DRM As A Weapon: Universal vs. iTunes…

August 13, 2007 By Leave a Comment
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EMI was the first big record company to offer non-DRM encoded versions of their music for sale online. Apple and EMI announced in April that they would offer non-DRM encoded versions of their catalog for $1.29 per song, with the option for people to still buy the DRM’ed version for just $.99 per song. While not a significant shift in the business model, it was a big step forward for an industry traditionally obsessed with copy protection.

200px-universalmusic.gifLast week Universal – the largest record company in the world – announced they would join EMI and start selling their catalog online without DRM. But unlike EMI, their non-DRM versions will be just $.99 per song – no premium will be attached. But pricing isn’t their only difference from EMI.

Universal will not be selling their unprotected versions on iTunes…

How come? Universal’s move is not about them “finding religion” on the ultimate fultility of the industry’s DRM stance. It’s about fear, and right now they are more afraid of iTunes than they are of selling unprotected MP3′s. Universal sees iTunes as the lone online “superpower”. They are looking for some way to create a second superpower to rival them, or at least a Lilliputian-like army of smaller outlets to subdue the iTunes giant. They want leverage against the iTunes store, and see this as their best shot at creating some type of meaningful competition to achieve this.

They want to give other stores something to offer their customers that they can’t get on iTunes, while at the same time not pulling off of iTunes and risking a potential loss in revenue. They believe they can accomplish this by creating a “DRM Divide” between iTunes and other music stores.

While this is an interesting play by Universal, I think it will ultimately fail…

One of the reasons for iTunes success is the strength of the overall music ecosystem Apple has developed. The iPod is the clear winner in the portable media player market, and it’s integration with iTunes is truly seamless. It combines an online store with a user’s library, and syncs it all to an iPod without any configuration or user knowledge of the process

Most people are not technical, and have no interest in dealing with multiple steps to buying music. They don’t want to take a ‘file’ that they bought somewhere else and import it into iTunes. They probably don’t even know where the music files they buy actually are on their computer. But when they buy a song from the iTunes store, it shows up right there in their library. For the average person using an iPod, that means a lot.

Certainly more than any DRM encoding they may not even be aware of…

And for Universal to make this work, they will need to lure a lot of iPod users over to non-iTunes venues.

Not likely…

While I’m passionate that DRM as it exists today is a big problem (the word “evil” comes to mind), it isn’t the biggest problem the record labels have right now. Their biggest problem is that the fundamental business model around music is collapsing, and they need to reinvent themselves in a hurry. But they have no vision of “what’s next” or where they are headed. They need to bring new people into the online music space, and get existing online buyers to buy a lot more – something the probably won’t do at a buck a track. And while they may long for the days when albums ruled and CD sales boomed, those days are gone and not likely to return. Unfortunately, Universal’s move to open up and sell unprotected songs online is really a hollow gesture that has nothing to do with bringing their business into the future.

For Universal, it’s all about trying to preserve the past…

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What Happened To Integrity…

August 8, 2007 By Leave a Comment
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Last night, Barry Bonds smacked homer number 756, passing Hank Aarons record of 755 career home runs. It was a record that stood for over 30 years.

And in many people’s minds, it still stands…

Barry Bonds, despite his denials, used steroids. He knows it, and so does everyone else. And because of this, his accomplishment is hollow. He passed a number, but he didn’t set a record. He fabricated with chemical enhancement something his predecessor accomplished with talent and determination. He took a shortcut while everyone else ran the course. So no one really cares.

His lack of integrity has nullified any glory in the deed…

And a lack of integrity isn’t confined to the sports world.

    We recently went through a period where a few big corporate executives thought they could play with the numbers to make their companies appear more successful to Wall Street.

    We had some big name individuals on Wall Street that were bending the rules to gain an edge in the market and fatten their wallets.

    We have one of the key people involved in bringing these folks to justice, Elliot Spitzer – now governor of New York – caught up in his own scandal over trying to smear a rival political figure that challenged him.

In every one of these cases, folks have simply refused to admit their guilt. They all plead innocent and ignorant, and point the finger at someone else. Anybody but them. They view honesty as a last resort – a tool to use when all else fails.

Money. Power. Fame. The motives may all be different, but the individual players all act the same.

We need to turn our backs on people like Bonds, and anyone else looking to use “cheat codes” as an easy way to get something they want in life. To do anything less undermines what we claim to stand for as a society. It cheapens the accomplishments of everyone that plays by the rules, and untimately make us a part of the deceit.

Integrity really does matter…

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FCC: A Conflict Of Interest…

August 6, 2007 By 2 Comments
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With the sunsetting of analog television, the FCC intends to auction off the spectrum that it once occupied. All of the usual players are lining up to participate in the auction, but there are a couple of new faces in line that have the power to shake things up a bit.

Google and Frontline Wireless…

While most everyone has heard of Google, Frontline is probably not that well known. Here is how they describe themselves:

Frontline Wireless envisions a 4G wireless broadband network that will make advanced Internet services as ubiquitous as the air we breathe. By leveraging efficiencies of shared spectrum and network infrastructure, Frontline will empower first responders with state-of-the-art technology and liberate consumers from the “walled gardens” of the incumbent wireless providers.

Frontline Wireless was founded by a collection of telco industry heavy-weights, including former FCC chairman Reed Hundt, and backed by serious money folks like Kleiner Perkins’ John Doerr and Jim Barksdale of Barksdale Management Corporation (and former CEO of Netscape). They are folks that understand this space cold and should be taken very seriously.

Though there are some differences, both Google and Frontline are looking for the FCC to establish principles of openness as a part of this auction by requiring bidders to allow any device to connect to the network, any applications to live on the network, any party to access bandwidth on a non-discriminatory basis, and any internet provider to connect to the network.

They want the principles of Network Neutrality applied to wireless communications and services…

fcc-kjm.jpgWhile the FCC has paid lip service to requiring this type of openness, chairman Kevin Martin hasn’t shown any willingness to lock it in to the auction terms in any way that couldn’t be easily side stepped by the big telcos. While he’s agreed to add requirements for open devices and open applications, these are meaningless gestures without requiring non-discriminatory access to bandwidth and a choice of ISP’s and other service providers. As it stands right now, the wireless broadband landscape won’t look much different than it does today once this auction is over. It will still be the same players offering the same walled garden approach to providing data, content, and services. Everyone knows that lock-in’s are all about who controls the flow of bits – and nothing in the terms of this auction will change the status quo.

The consumer will still be captive to essentially government anointed monopolies…

I would be hard pressed to find anyone that considers the limited choices, termination fees, and service restrictions imposed by the existing wireless carriers to be serving the public interest. But somewhere along the line, that seems to have stopped mattering. The FCC ‘s priority in this auction is more about maximizing the revenue that can be raised than anything dealing with the public good. They have become conflicted by congress’ desire to realize a revenue windfall.

Hopefully its not too late…

I believe the FCC should be focused on creating the same conditions in the wireless space that have turned the wired internet into the backbone of our global economy. While there are clearly differences between the two, there is a lot of creativity in the marketplace, and some very interesting thinking around both policy and technology initiatives that could help maximize the bandwidth available in the wireless spectrum. This is innovation that will not just serve the common weal, but also enrich the coffers of government by fostering the growth of a new commercial wireless ecosystem. The one real downside to this approach is that it doesn’t offer the big near term revenue win that our short sighted political establishment is looking for.

Our transition from analog to digital television transmissions is offering us a unique opportunity to transform the wireless landscape. It would be ashamed for us to sacrifice the significant good we could realize here at the altar of near term revenue – money that will likely be squandered before it is even all collected.

As an increasingly mobile digital society, we can’t afford to let that happen…

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Switchers Diary: Blackberry To iPhone – Month 1

August 2, 2007 By 1 Comment
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It’s hard to believe it, but it’s now been over a month since Apple released the iPhone and I joined the “ranks” of Blackberry to iPhone switchers. I am still completely satisfied with having made the switch, but there are a few observations I would like to make about issues that weren’t obvious by my ‘Week 1′ post.

Typing: I’m finding that I getting to be faster, and am certainly doing better than I ever did on my Blackberry. This is due largely to the fantastic job the software does at figuring out what you actually intended to type. The correction system on the iPhone beats any other correction system I have ever used – it’s almost scary good. However, there are two typing problems I seem to have frequently. One is missing the ‘Space bar’ on the bottom of the screen and hitting one of the keys above it instead. The other is hitting the backspace key when I mean to type an ‘M’. When either of those typos happen, the auto correction fails as well since words are either mundged together with a bogus letter instead of a space, or are missing a couple of letters entirely. I would love to have a slightly different click sound for those keys so I could tell without looking that I didn’t type what I thought I did. The other thing I’ve found is that if I start typing very quickly, the iPhone keypad can pause for a second as it catches up – nothing big, but enough to throw me off my typing rhythm. All that said – I am more productive typing now than I was on my Blackberry.

Battery Life: I didn’t have any issues with battery life when I first started using the phone, and I still don’t – as long as I use it as a smart phone and not a mini laptop. What I’ve found is that the interface on the iPhone is so good that I end up doing a lot more work on it than I did on my Blackberry. I’ll browse the web more frequently, and actually work with online applications. I’ll also spend more time with email – both reading them, following links, open atachments, and, of course, writing them. Wrap all that together with my multiple daily SMS sessions, conference calls (love that feature!) and music/video playback, and the battery is challenged to last a day. As good as it may be at playing the role of “MacBook Nano”, I would show some restraint in using the iPhone this way if there is no recharging option available to top it off during the day.

If anything, the iPhone is just a bit “too sexy” for its battery…

Searching: More accurately said, this would be the inability to search. As I have more stuff stored on the iPhone, I’m starting to miss having the ability to search for things – especially emails. Here is a typical case for me: I needed to find a message from a particular person on some followup items from a meeting we had two weeks previously. To do that, I needed to scroll back the two weeks of messages (probably over 400 emails), then scan every email over a three day period to find it. That’s way too much finger flicking! I would love, at a bare minimum, to have a way to see every email from a particular individual. Having some text searching – even just for headlines – would be useful as well.

Stability: I have had only one hang since using the iPhone, and it resolved itself with a reboot. No clue why it happened and I can’t reproduce it. Outside of that, the device has given me no problems.

Syncing: What has been problematic for me is syncing. I am on a Mac using Microsoft’s Entourage as my main email/contact application. The iPhone sync’s to Entourage in a Rube Goldberg kind of way. Entourage syncs itself with Apple’s iCal and Address Book applications, and then the iPhone syncs with them. And visa-versa for changes on the iPhone. I have had issues where a meeting I see in Entourage hasn’t yet made it to iCal and therefore doesn’t make it to the iPhone on that sync – even though I think I have it there. It also seems to get some meetings in there twice. I also find that on occasion, syncing can just start but never complete. It doesn’t hang the iPhone, but just keeps trying to sync with it. None of these are critical issues, but they can be annoying. I am hopeful that we’ll see a lot more focus from Apple on this part of the software.

With a month of iPhone use under my belt, I am still glad I made the switch. No Regrets. Though some of the iPhone’s shortcomings are more obvious to me now, the incredible interface and intuitive accessibility of all of the functionality in the device continues to be compelling. It is one of the best ‘first cuts’ I have ever seen is a software based product.

And it should only get better from here…

NOTE: The first software update for the iPhone came out yesterday, and I installed it last night. If it makes a difference with any of the issues I discussed here, or if I find something new and incredible burried in it, I’ll let you know.

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RSS, The Limits Of Scale, And InfoNgen…

August 1, 2007 By 1 Comment
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I am a big believer in the power of RSS. So much so that I started an RSS video series on this blog. It is one of the cornerstones of the current generation of Web technologies, and it’s now easy to find RSS feeds on a wide range of sites and services.

To work with these feeds, most people use readers like Google Reader or portal sites Netvibes or Pageflakes. Google Reader lets people browse through the feeds they subscribe to as either individual sources or as commingled headlines. Pageflakes and Netvibes present the feeds in widget based frameworks, with each source appearing as an individual widget that can be positioned anywhere on user configurable pages.

googlereader-screen.jpgnetvibes-screen.jpgpageflakes-screen.jpg

These are all great tools except for one thing.

None of them are designed to scale up…

Each of these tools will do a good job managing less than 100 feeds, and could probably work reasonably well with twice that number. The most aggressive feed user I know, blogger Robert Scobble, manages to have over 600 feeds in his Google Reader. He ends up doing a quick scan through the 1300 headlines a day he gets to pluck out those few he thinks he should actually read. And while I know he does an incredible finding little tech nuggets to write about, I’m sure there are a lot of things he ends up missing – people just can’t effectively screen through that many sources and that many discrete pieces of information manually.

And compared to the vastness of the web, 600 sources seems like a pretty small number…

In my interview with Wallstrip, I talked a little about my company’s product, infoNgen. InfoNgen was designed specifically to handle these types of scale issues with RSS.

Our free version of InfoNgen is a new type of web based feed reader. It offers a hybrid widget/headline interface combined with a powerful semantic tagging engine in the backend to let us ‘understand’ what each individual story is about. The basic service comes with a directory of over 15,000 handpicked and organized feeds (and growing). You can turn any of them off that you don’t think are useful to you, and also add any additionals ones you’d like to have. You can also screen feeds by language – the feeds in our directory represent multiple languages and come from sources authored around the globe.

Continuously throughout the day, each individual feed is crawled, and the full text of each story in it is analyzed and classified using a broad yet detailed financial taxonomy. Because we provide these traditionally unstructured sources with rich tagging, you’re able to do a lot more with InfoNgen than just browse through feed headlines or perform basic text searches.

infongen-screen.jpg

InfoNgen gives you the ability to read across all of your sources in aggregate using very detailed filtering. You can see what’s happening with individual companies, specific industries, or even regions. You can filter what you see further using topic based screens like ‘Management Changes’ or ‘Unusual Dividends’. You can also choose to look only at stories based on the type of source – blogs, technical publications, or local new papers for instance.

You get to focus on just the things you care about without all the noise…

I’ll be covering this version InfoNgen in more detail in the next episode of Practical RSS, so I’d encourage you to head over to www.infongen.com and check out the service in advance.

It’s completely free, and I believe you’ll find it to be a valuable tool…

QUICK COMMERCIAL NOTE: A professional version of InfoNgen with customized topics and enhanced searching and alerting features is available on a subscription basis. Contact me through email if you have any questions.

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