Category Archives: Web 2.0

The Web isn’t dead, browsers just suck

I spent a good part of the weekend reading up on Chris “Long Tail” Anderson‘s obituary for openness, Wired Magazine’s  The Web is Dead. The article and its sidebars are a pretty dense read, but well worth it. Once again Anderson has done what he does best. He’s garnered a lot of attention making an apparently shocking claim that’s really not that shocking at all. “The Web is Dead” is a far better attention grabber than his actual thesis that Web browsers just plain suck on mobile devices.

Specialized devices, with hardware limits (screen size, lack of mouse/keyboard, etc) require specialized apps. They also tend to come with billing relationships built-in, so this is an opportunity to reset assumptions about what consumers will or will not pay for. No surprise that content producers are flocking to apps, a greenfield opportunity to find a more sustainable model for digital content.

The above is an Anderson quote from what I found to be the most interesting part of the multi-article feature, the robust debate among Anderson, Tim O’Reilly and John Battelle. It sums up the two key issues quite nicely. The browser-based Internet is challenged by the poor usability of the browser interface on mobile devices, and large content providers have failed to develop a sustainable business model for delivering high quality content over the Web.

Anderson believes the open Web is in peril because media giants like his magazine’s publisher have been losing money on it. Citing the railroads, telcos, and electric utilities of the 19th and 20th centuries as examples, standardization and lower barriers to entry eventually lead to massive consolidation because no one makes money in hyper-competitive environments. These markets (like most) evolve towards oligopoly. Anderson also points out that apps on mobile phones solve a lot of business problems — the networks are closed and provide gatekeepers, customers are used to paying for content on closed networks, and the billing mechanisms are in place to make small payments feasible.

Though touched on at times, the Wired articles fail to pay enough attention to Google’s role in this world. For the most part, Anderson and his colleagues relegate Google to Web company status. And that is a significant flaw in their hypotheses. Google is a mobile player. It might not own the networks, but it controls the fastest growing mobile platform in Android. Google’s more laissez faire approach to app developers promises a more open mobile world. Customers will demand Android remains open. (The various authors also pay scant attention to HTML 5’s potential.)

Whatever flaws exist in Anderson’s argument do not detract from the value of his main point. The threat to the open Web is less about net neutrality than big media consolidation. Furthermore, Steve Lohr carried the banner of evolution over revolution quite well yesterday’s New York Times piece, Now Playing: Night of the Living Tech.

Yet evolution — not extinction — has always been the primary rule of media ecology. New media predators rise up, but other media species typically adapt rather than perish. That is the message of both history and leading media theorists, like Marshall McLuhan and Neil Postman. Television, for example, was seen as a threat to radio and movies, though both evolved and survived.

The open Web will survive. Advertising will survive. Apps might just be the fad – if an HTML 5 site on an Android device can deliver the app experience without the middleman, meet the new Web, same as the old Web.

Giving customers an exit strategy

So you’ve uploaded your data to the cloud — maybe Flickr, Google Docs or YouTube, and you decide to change services. Now what? After wrestling with downloads, re-formatting, and complex account closing procedures, most of us stay put. The added benefit of changing services almost never outweighs the cost of the move. Remember when you couldn’t take your mobile phone number with you when you changed carriers. Countless people stayed in bad plans with bad coverage because they wouldn’t risk changing phone numbers.

As we enter the adolescent phase of Web 2.0, the ability to switch services easily is detrimental to the growth of cloud and subscription-based services. “Oh crap,” the potential customer says, “I’m marrying this company without a pre-nup.” So he puts off giving the service a try, fearing he will be locked in when a better service comes along.

They teach us in business school that high switching costs are a good thing. It keeps customers locked up. It also frustrates the living hell out of them and they become determined to jump ship at the first reasonable opportunity. A short term advantage can easily be erased by long term ill will.

Google is addressing the issue with its Data Liberation Front. Simply stated, you can leave and take your data with you in a usable format anytime you like. Old schoolers, don’t be so sure this is so bad even in the near term. Experience taught me with Xprove that making it easy to opt in and out of the service at will gives users confidence. It also says, “We’re so damn good we don’t worry about you ever wanting to leave.” A simple website tweak that made that point clearer increased paid subscriptions overnight.

Webmonkey has an interview with Brian Fitzpatrick of Google on the Data Liberation initiative. It’s good reading for any business looking to move into cloud-based or subscription-model businesses. One excerpt:

To be very clear: It’s not that Google is just an altruistic, lovable, huggable company. I think we’re a good company, but we get a benefit from this. We benefit from the work we do with open web standards, open-source and data liberation. But if you’re using a Google product now and you decide to go somewhere else, the easier we make it to leave and take your data with you, the more likely you are to come back and use something we come out with in the future.

There’s also the “rising tide floats all boats” analogy — the more we contribute to the success of the internet, the more we contribute to our own success since we’re such a big player.

A nice Web 2.0 addendum to the Innovator’s Dilemma.

What is news?

Iranian protestor

An image of an Iranian protestor posted to Flickr this week

This week’s events in Iran remind me, perhaps too much, of the Tiananmen Square protests twenty years ago. People coming together peacefully to rally against oppression, whether in Selma, Johannesburg, or Berlin brings hope. Knowing how Tiananmen, Prague, and Myanmar ended brings dread.

Optimists say the world has changed. While tyrants can restrict the activities of CNN and the New York Times, they can’t block Twitter, SMS, YouTube, and Facebook as easily. The truth will get out. People can be called to action and know they will outnumber their oppressors. I hope they are prescient, but in this case the tyrants will prevail — at least in the short run, and people will continue to be injured and killed.

Ahmadinejad is about the worst the world has to offer. He will cling to power and he will be as ruthless as a cornered rat when confronted. People are already being killed by his and the clerics’ thugs, the basij. These people with their 15th century worldviews don’t understand Twitter, and they certainly don’t fear it. Twitter, Facebook, and YouTube might get the word out, but they can’t block the bullets. We will know more about what happens in Tehran in 2009 than we know about what happened in Tiananmen in 1989, but it’s not going to change the outcome.

The Economist summed up the old media v. new media coverage of the events in Tehran quite well. No flowery speech about how the face of politics is forever changed by Web 2.0 techologies. Just the facts.

[The] much-ballyhooed Twitter swiftly degraded into pointlessness. By deluging threads like Iranelection with cries of support for the protesters, Americans and Britons rendered the site almost useless as a source of information—something that Iran’s government had tried and failed to do. Even at its best the site gave a partial, one-sided view of events. Both Twitter and YouTube are hobbled as sources of news by their clumsy search engines.

It’s ironic that the same week China has begun stepping up its censorship efforts. PCs can only be sold in the People’s Republic with government controlled web filters.

The software, which manufacturers must install on all new PCs starting July 1, would allow the government to regularly update computers with an ever-changing list of banned Web sites.
The rules, issued last month, ratchet up Internet restrictions that are already among the most stringent in the world. China regularly blocks Web sites that discuss the Dalai Lama, the 1989 crackdown on Tiananmen Square protesters, and the Falun Gong, the banned spiritual movement.

And just this week, Google agreed to further restrictions on the information it serves up to the Chinese people.

Google caved. Dell, Lenovo, and company caved. They cannot be blamed. As publicly traded companies they have a fiduciary responsibility to their share holders to maximize profits, not a mandate to make the world a freer place. Our 401Ks contribute to the problem today, but not as much as many liberals complain. In the end places like Iran and China will have to open up and allow the freer exchange of ideas. Otherwise the best and the brightest will continue to bring their innovations to freer countries. Look at how many Silicon Valley start ups are started by immigrants to the US. Look at the wealth they create. Wealth that keeps the US the dominant economic power. If China and Iran want to continue to be economic and technological followerers, they are on the right path. Otherwise they have to open up their miserable political systems.

So what is news? If CNN can’t get there first, but Twitter and YouTube are too clunky to disseminate information quickly and efficiently, what models will emerge? Large news organizations will have to take on the task of organizing the world’s tweets and mobile videos. It will require new business models and new infrastructures. The traditional satellite feed will diminish in importance.

It’s a good time to be a software designer for the media industry. We still have our fiduciary responsibilities, but we can build the tools to help the world become a freer place.

User-generated blues

Remember when user-generated content was all the buzz? It still is in the social networking space. Facebook is nearly 100% user-generated content, but where’s the business model?

Facebook is top dog in social networking, but it’s number one among the most fickle user base. Not too long ago all your Facebook friends were on MySpace. Should Facebook irritate users further with another UI change or more ads, its users will go elsewhere.

In 2005 Rupert Murdoch surmised that MySpace had achieved permanent dominance in its segment due to Metcalfe’s Law, and promptly shelled out $580 million for the soon-to-be-number-two social networking site. Apparently Murdoch failed to factor zero switching costs into his network valuation model.

But this isn’t about MySpace or Facebook. It’s about user-generated video content. In another blow to the Long Tail [see previous post], both AOL and Brightcove have announced their free video publishing services will go dark in mid-December. From Brightcove’s announcement:

Although more than 40,000 publishers have signed up for the Network, it represents less than 1% of our revenue. Our core business, the Brightcove platform, has been extremely successful for us and for our customers. So we’ve decided to focus 100% of our business efforts on the Brightcove platform, which customers pay us to use.

That’s not much revenue, but a good amount of storage and bandwidth. Brightcove is a distribution platform, so it makes sense to move unprofitable content off the system. AOL is in a much different position. Liz Gannes gives a good analysis over at NewTeevee.

If you’re truly pushing your overall platform as a default, there should be a way for users to post videos without leaving to log in somewhere else. But it’s also an ominous sign that simply hosting a few user videos is a significant enough diversion of resources to be considered worth cutting. The cost of running a video service is pretty high, regardless of how cheap everything is getting.

Video differs from other types of UGC. Watching video online requires greater audience commitment than text, still images, and even audio. Having reasonably short, clearly rated, and easily searchable content all in one place are the table stakes. YouTube for UGC and Hulu for commercial material are the clear winners. There’s no room for a second tier player.

The dynamic changes somewhat for longer form content. Users have to block out a time to watch the content. That investment in time must be rewarded. Quite often the content offerings on the free platflorms don’t reward that investment. Put more succinctly, a lot of the content on free Brightcove Network wasn’t very good, making it difficult to find the good stuff. What Brightcove learned is that charging producers to publish content filters out a good proportion of the nearly unwatchable.

It’s not a feel good story about the democratization of the media or the Long Tail. It’s just a market working itself out. To this capitalist, that’s a pretty good feel good story in 2008.

Debunking the Long Tail?

Repeat a theory often enough and it is treated as fact. The Long Tail may have attained such status. Because it is the basis of so many Web 2.0 initiatives, and it’s both elegant and charming, many content producers no longer question it. Last week an article in The Register cited the work of economists Will Page and Gary Eggleton with Mblox founder Andrew Bud in putting the Long Tail to the test. It doesn’t fare well.

This really isn’t the upbeat fairy tale message Anderson has spent four years selling on the conference circuit. However, as he took his “message” to Davos and beyond, the Long Tail has gradually developed into a ‘Policy Based Evidence Making’. Having convinced himself of the truth of his hypothesis by looking at one US music service, Anderson widened his search for facts that might fit his theory. But he didn’t examine the numbers closely or critically enough, say the economists.

At some point the Long Tail has to prove itself in real-world business applications. Storefronts (real and virtual) and mass marketing are going to be with us for a long time, so a pure application of the Long Tail may be years away. Until it’s catalogued and easily discoverable, it’s unsellable. The iTunes Genius sidebar might be the Long Tail’s first true enabler… someday, but it’s a ways off. If an application can’t recommend something to go with a Beatles tune, how useful is it?

I’ve always appreciated the elegance of the Long Tail theory, and have been surprised that it failed to produce superior profits in the media and entertainment sector. The article goes a way towards explaining why it is failing in the market place.

Others have appreciated it for the Utopian vision the Long Tail provided of being able to make marginally marketable media, but still turning a profit on it. Who wouldn’t rather make an art film over an infomercial? Like Santa Claus, people believe in the Long Tail because it makes them feel good to believe.

At the end of the day it proves an old algebra teacher quite prescient – “Question anything that doesn’t resolve to a normal curve.” An exaggeration to be sure, but something to keep in mind.

To this I add the Capria corollary – If the guy sounds like he’s selling snake oil, he is. Chris Anderson and his theory have long been more hype than substance. He’s parlayed a single theory posited in a magazine article into a career.

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