In a brilliant analysis of a rapidly growing crisis for TV stations, Henry Blodget writes:

As with print-based media, Internet-based distribution generates only a tiny fraction of the revenue and profit that today’s incumbent cable, broadcast, and satellite distribution models do. As Internet-based distribution gains steam, therefore, most TV industry incumbents will no longer be able to support their existing cost structures.

He writes that:

“TV business models for the past half-century, from broadcast to cable to satellite, have been built on the following foundation:

* Not much else to do at home that’s as simple and fun as TV
* No way to get video content other than via TV
* No options other than TV for advertisers who want to tell video stories
* No options other than cable–and, more recently, satellite–to get TV
* Tight choke-points in each market through which all video content has to flow (cable company, airwaves), which creates enormous value for the owners of those gates.”

And why is this changing:

“* Other simple and fun options emerging at home: Internet, video games, Facebook, IM, DVDs

* Fewer choke points in each market: With an Internet connection anywhere in the world, you will soon be able to get to almost anything. And not just to your computer–to your television.”

He then outlines all the wrong things TV moguls are trying to implement to stave off the inevitable (see the full article for a full overview!).

In the end …

“You won’t have 5 channels, or 50 channels, or 500 channels. You’ll have millions of channels. You’ll be able to watch anything you want, live or taped. You’ll be able to watch it wherever you want–TV, computer, mobile device. You won’t have to sorry about “slinging” video content around or programming your DVR. You’ll just plug a pipe (Internet) into a box (device) and watch. This is where the future is going. That’s obvious. The only question is how long it takes us to get there–and who gets killed along the way.”

“When will this happen? Over the next 5-10 years. And it will leave today’s TV industry looking like today’s newspaper industry.”

Here in the UK a recent ‘Digital Britain’ report by Lord Carter, the minister for communications, technology and broadcasting, was unveiled.  Started in October 2008, it was to be the definitive word on digital media, communications and government policy.  In it was a number of pronouncements, including this one;

In relation to rights, the Government believes piracy of intellectual property for profit is theft and will be pursued as such through the criminal law. The civil infringement of taking someone else’s intellectual property or passing it on to others through file-sharing without any compensating payment is, in plain English, wrong. However, the Government also believes, and the evidence suggests, that most people, given a reasonable choice would much prefer not to do wrong or break the law. The objective of the Government’s policy is therefore three-fold. Firstly, to provide a framework that encourages the growth of legal markets for downloading that are inexpensive, convenient and easily accessible for consumers.

This came on the back of another report about online piracy by the Centre for Information Behaviour and the Evaluation of Research, which generated a slew of stories and lurid headlines;

“Estimates as to the overall lost revenues if we include all creative industries whose products can be copied digitally, or counterfeited, reach £10bn (IP rights, 2004), conservatively, as our figure is from 2004, and a loss of 4,000 jobs.”

The convergent summary of these two reports appears to be that copyright violation is wrong and is costing the creative industries money.  But it appears to me on both of these points that there are fundamental assumptions being made here that are incorrect.  Thankfully, in regard to the Centre for Information Behaviour and the Evaluation of Research, blogger Ben Goldacre took them to task for both sloppy reporting and unproven claims;

“What is the origin of this conservative figure? I hunted down the full Ciber documents, found the references section, and followed the web link, which led to a 2004 press release from a private legal firm called Rouse who specialise in intellectual property law. This press release was not about the £10bn figure. It was, in fact, a one-page document, which simply welcomed the government setting up an intellectual property theft strategy. In a short section headed ‘background’, among five other points, it says: ‘Rights owners have estimated that last year alone counterfeiting and piracy cost the UK economy £10bn and 4,000 jobs.’ An industry estimate, as an aside, in a press release. Genius.”

Ben also challenged the claims over the lost per illegal download; the research makes huge assumptions - each download is equivalent to a lost sale, not only a lost sale, but a full price one worth around £25.  Indeed, to take this point further, is it not an assumption that an illegal download is a loss at all?

Interestingly a new draft study by Oberholzer-Gee & Strumpf of Harvard Business School challenges these assumptions too;

As our survey indicates, the empirical evidence on sales displacement is mixed. While some studies find evidence of a substitution effect, other findings, in particular the papers using actual file-sharing data, suggest that piracy and music sales are largely unrelated.

In addition, that leads us to ask that if the assumptions around lost sales are both over-priced and incorrect, what about Lord Carter’s basic statement that filesharing is simply ‘wrong’?  Here again, Oberholzer-Gee & Strump’s paper suggests that it is not quite that simple;

[We] do not yet have a full understanding of the mechanisms by which file sharing may have altered the incentives to produce entertainment. However, in the industry with the largest purported impact – music – consumer access to recordings has vastly improved since the advent of file haring. Since 2000, the number of recordings produced has more than doubled. In our view, this makes it difficult to argue that weaker copyright protection has had a negative impact on artists’ incentives to be creative.

The study also notes the same outcome being observed for films, books and games - if filesharing impacted production, then as p2p grew, productions would fall - and that is simply not shown by the data.  In all areas of media the number of productions is growing.  The authors note that digital technology, while raising the issue of piracy, also lowers production and distribution costs.

This suggests that Lord Carter is wrong; that filesharing is not ‘wrong’, that indeed something dramatic is happening to media production that peer-involvement in, even at a distributive level, is leading to a dramatic increase in output.

Via Axel Bruns, word on an Australian report on social media that he co-authored:

“I’m very happy to say that our first report for the Social Media project at the Smart Services CRC has now been published. Written with my research assistant Mark Bahnisch (an expert in the field in his own right), this report provides an overview of the state of the art in social media,and focusses especially on the dynamics of user community participation in social media sites; as part of this, we’re also looking at a number of leading social media sites (and one or two ‘interesting failures’), particularly in three key areas: news and views, products and places, and networking and dating.”

The report is already available here.

See also the Executive Summary.

Interesting contribution on the nature of the “distributed attention economy”, by Julian Kücklich in the IDC mailing list.

Julian Kücklich:

“I think what we see evolving is a system of microstardom and tactical fandom that calls into question the classical power relationship between fans and stars.

So I think we are not dealing with a dyadic system at all, but with something much less structured and, for lack of a better word, more fun (fun also being the mechanism underwriting new forms of (self-)exploitation). Let’s not forget, however, that achieving and maintaining microfame is a form of labour, and one not so dissimilar to the kind of work described in the MechTurk presentation sent around by Matthew yesterday: it’s affective and relational labour, much of which consists in maintaining a good relationship with the “requesters” (or “followers”). It seems to me that the decisive difference between mass media fame and microfame resides in the fact that the former is systemic, while the latter is endemic. In other words: in mass media stars are made, while in multitudinous media stars make themselves by performing their virtuosity across different registers.”

In the French journal Esprit, “Laurent Mauriac and Pascal Riché, members of the team behind French politics website Rue89, explain how they attempt to bridge the gap between print and the Internet by encouraging contributions from experts and web users, but using journalists to coordinate, direct and edit this participation.”

Here’s an excerpt in which Laurent Mauriac gives an interesting typology of how journalists can work with citizen bloggers:

“Esprit: How would you describe current strategies that try to take account of new technology?

LM: I would say there are three different attitudes. First there are the traditional media that use the Web as a new channel for diffusing the information that they are already producing. Little by little and very warily they are including some degree of participation. The possibility of reader participation was already there, in the form of readers’ letters, for example, but this was very circumscribed in that it was under a separate heading that had no impact on the content of the newspaper or how it functioned. And yet Libération, when it was first set up, had already proclaimed: “By basing itself on the voice of the people, Libération will provoke discussion”. In the 1980s, radio and television had responded to the demand for listener and viewer participation right across their programming, with phone-ins, talk shows that involved listeners, panel discussions such as Ça se discute, and even reality TV in its various forms. The printed press played no part in this process of evolution. At best one can point to the appointment by some publications of “readers’ editors”, who would produce journalism based on readers’ letters. But for the most part, the profession stuck with the idea that only journalists themselves were competent to provide information. And this divide probably contributed to the crisis of confidence that developed throughout that period between readers and their newspapers. The media are largely seen as the voice of the powers that be and not as a counter-force. The perception of journalistic independence in relation to political power, and indeed to financial power, worsens year on year.

The third area then lies between the first two. This is where you find sites which, like Rue89, are trying to create a synthesis between the culture of journalism and the culture of the Internet, sites such as Médiapart, Bakchich, Arrêt sur image, De source sure, La télé libre, and Slate.fr. From our point of view, what this amounts to is a kind of cooperation between journalists and non-journalists, but where the journalists are responsible for the editorial framework.”

I have opened a page at SpokenWord.org to make it easier to find the P2P Foundation podcasts. I’ll be adding all of the podcasts from the archive as well as any new material. You can find the page here & subscribe in an RSS reader or iTunes etc.

The study highlights how in a moment of major, unexpected crisis the institutions of power - whether political, governmental, military or corporate – face a new, acute vulnerability of both their influence and effectiveness.

Report: ‘Skyful of Lies’ & Black Swans: The new tyranny of shifting information power in crises’ by Nik Gowing. Reuters Institute for the Study of Journalism, 2009

Interesting report showing the challenge of social media fragmentation to the Manufacturing of Consent:

“Exponential changes in portable digital technology are redefining, broadening and fragmenting the nature of the media in a crisis by way of a new omnipresent breed of ‘information doers’. These new ‘media players’ have an unprecedented mass ability to bear witness leading to a proliferation of instant impressions in a crisis that get wide and immediate distribution. The resulting new matrix of real-time information flows is highlighting the inadequacy of the structures of power to respond both with effective impact and in a timely way.

After detailed examination of these new media realities in moments of acute crisis, the study concludes with a series of recommendations for how institutions can further modify mindsets and prepare both their structures and personnel at all levels to respond.”

Reading media blogger Jeff Jarvis’s book, ‘What Would Google Do?‘  is very interesting and full of great anecdotes, human-level stories and aspirational ideas for technology - but I can’t help feeling the book is a little miss-named; I would suggest that it would have been more accurate to call it ‘What Would p2p Do?‘.  (I mean p2p in the broader sense) Why?  Because much of the book looks at the contrast of old ways vs. new ways of doing things, it’s just the the new ways Jeff describes often have more to do with p2p than Google.  Google is there, but more as an entity that captures the data of the new way rather than representing the new way itself.

For example take the chapter on banking and insurance entitled, ‘Money: Google Capital/First Bank of Google’, Jeff talks about peer-lending and micro-finance and shared insurance as the new way, as methods of removing the middle-men from the process and of connecting people directly to people for co-financing.  This is clearly a p2p model and not what Google does.  In the section on insurance he confesses the he didn’t think this area could be more ‘Googley’, (his term for ‘being like Google’) but on his blog he’d thrown open the topic to the crowd (his peers) to see what they thought, and the peer-group came back with ideas for new ways of doing insurance - such as peer-insurance.

Another example is the media section of the book; where Jeff talks about peer-journalism, about how the wisdom of the swarm can be harnessed to assist in suggesting, building, fact-checking and ultimately promoting the story. (These ideas that Jeff is great with remind me of the fact that myself and my colleague Ana did a few articles for the media section of The Independent, including one on Wikis we generated much more information than would fit in the final article.  We were all for adding the ’source’ data in some kind of a link to this article so others could use/remix plus use the research we’d done for other articles in this peer-journalism method.  Sadly it didn’t happen…but I digress).

Also in the book there is the oft cited Craiglist as a means of connecting peers and letting them get on with it. Craiglist is a classic peer-generated system; the wealth comes from the mass of users and their effort, and founder Craig Newmark knows this; and Jeff documents its method as success well, however it’s a peer process and so a peer method that is being espoused.

Jeff is an open and enthusiastic writer and the book is a good read and whistles though topics leaving lots of interesting trails to be explored in depth at a later date.  I would critique the deeper idea of some of the ideas (as in: it’s p2p, not Google, that is really emerging) so for example; if we are going to re-think what a Bank actually is under the Googley microscope; why not re-think money itself?  The deeper questions the book raises are ones of structure.

Geert Lovink was invited to participate “to discuss the whereabouts of tactical media in the age of the financial meltdown“, through a Skype conference organized from Ljubljana. The description of the discussion would seem to indicate that the artivist communities are ready to engage in the more long term building of counter-networks that has been the focus on our work at the P2P Foundation.

Geert Lovink:

“In the post-89 period the Internet was about autonomy and empowerment. What should be put on the table now is the question of ownership. The Net has become inseparable from the society of control. In the past tools had no owners, but with Facebook, MySpace and Google, this has all changed. In the 90s the tools were easy to squat. Within the corporate Web 2.0 environment that’s no longer possible. Cheap and dirty appropriation of technology doesn’t make sense anymore. It therefore becomes necessary to, again, build up counter-networks in the shadows of the System. We also need to re-assess the relationships between geeks, artists and activists. Compared to the days of Hacking-in-Progress (1997), programmers are becoming absent. Their ‘conceptual hegemony’ in Web 2.0 is even more limited compared to the dotcom days and their work is getting outsourced anyway. This could also be a reason why perhaps some geeks tend to the populist right. We need to counter these dangers and get into ’strategies of invisibility’ in order to focus on larger projects (such as network architectures to overcome the Internet). The resistance needs to think long term. It is no longer interesting to ‘tactically’ create turbulence within the system. I emphasized the limits of speed politics here. In the light of Twitter, what’s the use for activists of even faster, shorter and fragmented exchanges?

We spent a considerable part of the discussion on the question how to reframe networks and Web 2.0 as military and corporate projects. What mistakes did we make in this respect? Brian Holmes: “Just-in-time networks have a military origin and also a financial and corporate history that we need to uncover.” Graham Harwood stressed the roots of networks in scientific management, going back to the computers of the early 1950s. What Web 2.0 expresses is the “financialization of the everyday life.” Self-organization of humans exists, but it’s something else. It is not to be found on the Web. If you do politics you have to think of people. We cannot talk about networking in general. And about the computer. Florian Schneider objected, saying that neither the military or the corporations invented Linux or Web 2.0. The crucial difference here is subjectivity. Konrad Becker disagreed. The army uses LSD. There are New Age battalions. We overestimate the autonomous perspective of “just doing”. In this light, what does it mean we if call for a return to the local and to “subcultures”? Small local groups operate on a modest and precise level. They are no longer so homogenizing like the megalomanic Indymedia and Pirate Bay platforms. For Graham it was important to go back to the space of art where you can explore these conditions. All agreed that reflection was necessary. But how to turn reflection into expression, Brian asked. The danger here is one of latency. Much of the networking efforts, and their alternatives, are inwards looking. We need to escape the limiting cult of self-representation here. We closed with the observation that ‘gardening’ is happening is a variety of localities, worldwide. For Marko the contradictions in a place like California are coming together in the landscape.The garden as a reintroduction of territory. It can become part of a larger movement to build cultural corridors.”

The debate over whether Google’s excerpting content on its search result pages is a violation of copyright law, i.e. whether Google is effectively stealing content, overlooks the much more valuable asset that Google is appropriating. Google makes money less by its ability to display that snipet of content and much more by its ability to know that snipet of content is relevant to what the content consumer is looking for — it makes money by its ability to efficiently distribute that content.

Following similar commentary by Nicholas Carr, Scott Karp analyses the economic logic of Google, and why it’s not a friend of other endangered media.

Scott Karp:

“Google isn’t stealing content from newspapers and other media companies. It’s stealing their control over distribution, which has always been the engine of profits in media. Google makes more money than any other media company on the web because it has near monopoly control over content distribution (i.e. like a metro newspaper in the pre web era).

The more content there is on the web, the less money every content creator makes, and the more money Google makes by taking a piece of that transaction.”

And how does it do that: through the links that everybody else graciously provides:

“The greatest irony of the web content economy is that Google by itself doesn’t have a clue what content is good or bad. Google is able to deliver relevant search results only because every site on the web helps them figure it out.

Google doesn’t really need your content, because there’s plenty more where it came from. What Google really needs is your links, i.e. your votes for content — it needs your help separating the wheat from the chaff on the web.”

There is a strategic lesson in there for other media companies:

“If media companies want to compete with Google, they need to look at the source of its power — judging good content, which enables Google to be the most efficient and effective distributor of content. They also need to look at Google’s fundamental limitation — its judgment is dependent on OTHER people expressing their judgment of content in the form of links. Above all, they need to look at sources of content judgment that Google currently can’t access, because they are not yet expressed as links on the web.”

Scott Karp of Publishing 2.0 concludes:

The balance of power on the web can shift — but only by understanding what the real sources of power are.