide of flashy flotsam comes the iPad. For the smaller screens of mobile devices, hard decisions have to be made, and the crap gets cut. Which raises the question: Why was it ever there in the first place?

Indeed. Could it be that for the first time since the Internet exploded media we're headed for an era in which less is actually more? Where fewer points of entry, greater simplicity, makes for a more successful user experience?