Wednesday, December 28, 2016

Best of this blog 2016

It’s the holiday season and therefore time for the unavoidable ‘best of’ lists. Same deal here at the Demassed blog. In this year of virulent hacks, ransomware, digital ad fraud, and an epidemic of fake news, there were still other stories significance in the digital universe, and this post is dedicated to the Top 5 most clicked on stories on this blog in 2016.

The top two posts were on blockchain, a decentralized ledger of digital transactions that “brings security structures and incentives in line with the way we share information in the 21st century.”

One of the posts was about the vision for a new foundation of the music industry, based on direct artist to fan communication and payment, and that story can be found here.

The other blockchain post was about the great cryptocurency hack of 2016, reported to have removed between $50 million and $80 million of funds from the Ethereum blockchain. Read the full post here.

Some of the stolen funds have since been located, and despite the hack and the many unknowns associated with the blockchain it is already in use by several major banks and is forecast to be used by 15% of financial institutions in 2017.

The third most popular post of the year was a series of tweets from a talk given back in January on Marshall McLuhan in the age of social media. I wasn’t able to attend the talk but I was able to follow the discussion by way of the hashtag and captured those nuggets here.


Coming in at number four for the year was on a talk given by media and cultural theorist Douglas Rushkoff who has been thinking about and writing on the social and politic realities brought about the Internet for over 20 years. That post can be read here.



Rounding out the list, at number 5, is a post that looks at one of the most contested topics of life online, and that’s the preponderance of free, or more accurately ‘free’ content, the quotes referencing the fact that very little is ever free, it just appears to be.


What you receive for ‘free’ online is in fact traded for information about you as a consumer, and it’s a transaction all of us partake in dozens of time daily. Could the economy of free be shifting from just the way things are online to being one of a handful of possible business models? This post offers exhibits A, B, C, and D and lets you decide for yourself.

Thanks for reading and sharing the blog this year. I'm now up to 160,000 lifetime views, and even though as much as half of all Internet traffic is reported to be bot-generated, I'm still pretty happy.

Friday, December 16, 2016

The accidental industry of YouTube

2016, the year many cannot wait for the end of also had a few non-traumatic moments, such as the introduction of the term ‘YouTuber’ into the new version of the Oxford English Dictionary. And for those who don’t necessarily indulge in the delights of video by the people and for the people, a YouTuber is a person who creates video content and uploads to the video-sharing site. 

Now that YouTube itself is into its teen years we have seen YouTubers morph from hobbyists or one-off video uploaders to micro-celebrities and even stars in their own right, with tens of thousands YouTubers globally now making a living showing their wares on the site.

How did the random uploaders became hobbyists, then amateurs, and then a new type of media professional? And what is the difference between an amateur and a professional anyway? Is it intention, or is it outcome? Is it getting paid, and if so, how much? Is it the ability to attract thousands to millions of views? Or is this the future in which everyone is famous to fifteen people, a dictum issued all the way back in 2005, around the same time as the hybrid designation “pro-am” (for combination professional amateur) was explored at book length.

Whereas YouTube – and other open uploading platforms, e.g. SoundCloud, MixCloud, assorted mixtape sites – once existed in a parallel and necessarily separate universe from this thing we think of as ‘the industry’, the platforms are increasingly becoming intertwined with industry. And in ways not necessarily planned or imagined. For example, YouTube has become the new radio, with 1 in 4 music streaming hours spent on the site, which I’m pretty sure was not part of the original vision.

The same goes for the emergence of new entertainment genres, and this is isn’t an overstatement as the numbers don’t lie. Billions of views are being racked up by videos of people unboxing mattresses, of kids doing toy reviews, and in perhaps the most unanticipated category of new genre of media, YouTube videos of people reacting to other YouTube videos. (Ed. Note: Repeated use of 'wtf bro' ahead)


YouTube has also become an important second window for television, with clips from such shows as Jimmy Fallon, John Oliver, SNL, and that carpool karaoke guy (okay, James Corden, but to me he’s the carpool karaoke guy) pulling in millions of additional views by being posted and shared online. Whether or not I watch the shows (and generally I don’t) I can still play catch up by having them appear in my Facebook feed or having them pushed to me as suggested or popular videos when I open YouTube. Just as the music industry saw an unbundling of songs from albums, now television has an unbundling, from both format (the 30 or 60 minute program) and distribution channel, in this case moving from the world of the television schedule to on-demand, atomized viewing.

Sunday, November 6, 2016

Piracy is as good as dead. Now What?

It’s been 17 years since Napster came onto the scene, bringing with it the combination innovation/major threat of peer-to-peer (P2P) file-sharing. What began as an outlaw activity of uploading MP3s and making them available to anyone with a desire to hear the song and a decent Internet connection ended up providing a beatdown to the music industry that lasted well over a decade, with the carnage only settling down recently. And even now the music industry is, in many ways, still up for grabs.

You may have seen the headlines proclaiming that 2016 was the first year in which streaming revenues were the largest revenue source for music, eclipsing digital downloads for the first time, and taking a big lead over physical sales of all other physical formats combined. The pie below shows the respective shares for the U.S. market. To put things into additional context it's worth considering that the global music industry peaked in 1999 with revenues of about $30 billion, which, by 2005 had shrunk to $20 billion, and now hover just under $15 billion

Source:
http://www.riaa.com/wp-content/uploads/2016/03/RIAA-2015-Year-End-shipments-memo.pdf

It doesn’t take Nostradamus to see that the blue piece of the pie is only going to get bigger, while the red and green slices shrink. (The diet yellow slice, marked “synch”, refers to music synchronization, which are the revenues that come from licensing fees when songs are used in commercials, movies, TV shows, videogames, etc. I have no view on whether or not this chunk will grow though I understand it’s a valuable source of income for musicians both well-known and up and coming).

What we can extrapolate from these developments in the music industry is that piracy is more or less dead. Which is not to say that it doesn’t exist. Of course it does. But it’s dead in the sense that it is considered to be public enemy #1 of the industry. When pretty much any music you want to hear is available on demand -- whether via legit sources or unsanctioned ones -- the location of value shifts irrevocably, whether we like it or not. Where did it go? To the new intermediaries,  in this case the platforms that enable us to hear anything we want to, whenever we want to.

So what happens now? This discussion got underway at a Music Tech Meetup I attended at the end of the summer, at which the featured speakers were Steven Ehrlick and Noah Schwartz, both from Ryerson University’s Music Den, a music and tech incubator that brings creators together with technologists, in the hope of building apps, systems, or platforms, that identify, and hopefully propose a solution to, addressable problems in a new environment of possibility. Ehrlick and Schwartz shared their thinking around the experience of being a musician in the 21st century, the reality of which, in their view, is that you have to a digital media specialist in addition to being a performer and/or writer. 

But what does that mean?  We so often hear people with titles such as Chief Digital Officer tell the troops at organizations that were not ‘born digital’ that everyone’s thinking needs to be re-jigged.  Phrases such as ‘from now on the company will think like a digital company”, or “starting today we’re a digital first organization”. Erhlich & Schwartz see it this way: There are two kinds of companies: Tech companies that get into music and music companies that get into tech.

An example of the former:

Bandcamp: A music discovery platform that, as of Fall 2016, has paid close to $200 million directly to artists since its inception.

Examples of the latter:

MusicNet (b. 2001, d. 2005)  and PressPlay (b. 2001, d. 2003), services started by the music labels that tried to replicate the analog industry in the digital world. 

Why did they do that? Because that’s the business they knew well. Contrast with what Steve Jobs did with iTunes: unbundled the album, established a price point of 99 cents that was low enough to move people from Limewire, Kazaa, Gnutella, and created an ecosystem of beautiful hardware and easy to use software which for many became a way of life, not just music or gadgets, and resulted in Apple becoming (if only intermittently) the world’s most valuable company.

The enterpreneurial trick is this: Ask yourself "what is the problem you're trying to solve?" Apparently the investment community, particularly in Silicon Valley, wants to hear things expressed as verbs, not nouns. It’s about what people will do with what you’re making, not what it is.  Think Twitter, Snapchat, even Pinterest – hard to rationalize if you’re only describing what it is; easier to rationalize as a vision for a new way in which people communicate and connect.

Erhlich and Schwartz suggested that a company allows you to solve musicians’ problems e.g. where to play, where to stay, how to do your digital distribution. And you can start small and do so on a small budget and scale up, moving from local to global, with the costs of working globally being a fraction of what they were in the world of physical things and physical places.

They point to this example: DistroKid, where for twenty dollars per year musicians get the ability to do unlimited uploads to digital services such as iTunes and Spotify (and no, it’s not free to get your music onto those sites.)

As we approach two decades since peer-to-peer technologies effectively detonated the music industry,  some pieces are falling into place while others are still trying to find a way for the peg to fit the slot (Heck, Spotify, with its 100 million users of which about 40 million are premium users is still not profitable in 2016). But it's not all bad news, which is the rallying cry of this blog if there is one. I am reminded of the words of Clay Shirky when asked how the rapidly declining revenues of the newspaper industry might be stemmed. His response: What will work? Nothing. But everything might. 

Tuesday, October 18, 2016

Where Credit Is Due: Max Levchin and Banking For A New World

HVF is his motto. And the name of the umbrella company that arches over his many undertakings. He is Max Levchin, one of the founders of PayPal, and therefore member in good standing of the PayPal mafiawith personal investments in over 100 startups, the most recent of which are a fintech company and a women’s reproductive health company

The HVF part stands for hard valuable fun, which is how Levchin decides which projects to take onThe hard part refers to something that is challenging, something that is a problem to be solved. If it was easy, anyone would do it. The valuable may be something on a global scale, such as a shortage of clean drinking water or it may be something of a more everyday nature, such as simplifying banking. And the fun, that’s where personal obsessions and passions come into the picture. If you love what you’re doing, it’s fun. It may not be Tommy Lee’s idea of fun, but we’ll leave the drumming on a roller coaster to him and the real HVF to others.

Levchin’s latest project is Affirm, which seeks to solve the problem of banking in a world which has changed. Whereas people used to get into professions in their mid 20s and stay in them until the arrival of the gold watch several decades later. As he put it during a recent conference keynote interview: “banking doesn’t have to be an industry that helps you shoot yourself in the foot”, referring to the fact that the banks’ objectives – of charging as many fees to customers as possible – and individuals’ objectives – of paying as few fees as possible while hopefully being able to squirrel away a few dollars here and there and earn a bit of interest – are generally at cross-purposes with each other. 

Max Levchin, interviewed by Kara Swisher in Boston, October 15, 2016

Does it have to be this way? Levchin doesn’t think so. “It’s possible not to charge 5 to 7% overhead, as most banks do, and it’s possible not to have 100 disparate software systems, which is what you find in a typical bank”, Levchin told the crowd. 

“I think the bank of the future is more like an app that works in real time, linking your decisions and behaviors to your financial goals and overall fiscal health”. In other words, if you say you’re saving up for a vacation, or a car, or a pricey jacket, then maybe visiting Starbucks twice a day isn’t in your best interest, and the app could help with reminders that nudge you in a more productive direction. And when it comes to determining creditworthiness, the Fico score has been the accepted standard since 1989. 


Lenders are in the business of risk assessment....i.e. are you a reasonably good candidate for credit? What recourse does the bank have if you default on your loan or mortgage, or if you overextend your credit? This doesn't sound at all unreasonable but, as Levchin is quick to point out, the Fico score system does not reflect today’s world of fairly frequent job hopping, of startups and creative endeavours funded on credit cards, of flexible work and the gig economy, or of rising student debt loads. The Fico system effectively penalizes people that don’t fit into neat little boxes of creditworthiness assessment, and that’s where Levchin sees the opportunity. 

After all, according to a recent McKinsey study, as many as 162 million people, representing 20 to 30% of the working age population, are said to participate in the economy of flexible work. This does not, by definition, make them irresponsible or poor candidates for loans; it just makes them people who don’t fall into the existing buckets of the Fico measurement system.

And this is where digital, networked systems -- whether they are deployed for fairly mundane functions such as dating or providing alternate accommodation options or for more serious enterprises such matching organ donors with those in need or identifying scientific, technical, or socio-political problems and providing monetary incentives for their solution -- are fascinating to both observe and participate in, manifesting new ways of operating that in no way resemble the rationales of the previous era.

For more thinking on this topic, here's Max Levchin speaking at SXSW 2016 about what he sees as the unstoppable trends in our midst.

Saturday, October 8, 2016

Discoverability: Audiences in a time of endless choice

One way to think about today's media landscape is as the 'attention olympics'.

It's not always the best or even the first that 'wins', but the players that are able to grab the most attention. I recently saw this line: "On the Internet the reptilian brain gets served first", and while it's not true across the board, there is certainly some truth in the statement.

That which is refreshing about the Internet is also that which is threatening to some. The authentic and the contraband flow throw the same pipes, which means the traditional big players often find themselves vying with the smaller ones online. Competition now comes from all corners. Competition for screen space, and competition for viewers', listeners', and readers' attention.

Search and Search Engine Optimization (SEO) used to be the primary ways things rose to the surface online. Then came curation and aggregation. Social added another dimension to an already complex model of production and distribution.

So how do audiences navigate through the maze? 


The term being used in some circles to refer to the challenges inherent in a saturated media environment is Discoverability. A report I worked on released earlier this week offers some perspectives. 





Click here to read the full report, entitled "Discoverability: Toward A Common Frame Of Reference, Part 2 The Audience Journey".

Sunday, September 25, 2016

When "you get what you pay for" no longer applies

Ah, the Internet. It brings us hotel reviews, deals on shoes, too many pictures of people's kids and renovations, and so much more...hence the 2 word catch-all Because Internet as a glib attempt to explain away the oddities of the vast network's offerings, and the often strange behaviours we all contribute to the mix.

The many splendored thing that is the Internet has rewritten the rules of many businesses, or, more accurately, those rules are in the process of being rewritten.

The conventional economic thinking of people operating in self interest, and therefore not working for free has been upended by the likes of Wikipedia and The Huffington Post.

The laws of supply and demand have similarly been suspended. Generally it works like this: demand goes down, supply co-operates with gravity and also goes down. Not always so on the Internet, with, for example, the output of the creative industries such as music, writing, and photography, being prime examples.  Fewer people pay, more people produce. What would Adam "Wealth of Nations" Smith have to say about this?  We'll never know.  

Conventional wisdom says we get what we pay for.  But on the Internet we also get what we don't pay for, a topic explored further in the Up Next Podcast on which I was recently a guest.  

Or perhaps as an old friend from my campus radio days put it:






Monday, August 1, 2016

Better complaining through technology

People just want to get stuff done. And with as few hurdles as possible. Sometimes intermediaries can assist in the process – that’s what the concept of a value chain is all about, i.e. the sequence of steps between creators and consumers, between organizations and citizens, that exist because they refine and improve products and services along way. That's the idea, anyway. Think of the journey a coffee bean harvested in Ethiopia takes to become the half caff tall skim latte at your neighbourhood Starbucks and you’ll have the beginnings of a mental model of a value chain. In such a case there are undeniable value adds along the way, though whether or not the end product is 'worth' the $4 you pay for it is a debate best left to branding experts. Or these everyday citizens. But I digress. 

This blog has focused on the changing faces and shapes of intermediaries in the creative industries, but today we’re going to look at an area known as civic tech, a way for interested individuals and community groups to enter the value chain of government and governance, using the self-organizing tools and techniques of peer-to-peer networking, crowdfunding, and co-creation.


I first learned of the field while living in Boston, by way of the MIT Center for Civic Media , and thanks to the civic tech involvement of a friend in Toronto ended up at an event hosted by the local Civic Tech group.

What I learned at this event is that while many of us spend our evenings with, I don’t know, laundry, yoga, or Netflix, there’s a group of laptop-toting individuals out there who get together each week to put their coding and design skills to work to address such civic issues as affordable housing, resource sharing, and getting out the vote. And they do it all on a volunteer basis. If you want to see the wheels of disintermediation in motion, this is a great place to start.

One of the projects discussed at last week’s Civic Tech meetup was based on SeeClickFix,  a website and app that lets anyone report civic concerns – whether they’re abandoned mattresses, potholes, or even roadkill -- and also offers tools through with third party developers can build on top of the site's core functionality. 

Civic complaints made easier at www.seeclickfix.com 

If you don’t believe me, just go to the home page at www.seeclickfix.com and enter your city’s name and see what’s going on around you. Some municipalities have some pretty brisk blotters going on while others have just a handful of ancient complaints. 

Street light bird nest issue recently resolved in NYC, taken from SeeClickFix.com

But the larger point is that anyone can post, thereby opening a ticket, and a combination of community members and civic officials comment and then follow up. As posts build up so does a picture of the neighbourhood, from the ground up. This is a key feature of the majority of civic tech projects: the collective corralling of community intelligence that also creates an asset for better governance and improved communication.

Note that also built into the system is a points mechanism, whereby frequent civic watchers can collect points for their interactions, becoming a digital Jane Jacobs at the 10,000 point level.